Service Leaders Testify at Senate Hearing on Military Housing Conditions


The top civilian and military leaders from all four services testify at a Senate Armed Services Committee hearing on reports of substandard housing conditions and services, December 3, 2019.

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Transcript

We’ll do that. Alright the committee meets today to receive testimony from the Government Accountability Office, the Service Secretaries, the Service Chiefs, on the current condition of privatized military housing. Almost a year ago, I first heard from military families about the dismal conditions they faced. Frankly, confession’s good for the soul. This was Janet Driver called this to my attention from Tinker Air Force Base. And I thought this was something that was just unique to Tinker Air Force Base and then I thought, no, it’s elsewhere in Oklahoma but then it’s also all the way around the country. And so that was the kind of the background of how this all started. We’ve come to learn that it is a problem nationwide. It’s a national crisis of proportions we haven’t seen since the scandal at Walter Reed about a decade ago. Members of this committee, our staff, and myself, we’ve all traveled and seen these problems firsthand. This is the third hearing this committee has had on this issue. And I am sure it’s not gonna be the last. We hope that since our first two hearings in February and March that we would see marked differences by now and be able to use this hearing, in fact it was set up to discuss the progress that has been made. Well, it is set up to look at the progress, but the progress has not been what we wanted. We continue to hear regularly from the families across the country about questionable practices, poor workmanship, and frankly, in some places about housing contractors just not caring about the families they’re supposed to be serving. Additionally as reported in the press, some of these contractors are now under investigation for defrauding the federal government. I’m really worried, what else can come out of the woodwork on this? What other problems are out there that we don’t know? To our witnesses from the Department I have to ask when is enough enough? I have to make one comment, though, of the eight witnesses that are here, with one exception, they all kind of walked into this blind because this is a new issue that you were not familiar with so when I’m critical and say some things that are critical I’m not looking at you personally but at the department and who was representing before you arrived here. So, regardless of any potential criminal wrongdoing we’re still receiving complaints on a daily basis showing that you are still failing to fix the problem. The time for talk is over. If these companies can’t get the job done you owe it to the military families to find a company who will. I say this because this housing problem is really a readiness problem. We don’t think of it as being a readiness problem. I had experience in talking about this, we actually had two airmen had to come back from UAE to handle this problem that should have been handled by the military in their absence. So, this is a very important element. These hearings are not to be an indictment on the privatization housing system as a whole because in some cases it’s worked and worked very well. It is meant to be an indictment on the bad actors that we know are out there. To those who lead our men and women in uniform, I ask what are we gonna do about it since almost a year later we’re still hearing about the same problems? As I mentioned earlier, this will not be the last hearing. I’m putting our witnesses on notice that we will have another hearing early next year to discuss implementation of our housing reform efforts and contractors will be back to answer the hard questions. I had some things I was gonna say about Ms. Field but I think I ought to go ahead and not use her time. But I think the GAO has done a great job and I want to make sure everyone hears from them. But to remediate these and dozens of other problems we have more than 30 housing related legislative provisions in the NDAA this year, 30 provisions. That’s another reason that the NDAA is important. We’ve been unable to get, we did a good job in the Senate, they didn’t do that good of a job in the House and we do have those problems that we will be addressing. We can’t afford to ignore this readiness problem. Issues like military housing are why it is so crucial we continue to pass the NDAA every year. NDAA supports the bipartisan national security of this country and should not be held hostage by issues outside this committee’s jurisdiction. Unfortunately, because of issues that are not in the Senate Armed Services Committee’s jurisdiction, this year’s NDAA is not yet resolved which means only leadership can clear up this log jam that’s out there. Otherwise, the likelihood is greater now than it was that we’ll have a skinny bill. We’re out of time and I didn’t mean to deviate from the subject of this committee hearing but I think it’s very important that we bring this up as a critical thing that’s taking place right now. I hope that we can move past these issues so that we can remain focused on the promises we made to those who serve our country and get an NDAA signed into law. That should be our priority and it is. With that I would like to recognize military families who have traveled here today to seek answers from you. And we’d like to have all of them, they’re in the back of the room, all families that have an interest or who have been affected to stand up right now. Let’s give them a round of applause.

To our DOD witnesses as I’ve said before, these are the people who trust you, whose trust you’re gonna have to regain. Senator Reed.

