Transcripts For CSPAN3 Hearing On Privatized Military Housing 20240713

Participate in the questions. And there is a formal unanimous consent that a nonsubcommittee member participate in the hearing after all of the subCommittee Members have had an opportunity to ask questions. Is there objection . There being none the nonsubcommittee member is recognized at an appropriate time for fiveminute questioning. All right. With that, committee will come to order. Ladies and gentlemen, i call the committee to order, the subcommittee of the Armed Services committee. Since february of this year, the subcommittee has been conducting extensive oversight of the Privatized Housing military program. We first heard about the systemic failures in the privatized military Family Housing program from a panel of courageous military spouses, who provided graphic and disturbing testimony about lead, mold, exposure, rodent infestations, rude and dismissive house management, and ineffective oversight of the program by the services. Then we heard from the assistant military Service Secretaries on their efforts to address the failures of oversight that led to the privization of military housing crisis and the plans of the services to continue to make improvements. Today, we will hear from five of the private military Housing Partners for their perspective and importantly, their plans for bringing Family Housing back to the level our military families deserve. I also want to make one thing clear, while we do not have all of the privatized military Housing Partners present today, that in no way means that those who are not here are off of the hook. We are watching them, and we expect them to do right by the military families that they provide services to. Our oversight of this issue will continue, and we are watching not only those five that are here but those who are not. I have heard troubling reports about the michaels organization, and michaels organization, Clark Realty Capital and particularly concerned about the reports of the abusive use of nondisclosure agreements. For all of the Housing Partners whether you are here today or not i am putting all of you on notice that this committee is going to be watching, and we will not tolerate in any way the abusive problems that we have seen. It is deeply troubling that i am still after these months getting reports that certain partners continue to show a blatent disregard for the seriousness of the issues facing the military families and frankly a lack of respect for our Service Members and their families. They deserve better. While it is clear that the private partners and the military services are working to improve conditions and processes since we first heard from the families in february, this committee and many of our members still hear from concerned military families who continue to struggle with getting quality resolution of the maintenance concerns. And some of the unprofessional Profit Management staff. There is work yet to be done. And we will continue to follow up on these issues until they are resolved to the satisfaction of the military families and this committee. One of the themes that has permeated our discussions about the privatized Family Housing is the issue of the ineffective management, and particularly at the installation level. The symptoms of the problem have taken many forms, including disrespectful Customer Service personnel, inexperienced maintenance teams performing low quality maintenance and negative consequences from wrong contract performance incentives, and we have heard about the department of Defense Initiatives to address these issues, but because daytoday management is within the purview of the private partner, im interested in hearing what you have to say about your, what you are doing to change the culture at the installation level. As military services have recommitted to their oversight role, they are working to improve their processes and refine themetics that met ikrics that we are using to refine each housing project. I am looking forward to hearing from the Witnesses Today with the degree to which they are cooperating with the initiatives and the steps they are taking to ensure that the housing enterprise is as transparent as possible. Counter productive practices such as closing Maintenance Work orders before the problems are resolved in order to bolster the closing statistics or asking the tenants to sign nondisclosure agreements as a matter of routine when they move out of the unit are simply not acceptable. All of you have had enough time to assess and scrutinize the problems and as we move into the 2020 the focus must be on action. Not only must corrective policies and processes be instituted across the enterprise enterprise, but you must develop mechanisms to have the sustainment of positive changes to ensure that the families receive high quality housing regardless of where they live. We ask our Service Members and their families to sacrifice enough in service to their country. We will not accept substandard housing as well. These families deserve better, and this committee will demand they get the best. Mr. Lamborn, thank you for joining us. I have explained that you were in a Committee Markup casting the votes. I am sure they were all to my satisfaction. Mr. Lamborn you will be just as satisfied as my votes here. Thank you. And thank you for having the hearing and thank you for all being here as witnesses, and thank you for everyone in the audience showing your concern. Today we will hear testimony from five of the companies that make the privatized military Family Housing model work. As someone whose district has 48,000 military members and like the chairman, i have been, i am also deeply troubled by the lack of the oversight of the program, and the military families deserve better. Our committee has heard significant concerns about insufficient mold remediation, and terrible Customer Service at the military installations and mostly at Macdill Air Force station, and we wont address them specifically, but there are cases of fraud in a few extreme cases. According to the survey released by the military Family Advisory network, 63 of fort carson respondents who live in my district said that the units needed better maintenance, repairs or remediation. The committee has heard the Horror Stories of mold, and rat infestations in what is generally described as poor Customer Service. The military Housing Initiative began as a Public Private ven or thes or ppvs in 1996 as a means to modernize housing and grow reserves in accounts for future investments. The oversight is challenge, because each military department manages the programs differently, and the respective projects are governed by unique legal agreements. The army has a total of 35 projects and the navy and marine corps with 50 and the air force with 32. The most complicated is for the army and navy because they are limited partners with both sides investing capital. My sincere hope is that the attention that the family military housing has received is a wakeup call to the military departments and to the Housing Partners. We need this model to work, but not at the expense of military families. Every dollar wasted through the mismanagement or incompetence diminishes the longterm viability of the reserve accounts that are vital for the future recapitalization. The house and the senate both passed significant Bipartisan Legislation in the defense bills this year, and i look forward to enacting meaningful reform. First and foremost among these is the tenants bill of rights. The military departments have an inherent responsibility to provide the oversight for these projects a. Recent air force ig report found that there is a pervasive misperception that when the housing was privatized it was effectively outsourced. The leaders at many levels did not actively engage as they might have on other issues based on the misunderstanding of the authority, unquote. We have heard from Army Families that some Installation Commanders characterize the government as the weaker or the 49 partner in the housing agreements implying they have limited means to address shortcomings. Oversight is inherently governmental, and it is not optional. On some of the installations, there is confusion regarding the identity of the installation housing office, and the office of the housing partner or the thirdparty management company. It should be Crystal Clear to a family whether they are speaking to someone representing the Installation Commander or a representative of the housing partner, and we