[Senate Hearing 116-642]
[From the U.S. Government Publishing Office]
S. Hrg. 116-642
THE CHAIN OF COMMAND'S ACCOUNTABILITY
TO PROVIDE SAFE MILITARY HOUSING AND
OTHER BUILDING INFRASTRUCTURE TO
SERVICEMEMBERS AND THEIR FAMILIES
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON ARMED SERVICES
UNITED STATES SENATE
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
MARCH 7, 2019
__________
Printed for the use of the Committee on Armed Services
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via: http://www.govinfo.gov
________
U.S. GOVERNMENT PUBLISHING OFFICE
54-853 PDF WASHINGTON : 2024
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COMMITTEE ON ARMED SERVICES
JAMES M. INHOFE, Oklahoma, Chairman
ROGER F. WICKER, Mississippi JACK REED, Rhode Island
DEB FISCHER, Nebraska JEANNE SHAHEEN, New Hampshire
TOM COTTON, Arkansas KIRSTEN E. GILLIBRAND, New York
MIKE ROUNDS, South Dakota RICHARD BLUMENTHAL, Connecticut
JONI ERNST, Iowa MAZIE K. HIRONO, Hawaii
THOM TILLIS, North Carolina TIM KAINE, Virginia
DAN SULLIVAN, Alaska ANGUS S. KING, Jr., Maine
DAVID PERDUE, Georgia MARTIN HEINRICH, New Mexico
KEVIN CRAMER, North Dakota ELIZABETH WARREN, Massachusetts
MARTHA McSALLY, Arizona GARY C. PETERS, Michigan
RICK SCOTT, Florida JOE MANCHIN, West Virginia
MARSHA BLACKBURN, Tennessee TAMMY DUCKWORTH, Illinois
JOSH HAWLEY, Missouri DOUG JONES, Alabama
John Bonsell, Staff Director
Elizabeth L. King, Minority Staff Director
(ii)
C O N T E N T S
________________
March 7, 2019
Page
The Chain of Command's Accountability to Provide Safe Military 1
Housing and Other Building Infrastructure to Servicemembers and
Their Families.
Members Statements
Statement of Senator James M. Inhofe............................. 1
Statement of Senator Jack Reed................................... 7
Witnesses Statements
Esper, Hon. Mark T., Secretary of the Army; Accompanied by 9
General Mark A. Milley, USA, Chief of Staff of the Army.
Spencer, Hon. Richard V., Secretary of the Navy; Accompanied by 14
Admiral John M. Richardson, USN, Chief of Naval Operations and
General Robert B. Neller, USMC, Commandant of the Marine Corps.
Wilson, Hon. Heather A., Secretary of the Air Force; Accompanied 17
by General David L. Goldfein, USAF, Chief of Staff of the Air
Force.
Questions for the Record......................................... 67
(iii)
THE CHAIN OF COMMAND'S ACCOUNTABILITY TO PROVIDE SAFE MILITARY HOUSING
AND OTHER BUILDING INFRASTRUCTURE TO SERVICEMEMBERS AND THEIR FAMILIES
----------
THURSDAY, MARCH 7, 2019
United States Senate,
Committee on Armed Services,
Washington, DC.
The Committee met, pursuant to notice, at 9:30 a.m. in room
SH-216, Hart Senate Office Building, Senator James M. Inhofe
(Chairman of the Committee) presiding.
Committee Members present: Senators Inhofe, Wicker,
Fischer, Cotton, Rounds, Ernst, Tillis, Sullivan, Cramer,
McSally, Scott, Blackburn, Hawley, Reed, Shaheen, Gillibrand,
Blumenthal, Hirono, Kaine, King, Heinrich, Warren, Peters,
Manchin, and Duckworth.
OPENING STATEMENT OF SENATOR JAMES M. INHOFE
Chairman Inhofe. Our meeting will come to order.
I see our witnesses are already taking their positions. I
appreciate that very much. We always start on time. Jack and I
have this understanding, and it has great effects.
The Committee meets today to receive testimony from the
service secretaries and service chiefs of our Nation's
military.
At the end of December, I heard from families about the
dismal conditions they faced in privatized housing in Oklahoma
and then around the country. I was here 20 years ago when that
decision was made, and I remember the discussion at that time,
``It's going to work for a while, then you wait 20 years from
now and see what problems have erupted,'' and it happened.
Since that time, this committee has acted quickly. We held
a hearing, where we heard heart-wrenching testimony from family
members, privatized-housing partners, and military leadership.
One of those was Janet Driver, who's back there in the front
row of the second section. I just told her how much I
appreciated the fact that she drew this to my attention. Her
husband's at Tinker Air Force Base, and you can always be more
sensitive and understanding when you hear problems coming
from--emanating from someone who has personally experienced it.
Senator Reed and I sent our staff to a number of military
installations, including Fort Bragg, Norfolk, Joint Base
Anacostia, and Tinker Air Force Base. The others came from the
services, who actually went to every one of--and I've talked to
many of you who have been to every one of the installations in
your command, certainly the Army. You've never seen government
working as fast as it's worked in the last 3 weeks.
I'd like to read you a portion of the trip summary that the
staff wrote, which I will note was shared with each of our
witnesses. Now, I'm quoting now, and this is for the benefit
of, not just the witnesses here, or this table, but those in
the back of the room, who we'll recognize in a moment. Quote,
``From both home inspections and sensing sessions conducted
with current on-base residents, the systemic issues outlined at
the recent SASC [Senate Armed Services Committee] hearing are
not only substantiated, but we believe the problems may be much
worse. Installation commanders had different opinions of their
housing inventory before and after we conducted our tours,
where they thought they had a good understanding of current
housing conditions. Most came away embarrassed that they were
not aware of some of the dire situations. Specific issues
included absolutely no quality assurance from the services,
which the chain of command admits is a problem, primary
partners and subcontractor maintenance performing shoddy
patchwork instead of remediating the cause of the problem, and
extreme frustration with the resident energy conservation
program, which is supposed to curb the energy uses for on-
base''----
Now, this is where the summary ends, but this is where the
tough questions must begin. How did we get to this point, where
the chain of command felt that they were not empowered,
expected, or morally obligated to help? This is something
different. I can remember my chain of command when I was a
private in the United States Army. That was it. There was no
question about it. And that has somehow changed, and perhaps
this is going to help us in changing back something that should
not have been changed.
What actions have you taken since that hearing? Why didn't
you know about this and fix it before Congress had to step in?
Who is responsible, and who is being held accountable? Held
accountable. Finally, what can we do now to make this right for
our families? I have asked the chain of command from each of
the services here today because the health, safety, and welfare
of our servicemembers is the responsibility of everyone from
the Secretary to the squad leaders, plain and simple. The chain
of command failed to take care of its own, and lost their
trust. Now the chain of command must regain that trust.
But, the contractor must bear an equal or greater share of
this responsibility. By no means will we bail the contractors
out and pass along the costs to the taxpayer. That's not going
to happen. They agreed to take care of our families, and, in
fact, by their own admission, these contractors have not.
In closing, we always say ``recruit the servicemember,
retain the family.'' But, if we lose the trust of the military
families, we risk losing the next generation of servicemembers,
which could be a very serious problem to the safety of this
country.
With that, I would like to recognize any military families
who are here today. We're going to ask you to stand up. I know
where you're seated. Stand up if you're a family of a
military----
Okay, let's give them a hand.
[Applause.]
Chairman Inhofe. Let me summarize what our feelings are now
with you: Help is on its way.
To our service secretaries and chiefs, these people
represent the thousands of military families whose trust you
must regain.
Before I turn to Senator Reed, I'd like to ask the members
to stay on topic. We are here to get answers for our families,
and our witnesses will be back in the coming weeks to answer
questions and so forth.
But, what we're going to do on this is something we have
not done in quite a while, and that is, we're going to have--
instead of a 5-minute question, we're going to have 7-minute
questions, but we're going to use the gavel. To all of you who
might be tempted to go over that, we're not going to let you do
that. I don't mind being unpopular in this day and maybe you'll
forget it tomorrow.
Senator Reed, for an opening statement.
STATEMENT OF SENATOR JACK REED
Senator Reed. Well, thank you very much, Mr. Chairman.
And I'd also----
Chairman Inhofe. Oh, let me interrupt you first. We have--
I'm afraid might--
[Laughter.]
Chairman Inhofe.--I'm afraid we might lose a quorum. Since
a quorum is now present, I'd ask the Committee to consider the
nomination of William Bookless to be Principal Deputy
Administrator, National Nuclear Security Administration;
Veronica Daigle, to be Assistant Secretary of Defense for
Readiness and Force Management; Tom McCaffery, to be Assistant
of Defense for Health Affairs; and Lisa Schenck, to be Judge of
the U.S. Court of Military Commission.
Is there a motion to favorably----
Senator Reed. So move.
Chairman Inhofe. A second?
Senator Rounds. Second.
Chairman Inhofe. All in favor, say aye.
[A chorus of ayes.]
Chairman Inhofe. Ayes have it. It is now done.
I apologize, Senator Reed.
Senator Reed. Quite all right, sir.
Let me thank you again, Mr. Chairman, and thank the service
secretaries and the chiefs for being here today.
]In the 3 weeks since our last hearing on military
privatized housing, it has become clear that there are
systematic failures on the part of both the private housing
companies and the Department of Defense (DOD). While the
horrific conditions vary by installation, ranging from lead-
based paint, mold, and rodents, the underlying causes and
fundamental breakdowns are, unfortunately, all too common
across the country. These housing problems are exacerbated by
the fact that military families frequently move every few
years, and is reinforced by a culture of enduring hardships
rather than speaking of them, for fear of retaliation, among
other reasons.
For far too long, privatized housing companies have been
allowed to deliver lackluster customer service to military
families, conduct in bare minimum for routine maintenance, and
exercise zero quality control, while accruing sizable profits.
Unfortunately, all this has been able to occur because of the
lack of accountability by the Department of Defense.
I wanted to give just one example. A Navy family had
squirrels enter their attic through a hole in the roof. Soon
after, the squirrels died and maggots dropped through their
ceiling fan onto the bed. The housing company showed up to
remove the squirrels, but failed to seal the hole in the roof
for the last year. We know this because committee staff visited
them 2 weeks ago. Furthermore, over the last 2-\1/2\ years,
workers from the housing company visited this same home 52
times for instances of water intrusion and inadequate follow-on
work orders. Fifty-two times, without ever bothering to examine
the root cause of the problem. On top of all this, the housing
company still charges this family $1,780 per month in BAH
[Basic Allowance for Housing].
I guarantee no one in this room would ever put up with the
substandard living conditions some of these military families
have had to endure. I'm eager to hear what solutions the
military service will propose today. I have several thoughts:
First, I believe that the services have lost sight of the
important philosophy of taking care of uniformed personnel and
their families in all aspects of life, whether it is the
professional readiness of the warfighter or the fact that he or
she arrives home, on post or off post, each night to a flooded
basement and black mold on the wall. I want to know how each of
you intend to instill that obligation in your commanders.
Second, military families must feel empowered with a
standard Bill of Rights across the military services. Families
deserve the flexibility to withhold their BAH, in the event of
a housing problem that is not adequately resolved in a timely
fashion. I understand some of the military services have
already begun looking into this situation and how they can
implement it on their own, and I'm interested, again, in your
views.
Third, installation commanders need to be far more active
in their oversight role, an advocate for the homes of their
warfighters, and no longer simply rubber-stamping center fees
for housing contractors. Military families also deserve
unfettered access to the maintenance records conducted in their
homes. Privatized housing companies need to fundamentally
overhaul the way in which they conduct customer service and
execute work orders. Clearly, these companies are conducting
the bare minimum when it comes to maintenance, and bandaid
fixes are commonplace in order to cut costs and maximize
profits. Yet, we still may hear from housing companies in the
coming months that the answer to the problem is still more BAH,
and I agree with the Chairman, that's not the answer.
All of us--the services, the housing companies, and, yes,
Congress--have let down the men and women who selflessly
service this country. We need to do better. I look forward to
hearing more specific solutions from our distinguished panel
today, and to working with you as we consider this year's NDAA
[National Defense Authorization Act].
Thank you.
Chairman Inhofe. Thank you, Senator Reed.
We'll now hear from our secretaries. We're going to do this
in order starting with you, Secretary Esper, and then coming
across the table.
Secretary Esper. Yes, sir. Thank you.
Chairman Inhofe. Your entire statement, of course, will be
made a part of the record, and we ask you to confine your
remarks to 5 minutes.
STATEMENT OF HON. MARK T. ESPER, SECRETARY OF THE ARMY;
ACCOMPANIED BY GENERAL MARK A. MILLEY, USA, CHIEF OF STAFF OF
THE ARMY
Secretary Esper. Good morning, Chairman Inhofe, Ranking
Member Reed, and distinguished Members of the Committee. Thank
you for the opportunity to appear before you today. Thank you,
also, for the fact that you gave our families a voice, a few
weeks ago, and brought this issue to everybody's attention. It
has had a cathartic effect on us, and we look forward to
discussing this matter with you today. But, thank you for
bringing this issue forward.
One of our fundamental obligations as Army leaders is to
take care of our soldiers and their families. The recent
reports of substandard conditions in some of our military
housing units are deeply troubling. It is unacceptable for our
families, who sacrifice so much for our country, to endure
these hardships in their homes. We are fully committed to
solving this problem, and have initiated a number of actions to
ensure our soldiers and their families have access to safe,
quality military housing across all of our installations.
I would like to submit for the record a 1-page document
that outlines the Army's Housing Action Plan. I believe each of
you have a copy at the dais.
Chairman Inhofe. Of course.
Secretary Esper. We'll briefly highlight the key actions
for the Committee.
Chairman Inhofe. It'll be made a part of the record.
Secretary Esper. Thank you, sir.
[The information referred to follows:]
Secretary Esper.
united states army housing action plan
The U.S. Army is taking aggressive actions to rectify current
housing deficiencies, and to implement longer-term solutions so our
soldiers and their families are afforded a safe, secure, and quality
place to live. The following is a listing of many of the initiatives
the Army has taken or is pursuing.
Immediate Actions
Army Senior Leaders met with all seven housing company
CEOs or senior executives on February 19 to take immediate action to
address housing issues.
Installations have established 24-hour Command Hotlines
for housing issues.
Senior Commanders and housing company representatives
conducted Town Halls with soldiers and families at every U.S. Army
installation.
Housing companies suspended non-refundable pet fees.
The Army suspended the Army Residential Community Energy
Conservation Program to review billing procedures.
The Army elevated approval of housing company incentive
fees to Army Headquarters level.
Housing companies provided full work order visibility to
all garrison leaders.
Service Secretaries developed a draft ``Tenant Bill of
Rights'' for residents.
The chain of command is conducting Barracks inspections
and Family housing visits for all Army-owned and privatized facilities
by March 18, 2019.
Department of the Army Inspector General is inspecting
all 49 installations with privatized housing and will complete their
report by mid-May.
Longer Term Actions
The Army will begin conducting a Quarterly Board of
Directors meeting with housing senior executives beginning in April.
The Army is working with housing companies to develop an
online work order tracking system for residents.
The Army is developing its own online reporting system
for tenants to rate work order timeliness, quality of work, and
customer service for each service visit.
The Army is developing new metrics to assess RCI company
performance and customer satisfaction; this will serve as the basis for
a new incentive fee structure.
The Army is renegotiating all housing company incentive
fee structures to align with Army customer service objectives and the
Tenant Bill of Rights
The Army is developing a new training curriculum on
housing oversight for garrison command teams.
The Army is reviewing quality control procedures to
ensure adequate resourcing and staffing is available for effective
oversight of housing company performance.
The Army is reviewing options to empower residents to
withhold rent payments to hold the housing companies financially
accountable for poor performance.
Secretary Esper. The Army currently has 111,000 housing
units, of which 87,000 were privatized under the RCI
[Residential Communities Initiative] program. These homes are
managed by seven private companies across 49 installations. The
transition to privatized housing in 1998 marked a dramatic
improvement in living conditions for our soldiers and their
families. However, this model assumed that the RCI contractors,
with sufficient Army oversight, would continue to maintain the
quality of these homes. In too many cases, it is clear the
private housing companies failed to uphold their end of the
bargain, a failure that was enabled by the Army's insufficient
oversight. We are determined to investigate these problems and
to hold our housing contractors and chains of command
accountable.
The Army is taking immediate action to fully understand the
scope and scale of our military housing problems and to remedy
the current housing deficiencies. Within 18 hours of the first
hearing on this topic, I traveled with General Milley and
Sergeant Major of the Army Dailey to Fort Meade, where we
personally walked through multiple homes and spoke to our
affected families. We also met with the leadership of the
privatized housing company, and pressed them to take immediate
actions.
Since then, Army senior leaders have traveled to Fort
Bragg, Fort Belvoir, Fort Campbell, and West Point to conduct
our own housing visits and to meet with families and garrison
leadership. Over the past 3 weeks, Army installations have
conducted townhall meetings, in collaboration with the RCI
contractors, in addition to establishing housing hotlines. This
has provided families a forum to voice their concerns and to
report problems directly to garrison commanders.
We also ordered all senior commanders to complete a 100-
percent screening of their installation housing by March 18.
Where life, health, and safety issues exist, senior commanders
have been instructed to immediately relocate housing residents
to temporary quarters until the housing conditions are
remediated. This screening process is ongoing, and, to date, we
have completed over 19,000 housing visits.
We have also met with the CEOs [chief executive officer] or
senior executives from each of the seven privatized housing
companies to discuss the current problems. The poor customer
service, the lack of work-order transparency, and the inability
of residents to hold the housing companies accountable for
deficient conditions were common themes presented during our
town halls. All of our housing contractors have committed to
working together to find ways to improve customer service and
to increase transparency. Additionally, they all agree to
ensure sufficient numbers of trained technicians and staff are
available at each installation to address problems in a timely
manner.
To inform our long-term solutions to this problem, we have
initiated IG [inspector general] inspections across the 49
installations with RCI housing. These inspections are focused
on customer satisfaction, work-order responsiveness, and the
ability of our garrison commands to provide proper oversight of
our private contractors. Many residents have told us that
communication between residents and the private housing
companies is broken. To enable greater transparency in the
future, we are developing tracking systems to provide a common
picture to residents, garrison leadership, and housing
contractors. We are also restructuring incentive management
plans to more closely align with those areas that are most
important to our residents, such as work-order resolution and
customer satisfaction. It is not acceptable for us to provide
high rates of incentive payment when the quality of service
provided to our residents is substandard.
Furthermore, to ensure our soldiers and their families have
proper legal protections, we are working in conjunction with
the other services to develop a Tenant Bill of Rights. I
believe the Committee received this yesterday, and if I may, on
behalf of my colleagues and myself, submit this as a record, as
well----
Chairman Inhofe. Without objection.
Secretary Esper.--our draft Tenant Bill of Rights.
[Tenant Bill of Rights has been retained in Committee
files.]
Secretary Esper. Many Army families are concerned they lack
the ability to hold the private housing companies accountable
for poorly performed services, and are inadequately protected
from retaliation. This Tenant Bill of Rights will outline the
residents' basic rights while living in military privatized
housing, including options that address the problems they are
facing most frequently. To better empower chains of command, we
will implement training for garrison command teams on
contracting and housing management. Additionally, we will
increase garrison staffs to perform quality assurance and
quality control checks on work-order completion and housing
transitions. Furthermore, we will develop our own reporting
system for residents to rate timeliness, quality of work, and
level of customer service, to provide additional data to
garrison oversight teams.
Providing a safe, quality living environment for our
soldiers and their families is critical to the readiness of the
force. This is essential to building trust, so, when soldiers
deploy, they can rest assured their families are taken care of
back home. To do this, the Army needs to get back involved in
the housing business.
[The joint prepared statement of The Honorable Mark T.
Esper and General Mark A. Milley follows:]
Joint Prepared Statement by The Honorable Mark T. Esper and General
Mark A. Milley
introduction
Chairman Inhofe, Ranking Member Reed, and distinguished members of
the Committee. Thank you for this opportunity to testify on the chain
of command's accountability to provide safe military housing and other
building infrastructure to servicemembers and their families.
One of our fundamental obligations as Army leaders is to take care
of our soldiers and their families. The recent reports of sub-standard
conditions in some of our military housing units is deeply troubling.
It is unacceptable for our families who sacrifice so much for our
country to endure these hardships in their own homes. We are fully
committed to solving this problem, and have initiated number of actions
to ensure our soldiers and their families have access to safe and
secure military housing across all of our installations.
The Army currently has 111,000 family homes, of which 87,000 were
privatized under the Residential Communities Initiative (RCI) program.
These privatized homes are managed by seven private companies across 49
installations. The transition to privatized housing in 1998 marked a
dramatic improvement in living conditions for our soldiers and their
families. However, this model assumed that the RCI contractors, with
sufficient Army oversight, would continue to maintain the quality of
these homes. In too many cases, it is clear the private housing
companies failed to uphold their end of the bargain, and the Army
failed to adequately provide oversight. We are determined to
investigate these problems and to hold our housing contractors and our
military and civilian chains of command accountable. The Army is moving
out to immediately rectify the current deficiencies and to implement
longer-term solutions so that our servicemembers' families are afforded
a safe, secure, and quality living environment.
immediate actions
The Army is taking immediate action to fully understand the scope
and scale of our military housing problems and to remedy the current
housing deficiencies. Army senior leadership has traveled to Fort
Meade, Fort Bragg, Fort Belvoir, Fort Campbell, and West Point to
personally walk through housing, meet with families, and press the
housing CEOs on taking immediate actions. Additionally, every
installation has conducted town hall meetings in collaboration with the
RCI project company representatives and established housing hotlines.
This has provided families a forum to voice their housing concerns and
to report problems directly to garrison commanders. Throughout these
meetings, we gained valuable insights from our residents that will
inform our long-term solutions. Additionally, we ordered all senior
commanders to complete a 100 percent life, safety, and health screening
of their installation housing by March 18th, as well as any maintenance
deficiencies. Where life, health, and safety issues exist, senior
commanders have been instructed to immediately relocate housing
residents to temporary quarters until the hazardous conditions are
remediated. This screening process is ongoing and will be followed by a
detailed report by each senior commander, providing their assessment of
the quality of housing on their installation.
We have also met with the CEOs or senior executives from each of
the seven privatized housing partners that manage housing on Army
installations to discuss the current problems. The poor customer
service, the lack of work order transparency, and the inability of
residents to hold the housing companies accountable for deficient
conditions were common themes presented during our installation town
halls. All of our partners have committed to working together to find
ways to improve customer service, increase transparency, and to
renegotiate incentive management plans. Additionally, they all agreed
to ensure sufficient numbers of trained technicians and staff are
available at each installation to address problems in a timely manner.
long-term solutions
In addition to taking swift action to rectify all current housing
deficiencies, we are conducting Inspector General inspections to
determine the root of the problems across the 49 installations with RCI
housing. These inspections are focused on customer satisfaction, work
order responsiveness, and the ability of our garrison commands to
provide proper oversight of our private contractors. Throughout this
process, we will work with families, garrisons, and our housing offices
to develop more effective tracking, reporting, and enforcement
mechanisms to ensure we are meeting our obligation to provide safe,
high-quality family housing.
Part of our long-term solution includes developing systems to
ensure greater transparency and responsiveness to resident needs, while
enabling more effective oversight of our privatized housing. Resident
visibility on maintenance requests varies across installations and
generally does not provide tenants with a clear status of work orders.
To enable greater transparency, we are developing tracking systems to
provide a common picture to residents, Army RCI Asset Managers, and
housing contractors.
We will also be restructuring contracts and incentive management
plans to more closely align with those areas that are most important to
our residents such as work order resolution and customer satisfaction.
It is not acceptable for us to provide high rates of incentive payment
when the quality of service provided to our residents is substandard.
Designing these incentive payments with more accurate information will
allow us to better focus the private housing companies on quality of
life issues that affect our communities.
Furthermore, to ensure our soldiers and their families have proper
legal protections, we are working in conjunction with the other
Services to develop a Tenant Bill of Rights coupled with appropriate
enforcement and arbitration mechanisms. Many Army families are
concerned they lack the ability to hold the private housing companies
accountable for poorly performed services and are inadequately
protected from retaliation. This Tenant Bill of Rights will outline the
residents' basic rights while living in Army privatized housing. We are
also developing options for financial recourse if they are not provided
quality housing.
As we move forward to meet the fundamental obligation of providing
our families with quality housing, the Army will focus on those longer-
term actions that will prevent this from happening again. We will
require training specific for garrison command teams on contracting and
housing management, which will empower them to better respond to tenant
grievances. We will also add staff to perform quality assurance and
quality control checks on work order completion. Furthermore, we will
develop our own reporting system for residents to rate timeliness,
quality of work, and level of customer service to provide additional
data to garrison oversight teams. Finally, we will hold the chain of
command responsible for visiting housing and barracks on a routine
basis as part of their health and welfare programs.
conclusion
Providing a safe and secure living environment for our soldiers and
their families is an enduring obligation of ours as Army leaders and is
critical to the readiness of our force. It is clear that we have failed
to conduct the necessary oversight to hold our private partners
accountable for the sub-standard housing conditions across our
installations. The Army is moving out rapidly to understand the extent
of this housing problem and to rectify the deficiencies that exist.
Moving forward, we are committed to applying the necessary resources to
enable the oversight required to fully address these issues.
We will continue to work closely with our residents, garrison
commands, and our seven private housing companies to ensure we provide
our soldiers and families the quality of housing they deserve. The Army
needs to get back involved in the housing business. This includes
taking a more active oversight role of not only privatized housing, but
also the barracks where many of our junior soldiers live. This is
essential to maintaining our readiness, so when soldiers deploy, they
can rest assured their families are taken care of back home. Thank you
for your interest in this matter, as well as your continued support to
the Army.
Chairman Inhofe. Good statement.
Secretary Spencer.
STATEMENT OF HON. RICHARD V. SPENCER, SECRETARY OF THE NAVY;
ACCOMPANIED BY ADMIRAL JOHN M. RICHARDSON, USN, CHIEF OF NAVAL
OPERATIONS
Secretary Spencer. Chairman Inhofe, Ranking Member Reed,
distinguished guests, I wish I could say I'm pleased to be here
today, but I am not.
I want to start by first apologizing personally on behalf
of the Department of the Navy to any sailor, marine, soldier,
airman, coastguardman that was affected by the housing malady
that we've seen before us right now. The people of the Navy/
Marine Corps team will always be our greatest resource and our
greatest asset, and the safety and well-being of sailors and
marines and their families is a top priority for all of us.
After the initial assessment, I can state with certainty
that we can, and we will, correct the issue--the issue at hand,
which is not acceptable. We will make the process and the
product better in the long run. The solution is based on the
simple precepts of communication, education, and attention.
When I say ``simple,'' that's just the basic concepts. The
details will be forthcoming.
I also want you to know that the three service secretaries
are working in lockstep. Much that you will hear today, we are
doing in coordination. You'll hear of a common lease, the
development of that. We are working hand-in-hand in that
regard.
On top of the considerable demands of service, no military
family should ever have to contend with chronic maintenance
issues or concerns such as mold, pests, and intrusions into
their house. In order to fulfill our obligation to our families
and ensure the strength and readiness of our force, we must
demand excellence and responsiveness for all concerned,
including our housing partners. It is clear, in many cases, we
have fallen woefully short of this obligation, and, upon
reviewing the issues surrounding housing, it's apparent there
is culpability around the table. We're taking steps to address
the immediate problems, as well as address our business and
education processes, to permanently correct systemic issues.
Upon the assessment, the CNO and the Commandant of the
Marine Corps issued a NAVADMIN and white letters stating that,
by April 15 of this year, every Marine and Navy family in
Private Public Venture (PPV) housing will be offered a personal
visit from base officials. We're getting the uniformed command
back into the equation. These command teams will not be
satisfied until the housing issues they discussed or observed
are resolved.
Following that, a regular drumbeat of follow-on chain
command attention will follow. We've been in discussion with
our private partner--Private Public Venture partners about the
availability of apps that are available now--and they are
attacking this issue--that allows for reporting, tracking,
rating resolution, and enhancing the communication that is
needed between our servicepeople and the Private Public Venture
partner.
The three service secretaries will be holding quarterly
meetings with the CEOs of our venture partners to address and
monitor, on a continual basis, the satisfactory delivery of
housing for our military families. Our housing partners will
remain an important component of the housing solution offered
to military families. However, our military leaders must never
outsource their role as advocates for our servicemembers and
their family. The Navy-Marine Corps team will continue to
pursue improvements in military housing with a sense of urgency
to deliver the services our military families deserve, the
value the American taxpayers expect, and the readiness our
global force requires.
Going forward, we look forward to working with this
Committee to do everything in our power to protect the health,
well-being, and safety of our sailors, marines, and military
families, wherever they call home.
Thank you.
[The joint prepared statement of The Honorable Richard V.
Spencer, Admiral John M. Richardson, and General Robert B.
Neller follows:]
Joint Prepared Statement by The Honorable Richard V. Spencer, Admiral
John M. Richardson, and General Robert B. Neller
Chairman Inhofe, Ranking Member Reed, distinguished Members of the
Committee, thank you for the opportunity to testify on this critical
issue. The people of the Navy Marine Corps Team will always be our
greatest resource, and the safety and well-being of our sailors and
marines and their families is a top priority for each of us. Trust and
confidence are the bedrock upon which effective command rests, and the
sailors and marines in our care must be confident that when they bring
a problem to their chain of command, their leadership will advocate
tirelessly on their behalf.
