I will read his statement. Very good. Before we get started i request unanimous consent that a member of the full committee be allowed to join us, mr. Brown, who is behind me and participate in the questions. And there is a formal unanimous consent that a nonsubcommittee member participate in the hearing after all of the subCommittee Members have had an opportunity to ask questions. 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 of the Armed Services committee. Since february of this year, the subcommittee has been conducting extensive oversight of the Privatized Housing military program. We 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 th met irics t 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 enterpr e 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 for mall testimomal testim 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 percertain, 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 StandardResident 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 residents expectations. We are committed to taking the necessary actions to rebuild the trust between hunt and our residents. We have made progress over the past year, but our work is far from done. Thank you for the opportunity to testify today. I look forward to hearing your 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