Click to see a chart of cost projections.
RAMSTEIN AIR BASE, Germany — When German and American military officials broke ground for the 844,000-square-foot mall and hotel complex at this base, they pointed to the project as an example of their cooperation.
Once envisioned as the crown jewel of the Air Force’s plan to revamp its largest base in Europe, the Kaiserslautern Military Community Center has now been called a $200 million “white elephant.”
More than 2½ years after construction began, congressional investigators and auditors report the U.S. military’s largest single construction project is beset by poor coordination, vandalism, insufficient oversight, fraud allegations, shoddy work, faulty design and contractor work stoppages. The project is more than a year behind schedule. It is expected to cost millions more than contracted and no completion date is in sight.
Americans stationed in the area have known for months about some of the problems and the delays, but new details that have emerged expose troubles much worse than initially revealed publicly. The fallout could affect morale, welfare and recreation programs and military construction at bases beyond Kaiserslautern and across Europe.
There is plenty of blame going around as work on some parts of the site has ground to a halt.
Air Force officials fault German government construction agency, Landesbetrieb Liegenschafts- und Baubetreuung, for not hiring a general contractor and mismanaging the project design and construction. LBB points the finger at the military’s insistence on putting the project on a risky, fast-track schedule doomed from the beginning. And General Accountability Office investigators hold both responsible for mistakes leading to schedule and cost problems.
The severity of the situation caught the attention of Washington lawmakers with the House Committee on Oversight and Government Reform, which held a hearing June 28 to find out what went wrong with the project. Rep. Henry Waxman called the mall and hotel a “white elephant” during the hearing, criticizing the Air Force for the lack of oversight.
Brig. Gen. Danny Gardner, USAFE director of installations and mission support, admitted in his June 28 testimony that management, technical and fiscal issues exist, but he said the command’s senior leaders are working with the German government to get the project back on track. In an interview with Stars and Stripes on Wednesday, he adamantly defended the Air Force against accusations that it could have prevented any problems because the German government construction agent is in charge.
“We trusted our agent too much as we have for the last 25 years and they failed us,” Gardner said.
Markus Ramp, an LBB spokesman contacted on Thursday, said he needed more time to answer questions on the agency’s role in the project, but he blamed the need to get the project done quickly as the overriding reason for any problems.
The Air Force estimates the project will come in under the allocated $182 million, but more than 20 percent higher than contracted. Senior General Accountability Office officials gave lawmakers a much higher price tag. They testified that the complex is “serious trouble” and will likely cost in excess of $200 million.
And there could be more far-reaching consequences for the delays and cost overruns. If changes are not made, congressional investigators report that those issues could affect $400 million worth of construction in Germany over the next five years.
The GAO report concluded that the attempt to build the mall and hotel building quickly so it could coincide with the closure of Rhein-Main Air Base in Frankfurt in December 2005 was a contributing factor to many of the failures. Congressional investigators who visited Ramstein in May and June determined that cost and schedule problems had been exacerbated by multiple factors, including poor workmanship and ineffective management.
Investigators criticized LBB, the agency in charge of the project, for not hiring a general contractor to help oversee more than 30 contractors. But Air Force officials are accused of not doing enough to minimize the risks.
Air Force officials have said that German authorities insisted on not hiring a prime contractor so that they could “spread the wealth” to smaller construction companies in the area. But the lack of coordination and design flaws led to damage on finished work and an overwhelming number of changes.
The project has experienced additional problems. Last April, vandals used acrylic paint to deface more than 200 of the 350 rooms in the hotel, causing $410,000 damage. There also have been sweeping changes in management. Last year, LBB fired design firm JSK, which was serving as the construction management contractor. Months after LBB put their project managers in charge, they ended up firing them, too. The Air Force’s senior civilian working on the project also resigned.
German and Air Force law enforcement agencies are investigating more than 20 people connected to the project for suspected wrongdoing. Nobody has been charged, and Gardner said he doesn’t believe anybody from the Air Force did anything wrong.
“There’s nothing to fire anybody for — on the U.S. side,” he said.
That’s because, he said, much of the blame rests on the German construction agency.
The U.S. military builds facilities in accordance with NATO’s agreements, which instructs military forces to coordinate construction management and planning through the German government. LBB is the agency in charge of the mall-hotel complex as well as many other construction projects at Ramstein.
But GAO investigators reported that the Air Force could have performed better oversight. The GAO report states that the Air Force should have developed “control procedures” to reduce the risks, stating that U.S. forces have “the power of the purse.” A June 22 report by the Air Force Audit Agency went further, listing at least 35 oversight defects.
But even if the Air Force had done the things the auditors suggested, Air Force officials said it probably would have had done little good.
“While we agree with many of the Air Force Audit Agency’s findings, had those findings been corrected before this project started [they] probably would have had almost no impact on where the project sits today,” said Col. Dave Howe, USAFE deputy director of installations and mission support.
Air Force officials acknowledge there are no easy fixes. They continue to meet with top-level German authorities to work out the issues. They also are looking at working with the German government to tweak the rules on how similar projects are governed.
In the end, even though the U.S. is spending millions on the project, there is little the military can do to fix the problem, Gardner said. He says it’s up to the German government to come to the rescue.
“Certainly in a project of this size you’re going to have all kinds of problems,” Gardner said. “But you can do what everybody has been asking, ‘Who do you hold responsible? Who’s accountable for this?’ In the U.S. government, I guess I’m accountable. I guess I’m the responsible agent, I guess. But the real people who have the control over this [are] on the German side.”
Excerpts from GAO report
The General Accountability Office report, “Military Construction: Observations on Mismanagement of the Kaiserslautern Military Community Center,” found examples of cost, schedule and performance problems. They include:
n Exhaust Ducts: Flammable exhaust duct seals in the kitchen that did not meet U.S. fire safety standards. Air Force officials said it will take several months to make the ducts compliant, costing hundreds of thousands of dollars.
n Poorly constructed ceiling: A ceiling over the retail section was so weak that it could not support light fixtures.
n Misplaced escalator: An escalator did not fit into a previously-built pit.
n Leaky roof: The poorly constructed “green” roof is leaking. It is one of the biggest faults on the project and will cost millions to fix. The German company did such a bad job on the structure that Air Force officials suspect that much of the roof will have to be torn down and redone. The firm, which declared bankruptcy last year, spread tons of gravel across the top of the mall but stopped before planting grass on what was to be an environmentally friendly roof. A new contractor will have to be hired to remove that gravel and make the repairs.
n Poor coordination: One contractor installed paving stones outside of the building only to see them crushed by heavy cranes being used to finish major exterior work to the building. Another company could not install tile flooring because one firm had not finished ceiling work.
n Construction workers: Some contractors have reduced the number of workers or have quit altogether because they’re not getting paid. The Air Force has delayed the payments because it is still awaiting change orders for approval. Before September 2006, several hundred workers would normally be on site. Now there are usually less than 50.
n Understaffed Agency: German construction agency, LBB, reported that they did not have enough people to oversee the project design, process the high number of change orders and coordinate the various contractors.
n Lack of Air Force Oversight: The Air Force relaxed controls over the project so that the construction could proceed as “expeditiously as possible.”
The GAO report, the Air Force audit, video of the congressional hearing and various other documents can be found at: http://oversight.house.gov