A fog of secrecy has shrouded the $592 million contract for building the US embassy in Baghdad ever since it was quietly awarded in summer 2005 to a Kuwaiti contractor.

The award, in itself, is odd. New York-based Framaco claims to have made the least expensive bid. One company source told me Framaco was $60 million to $70 million less than First Kuwaiti General Trading and Contracting, a.k.a., First Kuwaiti, the company that quietly landed the controversial contract. (Update: The company source called me more than a year later to claim I misunderstood the conversation, then later claimed my reporting was a flat out lie, then Framaco landed a contract to work on the very same embassy. I stand by my reporting.)

Then, there is this mysterious tale as told by Cosmopolitan, Inc., of Columbia, Md.

Cosmopolitan has been building and renovating US embassies for 22 years. The company specializes in secured and controlled access areas — just the kind of thing you might expect for a Baghdad embassy project, which is designed as if it were Fort Apache on steroids. And, as an American firm, Cosmopolitan holds top security clearances — just the kind of thing a foreign firm like First Kuwaiti can never qualify for. (And that’s another brewing story.)

In July 2005, Cosmopolitan says the US State Department’s Overseas Buildings Operations division (OBO) approached the company and asked if Cosmopolitan would be interested in building the U.S. Embassy in Iraq.

That sort of meeting would be very strange, if true. Cosmopolitan didn’t know it, but OBO was already soliciting competing bids for the project, which when completed will be the largest US embassy in the world — the size of Vatican City.

Cosmopolitan said, yes, of course it would love to have the project. After all, OBO was seemingly courting Cosmopolitan for the work and we’re talking the whole enchilada here: a $592-million job.

But there was just one hitch, Cosmopolitan recalls OBO as saying: The lead subcontractor for all the general construction unrelated to the classified work must be promised to a little-known Kuwait company called First Kuwaiti.

Okay….Cosmopolitan says it followed through by submitting a proposal followed by several meetings conducted with James Golden, the managing director for the Iraq Project at OBO who oversees the project to this day. A few months later, Cosmopolitan says it learned that First Kuwaiti secretly had been awarded the $592-million contract that very summer for building all the non-secured portions.

It’s a long story, but the abridged version is that Cosmopolitan was aced out of the embassy work entirely. Cosmopolitan is not very happy and is not taking this quietly, especially after spending a good deal of money on getting ready to deploy….and there is a good deal more to tell.

I’ll get back to it soon.