Air Force faces criticism over hotel construction project

Price tag has ballooned by $50 million to $200 million, analyst says; Air Force official disagrees, citing final cost of about $174 million.

The Air Force last week was accused of irresponsible management and lax oversight of construction of a 350-room hotel and massive retail mall at a military base in Germany during a hearing of the House Oversight and Government Reform Committee.

The Government Accountability Office and committee members criticized the Air Force for its handling of the unfinished construction of the Kaiserslautern Military Community Center on the grounds of Ramstein Air Base in Germany.

An Air Force audit dated June 22 reported that the Air Force sought authorization in the fiscal 2005 military construction budget for $131.1 million for the project, to be added to $15.8 million to come from the German government.

As of January 2006, the project authorization was increased to $164.3 million in addition to the German funds, the audit said.

GAO's Gregory Kutz testified that the project was initially slated to cost $150 million and be finished in late 2005, but the cost has mounted to about $200 million and fraud investigations are now under way.

Under heated questioning, Air Force Brigadier Gen. Danny Gardner, who oversees installations and mission support in Europe, sought to shift blame to a German contractor for what he admitted has been "poor project execution."

Gardner disputed Kutz's and the GAO's testimony that the project had run so far over budget that it is impossible to make a reliable estimate of its eventual cost.

Gardner insisted the final project cost is now estimated at $174 million -- below the $200 million budgeted. Kutz told the panel that an assessment of the final cost was difficult because there is no scheduled completion date and there have been more than 500 changes in the project, mostly due to poor design and insufficient design review.

Gardner blamed an agreement between the U.S. and German governments that any contracting work in Germany must be done by German contractors, not U.S. ones.

Gardner added that the Air Force oversight team was understaffed and that he did not realize the project was running behind until just before it was to open in December 2005.

Asked by several committee members if anyone in the Air Force has been fired or disciplined or if the Air Force takes any responsibility, Gardner said some Germans were fired but no U.S. official lost his job.

Oversight and Government Reform ranking member Tom Davis, R-Va., called the project "a disaster in the form of inadequate and unfocused high-level leadership, poor planning, poorly designed requirements, and an inadequate number of trained personnel overseeing the project."

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