    [House Hearing, 116 Congress]
    [From the U.S. Government Publishing Office]

                             [H.A.S.C. No. 116-51]

                              PRIVATIZED HOUSING:

                            ARE CONDITIONS IMPROVING

                           FOR OUR MILITARY FAMILIES?

                                   __________

                                    HEARING

                                   BEFORE THE

                           SUBCOMMITTEE ON READINESS

                                     OF THE

                          COMMITTEE ON ARMED SERVICES

                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED SIXTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                  HEARING HELD

                                DECEMBER 5, 2019

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                                  __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    41-473                      WASHINGTON : 2021

    --------------------------------------------------------------------------------------

                          SUBCOMMITTEE ON READINESS

                      JOHN GARAMENDI, California, Chairman

    TULSI GABBARD, Hawaii                DOUG LAMBORN, Colorado
    ANDY KIM, New Jersey, Vice Chair     AUSTIN SCOTT, Georgia
    KENDRA S. HORN, Oklahoma             JOE WILSON, South Carolina
    CHRISSY HOULAHAN, Pennsylvania       ROB BISHOP, Utah
    JASON CROW, Colorado                 MIKE ROGERS, Alabama
    XOCHITL TORRES SMALL, New Mexico     MO BROOKS, Alabama
    ELISSA SLOTKIN, Michigan             ELISE M. STEFANIK, New York
    VERONICA ESCOBAR, Texas              JACK BERGMAN, Michigan
    DEBRA A. HAALAND, New Mexico
                   Jeanine Womble, Professional Staff Member
                     John Muller, Professional Staff Member
                               Sean Falvey, Clerk

                                C O N T E N T S

                                  ----------
                                                                       Page

                  STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

    Garamendi, Hon. John, a Representative from California, Chairman,
      Subcommittee on Readiness......................................     1
    Lamborn, Hon. Doug, a Representative from Colorado, Ranking
      Member, Subcommittee on Readiness..............................     3

                                   WITNESSES

    Bliss, Jarl, President, Lincoln Military Housing.................    10
    Ehle, John, President, Hunt Military Communities, Hunt Companies,
      Inc............................................................     6
    Hickey, Denis, Chief Executive Officer, Lendlease Americas.......     7
    Picerne, John G., Founder and Chief Executive Officer, Corvias
      Group, LLC.....................................................     5
    Taylor, Richard C., President, Facility Operations, Renovations
      and Construction, Balfour Beatty Communities...................     9

                                    APPENDIX

    Prepared Statements:

        Bliss, Jarl..................................................    96
        Ehle, John...................................................    53
        Garamendi, Hon. John.........................................    33
        Hickey, Denis................................................    69
        Lamborn, Hon. Doug...........................................    35
        Picerne, John G..............................................    37
        Taylor, Richard C............................................    82

    Documents Submitted for the Record:

        Representative Brown letter to COL Spragg....................   111
        Balfour Beatty, Attachment C, Temporary Relocation Policy....   113
        Lincoln Military Housing, Standard Procedures for Operations
          and Maintenance of Asbestos and Lead Based Paint...........   116
        Lincoln Military Housing, Water Intrusion/Mold Operations and
          Maintenance Management System..............................   168
        Corvias, Work Order Priority Schedule........................   185

    Witness Responses to Questions Asked During the Hearing:

        Ms. Houlahan.................................................   189
        Ms. Stefanik.................................................   191

    Questions Submitted by Members Post Hearing:

        Mr. Brown....................................................   212
        Ms. Haaland..................................................   208
        Ms. Houlahan.................................................   197
        Ms. Stefanik.................................................   205

    .
    PRIVATIZED HOUSING: ARE CONDITIONS IMPROVING FOR OUR MILITARY FAMILIES?

                                  ----------

                      House of Representatives,
                           Committee on Armed Services,
                                     Subcommittee on Readiness,
                            Washington, DC, Thursday, December 5, 2019.
        The subcommittee met, pursuant to call, at 1:00 p.m., in
    room 2118, Rayburn House Office Building, Hon. John Garamendi
    (chairman of the subcommittee) presiding.

    OPENING STATEMENT OF HON. JOHN GARAMENDI, A REPRESENTATIVE FROM
            CALIFORNIA, CHAIRMAN, SUBCOMMITTEE ON READINESS

        Mr. Garamendi. My colleague, Mr. Lamborn, is definitely
    tied up with voting that is going on in the Natural Resources
    Committee. He will be along shortly. Mr. Scott will stand in
    for him and we will pick up Mr. Lamborn. You can either----
        Mr. Scott. I will read his statement.
        Mr. Garamendi. You will read his statement. Very good.
        Before we get started, I request unanimous consent that a
    member of the full committee be allowed to join us, Mr. Brown
    who is behind me, and participate in the questions. And there
    is a formal way. I ask unanimous consent that a non-
    subcommittee member be allowed to participate in today's
    hearing after all the subcommittee members have had an
    opportunity to ask questions. Is there an objection?
        There being none, the non-subcommittee member is recognized
    at the appropriate time for 5-minute question.
        Okay, with that the committee will come to order. Ladies
    and gentlemen, I call the committee to order, the Readiness
    Subcommittee, the Armed Services Committee.
        Since February of this year, this subcommittee has been
    conducting extensive oversight of the privatized military
    housing program. We first heard about the systemic failures in
    the privatized military family housing program from a panel of
    courageous military spouses who provided graphic and disturbing
    testimony about lead, mold exposure, rodent infestations, rude
    and dismissive house management, and ineffective oversight of
    the program by the services.
        Then we heard from the assistant military service
    secretaries on their efforts to address the failures of
    oversight that led to the privatized military housing crisis
    and the plans of the services to continue to make improvements.
    Today, we will hear from five of the private military housing
    partners for their perspective and, importantly, their plans
    for bringing family housing back to the level our military
    families deserve.
        I also want to make one thing clear. While we do not have
    all of the privatized military housing partners present today,
    that in no way means that those who are not here are off the
    hook. We are watching them. We expect them to do right by the
    military families that they provide services to. Our oversight
    of this issue will continue, and we are watching not only those
    five that are here, but those who are not.
        I have heard troubling reports about the Michaels
    Organization, Michaels Organization/Clark Realty Capital. I am
    particularly concerned by reports about the abusive use of
    nondisclosure agreements. For all of the housing partners,
    whether you are here today, I am putting all of you on notice
    that this committee will be watching, and we will not tolerate
    in any way the abusive and problems that we have seen. It is
    deeply troubling that I am still, after these months, getting
    reports that certain partners continue to show a blatant
    disregard for the seriousness of the issues facing our military
    families and, frankly, a lack of respect for our service
    members and their families. They deserve better. While it is
    clear that the private partners and military services have been
    working to improve conditions and processes since we first
    heard from the families in February, this committee and many of
    our members still hear from concerned military families who
    continue to struggle with getting quality resolution of the
    maintenance concerns and some of the unprofessional property
    management staff. There is work yet to be done and we will
    continue to follow up on these issues until they are resolved
    to the satisfaction of the military families and this
    committee.
        One of the themes that has permeated our discussions about
    privatized family housing is the issue of ineffective
    management particularly at the installation level. The symptoms
    of this problem have taken many forms including disrespectful
    customer service personnel, inexperienced maintenance teams
    performing low-quality maintenance, and negative consequences
    resulting from wrong contract performance incentives. We have
    heard about the Department of Defense initiatives to address
    these issues, but because day-to-day management is within the
    purview of the private partner, I am interested in hearing what
    you have to say about what you are doing to change the culture
    at the installation level.
        As military services have recommitted to their oversight
    role, they are working to improve their processes and refine
    the metrics that we use to measure the performance of each
    housing project. I am looking forward to hearing from our
    witnesses today about the degree to which they are cooperating
    with these initiatives and the steps that they are taking to
    ensure that the housing enterprise is as transparent as
    possible.
        Counterproductive practices such as closing maintenance
    work orders before the problems are resolved in order to
    artificially bolster closure statistics or asking tenants to
    sign nondisclosure agreements as a matter of routine when they
    move out of a unit are simply unacceptable.
        As we move into 2020, the focus now must be on action. Not
    only must corrective policies and processes be instituted
    across the enterprise, but you must develop mechanisms to
    ensure the sustainment of positive change and the sharing of
    best practices to ensure our families receive high-quality
    housing regardless of where they live. We ask our service
    members and their families to sacrifice enough in service to
    their country. We will not accept substandard housing as well.
    These families deserve better and this committee will demand
    that they get the best.
        [The prepared statement of Mr. Garamendi can be found in
    the Appendix on page 33.]
        Mr. Garamendi. Mr. Lamborn, thank you so much for joining
    us. I have explained that you were in a committee markup
    casting votes. I am sure that they were all to----
        [Audio malfunction in hearing room.]
        Mr. Garamendi. Mr. Lamborn, please.

    STATEMENT OF HON. DOUG LAMBORN, A REPRESENTATIVE FROM COLORADO,
               RANKING MEMBER, SUBCOMMITTEE ON READINESS

        Mr. Lamborn. You will be just as satisfied. And thank you
    for having this hearing. Thank you all for being here as
    witnesses. Thank you for everyone in the audience showing your
    concern.
        Today, we will hear testimony from five of the companies
    that make the privatized military family housing model work. As
    someone whose district has almost 48,000 military members, and
    like the chairman, I have also been deeply troubled by the lack
    of oversight of this program and our military families deserve
    better.
        Our committee has heard significant concerns about
    insufficient mold remediation and terrible customer service at
    numerous military installations, most recently at MacDill Air
    Force Base Florida and Fort Belvoir. We are not going to
    address them today, but there have also been allegations of
    fraud in a few extreme cases.
        Now, according to a survey released earlier this year by
    the Military Family Advisory Network, 63 percent of Fort Carson
    respondents who live in my district said their units needed
    better maintenance, repairs, or remediation. The committee has
    heard horror stories about mold, rat infestations, and what
    could generously be described as poor customer service.
        The Military Housing Privatization Initiative began as
    public/private ventures or P/PVs in 1996 as means to modernize
    family housing, improve efficiency, and grow reserve accounts
    for future investments. Oversight of the program is challenging
    because each military department manages their programs
    differently and the respective projects are governed by unique
    legal agreements. The Army has a total of 35 projects, the Navy
    and Marine Corps have 15, and the Air Force has 32.
        Oversight is further complicated for Army and Navy projects
    because they are partners with the developers in limited
    liability companies with both sides investing capital. My
    sincere hope is that the attention the military family housing
    has received over the last year has served as a wake-up call to
    both the military partners and to the housing partners. We need
    this model to work, but not at the expense of military
    families. Every dollar wasted through mismanagement or
    incompetence diminishes the long-term viability of the reserve
    accounts that are vital for future recapitalization.
        The House and Senate both passed significant bipartisan
    legislation in their defense bills this year and I look forward
    to enacting meaningful reform. First and foremost among these
    will be a tenant's bill of rights. The military departments
    have an inherent responsibility to provide oversight for these
    projects. A recent Air Force IG [Inspector General] report
    found ``a pervasive misperception that when housing was
    privatized it was effectively outsourced. Leaders at many
    levels did not actively engage as they might have on other
    issues, based upon misunderstanding of their authority.''
        We have heard from Army families that some installation
    commanders characterized the government as the weaker or 49
    percent partner in these housing agreements, implying that they
    have limited means to address shortcomings. Oversight is
    inherently governmental, and it is not optional. On some
    installations there is confusion regarding the identity of the
    installation housing office and the office of the housing
    partner or third-party management company. It should be crystal
    clear to a family whether they are speaking to someone
    representing the installation commander or to a representative
    of the housing partner.
        And we must simultaneously reform while preserving the
    financial footing of the privatized housing projects. A 2018
    GAO [Government Accountability Office] report highlighted and
    found that the military departments vary in the extent to which
    they use measure of future sustainment needs and funding to
    assess project sustainability. I am beginning to question the
    wisdom of the fiscal waterfall and why the recapitalization
    accounts are only paid after P/PV management partners and bond
    holders are paid. So, I look forward to hearing more from our
    witnesses about their perspectives on the program overall, the
    actions they have taken to address any health and safety
    concerns and to improve customer service. We would also
    appreciate their thoughts on improving the overall program
    going forward.
        Thank you, Mr. Chairman, and I yield back.
        [The prepared statement of Mr. Lamborn can be found in the
    Appendix on page 35.]
        Mr. Garamendi. Thank you, Mr. Lamborn. It has been good to
    work with you on this problem and I know that we will continue
    to do so.
        I would now like to welcome our witnesses: Mr. John
    Picerne, CEO [Chief Executive Officer] of Corvias Group, LLC;
    Mr. John Ehle, President of Hunt Military Communities; Mr.
    Denis Hickey, CEO of Lendlease Americas; Mr. Rick Taylor,
    President, Facility Operations, Renovations and Construction
    for Balfour Beatty Communities; and, Mr. Jarl Bliss, President
    of Lincoln Family Housing.
        Gentlemen, your formal testimony will be put into the
    hearing record. In the interest of time, which we are
    unfortunately limited today because votes will occur sometime
    after 2:00, perhaps hopefully as late as 2:30, I would ask you
    to limit your testimony and summarize to 3 minutes.
        So, let's start with Mr. Picerne. My apologies for the
    pronunciation.

       STATEMENT OF JOHN G. PICERNE, FOUNDER AND CHIEF EXECUTIVE
                      OFFICER, CORVIAS GROUP, LLC

        Mr. Picerne. Perfect. Thank you, Mr. Chairman, Ranking
    Member Lamborn, and members of the committee. Thank you for the
    opportunity to appear before you today. My name is John Picerne
    and I am the founder and CEO of Corvias. I am here on behalf of
    950 dedicated team members who support our service members and
    their families. Many of our employees are veterans or spouses
    of Active Duty military members. These talented people are
    generally committed to supporting those who protect and defend
    our Nation. It is my honor to serve in this capacity.
        When I was first introduced to the massive challenge facing
    the Department of Defense with its struggling housing program,
    I was moved by how poorly we as a Nation were caring for our
    military personnel in what was the most personal way of all,
    their homes. The DOD [Department of Defense] was committed to
    creating a real long-term solution and with our experience I
    believed we were well suited to help.
        When I founded our company some 20 years ago, we set out to
    create something that could fix the housing challenges that
    were facing our military, and after 9/11 a very important job
    became a vocation. When I was last on the Hill in February, I
    said I was sorry in no uncertain terms. I apologized for the
    issues some of the residents were dealing with. I said we would
    do whatever it takes to do right by all of our residents.
    Today, I want to tell you a few of the things that we have done
    since I apologized nearly 10 months ago.
        Since early in 2019, we have been making changes in a
    concerted effort to get back to the gold standard. The gold
    standard of resident service will be known when we have
    deployed service members who are able to speak to their
    families about their daily lives, what is happening at school
    and not about problems they are experiencing within their
    housing. We will know that we have achieved the gold standard
    when our residents talk about Corvias and the things that they
    are doing at resident events, strong sense of community, and a
    team that has helped create a better living environment.
        With that goal in mind, we added neighborhood staff to work
    directly with families. We moved our resident service call
    centers back onto the installations so that our residents talk
    to somebody right down the street as opposed to a central call
    station. We launched the Corvias resident portal so that
    residents can use their smart phone or laptop to place service
    calls, track progress, and let us know if we have gotten the
    job done right. We established the role of resident advocate to
    work as an ombudsman for those families with more challenging
    issues. From the early days of the MHPI [Military Housing
    Privatization Initiative] program it was well understood that
    to give our service members the homes they deserved, the
    program needed to operate in a consistent state of development,
    construction, and financing.
        Solving the housing challenges has always been based on a
    regular investment in homes, building new homes while
    maintaining homes both new and old and investment in these
    homes is an investment in the service member. That is why we
    have injected new money into the program, $325 million of
    private capital in 2019 with another $150 million prepared for
    2020. We are also putting close to $200 million to work from
    our partnership reserves, $675 million all together at no cost
    to the government.
        These investments will be used to replace or completely
    upgrade some of the most challenging homes we maintain. More
    than 16,000 homes we brought up to higher energy standards,
    like new heating and air conditioning systems that give
    residents a better home experience while saving the program
    nearly $300 million over the course of the next 30 years. As
    someone who has been in the program for nearly 20 years, I can
    say from personal experience that the homes that we inherited
    were in terrible shape and in many cases uninhabitable.
        Through the MHPI program we were able to upgrade or replace
    thousands of older homes in the early years. However, to date,
    46 percent of our homes in our military portfolio were built
    before 1980 and some as old as 1870. As we look into the
    future, there is a lot to be encouraged about and some real
    challenges as well. The priority is to deliver gold standard
    resident service, service older homes that cost more each year
    to maintain, and drive constant investment in new homes and
    renovations.
        Corvias will continue to work tirelessly for our families.
    We will keep innovating, finding new answers to give service
    members the homes and residence experience they deserve. We are
    proud to serve our military women and men as we believe there
    is no higher calling in our industry. I thank you for this time
    and look forward to your questions and dialogue.
        [The prepared statement of Mr. Picerne can be found in the
    Appendix on page 37.]
        Mr. Garamendi. Thank you.
        Mr. Ehle.

     STATEMENT OF JOHN EHLE, PRESIDENT, HUNT MILITARY COMMUNITIES,
                          HUNT COMPANIES, INC.

        Mr. Ehle. Chairman Garamendi, Ranking Member Lamborn, and
    distinguished members of the subcommittee, good afternoon. My
    name is John Ehle. I am president of Hunt Military Communities.
    Thank you for the opportunity to be here.
        At Hunt, we are entrusted to build quality communities for
    America's heroes. We take that responsibility very seriously.
    During the Senate hearing in February, it became obvious to us
    that there were families living in our homes whose voices were
    not being heard. We lost their trust, we are sorry, and we want
    to get it right. We have heard our residents loud and clear and
    we are singularly focused on rebuilding their trust in us and
    improving their living experience.
        Over the past year, we have been working diligently on that
    front. First, we recognize that quality homes and resident
    services depend on open and regular communication with our
    residents. We need to hear from all of our military families in
    order to address their issues. We have made a number of
    improvements to make it easier for our residents to communicate
    with us. In addition, we understand that maintenance is a
    critical part of providing quality homes, and earlier this
    year, it became clear to us that we had substantial room for
    improvement.
        While maintenance issues will inevitably arise, it is our
    goal to provide professional, transparent, and timely service.
    In the last year, we have enhanced maintenance processes, added
    key positions, and improved training. Finally, we are actively
    supporting reforms to ensure the long-term success of the MHPI
    program. We are by no means perfect and there have been times
    when our performance has fallen short of our residents'
    expectations.
        We are committed to taking the necessary actions to rebuild
    the trust between Hunt and our residents. We have made progress
    over the past year, but our work is far from done. Thank you
    for the opportunity to testify today. I look forward to hearing
    your thoughts and answering any questions.
        [The prepared statement of Mr. Ehle can be found in the
    Appendix on page 53.]
        Mr. Garamendi. Thank you.
        Mr. Hickey.

