Company officials have not responded to numerous messages seeking comment.
Stephen D. Abney, spokesman for the Army's Joint Munitions Command, said storage space "wasn't a factor in us letting the contract" because Explo planned to sell the material.
Still, the company told the Army it had somewhere to put the millions of pounds of explosives it would receive. Aside from bunkers in Louisiana, it claimed to have 600 acres of underground storage at a Kentucky facility. Yet Kentucky authorities say the company doesn't have the needed permits.
The Army gave Explo a contract in March 2010 to demilitarize up to 450,000 propelling charges a year. The contract was for $2.9 million annually with options for renewal for four years.
Each charge contains 20.6 pounds of M6, according to Explo Systems' plan, meaning the company could take in nearly 9.3 million pounds each year under the contract.
In the proposal, Explo Systems Inc. said it had the capacity to store 10 million pounds of material at Camp Minden â¿¿ a number verified by Louisiana authorities. But some of the storage space was taken up by other material.
In addition, the proposal says there is over "70,000,000 pounds of capacity currently unused" at "its slurry facility the Kentucky Powder Company site." Kentucky Powder is an explosives company with offices in Lexington and Mount Vernon, Ky.
Linda Potter, a spokeswoman with the Kentucky Department for Natural Resources, said neither company has permits to store Explo Systems' propellant.
"To store explosives or lease space for Explo, both Kentucky Powder and Explo Systems would need to obtain the appropriate permit from the Explosives and Blasting Division. Neither company currently holds this permit, nor did they in 2010," Potter said.
Abney said Army officials visited Kentucky Powder in May 2010 because Explo listed Kentucky Powder as a purchaser of its product.