must simultaneously reform while preserving the financial footing of the Privatized Housing projects. A 2018 housing study found that it is varying for the measure of the sustainment needs and maintenance for sustainability. I am questioning the waterfall and why the recapitalization accounts are paid only after the ppv partners and bondholders are paid. So i am looking forward to hearing more from the witnesses about their perspectives on the program overall, and the actions they have taken to address any health and safety concerns, and to improve Customer Service. We would also appreciate their thoughts on improving the Overall Program going forward. Thank you, mr. Chairman, and i yield back. Thank you, mr. Lamborn. It is good to work with you on this problem, and we will continue to do so. I would like to welcome the witnesses. The ceo of coravis, llc, and mr. John healy, president of Hunt Communities and mr. Dennis hickey of lend lease america, and mr. Rick taylor president , Facilities Operations and renovations and constructors for ballbeatty, and john bliss of lincoln housing. Your formal testimony will be submitted to the record, and because we are on limited time with the votes at 2 00 or as late as 2 30, i ask you to limit the testimony and summarize to three minutes. So lets start with you mr. Persinny, and my apologies for the pronunciation. Perfect. Thank you, mr. Chairman, and Ranking Member, and thank you for the opportunity to appear before you today. My name is john picerne, and im the founder of tkorbius. Many of our employees are veterans or spouses of active duty military members. These talented people are genuinely committed to supporting those who protect and defend the nation. It is my honor to serve in this committee. When i was first asked to help with this program i was moved at how poorly we were caring for the military personnel the most personal way of all the homes. The d. O. D. Is committed to creating a long term solution, and with our experience, i believed that we were well suited to help. When i founded our company some 20 years ago, we set out to create something that could fix the housing challenges, and that were facing our military, and after 9 11 an important job became a vocation. When i was on the hill last november i said im sorry under no uncertain terms. I said i was sorry about the issues that the residents were dealing with, and we will do right by the residents. Today, i want to tell you about some of the things that we have done since i apologized nearly 10 months ago. Since 2019 we are making changes to get back to the Gold Standard. The Gold Standard of Resident Service is known when we have deployed Service Members who are able to speak to their families about their daily lives, what is happening at school and not about the problems they are experiencing within the housing. We will know that we have achieved the Gold Standard when our residents are talking about korvias and the resident events, and a team that has helped to create a Better Living department. With that goal in mind, we have hired neighborhood staff, and we have moved the resident call centers back on to the installations so that our residents talk to somebody right down the street as opposed to a central call station. We launched the portal so that residents with use the smartphone or the laptop to Place Service calls and track the progress and let us know if we have the job done right, and we have established the role of resident advocate to work as an ombudsman to work with the families with other issues. We understood that to give the members the homes they deserve to operate in a consistent state of building and financing. And so we want to build new homes and maintaining the homes new and old, and this is an investment in the Service Member. That is why we have injected new money into the program, and 325 million of private capital in 2019 and another 150 million prepared for 2020, and we are putting close to 200 million to work from the partnership reserves. 675 million altogether at no cost to the government. This is used to upgrade or change some of the homes that we maintain. Some of them have brought up to standards of heating and air Conditioning Systems and giving the residents a better home existence while saving the program 30 million over the course of the next 20 years. I can say from personal experience that the homes that we inherited were in terrible shape and in many cases uninhabitable, and we were able to replace or upgrade hundreds of home, but today, 46 of the homes in the military portfolio were built before 1980 and some as old as 1870. As we are looking into the future, there is a lot to be encouraged about and some real challenges as well. The priority is to deliver the Gold Standard Resident Service, service older homes that cost more each year to maintain and drive the constant investment in new home renovations. We will work tirelessly for the families and innovating to give answers for the homes and the Resident Experience they deserve. We are proud to serve the military men and women as we believe there is no higher calling in the industry. I look forward to the time and the questions and the dialogue. Thank you. Chairman garamendi and Ranking Member lamborn. Im john ale and im president of hunt military communities. Thank you for the opportunity to be here. At hunt, we are intrusted to build Quality Homes for americas heroes, and we take that responsibility very seriously. During the Senate Hearing in february it became obvious to us that there were families living in our homes whose voices were not being heard. We lost their trust, and we are sorry. We want to get right. We have heard our residents loud and clear, and we are singularly focused on rebuilding the trust in us, and improving the living experience. Over the past year, we have been working diligently on that front. First, we recognized that Quality Homes and Resident Services depend upon open and constant communication with the residents. We need to hear from all of the military families in order to address the issues, and we have a number of improvements to make it easier for the residents to communicate with us. In addition, we understand that maintenance is a critical part of maintaining Quality Homes, and earlier this year, it is clear to us that we had substantial room for improvement. While maintenance issues will inevitably arise, it is our goal to provide professional and transparent and timely service. In the last year, we have enhanced maintenance processes, added key positions, and improved training. Finally, we are actively supporting reforms to ensure the long term success of the mhpi program. We are by no means perfect and there are times when the performance has fallen short of our residentsexpectations. We are committed to taking the necessary actions to rebuild the trust between hunt and our residents. We have made progress over the past year, but our work is far from done. Thank you for the opportunity to testify today. I look forward to hearing your questions and answering, and hearing your thoughts and answering any questions. Thank you. Mr. Hickney. Chairman and Ranking Member and distinguished members of the committee, im dennis. Can you hold the microphone up closer . Sorry. Lend lease is a proud partner of the department of defense and we have the privilege of overseeing 40,000 homes that contain over 130,000 people who call lend lease communities home. Mr. Chairman, the issues discussed here today are critical for both lend lease and for me personally. No family, and much less a military family should be subjected to living in substandard housing conditions, and i reiterate any part we have caused in the situation. At lend lease we are proud of the work we do the take care of the military families, and we have more work to do and we must continually improve. As an example, lend lease is over 400,000 Service Members a year, and we have serviced over 40,000 Service Members in our homes, and these work orders were completed on time and on function, and this is a good result and proud of it, but it means that 3 of the orders were not processed on time and this is a big issue. So mr. Chairman, and members of the committee, that 3 is my central focus. What can we do to get that number down. How can we take care of these families more quickly and more effectively than we currently are. In order to improve the performance we have recently taken the following steps. Firstly, increased focus on Customer Service, and added new staff, new suppliers and new contractors