On top of the considerable demands of service, no military family
should ever have to contend with chronic maintenance issues or concerns
such as mold, pests and intrusion in their home. In order to fulfill
our obligations to our military families and ensure the strength and
readiness of our force, we must demand excellence and responsiveness
from all concerned, including the Public-Private Venture (PPV) partners
who provide 39,384 housing units to the Navy and 23,329 to the Marine
Corps.
It is clear that in some cases we have fallen short of this
obligation, and we are determined to take corrective action with a
sense of urgency. In response to the concerns that have come to light
regarding the PPV Housing program, the Navy and Marine Corps are
comprehensively reviewing the business systems, reporting mechanisms
and oversight procedures governing the way housing maintenance issues
are reported, remediated and verified in privatized housing.
These ongoing reviews have revealed several systemic issues. For
example, the burden for reporting and escalating a housing issue too
often falls on the servicemember, sometimes requiring multiple calls to
achieve a satisfactory response. Once the need for corrective action
has been established, our private partners have too often failed to
live up to their obligations to conduct satisfactory repairs in a
timely manner. And the Department of the Navy has too often failed to
effectively exert the oversight needed to identify and correct isolated
issues before they become systemic. There is culpability around the
table.
In response to these concerns, we are taking steps to address
immediate problems as well as adjust our business processes to
permanently correct systemic issues. General Neller and Admiral
Richardson have each issued orders requiring commanding officers to
afford the opportunity for every family in military housing to receive
a voluntary visit by 15 April 2019. The purposes of these visits are:
(1) to raise command awareness of family living conditions to ensure
that they are safe, secure and environmentally healthy; (2) to
personally observe any issues affecting the home and to understand any
actions being taken to address them; and (3) if a problem is found, to
help servicemembers and their families get the problem resolved, and
ensure that all families understand the help and resources available to
them.
Marine Corps Commanders will use the Marine Housing Outreach
program to improve their awareness of concerns and better advocate for
military families. Commanders will leverage appointed servicemember
advocates and the base housing office to streamline communication with
providers. Both Commanders and appointed advocates will ensure
effective oversight and remediations are in place, operating with the
full authority and support of the chain of command.
The Navy will streamline its reporting process so that no sailor
has to exceed two calls before achieving resolution--the first to the
housing company, and the next to their chain of command, which can then
properly advocate on their behalf with the government base housing
office, base leadership, and Commander Naval Installation Command
(CNIC) to ensure resolution. Simultaneously, families will continue to
have an open channel to the base housing office.
Additional systemic improvements include:
Privatized Housing Crisis Action Teams at the
Installations Command headquarters, as well as each Regional Command to
respond with alacrity to housing complaints.
Comprehensive reviews of all reporting mechanisms and
oversight procedures that govern the way privatized military housing
discrepancies are reported, remediated, and verified through our
Public-Private Venture partners. We have been in discussion with PPV
partners about available apps to address reporting, tracking, rating
and resolution.
Weekly assessments conducted by Regional Housing
Directors to provide comprehensive oversight and quality control on
work orders, including database systems to track work orders and spot
checks of individual work orders to ensure quality repairs.
Outreach letters to all families in PPV housing as well
as social media communication.
Open forums sponsored by installations and delivered by
the local base commanders.
Out of cycle independent Resident Satisfaction Surveys
with specific questions added to ensure resident concerns have been
captured fully.
Quarterly meetings with PPV CEOs and Service Secretaries
to address and monitor the satisfactory delivery of housing for our
sailors and marines.
These are just a few examples of the actions being taken by the
Navy Marine Corps Team. We will continue to improve oversight
procedures. We will evaluate and modify as needed the business
agreements with our Privatized Housing Partners to incentivize
responsiveness, quality control, field management oversight and
customer service to ensure that resident safety and satisfaction is
paramount. We will also leverage mobile technology, upgrade our
database systems, and improve chain-of-command advocacy.
Our PPV partners will remain an important component of the housing
solutions offered to military families, however our military leaders
must never outsource their role as advocates for our servicemembers and
their families. It is an essential function of commanders and small-
unit leaders to effectively advocate for the sailors and marines they
serve.
We must empower these leaders to navigate the constellation of
relationships that govern PPV Housing, and provide the authority and
opportunity to take corrective action before it impacts the safety and
wellbeing of our military families, and the readiness and effectiveness
of our force.
We're ensuring base officials are aware of the leverage options
available to hold PPV partners accountable, including the adjustment of
incentive fees, the authority to issue cure notices, and ultimately,
the ability to replace the property management company if necessary. We
are educating leaders on how they can forcefully and effectively assist
when established processes are not providing our servicemembers and
their families with satisfactory results in PPV housing.
We have also made clear the expectation that command teams shall
not be satisfied until housing issues are resolved, and have
invigorated the relationship between deployed servicemembers and the
installations enterprise. Finally, we are expanding the scope of
engagement between commands and servicemembers regarding off-base
housing.
The Navy Marines Corps Team will continue to pursue improvements in
military housing with a sense of urgency to deliver the services our
military families deserve, the value the American taxpayers expect, and
the readiness our global force requires. We will continue pursuing
solutions to correct the issues that have been identified and provide
lasting systemic improvements to prevent their recurrence. We look
forward to working with this committee to do everything in our power to
protect the health, well-being and safety of our sailors, marines and
military families wherever they call home.
Chairman Inhofe. Secretary Wilson.
STATEMENT OF HON. HEATHER A. WILSON, SECRETARY OF THE AIR
FORCE; ACCOMPANIED BY GENERAL DAVID L. GOLDFEIN, USAF, CHIEF OF
STAFF OF THE AIR FORCE
Secretary Wilson. Thank you, Mr. Chairman.
Our military families deserve good housing, and when
there's a problem with a house, it should be fixed promptly and
competently. Moreover, our airmen should be comfortable that
they can identify problems without any fear of retaliation.
Over the past 3 weeks, the Chief and I directed the chain
of command to do a 100-percent health-and-safety review of all
Air Force family housing. We have the initial results of that
review, and I would ask that this be put into the record.
Chairman Inhofe. Without objection.
[Air Force Health and Safety Review have been retained in
Committee files.]
Secretary Wilson. The real question is, where do we go from
here? In the immediate term, we have to take action on all of
the health and safety issues that were identified, and make
sure they are addressed competently and promptly, and fixed.
The Chief and I also will be clarifying and communicating to
our commanders our expectation of them and of our Civil
Engineering Center so that we know, and they know, what we
expect from them, going forward, in taking care of our airmen.
In the medium term, we have to fix the system. There are
several elements of that, based on our initial view. The first
is an enforceable Tenant Bill of Rights, and my colleague has
already put that into the record. It's something that the three
service secretaries are united on, but it is a draft. We're
looking, also, for input from all of you.
Second, we believe we need to strengthen the base commander
input, oversight, and eyes-on when it comes to family housing.
That means giving base commanders more input on performance
fees, more support when it comes to quality control in their
own housing offices, as well as support from the Civil
Engineering Center, and more support from contracting
representatives who have the ultimate control over those
contracts.
Third, we need to improve communications and feedback loops
to restore trust with airmen. They need to--we--they need to be
engaged, not just on that first day, when it's so chaotic
moving in, but thereafter, so they know what to expect and how
to get help when they need it. There are multiple avenues for
them to get action and report problems, and we are going to
make sure all of those avenues are open.
Fourth, the Chief and I have also directed an inspector
general review, which is ongoing, to look at the system, to
identify additional actions that need to be changed to fix the
problem.
Thank you, Chairman, and I look forward to your questions.
[The joint prepared statement of Dr. Heather Wilson and
General David Goldfein follows:]
Joint Prepared Statement by Secretary of the Air Force Dr. Heather
Wilson and Chief of Staff General David Goldfein
introduction
The United States Air Force is committed to the health and safety
of our airmen and their families. Our people are our most important
resource. Airmen are executing warfighting missions for our nation
around the world, twenty-four hours a day. Our ability to conduct these
operations is affected by the well-being of our airmen, their families,
and the communities that host our installations. We project combat
power from these installations, which also serve to house and protect
our airmen and their families. Inadequate housing reduces the quality
of life for our airmen. Morale declines, retention suffers, and the Air
Force pays a price in readiness. Since we began privatizing Air Force
housing twenty-two years ago, we have proactively sought feedback from
airmen and implemented better ways to manage the system. Where there
are challenges, Air Force leadership owns it. Access to high-quality,
safe, and healthy housing is the right thing to do for our airmen and
for the readiness of our force.
protect airmen and their families' health
In 1996, Congress passed the Military Housing Privatization
Initiative, giving the Services the authority to enter into agreements
with the private sector to improve housing and quality of life for
servicemembers and their families. Since then, across the United
States, the Air Force has privatized more than 55,000 homes.
Installation housing occupancy is at about 96 percent. Airmen generally
give high marks for their accommodations. A 2018 third-party survey
found that nearly 82 percent of respondents reported their homes to be
``Very Good.''
While the overall ratings may be good, some privatized housing
project owners have not met expectations. We have retained Performance
Incentive Fees for poor performance, and implemented corrective action
plans to fix systemic problems where we have identified them. However,
these actions have not been sufficient, in some cases, to fix the
problem.
Our airmen have a right to openly report housing problems without
fear of reprisal. We are committed to improving trust and transparency
between our airmen, the housing management teams, and base leadership
to resolve issues quickly and fairly, and to help our airmen thrive.
how the air force manages housing
The Air Force has a comprehensive portfolio management process. At
the base level, each installation has a local housing office that does
the daily work of engaging with airmen and their families, visiting
their homes, working with project owners' staffs, and ensuring
paperwork is correct. Capacity at the unit level is likely adequate
when the privatized housing owner is performing well. It is likely
insufficient when a privatized housing owner is not performing well.
This is an area where the Air Force has a lack of capacity to support
base commanders when things are off track.
At the next level up, the agreements for privatized housing project
owners are centrally managed by the Air Force Civil Engineer Center
(AFCEC). This Center is focused on broader community concerns and works
directly with our installations and privatized project owners. In some
instances, the Civil Engineer Center has not been able to provide
sufficient support and analysis when things are off track at the base
level.
Airmen are encouraged to address housing issues with their local
housing office first. If the housing office can't resolve the issue,
they are either directed through the airman's chain of command or, in
some cases, directly to the Civil Engineer Center. At that level, the
Civil Engineer Center interacts daily with the Deputy Assistant
Secretary for the Air Force for Installations and can elevate an
airman's housing concern for consideration with Air Force leadership.
Each quarter, the Air Force Civil Engineer Center conducts project
reviews with installation leaders, project owners, and local housing
offices. Corrective action plans can be established, if needed. Each
year, the Air Force Civil Engineer Center visits every Air Force
installation to inspect homes and ensure project owners are complying
with requirements. Our review is showing that this is insufficient when
there are serious problems in privatized housing.
The Air Force Civil Engineer Center and the Deputy Assistant
Secretary for the Air Force for Installations, Environment, and Energy
conduct Program Management Reviews on a regular basis to evaluate
housing activities across the Air Force. Twice each year, they meet
with the project owners to share best practices, discuss lessons
learned, and conduct one-to-one feedback sessions. Again, this is
insufficient where we have an underperforming location.
leadership review
The health and safety of our airmen and their families is a
leadership imperative. Over the past two weeks, the Air Force
implemented a 100 percent review of our military housing. Wing
Commanders with responsibility for military and privatized housing on
their installations led the reviews with their subordinate unit
commanders and senior enlisted leaders. The Assistant Secretary of the
Air Force for Installations, Environment, and Energy created a standard
checklist and sent it to each installation housing office. Commanders
used the checklist to document any health or safety risks they found.
The Assistant Secretary also established an action team to support our
Wing Commanders, provide guidance, advice, and assistance, and gather
the collected data for this review.
Wing Commander Review Findings
The review included responses from 50,991 military personnel out of
57,500 (89 percent) military personnel living in government-owned,
government-controlled, and privatized housing. There were 44,097
responses for privatized housing and 6,894 responses for government-
owned and government-controlled housing. Eleven percent could not be
reached during the limited time of the review due to personal and work
travel, or being assigned under a Joint commander.
At Joint bases, Air Force, Army, and Navy commanders worked to
avoid redundant reviews and to ensure other service commanders were
aware of identified issues with their members. Commanders report that
14.1 percent of members expressed a life, health, or safety concern in
their homes. The percentage was much lower in government owned and
leased homes, where only 1.5 percent expressed concerns vice 15.4
percent for privatized housing. Common issues include mold and
moisture, insects, or mice. Some residents also expressed concerns
about other areas for further investigation, like peeling paint that
could potentially contain lead, or the potential presence of radon or
asbestos.
Of the 50,991 housing members who responded to our review, 9,861
members requested visits. Leadership visited those homes and found:
25 percent had mold and moisture issues,
5 percent had chipped or flaking paint,
13 percent had droppings, or other evidence of vermin,
and
71 percent presented other maintenance concerns.
Commanders continue to make contact with the airmen that have not
yet been reached and to conduct all of the visits requested by our
members. For identified issues, commanders are overseeing and tracking
work orders created by the project owner for the housing maintenance
crews through actual completion. Each commander is also working with
Army and Navy commanders to ensure issues are addressed for
servicemember without duplication of effort.
This is a start. We will follow through to address the systemic
issues at each of our installations.
Air Force Leadership Visits
We personally conducted visits to our most troubled installations
to see the issues and talk to the airmen, the installation leaders,
and, in some cases, the project owners. They participated in listening
sessions comprised of airmen and their families to get a better
understanding of what was working and what still needed to be done.
The results of the Wing Commander's reviews and Air Force
leadership visits reviews highlighted five things:
An inability to do adequate quality assurance on
maintenance crews
Housing Management Offices are too small and lack
authority
Airmen do not fully understand their rights and
responsibilities
Project owner performance incentive fees are not driving
desired outcomes
Persistent mold issues caused by poor construction
quality
The quality of local project-owner leadership and management of
privatized housing matters. At one base, where local leadership was
weak, there were widespread complaints of unqualified staff, poor or no
repairs, poor communication, lack of responsiveness, and deep
frustration. A base in the same climate, under the same project owner
company, with good local management was complimentary to staff who were
competent and responsive and ``went the extra mile'' to take care of
airmen.
Unlike normal renting relationships on the commercial market,
military renters have less leverage to get a response when service is
poor. This is why we want to create a Tenants Bill of Rights with local
third-party arbitration built in to assure proactive and competent
responses by the project owner maintenance teams for deficiencies.
specific construction deficiencies
F.E. Warren Air Force Base
Some of the 13,426 homes conveyed privatized housing projects were
built before 1978 and may still contain lead paint or materials. Each
installation has a program to track and manage lead-based paints. We
randomly visit homes every year to ensure project owners are complying
with all documentation and statutory requirements. To date, we have
only found some documentation issues. Where we have found elevated
levels of lead in homes, like at F.E. Warren Air Force Base, the
project owners have responded quickly and worked with our airmen to
ensure their safety, and the safety of their families, within their
homes.
Keesler Air Force Base
In 2010, 1,028 homes were built for Keesler Air Force Base. Poor
quality workmanship during construction of the air conditioning systems
and building envelope caused condensation and recurring problems with
mold. The project was bought in 2015 on the condition that original
work defects be fixed. The new Moisture Remediation Plan has three
phases. The Test Pilot Phase and Immediate Response Phase have both
been completed. The Sustainment Phase is comprised of three stages of
work. During Stage 1, all 1,028 homes had some work done to them. Stage
2 is 33 percent complete and involves 255 homes. The third and final
stage will look for any residual moisture issues that need to be fixed.
The Sustainment Phase is due to finish in June 2020. In the meantime,
the Air Force Civil Engineer Center is monitoring compliance.
MacDill Air Force Base
The Air Force conveyed 241 homes at MacDill Air Force Base to a
project owner. The homes had systemic moisture problems due to breaches
in or lack of a vapor barrier. In 2017, the project owner reclad 94
homes. Last year, they repaired stucco siding and interstitial spaces
under floors. They also added dehumidifiers to homes with inadequate
air conditioning and treated homes for mold. This year, they have 68
homes scheduled for recladding.
Tinker Air Force Base
Many homes at Tinker Air Force Base were built using cross-linked
polyethylene plumbing lines. These lines had a manufacturing defect
that caused pinhole leaks, and 398 homes showed signs of mold growth
inside the walls. Last May, the Air Force moved all affected families
into furnished homes while the faulty water lines were replaced. In
June of last year, mold growth was discovered in the mechanical rooms
of 200 newly-constructed homes. A third-party engineering service was
hired to assess the room design and identify the root cause the of
moisture problems. Both projects are due to complete by May 2019.
Tyndall Air Force Base Rebuild
On October 10, 2018, the strongest hurricane ever recorded on the
Florida panhandle made landfall near Tyndall Air Force Base. All 876
privatized homes were damaged in the storm ranging from roof and siding
to complete losses. Tyndall's enduring missions didn't stop, and the
Air Force has been working to secure housing for the airmen in those
units. Tyndall is also one of four bases in the Air Education Training
Command Group 1 Housing Privatization Project that also includes
Sheppard, Altus, and Luke Air Force Bases. The damage at Tyndall was so
severe, the entire project requires financial restructuring. The Office
of the Secretary of Defense and Office of Management and Budget would
have to approve this course of action, so we are working with each
office, along with the project owner and its private lender to provide
long-term housing for our airmen at these four bases.
way ahead
Immediate actions
For identified healthy and safety issues, we are taking immediate
action to ensure they are addressed. In response to Air Force
leadership observations, we will ensure qualified expertise is in place
to address quality assurance requirements.
To improve communication with residents the Air Force, the Army,
and the Navy have developed a draft Tenant Bill of Rights to improve
tenant-landlord communications, collaboration, and expectation
management. It would also provide airmen financial leverage during
housing disputes.
It is a draft. We want to engage with you to finalize this effort.
A Tenant Bill of Rights would allow airmen to withhold rent or break
leases if project owners weren't fixing significant problems.
Within the next two weeks, the Air Force is completing an Air Force
Inspector General review and assessment of policies and procedures for
handling resident health and safety challenges. We're taking all
allegations or indication of fraud very seriously. Our AF Office of
Special Investigations (AFOSI) will carefully assess, and as warranted,
pursue such concerns.
To improve the housing management offices, we have already begun
increasing the capability and capacity of the workforce through a
broader Infrastructure Investment Strategy. This strategy is focused on
developing and retaining civil engineering expertise, while adding
enough trained staff to manage our housing management offices
effectively. We have also established a nationwide call center in order
to provide residents with an alternate channel to elevate their housing
concerns.
Of the four installations where mold is an endemic issue, we have
had corrective action plans in place for about two years. All projects
are scheduled for completion over the next six to eighteen months.
Next steps toward enduring improvement
The Air Force will increase oversight by Wing leadership and the
chain of command. Nothing can substitute for a commander on site with
the appropriate level of authority. We will also ensure that the
medical leadership and installation leadership are sharing information
properly.
We will likely need to renegotiate agreements with privatized
project owners to implement the Tenant Bill of Rights. We will need to
revise the incentive fee structure to provide more leverage to the
services to address systemic lack of performance. In particular, we
want to give the base commander significant input on the award of
incentive fees and move away from formulas that can always be
``gamed''. Doing so, we believe, will make the privatized housing owner
more responsive to the local commanders who have ``eyes on''. In some
cases we will retain incentive fees for poor performance and establish
corrective action plans to fix systemic technical and leadership
challenges.
We will continue to strengthen housing management offices and
structure support from the Air Force Civil Engineer Center so that
troubled projects get sufficient focus and attention. While we will
continue our quarterly reviews and annual audits, that pace of
engagement is not sufficient for projects under corrective action.
We also are concerned that some airmen feel that they don't have a
voice with their landlord and they don't know who to call when they
have problems. While the Tenant Bill of Rights will help, and will give
them locally arbitrated financial leverage, we think we need to
increase training and information to families about privatized housing.
The Air Force already does training with Wing Commanders about civil
engineering support and privatized housing in our Wing Commander's
course. We believe we need to extend that training to senior non-
commissioned officer and first sergeant courses. We also need to
educate airmen on options and support available to them, likely from
the local housing management office sometime after the chaotic first
days when an airmen moves in.
conclusion
The Air Force has a responsibility to provide safe and healthy
living conditions to our airmen their families, and joint teammates
living on our installations. We will hold project owners accountable
for performance. While the majority of our airmen are satisfied with
their living conditions, we have some privatized housing project owners
who are not meeting expectations. We are addressing the housing issues
we know about and taking steps to improve each airman's access to get
help quickly and fairly. Air Force, Army, and Navy commanders will
continue to communicate to take care of all joint members and their
families. These steps will improve consistency across installations.
Our services are stronger together. We live on each other's bases. The
draft Tenants Bill of Rights is intended to start a conversation with
the U.S. Congress, Air Force families, and our advocates in order to
refine the document. We look forward to working with you on an
enforceable Tenants Bill of Rights, as well as any other needed
improvements.
Chairman Inhofe. Thank you, Secretary Wilson.
All right. For those of you who were not here during the
opening of the meeting, we are going to have 7-minute
questions, but we are going to hold you to the 7 minutes,
because we have a full house here, and people do want to be
heard on this subject.
I'll start off, and I'll have my first two questions to
address to the Army and to the Air Force, not the Navy at this
point, and those questions are--and you decide which one is the
best one to respond--number one, when were these issues first
brought to your attention, and who should be held accountable
because you were not aware of what was going on in your own
service? Secondly, since these issues were brought to your
attention, which installations have you personally visited
specifically about the issue?
Secretary Esper.
Secretary Esper. Thank you, Mr. Chairman.
On the first matter, I think, with regard to--the full
realization of the size and scope of this issue came up the
week that the Committee held its hearing. I think the media
reports, coupled with the report of the Military Family
Association (MFA), and then culminating in the hearing, was
what I think brought home to us the size and scale of that.
That said, of course, last summer, we were aware of the lead-
based paint issues at some of our homes, such as Fort Benning.
We quickly took a number of actions--we can talk about that--to
address that problem, and had been working on it pretty
diligently throughout the fall. Then, at a family forum in
October, the Chief and I, as we meet with families and discuss
issues, there were some housing issues in singular homes at, I
think, Schofield Barracks and Fort Gordon, and another at West
Point, where we quickly attacked those problems and remediated
them, but nothing with regard to the size and scope that you
heard from the witnesses that appeared before this Committee.
Chairman Inhofe. The second part of that question was,
since these issues were brought to your attention, how many
installations have you and the Chief and--either supervised or
personally visited?
Secretary Esper. Yes, sir. I personally visited Fort Meade
and Fort Bragg, and I'm supposed to go down to Fort Belvoir
next week, and, of course, every time I visit an installation,
I meet with families and do town halls, so I talk about this
quite often.
Chairman Inhofe. Chief, have you----
General Milley. In terms of the timeline, Chairman,
similar. The July-August timeframe for the lead paint. Then, in
November--October-November, started becoming aware of some
reports on mold. It really came into fruition at the time of
the hearings and the media----
Chairman Inhofe. Well, as far as both of you, I appreciate
the briefing that you've given me, and I know that you've been
very busy since the last meeting that we had. I appreciate that
very much.
Secretary Wilson.
Secretary Wilson. Mr. Chairman, since your hearing, I have
visited MacDill, Tinker, and Shaw Air Force Bases. With respect
to----
I'm sorry. Chief?
With respect to awareness of the problems, Air Force was
aware of construction defects at four bases, and on page 7 and
8 of the handout in front of you, it highlights those dates on
where we were aware of construction defects. The actions that
we're taking there--I think, though, that, while the Air Force
was managing those projects and getting construction defects
taken care of, what we really didn't understand was the decline
in trust and confidence in the airmen that problems would get
fixed. That is, to me, the most important part of the hearing
that you had that brought that forward to us.
General Goldfein. Yes, ma'am. I'll just add that Chief
Master Sergeant of the Air Force (CMSAF), Chief Wright, and I
went to Keesler and Maxwell Air Force Base, and our findings
were very consistent with the testimony that you heard from the
families that came forward. I'll second what the Secretary
said, that the most concerning to me that I found was the
breakdown in trust that we've got to rebuild, as you've said,
Chairman.
Chairman Inhofe. Yes. Exercising back your memory of the
previous testimony that came from the homeowners, was anything
found to be inaccurate from their testimony?
General Goldfein. No, sir. Very accurate.
Chairman Inhofe. Okay.
Secretary Spencer, would you respond to the same questions?
I have a separate question for you.
Secretary Spencer. Yes, Mr. Chairman. Since the hearings, I
personally have visited three communities in the Hampton Roads
area--Camp Lejeune and Cherry Point--to visit housing and meet
with people there. We stepped right out, right after the
hearings, went out to the West Coast--our office did--to
inspect what was going out there, and hearing from the families
of their concerns. Nothing we found that they reported was
inconsistent.
Chairman Inhofe. Admiral, do you want to add to that?
Admiral Richardson. Sir, I personally visited Patuxent
River and then facilities around the naval district in
Washington area, and have flag officers who have also gone to
the Pacific Northwest, the Southwest. We've got good eyes on
this problem, and nothing that we've seen is inconsistent with
the testimony and the--I guess, the witness of the residents. I
would just echo that we became aware of this, I think, about
the time that everybody else did, in terms of the magnitude of
the problem, and the fact that the actual truth on the ground
was differing to a great degree from the information that we
were responding to, which is why we're getting after 100-
percent awareness.
Chairman Inhofe. All right. I appreciate that.
Secretary Spencer, a recent news article states that the
Navy is moving forward with creating a new Assistant Secretary
for Information Management, which, by default, would eliminate
your Assistant Secretary for Energy, Installations, and
Environment. Now, that second one I mentioned is the part of
the bureaucracy that is responsible for what led to this
meeting now.
Now, you came to our Committee, both the Majority and the
Minority, and said you wanted to make an announcement. But, we
told you not to, and you did it anyway. I'd like to know, first
of all, why you did it. Secondly, would you be in a position
right now to commit to this Committee to not dispose of the
position that is responsible for the problems that led to this
committee today. It's--at the conclusion of this meeting.
Secretary Spencer. Senator, I'll take full responsibility
for what my office does. I did speak to your staff and the
Ranking's staff about the idea that we wanted to put together
in light of the cyber report, which you will soon be exposed
to, that we did in the Navy after we had our exfiltrations.
It's a risk that we have to manage. I apologize for my office
getting ahead of the lights. That was not my intent. We are
marching along. We will keep everything in place, as is.
Chairman Inhofe. Okay. Will you commit to keeping----
Secretary Spencer. That's----
Chairman Inhofe.--that position, your current Assistant
Secretary for Energy, Installations, and Environment?
Secretary Spencer. I will.
Chairman Inhofe. Very good. Thank you.
Senator Reed.
Senator Reed. Thank you, Mr. Chairman.
Thank you for your testimony.
I'll begin with the Army, and who's ever appropriate can
respond. I would hope that the housing companies are
cooperating with you in addressing these problems. Some might
require contractual changes. Is that cooperation evident and
positive and genuine?
Secretary Esper. So far, yes, sir. The Chief and I and our
senior Army leaders met, within several days of the hearing,
with all seven companies. I think they were saying the right
things. They agreed up front to--for example, eliminating
nonrefundable fees. They agreed to suspending the energy
program, and a number of things. But, I think, over time, there
will be more challenging tasks at hand, such as renegotiating
lease agreements at the installations. We need to restructure
the incentive fees. So, time will tell, and I think the
oversight by this Committee helps give us the leverage to push
those changes through.
Senator Reed. I know that the Chairman and I are both
committed to oversight continuously on this issue until all the
problems are resolved.
Some of the suggestions that have been made--and just get
your reaction on the last--the other services--a uniform lease
for all military personnel, the ability to withhold BAH if
there's unsatisfactory response to complaints. Perhaps that has
to be validated by your housing officer, but----
Secretary Esper. That's right.
Senator Reed.--at some point, the BAH should be not the
right of the company, but in payment for adequate housing. Is
that something you're producing?
Secretary Esper. Yes, sir. That's one of the items we put
into the Tenant Bill of Rights, is the ability to withhold BAH,
and then, at least for the Army, we would--we could arbitrate
that issue between the provider and the soldier, and make sure
we come out to a proper solution.
I think, on your first point, with regard to a common lease
agreement, I think it's fair. It's the right thing to do for
our servicemembers, because I have Navy personnel and Air Force
personnel on Army bases, or Army personnel on Navy bases. I
think the ability for a servicemember to go from base to base
to base and have a common set of expectations with regard to
the type of housing that will be provided would be very helpful
to the force.
Senator Reed. Then all I would ask is, as you go forward
and there are issues you think should be properly covered in
the NDAA, if you could make the Chairman and myself aware of
them, we'd appreciate that----
Secretary Esper. Yes, sir.
Senator Reed.--very much.
Secretary Esper. Will do.
Senator Reed. Secretary Spencer, with respect to the Navy,
you're cooperating, so far, productively with the housing
companies, and you're trying to implement many of the similar
proposals that Secretary Esper is?
Secretary Spencer. Yes, Senator. We're having--I would
actually call them fairly robust conversations with the
partners--again, to get back on education, communication, and
attention.
Senator Reed. Very good.
Issues like a uniform lease, issues with respect to
withholding BAH, you're considering those?