     STATEMENT OF DENIS HICKEY, CHIEF EXECUTIVE OFFICER, LENDLEASE
                                AMERICAS

        Mr. Hickey. Chairman Garamendi, Ranking Member Lamborn, and
    distinguished members of the subcommittee, my name is Denis
    Hickey. I am chief executive of Lendlease Americas. Lendlease
    is a proud partner of the Department of Defense and----
        Mr. Garamendi. Pull the microphone up closer.
        Mr. Hickey. Sorry.
        Lendlease is a proud partner of the Department of Defense
    and we have the privilege of overseeing 40,000 homes that
    contain over 130,000 people who call Lendlease communities
    home.
        Mr. Chairman, the issues being discussed here today are
    critical for both Lendlease and for me personally. No family,
    much less a military family, should be subjected to living in
    substandard housing conditions and I reiterate our apology for
    any creation that we have caused in this instance.
        At Lendlease we are proud of the work we do to take care of
    our military families. However, we realize we have more work to
    do and we must continually improve. As an example, Lendlease
    processed over 400,000 service orders per year. Last month, we
    processed approximately 25,000 service orders across our homes.
    Pleasingly, 97 percent of these orders were successfully
    completed on time and function. We think this is a good result
    and we are proud of that. However, it does mean that 3 percent
    of those orders were not effectively processed on time and that
    is the big issue.
        So, Mr. Chairman, members of the committee, that 3 percent
    is my central focus. What can we do to get that number down?
    How can we take care of these families more quickly and more
    effectively than we currently are? On the road to improve our
    performance, we have recently taken the following steps.
        Firstly, we have significantly increased our focus on
    customer service. We have added new staff, new suppliers, new
    contractors, and have instituted new training modules to train
    our staff. For example, we have instituted a maintenance
    academy to train all of our maintenance people. Secondly, we
    have introduced new resident smart phone app. This contains a
    volume of information easily accessible to residents, including
    the ability for them to initiate and track service requests.
    The use of this app has doubled in the last 6 months across our
    communities.
        Thirdly, we have introduced new mold-inhibiting protocols.
    These include new mold painting techniques, enhanced filter
    protections, new ventilation systems, and other initiatives.
    Fourthly, we are continuing to invest in digital technology to
    improve all aspects of our business. This includes modules that
    improve customer service, greater data analytics, and the
    adoption of digital twin technology that better uses predictive
    maintenance technology across new homes being built.
        Finally, Mr. Chairman, I am particularly proud of the work
    that we have done in establishing the resident advisory boards
    in our communities. Our objective is to create an open and
    transparent environment where residents work collaboratively
    with us in order to create an active and engaged community. We
    looked to other sectors for inspiration and identified the
    school and PTA [Parent Teacher Association] model as the
    benchmark. We all know that when you see a strong PTA, you see
    a strong school.
        Similarly, our resident advisory boards are designed to
    allow residents to regularly engage with both Lendlease and the
    local command to work together to ensure housing issues and
    quality of life concerns are addressed and best practice is
    shared. Our goal is to have one neighborhood representative for
    every 400 homes and these representatives become members of the
    resident advisory board. In addition, Lendlease project
    director and garrison representative are members of this board.
        We believe this initiative is already having great impact
    and this is evidenced by the correspondence I received last
    night from the Safe Military Housing Initiative which was
    founded by some of those military spouses who appeared before
    the Senate committee earlier this year who asked me to read
    this statement on their behalf today.
        ``Lendlease and their team have embraced some of the
    toughest critics by sitting down and building a relationship
    with them. These relationships have benefited the project
    companies and the residents on a micro and macro level.
    Lendlease is leveraging their best staff to help build best
    practice and better serve our military families. By closing
    gaps and changing cultures at the local and corporate levels,
    Lendlease has been able to build relationships with their
    staff, government offices, project companies, family advocates
    and, most importantly, the residents to improve program work
    and its efficacy.''
        Mr. Chairman, we appreciate the work this committee has
    done to find sensible solutions to improve the quality of
    privatized military housing and we remain committed to being
    part of the solution. I look forward to your questions.
        [The prepared statement of Mr. Hickey can be found in the
    Appendix on page 69.]
        Mr. Garamendi. Thank you.
        Mr. Taylor.

    STATEMENT OF RICHARD C. TAYLOR, PRESIDENT, FACILITY OPERATIONS,
        RENOVATIONS AND CONSTRUCTION, BALFOUR BEATTY COMMUNITIES

        Mr. Taylor. Good afternoon, Chairman Garamendi, Ranking
    Member Lamborn, and distinguished members of the subcommittee.
    My name is Rick Taylor, president of Facility Operations,
    Renovations and Construction for Balfour Beatty Communities and
    I appreciate the opportunity to testify before you today.
        We take the responsibility of serving those who serve our
    country very seriously. We have heard your concerns and those
    of our residents loud and clear, and on behalf of Balfour
    Beatty Communities I would like to apologize for having fallen
    short of the high standards our military families deserve. We
    are working hard to regain the trust and confidence of our
    residents and our military partners. This has truly been a
    humbling experience. We have learned a lot and we realize we
    needed to transform many of the ways in which we do business in
    order to improve our residents' daily living experiences. That
    transformation is underway today and I would like to highlight
    just three of our transformation efforts with you now.
        First, we have reorganized. This includes my appointment as
    president for Facility Operations, Renovations and
    Construction. This means there is now a president in charge of
    and responsible for all military housing maintenance
    activities. The reorganization puts me at the table with our
    most senior leaders in the company to ensure the highest levels
    of oversight and the keen focus on maintenance issues and
    resident support services.
        As a former Navy Civil Engineer Corps officer, I am
    especially sensitive to the types of challenges and concerns
    and I am fully committed to providing solutions. Additionally,
    we are appointing a senior executive to the role of
    transformation director, another completely new position. This
    individual will be responsible for ensuring that an effective
    change management program is in place across our entire
    military housing portfolio.
        Second, we are transforming our approach to maintenance and
    customer service. We have delivered live, mandatory code of
    conduct training to our employees to underscore the importance
    of business integrity and ethics. We have also delivered
    enhanced customer service training to our employees to
    reemphasize our commitment to best practices and high
    standards. We recently appointed a new vice president of
    training and we have added 130 professionals to our military
    housing staff, and we are empowering our residents with more
    transparency and control over their work order requests. Third,
    we are improving our mandatory environmental training for all
    facilities management employees, have increased monitoring of
    all homes for life, health and safety, and particularly mold
    and moisture issues. We have supplemented our local teams with
    additional third-party specialists, teamed with a national HVAC
    [heating, ventilation, and air conditioning] servicing and
    maintenance company, and have hired regional environmental
    specialists to advise our local teams, monitor environmental
    processes and projects, and manage that communication with our
    residents.
        I also want to make myself clear on a particularly
    sensitive issue for us. Balfour Beatty Communities takes the
    issue of fraud very seriously, including the allegations that
    certain members of our staff handled work orders
    inappropriately. We are already cooperating with the Department
    of Justice with respect to its own civil investigation into
    these allegations. Simultaneously, we have instructed our
    external counsel, Hunton Andrews Kurth, to lead an
    investigation across our entire military housing portfolio.
    Hunton, in turn, has engaged PriceWaterhouseCoopers, a leading
    forensic accounting firm, to undertake an extensive review of
    the work order system used to support our submission to request
    incentive fees.
        To summarize, over the last 9 months, we have made efforts
    to transform and strengthen our management structure to
    increase staffing in a strategic, focused, and smart way to
    address our customers' concerns. Going forward, I remain
    encouraged and 100 percent committed to the success of the MHPI
    program.
        I want to thank Members of Congress and your staff for
    reforms you are undertaking in the fiscal year 2020 NDAA
    [National Defense Authorization Act]. We support many of the
    MHPI provisions offered in the House and Senate versions,
    reforms that I believe will strengthen the program. For
    example, we wholeheartedly support the creation of a resident
    bill of rights, a common lease, a uniform mold policy, a
    uniform resident displacement policy, and standardized
    incentive fee metrics.
        These are responsible and thoughtful reforms that will
    focus everybody, the Department of Defense, military providers,
    our residents, on standards and agreed-upon processes. The
    reforms will minimize ambiguity, enforce oversight, clarify
    responsibilities, and allow everybody's voice to be heard. I
    support these efforts and I believe the MHPI program will be
    improved because of them. Our customers deserve the very best
    and we are determined to deliver for them.
        Thank you for your time and I look forward to your
    questions.
        [The prepared statement of Mr. Taylor can be found in the
    Appendix on page 82.]
        Mr. Garamendi. Thank you.
        Mr. Bliss.