Well, thank you very much, Mr. Chairman. I would like to begin by again thanking the vast number of military families who have spoken out about the inadequate conditions of their privatized housing. I especially want to recognize the military families who have traveled here today for this hearing as the Chairman has done. Today we welcome Ms. Elizabeth Field from the GAO and the senior civilian and uniformed leadership of the military Services. Ms. Field, I especially want to thank you and your team for your dedicated work thus far. The GAO’s findings thus far confirm the alarming trends we have hear from many military families. For example, the GAO found that the often quoted 87% satisfaction rate is “misleading and unreliable” and that the records for resident requests for work orders and service calls are questionable. This committee continues to receive complaints directly from military families. While the Services have made strides since last February, many unacceptable problems with housing remain. I am still not convinced these private companies are doing everything in their power and investing as much as they can to improve the quality of homes for our military. I also have several questions I ask be entered into the record that were requested directly by military families on the many issues within military treatment facilities and diagnosing medical problems caused by inadequate housing conditions. While the conference process is still under way for the Fiscal Year 2020 NDAA, I remain confident that we will reach an agreement on legislation that will represent the most significant reform of privatized housing since its inception in 1996. We all still have a lot of work to do on addressing the systemic problems that have been discovered with privatized housing and I thank the Chairman for convening this important and timely hearing. Lastly, I want to take this opportunity with the civilian and military leadership of each of the Services present to express my deep concern about the President’s recent interference in war crimes cases involving members of the U.S. military. These comments follow on my remarks on the floor of the Senate on November 21st. The President has the power to pardon but he has a responsibility to use that power wisely not recklessly. Good order and discipline are critical and time-honored traits of the United States military not only to enable military readiness and effectiveness but also to ensure military men and women remain firmly tethered to our nation’s moral and ethical principles in the most demanding war time environments. Some have claimed that these cases were distractions or that the President’s intervention has somehow improved the morale of the military. On the contrary. President Trump’s disregard for our military justice system risked undermining the confidence of our service members in the rule of law and their chain of command especially those who are courageous enough to bring allegations of war crimes to light and testify against their teammates. When we do not hold our military personnel to appropriate standards of conduct, it also makes it more likely that they will face similar abuses on the battlefield and less likely that we will be able to be hold our enemies accountable. There is no one with more credibility on these issues than former Senator John McCain who stated, “This is a moral debate, “it is about who we are. “I don’t mourn the loss of any terrorist life. “What I do mourn is what we lose “when by official policy or official neglect “we confuse or encourage those who fight this war for us to, “that best sense of ourselves. “Through the violence, chaos, and heartache of war, “through deprivation and cruelty and loss, “we are always Americans, “indifferent, stronger, “and better than those who would destroy us.” This is the standard we should demand from our military men and women and I believe the President’s interference in these cases has done them a serious disservice. Thank you, Mr. Chairman.

Thank you, Senator Reed. Each of the military departments has submitted a statement for the record which will be made a part of the record and I’d ask each of our military departments, through the Secretaries, to limit your remarks to five minutes. We have a full panel today, we have a lot of members who have a lot of questions. So, before we turn to the departments I would ask Ms. Elizabeth Field Director of the Defense Capabilities and Management at GAO to provide her statement which I know includes new findings that will be made public for the first time today. Ms. Field.