and instituted new training modules to train the staff. For example, we have instituted a Maintenance Academy to train all of the maintenance people. Secondly, we have introduced new resident smartphone app. This is containing a volume of information easily accessible to the residents including the ability for them to initiate and track service requests. The use of this app has doubled in the last six months across our communities. Third, we have introduced new mold prohibitive techniques which is new painting techniques and ventilation systems and other initiatives. And fourthly, continuing to invest in the Digital Technology to improve all aspects of the business which is including the modules of Customer Service, and greater data analytics, and the adoption of the twin technology that better uses the Predictive Maintenance technology across the new homes being built. Finally, mr. Chairman, im particularly proud of the work we have done in establishing the resident Advisory Boards in our communities. Our objective so to create an open and transparent environment where the residents will work collaborately with us to create in a active community, and we will identify the school and the pta model as the benchmark. So when you see a strong pta, you will see a strong school. Similarly, the resident Advisory Board is to engage with lend lease, and the local command to ensure housing issues and the quality of life concerns are concerned and best practices are shared and our goal is to have one representative for every 400 homes and these members would become members of the resident Advisory Board. And in addition, land lease and garrison will have membership on the board. We believe this is having great impact and this is evidenced by the correspondence i have received from the safe military Housing Initiative which is founded by the military spouses earlier this year who asked me to read this statement on their behalf today. Quote. Lend lease and the team have embraced some of the toughest critics by sitting down and building a relationship with them. These relationships have benefitted the project companies and the residents on a micro and macro level. They are leveraging the best staff to build best practice, and better serve the military families and closing the gaps and the changing cultures at the local and corporate level, they have built bet relationships with the staff, the government office, and the family advocates and most importantly the residents to improve program work and its efficacy. Mr. Chairman, we appreciate the work that this committee has done to find the sensible solutions to improve the quality of the private military housing, and we are remaining committed part of the solution, and i look forward to the questions. Thank you. Mr. Taylor . Good afternoon, chairman garamendi, and members of the subcommittee. Im rick taylor president of the Systems Operations and operations for bellford communities. We take the responsibility of serving those who serve the country seriously. We have heard the concern of you and the residents loud and clear. On behalf of the belford Building Communities i would like to apologize for having fallen short of the high standards that the military families deserve. We are work hard to regain the trust of the military residents and the military partners. This is truly a humbling experience. We have learned a lot. We realize that we needed to transform many of the ways in which we do business in order to improve the residents daily living experiences. And that transformation is under way today and i would like to highlight three of the transformation efforts with you now. First, we have reorganized. This is including my appointment as president for facility operations, renovations and construction, and this means that there is now a president in charge of and responsible for all military housing maintenance activities. The reorganization puts me at the table with the Senior Leaders to ensure high levels of oversight, and keen focus on the maintenance issues and the resident support services. As a former Navy Civil Engineer Corps officer, i am concerned with any issues and committed to providing solutions. And we have a new position with the director of operations, and this individual will be responsible for making sure that a effective change management is in effect across the portfolio. And seg, we are changing the approach to Customer Service. We have required mandatory code of conduct training to ensure ethics and training. We have delivered enhanced customer training to the employees to emphasize our commitment to best practices and high standards. We have recently appointed a new Vice President of training and added 130 professionals to the military housing staff. And we are empowering the residents with more transparency and control over their work order requests. Third, we are improving the mandatory and environmental training for all of the civil and Management Employees and increased the training for life, health and safety and in particular mold and moisture issues, and we have supplemented the teams with the additional thirdparty specialists teamed with the hva hba Servicing Companies and to monitor and manage environmental practices, and manage that with our residents. I want to make myself clear on a particularly sensitive issue. We take the issue of fraud seriously, including the allegations that certain members of our staff handled work orders inappropriately, and we are coopoperateing with the department of justice with regard to their investigation into these allegations. Simultaneously we have instructed our outside counsel to conduct an investigation across the entire portfolio. They have engaged Price Water House Coopers a leading Forensic Accounting review of support for our submission to request Incentive Fees. To summarize, over the last nine months, we have made efforts to transform, and structured the staffing and the strategic focused and smart way to address the customersconcerns. Going forward, i remain encouraged and 100 committed to the program. I want to thank the members of congress and your staff for reforms that you are undertaking in the fy20 nda, and we support many of the provisions offered, and the reforms that i believe will strengthen the program. And for example, we wholeheartedly support the resident bill of rights, and common lease, and uniform mold policy, and the uniform resident displacement policy, and standardized Incentive Fee metrics, and these are thoughtful reforms for everybody, the department of defense, the military provides and the residents on standards and agreed upon processes. The reforms will minimize ambiguity and enforce the oversight, and clarify the responsibilities and allow everybodys voice to be heard. I support these efforts and i believe that the mhip program is going to be improved because of them. Our customers deserve the very best and we are determined to deliver for them. Thank you for your time, and i look forward to the questions. Thank you. Mr. Bliss. Chairman garamendi, and Ranking Member lamborn and members of the subcommittee. On behalf of my company, i am honored to testify before you. I am gerald bliss and i oversee bliss. Despite recent setbacks the mhip is a valuable program that has improved the military housing over the last century. And we welcome your oversight of the lmhs ability to deliver the high quality housing and the proper management that our nations heroes deserve. Over the past year, our company has listened carefully to the concerns that some families have expressed about the quality of the lmh housing. More than 1,200 lmh employees many of whom are veterans and military spouses or have members serving in the military wake up everyday to serve the families with honor and integrity, but it is obvious that some of the families feel that we have come up short. As president of the organization, i apologize to our military families for the times that we have failed to live up to expecttations. And beginning in 2017, lmh undertook a whoa lislistic review. And we have identified and implemented several reforms to address two main goals. The first was to improve the quality of the homes and services. The second goal was to make reforms that reestablish a churl of trust, transparency and dialogue with the residents. I am pleased that as i sit here today, many of the reforms have been implemented, and let me list a few of these for you. First, we have worked with a military Family Organization to identify and place advocates in over a dozen of the