A Defense Department investigation that revealed Air Force officials improperly steered a $50 million Thunderbirds multimedia production contract to a well-connected company has found other questionable deals.

The Defense Department inspector general’s nearly two-year investigation into the 99th Contracting Squadron at Nellis Air Force Base, Nev., has found evidence that:

• Private firms performed work before contracts were awarded.

• Contracting personnel backdated documents.

• Officials eliminated competition for a favored vendor by funneling money to it through a AlaskaNative corporation.

The IG subsequently launched in July 2007 a separate, more thorough audit of eight contracts worth $57.2 million awarded by the 99th Contracting Squadron between 2003 and 2005. The audit results will be released in late May, IG spokesman Gary Comerford said.

Comerford would not say how many of the contracts had irregularities, but the IG report includes evidence of potential problems with at least five contracts related to the Thunderbirds.

Air Force officials at the Pentagon declined to comment for this story, but a memo sent to reporters April 17 points out that senior leaders have taken many steps since 2005 to improve the contracting process. Those include strengthening legal oversight and review and providing more avenues for people to raise red flags if they see problems.

Three Air Force members — including Air Force Maj. Gen. Stephen Goldfein, the vice director of the Joint Staff at the Pentagon — were reprimanded in February for their roles in steering the $50 million contract, awarded in December 2005, to Strategic Message Solutions, a firm headed by Ed Shipley, a longtime friend of the Thunderbirds, and Gen. Hal Hornburg, who had retired Jan. 1, 2005, as commander of Air Combat Command.

The investigation into the multimedia contract expanded when evidence of problems with other contracts cropped up. It is not yet known whether the subsequent, broader audit will lead to more disciplinary action or criminal prosecution.

The U.S. Attorney’s office in Las Vegas originally declined to prosecute in May 2007 because of lack of evidence, but the IG report notes that further evidence and documents have been obtained since then.

Sole-source contract

One of the deals scrutinized by IG investigators was a $128,000 contract in 2004 to upgrade the sound system used at Thunderbird shows.

The contract drew investigators’ attention because it was awarded to Chugach McKinley, an Alaska Native-owned firm, on Sept. 2, 2004, a day before the company even submitted a proposal for the project, according to the IG report.

Contracting personnel, whose names were blacked out of the IG report for privacy reasons, told investigators that Hornburg — who was then still ACC commander — and Brig. Gen. Gregory Ihde, then commander of the 57th Wing at Nellis, had wanted to give the work to Framework Sound, a California-based sound production studio. Ihde retired from the Air Force in January 2007.

Ken Dahlinger, Framework’s owner, told investigators an Air Force official informed him his company could not be awarded a sole-source contract because the amount was more than $100,000, according to the report.

Instead, Dahlinger told investigators, the contract would be awarded to Chugach McKinley, which could legally be awarded sole-source contracts of any size because it is a Alaska Native-owned business. Chugach McKinley would then subcontract the work to Framework Sound, Dahlinger was told.

Framework performed the work and was paid $120,000 of the $128,000 contract amount, Dahlinger told investigators. Chugach McKinley kept the remaining $8,000 “for just shuffling papers and subcontracting the work,” according to the report.

A contracting officer with the 99th told investigators “that ... Ihde ... informed him that directions came down from General Hal Hornburg, the ACC Commander, to award the contract to the Alaska company to avoid competition.”

Dahlinger told investigators Ihde sent him an e-mail saying “the money was flowing through the Eskimo company.”

Dahlinger declined to discuss the contract with Air Force Times, a sister publication of Federal Times, saying only, “I didn’t do the funneling.”

Ihde did not return phone calls requesting comment and Hornburg declined to comment, but Ihde told investigators that neither he nor Hornburg played a role in awarding the contract to Chugach McKinley.

The report also says Tim Hopper, a retired Air Force colonel and former vice commander of the Air Warfare Center, “seemingly played a go-between role in the contract awarded to Chugach McKinley.” Hopper is president of Chugach Industries, a corporate sister company of Chugach McKinley.

Barney Uhart, president of Chugach Alaska Corp., the parent corporation of both companies, confirmed that Hopper brought the Air Force contract to Chugach and that the Air Force directed the company to subcontract the work to Framework Sound, but he said the company did nothing wrong.

“It was obvious to us that the Air Force was in a time crunch and requested assistance to meet their timeline,” he said in an e-mail. “I have reviewed the IG’s report and am dismayed at some of the comments regarding Chugach’s performance ... on this contract. Had the IG’s office contacted Chugach during their investigation, we would have provided the documentation to support our participation.”

At least three smaller contracts awarded by the 99th Contacting Squadron showed irregularities, including companies performing work before contracts were awarded and backdating supporting documentation, according to the report.