      STATEMENT OF JARL BLISS, PRESIDENT, LINCOLN MILITARY HOUSING

        Mr. Bliss. Chairman Garamendi, Ranking Member Lamborn, and
    members of the subcommittee, on behalf of Lincoln Military
    Housing, thank you for the opportunity to testify before your
    subcommittee today. My name is Jarl Bliss and I am the
    president of LMH. Our company welcomes this subcommittee's
    oversight of the Military Housing Privatization Initiative. We
    hope you share our view that despite recent setbacks, the MHPI
    is a valuable program that has improved the quality of military
    housing over the DOD-managed housing of the last century. We
    also welcome your oversight of LMH's ability to deliver the
    high-quality housing and property management services our
    Nation's heroes deserve.
        Over the past year, our company has listened carefully to
    the concerns some families have expressed about the quality of
    their LMH housing. More than 1,200 LMH employees, many of whom
    are veterans, military spouses, or have members serving in the
    military, wake up every day to serve our families with honor
    and integrity. But it is obvious that some of our families feel
    we have come up short. As the president of the organization, I
    apologize to our military families for the times that we have
    failed to live up to expectations.
        Beginning in 2017, working with military families and
    advocacy organizations, LMH undertook a holistic review of our
    policies and procedures to explore how we could improve. We
    identified, developed, and implemented several reforms to
    address two main goals. The first was to improve the quality of
    our homes and services. The second goal was to make reforms
    that establish a culture of trust, transparency, and dialogue
    with our residents. I am pleased that as I sit here today, many
    of those reforms have been implemented. Let me list a few of
    these for you.
        First, we have worked with a military family organization
    to identify and place advocates in over a dozen of our
    communities with more in the pipeline. These advocates seek to
    identify issues before they become problems and try to work
    with the families and Lincoln to resolve them. Second, our on-
    the-ground property managers and personnel have set a goal of
    proactively knocking on residents' doors even when there is no
    work order pending, just to check in with the resident and ask
    if there are any issues with the home that we need to address.
    In addition to addressing issues with the home, this reform
    also helps reestablish a culture of trust and dialogue with the
    families.
        Third, we have been responsive to requests from residents
    for improved access to communications tools. We have
    significantly improved our mobile phone app that enables
    residents to submit and track work orders. We still maintain
    our call center in San Diego for those who prefer to call in
    work orders. And fourth, we have worked with our service branch
    partners to get public health and medical experts involved in
    cases involving environmental hazards more quickly, and Navy
    and Army have given us access to doctors and specialists who
    help both us and our families understand when a family should
    be moved while remediation is performed. These are just a few
    of the reforms we have undertaken. We are in the process of
    making further reforms, many of which we believe are consistent
    with several provisions in the HASC [House Armed Services
    Committee] and SASC [Senate Armed Services Committee] marks of
    the NDAA. As your subcommittees look at how LMH and other P/PVs
    are performing, I look forward to working with you and our DOD
    partners to explore new and creative ways to improve our
    military families' experience in our housing. We understand
    that the issues are not just about fixing drywall, but
    repairing a culture of trust with our residents, a culture that
    recognizes the dignity of their service to our Nation.
        I look forward to your questions and, more importantly, to
    working with you to address the concerns of military families.
        [The prepared statement of Mr. Bliss can be found in the
    Appendix on page 96.]
        Mr. Garamendi. For the committee members and our guests, we
    are scheduled votes probably about 15 minutes from now, so I am
    going to pass on my questions and turn to Mr. Lamborn and then
    take as many of our colleagues as possible.
        Mr. Lamborn.
        Mr. Lamborn. Thank you, Mr. Chairman, and for having this
    hearing. Thank you all for being here. My first question or
    two, I just want to go down the line and have a yes or no
    answer for the sake of time.
        From your perspective, do your companies have a 51 percent
    controlling position in the privatized military housing
    agreements?
        Sir, if you start and go down the----
        Mr. Picerne. The answer is no----
        Mr. Lamborn. Okay.
        Mr. Picerne [continuing]. Representative.
        Mr. Ehle. The answer varies from property to property.
        Mr. Lamborn. Okay.
        Mr. Ehle. So it is not as simple as yes or no.
        Mr. Lamborn. Okay.
        Mr. Hickey. Whilst the structure may look like that, it
    doesn't operate like that.
        Mr. Taylor. No, sir, we do not.
        Mr. Lamborn. Okay.
        Mr. Bliss. As Mr. Hickey said, the structure may say that,
    but the operating agreements don't call for that sort of
    control.
        Mr. Lamborn. Okay, thank you.
        And do you agree that the government and the military has a
    legitimate oversight responsibility for the P/PV initiatives?
        Mr. Picerne. Absolutely. Yes, sir.
        Mr. Ehle. Yes.
        Mr. Hickey. Yes.
        Mr. Taylor. Yes, sir.
        Mr. Bliss. Yes, sir.
        Mr. Lamborn. Okay, thank you. I am sure there are some
    great questions about specific remediation progress or lack of
    progress that you are making but let me jump into the financial
    side of things. Should Congress intercede and require that we
    restructure the waterfall agreements so that the result would
    be that reinvestment accounts have to fully paid up before
    everyone else gets paid?
        That is something that would be a radical departure, but it
    is the kind of reform that we may have to look at. Any thoughts
    on that that you would like to offer?
        Mr. Picerne. So, Representative, I think that as the
    program is currently structured, it was set up and is set up so
    that we can continue to advance investments and have continuous
    investments if allowed to do so. Working with our DOD partners
    and with support from Congress, I think we can get there
    without having to go through tremendously radical changes. I do
    believe though that an adjustment in the waterfall to make sure
    that investment is consistent would be of benefit.
        Mr. Lamborn. Okay, any other thoughts or comments? Thank
    you. Mr. Taylor.
        Mr. Taylor. Congressman, I think certainly it is worthwhile
    to consider, you know, everything should be on the table for
    consideration, but I would say that, you know, we have lending
    agreements that, you know, would have to be maintained such
    that debt services is paid where it is currently prescribed in
    the waterfall.
        So that being said, you know, if we didn't disrupt that
    then I think that we should certainly be having that
    conversation about figuring out a better way to ensure long-
    term sustainability.
        Mr. Lamborn. Okay. Any last thoughts on that and then I
    will switch to another question.
        Mr. Hickey. No, I support--Congressman, I support that
    position. I think at the end of the day the objective is to
    make sure there is sufficient capital in the reserve account to
    undertake out-of-year development. There are a variety of
    solutions to do that. I think, you know, the interest of
    bondholders and debtholders need to be, you know, factored in
    mind and so therefore it would be a complex arrangement to
    undertake.
        Mr. Lamborn. Okay. And, lastly, for the sake of time, I
    will finish with this. Could someone comment on what we could
    do here in Congress to make your job easier so that the
    finances work better, so that the investments can be made to
    keep properties as high of quality condition as possible, so is
    there something, anything like with the scoring that OMB
    [Office of Management and Budget] calls for that we should
    reexamine?
        Mr. Picerne. So, Mr. Representative, I think that if we
    went back to the premise on the program, or the beginning of
    the program was based on what was known as the ``Raines Memo''
    from OMB that was rescinded over time, so we start out with the
    right program and the right investment philosophy and the right
    investment thesis, but then change the game midstream.
        So, if we just went back to that original scoring
    methodology that would continue to allow us to add additional,
    which was always the premise, additional funding sources on a
    going forward basis. So, if we kind of went back to the
    original rules, I think we would be able to solve many of the
    investment challenges.
        Mr. Lamborn. Anyone else on that?
        Mr. Hickey. No, Congressman, I agree with that. I think the
    scoring process could be reviewed. I think at the end of the
    day, looking for additional sources of funding is proactive if
    we can do that, you know, across the structures. Also, I think
    the other issue that is around the BAH [basic allowance for
    housing] process and I think that process is set annually. And
    whether it goes up or down regarding, you know, where it sits
    within relative outside the base accommodation, I think
    probably the optics about how that is determined is something
    that is very vital because that is the revenue source of the
    bases in its entirety. So maybe some transparency around the
    optics of how the BAH is calculated would be beneficial.
        Mr. Lamborn. Okay. Okay, I want to thank you all.
        Oh, Mr. Bliss, did you want to finish?
        Mr. Bliss. Yes, sir. I just wanted to add, I also would say
    anything Congress could do to create flexibility on financing
    that we could use private sector tools without having scoring
    issues, I agree with Mr. Picerne on that.
        Mr. Lamborn. Okay, thank you for your input.
        Mr. Chairman, I yield back.
        Mr. Garamendi. I thank you, Mr. Lamborn.
        Presumably, votes will begin shortly. We are told that we
    are expected to be off the floor and back here around 2:30. So
    we will break and then, without objection, we will break and
    then return.
        Ms. Horn, you are next.
        Ms. Horn. Thank you, Mr. Chairman. And I want to thank this
    entire committee for the work that we have done on this
    incredibly critical issue, in a bipartisan way, and I think the
    beginning of the work that we have done in the NDAA for this
    year is critically important.
        But I want to dig in a little bit more to the issues that
    we are talking about and what this means for our military
    families, because the first time I heard about these issues was
    at a town hall in January and a mother showed up and brought
    pictures of the housing that they were living in, told me about
    the conditions and the health impacts that their families at
    Tinker Air Force Base which, Mr. Taylor, is a Balfour Beatty
    property.
        And I was angry and frustrated and hoping it was a limited
    problem, but sadly found out that it was not and this is why we
    are here today, because the issues that have already been laid
    out, the infestations, are rampant across Tinker and it is one
    of those things that is so outrageous to me that we are not
    taking care of our service members and their families in the
    way that they deserve, these people that are putting their
    lives on the line.
        And Balfour Beatty has responsibility for 55 different
    facilities across 26 states, 43,000 homes and 150,000 people.
    That is not an insignificant impact and I am incredibly
    disappointed that you have failed to live up to your
    responsibility for taking care of the people that are living in
    these houses. It is cheating our military families and our
    taxpayers, and I have seen it firsthand. My staff and the
    Secretary of the Air Force and others were just out at Tinker
    again, there are ongoing problems, and I wish that I could say
    that things were all better, but they are not. Because while
    things--while there has been some progress, it seems like every
    other week there is something else that is coming out, toxic
    mold, safety hazards, and just week before last, November 20th,
    yet another report that maintenance records were being
    falsified to get Balfour Beatty payments that they weren't
    entitled to. This is not an isolated incident because there are
    already 65 documented instances over 2016 and 2017 of falsified
    maintenance records.
        And according to this same November 20th report, employees
    of Balfour Beatty had systematically doctored records, not just
    at Tinker Air Force Base, but at two other bases. This is a
    systemic problem and one that we have to fix, and you have a
    lot of work to do to fix it. The image behind me is an image of
    one of the homes that was brought to me by the families living
    there at Tinker Air Force Base.
        So, Mr. Taylor, my question to you is, even if times have
    improved, is this someplace that you would want to live or
    allow your family to live?
        Mr. Taylor. Congresswoman, that picture is unacceptable,
    absolutely unacceptable.
        Ms. Horn. Thank you. I appreciate that. It is just, to me
    this is unconscionable, and we have to fix it and it is going
    to require a lot of effort. It is going to require getting down
    to the heart of the problem. Not just putting Band-Aids and
    painting over things and patching walls which may make it look
    good for a few moments, but it is basically like putting Band-
    Aid on a gaping wound and that is what people have been living
    with in far too many places and we have to get to the heart of
    this issue.
        In fact, I just spoke to the Secretary of the Air Force
    earlier today and what we talked about was the need to get
    down--and this goes for everybody--we have got to get down to
    the heart of this issue. We have got to stop putting Band-Aids
    on gaping wounds. We have to identify and get down to the core
    of the issue.
        So my next question to you is, will you commit to making
    whatever investments are necessary to put in place long-term
    solutions, solutions of culture, solutions of reorganization,
    and if it needs to be tearing down properties and starting over
    to get to the heart of these issues so that we are doing right
    by our military members and their families?
        Mr. Taylor. Congresswoman, I alluded to it in my opening
    remarks. We have made significant changes in the way that we
    are conducting our business. Putting clear line of sight for
    the technical issues, these fall in that area, a clear line of
    sight all the way up to the top of the organization and that
    rests on my shoulders. And so, I am committed to and I shall be
    held accountable for the changes that we need to make.
        Ms. Horn. I will be holding you accountable to that. And
    since I only have a few seconds left, I also want to follow up
    with one final question. From the documents I have seen it
    appears that your company earns about $4.3 million in
    performance bonuses each year on these properties. Over these
    years that is tens of millions of dollars in performance
    bonuses that were paid out while documented evidence that
    Balfour Beatty--and it doesn't matter if it was an employee
    down the line--Balfour Beatty was falsifying maintenance
    records, tens of millions of dollars.
        What I want to know is that will you commit to taking every
    single penny at least of this money that was paid based on
    falsified maintenance records to invest that in fixing the
    problems at all of these housing units.
        Mr. Taylor. Congresswoman, as I mentioned, those
    allegations are quite shocking to us and we are undertaking a
    thorough review. I mentioned that we have invested with outside
    counsel to investigate that. The Department of Justice is
    undertaking an investigation into those very same issues. We
    have committed to providing the results of our findings to the
    DOJ. In the event that we are found to have falsified records,
    then we are absolutely committed to refunding any incentive
    fees received back to those projects. And, further, in the
    event that any of our individuals are found to be at fault, not
    complying with our code of conduct which we take extremely
    seriously, to the extent that we find that anybody has strayed
    from our code of conduct, we will take appropriate disciplinary
    action no matter where they sit in the organization.
        Ms. Horn. Mr. Taylor, I am over time. I just think that it
    is important for us to say we are going to continue to work on
    this. But the confidence that our communities have and that our
    service members have and their ability to trust their families
    to your care, collective care, has been seriously eroded and it
    is going to take a lot of work, transparency, and contrition to
    get to the root of this. Thank you.
        Mr. Garamendi. Thank you.
        Mr. Scott.
        Mr. Scott. Thank you, Mr. Chairman and Ranking Member
    Lamborn. In February, we had a roundtable with the spouses and
    military members affected by these housing issues, and I want
    to tell you that I found those spouses and those soldiers that
    were there, primarily spouses, to be extremely professional and
    credible.
        And I was a little taken back at a couple of things. One of
    the things that I was taken back at--it is our fault or the
    DOD's fault--I don't think our base commanders and I don't
    think the DOD took this issue serious enough in many cases. I
    think where we had good base commanders it was taken serious
    and then in other areas maybe poor base command allowed part of
    these things to happen.
        But the primary issue that got my attention was the
    complexity of the landlord/tenant contract written by lawyers
    of extremely large corporations that you represent that is then
    handed to a soldier who may be, quite honestly, just out of
    high school in many cases. And so when you hand these service
    members the contracts, there are provisions in these contracts
    and the mediation contracts that are intentionally designed to
    and have the impact of financial intimidation of our service
    members and their families that say that if they take you to
    mediation, if that is their only course of action where they
    can resolve the issue and they don't win, then they have to pay
    your legal fees.
        And so, my question is this, are these provisions still in
    your contracts? And we will just go down the line.
        Mr. Picerne. To the best of my knowledge, Congressman, we
    have been adapting the provisions to not have any forms of that
    type of language, languages of intimidation or languages that
    would provide remuneration back to us as a company if a suit
    was filed and/or filed forcefully.
        Mr. Scott. Let me move--Mr. Ehle, yes or no?
        Mr. Ehle. All of our lease forms are under review and in
    fact the industry is working on a common lease form that
    would----
        Mr. Scott. All right. That is not a yes or no, so I will
    assume that you still have the intimidation provisions.
        Mr. Hickey.
        Mr. Hickey. Congressman, to the best of my knowledge they
    don't exist in our contracts.
        Mr. Scott. Mr. Taylor.
        Mr. Taylor. I am not aware that they exist, but I can tell
    you that we have never pursued recovery of those fees from
    residents.
        Mr. Scott. Mr. Bliss.
        Mr. Bliss. They do still exist, but we are in the process
    of working with the services with their approval of removing
    those clauses.
        Mr. Scott. Okay, thank you. I think though when we have our
    landowners--I think when we have our soldiers' bill of rights,
    housing bill of rights, I think those provisions will be
    struck; that that is unacceptable to me to ask an 18-year-old
    soldier straight out of high school to sign a contract that
    makes him responsible for the legal fees of a multimillion-
    dollar corporation.
        With that, Mr. Chairman, I would like to yield the
    remaining provisions to my colleague from North Carolina, Ms.
    Stefanik. I am sorry. New York.
        Ms. Stefanik. That is all right, Mr. Scott.
        Mr. Scott. You talk like you are from North Carolina.
        Ms. Stefanik. No, I talk like I am from New York Upstate.
        Gentlemen, thank you for being here today. Earlier this
    year, we heard from the services and military family members
    and it was really stunning to hear about the challenges that
    these military families have faced. I have the honor of
    representing Fort Drum, home of the 10th Mountain Division, the
    most deployed unit in the U.S. Army since 9/11, so these are
    families that have faced multiple, multiple deployments in
    Iraq, in Afghanistan, around the world, and it is extremely
    important to me that they not have the stress that their family
    members face at home because of housing issues. So, Mr. Hickey,
    as you know, Lendlease is the primary private partner for the
    Mountain Community Homes and the Timbers located at Fort Drum.
    And I want to ask you, for the record, because this gets to
    this feeling that people don't have a voice and they don't have
    an adequate response time when there are complaints, if a
    military tenant has a complaint or concern how can they
    absolutely count on Lendlease to address this concern in a
    timely, professional, and adequate manner? And, most recently,
    snow removal has come up in the north country. I know some of
    you don't face that, but that is a significant concern and came
    up at a town hall just recently.
        Mr. Hickey. Thank you, Congresswoman, for the question. You
    know, we operate in actually very clear protocols of responding
    to inquiries. We give residents multiple access points to of
    any concerns they can come straight to our project director.
    They can come through our customer service. They can come
    through our resident apps. We monitor all of the requests
    digitally, so it is all done through a system so it is not a
    manual process, and we can track anything that is not monitored
    or not assessed in time comes as an exception to us.
        And so, we have a management regime looking at the things
    that are not addressed in an appropriate manner. I think in
    addition, the residents advisory board that we have actually
    put in place, which we will be rolling out onto Fort Drum as
    well very soon, is the other forum for which residents can get
    voices and access in because we will have those community
    representatives on small areas and making sure that there are
    several opportunities for them to get heard and get opportunity
    to voice their concerns or ideas proactively or negatively.
        Ms. Stefanik. Thank you, yield back. I will do my round
    after.
        Mr. Garamendi. I thank--I will turn to Ms. Houlahan.
        Ms. Houlahan. Thank you, Chairman. And thank you,
    gentlemen, for joining us today. And just by way of background,
    I am third-generation military. My mom was a resident of
    military housing as was her six brothers and sisters. I was a
    resident of military housing as was my brother. I have four
    Active Duty cousins right now who serve. We represent the Army.
    We represent the Navy. We represent the Air Force.
        I also was an educator in a community that was very, very
    underserved in the population and lived in very--housing
    conditions that looked a lot like this. And as an educator and
    a person who lived in housing like this, I can say that I
    really worry for the children. You know, I worry for the
    children who are exposed to lead and who are exposed to mold,
    and I am worried that what I am hearing is that people are not
    using the word ``mold'' because it would create problems and
    they are creating, your organizations are creating kind of the
    opportunity to sort of hide things.
        And so the first thing that I would like to ask because of
    time, for the record, would you guys be able to submit your
    policies on lead and mold remediation and amelioration so that
    we can understand what they are and what kind of--what you do
    in terms of what timelines you expect to remediate those and
    also what you do to make sure that people are--you talked a lot
    about displacement. You know, what happens when they are
    displaced?
        [The information referred to can be found in the Appendix
    beginning on page 189.]
        Ms. Houlahan. And also, for the record again, what
    compensation do families have when their home goods are
    destroyed? Having had that experience as a child, I understand
    that. So that I would like to have for the record.
        [The information referred to can be found in the Appendix
    beginning on page 189.]
        Ms. Houlahan. The other thing I would like to understand,
    maybe individually, is in the case where there is a child who
    has been affected by this, who will permanently be disabled
    because of this, what responsibility do you all have and do you
    all plan for with your for-profit businesses to make sure that
    those children and those families are being taken care of or do
    you expect that the government will do that for you?
        Mr. Picerne. So, Representative, in our case we work
    directly with when an instance like this comes up, we work
    directly with the medical community on the installation with
    the garrison commander and we try to define where the--or
    divine where the problem really is. We have had instances
    where, although believe that it was the home causing it, it
    turned out that it was lead in the munitions plant that the
    soldier was actually working in.
        So, if in fact----
        Ms. Houlahan. Let's just assume that it is something that
    is identified as a housing issue that happened in the past,
    what is the process that you go through?
        Mr. Picerne. So, if we find out that it is determined that
    the home is in fact the cause of the illness, then we will
    support that child or its medical costs.
        Ms. Houlahan. And, Mr. Ehle, is that how you pronounce it,
    Ehle?
        Mr. Ehle. Yes, Ehle. Sorry.
        Ms. Houlahan. Ehle.
        Mr. Ehle. You know, if, you know, we are obviously
    supportive of the process of determination and through dispute
    resolution and so forth, if there is fault that is determined,
    you know, we will certainly work with whatever the
    determination is.
        Mr. Hickey. Thank you, Congresswoman. We will provide you
    with all our protocols.
        Ms. Houlahan. Thank you.
        Mr. Hickey. They are very clear. They are clearly outlined.
    We have a 24-hour response time. Just to let you know that if
    anything happens within that 24 hours once it is the residents
    feel uncomfortable, we will relocate them immediately and so
    forth.
        Ms. Houlahan. Right.
        Mr. Hickey. So, there is a whole clear regime around how we
    deal with mold and lead-based paint, which I am happy to share
    with you. You know, if in the instance that, yes, we are the
    cause of any medical condition then we would absolutely look
    to, you know, financially compensate through any structure that
    is appropriate.
        Ms. Houlahan. Thank you.
        Mr. Taylor. Congresswoman, I would agree with the other
    gentlemen. If we are found to be at fault, we are complicit,
    then----
        Ms. Houlahan. And you are planning for that, you know,
    because you guys have been at this for a couple, a few decades
    and there will be decades where the kids who are now presumably
    grown that may have those problems that can be attributed
    possibly back to that.
        Mr. Taylor. If attributed to our conduct, then yes, ma'am.
        Ms. Houlahan. Thank you.
        Mr. Bliss. Congresswoman, we will also provide you the
    protocols and whatnot.
        Ms. Houlahan. Thank you.
        Mr. Bliss. To answer your question about medical, again, if
    we are proved to be at fault to that then we work with the
    families and medical to figure out what is the best resolution
    to solve that issue.
        Ms. Houlahan. Thank you. And with the last kind of 45
    seconds of my time, I just would like to know--I have heard a
    lot of go down the line and say yes, yes, no, no, no. Having
    been a former entrepreneur and businesswoman myself, I think
    best practices are definitely something that you each are
    talking about individually.
        But do you have a group that you share your best practices
    across all of your different organizations so that each one of
    your standards is similar or the same and that you are sharing,
    somebody who said they have an app that people can use, or you
    said you have a roundtable, do you have a best practice
    roundtable?
        Mr. Picerne. Yes, Representative. We actually formed the
    Military Housing Association, MHA, specifically to do that. As
    an outcome of challenges we have had, we have realized that we
    do share individual best practices, but we didn't share them or
    weren't sharing them as an industry. So, we have started to do
    that on a much grander scale, and I think it is starting to
    provide some of the benefits that you will be seeing or have
    been seeing thus far.
        Ms. Houlahan. And I know I have run out of time and I want
    to give everybody else their time, so I would love to just hear
    if you guys could get together on that and get back to us.
    Thank you. I yield back.
        Mr. Garamendi. I thank you.
        Mr. Wilson.
        Mr. Wilson. Thank you, Mr. Chairman, and thank each of you
    for being here today. And, Mr. Taylor, I am really grateful for
    the leadership at Fort Jackson. Commander Brigadier General
    Milford Beagle has conducted a town hall with your company with
    Balfour Beatty. And to address the issues of housing,
    complaints were raised about the broken sidewalks, long lines
    for the completion of work orders, shoddy work repairs, and no-
    shows by the maintenance staff. What have you done to correct
    these deficiencies? Is there a residency advisory board
    established and is there a project manager that you can report
    to on a 24-hour basis?
        Mr. Taylor. Thank you, Congressman. Yeah, I think
    universally across all of our portfolio we are getting better
    at forming resident groups that we can meet with and we do that
    in concert with our military partners at the individual
    installations as well. Town halls that are--we are starting to
    see an increase in the frequency of town halls that we
    participate again alongside our military partners. Those are
    great ways for us to get the information to understand what
    concerns our residents are facing.
        In terms of processes, changes that we are undertaking, as
    I indicated in my opening remarks, we certainly recognize that
    we could do better in many locations. And so, we have addressed
    that through a number of staffing level increases looking at
    the policies and procedures that we do have in place and where
    we saw that they were deficient we are addressing those. So, it
    is not as simple as one, you know, addressing one area to
    address, you know, a more broad problem, but we are taking on a
    number of different areas to improve. But a lot of that is
    through process, procedure, making sure that we have got
    appropriate staffing at the level.
        Mr. Wilson. Is there a hotline where a resident could
    report an issue?
        Mr. Taylor. Yes, sir. We have an 800 toll-free line that
    any resident, employees, anybody can call to let us know at the
    corporate level any issues that they are facing that aren't
    being addressed locally.
        Mr. Wilson. Thank you.
        And, Mr. Ehle, Joint Base Charleston is a Hunt Military
    Community; however, there is some confusion about the structure
    of your deal with the military. I understand there is a 50-year
    deal, the agreements are not contracts, and that you are
    considered a partner not a contractor. Can you explain this and
    how the system works?
        Mr. Ehle. All of the LLCs we have are 50-year ground
    leases, the land owned by the government. And the partnership
    element is that, you know, these are meant to be true public-
    private partnerships. With the Air Force, which is what JBC
    [Joint Base Charleston] is, the Air Force is not a legal member
    of the LLC like the Navy or the Army are in their projects, but
    the Air Force does have an investment in the form of government
    direct loans, so they have a financial interest in the project
    and so there is a partnership. And, of course, none of these
    can succeed without having a really good functioning
    partnership, and a partnership is both cooperation, but also
    mutual accountability and it works very well with the Air
    Force.
        Mr. Wilson. Thank you. And I yield the balance of my time
    to Congresswoman Elise Stefanik.
        Ms. Stefanik. Thank you. Just to follow up, one of the
    aspects in the NDAA that we have focused on is the importance
    of a common tenant bill of rights. And I want to hear from each
    of you and I will start with you, Mr. Hickey, just because of
    the importance of your answer to my district. What rights are
    you proactively ensuring that are afforded to our military
    families who are leasing your properties and how do you measure
    that success?
        Mr. Hickey. Thank you, Congresswoman, for the question. We
    have all been working diligently with the services on a common
    bill of rights, so we have participated, we have put forward
    our suggestions, and so that is well-documented and I think
    that might be a solution, but putting in the ability for
    residents to receive a refund, for example, if they are in a
    situation where they are in a house that has not been
    maintained properly they can get refunded rent, putting in
    plain English version contracts a right to actually terminate
    contracts, you know, if there is something wrong with the
    house, giving more flexibility back to our residents is
    something that we have been focused on.
        Ms. Stefanik. Sure. And I know you have communicated that
    to the services. What about to the families? Have you solicited
    feedback from military families for suggestions for that tenant
    bill of rights?
        Mr. Hickey. Yes, we have. Yes. As I said before, we have
    been liaising with the Safe Military Housing Initiative. We
    have been liaising directly. We have been holding town halls,
    all of our, across all of our bases including Fort Drum, and
    getting that feedback and asking, you know, what they would
    like to see, so it has been a collaborative approach.
        Ms. Stefanik. Okay. And the rest, I will take the answer
    for the record because my time has expired.
        [The information referred to can be found in the Appendix
    beginning on page 191.]
        Mr. Garamendi. Thank you.
        Yes.
        Ms. Haaland. Thank you, Chairman.
        Mr. Garamendi. Ms. Haaland.
        Ms. Haaland. Thank you, Chairman. Thank you. And thank you
    all so much for coming. I appreciate you being here and taking
    the time to be with us today.
        My district is in New Mexico's First Congressional
    District. I have Kirtland Air Force Base and we have 365 days
    of sun per year and the climate is extremely dry and yet we
    have still had reports of mold there for whatever reason. It
    sounds kind of strange, but nonetheless that is one of the
    issues that my constituents have reported to me.
        I am a daughter of a 30-year career Marine so I grew up in
    military housing all along Southern California and in Virginia
    both and so I am, luckily I have nothing but good memories of
    those times unlike many of the families who, unfortunately, do
    not share that same--will not share the same memories that I
    do.
        So, I do hear some good things from my district. For
    example, I hear the new maintenance comment cards include
    information about the technicians coming into the homes as well
    as what work they are doing and that quality of the repair work
    has improved, their better communication and that is absolutely
    vital, and I am glad to hear that Hunt is taking these steps,
    also hear about the fall festival and other family activities
    and those are all good things. Unfortunately, substantial
    challenges remain. Families continue to receive inconsistent
    treatment and information from Hunt staff. So, my first
    question is for you, Mr. Ehle. Can you please share what steps
    your company has taken to improve and standardize customer
    service?
        Mr. Ehle. Yes, Representative. The lack of consistency is
    something that we are extremely focused on all across our
    portfolio and it is one of the reasons why we are focused on
    promoting standardization across not just our portfolio but the
    industry. So, we look at things like variances in response and
    completion standards, not just, you know, a property but across
    the portfolio and across the industry. We are very much in
    favor of doing that. In fact, we have already done that in our
    own portfolio is establishing a Hunt standard for a standard
    consistency, so our residents should start seeing that very
    shortly.
        You know, in terms of our environmental concerns,
    environmental concerns are on the rise. In the last couple of
    years we have seen mold in ways to the extent that we haven't
    seen in a long, long time, primarily caused by some extreme
    climatic conditions that haven't historically been seen, but I
    don't think that is going to change in the future.
        So, we are beefing up our environmental expertise on site
    and at the corporate level. We are beefing up our environmental
    training for our maintenance techs. We are adding maintenance
    techs. We are adding QA/QC [qualilty assurance/quality control]
    professionals to mainly ensure quality of work completion and
    we have made a great deal of progress in filling all those
    positions. And then, of course, the increased training across
    all of our people.
        Ms. Haaland. Thank you. Thank you.
        I would like to turn to the issue of mold and thank you for
    raising that yourself. It continues to be a major challenge and
    we have heard that from my colleagues. Many families want to
    have licensed and certified third-party experts conduct testing
    in their homes. Some have been told that Hunt and other housing
    companies won't accept these results or that third-party
    experts would not be permitted to enter the homes.
        Mr. Ehle, what is Hunt's policy regarding mold testing by
    licensed third-party experts?
        Mr. Ehle. We tend to follow the EPA [Environmental
    Protection Agency] guidelines related to testing and the EPA
    tends to advise against testing because they find it to be
    inconclusive. And examples from elsewhere in our portfolio is
    we have had tests on houses that don't readily apparently have
    mold that the tests come back high. On the other hand, we have
    been in houses where there is obvious mold all over a wall and
    the test comes back that there is no mold in the house. So, we
    have found that it is difficult to find a reliable test.
        Ms. Haaland. Would you allow families to seek a second
    opinion on the presence of mold in their homes by licensed,
    third-party experts?
        Mr. Ehle. We support anything that our residents choose to
    do pursue for evidentiary purposes. You know, again, we have
    found that testing is unreliable because it can go either way.
    It could be a false positive or a false negative.
        Ms. Haaland. Thank you. I would like to--how much time do I
    have?
        Chairman, I yield.
        Mr. Garamendi. Thank you.
        Ms. Stefanik.
        Ms. Stefanik. Thank you. One of the aspects of this crisis
    that I think is really important is prevention and mitigation.
    And at Fort Drum, we have a relatively young population of
    young soldiers, young military families, oftentimes this is the
    first time that they are responsible for their home that they
    are living in.
        How are you, Mr. Hickey, investing and sort of providing
    educational materials for those young family members and young
    service members to know to contact you before something gets to
    a crisis level that we have seen in some of these photos?
        Mr. Hickey. Yeah. Thank you, Congresswoman, for the
    question. Look, we actually share your same concern. Many
    times, they are 18-, 19-year-old people who have just moved out
    of home and they have to maintain a house and think about, you
    know, issues about avoiding damp, you know, conditions arising
    in a house and so forth. So, at every move and anytime someone
    moves into a residence, you know, it is a personal hand-over.
    We take a personal tour of the house with them. We explain some
    of the issues. We explain how things work in the property. We
    explain some of the maintenance obligations and how they go
    about looking for things that are problematic.
        We also do a 30-day and a 90-day check-in with them to make
    sure that, you know, how are things going, what are we doing,
    if they want any help in terms of looking after their home, and
    we also do a yearly inspection on all of the properties. So in
    all of those times, we seize the opportunity to help train them
    or help educate them or give them visibility as to what they
    can do better and we also tell them that the minute they have
    got a concern is to ring us right away and then we will come
    out and talk to them.
        So, there is a little bit education, we can do more of it
    and we would like to do more of it, but there is also training
    them to help themselves at the same time. So, you know, that is
    what we do, and we continue to invest in that.
        Ms. Stefanik. Thank you, yield back.
        Mr. Garamendi. Thank you.
        Mr. Brown.
        Mr. Brown. Thank you, Mr. Chairman, and I thank the
    committee, the subcommittee, for allowing me to participate in
    today's hearing. Let me just start by saying, look, I support
    the Military Housing Privatization Initiative. I support things
    like enhanced use lease on military installations. I support
    public-private partnerships. In Maryland we have done a lot of
    good things, from the Port of Baltimore, to the Purple Line, to
    travel plazas on interstate roads, but I support them only when
    we can ensure that we deliver quality, safety, reliable value
    products and services to the public, what the public demands
    and what they deserve. And in this case, when we are talking
    about privatizing military housing, the public is that very
    cherished public, our military families, and here we fell
    short, and my concern is this. I get that circumstances may
    have changed over the decade or so when we started the program
    to where we are today. I hear about the drawdown. I hear about
    the reductions in the BAH rates and how that put pressure on
    the ability to deliver quality. But what concerns me is that it
    took the courage of military spouses to come to Congress. The
    Pentagon didn't come to Congress and say we have a problem. You
    didn't come to Congress and say we have a problem. The
    framework, the model, the formulas that we based these
    agreements on years ago doesn't work because of a changed
    environment. Instead, military families got squeezed and it was
    military spouses who stepped up, and that is a shame on you. It
    is a shame on the Pentagon, and we have got to fix it.
        Mr. Picerne--did I get that right, Picerne? Close enough?
    Yeah. In February of 2019, earlier this year, at a SASC hearing
    you stated, we hire world-renowned specialists at no cost to
    the government to renew our mold and mildew procedures so that
    here too we are living up to the gold standard. Yet, today, you
    are now saying it is ``going to take some time to get back to
    the gold standard of communication and service that residents
    enjoyed in the early years of our MHPI partnerships.''
        Why have you--this is a question--why have you not been
    able to return to the gold standard that you promised to
    Congress and, more importantly, to our service members? Why has
    your position changed?
        Mr. Picerne. Mr. Congressman, our position has not changed.
    We endeavor to return to the gold standard. As I mentioned in
    my testimony, the gold standard really will be when a deployed
    soldier is able to call back, which is one of the tenets that
    we founded our business on, will call back from forward
    deployment and talk to his family or her family about what is
    happening in their lives and not deal with homeowner or home
    issues.
        We are getting closer and closer back to that standard. We
    are not there yet. I don't want to----
        Mr. Brown. Let me ask you this question.
        Mr. Picerne [continuing]. I also don't want to accept the
    fact that we got there because it is an ever----
        Mr. Brown. Thank you. And let me ask you this question. At
    Fort Meade, Maryland--and you had mentioned in your testimony
    today that town halls and greater communication with service
    members is a big part of it and their families. It is my
    understanding that at least one service member has been denied
    access to those town halls where those communications--are you
    familiar with that?
        Mr. Picerne. Congressman, I am not familiar with that.
        Mr. Brown. Okay. I would ask you, please, to familiarize
    yourself with that so that when we say that service members are
    in both formal and informal communications with you that that
    means all service members. Mr. Chairman, I would ask unanimous
    consent to enter into the record a letter that I have sent
    today to the installation commander at Fort Meade asking the
    garrison commander, Colonel Spragg, to really step up his
    oversight at Fort Meade, because I really believe that you guys
    are not even making forward progress as you had committed
    earlier this year. Without objection, Mr. Chairman, can we
    enter this into the record?
        Mr. Garamendi. Without objection, is my turn. There being
    no objection.
        Mr. Brown. Thank you.
        Mr. Garamendi. So, ordered.
        [The information referred to can be found in the Appendix
    on page 111.]
        Mr. Brown. Another question. Several of the service members
    that are stationed at Fort Meade have conveyed to me that they
    have experienced direct retaliation from your company in
    response to their attempts to resolve maintenance issues with
    their homes. These behaviors include obscene gestures, drive-by
    harassment, denying access to the resident response group,
    which I just mentioned, and a refusal to address maintenance
    issues until service member receives a PCS [permanent change of
    station].
        First of all, are you aware of that? If so, whether you are
    or are not, do you condone this behavior? And, finally, what
    actions are you going to take to ensure that harassment
    immediately ceases?
        Mr. Picerne. So, Congressman, we absolutely take any form
    of retaliation, retribution, or harassment seriously and do not
    condone that behavior. I am not aware of any specific cases
    where that has taken place. I will look into it immediately and
    I will report back to you once we have our findings.
        Mr. Brown. Well, I appreciate that because I mean these are
    serious allegations. And, look, when military families are
    stepping up and just protecting their own rights, they
    certainly do not warrant retaliatory measures. With that, Mr.
    Chairman, I yield back.
        Mr. Garamendi. Thank you, Mr. Brown.
        Ms. Escobar.
        Ms. Escobar. Thank you so much, Chairman. I am very
    grateful for this hearing. Thank you to our panelists. I
    appreciate your presence here. I want to also recognize and
    thank the military families who have expressed so much courage
    in the face of potential retaliation and after years of
    frustration and incredible difficulty. Thank you all so much
    for being here. I am very, very grateful for your strength and
    your courage.
        The roundtable that we had with military families--and I
    have had some of these conversations with you all personally,
    not everyone but with most of you. Those conversations at the
    roundtable were shocking, heartbreaking, difficult to hear and,
    to be honest, infuriating. And I am very grateful that there
    has been a spotlight placed on all of this and that there has
    been a demonstrated desire to preserve the private-public
    partnership but to improve it in order to sustain it and make
    sure that we continue it.
        Mr. Taylor, we had a conversation about all of this, but as
    I mentioned to you all in my office, what was particularly
    troubling on top of the many issues that families brought
    forward, issues that literally meant that people's lives were
    upended, that health was put at risk, children were put at risk
    through mold and through everything else, what was particularly
    troubling for me was the fraud allegations. And we talked about
    everything that you all are doing to not just remedy but to
    investigate and I appreciate the investigation. But I am going
    to ask you here in this hearing publicly the same thing that I
    asked you in my office and this is about accountability,
    because too often accountability is swept under the rug or as I
    mentioned to you, lower-level employees sometimes are fired,
    but the high-paid, high-level folks who should have known and
    who should have created a culture of accountability remain
    untouched.
        So I am going to ask you here in this hearing what I asked
    you privately, which is I would like to know the number of
    dismissals that have occurred as a result of the fraud
    allegations, any other disciplinary actions that have been
    taken, and how will leadership, how far up the chain will that
    accountability go, how will leadership be held accountable?
        And if you could answer all of those questions for me, I am
    not asking for names of folks. I am not asking for you to
    disclose anything that is in personnel files. This is important
    to understand in terms of accountability, for me, the general
    information, please.
        Mr. Taylor. Thank you, Congresswoman. And I do recall the
    conversation and it gave me an opportunity to go back and
    interrogate our information so that I would be prepared to
    respond. Before I give you the number, I will just say this and
    I will repeat a comment, a remark that I made earlier. We are
    all accountable. We are all accountable to provide the service
    that we are entrusted to provide. It doesn't matter where we
    sit in the organization.
        Since the allegations of fraud were levied earlier this
    year, you know, I went back and I asked our staff to look at
    how many folks that were on our staff were let go because they
    didn't comply with our policies, procedures, our code of
    conduct, because that is really at the heart of our
    organization. If we don't have staff members that are willing
    to follow those policies and procedures, that is an obvious
    weakness in any organization.
        And since the beginning of this year, we have found 17
    instances of where we have let people go because they were not
    complying with the standards that we have set for our
    employees. Where they sit in the organization, most of--from,
    without naming specific positions, there were managers that
    were let go. Those folks were at project sites, I grant you.
        I will tell you this, that, and again to reiterate a
    comment I made earlier, regardless of what the investigation
    reveals, if it identifies wrongdoing by any member of our
    staff, it doesn't matter if it is at the top of the
    organization, the middle of the organization, or wherever it
    sits, rest assured that we will take the appropriate action to
    make sure that those folks no longer are employed by our
    company.
        Ms. Escobar. Thank you. And I am just about out of time,
    but I will just say to all of you, it will be very important
    that the improvements that you have made that you report back
    to us. We need to know the number of calls, the number of
    people using the apps, et cetera, that we need to see within a
    time certain a reporting back, complete transparency, because
    that is the only way that we can hold you all accountable as
    well as hold ourselves accountable.
        Mr. Chairman, I yield back.
        Mr. Garamendi. Thank you, Ms. Escobar.
        Votes have been called, so I am just going to wrap it up
    with a couple of comments. I have noticed that the quality of
    questions from both sides here have asked most everything I
    would have asked, but I want to make a couple of comments.
    First of all, this hearing is one of a series. We will not let
    this issue go as long as, I am sure, the members of this
    committee are still Members of the House of Representatives we
    are going to stay on this. And, certainly, the committee will,
    certainly during my chairmanship and I am sure should that
    lapse and somebody else has it, it will carry on.
        So be aware, gentlemen. And for those who are not here that
    are part of this system, they too are going to be held
    accountable along the lines of the questions asked by the
    committee. Two things, or several things need to be noted.
    First of all, we knew right at the outset that part of the
    problem was that the base commanders did not take
    responsibility. That is changing. That needs to be addressed.
    The Pentagon is well aware of it from the previous Secretary
    all the way down the line and we will see to it that that
    accountability remains within the military and the base
    commanders.
        Secondly, there will be a bill of rights. It is in final or
    near-final form. We have not had a chance to review it. I am
    told the Pentagon is awaiting the passage of the NDAA and the
    final version of it, which may have some impact on the bill of
    rights itself. But it will be forthcoming, and it will in many
    ways deal with many of the issues that we have heard here
    today.
        Secondly, the question of the lease contracts themselves,
    we will push that all leases across the entire military reach
    the highest standard of any State lease, a homeowners' and
    tenants' laws and the highest standard, which I am told might
    be Massachusetts, but I claim California. We will see. If any
    of the members think that their tenant rights are better in
    North Carolina, well, bring it forward and we will see. But in
    any case, we will try to achieve consistent with the
    multiplicity of contracts that do exist between the military
    and the private housing providers. We will make sure that the
    lease contracts protect the tenants so that tenants will be in
    the first order.
        Secondly, many questions about metrics, how do we observe
    quality or lack thereof across the whole range of issues. Those
    metrics are under review and I would ask any member that has
    ideas about what should be in those metrics to bring it to us
    and we will drive that forward. Finally, with regard to the
    role of the tenants and the communities themselves, there are
    efforts underway on many of the bases, but I suspect not all,
    that there be formed within the homeowning, excuse me, the
    rental community or the renters' programs in which they can
    participate. The word ``PTA'' was used here. I am not sure that
    that is the best model, but it certainly speaks to the
    involvement of the families working together to assure that
    their issues are fully dealt with at the base level and, if
    necessary, here in Congress.
        So, I think that covers many of the issues. Mr. Lamborn,
    any further thoughts?
        Then this meeting is adjourned and before I adjourn, we are
    coming back, folks. We will do these hearings every 4 months or
    so, so we will be back in the early spring for a review of
    where we are, and we will ask the services as well as the
    owners of the privatized housing. We are adjourned.
        [Whereupon, at 2:27 p.m., the subcommittee was adjourned.]