Secretary Spencer. Most definitely. It goes along with the
Bill of Rights. When the three of us were talking about the
creation of this, we realized that we wanted to get something
out there in draft form for you all to view, for the
communities to view. There is a lot of work to be done on this,
because we will revisit the operating agreement, more than
likely. It's going to take time, but we've got to get it right,
because it's a good tool.
Senator Reed. Secretary Wilson, your comments.
Secretary Wilson. Senator, I also think that the idea of a
common lease makes sense, because we do have members on each
others' facilities. As my colleagues mentioned, the draft of
the Bill of Rights that we released yesterday does allow for
withholding of Basic Allowance for Housing.
Senator Reed. One of the issues that I think has come up
with respect to new construction--you mentioned, Secretary
Wilson, that you found some problems in construction. Housing
code standards are--you know, it's funny, you go out the front
gate, and the jurisdiction of the municipality has rigorous
housing code standards which people meet. I got the impression,
from talking to the families, that there's no real housing
codes, that it's what the company does or what, essentially,
you allow them to do. So, would it be useful to develop, sort
of, standard housing codes, in terms of initial construction
and maintenance?
Whoever wants to jump ball.
Secretary Spencer or Secretary----
Secretary Spencer. In the case of the Navy, sir, NAVFAC
[Naval Facility] oversees with the ultimate arbiter and creator
of the standard in that regards.
Senator Reed. Those standards are--the commanders at the
bases are aware of those standards? The personnel are aware of
those standards so that they can, if they have legitimate
complaint, they can make it?
Secretary Spencer. That, I am not aware of, Senator. I can
get back to you on that.
[The information referred to follows:]
Secretary Spencer. There are various provisions in the
Public Private Ventures (PPV) agreements that require the PPV
partners to comply with applicable housing codes. Additionally,
certain Unified Facilities Criteria are incorporated into
housing inspection checklists where applicable. The Navy and
Marine Corps are working to educate commanders, personnel, and
residents on the three-step process for reporting and resolving
any and all defects in housing units.
Senator Reed. My--again, an impression, from talking and
listening to the families, was that there was no clear idea, by
either the post housing authorities or anyone else, of what,
really, the standard was. You could have a situation where they
could come 52 times to make minor repairs and not effectively
deal with the problem.
Secretary Spencer. Just to clear the record straight, I was
commenting on original construction. When it comes to
maintenance calls, your observation is correct. That is one of
the things we're getting at, is the ability to put the tools in
the hands of the military family--without taking up too much
time, quickly, to photograph the problem, track the problem,
send the photograph back to the maintenance people if they
don't think the problem has been corrected. The chain of
command is in that communication loop. That is the primary leg
of communication.
Senator Reed. Secretary Esper, you had a point.
Secretary Esper. Yes, sir. Senator Reed, you're pulling on
a very important thread, here. As we've assessed the situation
to date within the Army, one of the things we realize we need
to work on, we need to improve, is the education of our
garrison commanders and our sergeant majors to effectively do
their job, whether it's oversight of the contractors,
understanding building codes, quality assurance, quality
control. All those things, we need to--and working to build
that into their training, into the program of instruction.
We're looking to do the same thing with regard to our
commanders in the pre-command courses, reeducating them, if you
will, on housing management and what their role is as
commanders and leaders.
Senator Reed. Let me reiterate what I think the Chairman
expressed very clearly. This is a issue that we will stay
engaged with, and it will take a while. We understand that.
But, this is not going to be a passing sort of review and trust
to the goodwill and good wishes of everybody involved. We're
going to keep our--involved and engaged, and any aspects of the
NDAA that has to be modified to help you make sure that the men
and women of the services have the best housing, just let us
know.
Thank you.
Chairman Inhofe. Thank you, Senator Reed.
Senator Wicker.
Senator Wicker. Thank you, Mr. Chairman, and thank you, to
the witnesses.
What I think I hear is a determination to really get to the
problem and fix it. I know that's the determination up here,
and I appreciate what Senator Reed just said about staying
after this.
As an Air Force veteran, let me direct my questions to
Secretary Wilson and General Goldfein.
General Goldfein, I appreciate you visiting Keesler
recently. Let me start by asking you what you found there. To
summarize, this has been an ongoing problem for quite some
time, dating back as far as 2011 at Keesler. There is a program
called the Moisture Remediation Project, MRP. Some of the
information we've gotten from the military members there is
that this has been sort of a surface attempt to go in and clean
the affected area with soap and water or some sort of
disinfectants, and not get behind and actually go the root
cause. This went so far as 11 families at Keesler having to
file a lawsuit against the contractor in the summer of last
year, seeking punitive damages and accusing the company of
fraud and concealment. So, it's a serious problem that's been
there for a long time.
Let me ask you this. In addition to telling us, Senator--I
mean, General Goldfein--what you found, to what extent are
military members required now to live in base housing? When I
was a young officer, I had the option. I could go off base, get
my basic allowance, and rent or buy off base. To what extent is
it more or less a requirement to live in this housing now? Is
this a problem inherent in the way we do privatized housing
construction now, or is this--can this happen either way we do
it? If you would talk about those things, and then I might let
Secretary Wilson follow up.
General Goldfein. Thanks, Senator. You know, when I went
down there, I looked at the remediation program, the mold
remediation program they're doing, and dug into the issues that
they're looking at. What I found there--so, I'm going to, you
know, be 60 years old this year, and I've lived in military
family housing now for 50 years. I grew up in it, I raised my
children in it. When I deployed for 2 years, I put my family in
it. What I found at Keesler, which was very consistent with the
testimony we heard, is, there are three things that families
today are worried about that I never worried about, either as a
parent or as a kid, growing up. I never once worried about the
health of my children, relative to living in a home, and we now
have families that have testified--and I saw that at Keesler--
they're worried about the health of their children.
The second thing I never worried about--you know, living on
base is the ultimate gated community experience. It's the one
place where your kids can play until dark. I never worried for
my kids about the safety and security of the infrastructure in
the neighborhood, and parents of airmen today are concerned
about that.
The third thing I never worried about? I never worried
that, if I actually complained about the housing, that there
would be a fear of reprisal or that my command chain and
leadership wouldn't get after it.
As we look through the long-term fixes that Secretary
Wilson laid out for the Air Force, we have to get at those
three issues. Senator Reed, what you said about this being a
long-term issue--you know, excitement in the near term, based
on hearings is interesting, not compelling. We're going to have
to keep our boot on the throat of the underperforming
contractors and our command chain and leadership to make sure
we get after this for the long term, and we're committed to do
so.
Senator Wicker. Do they have to live on base housing now?
General Goldfein. No, sir. Matter of fact, there's a
waterfall approach that we take. It's somewhat unique to the
individual installation. But, they have the choice to live on
or off base.
Senator Wicker. Do you think there's something wrong with
the program, itself?
General Goldfein. Sir, I think the program has got to work.
We've got to make it work. Where we have failed is to ensure
that we have command-chain involvement, oversight, leadership,
quality control, and followup.
Senator Wicker. What did you find with regard to this
Moisture Remediation Project, MRP, with regard to the
accusations that they're just treating the surface and not
getting back in there and finding the problem?
General Goldfein. From what I saw, far more thorough a
construction effort than what's been described. I did not see
any painting over. I saw complete reconstruction, pulling out
walls, going into the pipes. So, I thought I saw much more
significant engineering work to get after it. But, this is a
trust-but-verify solution for the future.
Senator Wicker. Is the contractor doing that?
General Goldfein. They are.
Senator Wicker. Okay.
This is a little off the subject, but let me just mention
this and ask you to answer on the record. I've been concerned,
for a number of years, about unaccompanied housing in Korea,
particularly at Osan. If you could get back to me, on the
record, about how many of our enlisted airmen at Osan are now
having to live in barracks that are not yet remodernized and
remediated--if you could get back to me, on the record, about
that, I would appreciate it. It's been something I've been
asking about for years and years.
[The information referred to follows:]
General Goldfein. Thank you for the question Senator
Wicker. None of the 3,200 airmen at Osan Air Base are living in
unacceptable dormitories. Any dormitory rooms identified as
unhealthy or unsafe are not available for occupancy. Osan Air
Base has 37 dormitories, 35 of which are required to house up
to 4,200 unaccompanied airmen. Seven are currently undergoing
renovation, with one additional dormitory scheduled to begin
renovation later this year, and two dormitories are unoccupied
awaiting demolition. These efforts will ensure all dormitories
at Osan Air Base meet contemporary living standards, while also
correcting any life, health, and safety concerns.
Senator Wicker. So, thank you very much.
General Goldfein. Yes, sir.
Chairman Inhofe. Thank you, Senator Wicker.
Senator Kaine.
Senator Kaine. Thank you, Mr. Chair, and thank you, to the
witnesses.
The hearing, 3 weeks ago, was very gripping, very graphic:
poor communication, poor physical condition, possibilities of
retaliation, and overwhelmingly, a lack of military oversight
of this program. I'm going to be touring Norfolk Naval Base
tomorrow and meeting with families there. The housing
companies, the seven, they must improve, but it's the military
that must solve this problem. People didn't enlist to be a
tenant of a private housing company, they enlisted to be a
marine, a soldier, a sailor, an airman or woman, or a coastie.
Their deal is with you, really, not with the housing company.
You are obligated to solve this problem for them.
A few questions. My understanding is, the contracts with
the private housing providers, since it was a new initiative,
offered the opportunity for the military to reopen the
contracts at the 5-year point to see how the program was doing,
and yet that opportunity was not taken up by the military. Is
that your understanding?
Secretary Spencer. Senator, as far as I'm concerned, that
is my understanding. The program, at that point, seemed to be
going swimmingly well, and I gather no one availed themselves
of the opportunity.
Senator Kaine. Any different testimony on that, or is that
generally understood?
Thank you.
I was a mayor, and I had a Code Office that used to do code
compliance inspections at housing all over my city. In the
first hearing, we asked the housing providers--I asked the
question about whether they would agree with me that somebody
living on a base shouldn't be living in housing that is
substandard to the housing that surrounds the base. And they
all agreed with that proposition.
In your dialogue about solving this problem, are you
contemplating using the expertise of existing local housing
code compliance officials to try to make sure that housing on a
base is, at a minimum, equal to the standards in the
surrounding communities?
Secretary Spencer. Senator----
Senator Kaine. Secretary Wilson and then Secretary Spencer.
Secretary Wilson. Senator, we actually think that we need
to improve the quality assurance--many of these within our
military housing offices, because those are the ones that are
responsible to the base commander, and that this is a command-
chain issue, and where we've had private housing contractors
who are underperforming, we haven't really had the support
there for the wing commander to go in and do the quality
assurance that needs to be done. We think that that's where it
needs to improve.
Senator Kaine. Secretary Spencer?
Secretary Spencer. Most definitely, across the board,
Senator. You've heard me say it before. I'm a firm believer
that we find the best practices, wherever they may be. Here is
an industry that is a robust, mature industry in North America.
Yes, we can find best practices and incorporate it in our
system.
Senator Kaine. I can see challenges of using local
officials. They might be pretty busy. But, the idea of bringing
in local code officials a couple of times a year--base
commander might work with them to come in and do spot audits on
a number of communities. Code offices would be thrilled to help
you with something like this. That's not to say that the
military shouldn't have its own expertise, but, when you have
code compliance officers who do this, day in, day out, in the
very communities where these folks live, who would be willing
to help you, I think you should take advantage of that
resource.
We will be voting next week on the President's emergency
declaration. The President's proposed to pull $3\1/2\ billion
out of the MILCON [military construction] budget, $2\1/2\
billion out of the drug interdiction budget within the DOD.
That funding source only has about $85 million available in it
right now. And so, the reports we've read suggest that there
would be an effort in the Pentagon to pull money from other
accounts into that account, to plus it up to $2\1/2\ billion. I
am very worried, in contemplating this particular challenge,
that, should this go forward, some of that $6 billion could
come out of monies that would be needed to solve this problem.
I don't know whether you can answer this question or not,
but I want to ask it. Can you assure me that none of the $6
billion that is being pulled from the Pentagon budget to deal
with what General O'Shaughnessy testified last week is a
nonmilitary emergency--can you assure me that none of that
money will come from funds that were slated to be used to deal
with base housing either here in the United States or overseas?
Secretary Esper. Senator, I can assure you that that is
certainly my position, as well. And I've articulated that to
Secretary Shanahan. I think there's general agreement within
the Department that we should not tap into either military
housing or barracks, I should add. But, I don't have final say
over that, so I cannot give the--100 percent assurance. But,
that's my view.
Senator Kaine. That's your recommendation?
Secretary Esper. Absolutely.
Senator Kaine. How about to the other secretaries?
Secretary Spencer.
Secretary Spencer. Same here. The prioritization, it's
right up there, and that would be my recommendation. Senator
Kaine. Right.
Secretary Wilson.
Secretary Wilson. That is my position, as well.
Senator Kaine. Thank you very much.
Let me ask one more question. The testimony last week--this
hearing is very focused on military family housing, as it
should be. What are you doing to look at housing for single
members of the military? Are you also engaged in that effort to
try to make sure that they are living in conditions that aren't
substandard?
Secretary Esper. Senator, with regard to the inspections we
have underway right now, those also include barracks where our
soldiers live, so we want to make sure that we're picking up
some issues there in the barracks, also--so, we want to make
sure we address that. Overall--and Senator Reed mentioned it--
we want to make sure that we're also checking in on our
soldiers who are off base. I think we have a responsibility to
take care of our soldiers, wherever they live, and their
dependents.
Senator Kaine. Secretary Spencer.
Secretary Spencer. Again, Senator, as we said earlier, the
three of us are working together on this issue, and we're in
lockstep, doing the same thing that the Army's doing.
Senator Kaine. Great. Thank you.
Secretary Wilson--or General Goldfein.
General Goldfein. Thanks, sir. During my trip to Keesler, I
went and visited the dorms. I walked through the dorms, as
well, dorms built in 1951, and so, as we take a look at this in
the future, we're going to make sure that we do not only
military family housing, but all housing where airmen live and
work.
Senator Kaine. Mr. Chair, thank you.
Chairman Inhofe. Thank you.
Senator Rounds.
Senator Rounds. Thank you, Mr. Chairman.
Let me begin. Ellsworth Air Force Base is in Rapid City,
South Dakota, and I--immediately when this started to come up,
my thoughts went back to what we have for housing at Ellsworth
and so forth. My first question, I guess, would to Secretary
Wilson. I'm just curious. We all agree the maintenance issues
that we're discussing here today are simply unacceptable. Is
privatized housing still a viable option for our military
families? If privatized housing is still the appropriate and
viable approach, what immediate and long-term actions would you
propose to fix these types of problems?
Secretary Wilson. Thank you, Senator. I think many of us in
this room remember what housing was like in the mid-1990s and
early 2000s. While we are having problems with some of our
private contractors, I think, overall, housing is in better
shape than it was at the time that this initiative was started,
and so, I believe that--and I saw it myself at bases in New
Mexico at the time, and I--as a young officer, I never lived
on--in on-base housing. I lived off base, as a single officer.
But, I do think that the housing is better than what we had in
the 1990s, overall. That doesn't mean that we change our
approach to demanding that, when there is a problem, it is
promptly fixed, and fixed in a competent way.
There are a few things that I think will help. The Tenant
Bill of Rights, I think, will help, and it will allow us to
have some leverage to work through these contracts and change
the way things are managed. I think we do need to strengthen
the role of the base commander so that they have input and
control and leverage with the local contractor. I think we need
to improve the communications and feedback loops for our airmen
so they have multiple ways to address problems, and, if they're
not getting response, to get somebody to help them in the chain
of command, and finally, we have an IG review underway that'll
identify other systemic fixes that the Chief and I will deal
with. Those are long term.
In the immediate term, we've got our command chain that has
identified and gone through houses, and we are focused on
fixing the problems that are identified.
Senator Rounds. Secretary Spencer, the same question. Would
you agree that this is still a viable option and should be
continued?
Secretary Spencer. Senator, when the hearings finished, one
of the things that I did was sit down with three of the authors
of this actual solution, back in 1996, and spent some time with
them as to how they addressed the problem they were solving,
and what the solution was. If you look at the history of where
we've been and where we are now, as an example, the service
secretaries met with the Private Partner Venture partners once
a month. Base commanders met with the local Private Partner
Ventures once a month, and the program was going along quite
well. The fact of the matter is, we did take our eye off the
ball. We know that. That's why I'm telling you this is--to
solve this problem, we have what we need right now, 80 percent
of it, and we'll let you know, obviously, if we need more as a
backstop or whatever we can call on you for the NDAA.
This is a viable solution. I was a single person also when
I was in the Marine Corps, but I have vivid memories visiting
my married friends, and the product is a much better product
that we have now. That does mean that we need to fix this. I
think the tools that we have in the immediacy and the long term
will affect that.
Senator Rounds. Thank you.
Secretary Esper, same question.
Secretary Esper. Yes, Senator. From everything I've learned
to date, I believe it's a workable model. We need to continue
to study the issue and get back to you with any
recommendations. I think any program, over time, needs
adjustments, and that's the piece of this we owe you, in
addition, obviously, to the initiatives we are implementing and
the need for the chain of command to get back involved.
Senator Rounds. Thank you. I think the idea of a Bill of
Rights is very important, and I think it's one that I think
perhaps this Committee may very well want to play a part in, in
terms of determining what it actually looks like. I also think
the fact that you have an ombudsman as a part of the discussion
is going to be critical, because I think there's something else
that has to be discussed, and we haven't really talked about it
yet, but there's clear evidence of negligence, perhaps fraud,
breach of contract, with regard to the contractors and the way
that they have, in some cases, managed their responsibilities.
I think this list may very well continue to grow as you inspect
these facilities. Why have we not taken these contractors to
court, suing them on behalf of our families and our Government?
Is the Government too cozy with these contractors to show them
what they have done wrong, perhaps immoral, and, in some cases,
outright illegal?
Secretary Esper.
Secretary Esper. Senator, I think you're asking many of the
same questions we are asking internally. I think we need to
look at the accountability aspects of this. I have walked
through some homes where I've seen work done, where I don't
know whether it is just simple, pure incompetence or some type
of fraudulent--fraudulence or negligence. But, you know, our
immediate challenge right now is fixing the problems before us
with regard to work orders, and getting the families right.
But, I do think we need a deeper look at the accountability
aspects of this.
Senator Rounds. Will you commit to following through and
reporting back what you find with regard to any anomalies that
have to be pursued through legal channels?
Secretary Esper. Yes, sir, absolutely, and particularly
with regard to retaliation. That's one of the issues most
acutely that troubles me. In fact, I had a discussion just
yesterday with one of the CEOs about an employee, and I was
very clear in stating that, ``I want this matter looked into, I
want to know what you find, and I want to know how this person
will be held accountable if this behavior was ongoing.''
Senator Rounds. Very good.
I have 1 minute left. Secretary Spencer, same question.
Secretary Spencer. Same answer with--we took a step
forward, we are launching Naval Audit to actually provide some
audit functions in certain areas where we have concern.
Senator Rounds. Thank you.
Secretary Wilson?
Secretary Wilson. Senator, we take all indications of fraud
seriously. We investigate them and will act accordingly.
Senator Rounds. Thank you.
Thank you, Mr. Chairman.
Chairman Inhofe. Thank you, Senator Rounds.
Senator King.
Senator King. Thank you, Mr. Chairman.
The key thing coming out of this, it seems to me, is that
good intentions and emergency discussions and these kinds of
reassurances aren't going to solve this problem. This strikes
me as a structural problem, and I want to focus in on the
contract with these entities. Because one of the problems is,
the customer on those contracts is the Navy or the Army or the
Air Force, not the tenant. So, any enforcement of contract has
to rest upon the Navy, the Army, and the Air Force. Do you see
what I'm saying? That there's a disconnect there. So, I presume
these contracts--I'll ask you, Secretary Spencer--are
incentive-based, there are incentives for good performance. Is
that correct?
Secretary Spencer. That is correct, Senator.
Senator King. My second question is, can these contracts be
modified in any way now? I know some of them are really long
term, like 50 years. Is there any reopener or opportunity to
renegotiate at all?
Secretary Spencer. I would--it being a document of
operation, I would hope we can--I'm not a lawyer, but I--we
plan to actually open it up and address it with the venture
partners.
Senator King. I think that would be important. The
incentives, it seems to me, have to be important. There should
be an approval rating, surveys of the tenants, and if it's not
above 90 percent--I understand, in some of these contracts,
it's 75 percent. That's pretty low bar, and they don't get paid
if they don't meet that. That's the structural part of it,
seems to me, that needs to be addressed.
Secretary Spencer. I would agree.
Senator King. the question is--let's say you had a perfect
contract, but, if it's not enforced, if it's not managed
properly by the service, then it's still not going to work.
There has to be somebody, either at the base--and I don't know
the answer to this--either at the base or at the Pentagon--I
would think the base--who's responsible and who's accountable
for the enforcement of this contract. My old management theory
is, you need ``one throat to choke,'' somebody who is
accountable. I hope that's part of your discussion.
Secretary Esper?
Secretary Esper. Yes, sir. I think there are multiple
facets to this issue that have to be attacked simultaneously.
Senator King. You can have a perfect contract, but if it's
not managed properly, it's not going to work.
Secretary Esper. Absolutely. The first contract is the
contract that the leasing arrangement that a resident comes in
and signs. That needs to be cleaned up, and that needs to be--
that needs to reflect what's in the Bill of Rights. We need to
update that one. Then there's the contract at the garrison
level, the one that includes incentive fees and stuff like
that. Those incentive fees should also reflect what we want to
pursue in the Bill of Rights. It needs to reflect that, as
well, and then I need quality assurance people at each level
handling it. As we discussed with the CEOs, we need qualified
professional people performing the work. The Chief of Staff and
I heard of instances where an employee would come in to fix
something in a home, and he'd have to pull out his iPhone and
watch a YouTube video to learn how to repair the work. T]his
problem----
Senator King. I do that, too, but I'm not a professional in
repairing----
Secretary Esper. Exactly. This problem has to be attacked
on multiple levels, certainly from the contractors, and then we
have an important role, at least with the Army, in terms of
doing quality assurance, quality control, training our garrison
commanders to make sure that we implement and enforce the
garrison-level arrangements vigorously.
Senator King. Well, Secretary Spencer, it seems to me that
technology can help us out, here. You could develop a--I would
call it a ``rat app,'' where the tenant can take a picture,
send it--it would automatically go to the person who's
responsible for managing the contract and the contractor, and a
clock would start running, and there would be a way of keeping
track of whether that repair was made, and how it was made, and
how soon it was made. This is something that's within our--
within the realm of our capability these days.
Secretary Spencer. Most definitely, Senator. That's the--
one of the three legs I was talking about: educate,
communicate, and pay attention. We are actually having
discussions with the venture partners right now about
inculcating one of those.
Senator King. Now, the word ``retaliation'' has come up
several times in this hearing. And I don't quite understand
that. Who's retaliating? Secretary Wilson, are we talking about
the military folks on the base retaliating for a tenant
complaining, or are we talking about the company? Who's
retaliating?
Secretary Wilson. Sir, I've asked, because I heard the
testimony, and that was actually--from your hearing, the thing
that bothered me most was--because if people feel as though, if
they act, there will be retaliation, then they're not going to
report problems and we're not going to know what's going on.
The fear--the only one that I identified and talked to a member
about directly, where there was a fear, had to do with the
housing office calling the first sergeant of somebody and
saying, ``Hey, your guy's making problems over here.'' In that
case, the first sergeant talked to his member, and the airman
said exactly what was going on, and he said, ``Wow. If you need
my help, man, what it--how can I do to help--what can I do to
help you?'' But, there is a fear of potential consequences if
you complain, in some cases. Not that it's--I have not found a
case where it happened.
I would also say, though--you identified something that I
think is important--that there was third-party payment----
Senator King. Could you repeat that? I like hearing that in
these hearings.
[Laughter.]
Senator King. I'm just kidding. Go ahead.
Secretary Wilson. You mentioned third-party payment. I
think this is one of those sources of frustration for our
airmen. They sign a lease, but their basic allowance for
housing goes directly, basically, from the Air Force to the
contractor. If you were downtown paying your rent payment to
your landlord, and you had a problem with rats or mold or
whatever----
Senator King. There's a direct relationship.
Secretary Wilson. There's a direct relationship. You can
report it. If you don't get a satisfactory answer, you can walk
in and--holding your check, and saying, ``You know, I'm not
going to give you this until you fix this problem.'' There's a
greater feeling of control. I think that lack of direct control
is the reason why, in this Bill of Rights, we've included the
right to withhold your Basic----
Senator King. But, it's----
Ms. Wilson.--Allowance for Housing.
Senator King.--all for naught unless the customer, which is
you, enforce the contract on behalf of that tenant. That's a
crucial part of this.
I'm running out of time, but, for the record--not now, but
for the record, could you all submit the copies of these
contracts? They can be redacted for proprietary reasons. I'd
very much like to see the terms and how the incentives are
structured, and those kinds of things.
Secretary Wilson. Yes, sir.
Senator King. If you could do that for the Committee----
Secretary Esper. Yes, sir.
[The information referred to follows:]
Secretary Esper. [Copies of the requested agreements have
been provided and retained in Committee files.]
General Spencer. [Copies of the requested agreements have
been provided and retained in Committee files.]
Secretary Wilson. [Copies of the requested agreements have
been provided and retained in Committee files.]
General Neller. [Copies of the requested agreements have
been provided and retained in Committee files.]
Senator King. Thank you.
Thank you very much for your testimony.
Thank you, Mr. Chairman.
Chairman Inhofe. Thank you, Senator King.
Senator Cotton.
Senator Cotton. Good morning, to all of our service
secretaries and service chiefs. We rarely see all of you
together. I think that reflects the seriousness with which this
Committee takes this problem.
I think we've all had the same reactions to the very
troubling reports of unsafe and unclean conditions at
contractor-managed housing at military bases around the
country. Stories are really terrible: kids struggling to
breathe because of black mold, lead paint, rodent infestations,
exposed wiring, doctors' office visits, where doctors plead
with the family to move out for the sake of their child's
health.
My office has reached out to Colonel Donohue, the 19th Air
Wing commander and installation commander at Little Rock Air
Force Base, to explore the issue there. It's not perfect by any
means, but it doesn't seem to have the same systemic problems
we have seen elsewhere. They've got about 1,000 total units
under private management. About two-thirds of those are
occupied, and about two-thirds of those report no problems or
did not request an inspection. That still leaves over 200
visual inspections that identified problems that are currently
being remediated, like moisture and lead paint and rodent
infestation.
Secretary Wilson, General Goldfein, I know that you will
work to make sure that those conditions are remediated
promptly.
I also want to commend the Military Family Advisory Network
(MFAN) for the work they've done bringing this situation to
everyone's attention. We ought to address it with the utmost
speed. We already ask a lot from our troops and our military
families, to sacrifice in terms of their freedom and their
comfort for ours. I think the least we can do is make sure that
they have a safe, clean home whenever they get off duty or when
they're downrange and their husbands and wives and kids are
back, by themselves.
I think we've explored a lot of the fundamental issues
already, so I want to give our service secretaries and service
chiefs an opportunity to speak directly to some of their troops
and families around the world. I know that you don't often get
a chance to do this, but this is a pretty high-profile hearing.
It will probably be highlighted on the Armed Forces Network
(AFN) and on military family social media sites and in your
services' respective media outlets.
Everyone on this panel has been a lieutenant or an ensign
before, so I know you've all worked with junior soldiers,
sailors, airmen, and marine to address their housing concerns.
Obviously, when you sit in the Pentagon, at the top of your
service, you can't have visibility into every single one of
those, but I know we do expect our young platoon leaders and
platoon sergeants and section chiefs to be on top of their
troops' living accommodations.
Starting with General Milley and going down the row, let's
just speak directly to each one of those platoon leaders,
platoon sergeants, squad leaders, and team leaders. You do want
them to be on top of the living situation of every one of their
soldiers, whether they live in on-base, off-post housing, or
they have a family. Is that correct, General Milley?
General Milley. That's correct, Senator, and I would say
that, as it's been true for 10,000 years of military history, a
commander, it's a very special duty position. It's a privilege,
it's not a right. Our duty, as commanders, is to be responsible
for everything our units fail to do or succeed at. That's a
long tried-and-true tradition. That includes housing,
readiness, training, fighting, taking the hill, doing whatever,
and that includes housing. I want all of the soldiers out there
to know that their chain of command is now fully engaged, and
it is our personal responsibility, and we will be held
personally accountable for the condition of their living
quarters or their houses.
Senator Cotton. Thank you.
Admiral Richardson?
Admiral Richardson. Senator, the same. It's a privilege to
lead our sailors in the United States Navy, and I agree with
you that the center of gravity is that small-unit leadership.
It is not only a privilege to become a small-unit leader, a
senior enlisted leader, or a junior officer, but it's also one
of the most rewarding things that you can do, to develop those
people under your charge. That development starts with ensuring
that the fundamentals, the basics, are taken care of, and I
would include not only housing, but also pay, food, safety, all
of those things that are just absolutely fundamental to human
existence. I'd just say, to all of our sailors and those small-
unit leaders, we're committed to making that relationship
productive. Those leaders will be our sailors' advocates as we
navigate through the recovery process, here. We will move out
with urgency, and we will, to Senator King's point, establish a
structure that will be sustainable so that we don't find
ourselves here again in 5 or 10 years.
Senator Cotton. Thank you.
General Neller?