communities with more in the pipeline. These advocates seek to identify issues before they are problems and try to work with the families and to resolve them. The second on the ground managers and personnel have set a goal of proactivity knocking on the doors when there is no work order pending to check in with the resident to see if there are issues with the home that we need to address. In addition to addressing the issues with the home, this reform helps to reestablish a culture of trust and dialogue with the families. Third, we have been responsive to requests from the residents for improved access to communication tools. We have significantly improved the mobile phone app to enable the residents to submit and track work orders. We are maintain the call center in san diego for those who want to call it in. And so we have worked with the Service Branch workers who have cases of environmental hazards to be cleared more quickly. We have access to doctors and specialists who have helped us and our families to understand when they need to be moved if remediation has to be performed. This is a few of the reforms. We are under the process of many more, and we believe they are consistent with the nnda. As the subcommittee is looking at the lmh and other ppvs are working, i look forward to working with you and the dod to improve the military familiesexperience in our housing. We understand it is not about fixing the drywall, but repairing a culture of trust, and dignity in serving with the nation. And so i look forward to working with you to address the concerns of the military families. For our Committee Members and guests, we are scheduled for votes probably about 15 minutes from now. So, i am going to pass on my questions and turn to mr. Lamborn and take as many of our colleagues as possible. Mr. Lamborn. Thank you for being here, and my first question or two, and i wanted to go down the line and a yes or no answer for the sake of the time. From your perspective, do your companies have a 51 controlling position in the privatized military housing agreements . Sir, if we could start there and go down. The answer is no. Okay. The answer varies from property to property. Okay. So it is not as simple as yes or, no. Okay. Well, my structure also does not operate like that. No, sir, we do not. As mr. Hickey said,. The structure may say that, but it does not call for that sort of control. Do you agree that the government and the military has a legitimate oversight for the ppv initiatives . Absolutely, yes, sir. Yes. Yes. Yes, sir. Yes, sir. Okay. Thank you. I am sure that there is some Great Questions about specific remediation progress or lack of progress that you are making, but let me jump into the financial side of things. Should congress intercede and require that we restructure the waterfall agreements so that the result would be that reinvestment accounts have to be fully paid up before everyone else gets paid . That is something that is a radical departure, but it is the kind of reform that we may have to look at. Any reforms that you would like to offer . Representative, as the program is currently structured, it was set up and is set up so that we can continue to advance investments, and can have continuous investments if allowed to do so working with the dod partners and support from congress, we can get there without having to go through tremendously radical changes. I do believe though that an adjustment in the waterfall to make sure that investment is consistent is of benefit. Okay. Any other thoughts or comments . Thank you. Mr. Taylor . Congressman, i think that certainly, it is worthwhile to consider everything is on the table for consideration, but id say that, we have a lending agreements that, you know, would have to be maintain eded such that Debt Services is paid where it is currently prescribed in the waterfall. So, that being said, if we did not disrupt that, i think that we should certainly be having that conversation about figuring out a better way to ensure long term sustainability. Any thoughts on that and then i will switch to another question. No, congressman. I support that position. The objective at the end of the day is to ensure sufficient capital to take out of the development. There are a variety of solutions to do that. I think that the interested bondholders and the dataholders have to be factored in mind, and so therefore a complex arrangement to undertake. And lastly for the sake of time, i will finish with this. Could someone comment on what we could do here in congress to make your job easier so that the finances work better so that it keeps properties as high a quality of a condition as possible, and something that is Something Like the scoring that omb is calling for that we should reexamine . So, mr. Representative, if we went back to the premise on the program of the beginning of the program was based on what was known as the reins memo of the omb, it was rescinded over time so we start out with the right investment philosophy and thesis and then changed the game midstream. So if we went back to that original scoring methodology, it would continue to allow us to add additional which is always the premise additional Funding Sources on the forward going basis. So back to original rules, we could solve many of the investment challenges. Anyone else on that . No, congressman. I agree with that. The scoring process could be reviewed. I think they at the end oftend that at the end of the day, looking across the structures, the other issue is around the bah process, and that process is set annually and when it is going up or down regarding where it is sitting within the relative outside of the accommodation, the optics of how that is determined is something that is vital and maybe some optics would be beneficial. Okay. Mr. Bliss, did you want to finish. , yes, i will add that anything that congress can do to create the flexibility on the financing that we can use the private sector tools without scoring issues, i agree with mr. Becertain about that. Thank you, mr. Chairman. I yield back. The votes are going to resume shortly and i am expected that we are to be off of the floor and back here to 20 30. And so we will break and without objection we will break and return. Ms. Warren, you are next. Thank you, mr. Chairman, and i wanted to thank the entire committee for the work that we have done on this incredibly critical issue in a bipartisan way, and the beginning of the work that we have done in the nnda this year is critically important, but i want to dig in more to the issues that we are talking about. I wanted to say that a mother showed up at the town hall and brought pictures of the housing they were living in and told me about the Health Impacts at Tinker Air Force base which is a bellforbeatty property and i was hoping it is an isolated event, but it is not. The issues the infestations are rampant across tinker. And it is one of those things that is so outrageous to me that we are not taking care of the Service Members and their families, and the way they deserve, these people putting their lives on the line. And ballfour beatty has responsible for 55 facilities across 36 states, and 150,000 people and that is not an insignificant impact. I am incredibly disappointed that you have failed to live up to your responsibility for taking care of the people who are living in these houses. It is dheeting our military families and the taxpayers, and i have seen it firsthand, my staff and the secretary of the air force and others were just out at tinker again, and there are ongoing problems. I wish that i could say that things were all better, but they are not. So while there has been some progress, it seems every other week there is Something Else coming out, the toxic mold or safety hazards and last month, maintenance records falsified to get ballfor beatty payments they are not entitled to. This is not isolated, because there are 65 documented cases and over 2016 and 2017 falsified records and according same november 20th report, employees at Balfour Beatty had doctored record records not only at tinker, but at other bases. So you a lot of work to do it to fix it. This image behind me is one of the homes brought to me by one of the families at Tinker Air Force base. And so mr. Taylor, my question to you is that even if the times have improved, is this some place that you would want to live or allow your family to live . Live . Congresswoman, that picture is unacceptable. Absolutely unacceptable. Thank you. I appreciate that. It is to me unconscionable, and we have