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                                A P P E N D I X

                                December 5, 2019

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                  PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                                December 5, 2019

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                       DOCUMENTS SUBMITTED FOR THE RECORD

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                  WITNESS RESPONSES TO QUESTIONS ASKED DURING

                                  THE HEARING

                                December 5, 2019

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                RESPONSES TO QUESTIONS SUBMITTED BY MS. HOULAHAN

        Mr. Picerne. Over the last year, our property management group's
    policy toward displaced families has evolved and been standardized
    across our portfolio. Operations Directors at each installation have
    the authority to make reasonable adjustments to our policy as is
    determined to be appropriate upon consultation with our partners in the
    Army and Air Force. Under all circumstances, we provide residents with
    alternate housing, including either a fully furnished hospitality suite
    on post or a hotel on or off-post as available, as well as an allowance
    for food and personal items. If provided a hospitality suite on post,
    then we may reimburse the family's BAH on a prorated basis depending on
    how long they have been displaced. We only ask that families move into
    a hotel suite if a fully furnished on-post hospitality suite is
    unavailable, and if that is necessary, will reimburse them 100% of the
    daily BAH rate for all days they are displaced, as well as provide a
    per diem for food, additional expenses, and for pet lodging if
    necessary. We expect that this policy will continue to evolve, as we
    are working with the Services and other MHPI partners to standardize
    our policies pursuant to Congressional direction in the recently-passed
    National Defense Authorization Act for 2020. I have attached a copy of
    our property management company's current standard operating procedures
    with respect to lead-based paint and suspected mold. Please note that
    these policies are also subject to revision as we, along with other
    MHPI partners, continue to work with the Services to developed
    standards policies and procedures.   [See page 18.]
        [The documents referred to are retained in the committee files and
    can be viewed upon request.]
        Mr. Picerne. ``If a family's personal belongings are damaged or
    destroyed due to conditions in a home that our property management
    group has not properly addressed, we will work with them to ensure that
    they are compensated. We strongly encourage all of our residents to
    obtain renters insurance, which will typically cover costs to replace
    belongings damaged by weather, fire, and other common events. But, in
    instances when a renter does not have insurance, or where insurance
    does not cover damage, we will work with the resident to clean
    belongings that we can, and replace those that cannot be preserved.''
    [See page 18.]
        Mr. Ehle. First and foremost, our goal at Hunt Military Communities
    (``Hunt'') is to provide safe, healthy, and quality homes for military
    families. To that end, Hunt has reviewed its policies and procedures
    to, among other things, ensure close adherence to environmental
    management plans, including mold operations and maintenance plans.
    These plans address remediation of environment-related housing issues
    and ensure that such issues are being handled in a consistent manner
    with appropriate oversight from a corporate level. Hunt has also
    enhanced and reinforced the training requirements of its maintenance
    technicians for environmental conditions and, when necessary, deploys
    licensed and certified third-party environmental experts. Hunt has also
    added in-house environmental positions to augment support, oversight,
    and compliance related to addressing environmental matters when they
    arise in our homes.
        Hunt's operations and maintenance plans for lead-based paint, mold,
    and asbestos-containing material follow the published guidance of the
    U.S. Environmental Protection Agency (``EPA''), Centers for Disease
    Control and Prevention, and applicable state regulatory agencies.
    Prescriptive remediation/abatement procedures are performed in
    accordance with guidance documents and standards, such as the Institute
    of Inspection, Cleaning and Restoration Certification (``IICRC'') S500-
    Standard and Reference Guide for Professional Water Damage Restoration,
    IICRC S520-Standard and Reference Guide for Professional Mold
    Remediation, the EPA National Emission Standards for Hazardous Air
    Pollutants, the Asbestos Hazard Emergency Response Act, and EPA's
    Renovation, Repair, and Painting Rule.
        Hunt believes it is important to educate its residents on health-
    and safety-related issues. Upon move-in, we affirmatively provide new
    residents with health and safety information regarding moisture and
    mold, lead-based paint, asbestos, radon, and/or pesticides. We have
    also redesigned for greater visibility and expanded the content of the
    Hunt Safety Zone, an online library of safety information for residents
    that is regularly updated with new or seasonally-specific information.
        As part of its mission to keep its homes in good condition, Hunt
    has an extensive inspection and preventative maintenance program at its
    properties to ensure the homes are meeting applicable standards.
    However, we recognize that there is no such thing as maintenance-free
    housing and that issues will inevitably arise that must be remedied. In
    these instances, we strive to address the situation in a professional,
    transparent, and timely manner, with a focus on resident safety.
        We classify resident-reported issues that pose an immediate danger
    to life, safety, or health as ``emergencies,'' and we strive to respond
    in one hour or less; other work orders are classified as ``urgent'' or
    ``routine'' with priority-appropriate target response and completion
    times. If the nature of the repairs requires a resident to be out of
    their home during a repair for a night or more, we will secure
    temporary accommodations and may provide financial support to ensure
    that the resident is not paying out-of-pocket during this time, for
    example, by providing gift cards for meals or rent concessions.
    Recognizing that confusion has arisen as a result of inconsistent
    displacement accommodations, we are collaborating with the Services in
    their efforts to establish a uniform resident displacement policy. We
    fully support the adoption of such a policy across all Military Housing
    Privatization Initiative (``MHPI'') communities to establish
    consistency no matter where residents reside, and to avoid confusion
    and missed expectations.
        Hunt also supports a number of other industry-wide uniform
    initiatives to promote the safety and health of residents with respect
    to environmental conditions, and to provide for a more consistent
    living experience across the entire MHPI portfolio, including:
          A uniform approach to health and environmental
    inspections;
          A uniform moisture and mold program designed in
    conjunction with licensed and accredited specialists;
          Implementation of a radon testing program in conjunction
    with the DOD;
          Developing a process to identify, record, and resolve
    environmental health hazards that is consistent with EPA and DOD
    standards;
          Conducting annual training for employees on the
    identification and remediation of environmental hazards; and
          Creating standard operating procedures to inspect and
    remediate rodent waste in attic spaces.
      [See page 18.]
        Mr. Ehle. Compensation for families when their home goods are
    damaged or destroyed depends on the particular circumstances. When, and
    if, appropriate, Hunt may pay to clean or replace personal belongings.
    [See page 18.]
        Mr. Hickey. [No answer was available at the time of printing.]
    [See page 18.]
        Mr. Hickey. [No answer was available at the time of printing.]
    [See page 18.]
        Mr. Taylor. Balfour Beatty Communities' lead-based paint (LBP)
    management policy describes policy and procedure for work around and
    handling interior and exterior surfaces know to contain lead-based
    paint. The policy also outlines procedures for compliance with LBP
    disclosure and Renovation, Repair and Painting (PRP) regulations. A
    copy of our policy is provided as Attachment A.
        [The document referred to is retained in the committee files and
    can be viewed upon request.]
        We also maintain a mold management policy, which outlines our
    policy and procedure regarding mold-related work orders submitted by
    residents. A copy of this policy is provided as Attachment B.
        [The document referred to is retained in the committee files and
    can be viewed upon request.]
        In certain circumstances, a tenant may need to be temporarily
    relocated when repairs or maintenance are so significant that the
    rental unit is unable to be occupied while work is undertaken. We
    recognize the importance of having a comprehensive policy and a
    consistent approach that outlines clear guidelines for managing
    resident displacements across our military housing portfolio. A copy of
    our Temporary Relocation Policy is provided as Attachment C.
        [The document referred to can be found in the Appendix on page
    113.]
        While this information reflects BBC's Temporary Relocation Policy,
    we are actively working with the Department of Defense and Services to
    develop uniform displacement policies that ultimately may be applied
    across all Military Housing Privatization Initiative (MHPI) projects.
    [See page 18.]
        Mr. Taylor. To the extent Balfour Beatty Communities is determined
    to be at fault with respect to the damage or destruction of any
    personal resident property, we would seek to provide reasonable
    compensation to residents.   [See page 18.]
        Mr. Bliss. Attached is a copy of Lincoln Military Housing's Water
    Intrusion/Mold Operations and Maintenance Plan. Lincoln commissioned an
    independent third party mold expert to review this policy in 2019 and
    it was found to meet, and in most cases exceed, industry standards in
    every respect. Lincoln's Lead Based Paint Operations and Maintenance
    Plans are site specific, and a representative sample is attached here.
        [The documents referred to can be found in the Appendix beginning
    on page 116.]
        With regards to displacement, all of Lincoln's projects provide
    allowances for residents who have been displaced from their homes
    through no fault of the tenant, to include covering the costs of
    temporary lodging in every case, and per diem for incidentals and meals
    where appropriate. I am also pleased to report that Lincoln Military
    Housing, in collaboration with the other privatized military housing
    partners, has been working towards a standardized displacement policy
    to ensure consistency across each of our projects, and the industry,
    with regards to displacement allowances. This policy will be aligned
    with the requirements in the 2020 NDAA, subject to additional
    requirements in state and local law, and we expect it to be rolled out
    industry-wide in the next few months.   [See page 18.]
        Mr. Bliss. This is dependent on the cause of the damage. If the
    damage is the result of a failure of a system in the home (roof,
    appliance, etc) that is included in the lease, an incident report will
    be completed and the resident's items will be covered under our
    insurance policy. If the failure is a natural disaster or the result of
    an action attributed to the resident (i.e. house fire with a report
    indicating resident responsibility, flood from a storm, etc), the
    replacement cost would be the resident's responsibility, just as it is
    in the economy where 80% of service men and women live today. We have
    consistently worked with families and helped coordinate with those who
    have personally owned renter's insurance.   [See page 18.]
                                     ______

