updated 3/9/2010 6:20:30 PM ET 2010-03-09T23:20:30

The Navy says that three dogs died and dozens more were in poor health after being neglected by a private security contractor in Chicago that had been hired to train the dogs to detect explosives.

A team of military handlers discovered the dogs last October at a facility run by Securitas Security Services USA after the Navy terminated a $7.5 million contract.

Navy spokesman Capt. William Fenick said that of the 49 dogs discovered, two were dead and the rest were in poor health. Another dog died soon after being recovered.

Securitas Security Services did not immediately provide comment.

The incident was first reported by The Virginian-Pilot, which says it obtained a picture of one of the rescued dogs, whose rib cage and hip bones were protruding.

The discovery is the latest in a string of contracting woes for the Defense Department. Lawmakers and government watchdog groups say they are concerned that the military is relying too heavily on outside vendors to do many of the jobs that should be handled internally.

In December 2008, the Navy signed a $350 million contract with Lockheed Martin Corp. to help guard its installations. The five-year contract included $7.5 million for 49 highly specialized K-9 units to sniff out explosives. To meet the K-9 requirement, Lockheed in turn hired Securitas Security Services, headquartered in Parsippany, N.J.

But after the dogs failed to demonstrate they could perform as promised, the Navy canceled the contract in July, Fenick said. The team of handlers were sent three months later to pick up the dogs from the Securitas' dog-training facility near Chicago.

Fenick declined to say how much the Navy had already paid Lockheed under the agreement, saying that the contract details are under review.

The state of Illinois is conducting a separate investigation into the allegations.

Fenick said that of the 46 dogs that survived, eight were adopted privately and the rest were deployed at various Navy installations after having completed training.

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