to fix it. It is going to require some effort, and getting down to the heart of the problem, a not just putting bandaids and painting over it and patching the walls which may look good for a few moment, but it is basically like a bandaid on a gaping wound and this is what the people have been living in far too many places. And so we have to get to the heart of this issue, and in fact, i spoke to the secretary of the air force earlier today, and what we talked about was the need to get down and this is going for everybody. We have to get down to the heart of this issue, and we have to stop putting the bandaids on the gaping wounds and identify and get down to the core of issue. So my next question is will you commit to putting in long term issues. Issues of culture and reorganization and if it is tearing down the properties to start over to get to the heart of issues to do right by the military members and their families. Congresswoman, i alluded to it in the opening remarks. We have made significant changes in the way that we are conducting our business. Putting clear line of sight for the technical issues, and these fall in that area. Clear line of sight all of the way to the top of the organization, and that is resting on my shoulders, and so i am committed and i shall be held accountable for the changes that we need to make. I will be holding you accountable to that. And since we have a few seconds left, i wanted to also follow up with one final question. From the documents that i have seen, it appears that your Company Earns 4. 3 million in performance bonuses each year in the property, and over the years, that is tens the of millions of dollars in the performance bonuses that were paid out while documented evidence that Balfour Beatty and it does not matter if it was an employee down the line, but Balfour Beatty was falsifying the records of tens of millions of dollars and what i want to know is if you are going to commit to taking every single penny of this money paid based on the falsified maintenance records to invest it in fixing the problems at all of these Housing Units . Congresswoman, as i mentioned, those allegations are quite shocking to us. We are undertaking a thorough review. I mentioned that we have invested with outside counsel to investigate that. The department of justice is undertaking the investigation into the very same issues. We have committed to providing the results of our findings to the d. Oj. In the event that we have been found to falsifying records we are committed to refunding any Incentive Fees back to the project, and further in the event that any of our individuals are found to be at fault not complying with the code of conduct which we take extremely serious, and to the extent that we have found that anybody has strayed from code of conduct, we will take appropriate disciplinary action. And mr. Taylor, i am over time. I think it is important for us to say that we are going to continue to work on this, but the confidence that our communities have, and that our Service Members have in their ability to trust their families to your care, collective care, has been seriously eroded, and it is going to take a lot of work, transparency and contrition to get to the root of this. Thank you. Thank you, mr. Chairman. Ranking member lamborn, in february, we had a round table with the spouses and military members affected by these housing issue, and i wanted to tell you that i found those spouses, and those soldiers who were there, primarily spouses to be extremely professional and credible. I was a little taken back at a couple things. One of the things i was taken back at, its our fault or the dods fault, i dont think the base commanders or the dod took this issue serious enough in many cases, i think where we had good base commanders it was taken serious and in other areas maybe poor base command allowed these things to happen. But the primary issue that got my attention was the complexity of the landlord tenant contract written by lawyers of extremely large corporations that you represent that is then handed to a soldier, who may be, quite honestly, just out of high school in many cases. And so when you hand these Service Members the contracts, there are provisions in the contracts and the mediation contracts that are intentionally designed to and have the impact of financial intimidation of our Service Members and our families that say if they take you to mediation, if thats their only course of action where they can resolve the issue, and they dont win, then they have to pay your legal fees. And so my question is this. Are these provisions still in your contracts . Well just go down the line. To the best of my knowledge, congressman, we have been adapting the provisions to not have any forms of that type of language, language of intimidation or, languages that would provide remuneration back to us as a company if a suit was filed and or filed forcibly. Mr. Allen, yes or no . All of our lease forms are under review and the industry is working on a common lease form thats not a yes or no. Ill assume you, still have the intimidation provisions. Mr. Hicky . Congressman, to the best of my knowledge they dont exist in our contracts. Mr. Taylor. Im not aware they exist but i can tell you we never pursued recovery from residents. They do still exist but were in the process of removing those clauses. I think when we have our soldiers housing bill of rights, i think those provisions will be struck. That is thats unacceptable to me for to ask an 18yearold soldier straight out of high school to sign a contract that makes them responsible for the legal fees of a multimillion dollar corporation. With that i would like to yield my provisions to my colleague from new york. Gentlemen, thank you for being here today. Earlier this year we heard from the services and military family members, and it was really stunning to hear about the challenges that these military families have faced. I have the honor of representing fort drum, the most deployed unit in the u. S. Army since 9 11. These are families that have faced multiple, multiple deployments in iraq, afghanistan afghanistan, around the world. And it is extremely important to me that they not have the stress that their family members face at home because of housing issues. So mr. Hicky, as you know, lend lease is the primary private partner for the mountain communities home and the timbers located at fort drum. I want to ask you for the record, because this gets to that feeling that people dont have a voice and they dont have an adequate Response Time when there are complaints. If a military tenant has a complaint or concern, how can they absolutely count on lendlease to address this concern in a timely, professional, and adequate manner . And most recently snow removal has come up in the north country. I know some of you dont face that, but that is a significant concern and came up at a town hall just recently. Thank you, congresswoman, for that question. You know, we operate in a structure with very clear protocols of responding to inquiries, we give residents multiple Access Points if any concerns they can come straight to our project director, through our Customer Service, our resident apps. We monitor all the requests digitally so its done through our system and we can track anything not monitored in time it comes as an exception to us so we have a regime looking at things not addressed in an important manager. The residents Advisory Board that we put into place, that will be rolling out in fort drum soon, is another way to get voices and access in because well have those Community Representatives on small areas and making sure they have several opportunities for them to get heard and voice their concerns and ideas proactively and negatively. Thank you, yield back. Ill turn to ms. Houlihan. Thank you for joining us today. Im Third Generation military. My mom was a resident of military housing, i was a resident of military housing, i have four active duty cousins that serve we represent the army, the navy, the air force. And i also was an educator that was underserved. As an educator and a person who lived in housing like this, i can say that i really worry for the children. I worry for the children exposed to lead and mold and what im hearing is that people are not using the word mold because it would create problems. Theyre creating your organizations are creating kind of the opportunity to hide things. So the first thing i would like to ask for time, would you be able to submit your policies on lead and mold remediation, so