                RESPONSES TO QUESTIONS SUBMITTED BY MS. STEFANIK
        Mr. Picerne. We agree that empowering and enabling residents to
    raise any concerns that they may have is the best way to ensure that we
    are hearing their concerns, and meeting their needs. We have taken a
    variety of steps to better serve residents at each of the installations
    where we manage military family housing, including working with our
    Army and Air Force partners to establish resident focus groups,
    bringing back local call centers to help coordinate maintenance work
    directly with residents at each installation, establishing the Corvias
    Resident Portal to allow 24/7 online access to work order submission
    and status, and hiring resident Ombudsmen to work directly with
    residents to address their concerns. We will continue to work with our
    partners to ensure that all of our residents are afforded every
    opportunity to exercise their rights, and that we are providing the
    gold standard of service that our residents deserve.   [See page 21.]
        Mr. Ehle. Hunt has been a leading voice for ongoing industry-wide
    reform and standardization, and supports a number of initiatives to
    standardize and improve the MHPI program in partnership with the
    Services, including a uniform resident lease, a resident bill of
    rights, resident responsibilities, uniform dispute resolution
    guidelines, and a uniform resident displacement policy.
        Hunt recognizes and appreciates the unique challenges our military
    families face and Hunt is committed to ensuring our families are
    afforded an equal or better experience than residents may find in the
    conventional rental market. Each Hunt resident enters into a resident
    lease approved by our military partners that affords our military
    families detailed rights and obligations similar to those found in the
    conventional rental market, yet recognizing and addressing the unique
    circumstances of living on or in the vicinity of a military
    installation, including the military policies and procedures that
    govern the installation and its residents. For example, Hunt lease
    forms generally provide residents with a detailed description of, among
    other things, their monthly rent, the term of their lease, the
    utilities included in their monthly rent, move-in/moveout procedures,
    the circumstances under which a resident may terminate their lease
    early, conditions under which pets may occupy the housing unit, the
    delineation of maintenance and other responsibilities between Hunt and
    the resident, conditions under which Hunt may enter the housing unit,
    procedures for residents to submit maintenance requests, community
    amenities, conditions under which a resident may operate a business
    from their home, and the process for landlord-resident dispute
    resolution.
        With respect to our goal to provide safe, healthy, and quality
    homes for military families, we measure our success in a number of
    ways. For example, we look at whether military families are choosing to
    reside in Hunt homes rather than in other housing in the marketplace,
    as well as customer satisfaction via resident surveys. We have
    implemented an enhanced resident survey tool run by a third party,
    SatisFacts, to measure customer satisfaction at move-in, move-out, and
    after work order completion. It is a very quick 5-star survey that is
    automatically sent to the resident at the conclusion of each of these
    events to ask the resident about their satisfaction. The resident
    completes the survey, and the results go immediately to the site
    management team at the resident's property. If the response yields a
    score of less than 3.5 (in the SatisFacts scale, a 3 is ``Satisfied''),
    the Community Director at the property is to contact that resident the
    same day to ascertain where we fell short of expectations so we can
    better resolve the issue and make improvements going forward.   [See
    page 21.]
        Mr. Taylor. Balfour Beatty Communities believes that all military
    housing residents are entitled to:
          A well-maintained and comfortable home
          A clean, attractive community and well-maintained amenity
    spaces
          Responsive, knowledgeable and friendly customer service
          Convenient methods to communicate with our team, express
    concerns and provide feedback
          Treatment with integrity, respect and professionalism by
    our team at all times, including honest and straightforward
    communications
          Fair treatment within Fair Housing guidelines
        To continuously ensure our residents have the best possible living
    experience, we send out a comprehensive Resident Satisfaction Survey
    annually that is designed to gather your opinions, ideas and concerns
    regarding our community, service and staff. In addition, we issue
    quality check surveys after move-in and every completed work order to
    confirm our performance has met or exceeded your expectation and there
    are no outstanding issues or concerns.
        Any resident who is not satisfied with their living experience with
    us at any of our military housing communities is encouraged to reach
    out to our senior management team via our BB Cares Helpline. The BB
    Cares Helpline is a dedicated resident relations system providing
    residents with direct assistance from our corporate management team.
        We also are actively working with the Department of Defense and
    Services to develop a uniform bill of rights that will be incorporated
    into resident leases and applied across all Military Housing
    Privatization Initiative (MHPI) projects.   [See page 21.]
        Mr. Bliss. Lincoln Military Housing has recently, or previously,
    implemented the below provisions outlined in the NDAA/DOD proposed
    Tenant Bill of Rights.

    Proposed Military Housing Privatization Initiative Tenant Bill of
    Rights

         1.  The right to reside in a housing unit and a community that
    meets applicable health and environmental standards.
         2.  The right to reside in a housing unit that has working
    fixtures, appliances, and utilities and to reside in a community with
    well-maintained common areas and amenity spaces.
         3.  The right to a written lease with clearly defined rental terms
    to establish tenancy in a housing unit, including any addendums and
    other regulations imposed by the Landlord regarding occupancy of the
    housing unit and use of common areas--LMH has been the lead on
    assisting Partners and the DOD with the appropriate language.
         4.  The right to have sufficient time and opportunity to prepare
    and be present for move-in and move-out inspections, including an
    opportunity to obtain and complete necessary paperwork.
         5.  The right to report inadequate housing standards or deficits
    in habitability of the housing unit to the Landlord, the chain of
    command, and housing management office without fear of reprisal or
    retaliation, including reprisal or retaliation in the following forms:
    (A) unlawful recovery of, or attempt to recover, possession of the
    housing unit; (B) unlawfully increasing the rent, decreasing services,
    or increasing the obligations of a Tenant; (C) interference with a
    Tenant's right to privacy; (D) harassment of a Tenant; (E) refusal to
    honor the terms of the lease; or (F) interference with the career of a
    Tenant.--While we can support this, we feel examples and more detailed
    definitions are required.
         6.  The right of access to a Military Tenant Advocate or a
    military legal assistance attorney, through the housing management
    office of the installation of the Department at which the housing unit
    is located to assist in the preparation of requests to initiate dispute
    resolution.
         7.  The right to receive property management services provided by
    a Landlord that meet or exceed industry standards and that are
    performed by professionally and appropriately trained, responsive and
    courteous customer service and maintenance staff.
         8.  The right to have multiple, convenient methods to communicate
    directly with the Landlord maintenance staff, and to receive
    consistently honest, accurate, straightforward, and responsive
    communications.
         9.  The right to have access to an electronic work order system
    through which a Tenant may request maintenance or repairs of a housing
    unit and track the progress of the work.
        10.  With respect to maintenance and repairs to a housing unit, the
    right to the following: (A) prompt and professional maintenance and
    repair; (B) to be informed of the required time frame for maintenance
    or repairs when a maintenance request is submitted; and (C) in the case
    of maintenance or repairs necessary to ensure habitability of a housing
    unit, to prompt relocation into suitable lodging or other housing at no
    cost to the Tenant until the maintenance or repairs are completed.
        11.  The right to receive advice from military legal assistance on
    procedures involving mechanisms for resolving disputes with the
    property management company or property manager to include mediation,
    arbitration, and filing claims against a Landlord.
        12.  The right to have reasonable, advance notice of any entrance
    by a Landlord, installation housing staff, or chain of command into the
    housing unit, except in the case of an emergency or abandonment of the
    housing unit.
        13.  The right to not pay non-refundable fees or have application
    of rent credits arbitrarily held.
        14.  The right to expect common documents, forms, and processes for
    housing units will be the same for all installations of the Department,
    to the maximum extent applicable without violating local, State, and
    Federal regulations.   [See page 21.]

    ?

    =======================================================================

                  QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                                December 5, 2019