Thank you Chairman Inhofe, Ranking Member Reed, Senators and staff of the committee, it’s an honor to be here today to discuss GAO’s ongoing work assessing the military housing privatization initiative or MHPI. Almost as soon as reports began surfacing last year of problems with military privatized housing, service members and their families began reaching out to us at GAO to share their stories. We heard from military families who reported mold throughout their homes, rodent infestations and other serious problems like gas and carbon monoxide leaks and repeated sewage leaks. While these are just some examples of the complaints we received, they are indicative of the types of concerns we heard from military families living in privatized housing at installations across the country. What we wanted to find out when we began receiving these complaints was how commonly held they were. Defense Department officials have primarily pointed to two metrics to help answer that question. First, they cite the results of the Department’s annual customer satisfaction survey. According to DOD’s most recent report evaluating the MHPI program, tenant satisfaction has remained at 87% and is “a critical indicator of overall program success.” However, as Senator Reed noted, we have determined that for many reasons ranging from how the survey question was asked to how the results were compiled and calculated, this 87% figure is not in any way reliable. Second, the Department points to high occupancy rates. In the same report from May of this year, DOD stated that the fact that occupancy rates remain greater than 93% program-wide demonstrates and I’m gonna quote again, “a high level of service member “satisfaction and overall success “in providing suitable and desirable housing.” However, through our site visits to 10 installations where we conducted 15 focus groups with families, we learned that family members often choose to live in privatized housing for reasons that have nothing to do with the housing itself. Reasons such as living in close proximity to medical and education services for children with special needs or a concern that off base housing is neither affordable nor safe. As part of our ongoing review we sought a different way to determine the extent of the problems we were hearing about. We collected and analyzed over eight million work order records from all 14 private partners and all 79 projects. Our hope was that we could use these data to determine the prevalence of certain hazards, to see patterns over time and in different locations, and possibly to assess the timeliness of maintenance conducted on the homes. Unfortunately we found that because the data in these records are not captured reliably or consistently, they cannot be used to do so. Among other problems we found anomalies in the data provided by all 14 private partners such as duplicate work orders and work orders with completion dates prior to when they were submitted. The problems I detailed are significant not just because they tell us that DOD’s statement that the program has been successful overall may not be fully accurate but because the Department has been using these metrics to reward and incentivize the private partners. I want to acknowledge that the Service Secretaries along with officials from the Office of the Secretary of Defense have taken steps to address these and other problems from working to renegotiate the performance incentive fee structure, to strengthening oversight on the ground, to increasing staffing levels in military offices that have seen their resources cut. And I also want to acknowledge the many factors that make this a deeply complex problem including the Department’s inability to unilaterally make certain changes to the legal agreements with the partners. Through our ongoing review we know that the Department’s efforts are headed in the right direction but it will take sustained attention, likely over a number of years, to work through the many complications of this long term public private partnership and to fully meet the Department’s goal of providing safe and clean housing for all service members and their families. Thank you and I look forward to your questions.

Thank you, Ms. Field. What we’re going to do is, we have a lot of participation today. We’re gonna have seven-minute rounds. Senator Reed and I agree that we were gonna ask our members to stay on subject. There’ll be temptation, I think, in this environment to get into other areas but housing is it today. So, that’ll be what we will attempt to do. I’ll take my first. I’m sorry. Let’s go ahead with our opening statements. We’ll start with Secretary McCarthy.

Thank you, Mr. Chairman. Chairman Inhofe, Ranking Member Reed, and distinguished members of the committee, thank you for this opportunity to provide an update on actions taken by the Army since the intensive focus on Housing Operations and Oversight that began in February 2019. I would like to reiterate the Army’s serious commitment to providing safe, quality, and affordable housing to our soldiers, civil servants, and their families. It is our responsibility to provide housing, not simply to code but also to quality. We must fix the current housing crisis using a house-to-house approach. We must also fix the governance model and address underlying issues to ensure systemic change. Over the last 10 months, we identified our governance flaws, initiated commander driven town halls, and created 24-hour help lines to hear feedback directly from the families affected. We have empowered the chain of command as part of the solution, created transparency of the work order process, and ultimately, sought to regain the trust of the men and women in our ranks and their families. We directed housing as our top quality of life priority and are aligning resources against it. As a demonstration of our commitment to this issue, we assigned housing operations to the four star commander of the Army Materiel Command, General Gus Perna, who has the delegated authority to withhold incentive fees. We developed new incentive fee metrics measuring work order response times, work order repair quality, and resident satisfaction that will allow us to withhold fees for substandard performance. A tri-service Resident Bill of Rights is being finalized to give residents an active voice and avenues of recourse. We are also equally concerned and committed to improving barracks and Army-owned housing. In the last two fiscal years, the Army has invested $1.1 billion in barracks sustainment. For FY20, projects for new barracks will total $790 million in R&M and MILCON. While the Army has worked hard over the past 10 months to make significant strides in the way we manage privatized housing, there is much more work to be done. The immediate focus is to fix current housing issues that can be addressed by effective follow-through on work orders and improved management. We owe it to the 45% of our force who live on post. In addition, we need to rapidly address the needs of families who have been temporarily displaced. Across Army installations, there is a need for standard operating procedures, transparency, and accountability of claims. This must include standardizing rent reimbursement, food cards, and remediation or replacement of household items. Since February, the Army has tracked the displacement of 2,265 families. Currently, 182 families are still in temporary housing while privatized companies are addressing issues in their homes. To displaced families, days can feel like weeks, and weeks can feel like months. These aren’t simply numbers, these are lives. Currently, we have over 86,000 privatized homes, with one third of the houses in good condition, one third in fair condition, requiring minor refurbishing, and one third in poor condition needing to be rebuilt. Right now, General Perna is working on an overall analysis of the Army’s privatized housing requirements. In the spring, we plan to present the findings to the key committees of jurisdiction. In closing, the Army is resolved in our commitment to providing safe, quality, and affordable housing to our soldiers and their families. But much more work remains. We need Congressional help in two areas. First, we need the NDAA approved to enact items such as the Resident Bill of Rights. Second, we need a final FY 2020 appropriations bill to continue immediate housing improvements. Thank you and I look forward to your questions.