we can understand what they are, and what kind of what you do in terms of what time lines you expect to remediate those. And also what you do to make sure that people you talked about displacement, what happens when theyre displaced and also, for the record, again, what compensation do families have when their home goods are destroyed . Having had that experience as a child, i understand that. So that i would like to have for the record. The other thing id like to understand, maybe individually, is in the case where there is a child who has been affected by this, who will permanently be disabled because of this, what responsibility do you all have and plan for with your for profit businesses to make sure those children and families are being taken care of, or do you expect that the government will do that for you . So, representative, in our case, we work directly with when an instance like this comes up, we work with the medical community on the installation with the Garrison Commander, and we try to provide define where the or devine where the problem really is. We have had instances where, although believed it was the home causing it, it turned out that it was lead in the munitions plant that the soldier was actually working in lets just assume that it is something identified as being a housing issue that happened in the past. What is the process that you go through . If we find out that it is determined that the home is, in fact, the cause of the illness, then we will support that child or its medical costs. Mr. Ail, is that how you pronounce it . Yes, ail. If, you know, if were obviously supportive of the process of determination, and through dispute resolution and so forth if theres fault thats determined well certainly work with whatever the determination is. I will provide you with our protocols, theyre clear, clearly outlined, we have a 24 hour Response Time to let you know if anything happens in that 24 hour response, if the residents feel uncomfortable well relocate them and so forth. So im happy to share that with you. If we are the cause of any medical, condition wed absolutely look to financially compensate through any structure that is appropriate. Thank you. Congresswoman, i would agree with the other gentlemen. Youre planning for that, youve been at it for a couple, few decades that are decades of kids who are grown that have those problems that can be a i tributed back to that. If attributed to our conduct, yes, maam. Thank you. Congresswoman well also provide you the protocols and whatnot. Thank you. To answer your question about medical, again, if were proved to be at fault, then we work with the families and medical to figure out whats the best resolution to solve that issue. Thank you with the last 45 seconds of manyy time, i heard a lot of yes, yes, no, no. Having been an entrepreneur and businesswoman myself, do you have a group that you share your best practices across all of your organizations so each of your standards is similar or the same and youre sharing somebody who said they have an app or you said you have a round table, do you have a best practice round table . Yes, representative we actually formed the military housing association, mha, specifically to do that. As an outcome of challenges weve had, we realized that we do share individual best practices but we didnt share as an industry, so weve started to do that on a much grander scale and i think it is starting to provide some of the benefits you will be seeing or have been seeing thus far. I know ive run out of time, i would love to hear if you can get together on that and get back to us. Thank you. I yield back. Mr. Wilson . Thank you, mr. Chairman. Thank you each of you for being here today. Mr. Taylor, im really grateful that for the leadership at fort jackson, Commander Brigadier beagle has conducted a town hall with your company, with Balfour Beatty and to address the issues of housing. Complaints were raised about the broken sidewalks, long lines for the completion of work orders, shoddy work repairs and noshows by the maintenance staff. What have you done to correct these deficiencies . Is there a residency Advisory Board established and is there a project manager you can report to on a 24hour basis . Thank you, congressman. I think universally across all of our portfolio we are Getting Better at forming Resident Group that is we can meet with and we do it in concert with our military partners at the individual installations as well. Town halls were starting to see an increase in the frequency of town hall that is we participate in alongside our military partners those are great ways for us to get the information, to understand the concerns our residents are facing. In terms of processes, changes were undertaking, as i indicated in my opening remarks. We certainly recognize that we can do better in many locations. And so weve addressed that through a number of staffing level increases, looking at the policies and procedures we do have in place and where we saw they were defishdeficient were addressing those. Its not as simple, as addressing one broad problem but were taking on a number of areas to improve. But a lot of that is through process, procedure, make sure we have appropriate staffing at the level. Is there a hot line where a resident can report an issue . Yes, sir. We have an 800 toll free line that any resident, employee, anybody can call to let us know at the corporate level any issues theyre facing that arent being addressed locally. Thank you. Mr. Ehler, joint based charleston is a Hunt Military Community however theres confusion about the structure of your deal with the military. I understand its a 50 year deal. The agreements are not contract. And youre considered a partner not a contractor. Can you explain this and how the system works . All of the llcs we have are 50 year ground leases, the land owned by the government. And the partnership element is that these are meant to be true Public Private partnerships. With the air force, which is what jvc is. The air force is not a legal member of the llc like the navy or army are in their projects. But the air force does have an investment in the form of government direct loans they have a financial interest in the project. So there is a partnership. And, of course, none of these can succeed without having a good functioning partnership and a partnership is both cooperation but also mutual accountability. It works very well with the air force. Thank you, i yield the balance of my time. Thank you. Just to follow up. One of the aspects in the ndaa that we focussed on is the importance of a common tenant bill of rights. I want to hear from each of you. Ill start with you mr. Hickey just because of the importance of your answer to my district. What rights are you proactively ensuring that are afforded to our military families who are leasing your properties and how do you measure that success . Thank you, congresswoman. For the question. We have all been working diligently with the services on a common bill of rights. So weve participated, put forward our suggestions and so thats well documented. But putting in the ability for residents to receive refund, for example, if theyre in a situation where they are in a house that has not been maintained properly, they can get refunded rent. Putting in plain English Version contracts. Right to actually terminate contracts if there is something wrong with the house. Giving more flexibility back to our residents is what we have focussed on. I know you communicated that to the families, what about the services . Have you facilitated feedback from families for the bill of rights . Yes, we have. Weve been liasing with the safe family initiative, weve been holding town halls, including fort drum, and getting that feedback and asking what they would like to see. Its been a collaborative approach. Ill take the answer for the record because my time is expired. Thank you. Yes . Thank you. Yes . Thank you, chairman. Thank you. Thank you all so much for coming. I appreciate you being here. And taking the time to be with us today. My district is in new mexicos first congressional district, i have Kirtland Air Force base and we have 365 days of sun per year and the climate is extremely dry, and yet we have still had reports of mold there. For whatever reason. It sounds kind of strange but nonetheless, that is one of the issues that my constituents have reported to me. I am a daughter of a 30year career marine. So i grew up in military housing all along Southern California and in virginia both. And so, i