General Neller. I would say this not just to the small-unit
leader, but the entire chain of command. The Nation expects
their marines to be the most lethal, ready force on the face of
the Earth, and now we have a lot of things to do to achieve
that requirement. Part of that is taking care of our families
and our marines and where they live, whether it be in the
barracks, whether it be in base, government-owned PPV or out in
town. This is part of our responsibility. I mean, that goes
with being a commander, being a leader. You're responsible for
all your unit does or all it fails to do.
I need everybody to understand why we're doing this. It's
part of readiness. We need our families ready. A marine can't
be ready if he or she's not living in a secure, safe place.
I personally commit that we'll get after this. I agree with
Secretary Spencer, I think--and Chairman Inhofe mentioned this,
back in the day, it was a different place, a different time. I
think we took our eye off the ball. We've been a little busy
the last 17 years, as you know, Senator, but that's no excuse.
We've got to reeducate ourselves about what our
responsibilities are as unit leaders, and that includes taking
care of the families.
Senator Cotton. General Goldfein.
General Goldfein. Thanks, Senator. When I talk to young
command-team groups, senior officers, officers and NCOs [non-
commissioned officer], I tell them that a lot of things we do
as senior leaders, we do the best we can. There's one thing we
do that's nothing short of sacred duty and a moral obligation,
and I believe it's our mirror check. That's to ensure that
every airmen that we send into harm's way to do the Nation's
business is properly organized, trained, equipped, and well
led. Then, when they get the job done and return to their
families, we've taken care of them while they've been gone.
That's a moral obligation, and so, my message to all airmen is
that we are not going to stop until we ensure that we have the
system right to take care of them.
Senator Cotton. Thank you, General Goldfein.
If I could plead for 30 seconds, Mr. Chairman, I think it's
very important that our troops hear this. As Senator King said,
there have been reports of retaliation and reports of
nonresponsiveness to complaints. I would just like our service
chiefs to speak directly, once again, to their troops and
assure us, yes or no, that there is zero tolerance for any
retaliation if you complain about the conditions of your
residence.
General Milley.
General Milley. Absolute zero tolerance.
Senator Cotton. Admiral Richardson.
Admiral Richardson. Same. Zero tolerance.
Senator Cotton. General Neller.
General Neller. Zero tolerance.
Senator Cotton. General Goldfein.
General Goldfein. Four.
Senator Cotton. There you have it. Family members and
troops on the front lines, when you have these problems, the
top boss in every one of your services has said there will be
zero tolerance, there will be immediate responses to your
problems. You should bring them forward and make sure that you
and your families have a safe residence while we work through
the bigger structural problems we have.
Chairman Inhofe. Thank you, Senator Cotton.
Senator Heinrich.
Senator Heinrich. Thank you, Chairman.
Secretary Esper, I want to start with you, and I certainly
agree that we need a Tenant Bill of Rights. We've heard a lot
of really good testimony from all of you, and a lot of good
questions from my colleagues, about using that as a tool to
address the unresponsiveness between some of these contractors
and people in the housing, as well as the issue of who is the
customer. Because I can tell you, from personal experience of
people who've reached out to me, both a concern that they would
be held--or that there could be retribution when they raise
issues, and then also the issue of not having the contractor be
adequately responsive because they're not the customer.
But, I want to switch gears and maybe come back to that
issue and address the other half of this, because I think half
of this is contract quality and enforcement of that contract,
and half of it is basic standards and enforcement of those
standards. I want to understand the lay of the land across the
board. W heard from a former mayor. I'm a former city
councillor. Any mayor, councillor, or county commission will
tell you that the--we have tools to deal with this. They're
building codes. I want to understand, across all of the
services, what the current standards are.
Secretary Esper, in the Army, what is the building code
standard that base housing must be built to in your service
branch? Is it uniform or is it governed by the local or State
building code standard at the site?
Secretary Esper. Yes, sir. My understanding is that, under
the umbrella agreement under which this privatized housing
operates, that the commitment is that the privatized housing
would abide by local standards.
Senator Heinrich. Okay.
Secretary Esper. It would be overseen by them, as well.
That said, I would want to take a look at what those standards
are to make sure that they meet what our expectations are as
leaders. We need to--we may need--well need higher standards
and a common standard, if you will. We've talked a lot about
commonality here with regard to leasing agreements. I think
common standards, common high-quality standards are the way to
go.
Senator Heinrich. I think you're dead-on, and I think
you're on to something here, because there is a patchwork of
standards across the United States. County and city, we have--
you know, Secretary Wilson is very familiar with Kirtland Air
Force Base, a few blocks from my house. They do not fall under
the City of Albuquerque's jurisdiction, because that's where
the boundary for the city stops. They're under the State or
county standards. So, I do think it makes sense for all of us
to look a uniform standard that may be a higher bar, for
safety, for comfort, for energy efficiency, than what may be
appropriate at the local level or what local politics might
dictate.
For the other service secretaries, what is the current
standard, and what is your opinion on the sort of approach that
Secretary Esper just----
Secretary Spencer. Senator, to underscore the fact we
probably need standardization, it's my understanding that we
are held to a government standard, a DOD-oriented government
standard. My naval facilities organization oversees the
enforcement of those standards on original construction.
Senator Heinrich. Secretary Wilson.
Secretary Wilson. Senator, the Air Force Civil Engineering
Center (AFCEC) does--oversees uniform DOD standard for
construction. I think where we've had problems is in quality
assurance of repairs, and quality control. That is often a
manning issue, and we need to address that issue, base by base.
Senator Heinrich. For each of the secretaries once again,
who would be responsible in your service branch for performing
basic inspections to make sure that either new or existing
construction meets code and/or meets the standard for repairs?
Secretary Esper. Senator, I think, if it's new
construction, it's likely our Corps of Engineers would be
responsible, and I think, in all cases, whether it's that and
repairs, it would be the garrison chain of command. I'd be
remiss if I didn't say, at the end of the day, the chain of
command of that soldier being involved is--certainly on work
orders, will be extremely important.
To Secretary Wilson's point, we're looking at the same
thing. As we staff up at all of our installations, making sure
we have sufficient quality assurance, quality control
personnel, at every step of the process, are involved and
either doing a 100 percent, depending on the nature of--if it's
an--life, health, and safety work order, or spot-checking if
it's a routine work order.
Senator Heinrich. Okay.
Secretary Spencer.
Secretary Spencer. In the case of the Navy, sir, CNIC
[Commander, Navy Installations Command] and then that local
housing office would be the responsible parties. Again, just
reverberating what Secretary Esper and Secretary Wilson said,
it's the quality control and quality assurance aspect that is
going to be the real nuts and bolts to make sure that we
enforce what we have.
Secretary Wilson. Senator, on your bases, you will have a
housing management office that is, as we mentioned, undermanned
for quality assurance. The civil engineering squadron, with
support from the Civil Engineering Center, assesses and--the
compliance with code-like items.
Senator Heinrich. I want to thank all of you for the
commitment that you made to Senator Cotton with regard to
retribution. I also want to ask, what are we doing to make sure
that commanding officers understand that, as well as sending
that message to the--to rank and file? I have had at least one
constituent raise the issue that they were afraid to bring some
of these issues forward. What is the mechanism, Generals and
Admiral, for just sending that message, loud and clear, that,
``We have an issue, and, if you raise issues, you're going to
be listened to, and you're not going to be held to some form of
retribution''?
General Milley. The chain of command is command information
mechanisms throughout the force to get that word out, but it is
well understood that any sort of action, a reprisal action or
retribution action, against anybody who raises a complaint
about anything, whether it's the IG, the EO, the EEO, housing,
or, you name it--it is illegal. It is not just against policy
and regulation, it is illegal. You will be held accountable if
you engage in any sort of reprisal action against anybody who
raises a complaint about anything. It's zero tolerance, period.
Senator Heinrich. Admiral?
Admiral Richardson. Senator, if I could, I'd just agree
with General Milley. But, just to make sure that we were clear
here, it was a specific part of the NAVADMIN message that I
sent to the Navy to make sure that we are particularly
sensitive to this, because perception can be----
Senator Heinrich. Right.
Admiral Richardson.--as powerful as reality here.
Senator Heinrich. Exactly.
Admiral Richardson. Then, all of our--I did a social media
post, made it clear there. The visit guidelines for visits to
homes include a part of this, so we're being extremely
sensitive to making sure that, certainly, we meet the legal
requirements, but we also, from a perception/management thing,
are open to this.
General Neller. I agree with both the Chief and the CNO
[Chief of Naval Operations]. In the white letter I sent out to
all commanders, directing the housing outreach, with the intent
to visit, at the permission of the servicemember, their home,
either in a PPV or out in town. There is very clear guidance on
what they can and cannot do, and whether they refuse the visit
or not. But, as General Milley said, any reprisal on anyone who
makes an allegation, it is illegal.
Senator Heinrich. Thank you, Mr. Chair.
Chairman Inhofe. Thank you.
Senator Hawley.
Senator Hawley. Thank you, Mr. Chairman.
I'd like to go back to the subject of contracts. I
understand that Senator King asked about some of these
contracts with the private entities, and requested copies of
relevant contracts. I'd like to see those, as well.
But, let me begin by directing this towards the service
secretaries. Secretary Esper, I noticed, in your written
testimony, you talked about the model, this model of private
housing, private partnership, and you say, ``It assumes--the
model assumes that the contractors, with sufficient oversight,
will continue to maintain the quality of these homes.'' I note
the verb, ``assumes.'' Do these contracts lay out particular
standards? Are these private housing operators, are they
contractually obligated to maintain particular standards in
these housing developments?
We'll start with you, Secretary Esper.
Secretary Esper. Yes, sir. I've reviewed a few of them,
and, having read through them, there are standards in there.
But, I do think we need to look into them, renegotiate them,
and make sure that the standards are high and sufficient and
meet the Bill of Rights that we've outlined here today.
Secretary Spencer. Senator, the standards are there. We
need to enforce the standards. It's, again, not a brilliant
flash of the obvious. We were not keeping our eye on the ball.
The housing office needed to be the quality control check and
balance, here, if there was a complaint. We have the processes.
Now we have to live up to performing the processes.
Senator Hawley. Same for you, Secretary Wilson?
Secretary Wilson. Senator, the contracts do have standards
in them. The issue is ensuring that we enforce those standards
when we have a contractor who is a sub-par performer.
Senator Hawley. Under the contracts, who is charged with
enforcing the standards? Have the--it's you? I mean, who has
the authority, contractually, to enforce these standards and
see that they're maintained?
Secretary Wilson. Senator, in the case of the Air Force,
the Air Force Civil Engineering Center has a contract manager.
The housing management office actually has a dual chain of
command to both the base commander and to the Air Force Civil
Engineering Center.
Secretary Spencer. Senator, we have the same structure with
CNIC. But, to go back to what Senator King said, you need ``one
throat to throttle,'' and that's the service secretaries. The
structure that you'll hear about is that the Government is a
passive partner in this. But, passive partner does not mean
getting involved in standards and enforcing what we have. We
have the agreement. Now enforce the agreement and the
standards, and that can be done at our level on down.
Secretary Esper. Senator, there's supposed to be an
overarching RCI partner entity doing oversight. I think it's
insufficient. At the Army garrison level, it would be, of
course, our--again, our garrison command, through its
Department of Public Works (DPW), doing that, And we need to
staff back up and get more aggressive on that. One of the
things we are proposing is, for example, 100 percent inspection
of all life, health, and safety work orders, 100 percent
presence in all transitions when somebody moves in or moves out
of a home, and then spot-checking pretty aggressively all other
work orders. Than, again, I'd be remiss if I didn't add in, the
chain of command has the responsibility to check in on their
soldiers, as well, if they're having problems with work orders,
customer service, you name it.
Senator Hawley. The Tenant Bill of Rights that each of you
has mentioned now a number of times, will--do you anticipate
incorporating that Bill of Rights into these contracts with the
service providers so that they're contractually enforceable?
Secretary Wilson. Yes.
Secretary Spencer. Yes, Senator, that's exactly what we're
talking about. This is a draft, but we want to fine-tune it to
make sure it has the teeth, and the teeth relies on the
contract agreement.
Secretary Esper. Yes, sir. I think we need to
operationalize each part of it into the individual home
agreement between the provider and the resident. We also need
to look at operationalizing key parts of it into the incentive
fee structure and everything else so that we're hitting at
multiple levels and enforcing it that way.
Senator Hawley. Going back to--a second, to your oversight,
and the thing about the garrison staff. We've seen reports that
there's been significant cuts in the number of civilian
employees who actually look at these installations, run the
installations. In some cases, I've heard as much as 90 percent.
So, that even if you do have the contractual--you're telling me
now you have the contractual authority to inspect these
properties, but it sounds as if there may have been nobody
around to actually do it. Is that accurate? What are you going
to do about it?
Secretary Spencer. Senator, this is one of the observations
that we've made, and one of the things we might be doing is
coming back to you all for the direct-hire authority to
increase staffing.
Secretary Esper. Yes, sir, it looks like, over a period of
time, beginning around 2010-2012, we began making reductions.
We're anywhere from one person to ten people. We didn't go to
zero anywhere, as best I can tell, but we did make reductions,
and we're now looking at, how do we staff back up to ensure we
can do adequate quality assurance and quality control, based on
some of the ideas I shared with you earlier?
Secretary Wilson. Senator, we have a similar kind of
situation. One of the bases that I went to was one that was
rated as performing well. When you have a contract housing
office, where the contractor is performing well, we probably
have enough people in that housing office to do the work. But,
when performance starts to slide, that's when it becomes
overtaxed. So, how we put the people back in to give support to
the base commanders where it's really needed is going to be the
key decision point.
Senator Hawley. Let me go back, for a moment, to the
contractual arrangements. How do you anticipate changing or
altering these contracts in order to ensure that the private
providers are appropriately incentivized and penalized, when
necessary, for maintaining adequate housing, for responding in
real time to complaints, and generally doing what they're
supposed to be doing? Let's just cut to the chase here--I'm a
lawyer. We can talk all you want about ideals and aspirations
and Bills of Rights. If you don't make them enforceable, if you
don't put them in contracts, if there isn't real bite behind
them, it's not going to go anywhere, and we'll be right back
here 5 years from now with people saying that, ``I know what
the Bill of Rights are. There's nobody who I can go to enforce
it. There's nowhere to get it done.'' We don't want to do that.
So, what are you going to do to make it enforceable so that
we're not back here doing this again in a few years?
Go ahead, Secretary Wilson.
Secretary Wilson. Senator, I'm not a lawyer, but I do
understand the incentives and how they're not set up properly.
I think that the answer to this is to get less quantitative
about these incentives, because those can always be gamed. We
need to put authority with the base commander so that that
local contractor knows that the base commander can say, ``No,
that work isn't good enough,'' and it can impact their bottom
line.
Secretary Spencer. Senator, I look forward to having the
negotiations with the Private Partner Venture partners to see
how we can come to a solution that provides us what we need for
the product that we require to be delivered. I can't give you
exact levers right now, but, like I said, in the whole Bill of
Rights, it will not work, it'll be a puff piece, unless we link
that into the agreements, whether at the local lease level or
at the operating level.
Secretary Esper. I completely agree with my colleagues on
this matter.
Senator Hawley. Thank you, Mr. Chairman.
Chairman Inhofe. Thank you, Senator Hawley.
Senator Peters.
Senator Peters. Thank you, Mr. Chairman.
Thank you for all of you being here. I appreciate your
attention to this issue, and, obviously, very serious attention
to the issue that you're taking.
I think it's important for us to step back and take a
personal look at how this is actually impacting an individual
in a family. And I want to recognize that there are two folks
in the audience here today from--are both Michiganders: Rachel
Kilpatrick, who is a soldier stationed at Fort Bragg, in North
Carolina. She's here with her husband, Calvin, and I had the
honor of meeting with them, talking indepth about kind of the
troubles that they went through, really kind of a nightmare
that they went through in relation to their home. In fact,
their home at Fort Bragg has been recently deemed unliveable.
To think they were living in a home that was deemed unliveable
is pretty outrageous. It was infested with termites, it had a
severe outbreak of black mold, which caused significant health
issues for her family.
You're not going to be able to see this, but I'm sure
you've seen some of these pictures. I'm sure, General Milley,
Secretary Esper, you've seen some of this when you visited Fort
Bragg. Thank you for being there. But, for the others, you
know, this is a picture of their home. I'll describe it.
There's this black mold all through the wood here in the
frames, along the floor, along this beam. It's pretty
despicable as to where they were living. It's no wonder that
they've had some significant health impacts, particularly with
Calvin, talking about respiratory issues related to that.
What gets me as I see this, and then I hear from
contractors who say that, ``Well, maybe we should adjust the
BAH formula to provide more money for this.'' Then, this is a
public picture that was out. This is the landlord for this
property, who has 100-acre estate. I think this is his dining
room. This is a pretty nice dining room for the landlord.
Probably can't see that, but that's a pretty amazing picture.
So, it doesn't sound like he's hurting too much, although he
thinks, ``Maybe I can't maintain this property while I dine
with my friends at this incredible mansion on 100 acres.'' It
brings back visions of the term ``land lord'' back in the
medieval days, where the landlords lived like this, and other
folks lived like this. Of course, these folks are our soldiers,
sailors, airmen, marines, who are serving our country, and
serving it with honor. This is simply unacceptable for us to
treat this way.
Her husband, Calvin, is an example of someone who's now
suffering from some health issues, some respiratory issues. He
told me this morning that what he wanted to do was join the
Army, that his wife was going to have--they were going to have
children. He would join the Army. But, now, because of
respiratory issues that may actually be a result of living in
this condition, he won't be able to join the Army and serve his
country, something that he wants to do.
So, as we move forward--and all of you have made a great
commitment to moving forward--what are we going to do about the
people who are suffering from health issues as a result of
living in these conditions in the past? Let's not forget what
has already happened as we look forward. If you could tell me,
how do we hold these landlords accountable for health issues?
This is a process that supposedly was going to save taxpayer
money, but now we have people in TRICARE and other health,
we've heard instances where children may have been impacted as
a result of living in these kinds of facilities. What are we
going to do?
We'll start with Secretary Esper, each of the secretaries.
What are we going to do to go back to make sure those who were
harmed in the past, that we hold these landlords accountable
for what they did to some of our wonderful servicemembers?
Secretary Esper?
Secretary Esper. Well, Senator, first of all, for sharing
that. I want to thank the family for coming forward, and, much
as I did in all the families I've spoken to, the Chief and I
and the spouses we met, again, wholeheartedly apologize that
they have to live in such despicable conditions. It is
unconscionable that that would happen. It's troubling, the
story you convey.
First of all, the first concern, obviously, is to the
health of the soldier and the family members, and we've talked
to our doctors about this. I visited Womack and spoke about
this when I was at Womack Hospital, at Fort Bragg. Of course, I
encouraged them to immediately see their primary care provider
and, if they're not getting any attention, we'll meet with them
immediately after this hearing and make sure we get them
connected to the right people, specialists, as need be.
I think you're right, over the long run, one of the things
the Army is doing is making sure we can track the houses, and
make sure we know who's lived in those houses, year over year
over year, and certainly, of course, track the medical status
of our soldiers and their dependents to make sure we understand
if there are any relationships over the long haul. I think we
need to pursue aggressively, if there's accountability, if
there's something that was caused by active negligence of the
private contractor, to hold them liable. But, at the end of the
day, the Army's going to take care of its own. We're going to
make sure that we take care of their needs, medically and
healthwise.
Senator Peters. Well, the important point is, you will hold
these landlords accountable.
Secretary Esper. Absolutely. I think they're the--the first
recourse is--they had a responsibility to maintain quality
homes, and, in that case, clearly, the homes I saw, that
Senator Tillis joined me with down in Fort Bragg, they were not
doing that, and in other places that the Chief and I and other
members of the chain of command have doing, they are not
maintaining the quality that they are responsible for.
Senator Peters. Thank you.
Secretary Spencer.
Secretary Spencer. Senator, I reverberate what Secretary
Esper just said, and, first of all, we have one of the best
healthcare systems around for our sailors, soldiers, marines,
airmen, guardsmen, and their families. That's number one, is
their health. Number two is doing what you're talking about
doing, which--hold accountability. The agreements, the master
operating agreements, have the requirement for the product they
have to deliver. They will be held to that standard in the
contract.
Senator Peters. Thank you.
Secretary Wilson.
Secretary Wilson. With respect to the health issues, the
most important thing for a member who thinks their health has
been affected is to go to the military treatment facility and
get evaluated and treated, and have it documented. Each of our
bases have legal assistance to help family members identify
what their options are and to be able to work those through
with respect to a claim towards this provider. But, it raises
another issue, and I'll defer to the Chief on this.
General Goldfein. Yes. Senator, you know, central to your
question, too, is--you know, what Chairman Inhofe brought up in
the beginning, which is, when did we know, and how did we know
it, and how did we not see the breakdown in trust that was
occurring? Now what are we doing about it to make sure that
can't happen again? So, what we're putting in place is--there
are five methods of what I call ``avenues of alarm,'' right,
when there's safety or security--the issues like you bring up,
that has to generate command-team action and followup. The
first one is, you go to your housing management office, which
is your first line of defense at the base, your advocate.
That's got to trigger action and followup. The second is, you
go to your command team, first sergeant or a commander. That's
got to trigger action and followup. The third is, you go to
your medical provider and say, ``I think I have a health
concern with my children, and it's associated with my home.''
That can't stop within the medical community. It's got to get
to the command chain and trigger an alarm. The fourth method
is, if--I visited a Navy family who's living on an Air Force
Base, and I was concerned with--that they were told, ``Well,
you're Navy, so you have to go through Navy chain.'' Not on our
bases. If they're on an Air Force Base, they're ours, and we're
going to take care of them within the Air Force chain, and I
know my teammates feel the same way about airmen on their
bases. The final is a 24-hour hotline that they can call. If
none of those top four work, they call the hotline. This
morning, unknown to anybody in my staff, I called it and
checked in to make sure that it is up and operating, and that
the checklists are there. It's up and operating. We have some
work to do on it. But, those avenues of alarm have got to get
to the command chain and leadership so we can follow up and
take action.
Chairman Inhofe. Thank you, Senator Peters.
Senator Ernst.
Senator Ernst. Thank you, Mr. Chair.
I want to thank everybody for coming forward today, and,
Secretary Spencer, I think you painted it quite appropriately,
that, you know, you're glad to be here, but you wish you
weren't here. This is a topic that we shouldn't be addressing
in today's age.
I was a young military spouse, many, many years ago,
married to an NCO, and we had similar issues. They are not
nearly as bad as what we have seen from our families. I
remember living in Indianhead at Fort Benning, Georgia, and the
roaches were horrible, so bad that my husband and I did have to
move into another set of quarters. They couldn't get rid of
them. But, we had to do it at our own expense. I thought that
that would have been alleviated, 20-25 years later. Obviously,
it hasn't.
Now, early 2000, living on Eglin Air Force Base, Army unit,
belonged to Fort Benning, but we were living on Eglin. The mold
problems in Florida, horrible. The guys living in our barracks
out there on the ranger camp, subjected to holes in the walls.
You could see daylight. It took a lot of arguing between the
service branches to get that taken care of.
This shouldn't happen, folks. We really owe it to our
servicemembers to do better for them and their families. I'm
thankful that you understand that. I'm just sorry that it took
their situations coming to this level to be taken care of, when
it could have been taken care of at a much lower level, in a
more expedient manner.
I'm glad we have the opportunity to straighten this out. My
fear is that we'll raise the issue, we'll have these
discussions, but we won't see the necessary followthrough.
Do we have a timeline? I'd like to hear from all of you.
We've talked about the Tenant Bill of Rights. We've talked
about other types of actions that can be taken. But, what is
our timeline, moving forward? When can we expect to see this?
When will those corrective actions be taken for our families?
Secretary Esper, can you start, please?
Secretary Esper. Thank you, Senator, for your comments and
your service, as well.
I think we look at this, generally, in terms of immediate,
mid, and near term. The immediate challenge right now is to
knock down all the life, health, and safety work orders. That's
happening right now on all 49 Army installations. Get those
resolved, and then take care of the other work orders, as well.
Then, I think, in the mid term, what we need to do is, at
least with regard to the Army, staff up quality assurance,
quality control. We need to make sure that we have adequate
independent, objective reporting systems on our Army bases to
make sure we understand soldier satisfaction with the customer
service being provided, and a few other things there.
Then, in the long term, we really need to--and I think this
will happen over the coming weeks--we need to finalize the Bill
of Rights, looking for input from Congress, and then begin
negotiating that and the leases and all the other pieces of
that, that we discuss today, to make sure we get it
contractually bound for the long term.
Then there are other longer-term issues: reeducating our
garrison commanders, our chain of command. The bottom line is,
this problem didn't come up overnight, it evolved over years,
and I think it's going to take some time to get it finally
resolved and in place and intact, and maintain the close
supervision so it doesn't fall back off the radar screen.
Senator Ernst. Secretary, do we have a timeline? What do
you envision? What do you think is realistic? What can we tell
our military families--when this will be implemented? Bottom
line, Tenant Bill of Rights.
Secretary Esper. Right. I want to believe we'll finalize
the Bill of Rights, here, in the next few weeks, with your
input, and then begin discussing with the contractors. The
Chief and I have already had some discussions with them,
generally in favor, in terms of principles we outlined 2 weeks
ago. But, then I think it's the hard work at--Senator Hawley
talked about--is getting lawyers and making sure we change all
the agreements. I would hope that we'd be able to do this in a
few short months, to make sure it's all in place and lined up,
and then we're working against these new standards, we're
working against contractual obligations, and we have our chains
of command in place, with the right people at the garrisons to
make sure that we do the new proper oversight.
Senator Ernst. Secretary Spencer?
Secretary Spencer. Senator, if you just cruise the Web and
look for communities, whether States or right here in the
District of Columbia, their Bill of Rights for Tenants, almost
every single case I looked at, each item in the Bill of Rights
was backed with a code. That's what we have to do, in that
light, is to put the teeth in the agreement that references the
terms that we're giving them. I agree with Secretary Esper. I
want to make sure that we get this in its fundamental basis
through your-all's input, families' input, et cetera, and then
sit down with the Private Partner Ventures.
I will tell you, just to manage expectations, some of the
things we'll ask for will probably take bondholder concurrence,
so there are parties that have to be addressed, here. I would
say 90 days, is what I'd be looking at, just my eyeball of it.
Senator Ernst. Okay. Thank you.
Secretary Wilson?
Secretary Wilson. Senator, I completely concur with my
colleagues on this.
Senator Ernst. Okay. I appreciate that very much.
Now, I thought it was really interesting, Senator Peters
bringing up the ``land lords.'' Truly, different situation,
centuries ago, but it begs the question--we know that the
garrison commander typically makes the determination each
quarter on the percentage of the quarterly incentive or bonus
payment that the private-partner landlord receives. What is
that average percentage that those landlords are receiving,
that private partner? Do we know what that is? Can that be
presented here today?
Secretary Wilson. Senator----
Secretary Esper or--oh, Secretary Wilson, did you----
Secretary Wilson. Senator, I was just going to say, in
our--we have 32 different agreements, those 32 different
contractors. Two of those 32 have no incentive fees.
Senator Ernst. Okay.
Secretary Wilson. Thirteen of 32 don't have the garrison
commander or the base commander evaluation. Seventeen of 32 do
have a base commander evaluation component. Where we have it,
it's generally between 5 and 10 percent of the total fee that's
influenced by the base commander. We don't think that's
sufficient.
Senator Ernst. Okay, thank you.
Secretary Spencer. I interpreted the question differently,
Senator, in that, what are we actually paying in incentive
fees? We do ours at the regional level, which is a--here's an
example of what we're rethinking, which is to deliver the
ability to award the incentive at the base level. But, in our
levels, we're somewhere around 75 to 80 percent of incentives
paid. It should be noted that those incentives that aren't paid
stay in the system and go into the sustainment fund, the
reserve fund, just as a note.
Senator Ernst. My time is expired, I apologize--and then
I'm assuming that reserve fund is held in trust, or is that
used to----
Secretary Spencer. That is--it is held in trust, with an
agreement on how it is used for capitalization.
Senator Ernst. Okay. Thank you.
Thank you.
Chairman Inhofe. Thank you, Senator Ernst.
Secretary Esper. Senator, I know you're out--we'll get you
that information, as well.
[The information referred to follows:]
Secretary Esper. It is 92 percent of the requested
incentive fee.
Senator Ernst. Thank you, Secretary.
Chairman Inhofe. Senator Warren.
Senator Warren. Thank you, Mr. Chairman.
Before the previous hearing, I sent out letters to all five
of the private housing companies that testified, 2 weeks ago,
to get some more data and background information on what was
going on. They have since provided my office with the requested
documents that I'd asked for in this letter. Representatives
from three of those companies have met with my staff to explain
how their business model works. The companies' summarized 600-
page complex, secret financial agreements into a single
PowerPoint slide that clearly laid out how they actually don't
make much money, and they only receive their fees after setting
aside money for operating and maintenance expenses. Meanwhile,
they also claimed that, because people don't have to live on
base, they are properly incentivized to provide excellent
service. If you believe the companies, it all makes sense, on
paper. The market works perfectly. They said, in effect,
there's no problem, the incentives are all working, the market
works, nothing to see here.
Let me just start by asking, Secretaries Spencer, Esper,
and Wilson, do you agree that the housing market for base
housing is working properly?
Would you like to start, Secretary Esper?