Thank you, Mr. Secretary. My staff has reminded me that we’ll stay on our schedule. Next we’ll be hearing from Acting Secretary Modly and then Secretary Barrett. And try to stay within your five minutes.

Chairman Inhofe, Ranking Member Reed, distinguished members of the committee, thank you for your continued attention to this very critical issue. For the Navy Marine Corps team, our people are our most precious resource and we will always prioritize their safety and their well-being, particularly of our sailors and Marines but also of their families who serve alongside them. There was an empty chair at Thanksgiving table for many of our Navy and Marine Corps families because a father, a mother, a wife or a husband was deployed overseas. These families serve with pride and distinction. On top of the considerable demands of military service, no military family should ever have to contend with chronic maintenance issues or concerns such as mold and pests in their homes. Trust and confidence are the bedrock of effective command, and the sailors and Marines in our care must be confident their leadership will advocate tirelessly on their behalf. This is commander’s business, the three of us are actively engaged on this issue and have been since the beginning and we are committed to empowering leaders throughout the chain of command to assess, monitor, and remediate issues of concern. Since the Department of the Navy last addressed this committee, we have diligently pursued three distinct lines of effort, one, active and engaged leadership, two, reinforcing the Department of the Navy’s oversight of our PPV partners, and three, improving partnerships with privatized housing owners to most importantly restore trust with those families that reside in those housing units. Our written testimony provides more details on these efforts so we’ll close with this. While we have made steady progress over the past six months, we are not completely satisfied and we will not rest in our determination to make this right for our sailors and Marines and their families. We appreciate the committee’s continued resolve on this matter and the committee’s efforts to secure the resources we need in this effort by ensuring final passage of the NDAA in the Fiscal Year 2020 appropriations. Thank you and we look forward to your questions.

Thank you. Secretary Barrett.

Chairman Inhofe, Ranking Member Reed, members of the committee, thank you for inviting us to discuss housing today. The Service Secretaries and Service Chiefs work together on this issue. We share ideas of how to improve housing because our soldiers, sailors, airmen, and Marines who live on military facilities deserve safe, secure quarters. We are jointly committed to resolving housing issues and we thank you for your continued attention to this matter of mutual concern. Issues with privatized housing on some installations revealed instances of faulty construction, subpar maintenance, and late to need responsiveness. While many bases have effective privatized housing, others have suffered with project owners who have simply failed. Some project owners have reportedly disregarded maintenance requests, misrepresented timelines, performed partial repairs, and failed to correct the root causes of problems. The Air Force owns part of the responsibility as well. We cut too many personnel who provided oversight of the projects and failed to fully empower the chain of command to own and fix these issues. As a result, housing problems have distracted from the Air Force mission, they have disrupted our airmen and dislocated their families. This is unacceptable so we are taking steps necessary to hold our project owners accountable for improved performance. During my confirmation hearing before this committee we discussed some of these issues. Subsequently, my first stop on my first trip as Secretary was to survey base housing. In my first five weeks as Secretary, I have examined privatized housing in Wyoming, Oklahoma, Texas, and Mississippi to observe problems and process first hand. Since my predecessor, Secretary Heather Wilson, and General Goldfein testified on this subject nine months ago, the Department of the Air Force has fixed many housing issues and made progress toward fixing others. They completed an important Inspector General’s investigation, the results of which have been shared with this committee. Dozens of recommendations from the IG and from Air Force itself and from families themselves have been fully and partially implemented. Process improvements fall into five broad categories. We are empowering the residents, we are integrating leadership and accountability into all levels of housing. Residents, project owners, and the military chain of command are now communicating directly and candidly. Housing now has local and central scrutiny and oversight. Finally, Air Force policies for housing management have been updated and standardized. Under the leadership of Air Force Assistant Secretary John Henderson and tenacious base commanders, we are establishing resident councils to solicit direct feedback. We are placing new resident advocates at each of our military housing offices to connect residents with resources and to help resolve disputes. And additional personnel will help us achieve 100% pre-move in inspections while enhancing oversight. We have also worked with project owners to fix root causes of recurring mold at the bases with the most severe challenges. Some housing issues invite concern about possible misconduct including allegations that some project owners manipulated maintenance data to increase their incentive awards. These allegations have been referred to the Air Force Office of Special Investigations which in coordination with the FBI will determine whether to press criminal charges. Senator Wicker last week when you and I visited Keesler Air Force Base in Mississippi we met Air Force families who had been displaced from their privatized homes as many as four times in recent years. As these families prepared for Thanksgiving they wondered whether they should decorate a Christmas tree in their temporary homes or rely upon the latest promise that they would return to their permanent homes in time for their holiday. Family disruptions and health challenges are profoundly personal and impactful to these families and therefore to us. We owe it to our Air Force families to get this right. With your continued support we will. I look forward to your questions.

