The Air Force has freakin' had it with one of its major private housing providers and has given them 90 days to get their shit together, or else.
Sen. James Inhofe (R-Okla.) announced last week that the Air Force has put Balfour Beatty Communities (BBC) on notice after finding additional housing problems at Tinker Air Force Base in Oklahoma.
“Seven months ago, Balfour Beatty, the company responsible for the housing at Tinker, testified in front of the Senate Armed Services Committee that they would move quickly to address systemic issues,” Inhofe said in a press release. “They have not.”
On its website, BBC identifies itself as the “nation's largest provider of military housing,” with operations at 55 military installations across the U.S. — including approximately 15,500 Air Force homes, 18,900 Army homes, and 8,600 Navy homes.
In a letter to BBC, Assistant Secretary of the Air Force for Installations, Environment and Energy, John Henderson, said that they discovered new problems at Tinker “that raise concerns with serious life, health, and safety issues,” which join “a growing list of serious construction, maintenance, repair, management, and oversight performance failures across BBC's portfolio of Air Force housing projects.”
Inhofe mentioned in his press release continuous mold, and “the lack of firewall protections between newly built housing units.”
Air Force Col. Paul Filcek, wing commander at Tinker AFB, told Oklahoma City Fox affiliate station, KOKH that there are “more reported cases of mold than there ever have been” on-base.
“The demand has risen,” he said, adding that they're currently handling mold cases at 73 to 85 homes.
So, the Air Force has given BBC 90 days to provide them with a comprehensive plan to clean up its act — at all its Air Force installations, not just Tinker AFB — or the service will initiate a formal dispute process which could ultimately end in BBC's contract being terminated.
A BBC spokesperson told Task & Purpose that the company is “redoubling its efforts to improve maintenance outcomes at Tinker.
“While the Acting Secretary of the Air Force acknowledged that problems like mold would always pop up, he has required that we present a more robust plan to address maintenance concerns,” the spokesperson said. “The company is committed to developing and executing a comprehensive maintenance plan, and is determined to ensure that the expectations of the Air Force are met.”
Laura McAndrews, an Air Force spokeswoman, told Task & Purpose that in the event BBC doesn't improve, a formal dispute resolution process will be initiated, which identifies the project owner's “failure to comply with specific performance obligations.” The service issues a “cure notice,” which demands that the company fix the identified issues. If that doesn't work, BBC could face legal action, or get the boot entirely.
“Formal disputes can have serious financial and operational consequences for a privatized housing project as a failure to cure can result in an Event of Default under project documents,” McAndrews said. “In the extreme, an Event of Default can lead to a default termination notice to the project owner resulting in a number of remedies ranging from legal action to management agreement and/or lease termination.”
In June this year, Reuters reported with CBS that BBC “falsified its Tinker Air Force Base maintenance records for years” in order to appear responsive to resident complaints, and secure its incentive fee bonuses from the Air Force.
Following that explosive report, the Navy also opened an investigation into the company as well, according to a separate Reuters report, which the Navy confirmed to Task & Purpose.
Cmdr. Pamela Rawe, a spokesperson for Navy Installations Command, said in a statement that the BBC's incentive fee package for the time period of July to December 2018 “is currently under review” pending a Naval Audit Service audit, and that “no decision has been made to either pay or withhold the property management incentive fees.”
The BBC spokesperson acknowledged that the Navy requested BBC to “review its internal practices and records verify the accuracy of incentive payments.”
The spokesperson added that BBC “strives” to provide residents with “the highest quality living experience,” and that it is “disappointing” when it falls short of resident expectations or self-imposed standards.
While Congress has played with the idea of cutting contracts with companies if they fail to perform, the services have mostly avoided venturing into “what-if” territory — as in, what if these housing companies don't shape up the way you want them to — primarily focusing on things like the Tenant Bill of RIghts, which the Defense Department said would be released soon; and the withholding of incentive fees for companies who don't perform, though a report from the Army Inspector General cast doubt on that as an effective option to force improvement.
But Inhofe, the Chairman of the Senate Armed Services Committee, said in the press release that If companies keep screwing up, the services need to show them the door.
“While I applaud the Air Force for taking these actions, I wonder why it has taken so long,” Sen. Inhofe said the release. “I encourage the other services to step up and do the same if they have contractors that are not taking care of our families. … These problems need to be fixed now and forever. If the current set of housing contractors won't do it, the Air Force and the other services need to find someone who will.”