Secretary Esper. Senator, clearly it's not working.
Senator Warren. It's clearly not working, right?
Secretary Esper. I mean, we have too many problems. It's
evidenced by what's coming out in our town halls and what this
committee heard from the families, the families sitting behind
us. It's not working.
Senator Warren. So, we don't have any doubt about that.
Secretary Spencer, you agree?
Secretary Spencer. Totally agree.
Senator Warren. Secretary Wilson?
Secretary Wilson. Agree.
Senator Warren. All right.
So, the market isn't working as intended. We have to ask
the question why it isn't working, intended. And the basic idea
behind what it takes for a market to work is, there have to be
rules, and there has to be someone who's willing to enforce the
rules. Last week, the Army personnel chief told us, in a
military personnel subcommittee, that the terrible conditions
in which military families have been living are a leadership
failure, plain and simple. Do you all agree with that
assessment?
Secretary Esper?
Secretary Esper. Yes, ma'am. I think the chain of command
over the past 20 years has slowly walked away from being
involved in the housing of our soldiers and their families.
Yes.
Senator Warren. Everyone else agrees with this? I'll get
you on the record, there.
Secretary Spencer. That's true.
Secretary Wilson. Senator, I think that there's more than
that. I think that the financial incentives, as they are
structured, do not incentivize the right behavior.
Senator Warren. Okay. So, you're saying you think both the
contracts are bad, but--let's just start with--the enforcement
part of this is also a problem, and that's a leadership
problem. Is that right?
Secretary Wilson. Yes.
Senator Warren. Just want to make sure we're in the same
place on this.
Secretary Wilson. Leadership both on the military side and
also the local leadership of the contractor.
Senator Warren. Okay. But, it's leadership on the military
side that enforces. It's not the contractor that enforces.
Secretary Wilson. One of--enforcement, that is true, but we
have--where--I would say that where we don't have problems at
bases, local leadership and management quality really matter.
That is the biggest indicator of quality housing, is a good
local manager by the housing contractor.
Senator Warren. Fair enough, Secretary Wilson, but I just
really have to bear down on this point. If no one will enforce
the rules, then--I understand exactly how incentives work, and
the way incentives work is to improve your profits by not
delivering the product that you promised to deliver. We've got
to look at both of these, the leadership on how we get
enforcement of the rules and whether the rules, themselves, are
adequate, and I take it from what you've already said, we have
a leadership problem, but we also have a problem on the rules.
Correct, Secretary Esper?
Secretary Esper. Yes, ma'am. I do want to make a good
point, something the Chief reminded me of, because we need to
be fair to the chain of command here, too. There was an
instruction given by civilian leadership in the 2013ish or
timeframe to say, ``You are not responsible, that you should
not conduct inspections of the homes.'' And so, we've
subsequently unwound that and are now giving different guidance
to the chain of command, to be involved----
Senator Warren. Okay, but who gave those orders? I mean, we
can talk leadership. Let's just move up a little. Somebody----
Secretary Esper. I think----
Senator Warren.--issued those orders, and it didn't come
from the contractor.
Secretary Esper. An assistant secretary at the time did.
Senator Warren. An assistant secretary of the----
Secretary Esper. Of the Army.
Senator Warren.--Department of----
Secretary Esper. Of the Army.
Senator Warren. The Army.
Secretary Esper. Yes, ma'am.
Senator Warren. Said, ``Don't enforce the contracts,'' in
effect.
Secretary Esper. No, no, said, ``Do not--you're not
responsible for conducting inspections of the housing''----
Senator Warren. But, who was going to enforce the contract?
Secretary Esper. Well, I--we completely agree, Senator.
Senator Warren. All right. Okay.
There's the problem we've got. We need better rules, and we
need better enforcement of those rules.
I'm putting together a reform bill that will enhance
oversight, protect tenants. I know we're working on a Tenant
Bill of Rights here. You know, the Committee can put all of the
right rules in place that it wants, but if the leadership
doesn't enforce those rules, then, at the end of the day, we're
not going to be delivering for our military personnel.
Enforcement--not just signing the contract, but enforcing the
contract is absolutely critical.
I just want to dig down on one part of that and on some
reports of potential fraud. The committee has received reports
from military families who are being charged for things like
carpet replacement, upon moving out, but the carpets are not
actually replaced. Did the services conduct any inspections,
when the houses are in between tenants, to make sure that the
providers are actually completing the work that they're
charging the military families for? Do we know the answer to
that, Secretary Esper?
Secretary Esper. I can't tell you right now, Senator, but
I'll get you the answer.
[The information referred to follows:]
Secretary Esper and General Milley. The Army conducted
limited inspections, but is now conducting inspection of 100
percent of all homes having completed between occupancy
maintenance to ensure families are moving into homes that have
no outstanding maintenance issues. Families are not charged for
maintenance work performed in Army owned or privatized homes,
they are charged for damages beyond fair wear and tear during
their occupancy.
Secretary Esper. I've heard the same thing, and I think,
going forward, one of the things I said earlier today is that
we want to have 100 percent quality control on any transition,
moving in or moving out, because----
Senator Warren. Okay.
Secretary Esper.--we've heard similar reports.
Senator Warren. If someone's going to have to pay for it.
Secretary Spencer, did you want to add to that?
Secretary Spencer. It is technically, Senator, the housing
office, the local housing office. Again, oversight, whether
they do it or not, is now front and center.
Senator Warren. Okay. So, they have the authority to do it,
they're just not doing it.
And, Secretary Wilson----
Secretary Spencer. Exactly.
Senator Warren.--did you want to add anything to that?
Secretary Wilson. Senator, we do about a 10 percent
sampling, so it is not a 100 percent look at the turnover time.
I also would like to say that it--we take all indications----
Senator Warren. I'm sorry, if you do 10 percent sampling,
what have you found in your 10 percent sampling?
Secretary Wilson. I'd have to get you the data----
[The information referred to follows:]
Secretary Wilson. Thank you for the question Senator
Warren. Reviewing the data over the last year from all Air
Force privatized locations, on average 9 of 63 locations (or 14
percent) reported having homes that did not meet rent-ready
standards when inspected. Additionally, 2 of 63 (or 1.5
percent) reported late turnover of the homes. For those homes
that were not rent ready, the Air Force Military Housing
Offices engaged the project owners to address the issues. In
January 2020, the Air Force will be progressing to a 100
percent check of Change of Occupancy Maintenance using a much
more comprehensive inspection regimen that looks at all major
building systems. Additionally, the Air Force is working with
the other Services and the project owners to include Change of
Occupancy Maintenance Quality within the Performance Incentive
Fee framework.
Senator Warren. Okay. Whether this is a problem or not.
Okay, and what kind of followup you do----
Secretary Wilson. If there's----
Senator Warren.--if you find out there's a problem.
Secretary Wilson. Uh-huh. If there is an indication of
fraud, we take that seriously and turn it over to the
investigators for fraud.
Senator Warren. Okay.
I appreciate that. But, I'll just say it again. Until we
get some real enforcement on these rules, we can write all the
rules we want here in Congress, but we've got to rely on you
folks to make sure they actually get enforced.
Thank you.
Thank you, Mr. Chairman.
Chairman Inhofe. Thank you, Senator Warren.
Senator McSally.
Senator McSally. Thank you, Mr. Chairman.
Senator Warren, this may one--be one of the few areas that
you and I are in strong agreement with each other, and I look
forward to working with you on it.
Thanks for the leadership, all, for coming here today on
this really important issue, and for the families who are
represented here, some of which testified a few weeks ago.
We've been talking a lot about landlords, but, honestly,
based on hearing their harrowing stories, some of these sound
like they're slum lords, not landlords. We've been talking a
lot about the commander. I can't imagine being a commander and
having someone in my unit whose family is dealing with these
types of situations, where their kids are sick, they end up,
you know, in a hotel, not knowing, day to day, where they're
going to be sleeping the next night, with them and their
children and their families, and the uncertainty and the lack
of responsiveness, and the impact that that has, not just on
the welfare of those individuals, but on the readiness of that
unit and the ability for them to be able to do their
warfighting mission. This is, ultimately, a commander
responsibility.
You mentioned, Secretary Esper, how some guidance in the
past somehow moved in that direction. I think it's probably
that way in most of the services. A few years ago, we had an
incident with energy bills pop up at one of the bases in
Arizona. When I started looking into it, I talked to the local
commander, and there was this feeling of, like, ``That's
between the tenants and the landlord, and that's a contract
that they have.'' We've got to get away from this. I think we
all agree that we've got to get away from this and we've got to
move back into the commanders having responsibility, having the
ability to enforce, having the ability to withhold payments and
make sure that the health and the well-being of our members and
their families are taken into account. It seems like right now
the commanders, to varying degree, are either totally out of
the loop at some bases or somehow involved slightly at some
bases. So, it's very patchwork, it sounds like from the
testimony today.
I also am concerned, from some of the testimony from a few
weeks ago, that we're hearing, even today, the first line of
advocacy is the housing office. In many cases, these families
testified the housing office felt--there was a feeling that
they were kind of in cahoots with the contractors and there was
no real accountability or oversight.
Since this has been raised, has there been any looking at
what's going on in the housing offices and holding individuals
accountable that maybe had these issues brought to their
attention for some of these families, but they did nothing or
they weren't responsive? Do you have any cases of that in all
of the reviews that have gone on in the last few months? Has
anybody been held accountable in these housing offices? Because
they're not their advocates, according to the families. Can I
get an ``amen''?
[A chorus of ``amen.'']
Senator McSally. Yes, ma'am.
Secretary Wilson. What we did find in the housing offices
was insufficient numbers of people and insufficient support.
Likewise, from the Civil Engineering Center, insufficient
technical assistance from civil engineers when it's required. I
think, with respect to your point on commander responsibility,
you were absolutely spot-on, and a commander needs to be able
to assess. That means they have to have access, and some
commanders were being told by contractors that they couldn't
bring in their environmental health folks and take a look at a
home. That's unacceptable. They need to be able to direct that
a repair is not sufficient. They need the adequate support in
their housing offices and civil engineering squadrons. They
need to be able to withhold payment, and they need to be able
to impact the fees that are paid. If a commander has that kind
of authority, I am pretty confident that they'll start to get
responsiveness.
Senator McSally. To follow up on that, Secretary Wilson,
what do you need in order to allow them to have that authority?
Does that take an act of Congress, or is that all happening at
the service level?
Secretary Wilson. I don't think we need an act of Congress
for that. I do think we are going to have to change some of the
contracts, and we may need a bit of backstopping from the
Committee as we go through those negotiations.
Senator McSally. Okay.
Secretary Spencer----
Secretary Spencer. I couldn't underscore that better. We
need your backstop as we go into negotiations. With them
knowing that you're behind us, I think we have a bully pulpit
to start the negotiations with.
Senator McSally. Thank you.
Secretary Esper. I agree, as well, Senator.
Senator McSally. Great. Thank you.
The other issue that came up in the hearing was--and it's
been mentioned a little bit today--is families having to have
extraordinary out-of-pocket expenses, some related specifically
to fixing their own problems that the private companies should
have done, some related to medical bills. Are you also
tracking, or is there a new mechanism for tracking, out-of-
pocket expenses of families and what mechanisms they need for
them to be reimbursed from the failures of this?
Secretary Esper. Senator, they should not be paying out-of-
pocket expenses for something that is the responsibility of the
private contractor. I have heard those stories, as well. Again,
it's reprehensible that that has happened. So, that's why, in
the Bill of Rights, we've changed some things. For example, no
longer will we accept nonrefundable pet fees, I think, is one
thing. There are other fees out there, as well, we need to
address and, likewise, in terms of, when somebody PCSs
[permanent change of station] and they move in or move out of a
house, having a third-party Army person there on the spot to
arbitrate any issues so that they just don't arbitrarily keep
their BAH, claiming that there's excessive damage to the home.
Secretary Spencer. I wouldn't want to, Senator, hang all
solutions on a new shiny object, but, in the leg that I was
talking about, communications, whether it be an app, whether it
be whatever, having a record of communications is stage one,
so, one, we can track it, and, two, advocates and/or
appropriate offices and people of responsibility are on record
that this is an issue.
Senator McSally. Okay, thank you.
Secretary Wilson, anything to add?
Secretary Wilson. No, Senator, I think my colleagues have
covered those pretty well.
Senator McSally. Okay, great.
I am almost out of time, but I do want to just go back with
a followup on my last statement of--I really think you guys
need to look at the housing offices and the housing advocates,
and what their role has or has not been, not just technical
issues or manning. But, again, the stories and the testimonies
we had for specific individuals in those cases--not everybody,
but what's happened, even if they're undermanned, but them not
playing their proper role and not actually being the advocate
for the families. Thanks.
Thanks, Mr. Chairman.
Chairman Inhofe. Thank you, Senator McSally.
Senator Blumenthal.
Senator Blumenthal. Thank you, Mr. Chairman.
I want to thank the Chairman and the Ranking Member for
following up on this issue, and all of the military families
who are here today.
I want to thank General Milley for visiting with me
yesterday and really giving me a very candid and determined
view of the extent and magnitude and complexity of this issue.
Like the panel today, he was reasoned and deliberate. But, I
sensed, in his view, what I hope you share, which is a sense of
outrage and anger that we've come to this point.
Now, I'm just a country lawyer from Connecticut, but I was
a prosecutor for a good part of my career. What I've seen about
landlords and about others who may break the law is that they
understand money, particularly withholding of money, and they
understand prosecution. There have been references here to
fraud. I think there are clear indications of fraud. I would be
even more emphatic, given another setting. But, I would
recommend that these issues be referred to the United States
Department of Justice (DOJ) for investigation.
[Applause.]
Senator Blumenthal. What's happened here is criminal. It
may not be criminal in the sense of provable beyond a
reasonable doubt in a courtroom against a specific company or
individual. I'll leave that to the Department of Justice. But,
I would respectfully recommend that each of your services ask
the Department of Justice to be involved in an immediate,
intensive review of whether a criminal investigation is
appropriate, or a civil investigation, because that's the
enforcement that these landlords will understand. They are
landlords. They may be slum lords, but they've counted on this
cash cow. It is a risk-free cash cow. Very few landlords in the
country have tenants who are obligated to pay, for decades--
literally decades--without any real accountability. That's been
their situation up to the present.
I'd like to ask each of the service secretaries who are
here today, would you consider asking the United States
Department of Justice to be involved?
Secretary Esper. Senator, yes, sir, I think we should
pursue any allegation of fraud, and hold people accountable if
that's the case. We'll certainly take this back to our lawyers
and make sure we approach it the right way, and aggressively.
Secretary Spencer. Senator, we're already underway with
Naval Audit. As you know, the way the system works, once Naval
Audit has the data, then DOJ would be involved.
Secretary Wilson. Senator, for the Air Force, it's the
Office of Special Investigations (OSI) that does the initial
investigation and then refers matters to the U.S. Attorney in
the district where it's involved. We take allegations of fraud
very seriously, and I'd be happy to talk to you about that
more, privately.
Senator Blumenthal. I'd be happy to talk to each of you
privately, but let me just point out that the procedures for
audit and internal investigation, in fact, take a lot of time.
I would, again, very respectfully suggest that this procedure
ought to be expedited, and, as a former United States Attorney,
I can tell you, I would respect your going directly to main
Justice with this issue, either the civil division or the
criminal division. If we really care about this issue, let's
recognize it for what it is and provide you with that backstop,
because, at the end of the day, what they will respect across
the table from you--and it won't be you, it will be people down
the chain of command talking for you and representing you--but,
what they will respect is the hammer of fair and effective law
enforcement behind you. I think, if this problem had just
arisen, if it were new or novel, maybe following the normal
audit procedure would make sense. But, we're dealing here with
a problem that has festered for a long time. I think that's
been the overwhelming testimony here today, and I appreciate
your being willing to talk to me, and perhaps others of the
Committee, about an immediate referral to the Department of
Justice. I say, I'm going to be formalizing that request in a
letter that I hope to send you within the very near future.
I want to ask about the health impacts. I heard from a
woman, military family who lived in housing in New London at
the sub base there from April 2014 to August 2018. She
explained that the Balfour BD maintenance officer was
responsive to some of her maintenance requests, like clogged
drains. When she reported mold in their bathtub, they were
advised, ``Just keep washing and cleaning the mold after every
shower.'' Her youngest child caught pneumonia and, shortly
afterwards, suffered a stroke, only a week before her first
birthday. She acknowledges, she'll never be able to determine
whether the stroke was caused by the mold in the apartment, but
I'm asking now about the health of that, particularly on
children, and whether you have been in touch with the VA
[Department of Veterans Affairs], because some of these
individuals may no longer be involved in active military
service, to determine whether these environmental hazards and
toxic substances encountered during military service can be
compensable and treatable under the VA health system.
I'll go down the line again, beginning with you, Mr.----
Chairman Inhofe. Yeah, before we go down the line, we are
going to adhere to our time limit, so I would deny that time
and recognize Senator Tillis.
Senator Blumenthal. I am sorry, Mr. Chairman. I'm happy to
take those answers in writing and adhere to the time----
Chairman Inhofe. Thank you, Senator----
Senator Blumenthal. Thank you.
Chairman Inhofe.--Blumenthal.
[The information referred to follows:]
Secretary Esper and General Milley. The Army is in regular
contact with the Department of Veterans Affairs to share
information on environmental hazards and toxic substances
encountered during military service. This occurs via the
monthly DOD/VA Deployment Health Working Group. The VA has
historically determined that veterans who have been harmed by
environmental hazards and toxic substances during military
service are eligible for compensation and medical treatment by
the VA.
Secretary Spencer. Interagency coordination is important to
ensure we address the needs of our current and former sailors
and marines. As part of the Health Executive Committee, the
Department of the Navy, in conjunction with DOD and the other
Military Services, meets on a monthly basis with the Department
of Veterans Affairs (VA) to address exposure-related topics.
This work is done through the Deployment Health Work Group,
which has both Navy and Marine subject matter experts engaged
in this very important collaborative work. Medical conditions
caused by exposure to toxic substances can be compensable and
would be rated under the VA Schedule for Rating Disabilities.
Secretary Wilson. The Air Force is in regular contact with
the Department of Veterans Affairs to share information on
environmental hazards and toxic substances encountered during
military service. This occurs via the monthly DOD/VA Deployment
Health Working Group. However, the Department of Veterans
Affairs should be consulted for any questions about eligibility
for compensation and health care benefits. There is a potential
conflict of interest for Active Duty Air Force members
directing VA compensation.
General Neller. Interagency coordination is important to
ensure we address the needs of our current and former sailors
and marines. As part of the Health Executive Committee, the
DON, in conjunction with DOD and the other Military Services,
meets on a monthly basis with the Department of Veterans
Affairs (VA) to address exposure-related topics. This work is
done through the Deployment Health Work Group which has both
Navy and Marine subject matter experts engaged in this very
important collaborative work. Medical conditions caused by
exposure to toxic substances can be compensable and would be
rated under the VA Schedule for Rating Disabilities.
Chairman Inhofe. Senator Tillis has--happens to be, in
addition to a good Member of this Committee, the Chairman of
the Personnel Subcommittee. So, he deals with these issues on a
daily basis.
Senator Tillis.
Senator Tillis. Thank you, Mr. Chairman.
Thank you all. We had a Judiciary Committee markup, and I
had one other commitment; otherwise, I would have been here to
hear your testimony. I'm only going to probably ask one
question.
I want to start, though, by thanking Secretary Esper. He
was down at Fort Bragg. I was with them on Friday. We got an
opportunity to visit two houses, the Bloods and the
Blankenships, and we got to meet little Jason, a little 18-
month-old that's living in unacceptable housing conditions. We
heard stories from a very empowered wife, Ms. Blood, who is
standing up for other people who I think are a little bit
intimidated and were afraid to come forward. I, frankly,
believe that we've somehow drifted, with a program that started
out well in 1996, worked well for a while, but now we're in the
wrong place.
I, for one, am not prepared to simply place blame on any
link in the chain, though, because my guess is the housing
providers are at fault, the command is at fault, the Department
is at fault, and Congress is at fault for taking their eye off
this ball.
The one thing that I tell everybody when I get before a
committee hearing, ``If you're in North Carolina and you're
living in military housing that has unacceptable conditions, if
you haven't gotten the right reaction from your command, call
my office. It'll be casework, and I'll guarantee you it'll move
to the top of the stack.''
I also want to thank General Milley for coming in and
talking about the plans, and Secretary Spencer, for the phone
call that we had. I know I'll have discussions with all of you
over time.
But, we've got--and I'm not going to let go of this for the
remaining Congress. We will have another oversight hearing,
with the Chairman's blessing, to see where the progress is. I'm
not talking about next year. I'm talking on fairly short
intervals. Because if you look at this, this is not rocket
science. We can fix this, and it starts by doing what every
branch has said they're going to do. They're going to go out,
knock on every door, and request permission to come in and see
things that they think are unacceptable. Many of them will be
okay. Some of them won't. All of them need to be identified.
I do want to ask a question, and it's probably less of
question, but more of a commitment from you all. It's been
brought to my attention that some of the housing providers go
to these young people--I mean, these are young--it may be the
first lease they've ever signed. They go to these big
organizations. Some of the ones are smaller, and these big
organizations wave a nondisclosure agreement (NDA) in front of
them and say, ``If you sign this nondisclosure agreement, there
may be actually some sort of a bonus or a payment that you will
be entitled to if you don't bring up what may be inadequate
housing.'' That's at least how I read it. I don't know if y'all
are aware of this, but here's what I'd like to find out if we
can do immediately: rescind every damn one of these that have
been signed, because it looks to me--and I don't mean to be
cynical, but this is one--this is a practice by the housing
providers. They'd better come up with a damn good reason for
having somebody sign onto this. Because I've been a landlord
before. It would have never occurred to me to say, ``I want you
to sign away your right to say you're living in inadequate
conditions.'' I don't know if that makes sense to any of y'all.
I'm not going to ask you to go down the line, because, God
forbid, you say it does. Because I can't imagine, on any level,
why it would make sense to have a new tenant, these young kids,
asked to sign this agreement, not understanding the
implications of it.
So, in my view, if any of these agreements are in force, I
expect them to be rescinded over the next 30 days. Over the
next 30 days, if they're not rescinded, I want to know what
housing company wants to come before me and tell me why it
makes sense. Tell me the business reason why it makes sense.
Tell me the reason why it's for the good of the tenant. I'd
love to have that conversation. We'll have it in an open
hearing, we'll have it in my office. But, I'll guarantee you,
this is has got to stop.
Again, all of you have responded the way I would expect you
to as the great leaders that you are. We have drifted. I can't
imagine that any of you would have knowingly allowed the
conditions that we've seen actually persist. But, now I expect
every one of you to be on the tip of the spear to fix it.
Everybody in command better be in touch with their folks that
they've been entrusted to take care of. They better fix it, and
they better applaud people who are coming forward in these
communities and stepping up and being the ones that are saying,
``This is wrong.'' This is not the way we treat our men and
women in uniform. I know you all agree with this.
But, this has got to be on short intervals. This isn't
something we come back to next year and say, ``How have you
done over the last year?'' We will have meetings in my office.
We will have as many hearings as the Chair will allow me to
have. I want to see, end to end, where are you making progress,
and I want to see short-interval timelines.
But, over the next 30 days, I want to see every damn one of
these canceled, unless you want to walk into my office with the
housing provider that thinks it's a good idea and build a case
for me removing myself or changing that position.
So, thank you all for being here.
The last thing I would ask every member of the Senate to
do. If you've got a military installation anywhere in your
State, go visit them. I'm going to go knock on a few doors down
at Camp Lejeune and down at Fort Bragg. I'm not going to do it
announced. I'm going to knock on a door and--I'm going to do
exactly what you guys are doing. I'm going to knock on the door
and say, ``Can I come in and take a look around?'' It better be
trending in the right direction. Because you all know I've got
a history of supporting you. I've got a lot of confidence in
every one of you. I know you can fix this problem. But, this
has to be a top priority. The housing providers better make
sure that unacceptable business practices--I don't know how to
do your jobs, in terms of waging war, but I know how to run a
business. This kind of business practice actually sets off a
series of thoughts in my mind that make me wonder just how far
these businesses have drifted, and we're going to find them.
The ones that haven't addressed this before I find them,
there's going to be a consequence.
Thank you all for being here, and thank you for your
commitment to taking care of our men and women in uniform.
Chairman Inhofe. Thank you, Senator Tillis.
Senator Hirono.
Senator Hirono. Thank you very much, Mr. Chairman.
I want to thank all of you for being here, because to have
all of our services represented in this way emphasizes the
importance of this issue and your commitment to resolving the
problems.
I do want to thank you, Secretary Esper, for coming to see
me yesterday, and, Secretary Spencer, I'll be discussing with
you some matters later on today. Thank you for your
responsiveness.
Now, as I sat here listening to all of you and the
questions, it is really astounding that--some of the additional
revelations. For example, I want to thank Senator Tillis for
raising the issue of these nondisclosure contracts. Let's go
down the line. Is this news to all of our secretaries?
Secretary Esper?
Secretary Esper. I think the first time I heard about it
was in a meeting that Senator Tillis and I had with some
spouses at Fort Bragg, and I don't understand it, and I've
never heard of it before in my life. I've rented my share of
apartments. So, we definitely got to dig into this. There's no
reason why people should be signing NDAs.
Senator Hirono. Secretary Spencer?
Secretary Spencer. Exactly.
Senator Hirono. News to you.
Secretary Wilson.
Secretary Wilson. Senator, in my visits to bases, I did not
come across anyone who told me about one of those, but we're
going to go back and check.
Senator Hirono. Thank you. Because I think that is simply
astonishing, that tenants would be forced to sign these kinds
of documents. It may be one of the reasons that we hear from
the tenants that there's a fear of reprisal if they even say
anything. So, I would very much appreciate. I share Senator
Tillis's concern about these kinds of so-called contracts.
I do want to thank you, Secretary Wilson, for pointing out
to us--and I was very taken with your acknowledgment of the
loss of trust--the loss of trust of the airmen and--women that
their housing concerns will be addressed and fixed. Is that a
concern that is acknowledged by the other secretaries, the loss
of trust of the servicemembers under your charge?
Secretary Esper. Yes, ma'am.
Secretary Spencer. Yes.
Senator Hirono. So, I'll start with you, Secretary Wilson--
what would be the first thing that you would do that would
directly go to your servicemember to tell them that you are
going to listen to them and that you are going to fix their
concerns relating to housing?
Secretary Wilson. Senator, one of the things that the Chief
and I are going to be doing over the next week, or possibly 2
weeks, is to send out a clarifying guidance from us of what we
expect from commanders and first-shirts all the way up through
the chain of command, what their responsibilities and
obligations are. I think you rebuild trust by doing what you
say you're going to do and being responsive and holding people
accountable. I don't think it's something that can be done with
one communication or one----
Senator Hirono. Yes, I realize that. This is why I ask,
What is the----
Secretary Wilson. Yeah.
Senator Hirono.--first thing that you're going to
communicate----
Secretary Wilson. The first is----
Senator Hirono.--to your service----
Ms. Wilson.--the first is communication----
Senator Hirono.--persons?
Ms. Wilson.--directly to the chain of command on what we
expect.
Senator Hirono. What the chain of command gets, is that
going to get to your servicemembers so that they know your
chain of command is now going to have other expectations as to
how they're--how they should behave?
Secretary Wilson. Yes, ma'am, we will be broadcasting that
very widely.
Senator Hirono. Secretary Spencer?
Secretary Spencer. Senator, right after the initial
hearing, the CNO issued the NAVADMIN letter, which laid out
exactly what we're doing, going forward. The Commandant wrote
the white letter. This is part of our knocking on every door
for a visit, to be completed by April 15, and there's a second
avenue to that, and this is also the trust that's been lost
with the Private Partner Venture provider. Now, the ball is in
their court, but that is something that all us three service
secretaries are coordinating through, not only the Bill of
Rights, but through communication and education.
Senator Hirono. Secretary Esper.
Secretary Esper. Senator, it's a combination of
communications, and we issued an execution order, if you will,
within days of visiting Fort Meade, to talk about what our
expectations are in the chain of command. We've sustained those
communications. I think the visits by the leadership, both
uniformed and civilian, are critical. But, now we've got to do
the hard work of renegotiating contracts, implementing this
bill of rights, and then have that sustained attention to this
issue.
Senator Hirono. If I were a tenant, the first thing that
might impact me as to the seriousness that you all take the
issue of housing would be a piece of paper that has the Bill of
Rights as a Tenant. So, I want to ask you, when is the timing
for the Bill of Rights which will be across all service?
Secretary Spencer. The three of us took a first cut at the
draft. You all are reviewing it now. We addressed that a little
earlier, in that I would say, to manage expectation, probably
90 days. You might ask, ``Why so long?'' We're going to sit
down with the Private Public Venture partners to ensure we put
the teeth in the agreement. In some cases, this might actually
get bondholders involved, and third parties involved. So, I
just want to manage expectations that it might take 90 days, up
to.
Senator Hirono. Sure, because we'd like to get it right. As
you're formulating the Bill of Rights, though, are you
contacting or are you--is a group like the Family Military
Association Network, for example, are they being engaged in
formulating--helping to formulate the Bill of Rights?
Secretary Spencer. I don't exactly that organization. I
know my office was reaching out to similar representatives of
the military families living in houses.
Senator Hirono. I think it would be very important to have
the military families' voices be heard as you develop the
Tenants Bill of Rights.
