The Pentagon’s largest single-building military construction project languishes unfinished because it is over-budget, behind schedule, and has significant design flaws. Simply put, the project is in shambles.

The project, you may be surprised to hear, is not in the United States or even in Iraq. The Kaiserslautern Military Community Center (KMCC)–K-town for short–is located on a military base 80 miles southwest of Frankfurt, Germany. The purpose of the project is to meet the requirements of the military community and others passing through Ramstein Air Base, the largest military community outside of the continental United States.

K-Town is millions over budget and nobody involved with the project has produced a credible final cost estimate. The project was supposed to be completed last year, but only 65% of the project is complete and the end date is nowhere in sight.

K-Town (which sounds more like a “boy band“ than a military project) has been called the military’s answer to the Mall of America. It includes retail and entertainment facilities, a 350-room hotel complex, recreation facilities, restaurants, a gym, a full-service travel agency, and a bank. The shopping mall portion includes approximately 844,000 square feet for retail shops, department stores, food and franchise companies.  

The Pentagon is in the middle of a construction nightmare because of a toxic recipe of corruption, mismanagement, and poor oversight. Rep. Henry Waxman (D-CA), Chairman of the House Government & Oversight Committee, noting that the main roof in the facility is falling apart, couldn’t comprehend how a “modern-day facility in a  Western county on a U.S. military base resembled the shoddy and makeshift practices of a war zone.“ This resulted in a situation where, “the contractors [are] getting rich, the work doesn’t get done and the taxpayers get soaked,“ Rep. Waxman concluded.

There is plenty of blame to go around. At the top of the list is the Air Force, which failed to provide adequate oversight of the construction itself or the contractual payments, did not review the qualification of the German contractors, and did not validate cost estimates. In accordance with NATO rules, the United States is required to use German contractors for the K-Town project and any other projects in Germany. Since the U.S. doesn’t have legal control over the actions of foreign companies, the oversight of contracts and payments is all the more important.

According to the Government Accountability Office (GAO), millions of dollars worth of invoices and change orders were paid by the Air Force with little supporting documentation. As a result, according to its own auditors, the Air Force, “improperly paid KMCC contractors $6.7 million for 248 contract items on 3 invoices.“ Even worse, the German company overseeing the project, LBB, is doing a terrible job, but receives 5.6% of every dollar spent on the project. That means the more money wasted on the project, the more profit going to LBB.

Even more worrisome is that LBB is the German equivalent of our Army Corps of Engineers, which has never been shy about wasting taxpayer dollars.

Mismanagement also did its fair share of financial damage.  First, K-Town was being built under a risky fast-track design-build process. The Air Force didn’t include other U.S. Government experts and didn’t have the oversight office properly staffed.

It should come as no surprise that this ready-made recipe for waste, fraud and abuse turned into a colossal example of poor government spending. Air Force auditors determined that the costs of K-Town have skyrocketed from $131.1 million to at least $201.6 million, a number that is likely to go higher.

There are $400 million of additional military construction projects slated for Germany over the next five years. We better learn fast what went wrong or we are guaranteed to repeat the mistakes of the K-Town debacle.