Thank you, Secretary Barrett. We’re gonna have five-minute rounds. We have more than a dozen contractors out there providing military housing to our Services and some are better than others. There’s one that’s kind of notorious at one end of the spectrum and that’s Balfour Beatty and I’m very familiar with that because that’s where this whole thing started. In my opening statement I mentioned Tinker Air Force Base. But they also are representing Lackland, Malmstrom, Travis, and Fairchild. And it might be a little unfair since you’re the newest one Secretary Barrett but to give you the first question, if you have a repeater like this and this conduct like this, why is that they’re still there? What do we have to do? How do you pull a plug? How do you get that done? Are there contract obstacles out there? We want to get things done. And you’re the newest one out there, what do you think?

Senator, that’s what we’re looking at. Before I was confirmed, the Air Force was taking action on exactly that concern. They received, that company received a letter of concern from the Air Force expressing that the Air Force has lost confidence in their ability to perform under their contract. That letter was issued in September. Since that time, they have not been receiving performance incentive fees, since that time all of their contracts, they have the contract on many bases, all of their performance fees have been withheld. So, they are under financial penalty right now. In addition to that, it has been requested that they submit an action plan for what they will be doing. That plan is due by the end of the year and there will be metrics and accountability from that plan or the Air Force will be initiating the elements accessible to us under the dispute resolution procedures which could lead to anything up to a default on their lease.

I guess, the short version is you’re doing everything that you can do that you inherited at all the facilities that you are able to, changes you’re able to make currently. To each of the Secretaries, I’d like to mention or I keep hearing that they’re talking about, these companies said that they would be open to reopening these agreements to ensure transparency, accountability, and performance. They never talk anything about what the cost would be. So, I would ask any Secretary who would like to respond to the question that behind closed doors are companies actually willing to reopen these agreements or are they just giving lip service to contractors trying to dig their way out of a bad situation? If they’re open to reopening the agreements have any of them talked about what the cost would be involved to do such a thing? Any of the Secretaries.

Mr. Chairman, in our most recent discussions with the RCI partners, there was a discussion about the restructuring of the debt of their companies. The economics in most cases for the projects are under 1996 interest rates, so, seven, eight, nine percent for these projects which by changing the scoring model at OMB we can provide an opportunity for them to go to capital markets and increase the capital for reinvestment. What we’ve instructed in the Army is for General Gus Perna to come back with an analysis of just how substantial of a project this would entail and then would have to negotiate that. But the sense that I had from the most recent discussion in September was there was definitely energy to do that.

Any other Secretaries?

We absolutely would consider reopening the contracts, renegotiating the contracts. It’s much more efficient to work under that contract now if they will correct their behaviors, but if not we will.

And that’s cheaper than trying to start all over again I would suggest? We’ve gotten some positive results. I know we hear more about the negative results but I know in our case at Tinker Colonel Filcek took command of the 72nd Air Wing and things really started to improve. And one of the things and I was down there and I heard from other people saying that he actually went to town hall meetings, and we’re talking about those that are in charge in the chain of command going to town hall meetings and meet with people and really getting mostly involved in ’em so I’d like to at least point out that some good things are happening and we want to learn from those experiences. Senator Reed.

Well, thank you very much, Mr. Chairman. And let me once again commend Ms. Field and the GAO for their excellent work. But you’ve made the point that many of the statistics that are used, particularly for the performance incentive fee structure, are erroneous, misleading, and not appropriate. Which begs the question which Secretary Barrett already responded to and I’ll address it firstly on the Navy. Have you withheld performance fees just in general because of the inaccurate data or specifically because of the problems you encounter? Secretary McCarthy or General McConville?