There's been a lot of focus on the enforcement aspect of
it, and I just want to reiterate how important that element is.
I hope that you're going to put in place some very specific
ways that enforcement will occur, and that your tenants will
know what they need to do to kick off the kind of enforcement
that we would expect from each of you.
Secretary Esper, you noted--and I want to thank you, that
you visited Schofield barracks. When was that?
Secretary Esper. That was last summer, Senator.
Senator Hirono. So, you talked specifically with them about
their housing issues?
Secretary Esper. I can't recall at the time whether we did.
I think what you may be referencing is, earlier this last year,
in October, we were at a family conference, the Chief of Staff
and the Sergeant Major and I, and an issue came up about
Schofield barracks with regard to a particular home at which we
immediately dispatched a team to go look into the problem and
remediate it.
Senator Hirono. So, Secretary Wilson----
Thank you. I think that, with all of this--the
communications that will occur about housing, you're going to
hear more about these issues as you visit the bases. I think
it's really important for all the secretaries, in particular,
to see firsthand.
Secretary Wilson, you mentioned that, as you're developing
a way for people to withhold their rents, but if the rents go
directly to the housing agencies or entities, how are you going
to fix that with regard to withholding of rent?
Secretary Wilson. Senator, there's a couple of different
ways that we're looking at it, and this is one of the things
that gets into the implementation of the Bill of Rights. But,
one of the ideas is an escrow account that's decided at the
local level so that it's not a big administrative hassle to be
able to get your rent back if you have reported a problem and
it hasn't been taken care of.
Senator Hirono. Okay. Thank you.
Thank you, Mr. Chairman.
Chairman Inhofe. Thank you, Senator.
Let me make one last comment here. I want to be sure
everyone understands, this isn't going to be the last hearing
that we're going to have. Senator Reed and I have talked about
this. In fact, the next one--we've had--we've already had with
residents, we've had with government, but we haven't had a
hearing with the contractors, and that would be next.
So, for the purpose of this meeting, I'm going to ask
Senator Tillis, the Chairman of the Personnel Subcommittee, to
chair the remainder of the meeting.
Senator Tillis.
Now it goes to Shaheen.
Senator Tillis [presiding]. Senator Shaheen.
Senator Shaheen. Well, thank you, and thank you all for
being here.
I want to begin, first, to make sure I understood, because
I came in in the middle of Senator Tillis's questioning, but he
was suggesting that everybody go out and personally visit some
of the housing on bases that are under your control. Is that an
intent of everyone here, to do that?
Secretary Esper. Yes, ma'am, it is. I've visited a few
bases. The Chief of Staff has. The Vice Chief of Staff has. The
Under Secretary has, and, of course, undergoing right now is a
100 percent inspection of all of our housing units. It'll be
complete in about another week and a half or so.
Secretary Spencer. Same with Navy, Senator. I've been out
to three of the Hampton Roads communities, Lejeune, Cherry
Point. The rest of the offices also on the West Coast, down in
the Gulf, we are out there visiting. I know the Commandant and
the CNO are also underway.
Senator Shaheen. You're doing 100 percent of all of the
housing.
Secretary Spencer. By April 15, yes, ma'am.
Secretary Wilson. Senator, in my case, I personally went to
Tinker, MacDill, and Shaw. The Chief went to Maxwell and
Keesler. We also did a directed review of all military family
housing that was finished by the 1st of March, and the initial
results of that review are in the record.
General Neller. Senator, if I could just clarify for the
Marine Corps.
Senator Shaheen. Please.
General Neller. We can't invade the privacy of their
property without their permission. So, what our commanders have
been directed to do is to ask the member, both on and off base,
if they lease their property, not a homeowner, if we can visit
them. If they refuse, which is their prerogative, we would ask
that we could interview them over the phone about the condition
of their property. If they refuse that, then we'll try to
provide information, like, ``Do you have these phone numbers?
Here's the process. If you have an issue or if you've got a
problem with your landlord, tell me what the problem is, we'll
engage with the landlord.'' So, that's kind of where we are,
and it's going to take some time, and just like everyone at the
table, we've got members that live on other services' bases,
because we do schools together, and we have education together,
and we have joint bases together.
It's going to take some time to scope this out, although I
believe we all recognize, based on today in the hearing, that
we've known there were problems, this is not--that we thought
it was more isolated. I don't think we had an idea of the
magnitude. We'll have to scope and scale that to get back to
you in the next hearing.
Admiral Richardson. Senator, just to give you a sense of
that, we have a similar--a very similar program to the Marine
Corps, as you would expect. To date, we've done--on our way to
100 percent contact, we've--have 62,000 people contacted. Of
those 62,000, about 900 have requested--agreed to have visits
done to their homes, and those visits are in progress. So, that
gives you a sense of the scale involved.
Senator Shaheen. Thank you.
I want to go back to a report that came out before many of
you were in your positions. But, in 2015, the Pentagon's
Inspector General conducted a series of military housing
inspections to determine if facilities were in compliance with
DOD. What that report found was that there were significant
deficiencies in homes at five different bases, including
dwellings that were built or renovated under the MHPI [Military
Housing Privatization Initiative] program. Have any of you seen
that Inspector General's report? Or are you aware of it? Is
there anybody on the panel who has seen it and is aware of it?
Secretary Spencer. I'm not aware of it, Senator.
Secretary Esper. I've gone back and looked at a few
reports. I don't know if I've seen that exact one, but there
was a DOD one, and I think there was a GAO [Government
Accountability Office] one. I've looked through three or four
reports, Senator.
Senator Shaheen. General Milley?
General Milley. I'm aware of it. It came out in the summer
of 2015. I became the chief in August. A couple of months
afterwards, I looked through it and appropriate agencies within
the Army have been working on it. We can give you a full status
on it. Our Army IG tracked all of the actions and all the
deficiencies, and they've been working on it for a while. It's
clear it was not a good report. It was in the negative, and
there's a lot of work yet to be done.
I think Secretary Esper or Secretary Spencer, one of them,
said this entire issue is the cumulative effect of a decade or
almost 20 years of multiple problems. This is not going to be
solved in 60 days, 90 days, a single Bill of Rights. This is
going to be a concerted effort, multiple hearings over time.
It's going to take a considerable level of effort by all of us
at this table, the Congress, and all the chains of command and
the contractors, to get after this thing. It's going to take a
sustained level of effort.
Senator Shaheen. I certainly appreciate that. I think
everybody who's hearing about this issue understands that it's
taken us a long time to get here, so it's going to take us a
while to get out. I guess the question that I've got is, When
we've got an IG report like that that raises the issue, it's
then surprising to me to hear so many people who appear to be
unaware of the extent of the problem. I'm just trying to figure
out how we make sure that information from an IG report like
this gets carried over from one generation of leaders to the
next so that it continues to be addressed.
You spoke to the fact that the Army is continuing to
address what was in that report. Is that something that--again,
if people are unaware of it, clearly you haven't done anything
to address it. But, how do we make sure that this kind of a
report gets shared and addressed as leadership changes?
Secretary Wilson. Senator, in the case of the Air Force, we
track all open IG recommendations monthly, and we have
corrective action plans on every open IG recommendation. Our
standard now in the Air Force is that there must be a
corrective action plan for any DOD IG finding within 30 days,
and that our objective is that 90 percent of them be closed
within 12 months of the finding.
We were aware of some systemic problems, particularly
related to construction quality and a lot of the impact of
water and moisture and mold and so on at four of our bases,
that were very significant, and the construction on those
continues.
Secretary Spencer. Senator, same for Navy. While I said I
was unaware of the study, we have the same tracking system, and
if, in fact, they had not been remediated, they would have been
flagged. That's why I said I wasn't aware of it. But, we didn't
have any open issues in the system.
Senator Shaheen. Well, I guess, again, that's why I'm
puzzled. How do we flag this kind of an issue in the future so
that it doesn't get to this point? I appreciated the
opportunity to visit with you, Secretary Esper--I was struck
with your comments about your concern that people in the
military didn't feel like they could come to the military
leadership and raise these concerns until it got so bad. I know
that everybody's wrestling with this, but it seems to me we
need to try and figure out how to make sure that it doesn't
have to be a crisis or an article that appears in the newspaper
before we're aware and begin to address it.
Secretary Esper. Yes, Senator. I've met and spoken with
spouses and soldiers. I think that's--maybe one of their
biggest concerns is, what's the long-term, sustained effort to
make sure that this doesn't fall off our radar screens? That's
why, you know, we're all putting forward a number of ideas to
make sure we have the systems in place, that the chain of
command is in place, that we get the culture back to where it
was, where we're checking in on soldiers and families, wherever
they live.
Senator Shaheen. Thank you.
Thank you all very much.
Secretary Spencer. I mean, Senator, if I might add, the
Army has a best practice there, where they outsource lodging.
You've done a terrific job in that regard, and the checks and
balances and single points are there. So, we can pay attention
from even models in our own system.
Senator Shaheen. Thank you.
Senator Tillis. Well, now that I've had a chance to count
to ten, I'm going to be a little bit more--as we close out the
hearing. First off, Senator Shaheen, I believe--I don't know if
Secretary Wilson was able to answer your question about the
inspection, but I think that the Air Force is also reaching out
and making sure they're all given an opportunity. It's not that
they're barging in every home. If someone says that they don't
want their home inspected, then the presumption is, they're
satisfied with it, and many of them are. To the point that
Admiral Richardson made about the number of contacts versus the
number of inspections, I would assume that they have a
challenge that they want to look at.
Admiral Richardson. We try and characterize them, also,
Senator, as visits, really, not as formal----
Senator Tillis. Inspections.
Admiral Richardson.--inspections.
Senator Tillis. Right. That's actually why I wanted to make
sure that, you know, the families know they're not coming in
for some sort of home inspection. But, I appreciate the
outreach.
But, it's just these mechanical things that drive me crazy.
When you hear a--in one of the cases, when we were down at Fort
Bragg, someone saying that they answer--they do this survey to
figure out where they are, what the satisfaction level is. So,
they have this annual event, ``Come in, maybe win a $500
certificate.'' There's this pressure to have a positive
predisposition. Why? Because these housing providers want a
good score so that they get a bonus allocation. So, the
negative sort of--the cynic in me says the only reason that you
would ask somebody to sign on to a nondisclosure is, you want
to juice the system so that you get a better review. Maybe I'm
wrong. Happy to talk with a housing provider who thinks that
that practice needs to stay in place.
But, Secretary Esper and I, we were in this garage at the
Blood's house. These are people that have been in this house
for 4 years. They're near a range, so the ground shakes, nails
are going to pop, general maintenance is going to occur. I
understand all that. As long as the maintenance requests are
fulfilled over a reasonable period of time. But, we went into
the garage. Underneath--I don't know--it was the bathroom, I
think, Secretary Esper----
Secretary Esper. Yes, sir, it was underneath the--it was a
bathroom leak.
Senator Tillis. Yeah. So, I was the first one to crawl in
and kind of look at the ceiling that had been--I used to
drywall work when I was a teenager, and this thing was patched
2 days before. It doesn't take 48 hours for even a thick patch
of drywall to dry. It was wet. I went up there and stuck my
finger in it, and then the Secretary did the same thing
afterwards. What happens, here? Well, we've got this process,
where the tenant calls and says, ``I've got what looks like to
be a leak.'' The plumber comes, obviously didn't do their job,
followed by the drywall people, who had to have known that the
patch wasn't fixed. The drywall was wet. But, they did their
job by patching the drywall. I'm sure that that drywall
repairman reported, ``Pay me, because I did my job.'' But, that
person should have had the authority to say, ``It's not right
for me to do my job now, because the precursor to this work
hasn't been solved.'' That's what I mean, in terms of the
supply chain.
General Milley, I agree----
Secretary Esper. Senator, if--you know, just to kind of add
more color to the story, because you recall this. What she told
us, as well, is, you know, when she originally called the work
order in, what they told her was, ``Just hang around your house
for 3 days, and we'll come sometime during''----
Senator Tillis. Right.
Secretary Esper.--``the 3 days.''
Senator Tillis. Right. So, we give you a window. You know,
the norm now----
Secretary Esper. A 72-hour window, while she has a job to
go to.
Senator Tillis. Right. I thought that Secretary Esper was
dead-on. I mean, we should be treating this engagement with the
tenants the way you engage an Uber driver. Just after the
experience with the plumber, give them stars for whether or not
they fixed the problem. With the drywall person--in other
words, let that be the feedstock for determining whether or not
these housing providers are doing their job and providing
adequate service. That's the sort of modernization that we need
to focus on.
General Milley, I completely agree, it's going to take time
for us to make sure that we have the operational pieces in
place not to drift. I also--I believe that, as you all go
through this process, some direction, either from this
administration or past administrations, may have increased or
decreased the priority on housing. Let's bring that to the
fore. Any congressional action that caused a negative impact--
we're not going to find any one person responsible. We're all
responsible, probably, and we're all going to be responsible
for the fix.
But, the one exception I would take--General Milley and I,
I think, only have one exception, and it's favorite football
team. That's the only thing I've found, over time, that I can't
get him to turn around on. But, on this issue, I do take
exception to the notion that this is going to take a long time
to fix for those who are in unacceptable housing now. I don't
think that's what you meant.
So, there's two pieces. Number one, fix every single one of
them now. I think some of these housing providers are hoping
that the problem kind of goes away, because people get PCS'd,
then they'll wait for the next person to raise the same issue
again. So, let's separate the systemic--the operational changes
that we need to make, that will take some time, from the
immediate challenge to make sure every single person who's in
unacceptable housing either gets it up to standard or gets them
in another home.
General Milley. Senator----
Senator Tillis. I'll do----
I'm sorry, General Milley.
General Milley. That's correct, that--if it's life, health,
safety, it's immediate. But, the systemic problems, of which
there are many--the restructuring of these contracts, the
incentive fees, going to the Department of Justice, all these
other things that we're talking about--the structural issues,
that's going to take a considerable length of time and a lot of
gnashing back and forth between Congress and the Department and
the contractors and lawyers and so on and so forth.
But, the immediate life, health, safety, that's immediate,
that's chain of command. We've got to be all over it. I
believe, by the way, that the contractors that we've talked to,
the seven contractors, I believe they're committed to those
immediate fixes for life, health, safety.
Senator Tillis. I do, too.
Then, finally, again, this issue with the nondisclosure----
General Goldfein. Sir, can I----
Senator Tillis. General, go ahead.
General Goldfein. Yes, sir. I wanted to just talk to that
nondisclosure, a minute. Senator Cotton allowed us to speak
directly to airmen. There's another group out there that I
think we can't close this hearing without speaking directly to,
and that's parents of airmen. As a parent of an airmen--you
know, every Friday afternoon, we have 800 young men and women,
greatest treasure in our Nation's arsenal, walk across the
parade field of Lackland Air Force Base, and they become
airmen. At the end of that ceremony, the parents rush out of
the stands, and they entrust them to us. I don't--I'm--imagine
there's a lot of parents of airmen who are listening to this
hearing and (USAF) wondering whether the leadership of the
United States Air Force is taking care of their airmen. Or
future parents. I don't want to leave this hearing without
looking at them in the eye and telling them that we own this,
that we will take care of their children.
Senator Tillis. I'm sure the thing could be said straight
down the line.
So, I want to work with you all. I am serious about it--
maybe it's not as--I want to--I also want to tamp down red
herrings. If this nondisclosure practice no longer exists, this
is just an artifact, that's great. If there is any one housing
provider that thinks that they have a rational basis for not
rescinding these nondisclosure agreements over the next 30
days, I want to see them in my office.
I want to get to these--what I think are big--these big
rocks that we can turn over fairly quickly so that we can
really size the problem and address the problem.
Secretary Spencer. Then we'll close out.
Secretary Spencer. Senator, I will tell you right now that,
this afternoon, I will call all of our CEOs of the PPV. I have
to believe they're probably watching this testimony right now.
If they have any of these documents in their files, they're to
be accounted for and we're going to talk about them this
afternoon.
Senator Tillis. Thank you, and again, if they think they
have a rational basis for it, I want them to come in my office
and explain it to me.
Thank you all. I--you know, every single one of you, I've
had the privilege to vote for and support in your current
positions. I have the utmost confidence in you. I know that
you're going to go after this. I know that it's complicated.
And you should know that I will do everything I can to help you
get to a good place as quickly as possible.
With that, we will end the hearing. I think we will keep
the record open for a week. I'll also pass it over to Senator
Reed before we close out.
Senator Reed. I just simply want to thank all the
witnesses, not only for your testimony, but for your commitment
to fix the immediate problems and then stay on target for
months and months and months as we fix the systemic problems.
Thank you.
Senator Tillis. Again, thank you all. We will keep the
record open for any questions for the record. Please know that
my office is here to help you.
Thank you.
The meeting is adjourned.
[Whereupon, at 12:06 p.m., the Committee adjourned.]
[Questions for the record with answers supplied follow:]
Questions Submitted by Senator Jack Reed
lessons learned
1. Senator Reed. Secretary Esper, General Milley, Secretary
Spencer, Admiral Richardson, General Neller, Secretary Wilson, and
General Goldfein, given the number of housing problems we have seen,
clearly these 50-year agreements need to be reopened and rewritten to
have some teeth in them. I imagine each of you have already identified
some lessons learned and specific areas in privatized housing that need
significant improvement in these last few weeks. What are some specific
fixes that you all will direct given your positions, and what are some
recommended fixes that Congress can help implement in the NDAA
[National Defense Authorization Act]?
Secretary Esper and General Milley. The Army developed an Army
Housing Campaign Plan to ensure effective policies and strategic
direction are in place at every echelon of command. This plan sets the
responsibilities for command oversight and program accountability at
all Army installations. In addition, the Army has enhanced training
programs at a number of senior leader courses, including Garrison Pre
Command Course, Battalion/Brigade Pre Command Course, and General
Officer senior Commander Course to ensure leaders understand their
roles and responsibilities for soldier and family housing.
Secretary Spencer and Admiral Richardson. The Department of the
Navy (DON) has initiated numerous efforts to improve our oversight,
assign accountability across the program, and provide our sailors,
marines, and their families with the quality housing they deserve.
Specifically, as of the date of this hearing, the DON has:
Initiated a comprehensive review of all of our Public
Private Venture (PPV) housing agreements;
Met with the Naval Audit Service to discuss a
comprehensive review of the PPV program;
Directed unit level leadership make personal contact with
every servicemember who lives in a privatized housing unit to
personally observe any issues affecting the home and help resolve
outstanding issues;
Held more than 70 town halls at our installations to
learn more about the conditions at each housing project and conducted
an out-of-cycle resident satisfaction survey; and
Established Privatized Housing Crisis Action Teams at
installation and regional command headquarters to respond to
complaints.
Worked with PPVs to create a web/mobile application to
provide ease and visibility into the maintenance request reporting,
tracking, rating, and resolution process. We look forward to working
with Congress to identify additional authorities that may aid in
improving the experiences of our military families living in privatized
housing.
General Neller. The DON has initiated numerous efforts to improve
our oversight, assign accountability across the program, and provide
our sailors, marines, and their families with the quality housing they
deserve. Specifically, as of the date of this hearing, the DON has:
Initiated a comprehensive review of all of our Public
Private Venture (PPV) housing agreements;
Met with the Naval Audit Service to discuss a
comprehensive review of the PPV program;
Directed unit level leadership personal contact with
every servicemember who lives in a privatized housing unit to
personally observe any issues affecting the home and help resolve
outstanding issues;
Held more than 70 town halls at our installations to
learn more about the conditions at each housing project and conducted
an out-of-cycle resident satisfaction survey; and
Established Privatized Housing Crisis Action Teams at
installation and regional command headquarters to respond to
complaints. We look forward to working with Congress to identify
additional authorities that may aid in improving the experiences of our
military families living in privatized housing.
Secretary Wilson and General Goldfein. The Air Force has identified
multiple areas for improvement and has already begun taking action on
these programmatic initiatives. The improvement areas focus on: (1)
empowering residents; (2) integrating leadership; (3) improving
communication; (4) standardizing policy; and (5) improving oversight.
Examples of the actions taken by the Air Force include: establishing a
housing advocate position at each installation Housing Management
Office; leading the working group to develop a Tri-Service Resident
Bill of Rights; increasing the visibility of work order status to
residents; renegotiating the metrics for performance incentive fees to
provide installation commanders with a greater role in evaluating
project performance; improving the oversight of life/health/safety
related maintenance work; revising resident surveys to ensure they more
accurately reflect the true concerns of residents; working with the
Navy and Army to develop a common Tri-Service resident lease; and
adjusting manpower and skill sets at installation housing offices to
enhance Air Force oversight of project performance.
oversight
2. Senator Reed. Secretary Esper, Secretary Spencer, and Secretary
Wilson, how many people in each of your departments are dedicated to
the oversight of the Military Housing Privatization Initialize (MHPI)?
Secretary Esper. The Army has 234 housing professionals responsible
for oversight of the Military Housing Privatization Initiative.
Headquarters, Department of the Army has 13 authorizations at the
Office of the Assistant Secretary of the Army Installations, Energy and
Environment, and the Office of the Assistant Chief of Installation
Management; while Installation Management Command (IMCOM) has 221
Housing professionals at Headquarters IMCOM and at the Garrisons,
including 114 new housing professionals. The intent is to fully staff
all authorizations.
Secretary Spencer. As of the date of this hearing, the DON has a
total of 191 positions dedicated to MHPI oversight. For the Marine
Corps, there are approximately 46 people dedicated to the oversight of
MHPI, most of whom are at the region and installation levels. The
Marine Corps also funds approximately 17 additional positions at Naval
Facilities Engineering Command (NAVFAC) for their support and oversight
of the business agreements. The Navy has 128 positions that support the
MHPI program, 88 of these positions are at Commander, Navy
Installations Command (CNIC) and are mostly at the installation level.
The Navy funds an additional 40 positions at NAVFAC for additional
support and oversight of the business agreements.
Secretary Wilson. In addition to the Assistant Secretary of the Air
Force for Installations, Environment and Energy and two members of his
direct staff, the Air Force has 247 funded positions in our government
Housing Management Offices and 13 positions at the Air Force Civil
Engineer Center providing oversight of the Military Housing
Privatization Initiative portfolio. The Air Force is adding manpower in
fiscal year 2020 to add tenant advocate positions at the installations
to address existing shortfalls, and adding manpower to support 100
percent government inspection of change of occupancy and life/health/
safety work at all privatized housing sites.
environmental compliance
3. Senator Reed. Secretary Esper, Secretary Spencer, and Secretary
Wilson, private housing partners are required to comply with all
applicable federal, state, and local laws and regulations related to
environmental, health, and safety hazards. These terms are generally
put forth in their agreements with the Department of Defense (DOD) when
the MHPI project is established. What steps do each of you take to
ensure compliance with all applicable environmental, health, and safety
laws and regulations as it pertains to privatized housing?
Secretary Esper. Residential Communities Initiative (RCI) project
companies are required to adhere to all Federal, state, and local laws
and regulations to address environmental hazards. The Army is ensuring
garrisons inspect 100 percent of all homes where occupancy maintenance
/ change of occupancy maintenance have been completed and inspect 100
percent of all work / service orders relating to life/health/safety
issues. The Army and the RCI project companies will continue to inform
and educate soldiers and families about the health impacts of
environmental hazards, the resources available, and the methods to
report life/health/safety issues.
Secretary Spencer. PPV partners' obligations to comply with
applicable environmental, health, and safety laws and regulations are
generally covered in the project ground leases, and may be augmented by
Environmental Management Plans or other legal agreements. The DON
ensures compliance with these obligations by requiring PPV partners to
immediately notify the Installation Housing Office of any resident
concern involving asbestos, carbon monoxide, lead based paint, radon,
security, mold/water infiltration and pest infestation. PPV Partners
then document and address such environment, health and safety issues in
accordance with hazardous material management plans, emergency/urgent/
or routine maintenance service calls, and established action plans,
including applicable laws and regulations. The Navy and the privatized
housing partners will continue to inform and educate sailors, marines,
and their families about the concerns and health impacts of
environmental hazards, the resources available to tenants, and all of
the available methods to report potential risks.
Secretary Wilson. Air Force privatized housing project documents
require project owners to maintain all homes to industry standards as
detailed in approved operating plans and in compliance with all
environmental, health, and safety laws and regulations. The Air Force
has a comprehensive oversight program of Military Housing Privatization
Initiative projects and several tools at its disposal if a project
owner is not taking appropriate actions to comply with the transaction
documents. The Air Force required project owners to employ third party
code compliance review firms during the development phase of projects
to ensure designs met all required codes.
The Air Force employed Residential Construction Managers to inspect
construction for compliance with codes and industry practice during the
development phase. The Air Force performs checks on 10 percent of the
project owner's completed work and change of occupancy maintenance. The
Air Force is increasing these compliance checks to 100 percent of all
life/health/safety work and 100 percent of all change of occupancy
maintenance. Additionally the Air Force is working with project owners
to revise Performance Incentive Fees to make them a more effective
oversight tool. The Air Force is revising the structure of the
Management Review Committees and incorporating security, legal, and
medical input into these discussions.
satisfaction surveys
4. Senator Reed. Secretary Esper, Secretary Spencer, and Secretary
Wilson, what is the response rate for both military department-
administered and private housing partner-administered tenant
satisfaction surveys?
Secretary Esper. The completed Army-sponsored survey for 2018
reported a response rate of 38.5 percent (30,241 respondents out of
78,515 surveys sent). Response rates for the previous two years were
38.2 percent and 39.8 percent. The Army is completing an analysis of
the most recent survey, conducted in 2019. The RCI project companies
administer additional surveys at each touch point--move-in, move-out,
and at every maintenance service. These point-of-service surveys are
administered via survey cards, independent third-party survey firms
hired by the RCI project companies, or electronic survey's through the
property management operations system. The response rates vary by, and
are maintained, at the installation level.
Secretary Spencer. The average response rate for the DON was over
45 percent in 2018.
Secretary Wilson. The only survey that is currently completed is
the annual resident satisfaction survey that is administered by a third
party with the project owners. The response rate for the annual
resident satisfaction survey in 2018 was 48.3 percent. The response
rate in 2017 was 46.4 percent.
lead-based paint (lbp)
5. Senator Reed. Secretary Esper, what have been residents'
response to the Army's efforts over the past six months to address
concerns about lead-based paint (LBP) in family housing?
Secretary Esper. The Army has not received a large amount of input
from residents in response to our efforts over the past six months to
redress concerns about lead-based paint (LBP) in family housing. Some
feedback indicates that residents appreciate the rapid response to
their concerns and are pleased with remediation efforts. Most families
welcomed the Army's additional inspection of their homes by EPA-
certified staff as well as the sharing of the inspection results. The
Army received a few negative responses on individual emails sent
through the Chain-of-Command where a couple of partners did not confirm
the visual findings with testing before they remediated areas
identified by visual inspection. Additionally, some residents noted a
lack of urgency in mitigating the areas identified during the visual
inspections.
6. Senator Reed. Secretary Esper, the Army recently conducted a
``90 enhanced review'' of environmental hazards, to include LBP, but
only surveyed 10 percent of homes with LBP. Of that 10 percent, the
Army found one or more positive indicators of LBP in over 60 percent of
those homes. How could you possibly characterize only a 10 percent
sampling of homes as an ``enhanced'' review and what is the Army doing
to ensure all problems are being addressed, given the 60 percent hit
rate at just those 10 percent of homes?
Secretary Esper. The visual assessments were a snapshot in time of
existing conditions in the homes built prior to 1978 which we treat as
containing some amount of LBP. USACE concluded the Army and the RCI
project companies had procedures in place to manage hazards in the
interior of the homes between occupants. Based on year built, 1978 or
before, we considered all of the homes to contain LBP. The 10 percent
inspection allowed us to confirm what we basically already knew. We
improved our monitoring program to manage potential hazards by:
ensuring environmental management plans are reviewed, approved, and
followed at each installation; increased Army staff inspections of all
homes to include the interior and exterior; monitored and ensured
visual inspection findings are tested/mitigated; established a system
for tracking inspections in Defense Occupational & Environmental Health
Readiness System--Industrial Hygiene (DOEHRS-IH), and fostered an
understanding of potential environmental hazards in housing through
resident education as well as housing and garrison staff.
oversight and funding
7. Senator Reed. Secretary Esper, Secretary Spencer, and Secretary
Wilson, the Government Accountability Office (GAO) reported in March of
2018 that routine maintenance is often not adequate due to low funding.
What is each of the military departments' long-term strategy and
approach to ensuring maintenance is being conducted?
Secretary Esper. The Army is enhancing quality assurance and
oversight of maintenance. The Army is reviewing maintenance and work
order histories to validate long-range plans for forecasted maintenance
work, and to assess and improve the quality of preventive maintenance.
We are using the findings to assess the RCI projects Capital Repair and
Replacement Plans and operating budgets to ensure the RCI project
companies are planning and budgeting appropriately for maintenance.
Secretary Spencer. As the DON transitioned from oversight and
monitoring of initial privatized housing project development to long-
term project sustainment, we held annual meetings with all of the PPV
partners to identify commonality in long-term sustainment financial
modeling. We have since transitioned to annual sustainment meetings by
project, culminating in a strategic planning document covering up to
five years. Our projections for the next five years indicate there is
sufficient funding available to accomplish our objectives. At the
headquarters level, PPV partner leadership meets at least annually with
CNIC, Marine Corps Installations Command (MCICOM), and NAVFAC to
collaborate and address sustainment related concerns. In the field, we
conduct annual condition assessment site visits and spot checks of
maintenance during home visits. We plan to increase these spot checks
and follow up with residents in the near-term to ensure adequate
maintenance is being conducted.
