[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2492 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 2492

 To provide for improved oversight of and accountability for military 
               housing privatization initiative projects.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 17, 2007

Mr. Pryor (for himself, Mr. Chambliss, and Mrs. Lincoln) introduced the 
 following bill; which was read twice and referred to the Committee on 
                             Armed Services

_______________________________________________________________________

                                 A BILL


 
 To provide for improved oversight of and accountability for military 
               housing privatization initiative projects.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Military Housing Privatization 
Initiatives Projects Oversight and Accountability Act of 2007''.

SEC. 2. IMPROVED OVERSIGHT AND ACCOUNTABILITY FOR MILITARY HOUSING 
              PRIVATIZATION INITIATIVE PROJECTS.

    (a) In General.--Subchapter IV of chapter 169 of title 10, United 
States Code, is amended by adding at the end the following new section:
``Sec. 2885. Oversight and accountability for privatization projects
    ``(a) Guaranteed Maximum Price Contract and Performance Schedule.--
            ``(1) In general.--Each military housing privatization 
        initiative project shall be carried out under a guaranteed 
        maximum price contract and accompanied by a performance 
        schedule.
            ``(2) Terms.--Each contract under this subsection shall be 
        reviewed by an independent third party and certified as 
        reasonable and consistent with local construction prices and 
        geographic costs of living standards established by the 
        Department of Defense.
    ``(b) Oversight and Accountability Measures.--Each Secretary 
concerned shall prescribe regulations to effectively oversee and manage 
military housing privatization initiative projects under the 
Secretary's jurisdiction in order to maintain project performance and 
schedule. The regulations shall include the following requirements for 
each privatization project:
            ``(1) Monthly site visits.--The chief engineering officer 
        at the local military installation shall conduct monthly site 
        visits and provide reports on the progress of the privatization 
        project. The reports shall be endorsed by the commander at such 
        installation and submitted quarterly to the chief officer for 
        installations and environment of the respective military 
        department and the Deputy Under Secretary of Defense for 
        Installations and Environment.
            ``(2) Monthly meetings.--The chief engineering officer at 
        the local military installation, and, as applicable, the 
        resident construction manager, privatization asset manager, 
        bondholder representative, project owner, developer, general 
        contractor, and construction consultant for the project shall 
        conduct monthly meetings to ensure that the project meets 
        performance and schedule requirements and that appropriate 
        operating and ground lease agreements are in place and adhered 
        to.
            ``(3) Notices of deficiency.--If a project is 90 days or 
        more behind schedule or more than 20 percent over budget, the 
        chief officer for installations and environment of the 
        respective military department shall submit a notice of 
        deficiency to the Deputy Under Secretary of Defense for 
        Installations and Environment, the Secretary concerned, the 
        bondholder representative, and the trustee for the project.
            ``(4) Correction of deficiencies.--
                    ``(A) Cure notice.--Not later than 15 days after 
                the submittal of a notice of deficiency under paragraph 
                (3), the Secretary concerned shall submit to the 
                project owner, developer, or general contractor 
                responsible for the project a summary of deficiencies, 
                or cure notice, related to the project.
                    ``(B) Official letter of notice.--If the project 
                owner, developer, or general contractor responsible for 
                the project is unable, within 30 days after receiving a 
                cure notice under subparagraph (A), to make progress on 
                the issues outlined in such notice, the Secretary 
                concerned shall submit to the project owner, developer, 
                or general contractor, the bondholder representative, 
                and the trustee an official letter of notice addressing 
                the deficiencies and detailing the corrective actions 
                that should be taken to correct the deficiencies.
                    ``(C) Certification required to continue certain 
                projects.--If the project owner, developer, or general 
                contractor responsible for the privatization project is 
                unable, within 60 days after receiving a cure notice 
                under subparagraph (A), to make progress on the issues 
                outlined in such notice, the Deputy Under Secretary of 
                Defense for Installations and Environment shall certify 
                to the congressional defense committees that continuing 
                the project is in the best interest of the United 
                States or the project shall be terminated for default.
    ``(c) Options for Combining Deficient Projects With Projects of 
Other Military Departments.--Before terminating a ground lease or 
foreclosing on a military construction privatization project, the 
Secretary concerned, in conjunction with the Deputy Under Secretary of 
Defense for Installations and Environment, shall examine options for 
combining the project with a planned project or projects for which a 
request for proposal or request for qualification is expected to be 
issued within 180 days by another military department.
    ``(d) Availability of Sufficient Reserves.--The Secretary concerned 
shall ensure that sufficient funds are available for the completion of 
each military housing privatization initiative project to provide for 
the timely completion of the project in the event of default, including 
to provide for the payment of subcontractors for the performance of 
work already accomplished and necessary to complete the project.
    ``(e) Conditional Release of Payments for Projects.--
            ``(1) Sequestration of funds.--Each contract or agreement 
        for a military housing privatization initiative project shall 
        provide for the sequestration of funds to be paid under such 
        contract or agreement into a separate account to be known as 
        the `project lockbox'.
            ``(2) Release of funds.--Funds sequestered under paragraph 