Most recently what we did, Senator, was had to go back and look at the incentive award fees to ensure that the metrics were such that we had incentivized the appropriate behavior by the contractor in this case. So, what General Perna has done is he’s revised them. We did get inputs from the GAO and others. But he has revised those. Those will go live here in a couple weeks. But there are specific instances for installations in Fort Benning and I think we did one other location most recently where we held back substantially, I think Joint Base Lewis McChord withheld substantial fees back from the contractors in this case because of poor performance in work order response time as well as quality. Chief you want to add anything?

I’d just add that as the Secretary said, the average incentive fee right now is 77% but we’re taking a much harder look at that so they’re not all getting 100%. We’ve had some posts that have gotten 100% but as low as 11%. And we see that making a difference in the performance of the contractors executing their mission.

Mr. Secretary.

Senator, we in the Navy have not paid out an incentive fee this year. We’re looking at those very, very carefully to understand whether or not they’ve earned them. And we’re going through that analysis. But going forward, we’ve also done what the Army has done in terms of changing the way that we’re calculating the incentive fee to much more heavily weight it towards resident feedback and their perceptions to including health and safety issues which were not part of the incentive fee structure before.

Thank you. Secretary Barrett, do you have anything to add?

The Air Force has been looking at restructuring the fees including a lot more input from the base commander so that the performance on the base is calculated into the structure.

I’m gonna return again, directing questions to each of the Services. These contractual agreements you find now somewhat constraining in terms of getting the proper performance. What’s the biggest contractual obstacle that you see Secretary McCarthy and is there any way we can provide assistance to you to get that modified?

Senator, when the Bill of Rights is published I think that the dispute resolution is one in particular that we need to put in place as quickly as possible. It’s why in many cases that the only mechanism that families have to get results is legal action. So, the sooner we can have a dispute resolution in place, it will help improve matters dramatically.

So, if there was a meeting of minds between the companies and the Services on dispute resolution to benefit the quality of life of soldiers, sailors, airmen, and Marines that would be a positive step?

Yes, sir.

Thank you. Mr. Secretary?

Yes, Senator, I agree with Secretary McCarthy on this one but I also would say that one of the other challenges that we have is that we don’t have, until now we did not have great visibility into the data. Most of maintenance data was captured in two different types of IT systems without getting into the mundane aspects of that. But they weren’t capturing data in the same ways. And so, what we’re trying to do is to standardize that so that we can get visibility into that a lot quicker and so we understand if a contractor is not performing properly we can take action on that a lot more immediately. And I also agree with Secretary McCarthy on this issue of the tenant Bill of Rights. I think once we standardize that, I think that’s really gonna help our ability to resolve disputes more quickly.

And you can rationalize the data without any contractual changes? You can do that within the current context?

Yes, sir, we believe we can do that. We just need the partners to enter the data in a way that makes sense to us so that we can compare it across the entire population of homes that we manage.

And Secretary Barret, you’re comments, please.

I don’t know of any contractual changes that Congress can help us implement but we’ll take a look and if that’s the case we’ll be happy to provide those for the record.

Thank you very much. Thank you, Mr. Chairman.

[Inhofe] Thank you, Senator Reed. Senator Wicker.

Ms. Field, who performed this satisfaction survey?

The annual satisfaction survey that I referred to in my opening remarks is conducted by an independent third party group named CEL and I should say we found nothing wrong with how CEL conducted the survey, it’s more the questions that were asked and how the results were collected and analyzed and presented to you.

Okay, who makes that determination?

Well, there are multiple levels in which there are problems with this.

So, CEL did not devise the questions they just simply asked what they were told to ask?

My understanding is that the Services coordinated with CEL to develop the questions. Specifically, they asked how much do agree or disagree, I would recommend this community to others, which is different than the question that was presented to you.

I think we should all agree that we got bad information, inaccurate information, and we ought to completely rethink how we ask that question so we can find out what the troops are really thinking there. So, thank you for that. Secretary Barrett thank you for coming to Mississippi and visiting with our service members there at Keesler. Senator Hyde-Smith was there with me. Congressman Palazzo’s staff was very involved also. Let me give a shout out to Colonel Heather Blackwell, the wing commander there at Keesler as well as her senior enlisted leadership. I think this particular group of leaders represents frankly a mindset change to be very customer oriented and to be empathetic with the troops and the folks that are trying to make it work in these houses. And frankly I would contrast that with some of the previous leadership we had at Keesler where one particular person told a member of my staff that by raising these questions he was simply making matters worse. And I was absolutely delighted to see that there’s none of that left at the leadership at Keesler anymore and there’s very much a mindset of knowing what the problem is and that it must be solved for folks that have stepped forward. You also, you have dedicated an assistant secretary to work almost exclusively with this problem is that right, Secretary Barrett?

