US: U.S. paid $32M for Iraqi base that wasn't built

Publisher Name: 
USA Today

The U.S. military paid a Florida company nearly $32
million to build barracks and offices for Iraqi army units even though
nothing was ever built, Pentagon investigators reported.

The project had to be abandoned because the Iraqi Defense Ministry
couldn't obtain rights to the land where the headquarters were to be
built, according to a report released this month by the Defense
Department's Office of Inspector General. Contracting records show the
buildings would have housed one brigade and three battalions of the
Iraqi military in Ramadi, a hotbed of the Sunni Muslim insurgency and
capital of Anbar province.

Still, the Air Force agency overseeing the project paid contractor
Ellis Environmental Group $31.9 million of the $34.2 million obligated
for the project, the report said.

An Air Force spokesman, Michael Hawkins, said in an e-mail that Air
Force auditors are reviewing the contract. Although the inspector
general's report says the Air Force was considering suing the
contractor, Hawkins said any talk of a lawsuit was premature until the
Air Force audit is complete.

Ellis Environmental Group spokesman Steve Brownstein said the work was
reassigned to Ellis World Alliance Corp., a related company. Bob
Smith, of Ellis World Alliance headquarters in Gainesville, Fla., said
contracting rules barred any official comment.

The Ramadi construction contract is one of many problems Pentagon
investigators cited in this month's report on the military's oversight
of $5.2 billion Congress approved in 2005 to help train and equip the
Iraqi military and police.

The report says the military didn't keep adequate records of equipment
for the Iraqis ranging from generators and garbage trucks to thousands
of guns and grenade launchers. Separately, the United States has
launched a criminal investigation into allegations that weapons it
bought for the Iraqis ended up in the hands of insurgent and terrorist

The Air Force Center for Engineering and the Environment near San
Antonio manages construction contracts for the Iraqi military
assistance program.

In May 2006, the Air Force center awarded the Ramadi project to Ellis
Environmental Group, according to federal contracting records.

The inspector general's report says vouchers provided by the
contractor don't show purchased materials. But Hawkins said the Air
Force had documentation on about $15 million worth of equipment and
supplies meant for the Ramadi headquarters. That gear is in storage
and available for other projects in Iraq, Hawkins said.

Hawkins said the contractor set up a camp for construction workers,
performed design and engineering work and had begun building roads and
an airstrip before the project was halted.

investigators have repeatedly faulted U.S. oversight of contracting in
Iraq, and more than two dozen people have been charged with corruption
related to the war and rebuilding effort.
AMP Section Name:War & Disaster Profiteering
  • 21 Reconstruction