    =======================================================================

                      QUESTIONS SUBMITTED BY MS. HOULAHAN

        Ms. Houlahan. It is our understanding the agreements made between
    the services and public private partner give majority ownership to the
    P3. We are aware that DOD cannot unilaterally change the deal
    agreements they have with private companies and every contractual
    change must be negotiated and agreed upon by the housing companies.
        What liberties are you afforded as the majority partner in the
    partnerships? What decisions are you allowed to make as a company that
    the services may not have say in?
        Do the services have a say in who is subcontracted out to do
    maintenance work/renovations? Can the services fire a subcontractor or
    property manager hired by the P3?
        If you had a subcontractor who was underperforming or being alleged
    of fraud, waste, abuse or called to testify in front of Congress for
    these issues, how would you handle the future of that relationship?
        Mr. Picerne. We work closely with our Army and Air Force partners
    with respect to all of the substantive operational decisions with
    respect to housing on each of the military installations we serve. Our
    partners are directly involved in ongoing budget decisions, have direct
    oversight over all major expenditures, and receive daily updates with
    respect to our work with residents. While our partners do not typically
    schedule maintenance, engage in direct leasing activity, or otherwise
    direct our employees' day-to-day activity, they do maintain regular
    operational oversight, and receive daily updates regarding our work.
    They have access to our maintenance and leasing systems, and regularly
    coordinate with us regarding work undertaken by contractors on behalf
    of the partnerships. The specific obligations of each Member may vary
    depending on the specific partnership at issue. These roles and
    responsibilities are spelled out in the Operating Agreement, Property
    Management Agreement, and other agreements applicable to each of the
    partnerships.
        A Service may, in accordance with the agreement between the Service
    and the private MHPI partner, request that a contract between the MHPI
    project company (P3) and a subcontractor or property manager be
    terminated, and in such case, in accordance with the private MHPI
    partner's agreement with the Service, it is required to terminate that
    subcontract or property management agreement.
        The Services may request that the Partnership terminate a
    relationship with a contractor or subcontractor and Partnership will do
    so. If we had a subcontractor who was underperforming or being alleged
    of fraud, waste, abuse or called to testify in front of Congress for
    these issues, we would investigate anything that was appropriate for us
    to investigate directly, and await the results of any investigations
    conducted by Congress or other authorities, and then, after considering
    all facts and circumstances, determine the appropriate response and
    actions we'd take regarding the future of that relationship.
        Ms. Houlahan. The GAO recently found several concerning data
    anomalies in the work order systems for MHPI projects, including
    duplicates, closed out work orders prior to submission date, and work
    orders open for over 18 months. Additionally, there have been recent
    reports that Balfour Beatty employees have intentionally rigged work
    orders so their company could receive incentive fees.
        Were any of you, as senior leaders in your companies, aware of
    intentional data rigging to receive incentive fees? How can you ensure
    this will not happen moving forward?
        GAO also found that measures for satisfaction and quality of
    housing used were invalid measures. What have your companies done to
    update these metrics to ensure health and safety are accurately
    measured?
        Mr. Picerne. I was not aware of any intentional attempts to
    increase incentive fees by prematurely closing work orders prior to
    public allegations of such behavior on the part of Balfour Beatty.
    Since hearing of these allegations, Corvias has taken proactive steps
    to work with our Air Force and Army partners to ensure that work orders
    are being addressed and closed appropriately.
        While our Army and Air Force partners develop and deliver the
    satisfaction surveys used to evaluate our performance, we will continue
    to work with them to accurately measure resident satisfaction. We rely
    heavily on this data to help us better serve our residents, and we
    share your concerns that this data may not accurately reflect
    resident's opinions due to the specific questions, format, or delivery
    methods adopted by our partners. For this reason, in addition to the
    annual resident satisfaction surveys, we ask residents to complete a
    survey after every work order, and watch those results closely to
    ensure that we are responding to their needs.
        Ms. Houlahan. It is our understanding the agreements made between
    the services and public private partner give majority ownership to the
    P3. We are aware that DOD cannot unilaterally change the deal
    agreements they have with private companies and every contractual
    change must be negotiated and agreed upon by the housing companies.
        What liberties are you afforded as the majority partner in the
    partnerships? What decisions are you allowed to make as a company that
    the services may not have say in?
        Do the services have a say in who is subcontracted out to do
    maintenance work/renovations? Can the services fire a subcontractor or
    property manager hired by the P3?
        If you had a subcontractor who was underperforming or being alleged
    of fraud, waste, abuse or called to testify in front of Congress for
    these issues, how would you handle the future of that relationship?
        Mr. Ehle. Hunt's MHPI partnership agreements with its military
    partners generally do not specify the percentage interests owned by
    each of the partners. Accordingly, Hunt is not characterized as the
    ``majority partner.'' The military partner is entitled to a majority of
    the remaining cash flow proceeds (after the payment of operating
    expenses, debt service and reserves) and the military partner exercises
    major decision rights over project decisions. Hunt typically manages
    the dayto- day operations of the privatized military housing project,
    subject to rights and controls afforded to the military partner. In
    addition, consistent with its role as ``day-to-day'' manager of these
    projects, affiliates of Hunt are responsible for property management
    and asset management at most of its properties. At certain properties,
    where Hunt and other private parties own an interest in the
    partnership, management of the project is delegated to Hunt's partner
    or a third party.
        Hunt works collaboratively with its military partners, including on
    maintenance work and renovations. Full transparency is a hallmark of
    these partnerships. Our military partners have multiple controls in
    place to oversee and monitor Hunt's performance, and we encourage such
    engagement. Hunt is subject to various reporting and inspection
    requirements that occur on a weekly, monthly, quarterly, and annual
    basis. Our military partners have access to our maintenance software,
    Yardi, and can review work orders and survey responses. They are also
    able to inspect homes and follow up directly with residents. Each of
    our military partners has its own unique requirements for reporting and
    inspection.
        For example, Hunt is required to provide monthly reports to its
    military partners on the financial health of the project, including an
    analysis of the approved annual operating budget. On a quarterly or
    semi-annual basis, Hunt conducts a meeting with military leadership at
    the base, command, and housing levels, as well as with the military's
    independent consultants. These meetings are intended to maintain open
    and consistent communication between the partners by facilitating
    discussion of the financial health of the project, sustainment of the
    project, resident issues, military partnership issues, events,
    occupancy, and/or strategic initiatives. On an annual basis, Hunt
    submits to its military partners, for example, (a) audited financials
    on a per-project basis, (b) verifications to uphold insurance,
    environmental, and document compliance, and (c) environmental reports
    relating to lead-based paint or asbestos-containing materials.
        Hunt's military partners on the projects also have extensive major
    decision and other approval rights. For example, Hunt generally must
    obtain approval from its military partners prior to encumbering or
    financing a project, distributing cash flow from a project, entering
    into or amending material project documents, including existing
    financing documents and management, construction and/or consultant
    agreements, or amending resident lease forms and related materials. The
    military partners also must approve the annual operational and
    renovation budgets for each project. In addition, among other
    deliverables, Hunt is required to provide detailed information on a
    project's operations, capital repair and replacement activities,
    executive home budgets, and long-term out-year sustainment plans for
    review and approval by its military partners and their independent
    consultants.
        Hunt is also subject to financial or other penalties if it fails to
    perform under its contracts. Under the terms of our project agreements,
    a military partner may terminate our agreements in certain situations,
    including, without limitation, if we are in material default of our
    obligations. Alternatively, if we are not in material default of our
    agreements, but we have, nevertheless, failed to meet performance
    expectations, a military partner may withhold all, or a portion of, our
    incentive fees.
        Hunt sometimes engages third-party subcontractors or vendors to
    provide services such as painting, HVAC maintenance, lawn care, and
    snow removal. The Managing Member of a project owner and affiliated
    entities has the right to engage contractors or subcontractors, subject
    to certain controls. These controls include, but are not limited to,
    (a) bidding requirements and consent rights for contracts exceeding
    specified amounts, and (b) specific requirements for contracts with
    affiliates.
        If we had a subcontractor who was not meeting its contractual
    obligations or facing allegations of fraud, waste, or abuse, we would
    take action to address the issue, up to and including terminating our
    relationship with that subcontractor, if warranted.
        Ms. Houlahan. he GAO recently found several concerning data
    anomalies in the work order systems for MHPI projects, including
    duplicates, closed out work orders prior to submission date, and work
    orders open for over 18 months. Additionally, there have been recent
    reports that Balfour Beatty employees have intentionally rigged work
    orders so their company could receive incentive fees.
        Were any of you, as senior leaders in your companies, aware of
    intentional data rigging to receive incentive fees? How can you ensure
    this will not happen moving forward?
        GAO also found that measures for satisfaction and quality of
    housing used were invalid measures. What have your companies done to
    update these metrics to ensure health and safety are accurately
    measured?.
        Mr. Ehle. We are not aware of any Hunt properties that are engaged
    in practices of the type alleged elsewhere in terms of ``off the
    books'' maintenance logs and deliberate falsification in order to
    obtain unearned incentive fees. Falsifying work orders would be wholly
    unacceptable and against our code of conduct.
        Because the privatization of properties that comprise the MHPI
    program took place over a 15- to 20-year period, the standards for
    response and completion of resident-initiated service requests vary
    greatly among the Services and across properties for a particular
    Service. At any given property, the applicable standards may simply be
    unclear. Hunt supports ongoing efforts to engage with the DOD and the
    Services to develop and adopt uniform, clear, and workable standards
    for all Services, across the industry, and at all properties. In the
    meantime, Hunt has adopted a company-wide ``Hunt Standard'' for work
    order response and completion. We expect these efforts to promote
    consistent and improved maintenance practices and performance.
        We have implemented an enhanced resident survey tool run by a third
    party, SatisFacts, to measure customer satisfaction at move-in, move-
    out, and after work order completion. It is a very quick 5-star survey
    that is automatically sent to the resident at the conclusion of each of
    these events to ask the resident about their satisfaction. The resident
    completes the survey, and the results go immediately to the site
    management team at the resident's property. If the response yields a
    score of less than 3.5 (in the SatisFacts scale, a 3 is ``Satisfied''),
    the Community Director at the property is to contact that resident the
    same day to ascertain where we fell short of expectations so we can
    better resolve the issue and make improvements going forward. These
    satisfaction surveys also help us assess the extent to which we are
    achieving our goal to provide safe, healthy, and quality homes for
    military families.
        Ms. Houlahan. It is our understanding the agreements made between
    the services and public private partner give majority ownership to the
    P3. We are aware that DOD cannot unilaterally change the deal
    agreements they have with private companies and every contractual
    change must be negotiated and agreed upon by the housing companies.
        What liberties are you afforded as the majority partner in the
    partnerships? What decisions are you allowed to make as a company that
    the services may not have say in?
        Do the services have a say in who is subcontracted out to do
    maintenance work/renovations? Can the services fire a subcontractor or
    property manager hired by the P3?
        If you had a subcontractor who was underperforming or being alleged
    of fraud, waste, abuse or called to testify in front of Congress for
    these issues, how would you handle the future of that relationship?
        Mr. Hickey. As a standard fee for service provider, the Project
    Companies are vested with the day-to-day operations of administering
    the projects, including but not limited to qualifying the companies
    under applicable federal or state laws, paying its debts, refinancing
    its debts, contracting for various professional services such as
    managers, accountants, attorneys, and consultants, purchasing
    insurance, paying the Project Company's operating expenses in
    accordance with lockbox agreements and commencing or responding to any
    litigation. However, the Project Companies do not have unfettered
    rights to operate the project without the express consent and direct
    approval of our military partner with respect to most material matters.
        Despite being the managing or sole member of the respective Project
    Companies, the Military Services retain integral governance oversight
    and control over a litany of major issues impacting each Project
    Company through contractual rights contained in the various project
    documents. This is evident by the fact that the Project Companies are
    subject to many government consent rights and other limitations on what
    they can do under the terms of the negotiated ground leases, the
    respective company and project operating agreements for the Military
    Services, and the master development and management agreements under
    the respective Air Force deals. For example, the Project Companies have
    to obtain the approval from the pertinent Military Service to incur
    indebtedness (beyond certain permitted daily operating expenses), to
    execute any construction, development management, asset management or
    property management and maintenance agreements, to terminate or replace
    the contractors under those respective arrangements, to alter funding
    levels of certain operating and development accounts and reserves, to
    make any expenditure that deviates from already approved project budget
    and business plan by certain thresholds, to award any incentive fees,
    to change the guaranteed scope of work, to change the unit online
    schedule, to make any expenditure from the replacement reserve
    subaccount, and to enter into any affiliated contracts (which in any
    event must be on prevailing market terms to prevent self-dealing). The
    foregoing list represents merely an abbreviated version of some of the
    salient areas where the Project Companies are constrained from acting
    unilaterally; however, there are many more areas of control exercised
    by our Military Service partners, which we have not included in
    response to this inquiry.
        We are similarly constrained by what we can do under our financing
    documents (i.e., the loan agreements and trust indentures) with our
    lenders who frequently have consent rights with the respect to the same
    or similar matters as those examples noted above.
        Do the services have a say in who is subcontracted out to do
    maintenance work/renovations? Can the services fire a subcontractor or
    property manager hired by the P3?
        As the Military Services are not the contractual counterparties,
    they do not have a direct contractual right to fire such a service
    provider. However, the Military Services did require they approve such
    service providers and their negotiated form contracts be subject to
    service approval at each project's inception. In addition, on a number
    of Lendlease's projects, the Property Manager can be removed based on
    unsatisfactory performance, which gives the Military Service, recourse
    when appropriate. For instance, the Navy expressly reserves the right
    to send (or direct the Project Company to send) notices of
    dissatisfaction with such performance. If multiple notices of
    dissatisfaction are sent within a specific period, the Navy can then
    direct the Project Company to terminate and replace the Property
    Manager or the individual acting as the Director of Property
    Management. In addition to the foregoing, management agreements
    typically have termination rights for, among other things, the failure
    of the manager to perform in accordance with its contractual
    obligations.
        Furthermore, the Military Services have the right to approve any
    new asset management, property management and/or maintenance agreement
    to the property as a whole, unless the agreement can be terminated on
    thirty (30) days' notice or less without cost.
        If you had a subcontractor who was underperforming or being alleged
    of fraud, waste, abuse or called to testify in front of Congress for
    these issues, how would you handle the future of that relationship?
        In addition to the notices of dissatisfaction and potential
    termination process described above found in the projects, the
    agreements also provide for various performance metrics and we
    regularly audit our projects and have quarterly meetings with senior
    leadership in property management to address issues or problems that
    need to be escalated and rectified.
        We take allegations of fraud, waste or abuse very seriously.
        Any such allegations levied against one of the Project Company's
    subcontractors would be immediately and thoroughly investigated and if
    the allegations were proven to be true, we would pursue our rights to
    terminate the relevant contract. All of our vendor agreements include
    termination for cause provisions, which include matters such as breach
    for fraud or illegal conduct. Lendlease does not tolerate such
    behavior.
        Ms. Houlahan. The GAO recently found several concerning data
    anomalies in the work order systems for MHPI projects, including
    duplicates, closed out work orders prior to submission date, and work
    orders open for over 18 months. Additionally, there have been recent
    reports that Balfour Beatty employees have intentionally rigged work
    orders so their company could receive incentive fees.
        Were any of you, as senior leaders in your companies, aware of
    intentional data rigging to receive incentive fees? How can you ensure
    this will not happen moving forward?
        GAO also found that measures for satisfaction and quality of
    housing used were invalid measures. What have your companies done to
    update these metrics to ensure health and safety are accurately
    measured?
        Mr. Hickey. No. We are not aware of intentional data rigging to
    receive incentive fees.
        Lendlease has very robust policies and procedures in place to
    ensure that data rigging does not occur. We regularly assess and review
    these policies and procedures. For instance, it is standard operating
    procedure that each of the project teams verify preliminary data by the
    property/community manager before final submission to the applicable
    Military Service for billing/credit. Also, as stated previously, we
    have quarterly meetings with senior leadership in property management
    to learn of any issues they have encountered and to keep abreast of any
    concerns. In addition, we may, from time to time, elect to cause the
    books and financial operations of the Property Manager to be audited by
    an independent auditor that we select.
        As part of our incentive fee submission process, the Director of
    Property Management and their team prepare quarterly or semi-annual
    incentive fee submissions in accordance with the guidance provided by
    the Military Service partner. The submission package is then reviewed
    and approved by the Lendlease Project Director prior to submission to
    the local DOD partner for review and approval. This review process
    imposes multiple layers of verification to identify any potential
    inaccuracies or issues prior to final DOD leadership submission.
        Army: Each Project Company must submit documentation of incentive
    performance with a recommendation of score to the local Residential
    Communities Initiative (RCI) partner who reviews and provides feedback.
    The local Garrison Commander approves the package locally prior to
    project owner submitting to IMCOM a formal request for payment with
    ultimate signoff at the IMCOM level. Funding approval is based on a
    review of performance against DOD established performance metrics that
    are part of Project Company contractual agreements.
        Air Force: Each Project Company must submit documentation of
    incentive performance with a recommendation of score to the local HMO
    partner who reviews and provides feedback. The local Wing Commander
    approves the package locally prior to project owner submitting to AFCEC
    a formal request for payment with ultimate signoff at the AFCEC level.
    Funding approval is based on a review of performance against DOD
    established performance metrics that are part of Project Company
    contractual agreements
        Navy: The Project Company must submit documentation of incentive
    performance with a recommendation of score to NAVFAC partner who
    reviews and provides feedback. Funding approval is based on a review of
    performance against DOD established performance metrics that are part
    of Project Company contractual agreements.
        Measures to Ensure Accuracy in Submissions
        We have reviewed our policies, procedures and reporting systems
    with the goal to ensure our project teams are properly executing
    company policy, particularly around the service order reporting
    process. Here are a few examples of how our systems are designed to
    maintain the integrity of Service Order reporting:
          All resident work orders are generated directly in Yardi
    through a call center or via our Military Cafe portal/app to ensure
    they are created real-time directly by the resident;
          All technicians use mobile devices to track all
    activities including their time, parts, notes and work status. Their
    time is validated against the HRIS system, which is also electronic, to
    ensure time is captured accurately; and
          Resident receives an email and survey request upon
    completion of work order, which is system-generated
        Additionally, we have added new monthly reviews and tools,
    including a new Business Intelligence Dashboard that is reported to
    senior Lendlease executives as part of a monthly business review. This
    provides transparency and visibility to the senior most levels of the
    organization around work order response and completion times.
        Isolated Incident Disclosed
          Reverting back to the question raised above in 35A, after
    learning of the alleged incentive fee manipulation by another private
    developer in the media, we further assessed all our projects and
    learned of only one isolated incident at a project in fiscal year 2009
    where a community manager duplicated callback cards.
          This former employee of our property manager was
    attempting to expedite her work by transcribing survey card responses
    contemporaneously and directly to the feedback tracking sheets, rather
    than performing the required follow-up phone calls to residents in
    accordance with the transaction documents. This issue was identified
    during review and preparation of the fee package with the Lendlease
    Project Director prior to submission. It was based upon the verbatim
    wording of resident comments appearing in both comment cards from
    residents and feedback sheets during said quarter. The feedback call
    sheets for the quarter in question were discarded and none of the
    inaccurate data was reported to the Air Force or claimed as
    justification for incentive fee or other compensation. Nevertheless, we
    disclosed this finding to the Senate.
          Our process for preparation of our incentive fees
    includes the Director of Property Management and their team preparing
    the quarterly or semi-annual submissions. It is then reviewed and
    approved by the Lendlease Project Director and approved prior to
    submission to the local DOD partner for review and approval. This
    review process is how the above isolated incident was identified.
          While this was an anomaly, we include it in the interests
    of full transparency and to demonstrate how stringent our checks and
    balances are.
        GAO also found that measures for satisfaction and quality of
    housing used were invalid measures. What have your companies done to
    update these metrics to ensure health and safety are accurately
    measured?
        Lendlease has developed several new exception reports that
    proactively identify data anomalies so they can be researched and
    corrected in a timely fashion. As the GAO report pointed out, even with
    the best IT systems and enterprise software, the human element provides
    opportunities for data entry mistakes (dates transcribed incorrectly
    and spotty mobile coverage areas that may produce syncing errors
    between the technicians' mobile tablets and the database of record),
    which necessitates data validation. These new tools look for anomalies
    such as:
          Labor Finish before Call Date
          Labor Finish with no Start Date/Time
          Labor Start before Call Date
          Labor Start with no Finish Date/Time
          Labor Start with Future Date
          WO Completed with Future Date
          Labor Finish before Labor Start
        Though Lendlease has independently developed this report, we have
    offered this improved protocol to the Yardi platform so it may be used
    by other developers.
        Additionally, Lendlease has enhanced internal key performance
    indicator dashboards and reporting tools with a broadened review and
    distribution program. Lendlease uses business intelligence platforms
    through a proprietary solution to synthesize data between multiple data
    sources to evaluate customer experience, service order performance and
    other key metrics. We internally monitor qualitative metrics for
    service order satisfaction based on indicators of excellent service
    including open work order aging, repeat work orders, service order
    response and completion time averages, and work order exceptions.
        Lendlease has also been working with our Military Service partners
    and the other developers towards the modification and standardization
    of performance incentive metrics in order to provide consistent
    measures to assess resident satisfaction and our performance. These
    metrics provide objective focus on service order response and
    completion, resident feedback, preventive maintenance and focus on
    business success factors from within the annual survey rather than
    subjective criteria.
        Ms. Houlahan. It is our understanding the agreements made between
    the services and public private partner give majority ownership to the
    P3. We are aware that DOD cannot unilaterally change the deal
    agreements they have with private companies and every contractual
    change must be negotiated and agreed upon by the housing companies.
        What liberties are you afforded as the majority partner in the
    partnerships? What decisions are you allowed to make as a company that
    the services may not have say in?
        Do the services have a say in who is subcontracted out to do
    maintenance work/renovations? Can the services fire a subcontractor or
    property manager hired by the P3?
        If you had a subcontractor who was underperforming or being alleged
    of fraud, waste, abuse or called to testify in front of Congress for
    these issues, how would you handle the future of that relationship?
        Mr. Taylor. BBC is not the majority owner of the project companies
    that operate the Military Housing Privatization Initiative (MHPI)
    projects from an economic or control perspective. Each project has a
    set of legal agreements that govern the rights of the project owners
    and what actions require government and/or third-party lender approvals
    to enter into subcontracts, make changes to lease forms or policies and
    procedures that govern operation of the properties, or cause amendments
    to any of the project agreements themselves. As a result of the
    complicated structure of the MHPI projects and different terms
    negotiated on a project by project basis, it is difficult to address
    these questions without providing a distinct response for each of BBC's
    21 projects. In an attempt to address these questions on a universal
    basis, however, we provide the following:
        Generally, BBC is the manager/managing member of each project
    company, which means it has the responsibility to perform the day-to-
    day management of the project (i.e., the power to make and execute
    contracts and agreements on behalf of the company; and the obligation
    to maintain the books and records of the company, to ensure compliance
    with the project agreements (i.e., ground lease, construction or
    renovation agreements, property management agreement, lease agreements,
    financing/lender agreements), and to enforce contractual rights against
    contractors or third parties). In addition, for each project, there are
    agreements that identify certain material matters or major decisions
    that require the government's consent, such as: approving the project's
    budget; permitting additional capital contributions to the project
    company; selling any assets of the project; refinancing the project;
    approving, terminating or amending any major project agreement
    (including the property management agreement and development
    agreement); expending project funds for capital repairs or replacement
    in excess of certain amounts outside of the approved budget; consenting
    to changes in scope of work under material construction or renovation
    agreements; entering into material contracts; approving or authorizing
    disbursements from project accounts under the project trust indenture/
    lockbox agreement other than pursuant to the terms of those agreements;
    approving of contracts with affiliates that are not otherwise on market
    terms; and approving of certain material contractors). Since BBC is not
    permitted to make major decisions without the government's consent, it
    is not deemed as controlling the projects. In addition, it should be
    noted that the project's third-party lenders have similar rights to
    consent to the above-referenced material matters relating to the
    projects.
        Generally, the Services (and third-party lenders) are required to
    approve of any major contracts for capital repairs and replacements
    that are not otherwise approved in the annual project budget or where
    funding is through the reinvestment account of the project. Contracts
    for routine maintenance work/renovations are not required to be
    consented to by the Services unless they contain non-market terms or
    fail to meet the standards as required under the project agreements -
    which contain minimum requirements for contract terms and insurance and
    require contractors to comply with applicable law, among other things.
    Where a subcontractor fails to perform its services in compliance with
    law or materially breaches its contract, it is the obligation of the
    property manager/project owner to ensure that the project enforces its
    rights to take action against the subcontractor (including possible
    termination after any relevant cure periods). The third-party lenders
    to the projects also have ``step-in'' rights under the property
    management agreement that enable them to take control of the property
    management/renovation services where the existing property manager is
    deemed in default.
        To the extent a subcontractor is underperforming or being alleged
    to have committed fraud, waste, or abuse, BBC would seek to investigate
    the matter; and where substantiated, the project owner would seek to
    enforce all remedies available under the contract or law in light of
    the facts and circumstances (including, as applicable, notice of
    default, right to cure and/or termination), as well as report any
    criminal behavior to government authorities. BBC incorporates
    provisions in each of its project agreements with contractors that
    require them to comply with a code of conduct and acknowledge they
    shall not participate in any criminal act or anti-competitive behavior,
    including, but not limited to, bribery, fraud or cartels. We also
    expect that subcontractors will comply with their own obligations to
    respond to Congress in connection with any invitation or subpoena to
    testify.
        Ms. Houlahan. The GAO recently found several concerning data
    anomalies in the work order systems for MHPI projects, including
    duplicates, closed out work orders prior to submission date, and work
    orders open for over 18 months. Additionally, there have been recent
    reports that Balfour Beatty employees have intentionally rigged work
    orders so their company could receive incentive fees.
        Were any of you, as senior leaders in your companies, aware of
    intentional data rigging to receive incentive fees? How can you ensure
    this will not happen moving forward?
        GAO also found that measures for satisfaction and quality of
    housing used were invalid measures. What have your companies done to
    update these metrics to ensure health and safety are accurately
    measured?
        Mr. Taylor. We have engaged Hunton Andrews Kurth LLP (Hunton) to
    investigate allegations that work orders were handled inappropriately
    and the way in which work orders were processed. To assist them in
    their investigation, Hunton has appointed PricewaterhouseCoopers
    Advisory Services LLC to perform a forensic audit work plan under AICPA
    consulting standards relating to our submission of requests for
    incentive fee payments. When broad allegations about the inappropriate
    handling of work orders were made in June 2019, we proactively reached
    out to the Department of Justice (DoJ) to notify them of Hunton's
    review. The DoJ subsequently issued a Civil Investigative Demand and we
    have been cooperating with their investigation. If it is determined
    that we did not properly earn incentive fees paid to us, we will refund
    those amounts. If the investigation determines wrong-doing by any
    member for our staff, we will take appropriate action. As this
    investigation is still ongoing, it would be inappropriate for us to
    comment any further on the subject matter at this time.
        To ensure confidence in our management of the work order process
    going forward, we also have undertaken an extensive internal review of
    our work order processes. Based on this review, we already have
    implemented several important changes and improvements across our
    military housing portfolio, including providing a mobile device app for
    residents to enter, track and sign-off on work orders, and changes to
    our staffing and remediation processes to ensure we have appropriate
    resources and checks and balances in place regarding management of our
    military housing portfolio. The findings from the Hunton investigation
    will be used to inform further decisions about improvements once the
    work is complete, which is expected to take several more months.
        With regard to the GAO findings, we are committed to working with
    the Services to design measurements for satisfaction and quality of
    housing that are considered appropriate. To that point, we have been
    reviewing proposed changes from the Services to the incentive fee
    performance metrics that apply to our projects. At this time, we
    already have agreed with the Department of the Army to a new 2020
    incentive fee metric plan, and to take actions necessary to update our
    project agreements to reflect this new plan. We expect to negotiate
    similar updated plans with the Departments of the Air Force and the
    Navy as well.
        Ms. Houlahan. It is our understanding the agreements made between
    the services and public private partner give majority ownership to the
    P3. We are aware that DOD cannot unilaterally change the deal
    agreements they have with private companies and every contractual
    change must be negotiated and agreed upon by the housing companies.
        What liberties are you afforded as the majority partner in the
    partnerships? What decisions are you allowed to make as a company that
    the services may not have say in?
        Do the services have a say in who is subcontracted out to do
    maintenance work/renovations? Can the services fire a subcontractor or
    property manager hired by the P3?
        If you had a subcontractor who was underperforming or being alleged
    of fraud, waste, abuse or called to testify in front of Congress for
    these issues, how would you handle the future of that relationship?
        Mr. Bliss. The services do not have a say in who is subcontracted
    to do maintenance work or renovations, nor can they fire a
    subcontractor, as the property manger is solely responsible for the
    hiring and oversight of the subcontractor. Under the project documents,
    to which the services are a party, the partnership can fire the
    property manager. Upon discovery of the underperformance or alleged
    fraud, waste or abuse by a subcontractor, the subcontractor would be
    terminated. In the case of a subcontractor called to testify in front
    of Congress, that fact and the substance of their testimony would have
    no bearing on Lincoln Military Housing's relationship with that
    subcontractor.
        Ms. Houlahan. The GAO recently found several concerning data
    anomalies in the work order systems for MHPI projects, including
    duplicates, closed out work orders prior to submission date, and work
    orders open for over 18 months. Additionally, there have been recent
    reports that Balfour Beatty employees have intentionally rigged work
    orders so their company could receive incentive fees.
        Were any of you, as senior leaders in your companies, aware of
    intentional data rigging to receive incentive fees? How can you ensure
    this will not happen moving forward?
        GAO also found that measures for satisfaction and quality of
    housing used were invalid measures. What have your companies done to
    update these metrics to ensure health and safety are accurately
    measured?
        Mr. Bliss. Lincoln Military Housing takes very seriously our role
    in ensuring the integrity of the MHPI program and our senior leadership
    has no knowledge of employees intentionally manipulating work orders in
    an effort to receive incentive fees. In 2008, Lincoln Military Housing
    did independently identify one employee, a mid-level manager, who
    manipulated data to receive a personal bonus. That employee was
    terminated, and to ensure that Lincoln did not unfairly receive
    incentive fees as a result, Lincoln reported it to the Navy and waived
    our fee for that time period. We have additional controls in place to
    ensure that data on the local level cannot be manipulated, and our
    internal incentives are now even more aligned with resident
    satisfaction. In an effort to better assess resident satisfaction and
    work quality, we added a survey service, SatisFacts, in 2014 to
    supplement the annual survey referenced by the GAO. That survey
    provides additional opportunities for residents to provide feedback and
    reviews about the service they receive: at move-in, at each work order,
    and at move out. In addition, they have an opportunity so submit a
    service survey through our website anonymously.
                                     ______