Well, Senator, that assistant secretary has a lot of other duties as well but he is really spending a great deal of his time on exactly this topic and really is devoted to it.

Right, and that’s John Henderson. He’s sitting behind you. I want to thank him, too. And it does occur to me he’s spending a lot of time on this. We have an unusual situation at Keesler in that Katrina hit and almost of our 1,188 housing units had to be replaced in one fell swoop. And it took me a while but yesterday I finally found out this information of the 1,188 residences there, 1,084 actually have experienced moisture and mold. Now, we’re told this was a mistake with the installation of the air conditioning units and particularly the air conditioning ducts. I’d like for you to tell us on the record, how many air conditioning companies were involved in this. Were all of them involved in these homes that have had the moisture problems? Why the multiple instances? And you mentioned a family that had had to leave their residence four times and the problem still hasn’t been solved. Why is it that the remediation is often not getting done? Why are they typically told you’re gonna be out of the house two weeks and typically that turns into four and six and eight weeks? Are there any houses that are ever repaired in two weeks? I’d like to know that. How often does it in fact take two weeks? And why is it that neighbors tell these people that their units that have been vacated often go days without workmen being there? And, of course, they’re out for longer and no work is being done. That can’t be a good use of the time. Many of our troops are asked to move out to hotels because there’s not adequate housing for them to be in. One troop said he had to be out by 11 a.m., got all his belongings in his vehicle to comply with the 11 a.m. check out and then mid-afternoon as he sat in his car he was told it’ll be another two weeks, you have to move back in. This is called being jerked around by the system. And then one other question and I’m over my time but these need to be answered on the record. In many instances like Biloxi Mississippi, the homeowner’s insurance is so high that the basic allowance for housing isn’t adequate. Now I was in the Air Force on active duty, I was happy to go off base and use my BAH and live well. Do we need to change the statute to account for higher homeowner’s insurance with BAH? Thank you, Mr. Chairman for that indulgence.

[Inhofe] Thank you. Senator Blumenthal.

Thanks, Mr. Chairman and thanks to you and the Ranking Member for having this hearing to follow up on our last hearing in March. Most of you were not here for that hearing. I recognize the progress that has been made since then has been encouraging but extremely limited. And I want to thank the military families who are here today but also the countless military families who have continued to contact us directly and as well to advocate for better housing. And I want to highlight, as a matter of fact, one area where we’ve received complaints and I’d like to know of all the complaints that you have received about retaliation. This issue is one that is most troubling to me, retaliation for legitimate complaints ranging from service members being prevented from attending certain training with their unit or military spouses being dis-invited from participating in spouse support groups. We’ve heard stories about housing company representatives circling homes of military families in cars, making verbal threats, or moving work orders to the back of the queue for families who are asking for desperately needed maintenance. These reports are absolutely outrageous and I’d like to know in writing of all the complaints received by the Services. My time doesn’t allow me to go into them here. These military families report to us conditions that have been chronic, repeated, recurring, endemic to their living and no doubt loss of incentive fees will spur some improvement but incentive fees and even the Bill of Rights, and I’ve been a strong advocate for the Bill of Rights, in my view lack the impact that rightful criminal prosecution would have. And I note that in none of the statements presented here this morning as there been any mention of an actual referral for criminal prosecution. I am deeply disappointed that there has been no such referral. Secretary Barret, I thank you for mentioning that in all actions where fraud is suspected you “immediately notify the Air Force Office of Special “Investigations and the Department of Justice.” There has been a recent report by Reuters released last month that Balfour Beatty communities fake maintenance records to pocket performance bonuses at several Air Force Bases nationwide. These same reports have been in the misrepresentations and outright lies to everyone of the Services and I’d to know from each of the Services whether you have referred any cases for criminal prosecution beginning with Secretary McCarthy.

Not at this time, Senator.

[Blumenthal] Secretary Modly?

Senator, we have not done that yet but I would like to say that a couple months ago I made a decision as the Under to put a dedicated audit function within the Assistant Secretary for EI&E solely focused on PPV to go out and investigate and to determine whether or not there is any such activity as you mentioned so that if there is such an instance of that we have the ability to have data to have evidence and then to turn that over for prosecution if necessary.

Secretary Barrett?

As I indicated we have investigations going on by the Office of Special Investigations of the Air Force and we have where fraud has been alleged, those facts have been presented to the FBI and they will be determining whether or not to go forward with pressing charges.