Secretary Wilson. Air Force privatized housing projects generally
have adequate funding to address routine maintenance. Annual operating
budgets identify funding levels for day-to-day maintenance and must be
approved by the Air Force. Deficiencies in routine maintenance are
normally not the result of inadequate operating funds for maintenance.
However, long-term forecasting performed by the Air Force indicates
that several projects are experiencing or will experience sustainment
funding shortfalls, and several more projects are projected to have
insufficient funds to perform large-scale reinvestment in the housing.
The lack of adequate sustainment funding and reinvestment funding can
create maintenance challenges.
In addition to approving funding for day-to-day maintenance in
annual operating budgets, the Air Force reviews and approves the
project sustainment plans for maintenance and repair efforts that are
beyond day-to-day maintenance.
The Air Force also conducts annual short and long range financial
forecasts and initiates restructure negotiations for projects that are
anticipated to not have sufficient funding for 100 percent of
operational needs, debt servicing and sustainment requirements and an
acceptable level of reinvestment over the life of the project.
In the long term the Air Force will need to restructure several of
the projects to ensure sufficient sustainment and reinvestment.
Additionally, the Air Force is increasing manpower at the installation
Housing Management Offices to provide additional oversight of the
maintenance function, to include 100 percent checks on all health and
safety work and 100 percent inspection of all change of occupancy
maintenance.
__________
Questions Submitted by Senator Richard Blumenthal
accountability for privatized housing companies
8. Senator Blumenthal. Secretary Esper, Secretary Spencer, and
Secretary Wilson, have you developed a Housing Action Plan with both
immediate actions and long term initiatives? Please submit this plan
for the record.
Secretary Esper. The Army has developed a Housing Action Plan with
actions completed to date, ongoing action items, and future actions.
The Housing Action Plan was submitted into the record.
Secretary Spencer. DON is actively working with OSD, Army and Air
Force on initiatives including but not limited to common lease language
and a resident bill of rights to create a more consistent privatized
housing experience across the DOD. In addition, the DON is executing
short- and long-term actions to increase oversight of PPV housing
through routine boots-on-the-ground and resident follow-up, spot
checks, continued town halls, education, increased leadership
engagement, and continued communications with all stakeholders.
Examples of specific Navy and Marine Corps efforts include:
Navy is reviewing long-term manning strategies to
increase oversight; revising governing Navy Instructions for housing
oversight; developing a quality assurance plan for partner
accountability; and increasing the number of Housing Service Center
staff to ensure support for sailors in privatized housing.
Marine Corps plans to conduct an independent out-of-cycle
resident satisfaction survey this Fall; and Marine Corps housing
representatives at the Headquarters level, along with our PPV partners,
will visit each installation to update the housing staff on upcoming
housing changes and performance expectations.
Additionally, we are working with PPV partners to better
address reporting, tracking, rating, and resolution, to include the
integration of mobile technology that not only allows tenants to
contact and track their service requests, but also provides Navy and
Marine Corps leadership with real-time data about issues and trends.
Secretary Wilson. The Air Force has developed an action plan to
improve the Military Housing Privatization Initiative Program. The plan
is attached for the record.
9. Senator Blumenthal. Secretary Esper, Secretary Spencer, and
Secretary Wilson, do you commit to holding town halls to solicit input
and feedback from military families? Will you release a schedule of
these town halls in advance to this committee and the public?
Secretary Esper. The Army is committed to holding town halls to
solicit input and feedback from families. The Garrison Commanders will
host town halls quarterly with the RCI partners and installation
housing support staff in attendance for support and participation.
Notice of town halls occurs at the installation level. While we require
holding these town halls, the pending town halls are not tracked at the
HQDA level.
Secretary Spencer. In February 2019, Navy and Marine Corps
leadership directed installation commanding officers to contact 100
percent of privatized housing residents informing them how to raise
issues with their homes. As of July 19, 2019, Commanding Officers have
conducted more than 70 town hall meetings to learn more about the
conditions at each housing project and hear privatized housing
residents' concerns first-hand. Town hall meetings are one of many on-
going efforts the Navy and Marine Corps are employing to solicit input
and feedback on how to improve the privatized housing experience.
Secretary Wilson. Installation commanders already routinely conduct
town hall meetings with the privatized housing residents to solicit
input and feedback. The frequency of town halls is determined by the
installation commander based on need; therefore, there is no master
calendar of town halls. To further improve resident feedback, the Air
Force will be directing installations to stand up Resident Councils to
increase the avenues for continued resident input and direct input to
the chain of command.
10. Senator Blumenthal. Secretary Esper, Secretary Spencer, and
Secretary Wilson, do you agree that services should require independent
monitoring of maintenance work orders, commission external air quality
inspections, and use external companies to conduct satisfaction
surveys? How will you enhance independent oversight of housing on
military installations?
Secretary Esper. The Army agrees that independent monitoring of
maintenance work orders, the commission of external air quality
inspections, and use of external companies to conduct satisfaction
surveys should be used when feasible. The Army's privatized housing
project companies are required to comply with all applicable federal
and state laws and regulations, including those that regulate housing
and response to environmental hazards. The U.S. Army Corps of Engineers
conducts ground lease inspections, sampling of homes for inspection,
and reviews environmental plans. The Army has established a tracking
system for inspections in the Defense Occupational & Environmental
Health Readiness System--Industrial Hygiene (DOEHRS-IH) with the Army
Public Health Center. The Army has increased project reviews and
development reviews at the HQDA level. Additionally, the Army has
contracted with a financial audit team to conduct analysis on the RCI
project companies. The Army has introduced enhanced quality assurance
procedures to be conducted by Army housing specialists that includes
increased inspections of maintenance occurring between occupants to
ensure families moving into homes have no outstanding maintenance
issues.
Secretary Spencer. The DON agrees that independent monitoring of
maintenance work orders may be an effective tool in certain
circumstances. Air quality is one component of an indoor environmental
quality assessment. In privatized housing, the PPV partners are
required to investigate and resolve indoor environmental quality
issues, including air quality. Resident satisfaction surveys have
always been, and will continue to be, conducted by external companies.
Secretary Wilson. The Air Force does agree and performs, encourages
or requires these actions. Specifically the Air Force requires the
government housing management offices to conduct 10 percent oversight
of maintenance work orders and will increase this to 100 percent checks
on all health and safety work and 100 percent inspection of all change
of occupancy maintenance. Air Force policy requires air quality
inspections in housing where requested by competent medical authority.
Where air quality inspections are requested by competent medical
authorities, the Air Force agrees these inspections should be completed
by an external accredited testing firm. Last, the Air Force encourages
the use of third party satisfaction surveys. Currently, the annual
resident satisfaction survey is conducted by a third party surveyor.
The Air Force is working with OSD to review the resident satisfaction
survey to ensure the integrity of the process.
The Air Force has identified multiple areas for improvement to
enhance independent oversight of privatized housing and has already
begun taking action on these programmatic initiatives. The improvement
areas focus on: (1) empowering residents; (2) integrating leadership;
(3) improving communication; (4) standardizing policy; and (5)
improving oversight. Examples of the actions taken by the Air Force
include: establishing a housing advocate at each installation Housing
Management Office; leading the working group to develop a Tri-Service
Resident Bill of Rights; increasing the visibility of work order status
to residents; renegotiating the metrics for performance incentive fees
to provide installation commanders with a greater role in evaluating
project performance; improving the oversight of life/health/safety
related maintenance work; revising the form of resident surveys to
ensure they more accurately reflect the true concerns of residents;
participating in the working group effort led by the Navy to develop a
common Tri-Service resident lease; and adjusting manpower and skill
sets at installation housing offices to enhance Air Force oversight of
project performance.
11. Senator Blumenthal. Secretary Esper, Secretary Spencer, and
Secretary Wilson, what other accountability measures--outside the chain
of command--should be employed?
Secretary Esper. The Army has taken other accountability measures
outside of the chain of command. We have increased inspections outside
the chain of command with USACE conducting inspections of ground
leases, sampling homes for inspection, and reviewing environmental
plans. The Army has established a tracking system for inspections in
Defense Occupational & Environmental Health Readiness System--
Industrial Hygiene (DOEHRS-IH) with the Army Public Health Center. The
Army has increased project reviews and development reviews at the HQDA
level. Additionally, the Army has contracted with a financial audit
team to conduct analysis on the RCI project companies.
Secretary Spencer. The DON is taking steps to improve our oversight
of the privatized housing program, assign accountability, and provide
our sailors, marines, and their families with the quality housing they
deserve. To that end, as of the date of this hearing, the Department
has:
Initiated a comprehensive review of all of our privatized
housing agreements.
Directed the Naval Audit Service to perform a
comprehensive review of the PPV program.
Established Privatized Housing Crisis Action Teams at
installation and regional command headquarters to respond to
complaints.
Directed an independent out-of-cycle resident
satisfaction survey at all PPV locations.
Established the Sustained Housing Improvements Program to
continue to address long-term goals for program improvement.
Secretary Wilson. The Air Force Inspector General's Office has
engaged in reviews of privatized housing oversight, in addition to
multiple targeted audits from the Air Force Audit Agency. Any matters
that may involve alleged criminal conduct are referred to the
appropriate office or agency for investigation. The Air Force is also
working to provide residents with the following direct measures: (1)
the Air Force is adding a resident advocate position in the government
Housing Management Offices to provide advice, education, and support
and to advocate on their behalf with landlords; (2) the Air Force is
working with project owners and the other services to develop a dispute
resolution process to give residents the right to have housing issues
heard and resolved by a neutral third party; and (3) a toll-free help
line has been established and widely advertised for residents to report
their concerns with privatized housing. Messages to the toll-free help
line are received by the Air Force Civil Engineer Center, coordinated
for further action with the project owner, and tracked to satisfactory
completion.
12. Senator Blumenthal. Secretary Esper, Secretary Spencer, and
Secretary Wilson, will you commit to publicly release the findings of
your respective audits? When do you expect that these audits will be
complete?
Secretary Esper. The Army is committed to releasing the findings of
our audits to the extent the report is publicly releasable. The audits
will take place during fiscal year 2020. The Army expects the audit
results to be available by fiscal year 2021.
Secretary Spencer. The DON directed the Naval Audit Service to
perform a comprehensive review of the DON PPV program. The DON is
committed to improving transparency and will release the findings of
our audits to the extent the auditing agency determines the report is
publicly releasable.
Secretary Wilson. The Air Force Inspector General's Office
completed a comprehensive review of privatized housing oversight in
April 2019. This report is pending release.
13. Senator Blumenthal. Secretary Esper, Secretary Spencer, and
Secretary Wilson, do you believe that some of these private contractors
may have engaged in fraud? If fraudulent activity is uncovered, what
action will you take?
Secretary Esper. The Army has no information that any private
contractor is currently engaging in fraudulent behavior. Between 2010
and 2015, Pinnacle American Management Services, the property manager
for four Army privatized housing projects (operating on Forts Belvoir,
Benning, Irwin, Moffett Field, Camp Parks, the Presidio of Monterey /
Ord Military Community, and the Naval Post Graduate School), was
terminated by the respective project companies for multiple acts of
fraud. An investigation by the Department of Justice resulted in
Pinnacle AMS entering into a deferred criminal prosecution agreement
and paying a $1.3 million fine. Pinnacle AMS also paid approximately
$40 million in damages to the RCI project companies as compensation for
its fraudulent behavior.
Secretary Spencer. As of the date of this hearing. the DON is not
aware of any fraud allegations against any of its PPV partners in
connection with Navy or Marine Corps privatized housing. The DON will
refer any potential fraudulent activity by its PPV partners in
connection with Navy or Marine Corps housing to the Naval Criminal
Investigative Service or Acquisition Integrity Office, as appropriate,
for a determination of whether to refer such activities to the
Department of Justice
Secretary Wilson. The Air Force has ongoing investigations related
to potential fraudulent activity. The Air Force takes allegations of
fraud seriously and all allegations are referred to the appropriate
office or agency for investigation. The Air Force does not comment on
ongoing investigations. If fraudulent activity is uncovered, the Air
Force will take the appropriate actions.
14. Senator Blumenthal. Secretary Esper, Secretary Spencer, and
Secretary Wilson, will you refer any evidence of fraud or other
criminal activity to the Department of Justice?
Secretary Esper. Yes. Any evidence of fraud or other criminal
activity reported will be coordinated with the appropriate law
enforcement and legal authority to include the Department of Justice.
Secretary Spencer. The Department of the Navy will refer any
potential fraudulent activity by its PPV partners in connection with
Navy or Marine Corps housing to the Naval Criminal Investigative
Service or Acquisition Integrity Office, as appropriate, for a
determination of whether to refer such activities to the Department of
Justice.
Secretary Wilson. The Air Force has referred all allegations of
fraud or criminal activity to the Air Force Office of Special
Investigations. The Air Force Office of Special Investigation works
closely with local law enforcement, the FBI, and the Department of
Justice.
15. Senator Blumenthal. Secretary Esper, Secretary Spencer, and
Secretary Wilson, do you agree that military services should withhold
BAH [basic allowance for housing] payments on behalf of servicemembers
when maintenance issues are unresolved? Do you require statutory
authority to implement this reform?
Secretary Esper. The Army supports ensuring that military tenants
can withhold their rent, consistent with applicable law, if a landlord
is not providing housing that is safe and habitable. The Army does not
see the need for legislation regarding rent withholding.
Secretary Spencer. The DON supports ensuring that military tenants
have the ability to withhold their rent, consistent with applicable
law, if a landlord is not providing housing that is safe and habitable.
Statutory authority and an operational agreement between services,
PPVs, and PPV bondholders may be required to implement this reform.
Secretary Wilson. As part of the ongoing effort to develop a
Resident Bill of Rights and a common lease, the Air Force is working
with the other Services and project owners to develop a dispute
resolution process to give residents the right to have housing issues
heard and resolved by a neutral third party. As part of that process,
this may include the right to have rent payments segregated and not
used by the property owner or property manager pending the outcome of
the dispute resolution process. Resolution in favor of the resident may
include a reduction in rent or an amount to be reimbursed or credited
to the resident. The Air Force believes this reform can be achieved
within existing statutory authorities.
16. Senator Blumenthal. Secretary Esper, Secretary Spencer, and
Secretary Wilson, will you commit to making public the contracts
between privatized housing contractors and the Department of Defense?
Secretary Esper. The Army is committed to releasing these contracts
to the extent doing so is consistent with the Freedom of Information
Act and the Privacy Act.
Secretary Spencer. The DON commits to releasing these contracts to
the extent that such release is consistent with the Freedom of
Information Act.
Secretary Wilson. The Air Force is not opposed to making public the
agreements between the Air Force and the privatized housing project
owners, subject to appropriate exemptions as may be applicable under
law.
17. Senator Blumenthal. Secretary Esper, Secretary Spencer, and
Secretary Wilson, are there any current contracts you are considering
renegotiating or have you issued any fines to private housing
companies? If so, which companies have been fined?
Secretary Esper. The Army is not currently considering
renegotiating any housing privatization contracts, but is negotiating
changes to the criteria used for determining incentive fee payments by
housing privatization companies to their property managers. The Army
has no authority to fine private housing companies.
Secretary Spencer. The DON has initiated dialogue with the PPV
partners to improve the property management incentive fee criteria, and
we continue to discuss this issue at the monthly/bi-monthly partnership
meetings. To date no business agreements have been amended or
renegotiated. No fines have been issued to private housing companies.
Secretary Wilson. The Air Force is negotiating for a change in the
structure of the Performance Incentive Fee metrics with the project
owners, to include more stringent performance requirements and greater
commander influence. Additionally, when financially-strained projects
come to the Air Force for restructure, the Air Force has used the
opportunity to re-negotiate key financial terms--often resulting in
reduced or delayed fees and profit to project owners--and will continue
to do so with future restructures. While the transaction documents do
not allow for the Air Force to issue fines, the Air Force has denied
the payment of some Performance Incentive Fees when project owners have
not met the required performance metrics.
18. Senator Blumenthal. Secretary Esper, Secretary Spencer, and
Secretary Wilson, will you commit to soliciting feedback and input from
military families and Senate offices during the drafting process for
the Tenant Bill of Rights?
Secretary Esper. The Army remains committed to taking care of
soldiers and families. A part of this commitment is to solicit input
from soldiers and their families, which we are in the process of doing
now with the Tenant Bill of Rights.
Secretary Spencer. The DON welcomes feedback and input from all
stakeholders as we work with OSD and the other military services to
develop a resident bill of rights. The General Counsel of the Navy and
his counterparts from OSD and the other military services plan to meet
with Professional Staff Members and Counsel for the Senate Armed
Services Committee, to capture feedback on the document. OSD will
circulate a draft of the resident bill of rights to current privatized
housing residents. Residents will have 30 days to provide feedback.
Secretary Wilson. The Air Force has solicited feedback and input
from the SASC and military families for the Tenant Bill of Rights. OSD
solicited and has received input to the Tenant Bill of Rights from
military residents.
health effects
19. Senator Blumenthal. Secretary Esper, Secretary Spencer, and
Secretary Wilson, how are you working with the Defense Health Agency
(DHA) to address health and safety hazards in military housing?
Secretary Esper. The Army's Office of the Surgeon General meets
regularly with the Defense Health Agency and sister Services' public
health organizations to synchronize the public health response to
concerns regarding health and safety in military housing. This is done
via a Housing and Health Integrated Product Team (IPT) chaired by the
Office of the Deputy Assistant Secretary of Defense for Health
Readiness Policy and Oversight.
Secretary Spencer. The DON and the other military services have
been working with OSD via a Housing and Health Integrated Product Team
(IPT) to address health and safety risks in housing. OSD Sustainment,
Facilities Management, has addressed overall management of housing
resident concerns--whether housing functioning or safety and health
hazards; OSD Readiness, Force Safety and Occupational Health, has
addressed safety and health risk assessment procedures; and OSD Health
Affairs, Health Readiness Policy and Oversight, has addressed public
health guidance and clinical care guidelines for military families
reporting health concerns to their health care provider. These efforts
have resulted in a draft ``Managing Health and Safety Risk in Housing''
letter that OSD will issue in the near future.
Secretary Wilson. The Air Force's Office of the Surgeon General
meets regularly with the Defense Health Agency and sister Services'
public health organizations to address and synchronize the health and
safety hazards in military. This is done via a Housing and Health
Integrated Product Team (IPT) chaired by the Office of the Deputy
Assistant Secretary of Defense for Health Readiness Policy and
Oversight.
20. Senator Blumenthal. Secretary Esper, Secretary Spencer, and
Secretary Wilson, do you think that TRICARE providers should be asking
patients about the living conditions during the appointments--for
example, asking military families whether there is mold in their home,
or whether they live in a home built before 1978 that may contain
asbestos?
Secretary Esper. DOD healthcare providers should screen for
preventive health and environmental exposures, as they are doing now.
Health care providers are skilled at eliciting symptoms and determining
the causes of illness. When signs and symptoms point to potential
household environmental causes, then providers should pursue lines of
questioning and testing to identify these causes in the home or
elsewhere.
Secretary Spencer. The DON is in the process of implementing a new
(18 March 2019) policy for Military Treatment Facilities evaluating
patients who attribute their health issues to housing-related
environmental exposures. This new policy will give medical providers
the ability to consult with public health experts who can now liaise
with Housing Service Centers and further investigate the environmental
conditions in particular homes.
Secretary Wilson. DOD believes providers should screen for
preventive health and environmental exposures, as they are doing now.
Health care providers assess for symptoms and determine causes of
illness. When signs and symptoms point to potential household
environmental causes, providers pursue lines of questioning and testing
to identify the source of the symptoms. If the healthcare provider
determines there is justification to recommend a housing assessment,
they will notify the patient and provide them with contact information
for installation Preventive Medicine Services/Public Health
Departments, who in turn notify the appropriate installation housing
authority.
21. Senator Blumenthal. Secretary Esper, Secretary Spencer, and
Secretary Wilson, will you commit to creating a database of military
members who lived in houses with known mold or lead paint problems?
Will you consider legal action in civil court to ensure private
companies are paying the health care costs incurred by living in
substandard and unhealthy housing?
Secretary Esper. In support of the Headquarters, Department of the
Army Housing Campaign Plan, the U.S. Army Medical Command (MEDCOM)
established a Housing Environmental Health Response Registry to address
Army Family concerns about housing and related health issues, provide
residents with additional information on housing environmental health
hazards, assist them in seeking medical care for any housing-related
illnesses or concerns, and allow MEDCOM to share its concerns with Army
leadership. As of 21 June 2019, 183 households have enrolled in the
registry with 84 households reporting hazards such as mold, lead,
dampness, water quality, or other. Seventy four (74) households
requested additional information and asked to speak to a public health
representative from the Army Public Health Center. Of these, 72 have
been contacted with 25 follow-ups completed to date. The Army will
consider the option of affirmative litigation against private companies
to recoup U.S. Army health care costs incurred because of substandard
base housing; however, the ultimate decision rests with the Department
of Justice, pursuant to 28 U.S.C. 516.
Secretary Spencer. The DON and our PPV Partners maintain multiple
databases (e.g., eMH, Yardi, Maximo, Realpage) that track residents and
the trouble calls/maintenance performed in their homes. If mold or
lead-based paint is identified, it is entered into these systems for
tracking and resolution. Medical conditions for servicemembers and
family members are documented in the medical treatment record. The DON
is not currently considering legal action in civil court to ensure
private companies are paying the health care costs incurred by living
in substandard and unhealthy housing.
Secretary Wilson. We currently have a database already in use.
Information gathered from these calls is placed into the Defense
Occupational and Environmental Readiness database. The Government
cannot file a civil court action under a private lease on behalf of a
tenant.
22. Senator Blumenthal. Secretary Esper, Secretary Spencer, and
Secretary Wilson, how will you share information with VA about medical
conditions that could result from the exposure to environmental hazards
in military housing?
Secretary Esper. All housing related medical conditions are
documented in a soldier's or beneficiary's electronic health record in
accordance with appropriate diagnostic coding practices. Service
Treatment Records for VA eligible beneficiaries are transferred from
the Army to the VA along standard transition practices. The DOD/VA
Deployment Health Working Group meets monthly and on an ad hoc basis to
discuss issues that relate to servicemembers and veterans.
Environmental exposures are frequent topics.
Secretary Spencer. Interagency coordination is important to ensure
we address the needs of our current and former sailors and marines. As
part of the Health Executive Committee, the DON, in conjunction with
DOD and the other Military Services, meets on a monthly basis with the
Department of Veterans Affairs (VA) to address exposure-related topics.
This work is done through the Deployment Health Work Group, which has
both Navy and Marine subject matter experts engaged in this very
important collaborative work. Medical conditions caused by exposure to
toxic substances can be compensable and would be rated under the VA
Schedule for Rating Disabilities.
Secretary Wilson. All housing related medical conditions are
documented in a beneficiary's electronic health record in accordance
with appropriate diagnostic coding practices. Service Treatment Records
for VA eligible beneficiaries are transferred from the Air Force to the
VA along standard transition practices.
__________
Questions Submitted by Senator Joe Manchin III
leadership accountability
23. Senator Manchin. General Milley, Admiral Richardson, General
Neller, and General Goldfein, the chain of command fills critical roles
and responsibilities in ensuring the wellbeing of soldiers, sailors,
marines, and airmen under their command. You all testified to the
effect that there has clearly been a failure of leadership at some
level resulting in the housing quality issues we are seeing. There has
also been a significant failure in the leadership of the privatized
housing contractors who bear legal responsibility through their
contracts to provide the agreed upon product quality. To date, I have
not heard of any military commander being relieved of command, any
contractor being terminated from their company, or any contracts being
rescinded. Has there been any individual or entity who has faced any
repercussions to date over the delivery of a clearly substandard and
dangerous product to our servicemembers?
General Milley. We identified there is a lack of knowledge about
housing issues and how to address these housing issues within the Army.
There has also been a shortage of personnel trained to address these
housing issues. We took measures to eliminate these deficiencies by
improving training and certification plans for Garrison Commanders, DPW
staff, and Army Housing staff. The Army incorporated into the Garrison
Pre-Command course specific training in housing program oversight,
quality assurance, legal documents, financial accounts, and development
planning. The Army developed a chain-teaching program of these topics
for commanders and command sergeants major currently in command. The
Army is increasing the number of Quality Assurance and Quality Control
personnel across its installations by 114 to increase its oversight of
all housing maintenance. The Army is also currently updating the
Portfolio Asset Management (PAM) handbook to further reinforce
oversight responsibilities. The PAM is a detailed portfolio asset
management Army publication, which includes detailed roles and
responsibilities of the Army's RCI portfolio and asset management
functions at each echelon. The ground lease and partnership agreements
are the primary documents that our partnerships operate under and
provide the Army with a means to compel action to resolve substandard
performance issues. Collectively, they prescribe the process for the
Army to compel the poorly performing property managers, developers, and
general contractors, and they provide the process for removing an RCI
privatized partner from their role as the partnership's managing
member. If an RCI private company and its lender fails to adhere to
material terms of the ground lease and do not take satisfactory steps
to cure the company's non-compliance, the Army may terminate the ground
lease and re-acquire ownership of the privatized housing located within
the terminated leasehold.
Admiral Richardson. The Navy has not relieved an Installations
Commanding Officer due to the condition of privatized housing. We are
educating leaders on how they can forcefully and effectively assist
when established processes are not providing our servicemembers and
their families with satisfactory results in PPV housing. Base officials
leverage all available options to hold PPV partners accountable,
including the adjustment of incentive fees, the authority to issue cure
notices, and ultimately, the ability to replace the property management
company if necessary.
General Neller. Concerns raised by our residents has caused the
Marine Corps to place greater emphasis on the quality of maintenance
repairs, and greater responsiveness to residents concerns. Accordingly,
the Marine Corps has augmented its staff through filling current
vacancies faster and activating Operational Support Reservists.
Additionally the Marine Corps has pushed for greater involvement at the
Installation Commanding Officer level. It is also notable that in some
cases partners have changed their staffing structures to include
additional personnel positions dedicated to service, maintenance and
oversight.
General Goldfein. At Tinker AFB, Balfour Beatty Communities has
terminated several employees in response to poor performance issues
raised by the Air Force.
----------------------------------------------------------------------------------------------------------------
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Regional Property Manager Terminated 22 Jun 16
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Vice President Terminated 6 Jul 16
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Work Order Administrator Terminated 22 Jul 16
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Maintenance Supervisor Terminated 9 Aug 16
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Community Manager Terminated 27 Jul 17
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Community Manager Terminated 7 Sep 18
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Maintenance Supervisor Terminated 5 Oct 18
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Regional Property Manager Terminated 3 Dec 18
----------------------------------------------------------------------------------------------------------------
At Maxwell AFB, Hunt Communities replaced the management in 2016 in
response to Air Force identified performance issues.
At the US Air Force Academy, Hunt Communities terminated one
employee and a criminal warrant was issued for a former Hunt employee
over the embezzlement of funds from the project. The Hunt corporate
entity repaid to the amount of the embezzled funds back to the project.
The activity was identified through Hunt's routine oversight audits.
The Project Manager for AMC West (which includes Tinker AFB, Travis
AFB and Fairchild AFB) was replaced in 2017 at the direction of the Air
Force in part due to concerns with management of this project.
24. Senator Manchin. Secretary Esper, Secretary Spencer, and
Secretary Wilson, your testimony highlighted a previous lack of
engagement with the housing companies as a direct contributor to the
problems we are seeing today. How are you now directing your respective
services to engage with the companies that manage base housing
contracts?
Secretary Esper. We now have a Board of Directors meeting with the
Military Housing Privatization Initiative (MHPI) partner CEOs
quarterly. HQDA hosts a MHPI partner working group meeting quarterly.
The Army's Senior Leaders are conducting monthly meetings with the all
RCI project companies. Garrison Commanders are meeting with their
installation RCI project companies regularly. Garrison Commanders are
hosting quarterly town halls with their residents and the RCI project
company in attendance. The installation Army Housing Staff meet with
the RCI project company routinely to discuss findings of inspections;
assess the timeliness, quantity, and quality of work orders; review
reports of life, health, or safety concerns; and collaborate to ensure
all reported problems and issues are heard and resolved.
Secretary Spencer. At the Secretariat level, DOD and the Service
Secretaries are meeting quarterly with the privatized housing company
executives to work on strategic initiatives including a resident bill
of rights, common lease terms, potential changes to incentive fee
criteria, improvements to government oversight, improvements to the
frequency and quality of partner reporting of key metrics, and
partners' use of mobile phone applications for reporting/tracking work
orders. In addition, Navy and Marine Corps senior leadership have been
actively engaged in monthly DON/PPV Partner meetings. The Navy and
Marine Corps has notified its PPV partners of its intent to update the
requirements and training for Installation Commanding Officers, to
include required increased engagement with the PPV partners. PPV
partners are sharing additional performance metrics with installations
and regions to improve communications and streamline issue resolution.
Increased quality assurance home visits and resident follow-up will all
lead to greater coordination between PPV partners, housing office, and
installation leadership. The Navy and Marine Corps will continue annual
meetings with PPV Partner Senior Management, the frequency of which may
increase to foster greater communications.
Secretary Wilson. Secretary Wilson, Gen Goldfein, and Chief Wright
will send a letter to all command teams emphasizing the importance of
installation leadership being engaged with privatized housing matters.