am luckily i have nothing but good memories of those times unlike many of the families who unfortunately do not share that same will not share the same memories that i do. So i do hear some some goods things from my district. For example i hear the maintenance comment cards include information about the tell me in additions coming into the homes and what work theyre doing and that quality of repair work has improved, better communication and that is vital. Im glad to hear that hunt is taking the steps. Also hear about the fall festival and other family activities. And those are all good things. Unfortunately substantial challenges remain. Families continue to receive inconsistent treatment and information from hunt staff. So my first question is for you mr. Ehle, can you share what steps your company has taken to improve stan darized service . Yes. The lack of consistency is something were extremely focussed on all across our portfolio, and its one of the reasons why we are focussed on promoting standardization across not just our portfolio but the industry and were very much in favor of that. So we look at things like variances in response and completion standards. Not just, you know, property, but across the portfolio and across the industry. Were in favor of doing that. Weve already done that in our own portfolio is establishing a hunt standard for standard consistency and so our residents should start seeing that shortly. You know, in terms of our environmental concerns, environment concerns are on the rise in the last couple years, weve seen mold to an extent we havent seen in a long, long time. Caused by some extreme climatic conditions that havent historically been seen but i dont think thats going to change in the future. So were beefing up our environmental expertise on site and at the corporate level, beefing up our environmental training for our maintenance teches, adding qaqc professionals. And weve made a great deal of progress in filling all those positions. And then, of course, the increased training across all of our people. Thank you. Thank you. Id like to turn to the issue of mold. And thank you for raising that yourself. It continues to be a major challenge and weve heard that from our my colleagues. Many families want to have licensed and certified Third Party Experts conduct testing in their homes. Some have been told that hunt and other Housing Companies wont accept these results or Third Party Experts would not be permitted to enter the homes. Mr. Ehler what is hunts policy regarding mold testing by licensed Third Party Experts . We tend to follow the epa guide lines related to testing and epa tends to advise against testing because they find it to be inconclusive. Examples from elsewhere in our portfolio. We had tests on houses that dont apparently have mold that the tests come back high. On the other, hand weve been in houses where theres obvious mold all over a wall and the test comes back there is no mold in the house. So weve found its difficult to find a reliable test. Would you allow families to seek a Second Opinion on the presence of mold in their homes by licensed Third Party Experts . We support anything that our residents choose to pursue for evidentiary purposes. Again we found that testing is unreliable because it can go either way, if could be a false positive or false negative. Thank you. Id like to how much time do i have . Chairman, i yield. Thank you. One of the aspects of this crisis that i think is really important is prevention and mitigation. At fort drum we have a relatively young population of young soldiers, young military families. Often times this is the first time that theyre responsible for their home that theyre living in. How are you, mr. Hickey, investing and sort of providing educational materials for those young family members and young Service Members to know to contact you before something gets to a crisis level that weve seen in some of these photos . Thank you, congresswoman, for the question. Look, we actually share your same concern. Many times they are 18, 19yearold people who have just moved out of home and have to maintain a house and think about issues about avoiding damp conditions arising in a house. So at every move in, any time someone moves in, its a personal handover we take a tour of the house with them, we explain some of the issues, how things work, some of the maintenance obligations and how they go about looking for things that are problematic. We also do a 30 day and a 90day check in with them to make sure, how are things going, what are we doing . If they want any help in terms of looking after their home and we also do a yearly inspection on all of the properties. So in all of those times we seize the opportunity to help train them, or help educate them or give them visibility as to what they can do better. We also tell them the minute they have a concern is to ring us straight away and well come out and talk to them. Theres a little bit of education, we can do more of it and wed like to do more of it, but its also training them to help themselves at the same time. So thats what we do and we continue to invest in that. Thank you, yield back. Thank you. I thank the subcommittee for allowing me to participate in todays hearing. Let me start by saying i support the military houseing privatization initiative. I support things liek enhanced use lease on installations, in maryland weve done a lot of good things from the port of baltimore to the purple line to travel plazas on interstate roads. But i support them only when we can ensure that e with deliver quality, safety, reliable value products and services to the public. What the public demands and what they deserve. In this case, when we talk about privatizing military housing that public is our military families and here we fell short. Our concern is this. I get that circumstances may have changed over the decade or so when we started the program to where we are today. I hear about the draw down, i hear about the reductions in the bah rates and how that put pressure on the ability to deliver quality. But what concerns me is that it took the courage of military spouses to come to congress. The pentagon didnt come to congress and say, we have a problem. You didnt come to congress and say, we have a problem. The framework, the model, the formulas that we based these agreements on years ago doesnt work because of a changed environment. Instead, military families got squeezed. It was military spouses who stepped up. And thats a shame on you. Its a shame on the pentagon. And weve got to fix it. Mr. Picerne did i get that right . Picerne . Close enough . In february of 2019, earlier this year at a hearing you stated we hired a worldrenowned specialist at no cost to the government to renew our mold and mildew procedures so that here, too we are living up to the Gold Standard and yet now youre saying its going to take time to get back to the Gold Standard that residents received in the early years of our mhpi paprtnerships. Why have you not been able to return to the Gold Standard that you promised to congress and to our Service Members . Why has your position changed . Our position has not changed. We endeavor to return to the Gold Standard. As i mentioned in my testimony, the Gold Standard really will be when a deployed soldier is able to call back, which is one of the tenants we founded our business on, will call back from forward deployment and talk to his or her family about whats happening in their lives and not deal with homeowner or home issues. We are getting closer and closer back to that standard. Were not there yet. I dont want to let me ask you this question. I dont want to accept the fact we got there because its an ever growing let me ask you this question at fort meade, maryland you mentioned that town halls and greater communications with Service Members is a big part of it and their families. Its my understanding that at least one Service Member has been denied access to those town halls or those communications. Are you familiar with that . I am not familiar with that. I would ask you to please familiarize yourself with that so when we say Service Members are in both formal and Informal Communications with you, that that means all Service Members. I would ask unanimous consent to enter into the record a letter i sent to fort meade asking the Garrison Commander to step up his oversight at fort meade because i really believe that you guys are not even making forward progress as you committed earlier this year. Without objection, mr. Chairman, can we