                      QUESTIONS SUBMITTED BY MS. STEFANIK
        Ms. Stefanik. One of the common concerns among military families,
    regardless of the specific housing issue, is that family members felt
    they did not have a voice. I would like to hear from the private
    partner witnesses how your companies are empowering and enabling
    military families throughout the leasing and residency process. For
    example, this Committee emphasized the necessity for a common ``Tenant
    Bill of Right'' in our NDAA bill. What rights are you ensuring are
    afforded to military families leasing your properties, and how are your
    measuring your success?
        Mr. Picerne. We agree that empowering and enabling residents to
    raise any concerns that they may have is the best way to ensure that we
    are hearing their concerns, and meeting their needs. We have taken a
    variety of steps to better serve our residents, including working with
    our partners to establish resident focus groups, bringing back local
    call centers to help coordinate maintenance work directly with
    residents at each installation, establishing the Corvias Resident
    Portal to allow 24/7 online access to work order submission and status,
    and hiring resident Ombudsmen to work directly with residents to
    address their concerns. We will continue to work with all of our
    residents to ensure that they are afforded every opportunity to
    exercise their rights, and that we are providing the gold standard of
    service that our residents deserve.
        Ms. Stefanik. One of the common concerns among military families,
    regardless of the specific housing issue, is that family members felt
    they did not have a voice. I would like to hear from the private
    partner witnesses how your companies are empowering and enabling
    military families throughout the leasing and residency process. For
    example, this Committee emphasized the necessity for a common ``Tenant
    Bill of Right'' in our NDAA bill. What rights are you ensuring are
    afforded to military families leasing your properties, and how are your
    measuring your success?
        Mr. Ehle. Hunt Military Communities (``Hunt'') recognizes that
    quality homes and resident services depend on open and regular
    communications with residents. We want to hear from all of our
    residents in order to be made aware of issues so we can address them.
    We also need to make it as easy and comfortable as possible for our
    residents to communicate with us. To that end, we have made significant
    improvements to our resident communication processes throughout our
    portfolio over the last year, including:
          Work Order Mobile Application: We have launched the
    RENTCafe mobile app for the real-time submission and tracking of
    routine work orders and to access select historic work order data. The
    app also encourages convenient communication between on-site Hunt
    employees and residents by (i) facilitating direct calls or emails to
    on-site staff; (ii) providing community announcements at sign-in; (iii)
    announcing emergencies by the leasing office; and (iv) featuring
    community events on a calendar.
          Surveys: We have implemented an enhanced resident survey
    tool run by a third party, SatisFacts, to measure customer satisfaction
    at move-in, move-out, and after work order completion. It is a very
    quick 5-star survey that is automatically sent to the resident at the
    conclusion of each of these events to ask the resident about their
    satisfaction. The resident completes the survey, and the results go
    immediately to the site management team at the resident's property. If
    the response yields a score of less than 3.5 (in the SatisFacts scale,
    a 3 is ``Satisfied''), the Community Director at the property is to
    contact that resident the same day to ascertain where we fell short of
    expectations so we can better resolve the issue and make improvements
    going forward.
          Hunt Promise Helpline: This 24/7, toll-free hotline makes
    it easier for residents to voice concerns about issues they feel have
    not been resolved at the property level by facilitating direct contact
    between residents and Hunt Military Communities senior management.
          Social Media Coordinator: We now have a dedicated
    specialist to liaise with each Hunt community online to make sure
    issues are identified and addressed in a timely manner. 2 This
    initiative has improved our ability to monitor resident complaints and
    concerns made on social media and follow up accordingly.
          Resident Resolution Tracker: As part of our quality
    assurance efforts, if we learn that a resident is not completely
    satisfied after his or her work order has been completed, the resident
    is added to this tracker for follow up from our management team through
    issue resolution.
          Community Advisory Board (``CAB''): Residents serve as
    volunteer members of CABs and meet with the Hunt property leadership on
    a monthly basis to discuss what they see happening in their
    neighborhoods and offer to Hunt suggestions for improving processes and
    service. In addition, the CAB will be involved in identifying
    opportunities to deploy the resources and services offered by the Hunt
    Heart program. This program is designed to address the needs of our new
    residents, deployed spouses, recently returned spouses, those suffering
    a family crisis, and those who may be in need of information about or
    access to social services through military or civilian sources.
          Secret Shopping: We will be launching an independent
    third-party ``secret shopping'' service in January 2020 to engage with
    Hunt employees to assess customer service. Training plans will be based
    on the results obtained.
        Hunt has also been a leading voice for ongoing industry-wide reform
    and standardization, and supports a number of initiatives to
    standardize and improve the Military Housing Privatization Initiative
    (``MHPI'') program in partnership with the Services, including a
    uniform resident lease, a resident bill of rights, resident
    responsibilities, uniform dispute resolution guidelines, and a uniform
    resident displacement policy. Hunt recognizes and appreciates the
    unique challenges our military families face and Hunt is committed to
    ensuring our families are afforded an equal or better experience than
    residents may find in the conventional rental market.
        Each Hunt resident enters into a resident lease approved by our
    military partners that affords our military families detailed rights
    and obligations that are substantially similar to those in the
    conventional rental market, yet recognizes and addresses the unique
    circumstances of living on or in the vicinity of a military
    installation, including the military policies and procedures that
    govern the installation and its residents. For example, Hunt lease
    forms generally provide residents with a detailed description of, among
    other things, their monthly rent, the term of their lease, the
    utilities included in their monthly rent, the security deposit (if any)
    that may be required, move-in/move-out procedures, the circumstances
    under which a resident may terminate their lease early, conditions
    under which pets may occupy the housing unit, the delineation of
    maintenance and other responsibilities between Hunt and the resident,
    conditions under which Hunt may enter the housing unit, procedures for
    residents to submit maintenance requests, community amenities,
    conditions under which a resident may operate a business from their
    home, and the process for landlord-resident dispute resolution.
        With respect to our goal to provide safe, healthy, and quality
    homes for military families, we measure our success in a number of
    ways. For example, we look at whether military families are choosing to
    reside in Hunt homes rather than in other housing in the marketplace,
    as well as customer satisfaction via resident surveys, as discussed
    above.
        Ms. Stefanik. One of the common concerns among military families,
    regardless of the specific housing issue, is that family members felt
    they did not have a voice. I would like to hear from the private
    partner witnesses how your companies are empowering and enabling
    military families throughout the leasing and residency process. For
    example, this Committee emphasized the necessity for a common ``Tenant
    Bill of Right'' in our NDAA bill. What rights are you ensuring are
    afforded to military families leasing your properties, and how are your
    measuring your success?
        Mr. Taylor. Balfour Beatty Communities (BBC) property teams work
    diligently to deliver an exceptional living experience to every
    resident. We repeatedly reinforce to residents that we want to know if
    their expectations are not being met so that we have the opportunity to
    make things right. Residents are actively encouraged to first contact
    our local management team if they have any issues or concerns with
    their home so we can promptly deploy the necessary resources to assist.
    If they've contacted our local team and are not satisfied with the
    outcome, we encourage them to reach out to our senior leadership team
    via the BB Cares Helpline at 1-877-253-6988. The BB Cares Helpline is a
    dedicated resident relations system providing residents with direct
    assistance from our corporate office team. All calls are transcribed
    and sent real-time to the head of our Military Housing Division for
    immediate action. It is our commitment to residents that we will fully
    review all concerns to ensure our team is doing everything possible to
    deliver an exceptional living experience. If residents are still not
    satisfied with our response, we also ensure they are aware of how to
    directly contact their local military housing office. This three-step
    issue resolution process is posted on our Resident Portals and is
    actively communicated to residents at move-in and periodically
    throughout the year via email and social media. We actively participate
    in all Command-sponsored Housing Town Halls and work closely with
    Resident Councils at locations where they have been established. These
    outlets provide our teams with important opportunities to interact
    directly with residents, answer their questions and better understand
    their issues and concerns. After Town Hall events, we send all
    residents a summary of topics discussed to provide overall awareness
    and reinforce any BBC action plans going forward. As I mentioned in my
    written testimony, we have been working with the Department of Defense
    in crafting a Tenant Bill of Rights and are fully supportive of this
    initiative. We further empower our residents during the maintenance
    work order process. For each work order, our maintenance technician
    and/or subcontractor takes a photograph of the before and after work
    performed (where applicable). These photos are uploaded into our work
    order management system, which is accessible to both residents and our
    military housing partners for review. On all emergency/urgent work
    orders, our Quality Control Specialist also conducts a follow-up
    inspection to confirm the work was completed to our standards and
    contacts the resident to review and ensure satisfaction. Upon
    completion, residents are requested to `sign-off' on the work order to
    indicate their satisfaction. In situations where the resident is not
    satisfied, the work order remains open and we dispatch our Maintenance
    Supervisor and/or Facility Manager to review and continue to work the
    issue until the resident is satisfied; if validated by our managers as
    properly completed, we engage military housing office representatives
    to assist in resolving with the resident.
        Ms. Stefanik. One of the common concerns among military families,
    regardless of the specific housing issue, is that family members felt
    they did not have a voice. I would like to hear from the private
    partner witnesses how your companies are empowering and enabling
    military families throughout the leasing and residency process. For
    example, this Committee emphasized the necessity for a common ``Tenant
    Bill of Right'' in our NDAA bill. What rights are you ensuring are
    afforded to military families leasing your properties, and how are your
    measuring your success?
        Mr. Bliss. Lincoln Military Housing has a multi-faceted customer
    service and work-order request system, and has also created a separate,
    dedicated process to address resident concerns that gives tenants a
    clear voice in their military housing. Specifically, Lincoln Military
    Housing's work-order request system allows tenants to submit work
    orders by phone via a dedicated ``Lincoln At Your Service'' hotline, on
    the internet via the Lincoln Resident Portal, or via a smart device
    through the Lincoln Military Housing Resident App. For customer service
    issues extending beyond maintenance requests, the local District Office
    is always open to tenants during business hours, and the Lincoln At
    Your Service hotline is available to residents 24/7. Lincoln has also
    instituted a Three-Step Resolution process throughout our enterprise.
    Through this three-step process, residents are encouraged to first
    attempt to resolve the issue at the District Office or by calling
    Lincoln At Your Service. If the issue is still unresolved they are
    encouraged to contact the General Management Office or Regional
    Property Manager for their district, and if the issue still remains
    unresolved they are encouraged to contact the Government Family Housing
    Office, who will reach over to Lincoln. At resident move-in, this
    Three-Step Resolution process is shared, and the appropriate phone
    numbers are provided. We also provide a refrigerator magnet that is
    placed on their appliance before they receive keys. Because we know
    move-in is a busy time for families, we also send a reminder about the
    Three-Step Resolution process once a quarter and include an invitation
    to a ``Meet the Manager'' event where they can sit and talk with a
    District Manager one-on-one. As a final matter, residents always have
    the ability to communicate by phone via the Lincoln Leadership Line,
    which puts them in contact with Lincoln Military Housing's Senior
    Executive Team.
                                     ______

                       QUESTIONS SUBMITTED BY MS. HAALAND
        Ms. Haaland. Families from across the country have contacted my
    office with heartbreaking stories of being displaced from their homes
    while housing companies make much needed renovations to raise them to
    livable standards. While pleased that companies are finally acting to
    address these issues, this process has highlighted appalling
    inconsistencies in the treatment. What is your company's policy
    regarding per diem or other allowances for displaced families?
        Mr. Picerne. Over the last year, our policy toward displaced
    families has evolved and been standardized across our portfolio. Our
    Operations Directors at each installation have the authority to make
    reasonable adjustments to our policy as appropriate. Under all
    circumstances, we provide residents with alternate housing, including
    either a fully furnished hospitality suite on post or a hotel on or
    off-post as available, as well as an allowance for food and personal
    items. If provided a hospitality suite on post, then we may reimburse
    the family's BAH on a prorated basis depending on how long they have
    been displaced. We only ask that families move into a hotel suite if a
    fully furnished on-post hospitality suite is unavailable, and if that
    is necessary, will reimburse them 100% of the daily BAH rate for all
    days they are displaced, as well as provide a per diem for food,
    additional expenses, and for pet lodging if necessary. We expect that
    this policy will continue to evolve, as we are working with the
    Services and other MHPI partners to standardize our policies pursuant
    to Congressional direction in the recently-passed National Defense
    Authorization Act for 2020.
        Ms. Haaland. Generally, displaced tenants do not have to pay rent
    when they cannot live in their homes. Does your company collect the
    rent/BAH from families while they are displaced?
        Mr. Picerne. Over the last year, our policy toward displaced
    families has evolved and been standardized across our portfolio. Our
    Operations Directors at each installation have the authority to make
    reasonable adjustments to our policy as appropriate. Under all
    circumstances, we provide residents with alternate housing, including
    either a fully furnished hospitality suite on post or a hotel on or
    off-post as available, as well as an allowance for food and personal
    items. If provided a hospitality suite on post, then we may reimburse
    the family's BAH on a prorated basis depending on how long they have
    been displaced. We only ask that families move into a hotel suite if a
    fully furnished on-post hospitality suite is unavailable, and if that
    is necessary, will reimburse them 100% of the daily BAH rate for all
    days they are displaced, as well as a per diem for food, additional
    expenses, and for pet lodging if necessary. We expect that this policy
    will continue to evolve, as we are working with the Services and other
    MHPI partners to standardize our policies pursuant to Congressional
    direction in the recently-passed National Defense Authorization Act for
    2020.
        Ms. Haaland. Can you confirm today that a minimum of 5% of the
    homes at each installation where your company has a contract to manage
    housing is accessible to people with disabilities?
        Mr. Picerne. We are in compliance with our contractual obligations
    to ensure that a minimum of 5% of all homes we have built are either
    fully accessible or readily adaptable for special accessibility
    features.
        Ms. Haaland. Families from across the country have contacted my
    office with heartbreaking stories of being displaced from their homes
    while housing companies make much needed renovations to raise them to
    livable standards. While pleased that companies are finally acting to
    address these issues, this process has highlighted appalling
    inconsistencies in the treatment. What is your company's policy
    regarding per diem or other allowances for displaced families?
        Mr. Ehle. First and foremost, our goal is to provide safe, healthy,
    and quality homes for military families. However, we recognize that
    there is no such thing as maintenance-free housing and that issues will
    inevitably arise that must be remedied. In these instances, we strive
    to address the situation in a professional, transparent, and timely
    manner, with a focus on resident safety. If the nature of the repairs
    requires a resident to be out of their home during a repair for a night
    or more, we will secure temporary accommodations and may provide
    financial support to ensure that the resident is not paying out-of-
    pocket during this time, for example, by providing gift cards for meals
    or rent concessions. Recognizing that confusion has arisen as a result
    of inconsistent displacement accommodations, we are collaborating with
    the Services in their efforts to establish a uniform resident
    displacement policy. We fully support the adoption of such a policy
    across all MHPI communities to establish consistency no matter where
    residents reside, and to avoid confusion and missed expectations.
        Ms. Haaland. Generally, displaced tenants do not have to pay rent
    when they cannot live in their homes. Does your company collect the
    rent/BAH from families while they are displaced?
        Mr. Ehle. The collection of BAH from families while they are
    displaced depends on the particular circumstances. For example, Hunt
    may continue to collect BAH when Hunt pays for alternate housing or
    provides a hospitality home that requires maintenance, furnishing, and
    utilities. Alternatively, if Hunt does not pay for or provide housing
    to a displaced family, Hunt may suspend the collection of BAH.
        Ms. Haaland. Can you confirm today that a minimum of 5% of the
    homes at each installation where your company has a contract to manage
    housing is accessible to people with disabilities?
        Mr. Ehle. Depending on the property, the standard is not
    necessarily that a minimum of 5% of all the homes at each installation
    be accessible to people with disabilities. For example, the standard
    may be that at least 5% of homes be accessible or readily adaptable to
    be accessible to those with disabilities. In addition, the 5% standard
    only applies to neighborhoods built or fully renovated after the
    effective date of the Americans with Disabilities Act (``ADA''), and we
    have legacy preprivatization neighborhoods in our portfolio that pre-
    date the ADA. For these and other reasons, the percentage of homes at a
    given property that are accessible today to those with disabilities may
    vary across Hunt's portfolio.
        Ms. Haaland. Families from across the country have contacted my
    office with heartbreaking stories of being displaced from their homes
    while housing companies make much needed renovations to raise them to
    livable standards. While pleased that companies are finally acting to
    address these issues, this process has highlighted appalling
    inconsistencies in the treatment. What is your company's policy
    regarding per diem or other allowances for displaced families?
        Mr. Hickey. We have been working closely with the Army and the
    other private partners to develop a formal resident displacement
    policy. Once that policy is finalized, we intend to immediately apply
    that policy across our entire portfolio.
        Our current process for displaced families is applied consistently
    across our portfolio. Residents are entitled to the following
    reimbursements or benefits, depending on the length of displacement:
    [GRAPHIC] [TIFF OMITTED] T1473.078

        .epsLength of displacement More than one day and fewer than
    fourteen days More than fourteen days Reimbursement for meals based on
    a set per diem for each location Lodging costs Reimbursement of
    incidentals of $5 per day Refund/waiver of rent from date of
    displacement* Other reimbursements Assessed on a case-by-case basis.
        If a resident repair exceeds thirty (30) days and an alternate
    home(s) is offered that meets the resident's bedroom and rank eligible
    requirements, but the resident refuses the alternative home(s),
    continued reimbursement of BAH may cease.
        Reimbursement of clothing and/or other household/personal items if
    they are found to have visible mold will be assessed on a case by case
    basis by the DPM and Project Director (in conjunction with any
    appropriate independent third-party subject matter experts).
        Based on input from an independent third party's recommendations,
    the Project Company retains responsibility for the reimbursement or
    cleaning/remedying, as applicable, of any contamination of personal
    belongings or furnishings with visible mold which is caused by the acts
    or omissions of the Project Company and/or project employees (including
    as it relates to service order response/resolution, preventive
    maintenance, etc.). Details and proper course of action to be
    determined by the DPM and Project Director in consultation with the
    independent third party.
          If relocation is required in order to properly clean the
    home and remedy any potential issues, the Project Company pays for the
    documented and substantiated expenses exclusive of Excluded Expenses.
    ``Excluded Expenses'' include:
            Cable, phone and internet bills at primary residence;
            Purchase of clothing and other household/personal items
    that exceeds level of incidental reimbursement identified above;
            Accommodation at luxury hotels; and
            Kenneling costs for pets (unless temporary lodging
    arrangements do not allow for pets)
        Ms. Haaland. Generally, displaced tenants do not have to pay rent
    when they cannot live in their homes. Does your company collect the
    rent/BAH from families while they are displaced?
        Mr. Hickey. As noted above, if a family is displaced for more than
    fourteen (14) days, the rent/BAH is refunded or waived effective as of
    the date of initial displacement.
        Ms. Haaland. Can you confirm today that a minimum of 5% of the
    homes at each installation where your company has a contract to manage
    housing is accessible to people with disabilities?
        Mr. Hickey. Five (5%) of all new homes designed and constructed on
    Lendlease MHPI project sites are ``ADA Adaptable.'' An ``ADA
    Adaptable'' unit has all the accessible features that a fixed
    accessible unit has but allows some items to be omitted or concealed
    until converted so the dwelling units can look the same as others and
    be better matched to the specific and unique needs or preferences of
    the occupant.
        Ms. Haaland. Families from across the country have contacted my
    office with heartbreaking stories of being displaced from their homes
    while housing companies make much needed renovations to raise them to
    livable standards. While pleased that companies are finally acting to
    address these issues, this process has highlighted appalling
    inconsistencies in the treatment. What is your company's policy
    regarding per diem or other allowances for displaced families?
    [Question #17, for cross-reference.]
        Mr. Taylor. In certain circumstances, a tenant may need to be
    temporarily relocated where repairs or maintenance are so significant
    that the rental unit is unable to be occupied during such work. This
    could be due to anything from damage caused by extreme weather events
    to flooding from a broken water pipe or a toilet overflow. We recognize
    the importance of having a comprehensive policy that outlines clear and
    effective guidelines for managing resident displacements across our
    military housing portfolio. Our current policy, which was developed
    with input from military leaders and representatives from military
    family advocacy groups as well as to ensure compliance with applicable
    state landlord-tenant laws, provides the following guidelines for
    taking care of residents that are temporarily displaced from their home
    due to a maintenance/repair issue:
        1. The landlord will provide temporary accommodation in a fully-
    furnished (including cable and internet service) `Patriot Home' at our
    cost, to the extent such a unit is available. Patriot Homes are housing
    units within the housing project community that are set aside
    specifically for the purpose of housing residents needing temporary
    accommodation. We also provide the family with a $300 weekly stipend.
        2. Where a Patriot Home is not available, the landlord will provide
    for accommodation in a local hotel/temporary lodging facility. If the
    family has approved animals living in the home and a pet-friendly
    hotel/temporary lodging facility is not available, the landlord will
    pay for reasonable costs to board the animals. Families staying in a
    hotel/temporary lodging facility are provided a $300 weekly stipend if
    the facility contains a kitchen, and a $100 per diem if the facility
    does not contain a kitchen.
        3. To the extent a resident elects not to utilize temporary housing
    provided by the landlord and instead opts to stay with family or
    friends (or another place of their choosing), the landlord will credit
    tenant's rent the daily rate for the days the tenant is unable to
    occupy the rental unit. Daily rent is calculated as 1/30 of the monthly
    rent value, or as otherwise stated in the lease agreement.
        4. If the repairs to the home are expected to take longer than
    thirty (30) days:
            a) the landlord will offer the resident a permanent transfer to
            a comparable home (i.e., similar number of bedrooms/bathrooms)
            where such home is readily available within the housing
            community; and
            b) If the resident does not elect to transfer to another
            available unit, or where the landlord does not have another
            available unit, then the resident may elect to terminate the
            lease agreement without penalty.
        In addition to BBC's current Temporary Relocation Policy, we also
    are continuing to work with the Branches of Service to develop uniform
    displacement policies that ultimately may be applied across all
    Military Housing Privatization Initiative (MHPI) projects.
        Ms. Haaland. Generally, displaced tenants do not have to pay rent
    when they cannot live in their homes. Does your company collect the
    rent/BAH from families while they are displaced?
        Mr. Taylor. Per landlord-tenant laws, landlords are required to
    provide a habitable dwelling in exchange for rent and are entitled to a
    reasonable timeframe to complete necessary repairs. Where the dwelling
    requires repairs that are significant enough to result in displacement
    of the resident, the landlord is entitled to collect rent/BAH to the
    extent it continues to provide a habitable dwelling and performs the
    repairs within a reasonable timeframe. As a result, BBC's Temporary
    Relocation Policy, as described in response to Question #17 [above],
    provides that the landlord will continue to provide the resident with a
    temporary Patriot Home/lodging while the resident is temporarily
    displaced from their assigned rental unit and the landlord continues to
    collect rent/BAH. In addition, BBC's policy also provides compensation
    to resident in the form of a monetary allotment; and where the repairs
    are expected to extend beyond 30 days, the resident may be offered a
    permanent relocation to another unit or the option to terminate the
    lease without penalty.
        Ms. Haaland. Can you confirm today that a minimum of 5% of the
    homes at each installation where your company has a contract to manage
    housing is accessible to people with disabilities?
        Mr. Taylor. In connection with BBC's Military Housing Privatization
    Initiative projects, the project owners (which, in the case of Army/
    Navy projects, are joint ventures in which the Army/Navy is itself a
    member or partner), were both (i) conveyed existing housing previously
    owned by the government and (ii) required to construct an agreed number
    of homes in accordance with the project agreement terms. In accordance
    with the project agreement requirements as issued by the government, 5%
    of the new construction homes were built to Uniform Federal
    Accessibility Standards.
        In addition, we work closely with the Services to actively support
    the Exceptional Family Member Program (EFMP) and maintain a Fair
    Housing Policy that requires the grant of reasonable accommodations or
    modifications by residents with a related disability need.
        Ms. Haaland. Families from across the country have contacted my
    office with heartbreaking stories of being displaced from their homes
    while housing companies make much needed renovations to raise them to
    livable standards. While pleased that companies are finally acting to
    address these issues, this process has highlighted appalling
    inconsistencies in the treatment. What is your company's policy
    regarding per diem or other allowances for displaced families?
        Mr. Bliss. All Lincoln Military Housing projects provide allowances
    for residents who have been displaced from their homes through no fault
    of the tenant, to include covering the costs of temporary lodging in
    every case, and per diem for incidentals and meals where appropriate. I
    am also pleased to report that Lincoln Military Housing, in
    collaboration with the other privatized military housing partners, has
    been working towards a standardized displacement policy to ensure
    consistency across each of our projects, and the industry, with regards
    to displacement allowances. This policy will be aligned with the
    requirements in the 2020 NDAA, subject to additional requirements in
    state and local law, and we expect it to be rolled out industry-wide in
    mid-to-late January.
        Ms. Haaland. Generally, displaced tenants do not have to pay rent
    when they cannot live in their homes. Does your company collect the
    rent/BAH from families while they are displaced?
        Mr. Bliss. Lincoln Military Housing's policy with regards to the
    payment of rent by displaced residents is governed by state and local
    landlord-tenant law. As a general rule, the majority of jurisdictions
    in the United States allow a landlord to continue to collect rent
    during periods of temporary displacement through no fault of the
    tenant, though the landlord is generally required to cover the
    reasonable costs of temporary lodging during that displacement. As
    noted in answer 5 above, Lincoln Military Housing's policy is to cover
    the costs of temporary lodging while a resident is displaced from their
    home, subject to additional requirements in state and local law.
        Ms. Haaland. Can you confirm today that a minimum of 5% of the
    homes at each installation where your company has a contract to manage
    housing is accessible to people with disabilities?
        Mr. Bliss. A minimum of 5% of the homes at each installation that
    Lincoln Military Housing manages are accessible to people with
    disabilities, and all homes constructed by Lincoln Military Housing
    meet state and federal requirements under the Americans with
    Disabilities Act (ADA). Legacy neighborhoods built via military
    construction (MILCON) funding prior to privatization are generally not
    built to the 5% requirement, but the number of those homes do not bring
    the total ratio of ADA compliant homes at each installation below 5%.
    Further, Lincoln Military Housing complies with all ADA reasonable
    accommodation requests as necessary for homes that were not
    specifically built to meet accessible home standards.
                                     ______