The Assistant Secretary of Air Force for Installations, Environment and
Energy provides routine updates to Major Command Commanders on progress
toward improvements and changes regarding Military Housing
Privatization Initiative oversight and management and their respective
roles. The Air Force Civil Engineer Center continues to provide a two-
hour introductory housing brief to all incoming installation
leadership. Additionally, the Air Force has made progress in re-
negotiating the Performance Incentive Fee metrics to provide for
increased commander input, and is revising the quarterly Management
Review Committee meetings and the annual site visits to provide
additional engagement amongst project owners, the government Housing
Management Office, installation leadership and the Air Force Civil
Engineer Center.
financial accounting
25. Senator Manchin. Secretary Esper, Secretary Spencer, and
Secretary Wilson, it has been reported that over the last two decades,
the Department of Defense has contributed approximately $3.4 billion in
funds for renovation and construction projects in partnership with
private housing contractors. Government Accountability Office (GAO)
report 18-218, ``Military Housing Privatization,'' details the
diversity in project structures and the associated differences in
reporting standards on finances, project status, and project health.
The GAO report states that the data provided is ``not comparable'' due
to these varying standards. How are you working with each other and the
Assistant Secretary of Defense for Energy, Installations, and
Environment (ASD (EI&E)) to ensure accountability for these funds and
to verify that they are being used in a priority consistent with DOD
objectives?
Secretary Esper. The Army is exploring options to develop a
Privatized Housing Index (PHI) system with specific goals for the
portfolio and for individual projects. The level of work needed in the
future is estimated based on the age of the unit in year 25 and the
work completed during the initial development period. The Army has
long-term sustainment plans which includes a capital repair and
replacement plan and a reinvestment plan. These plans provide details
on the future development and investment required to maintain and
improve housing over the long-term. The plans are also reviewed and
analyzed by a third-party company to monitor project health, finances,
and development status to ensure accountability of funds and
consistency with DOD objectives.
Secretary Spencer. The DON works closely with OSD in preparing
required annual reports on finances, project status, and project
health. Additionally, our business agreements require annual financial
audits by an independent third party. NAVFAC reviews the audit reports
to ensure accountability of these funds. The DON has the right to
approve annual operating budgets in the business agreements, which
provides appropriate visibility to ensure alignment with DOD
Objectives.
Secretary Wilson. The Air Force approved the development plans,
required the use of third party construction code compliance, and
utilized resident construction managers hired by the Air Force to
oversee the construction and ensure that it met the requirements in the
project documents.
As part of ongoing oversight and to ensure funds are used in a
priority consistent with our objectives, the Air Force approves annual
operating budgets, sustainment plans, and all reinvestment projects.
The Air Force also requires annual financial audits and reports which
are provided to the Assistant Secretary of the Air Force for
Installations.
quality control
26. Senator Manchin. General Milley, Admiral Richardson, General
Neller, and General Goldfein, based on you testimony and available
resources, it appears that inspections of military family housing is
done primarily through the private companies that manage the housing
and supplemented by spot checks by the services at varying levels and
frequencies based on service policy. The state of some of the military
family housing shows that this existing inspection process is not
functioning as an effective quality control measure. Have your services
considered or pursued independent third party inspection services to
provide regular and unbiased inspections, opinions and customer
satisfaction survey results to both the private companies as well as
the service offices responsible for housing management?
General Milley. The Army hired additional staff to conduct pre-
move-in/post departure home inspections. We currently use an
independent third-party company to assess resident satisfaction in
government-owned and privatized housing.
Admiral Richardson. Navy directed an additional Resident
Satisfaction Survey, managed and conducted by an independent third
party, with added questions to ensure we are fully capturing resident
concerns. In addition, in fiscal year 2020 the Navy is looking at
hiring approximately 50 new home inspectors at installation Housing
Service Centers to perform government inspections of privatized
housing.
General Neller. Currently, the PPV partner already utilizes an
independent contract to conduct resident satisfaction surveys, and the
Marine Corps is doing the same for the out of cycle survey targeted for
the Fall. As part of the contract, the independent third party is
required to develop improvement plans for locations that have low
ratings based on resident feedback received. Additionally, when
resident concerns warrant, audits are conducted to determine if a
residents concerns are warranted. Independent audits are currently
being conducted by GAO and NAVAUDSVC on the responsiveness to
maintenance requests. The Marine Corps also proactively had a third
party investigate the Resident Energy Conservation Program as a result
of concerns expressed by resident at MCB Camp Pendlton.
General Goldfein. Part of the Air Force's corrective actions
include increasing manpower at the installation Housing Management
Offices to allow for 100 percent inspection of change of occupancy
maintenance and emergency life, health and safety work orders, 30
percent inspection of urgent work order requests and 10 percent
inspection of routine work order requests. The inspections would be
completed by a combination of skilled government inspectors and third
party inspection service providers.
Customer satisfaction surveys are provided by third parties and the
Air Force is engaged with project owners to ensure impartiality to the
survey process.
__________
Questions Submitted by Senator Tammy Duckworth
tracking and addressing long-term exposure to harmful contaminants
27. Senator Duckworth. Secretary Esper, General Milley, Secretary
Spencer, Admiral Richardson, General Neller, Secretary Wilson, and
General Goldfein, one of my major concerns with today's topic is that
even if we succeed in fixing the urgent problems tomorrow, our military
families--particularly their children--will be struggling with the
harmful health impacts for months, years and in the worst cases, a
lifetime. In fact, some symptoms may not even appear until later on in
life. I am interested in how each Service is planning to track and
address the long-term effects of exposure to lead-based paint, lead-
contaminated water, toxic mold and mildew and other harmful
contaminants. What role should the Defense Health Agency (DHA) play in
tracking the population of servicemembers and family members who have
been exposed to lead and mold in military housing?
Secretary Esper and General Milley. Healthcare providers will
conduct Blood Lead Level (BLL) testing if a child is assessed to be at
an increased risk of exposure to lead hazards at well-child
examinations and annotate the risk assessment and BLL testing results
in the patient's electronic health record. Healthcare providers will
continue to monitor the health status of all children with confirmed
elevated pediatric BLLs per American Academy of Pediatrics clinical
practice guidelines. Healthcare providers will document patient
symptoms that are consistent with an increased likelihood of exposure
to mold and for whom a home assessment may be beneficial in the
patient's medical record. If the healthcare provider determines there
is justification to recommend a housing assessment, they will notify
the patient of this determination and provide them with contact
information for installation Preventive Medicine Services/Public Health
Department who is subsequently responsible for notifying the
appropriate installation housing authority of this recommendation Data
gathered as part of the Army's Housing Environmental Health Response
Registry and other housing related environmental health hazard
assessments are also being stored in the Defense Occupational and
Environmental Health Readiness System (DOEHRS). DOEHRS is the DOD's
system of record for managing occupational and environmental health
risk data. This data will be used to populate the Integrated
Longitudinal Exposure Record (ILER) to fulfill the requirements of DOD
Instruction 6055.20, Assessment of Significant Long-Term Health Risks
from Past Environmental Exposures on Military Installations. The DHA
should, at a minimum, be tasked to oversee the implementation of this
Instruction.
Secretary Spencer. Medical conditions, to include housing-related
environmental exposure concerns for servicemembers and family members,
are documented in the medical treatment record. Families can obtain
copies of these records to take with them when they transition. The DHA
should ensure documentation of medical conditions in the medical
treatment record, and in coordination with the military Services and
DOD, work to make privatized housing environmental health assessment
data available to government housing officials, public health
specialists, and healthcare providers.
Admiral Richardson. Medical conditions, to include housing-related
environmental exposure concerns for servicemembers and family members,
are documented in the medical treatment record. Families can obtain
copies of these records to take with them when they transition. The DHA
should ensure documentation of medical conditions in the medical
treatment record, and in coordination with the military Services and
DOD, work to make privatized housing environmental health assessment
data available to government housing officials, public health
specialists, and healthcare providers.
General Neller. Medical conditions, to include housing-related
environmental exposure concerns for servicemembers and family members,
are documented in the medical treatment record. Families can obtain
copies of these records to take with them when they transition. The DHA
should ensure documentation of medical conditions in the medical
treatment record, and in coordination with the military Services and
DOD, work to make privatized housing environmental health assessment
data available to government housing officials, public health
specialists, and healthcare providers.
Secretary Wilson and General Goldfein. Speaking for the Air Force
Medical Service, military members and their family members who have
confirmed exposure to lead will have their blood lead levels documented
in their electronic health record and if elevated, will be tracked to
ensure the source of the exposure is mitigated and further monitoring
will be done until the risk is abated. Residents who are asymptomatic
or symptomatic with visible mold in military housing, will receive
service to remove the mold and these records will be maintained by the
privatized housing contractor. Residents who are symptomatic will
receive diagnosis and treatment as needed, either via the local Medical
Treatment Facility or by a TRICARE provider. These individuals will be
tracked using our electronic health record system until their symptoms
have resolved.
28. Senator Duckworth. Secretary Esper, General Milley, Secretary
Spencer, Admiral Richardson, General Neller, Secretary Wilson, and
General Goldfein, would your Services support Congress amending the law
to authorize TRICARE benefits for former active duty family members who
receive diagnoses for illnesses that may stem from sustained exposure
to subpar housing conditions that occurred many years ago?
Secretary Esper and General Milley. The Defense Health Agency (DHA)
administers all aspects of the TRICARE program, to include managing its
budgeting and funding requirements. As such, it would be most
appropriate for DHA to address this question as the prospective law
would have direct impact on its operations.
Secretary Spencer. Former active duty servicemembers found to have
substantiated illness due to military service, including sustained
exposure to environmental health hazards in military housing, should
receive appropriate medical treatment. Presently, both TRICARE and the
VA provide these medical benefits.
Admiral Richardson. Former active duty servicemembers found to have
substantiated illness due to military service, including sustained
exposure to environmental health hazards in military housing, should
receive appropriate medical treatment. Presently, both TRICARE and the
VA provide these medical benefits.
General Neller. Former active duty servicemembers found to have
substantiated illness due to military service, including sustained
exposure to environmental health hazards in military housing, should
receive appropriate medical treatment. Both TRICARE and the VA provide
these medical benefits.
Secretary Wilson and General Goldfein. DOD is committed to ensuring
the health and safety of our Service Members and their families. As
validated evidence linking household exposures to illnesses becomes
known, DOD supports legislation that ensures our men and women of the
Armed Forces and their families receive appropriate and necessary care.
29. Senator Duckworth. Secretary Esper, General Milley, Secretary
Spencer, Admiral Richardson, General Neller, Secretary Wilson, and
General Goldfein, since there will be an increase in respiratory
illnesses among servicemembers returning from Iraq and Afghanistan, how
would the DHA differentiate the cause of these illnesses among the
military population, to include health problems that may actually
originate with prolonged exposure to dangerous military privatized
housing units?
Secretary Esper and General Milley. Differentiating the cause of
illness for a particular servicemember can be a challenge, especially
when multiple exposures may be involved. The integration of various
data sources--deployment health history, occupational and environmental
health surveys (workplace and residences, as appropriate), as well as
electronic health records, enables our providers to understand where
the potential sources of exposure may be linked to symptoms or to
illness. By working with public health professionals, symptoms linked
with exposures will be documented in our electronic health record and
followed appropriately.
Secretary Spencer. Differentiating the cause of illness for a
particular servicemember can be a challenge, especially when multiple
exposures from various environments, including occupational,
recreational, and residential, experienced throughout a military career
may be involved. The integration of the various data sources--
deployment health history, occupational and environmental health
surveys, as well as electronic health records--enables providers to
understand where the potential sources of exposure may be linked to
symptoms or illness. By working with Public Health professionals,
symptoms that are causally linked to exposures will be documented in
the electronic health record and followed appropriately.
Admiral Richardson. Differentiating the cause of illness for a
particular servicemember can be a challenge, especially when multiple
exposures from various environments, including occupational,
recreational, and residential, experienced throughout a military career
may be involved. The integration of the various data sources--
deployment health history, occupational and environmental health
surveys, as well as electronic health records--enables providers to
understand where the potential sources of exposure may be linked to
symptoms or illness. By working with Public Health professionals,
symptoms that are causally linked to exposures will be documented in
the electronic health record and followed appropriately.
General Neller. Differentiating the cause of illness for a
particular servicemember can be a challenge, especially when multiple
exposures from various environments, including occupational,
recreational, and residential, experienced throughout a military career
may be involved. The integration of the various data sources--
deployment health history, occupational and environmental health
surveys, as well as electronic health records--enables providers to
understand where the potential sources of exposure may be linked to
symptoms or illness. By working with Public Health professionals,
symptoms that are causally linked to exposures will be documented in
the electronic health record and followed appropriately.
Secretary Wilson and General Goldfein. Speaking for the Air Force
Medical Service, differentiating the cause of illness for a particular
servicemember can be a challenge, especially when multiple exposures,
both on and off duty/occupationally or recreationally-related, may be
involved. The Service Medical Departments would be the appropriate
place to differentiate the cause of these illnesses with support from
the DHA since these conditions could affect fitness for duty. The
integration of various data sources including deployment health
history, occupational and environmental health surveys, as well as
electronic health records, helps our healthcare providers better
understand whether the potential sources of exposure may be linked to
symptoms or to illness. By working with Public Health/Epidemiology
professionals and staying in touch with the most current applied
research, medical providers may have a better understanding of how
exposures and symptoms may be connected and then document that possible
cause in the member's electronic health record.
replacing all lead service lines
30. Senator Duckworth. Secretary Esper, General Milley, Secretary
Spencer, Admiral Richardson, General Neller, Secretary Wilson, and
General Goldfein, as Ranking Member of the Subcommittee that oversees
the Safe Drinking Water Act, I am convinced that our Nation is missing
an incredible opportunity to create jobs, bolster our economy and most
importantly, protect children from permanent brain damage by fully
replacing all lead service lines throughout the country. This is not
some pie-in-the-sky dream. American cities with both the means, and the
will, have achieved this goal. For example, the City of Madison
Wisconsin invested nearly $20 million over a decade to replace its lead
service lines. Thus, do you believe that the benefits resulting from
full lead service line replacement of the entire defense housing
portfolio would enhance readiness by lowering incidents of lead
poisoning and providing servicemembers with peace of mind that their
families' water is safe?
Secretary Esper and General Milley. The Army would benefit from
testing and full replacement of lead service lines if they exceed EPA
guidelines. Our installation housing water lines are connected to lead
water main lines which are situated outside of the housing foot print.
It is important to note that some of the water service lines belong to
either the local municipality or the servicing privatized water system
owner and not the Army. We will continue to improve our current
processes and procedures to reduce potential lead exposure.
Secretary Spencer. The Navy and Marine Corps would benefit from the
replacement of all lead services lines. Even one child affected by lead
poisoning is too many. However, it is worth noting that the DON's
existing lead exposure program is robust and highly regulated, in
accordance with all federal, state, and local lead regulations. DON
policy requires military treatment facilities to operate a formal
pediatric lead screening program and to monitor all beneficiary
children that exceed lead action levels. While universal blood lead
level screening of all children is not required, a benefit of TRICARE
is the assessment of lead exposure risk by questionnaire during each
well-child visit from age six months through six years and screening by
blood lead level for children considered to be at high risk for lead
poisoning. The Navy and Marine Corps Public Health Center (NMCPHC) Epi
Data Center performs quarterly and annual analyses of childhood blood
lead levels for Department of the Navy beneficiaries. To date, those
analyses have consistently found few elevated lead levels, and lower
rates of elevated lead levels than are reported in the general
population.
Admiral Richardson. The Navy and Marine Corps would benefit from
the replacement of all lead services lines. Even one child affected by
lead poisoning is too many. However, it is worth noting that the DON's
existing lead exposure program is robust and highly regulated, in
accordance with all federal, state, and local lead regulations. DON
policy requires military treatment facilities to operate a formal
pediatric lead screening program and to monitor all beneficiary
children that exceed lead action levels. While universal blood lead
level screening of all children is not required, a benefit of TRICARE
is the assessment of lead exposure risk by questionnaire during each
well-child visit from age six months through six years and screening by
blood lead level for children considered to be at high risk for lead
poisoning. The Navy and Marine Corps Public Health Center (NMCPHC) Epi
Data Center performs quarterly and annual analyses of childhood blood
lead levels for Department of the Navy beneficiaries. To date, those
analyses have consistently found few elevated lead levels, and lower
rates of elevated lead levels than are reported in the general
population.
General Neller. The Navy and Marine Corps would benefit from the
replacement of all lead services lines. Even one child affected by lead
poisoning is too many. However, it is worth noting that the DON's
existing lead exposure program is robust and highly regulated, in
accordance with all federal, state, and local lead regulations. DON
policy requires military treatment facilities to operate a formal
pediatric lead screening program and to monitor all beneficiary
children that exceed lead action levels. While universal blood lead
level screening of all children is not required, a benefit of TRICARE
is the assessment of lead exposure risk by questionnaire during each
well-child visit from age six months through six years and screening by
blood lead level for children considered to be at high risk for lead
poisoning. The Navy and Marine Corps Public Health Center (NMCPHC) Epi
Data Center performs quarterly and annual analyses of childhood blood
lead levels for Department of the Navy beneficiaries. To date, those
analyses have consistently found few elevated lead levels, and lower
rates of elevated lead levels than are reported in the general
population.
Secretary Wilson and General Goldfein. Air Force policy supports
replacement of lines with lead components or content where necessary to
meet federal water quality standards.
31. Senator Duckworth. Secretary Esper, General Milley, Secretary
Spencer, Admiral Richardson, General Neller, Secretary Wilson, and
General Goldfein, would you support Congress establishing a program to
achieve this goal?
Secretary Esper and General Milley. We would welcome the
opportunity to establish an appropriately funded program.
Secretary Spencer. Should Congress appropriate sufficient funding
to cover the cost of full lead service line replacement, the DON would
welcome the opportunity to achieve this goal.
Admiral Richardson. hould Congress appropriate sufficient funding
to cover the cost of full lead service line replacement, the DON would
welcome the opportunity to achieve this goal.
General Neller. Should Congress appropriate sufficient funding to
cover the cost of full lead service line replacement, the DON would
welcome the opportunity to achieve this goal.
Secretary Wilson and General Goldfein. Air Force policy supports
replacement of lines with lead components or content where necessary to
meet federal water quality standards.
communication between services and service members and families
32. Senator Duckworth. Secretary Esper, General Milley, Secretary
Spencer, Admiral Richardson, General Neller, Secretary Wilson, and
General Goldfein, at last week's Personnel Subcommittee hearing, Master
Chief Petty Officer Smith noted the disconnect between the way families
and servicemembers want to communicate and the way that the Navy
actually solicits feedback. Do the Services offer direct avenues of
communication outside of the immediate chain of command that
servicemembers and their families can reach out to if they are not
receiving satisfactory treatment or adequate answers to their concerns
about housing conditions?
Secretary Esper and General Milley. The Army offers other avenues
of communication outside the chain of command that servicemembers and
their families can contact if they are not receiving satisfactory
treatment or adequate answers to their housing concerns or conditions.
All residents have an Army advocate at each installation housing office
with whom they can discuss their housing concerns. Dissatisfied
residents can submit their concerns or complaints through Army housing
entities from HQDA to the installation housing office, and residents
can call the installation housing hot line about their concerns.
Residents can also escalate their concerns to the RCI project company.
The Army and RCI project company will collaborate to ensure all
reported problems and issues are heard and resolved. We are
communicating with residents to ensure they understand that they have
the exact same protection available to anyone under the Fair Housing
Act, without having to face any fear of reprisals.
Secretary Spencer. Yes. Unsatisfied Navy residents may contact the
Navy Housing Service Center. Each Navy installation has flyers posted
in the housing office and online that include points of contact for
resident support and dispute/issue resolution. In addition, each
installation, region, and CNIC headquarters has a ``vanity email''
(direct link to housing advocates and Navy leadership at the
installation/region/HQ level) set up to receive communications directly
from residents 24/7, with a response within 24 hours. Marine Corps
Commanders will use the Marine Housing Outreach program to improve
their awareness of concerns, better advocate for military families and
reinforce the three-step resolution process. Commanders will leverage
appointed servicemember advocates and the base housing office to
streamline communication between residents, PPV partners and
installation leadership. Both Commanders and appointed advocates will
ensure effective oversight and remediation are in place, operating with
the full authority and support of the chain of command.
Admiral Richardson. Yes. Unsatisfied Navy residents may contact the
Navy Housing Service Center. Each Navy installation has flyers posted
in the housing office and online that include points of contact for
resident support and dispute/issue resolution. In addition, each
installation, region, and CNIC headquarters has a ``vanity email''
(direct link to housing advocates and Navy leadership at the
installation/region/HQ level) set up to receive communications directly
from residents 24/7, with a response within 24 hours. Marine Corps
Commanders will use the Marine Housing Outreach program to improve
their awareness of concerns, better advocate for military families and
reinforce the three-step resolution process. Commanders will leverage
appointed servicemember advocates and the base housing office to
streamline communication between residents, PPV partners and
installation leadership. Both Commanders and appointed advocates will
ensure effective oversight and remediation are in place, operating with
the full authority and support of the chain of command.
General Neller. Yes. Unsatisfied Navy residents may contact the
Navy Housing Service Center. Each Navy installation has flyers posted
in the housing office and online that include points of contact for
resident support and dispute/issue resolution. In addition, each
installation, region, and CNIC headquarters has a ``vanity email''
(direct link to housing advocates and Navy leadership at the
installation/region/HQ level) set up to receive communications directly
from residents 24/7, with a response within 24 hours. Marine Corps
Commanders will use the Marine Housing Outreach program to improve
their awareness of concerns, better advocate for military families and
reinforce the three-step resolution process. Commanders will leverage
appointed servicemember advocates and the base housing office to
streamline communication between residents, PPV partners and
installation leadership. Both Commanders and appointed advocates will
ensure effective oversight and remediation are in place, operating with
the full authority and support of the chain of command.
Secretary Wilson and General Goldfein. The Air Force is adding a
resident advocate position in the government Housing Management Offices
to provide direct support to residents. Additionally, a toll-free help
line has been established and widely advertised for residents to report
their concerns with privatized housing. Messages to the toll-free help
line are received by the Air Force Civil Engineer Center, coordinated
for further action with the project owner, and tracked to satisfactory
completion.
oversight of company performance evaluations
33. Senator Duckworth. Secretary Esper, General Milley, Secretary
Spencer, Admiral Richardson, General Neller, Secretary Wilson, and
General Goldfein, based upon testimonies and briefings we have already
had on this subject, I understand private military housing contractors
earn incentive fees based upon performance assessments. Are public
reports that note these contractors receive all, or nearly all, of
their performance-based fees accurate?
Secretary Esper and General Milley. The past public reports about
RCI project company performance-based fees are accurate. The Army is
updating the project company incentive management plans.
Secretary Spencer. [Retained in Committee files.]
Admiral Richardson. [Retained in Committee files.]
General Neller. Please refer to Attachment 3 [Retained in Committee
files.] for a ten-year history of incentive-based fees. Performance
Incentive Fees are paid in accordance with the metrics that are
reflected in the operating agreements for these projects. While the
metrics used for each project may vary, maintenance performance is
typically one of many metrics that are used to assess the amount of
Performance Incentive Fees that are to be paid to a project owner. As a
general matter, it is accurate to state that, in accordance with the
agreed upon metrics, a large portion of the available Performance
Incentive Fees have been awarded to date. The Air Force is re-
negotiating the structure of Performance Incentive Fees to provide
commanders and residents with greater influence and to better align the
metrics to strategic objectives to incentivize desired behavior to
better serve our members.
Secretary Wilson General Goldfein. Performance Incentive Fees are
paid in accordance with the metrics that are reflected in the operating
agreements for these projects. While the metrics used for each project
may vary, maintenance performance is typically one of many metrics that
are used to assess the amount of Performance Incentive Fees that are to
be paid to a project owner. As a general matter, it is accurate to
state that, in accordance with the agreed upon metrics, a large portion
of the available Performance Incentive Fees have been awarded to date.
The Air Force is re-negotiating the structure of Performance Incentive
Fees to provide commanders and residents with greater influence and to
better align the metrics to strategic objectives to incentivize desired
behavior to better serve our members.
34. Senator Duckworth. Secretary Esper, General Milley, Secretary
Spencer, Admiral Richardson, General Neller, Secretary Wilson, and
General Goldfein, if true, please explain how these companies could be
earning payments for good performance in light of the deeply troubling
condition of their housing offerings.
Secretary Esper and General Milley. RCI project company
performance-based fees are dictated by the legal agreements and based
on metrics developed jointly between the Army and the RCI project
company. Approval authority of the performance incentive fees is now at
the Office of the Assistant Secretary of the Army for Installations,
Environment and Energy (ASA IE&E) in February 2019. As a result,
incentive fees awarded and withheld along with justifications are
tracked and monitored by ASA IE&E.
Secretary Spencer. For DON PPV projects, fees are paid to companies
that Managing Members (a.k.a. PPV Partners) contract with on behalf of
Limited Liability Companies (LLCs) to carry out the purposes of the
LLCs. These fees are paid out of funding available to the LLCs,
primarily revenue. Both base & incentive fees are documented in the
operating agreement of the LLC or attachments to that operating
agreement, and cannot be revised without DON approval. The vast
majority (98.3 percent) of fees that are unearned (i.e. not paid)
continue through the revenue distribution (cash flow waterfall) of the
LLC and are captured in sustainment reserve accounts for the
recapitalization and sustainment of housing over the long-term. The DON
is in the process of revisiting the incentive fee structure with the
PPV partners to emphasize resident satisfaction and increase the DON
discretionary component.
Admiral Richardson. For DON PPV projects, fees are paid to
companies that Managing Members (a.k.a. PPV Partners) contract with on
behalf of Limited Liability Companies (LLCs) to carry out the purposes
of the LLCs. These fees are paid out of funding available to the LLCs,
primarily revenue. Both base & incentive fees are documented in the
operating agreement of the LLC or attachments to that operating
agreement, and cannot be revised without DON approval. The vast
majority (98.3 percent) of fees that are unearned (i.e. not paid)
continue through the revenue distribution (cash flow waterfall) of the
LLC and are captured in sustainment reserve accounts for the
recapitalization and sustainment of housing over the long-term. The DON
is in the process of revisiting the incentive fee structure with the
PPV partners to emphasize resident satisfaction and increase the DON
discretionary component.
General Neller. For DON PPV projects, fees are paid to companies
that Managing Members (a.k.a. PPV Partners) contract with on behalf of
Limited Liability Companies (LLCs) to carry out the purposes of the
LLCs. These fees are paid out of funding available to the LLCs,
primarily revenue. Both base & incentive fees are documented in the
operating agreement of the LLC or attachments to that operating
agreement, and cannot be revised without DON approval. The vast
majority (98.3 percent) of fees that are unearned (i.e. not paid)
continue through the revenue distribution (cash flow waterfall) of the
LLC and are captured in sustainment reserve accounts for the
recapitalization and sustainment of housing over the long-term. The DON
is in the process of revisiting the incentive fee structure with the
PPV partners to emphasize resident satisfaction and increase the DON
discretionary component.
Secretary Wilson and General Goldfein. Performance Incentive Fees
are paid in accordance with the metrics that are reflected in the
operating agreements for these projects. While the metrics used for
each project may vary, maintenance performance is typically one of many
metrics that are used to assess the amount of Performance Incentive
Fees that are to be paid to a project owner. Other common criteria
include: occupancy rates, annual resident satisfaction survey scores,
achieving target financial performance, and submitting annual budget
and other required financial information on time.
Additionally, in cases of housing projects that are made up of
housing at multiple bases, in some instances the average performance at
all the bases is used to determine the performance-based award. This
averaged performance assessment across the project at times can mask
poor performance at one location.
The Air Force is re-negotiating the structure of Performance
Incentive Fees to provide commanders and residents with greater
influence and to align the metrics to strategic objectives to
incentivize desired behavior.
__________
Questions Submitted by Senator Doug Jones
historic houses on maxwell air force base, montgomery, alabama
35. Senator Jones. General Goldfein, what is the Air Force's plan
to preserve the historic homes at Maxwell Air Force Base in Montgomery,
Alabama?
General Goldfein. The Air Force is exploring the possibility of
removing from the housing project the requirement to operate and
maintain the utility and street infrastructure at Maxwell AFB. This
action would bring an appropriated funding requirement to the Air Force
but would free up project resources for the project owner's maintenance
and upkeep of the historical housing units.
36. Senator Jones. General Goldfein, are you aware if there are
issues with leaks, flooding, insects, lead paint, mold, or asbestos in
the historic homes at Maxwell that have not been mitigated?
General Goldfein. During the recent 100 percent check of all units,
97 residents identified a life / health / safety concern (53 mold, 21
lead-based paint, 23 pests/rodents). All of the 97 issues have been
resolved, to include those in the historic units.
37. Senator Jones. General Goldfein, are there mitigation plans and
enough funds available to preserve these historic homes in a safe,
reliable, and energy efficient manner?
General Goldfein. Financial forecasts indicate that the housing
project that includes Maxwell will struggle to keep homes in good
repair and limited funds will be available for renovation/reinvestment
of the homes. The Air Force is in the process of taking back utility
and road infrastructure within the housing area, in order to relieve
the project of some financial obligations so more funds can be focused
on sustainment of all homes at Maxwell.
[all]