        (1) shall not be paid to the project owner, developer, or 
        general contractor under the project contract or agreement 
        until the Secretary concerned is provided a report signed by 
        the project owner, developer, or general contractor, the 
        bondholder representative, the trustee, and construction 
        consultant that includes the following:
                    ``(A) A detailed list of payments to be made under 
                the contract or agreement.
                    ``(B) The amount of each such payment.
                    ``(C) The total amount of such payments that have 
                been made to date.
                    ``(D) A comparison between--
                            ``(i) the percentage of the total capital 
                        sources for the project that have been 
                        expended; and
                            ``(ii) the percentage of work that has been 
                        completed on the project.
    ``(f) Community Meetings.--
            ``(1) In general.--Whenever a military construction 
        privatization project is awarded, the chief officer for 
        installations and environment of the respective military 
        department and the commanding officer of the local military 
        installation shall hold a meeting with the local community to 
        communicate the following information:
                    ``(A) The nature of the project.
                    ``(B) Any contractual arrangements.
                    ``(C) Potential liabilities to local construction 
                management companies and subcontractors.
            ``(2) Publication in federal register.--The requirement 
        under paragraph (1) may be met by publishing the information 
        described in such paragraph on the Federal Business 
        Opportunities (FedBizOpps) Internet website.
    ``(g) Required Qualifications.--The Secretary concerned shall 
certify that the project owner, developer, or general contractor that 
is selected for each military housing privatization initiative project 
has construction experience commensurate with that required to complete 
the project.
    ``(h) Required Bonding Levels.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        Secretary concerned shall ensure that the project owner, 
        developer, or general contractor responsible for a military 
        housing privatization initiative project is fully bonded for 
        the project, including by obtaining payment and performance 
        bonds in an amount not less than 100 percent of the maximum 
        price allowable under the contract or agreement for the overall 
        project and each phase of the project.
            ``(2) Exceptions.--
                    ``(A) Waiver.--The Deputy Under Secretary of 
                Defense for Installations and Environment may waive the 
                bonding requirement under paragraph (1) to permit a 
                bonding level as low as 50 percent. Notice of such 
                waiver shall be submitted to the congressional defense 
                committees, including the rationale for such lower 
                bonding level.
                    ``(B) Alternative securities.--The Secretary 
                concerned may accept in lieu of the full bonding 
                required under paragraph (1) an alternative type of 
                security, including a corporate guarantee, if the 
                Secretary determines that such security meets or 
                exceeds the levels of coverage required under such 
                paragraph. Notice of such alternative security shall be 
                submitted to the congressional defense committees, 
                including the rationale for accepting such alternative 
                security.
    ``(i) Certifications Regrading Previous Bankruptcy Declarations.--
If a military department awards a contract or agreement for a military 
housing privatization initiative project to a project owner, developer, 
or general contractor that has previously declared bankruptcy, the 
Secretary concerned shall specify in the notification to Congress of 
the project award the extent to which the issues related to the 
previous bankruptcy impact the ability of the project owner, developer, 
or general contractor to complete the project.
    ``(j) Communication Regarding Poor Performance.--The Deputy Under 
Secretary of Defense for Installations and Environment shall prescribe 
regulations to provide for regular and appropriate communication 
between representatives of the military departments and bondholders for 
military housing privatization initiative projects to ensure timely 
action to address inadequate performance in carrying out projects.
    ``(k) Reporting of Efforts To Select Successor in Event of 
Default.--In the event a military housing privatization initiative 
project enters into default, the chief officer for installations and 
environment of the respective military department shall submit a report 
to the congressional defense committees every 30 days detailing the 
status of negotiations to award the project to a new project owner, 
developer, or general contractor.
    ``(l) Effect of Unsatisfactory Performance Rating on Affiliated 
Entities.--In the event the project owner, developer, or general 
contractor for a military construction project receives an 
unsatisfactory performance rating due to poor performance, each parent, 
subsidiary, affiliate, or other controlling entity of such owner, 
developer, or contractor shall also receive an unsatisfactory 
performance rating.
    ``(m) Effect of Cure Notices on Contractors and Affiliated 
Entities.--
            ``(1) In general.--The Deputy Under Secretary of Defense 
        for Installations and Environment shall keep a record of all 
        plans of action or cure notices issued to a project owner, 
        developer, or general contractor under subsection (b)(4), 
        including the identity of each parent, subsidiary, affiliate, 
        or other controlling entity of such owner, developer, or 
        contractor.
            ``(2) Consultation.--Each military department shall consult 
        the records maintained under paragraph (1) when reviewing the 
        past performance of owners, developers, and contractors in the 
        bidding process for a contract or other agreement for a 
        military housing privatization initiative project.
    ``(n) Annual Reports.--Each Secretary concerned shall submit to the 
congressional defense committees an annual report outlining lessons 
learned from the selection, approval, and implementation of military 
housing privatization initiative projects by the respective military 
department.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such subchapter is amended by adding at the end the following new item:

``2885. Oversight and accountability for privatization projects.''.
                                 <all>