                        QUESTIONS SUBMITTED BY MR. BROWN
        Mr. Brown. You stated in your written testimony that you report a
    92 percent satisfaction rating on work performed and 95 percent of work
    orders completed on time.
        How do you determine when work performed is ``complete'' and do the
    service members have the ability to concur with that disposition?
        What metrics do you use as a basis for satisfaction rating?
        How do you disposition a work order when a family is PCS'd to a new
    base? Is that work order logged as complete?
        How do you measure satisfaction for a work order that is still open
    when a family is PCS'd to a new base?
        What's the average duration for a work order that isn't
    accomplished in the first 24 hours?
        Mr. Picerne. Our maintenance teams consider a work order to be
    complete when the issue identified in the work order request has been
    successfully addressed. In those limited instances where an emergency
    work order has been submitted due to a health concern or potential
    structural damage to the home, the emergency work order is closed once
    the situation has been stabilized to eliminate the hazard, and a new
    work order is opened and coded for priority response based on any
    additional work necessary to fully address the resident's concerns.
    Attached, please find the work order priority schedule applied in these
    situations, which has been adopted in coordination with our partners in
    the Army and Air Force, and previously shared with the GAO in January,
    2019.
        [The document referred to can be found in the Appendix on page
    185.]
        Following closure of the work order, each resident is provided the
    opportunity to respond by completing a survey, which scores the overall
    response. If a family permanently moves from a home before a work order
    can be completed, then existing work orders are typically closed,
    allowing for completion of this survey. At that point, a new work order
    will also be entered for turnover of the unit, which involves a
    comprehensive inspection, and subsequent painting, flooring, or other
    activities necessary to make a home ready for a new family. The amount
    of time necessary to address a work order will vary substantially
    depending on the type of work and any supplies that may be required,
    particularly if a third party vendor must be engaged to complete work,
    if permission is required to conduct work (as is often the case in
    historic homes), or if parts or fixtures are not readily in stock to
    complete the work. We strive to complete all work within the timeframes
    outlined in the work order priority schedule, and typically do so
    consistently.
        Mr. Brown. In February 2019 at a SASC hearing, you stated that
    ``But specifically to the family that moved to Fort Meade expecting to
    have their child brought into a single-family or single-story home, it
    is unacceptable. And my company will stand up and will help and support
    that family and every family going forward in trying to make these
    things better.'' Yet, just one month later, a service member at Fort
    Meade in the Exceptional Family Member Program who required a single-
    story home was pressured by Corvias to accept a two-story home, to the
    detriment of the health and safety of their child.
        Why was this action allowed to occur?
        What actions have you taken following your testimony in February to
    ensure your company took action on your statement?
        Mr. Picerne. At Corvias, we take our responsibility under the
    Exceptional Family Member Program (EFMP) extremely seriously. This
    program provides a critical avenue for family members with exceptional
    needs to enhance their quality of life by making homes readily
    available, usable, and accessible to persons with disabilities. At the
    same time, we can only provide homes that are available at the time a
    request is made. As you may be aware, one former resident who has filed
    suit against Corvias and Meade Communities has made allegations
    regarding being pressured to accept a two-story home family home at
    Fort Meade. We disagree with the resident's characterization of these
    events, and intend to contest these allegations vigorously.
        Mr. Brown. You stated in response to a question from Rep. Houlahan
    that you work ``directly with the medical community on the
    installation, with the garrison commander, and we try to define where
    the problem really is.''
        Can you please expand upon this engagement you have with the
    medical community? Is this a formal or informal process? Please
    explain.
        Are you obtaining consent forms from service members and their
    families before speaking to military medical providers about their
    particular cases?
        If a medical provider recommends testing or mold remediation, are
    you following their guidance?
        Mr. Picerne. We work closely with our Army and Air Force partners,
    including installation health officials, to help them respond when
    residents express a health concern that may be related to their
    environment, but we do not request or share protected health
    information from or with medical professionals. For instance, when a
    resident reports an elevated blood lead level, we typically assist
    public health officials to gain access to inspect the resident's home
    and surroundings to identify potential causes, which often include
    common environmental factors like imported lead-painted toys, dishes,
    or other sources of lead. As an alternate example, following mold-
    related home-inspections at Fort Meade, we partnered with the Kimbrough
    Ambulatory Care Center to ensure that a qualified medical professional
    was available during public forums scheduled for residents to ask any
    questions they may have had with respect to the findings of third-party
    inspection reports.
        To the extent that an individual resident's medical provider has
    requested specific types of testing or remediation, we have and will
    take that into account to the extent practicable, pursuant to the
    policies and procedures adopted in conjunction with our Service
    partners.
        Mr. Brown. You stated in response to a question from Rep. Houlahan
    on the health of children living on base that if its determined that
    the home is the house of a health issue ``we will support that child or
    its medical costs.''
        Are you confirming that you will financially support the treatment
    of a child who become sick living in a Corvias-run home on base?
        Who would determining that the child became sick from a Corvias-run
    home? Would you accept that conclusion from a military doctor, a
    civilian doctor, or both? What about from a mold test showing a high
    level of toxic mold in the home?
        Mr. Picerne. We understand and accept our responsibility to ensure
    that all of the homes that we provide to our residents are fit for
    occupancy. We appreciate Congress's effort to work with the Department
    of Defense to develop a standardized process for evaluation of
    potential medical claims from residents, and are working with our
    military partners to adopt practices that ensure the best interest of
    our residents, while recognizing our fiduciary obligations to our
    investors and government partners.
        Mr. Brown. How do you determine when work performed is ``complete''
    and do the service members have the ability to concur with that
    disposition?
        What metrics do you use as a basis for satisfaction rating?
        How do you disposition a work order when a family is PCS'd to a new
    base? Is that work order logged as complete?
        How do you measure satisfaction for a work order that is still open
    when a family is PCS'd to a new base?
        What's the average duration for a work order that isn't
    accomplished in the first 24 hours?
        Mr. Ehle. Hunt considers a resident-initiated work order to be
    complete when all work required to address the issue is completely
    finished. In the case of Emergency or Urgent work orders, the Emergency
    or Urgent condition must be addressed and any follow-on work must be
    completely finished for the work order to be considered complete.
        We have implemented an enhanced resident survey tool run by a third
    party, SatisFacts, to measure customer satisfaction at move-in, move-
    out, and after work order completion. It is a very quick 5-star survey
    that is automatically sent to the resident at the conclusion of each of
    these events to ask the resident about their satisfaction. The resident
    completes the survey, and the results go immediately to the site
    management team at the resident's property. If the response yields a
    score of less than 3.5 (in the SatisFacts scale, a 3 is ``Satisfied''),
    the Community Director at the property is to contact that resident the
    same day to ascertain where we fell short of expectations so we can
    better resolve the issue and make improvements going forward. If a
    resident receives a survey after work order completion and does not
    believe all of the work has been done, the survey response is one means
    by which the resident can communicate their disagreement.
        It is not Hunt policy for a resident family's move to a new base to
    impact the disposition of a work order. As noted above, Hunt considers
    a resident-initiated work order to be complete when all work required
    to address the issue is completely finished. The survey discussed above
    is automatically sent to the resident's email address upon work order
    completion, regardless of whether a resident has moved to a new base.
        In the regular course of business, Hunt does not generally
    calculate the average duration of work orders that are not completed in
    the first 24 hours. Each property generally has its own target times,
    as agreed-upon by our military partners, for work order response and
    completion (e.g., 1 hour to respond and 24 hours to complete for
    Emergency work orders). Hunt strives to meet those target times.
        Mr. Brown. How do you determine when work performed is ``complete''
    and do the service members have the ability to concur with that
    disposition?
        What metrics do you use as a basis for satisfaction rating?
        How do you disposition a work order when a family is PCS'd to a new
    base? Is that work order logged as complete?
        How do you measure satisfaction for a work order that is still open
    when a family is PCS'd to a new base?
        What's the average duration for a work order that isn't
    accomplished in the first 24 hours?
        Mr. Hickey. Our process of initiating and closing work orders as
    ```complete''' includes the following:
        A.  All resident work orders are generated directly in Yardi
    through a call center or via our Military Cafe portal/app to ensure
    they are created real-time directly by the resident.
        B.  All technicians use mobile devices to track all activities
    including their time, parts, notes and work status. Their time is
    validated against the HRIS system, which is also electronic, to ensure
    time is captured accurately.
        C.  The technician enters the status of a work order, including if
    the work is complete. If a resident is at home during completion of the
    work, the technician requests a resident signoff of the completion and
    satisfaction.
        D.  The resident receives an email and survey request upon
    completion of work order, which is system-generated after the
    technician enters the work order ``complete.''
        To summarize the above, Lendlease implemented the 360 Degree
    Service Order touchpoints program for enhanced service order quality:
    [GRAPHIC] [TIFF OMITTED] T1473.079

        .epsThis process ensures residents have multiple opportunities
    during the service request process to ask questions, track progress,
    and sign off on service order completion and provide satisfaction
    feedback. Technicians record all labor, materials, work progress and
    completion directly on a mobile application, which drives these
    touchpoints for residents.
        Resident satisfaction with service orders is measured through both
    point of service and annual satisfaction surveys. The Insite survey by
    SatisFacts (a nationally recognized third-party survey firm) is
    generated and delivered to the resident vie e-mail or text (at the
    residents' selection) within 24 hours of service order completion. The
    survey results are immediately available to maintenance and project
    management. There are multiple questions on the survey that provide
    analysis and trends on maintenance management.
        Lendlease fared very well regarding the satisfaction ratings of its
    projects. To illustrate, for the 2019 portfolio average score on a
    scale of 1-5, Lendlease received:
          Service Request Experience = 4.48 (Army & Marines Corps
    consolidated score)
          Service Request Experience Survey (Air Force, reported
    separately due to the use of a different though similar survey question
    set) = 4.34
        The Annual CEL Resident Satisfaction surveys (from the Military
    Services) also measure work order satisfaction and provide higher
    response rates and broader feedback about resident satisfaction in that
    area.
        Additionally, we monitor internal qualitative metrics for service
    order satisfaction based on indicators of excellent service including
    open work order aging, repeat work orders, service order response and
    completion time averages, work order exceptions, and other similar
    metrics.
        If there are work orders generated but not completed prior to a
    family moving out of the home, those work orders are completed during
    the Change of Occupancy Maintenance (COM) unless they are part of a
    larger, planned project (e.g., gutter replacement, roof replacements,
    etc.). We are not aware of any other instances where work previously
    identified by a resident would not be completed prior to a resident
    moving out of a home. Any work orders that constitute normal wear and
    tear identified prior to the resident leaving would be completed on the
    COM and the resident would not be charged.
        Our policy is that work orders are not closed until all work is
    complete.
        Work completed during COM is not considered as part of the resident
    satisfaction survey. Residents would have an opportunity to provide
    feedback about their experience at the move out as another point of
    service survey is generated based on that activity.
        Our policy is that work orders are not closed until all work is
    complete.
        Work orders are generated when a resident calls the 24-hour
    maintenance line routing them to a local dispatch or call center,
    submits online via the web portal or mobile app., as well as in-person
    at a maintenance office, community center or employee.
        As work orders are generated, they are classified in the following
    categories:
          Emergency--Immediate danger to life, health or property.
          Urgent--Not an emergency, but if not corrected could
    become an emergency (e.g. toilet or sink(s) clogged, partial power
    outage)
          Routine--Failures or deficiencies that do not immediately
    endanger occupants or property (e.g. screen repair)
          Resident Scheduled--The resident is unable to accommodate
    the offered time a technician is available to respond to a routine work
    order and requests an appointment to occur at the resident's
    convenience.
        During the three-month period between September 1, 2019 through
    November 30, 2019, the following statistics demonstrate our
    responsiveness:
          74,802 total service orders were completed. This includes
    emergency, urgent, routine, emergency after-hours and urgent after-
    hours. This does not include resident scheduled maintenance.
          32.0% (23,940) of the total service orders completed took
    longer than 24 hours to complete:
            For these calls, the average completion time was 3.48
    days.
            For these calls, 20,509 (85.7%) were routine service
    orders which include issues that do not immediately endanger occupants
    or property (e.g. screen repair) and which typically have a three (3)
    to thirty (30) day completion requirement.
        Mr. Brown. How do you determine when work performed is ``complete''
    and do the service members have the ability to concur with that
    disposition?
        What metrics do you use as a basis for satisfaction rating?
        How do you disposition a work order when a family is PCS'd to a new
    base? Is that work order logged as complete?
        How do you measure satisfaction for a work order that is still open
    when a family is PCS'd to a new base?
        What's the average duration for a work order that isn't
    accomplished in the first 24 hours?
        Mr. Taylor. Currently, for each work order, a maintenance
    technician and/or third-party contractor takes a photograph of the
    before and after work performed. These photos are uploaded into our
    management system, allowing both residents and our military housing
    partners to access and review online via computer or mobile app. On all
    emergency/urgent work orders (and a sampling of all routine work
    orders), our Work Order Administrators conduct follow-up calls with
    residents to confirm the work was properly completed and that they are
    fully satisfied and have no further concerns. In addition, residents
    are requested to `sign-off' on the work order to indicate their
    satisfaction before the work order is officially deemed completed. In
    situations where the resident is not satisfied, the work order remains
    open and we dispatch a Maintenance Supervisor and/or Facility Manager
    to review and continue to work the issue until the resident is
    satisfied; and if the work is validated by our Maintenance Supervisor
    and/or Facility Manager as properly completed, we engage Military
    Housing Office representatives to resolve with the resident.
        If the work order involves a life/health/safety issue, the repair/
    remediation work performed is inspected by one of our Quality Control
    Specialists to ensure that it meets all required standards. Our Quality
    Control Specialists also conduct spot checks on all other completed
    work orders to further ensure the work was performed properly.
        When a work order is closed in our system, the resident receives an
    automated, third-party survey (administered by SatisFacts Research,
    LLC) that includes a series of questions related to the quality of the
    work performed, level of customer service and overall resident
    satisfaction with the experience. Ratings in these areas are provided
    on a scale of 1 to 5, with 5 being highly satisfied. All survey results
    are reported real-time to both local and regional Balfour Beatty
    Communities management and the Military Housing Office. If a resident
    rates our service below 3.5 (average), our management team contacts the
    resident to better understand the concern and address any outstanding
    issues.
        Open work orders remain open until the work is properly completed,
    regardless of whether the family is still in the home or has PCS'd to a
    new base. In the event there are open work orders after a resident has
    vacated the home, the work will be completed during the ``Change of
    Occupancy'' process that occurs prior to a new resident moving in to
    the home. When the work is completed, the work order is closed in our
    system with a note documenting the reason there is no resident sign-
    off.
        Prior to a new resident signing a lease, he/she accompanies a BBC
    team member to the home and jointly perform a move-in inspection. BBC
    goes through a comprehensive checklist and review of the home with the
    new resident to ensure the home is in good condition and ready for
    occupancy. After a new resident moves in, he/she receives an automated
    third-party satisfaction survey and the same follow-up process
    described above for work order surveys is followed here. On many of our
    sites, as an additional quality control measure, the Military Housing
    Office now also performs a home inspection prior to a new resident
    move-in and provides their sign-off that all outstanding work has been
    completed and the home is ready for move-in.
        Most of BBC's projects have defined response and completion
    timeframes associated with work order requests; and these timeframes
    are typically based on classification of the work order as emergency,
    urgent or routine. For example, a routine work order may require
    completion time of four (4) days, whereas an emergency work order may
    require completion within 24 hours (barring extenuating circumstances
    outside of the property manager's control). The majority of our work
    orders are successfully completed during the first visit. The average
    duration to complete more extensive work orders varies widely. In some
    instances, we cannot complete a work order because the resident has
    requested that the work be performed at a later date, the resident is
    not home and has not given us permission to enter when not present, or
    where the resident has given permission to enter but an unsecured pet.
    In other instances, work orders may require our team to order new
    equipment or parts that take time to special order or receive or
    require our team to engage and schedule a licensed, third-party
    contractors with a specific area of expertise. We consistently follow-
    up with residents to keep them informed throughout the process and
    clearly document the circumstances in our work order system. We also
    provide a mobile device app to residents that allows them to track work
    orders.
        Mr. Brown. How do you determine when work performed is ``complete''
    and do the service members have the ability to concur with that
    disposition?
        What metrics do you use as a basis for satisfaction rating?
        How do you disposition a work order when a family is PCS'd to a new
    base? Is that work order logged as complete?
        How do you measure satisfaction for a work order that is still open
    when a family is PCS'd to a new base?
        What's the average duration for a work order that isn't
    accomplished in the first 24 hours?
        Mr. Bliss. Once a work order is complete, Lincoln Military Housing
    will offer the resident the opportunity to sign-off on the completed
    work. If the resident is not available to sign, the work order is
    closed, though an immediate e-mail is sent to notify the resident that
    the work was completed and request their feedback via a survey
    (SatisFacts). The notice of work-order completion encourages the
    resident to contact Lincoln Military Housing if they are not satisfied
    with the work completed. The survey format has twelve questions to
    assess the level of satisfaction. Work orders opened by residents are
    generally completed within one business day. Even if the work order
    remains open after a resident's Permanent Change of Station move (PCS),
    Lincoln Military Housing will continue to keep the work order open
    until the work is complete. When a family moves out, they receive a
    satisfaction survey about their residency and the move-out process,
    though it is not related to any specific work order. Lincoln Military
    Housing has a multi-faceted work-order request system. Specifically,
    Lincoln Military Housing's work-order request system allows tenants to
    submit work orders by phone via a dedicated ``Lincoln At Your Service''
    hotline, on the internet via the Lincoln Resident Portal, or via a
    smart device through the Lincoln Military Housing Resident App. As a
    result, the majority of work orders are completed within the first 24
    hours. For those that take longer, which may be for a specialized part,
    or a specific vendor or trade that may be needed, the average time to
    completion is 13 days.

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