enter this into the record . Without objection. My turn, there being no objection, so ordered. Another question, several of the Service Members stationed at fort meade conveyed to me they experienced direct retailliation from your companies in response to their attempts to resolve maintenance issues in their homes. First of all are you aware that . If so, if you are or not, do you condone this behavior . And what action are you going to take to make sure harassment immediately ceases . We take any form of retaliation, retribution or harassment seriously and do not condone that behavior. Im not aware of any situations where that has taken place. I will look into it immediately and report back to you once we have our findings. I appreciate that. These are serious allegations. When military families are stepping up and protecting their own rights, they do not warrant retaliatory measures. With that i yield back. Thank you, mr. Brown. Thank you for this hearing, thank you to our panelists. I appreciate your presence here. I want to recognize and thank the military families who have expressed so much courage in the face of potential retaliation and after years of frustration and incredible difficulty. Thank you all so much for being here. Im very, very grateful for your strength and courage. The round table we had with military families ive had some of these conversations with you all personally, not everyone but with most of you. Those conversations at the round table were shocking, heart breaking, difficult to hear, and to be honest, infuriating. I am very grateful that theres been spotlight placed on all of this and that there has been a demonstrated desire to preserve the private public partnership, but to improve it in order to sustain it and make sure that we continue it. Mr. Taylor, we had a conversation about all of this, but as i mentioned to you all in my office, what was particularly troubling on top of the many issues that families brought forward, issues that literally meant that peoples lives were up ended that health was put at risk, children were put at risk through mold and through everything else, what was particularly troubling for me was the fraud allegations. And we talked about everything that you all are doing to not just to remedy but to investigate. I appreciate the investigation but im going to ask you here in this hearing publically, the same thing i asked you in my office and this is about accountability. Because too often accountability is swept under the rug or, as i mentioned to you, lower level employees sometimes are fired but the high paid, high level folks who should have known and who should have created a culture of accountability remain untouched. So im going to ask you here in this hearing what i asked you privately, which is id like to know the number of dismissals that have occurred as a result of the fraud allegations, any other disciplinary actions that have been taken, and how will leadership how far up the chain will that accountability go . How will leadership be held accountable . And if you could answer all of those questions for me, im not asking for names of folks. Im not asking for you to disclose anything that is in personnel files. This is important to understand in terms of accountability for me, the general information, please. Thank you, congresswoman. And i do recall the conversation, and it gave me an opportunity to go back and interrogate our information so that i would be prepared to respond. Before i give you the number, i will say this, ill repeat a comment a remark i made earlier. We are all accountable. We are all accountable to provide the service that we are entrusted to provide. It doesnt matter where we sit in the organization. Since the allegations of fraud were levied earlier this year, you know, i went back and i asked our staff to look at how many folks that were on our staff were let go because they didnt comply with our policies, procedures, our code of conduct, because thats really at the heart of our organization. If we dont have Staff Members that are willing to follow those policies and procedures, thats an obvious weakness in the any organization. Since the beginning of this year, we found 17 instances of where weve let people go because they were not complying with the standards that we set for our employees. Where they sit in the organization, most from without naming specific positions. There were managers that were let go. Those folks were at project sites, i grant you, i will tell you this. That and again to reiterate a comment i made earlier. Regardless of what the investigation reveals, if it identifies wrong doing by any member of our staff, it doesnt matter if its at the top of the organization, the middle of the organization, or wherever it sits. Rest assured we will take the appropriate action to make sure those folks no longer are employed by our company. Thank you, im just about out of time. But i will say to all of you, it will be very important that the improvements that youve made, that you report back to us. We need to know the number of calls, the number of people using the apps, et cetera. We need to see, within a time certain, a reporting back, complete transparency because thats the only way we can hold you all accountable, as well as hold ourselves accountable. Mr. Chairman, i yield back. Thank you, ms. Escobar. Votes have been called so im going to wrap it up with a couple of comments. I will ive noticed that the quality of questions from both sides here have asked most everything i would have asked. I want to make a couple of comments. First of all, this hearing is one of a series. We will not let this issue go as long as, im sure, the members of this committee are still members of the house of representatives were going to stay on this. And certainly the committee will, certainly during my chairmanship, im sure should that lapse and somebody else has it it will carry on, so be aware gentlemen, those that are not here that are part of the system they too are going to be held accountable along the lines of the questions asked by the committee. Several things need to be noted. First of all we knew right at the outset that part of the problem was that the base commanders did not take responsibility. That is changing. That needs to be addressed. The pentagon is well aware of it from the previous secretary all the way down the line. And well see to it that that accountability remains within the military and the base commanders. Secondly, there will be a bill of rights. It is in final or near final form. Weve not a chance to review it. Im told the pentagon is awaiting the passing of the ndaa and the final version of it, which will be some may have some impact on the bill of rights itself. But it will be forthcoming and it will in many ways deal with many of the issues weve heard here today. Secondly, the question of the lease contracts themselves, we will push that all leases across the entire military reach the highest standard of any state lease. A homeowners and tenantslaws and the highest standard. Which im told might be massachusetts but i claim california. Well see if any of the members think their tenant rights are better, north carolina, well, bring it forward and we will see. In any case, we will try to achieve, consistent with the multiplicity of contracts that do exist between the military and private housing providers. Well make sure that the lease contracts protect the tenants. So the tenants will be in the first order. Second, questions about metrics, how do we observe quality or lack thereof, those metrics are under review and i would ask any member that has ideas about what should be in those metrics to bring it to us and well drive that forward. Finally, with regards to the role of the tenants and the communities themselves, there are efforts under way on many of the bases, but i suspect not all, that there be formed within the home owning excuese me, the rental community, or the renters, programs in which they can participate. The word pta was used here, im not sure thats the best model but it speaks to the involvement of the families working together to ensure that their issues are fully dealt with at the base level and if necessary, here in congress. So i think that covers many of the issues. Any further thoughts . Then this meeting is adjourned. Before i adjourn, were coming back, folks. Well do these hearings every four months or so so well be back in early spring for a review of where we are, well ask the services, as well as the owners of the privateized housing. Were adjourned