The military contractor who allegedly disappeared with $1 million of Canadian government money and failed to build an acoustic monitoring system for the navy has a question for the Department of National Defence: When are you going to pick up your equipment?

Department officials say they have been trying since 2009 to get the equipment from Applied Radar and Sonar Technologies GmbH, a German firm.

But the company is no longer registered in Germany and "cannot be contacted," according to a December 2012 briefing note prepared for senior department staff. The company's contract has been terminated and DND is going to use an international collection agency to try to recover the $1 million it already paid to Applied Radar and Sonar Technologies.

But the Citizen has tracked the firm to Izmir, a city in Turkey, and interviewed its director, Klaus Kremer.

He says not only is the transportable acoustic range equipment ready to be picked up, but DND officials know very well where he is since they have visited him at least four times over the years.

"We built the system for them," he said in a telephone interview. "What we have here is Canadian property. We have tags on everything - this is Canadian property."

How Canadian taxpayers paid $1 million for military equipment that was never delivered appears to be a story of miscommunication, company financial problems and international intrigue involving the German spy agency BND.

It dates back to 2008 when Canada signed a deal with Kremer's firm for the building and delivery of a transportable acoustic range. The device, used to monitor and verify the noise and magnetic signature of ships and submarines, was needed for the Royal Canadian Navy's submarine program.

But at the time Canada signed the deal, Kremer was in the midst of a major legal battle with German government prosecutors and the country's foreign intelligence agency, BND.

The fight, known in Germany as the Kremer Affair, started after BND agents approached Kremer in 2005 with a request that he pass along information acquired during his arms deals with foreign customers. Kremer, who had been involved in the defence industry for 40 years, says he declined that request and, shortly after, German police seized his computers and company equipment. They alleged he had been selling military gear to Israel and other nations without the proper export permits.

Kremer was eventually cleared of any wrongdoing, but the legal battle, which he sees as government retribution for his refusal to spy for the BND, left him near financial ruin.

Although German courts later decided he was eligible for compensation, the government has yet to pay him any money.

Although Canada's transportable acoustic range was built, Kremer said after the legal proceedings he didn't have the money to transport it to the West Coast, where it was to be installed.

By that time, Kremer's firm had already been paid a little more than $1 million out of the total contract amount of $1.3 million.

He readily acknowledges that under the terms of the contract he was required to transport and install the system in 2009. At the time, he contacted DND, explained his situation and requested additional funding so that could be done, but that was declined.

When informed in August by the Citizen that the newspaper was writing a story about the contract, Kremer sent an email to the DND project office reminding officials that the system was ready and asking whether it could be transported to Canada. He received an email stating that the project director was on holidays.

Kremer said in an interview that he is surprised at the Canadian government's claims he had disappeared.

"We split the project into different milestones," he explained. "Every time a milestone was ready, a representative of the Canadian government came to (Turkey) to have a look and then they paid the money. That was the agreement."

The DND documents tell a different story.

"Contractor has not delivered on key deliverables and cannot be contacted," pointed out the DND briefing note obtained by the Citizen through the access-to-information law. "Neither (Public Works and Government Services Canada) nor DND has been able to reach the contractor since January 2012."

In June 2012, with the delivery almost three years behind schedule, Public Works requested the company provide evidence as to why the contract should not be terminated. It sent letters to the company's German office and to the Turkish facility where the equipment was being manufactured.

But those letters couldn't be delivered, according to the DND briefing note, prompting Public Works to determine that Applied Radar and Sonar Technologies was no longer registered in Germany and that there was no record of the firm having a Turkish company.

The briefing stated that it would be up to DND to try to recover the $1 million and the department was going to employ an international collection agency to do that.

Kremer said that while his German office was closed, Canadian officials were well aware of the Turkish facility where the acoustic system was built and stored since they had visited the site about five times over the years.

DND would not answer why, if site visits had been previously made to the Turkish facility by department officials, it could no longer find the company. It also declined to answer why DND had not sent someone back to Turkey to determine what had happened to the equipment?

The department also declined to provide information about what organization in DND inspected the equipment, who conducted the site visits and how many visits were done.

"It is normal for contracts such as that being queried for DND staff to conduct site visits to review progress, meet with contractors, and review contractor reporting," noted an email from DND spokeswoman Jocelyn Sweet. "As DND is assessing its options for recovery, we are unable to provide further details on this specific contract at this time."

Kremer said he has had good relations with the military personnel involved in the technical aspects of the project on the West Coast, but he suspects there has a disconnect with those in DND headquarters in Ottawa who are handling the financial aspects of the contact. He is still ready to install the system if Canada can transport it, he added.

"If we can get to a deal I'm willing to do that," Kremer said. "(But) I have the feeling they don't want to talk to me."