Have there been any referrals for prosecution as yet?

Not yet.

Well, I really want to urge you, and I did it in the March hearing as well, it’s not a new concern on my part. And in fact in the NDAA, there is language in the Senate passed version of the NDAA to encourage these investigations which I helped to write. I’ve also written to each of the Service Secretaries urging that fraudulent activity be referred to the Department of Justice and I would like a report within a reasonable amount of time from each of you as to what the status of any investigations are within your departments. Thank you for your attention and I know, just in closing let me say I know that every one of you wants the best possible housing for the men and women under your command. I have no doubt about your commitment but I think we need to use every tool, every possible resource to make sure that these private contractors get the message that there’s a new era for military housing. Thank you, Mr. Chairman.

[Inhofe] Thank you, Senator Blumenthal. Senator Ernst.

Thank you Mr. Chair. I’d like to say thank you to the witnesses today and for your commitment but even more importantly I want to say thank you to the spouses, the family members that are here today. In the ’90s I was a young Army wife, newly married into the Rangers and had a husband that deployed frequently. So, I can only imagine the situation that all of our family members went through, whether you’re juggling family, children, childcare, school, a civilian job, whatever it was that you had in addition to that, you had housing issues that you had to address. Because maybe your spouses were elsewhere doing what the United States federal government told them to do. So, thank you to all of you. I do understand those challenges and we have to make a change. So, thank you for being here. So, we’ve talked a lot about this high level of investigations and involvement of our Secretaries and so forth. But what I would like to hear from Commandant and to our Chiefs is what are we doing to educate those young commanders. The health and welfare of their troops, that is up to them. So, while we do have other special offices that are involved, what are we doing to educate that chain of command and how they can get engaged with their troops in making sure that housing is appropriate. Secretary Barrett if we could start with you.

We are in fact working on training for the commanders of the bases and the squadron commanders on the housing issue and on medical issues so that there is better understanding. And that will be passed on to each of the members of the military.

General Goldfein did you have any more to add?

Yes, ma’am. So, after this issue came up, I hosted a conference with all of our wing commanders in the United States Air Force, that’s active, Guard, Reserve, civilian leaders, 278 strong. And what I shared with them was that there are certain things that we have to do as leaders that are nothing short of sacred duty. And one of those is ensuring that every airman that deploys into harm’s way is properly organized, trained, and equipped and when they come home we’ve taken care of their families while they’re gone. I mean you can’t delegate that, that is command team business. So, in every echelon of command now we have training not only on their responsibilities but also on the tools they have available and to get to Senator Blumenthal’s point, to make sure that we have all the tools available and we’re pushing decision authority down to where they can make the most difference.

Absolutely, thank you. Commandant.

I think that your point, ma’am, about the two chains of command is really important because they both have a key role as you pointed out. That installation, this is what they do every day and they focus on it but I would say accurate prior to this spring they were not educated on how to interface with their PPV partners and what leverage they had when they weren’t performing. In the unit chain of command which is what General Goldfein focused on, I think, we didn’t look the other way but I’m not sure that all of our commanders, in fact pretty confident, most did not understand, they understand their role in leading their troops and everything they do or fail to do but not when their housing situation isn’t working right, what are they supposed to do? Now, that’s part of our commander’s course. You can argue it should have been beforehand, now it is. So, with both chains of command, I think your point about education has to be there but it can’t be one time, it can’t be in 2019 only. This is something we have to sustain.

Thank you, Commandant. Admiral.

Yes, ma’am. So, thinking about the core issue here, really the root cause of what drove us to where we are right now, I think a big part of that was mindset. The Commandant kind of got at this with the fact that we dismissed responsibility for those things that we’re accountable for as General Goldfein said, I think. The other thing that went hand in glove with that was the fact that we never codified roles, responsibilities, including oversight for commanders. And so, like the Marine Corps, we now have formalized courses for all of our commanders, executive officers, senior enlisted. But even more importantly right now, recognizing that most of the progress that we’ve made to date is grounded on good leadership, that allowing or enabling commanders at every level and their senior enlisted to understand what the processes are, what the right levers are to pull, so that when a sailor and his family has an issue we can respond immediately and not put it on the back burner.

Thank you. And General if you have anything to add briefly please.

Yes, Senator. We may have outsourced housing to private contracts but we’ve not outsourced responsibility. Our commanders at the lowest level, every leader is responsible and accountable for their soldiers, they understand that, and they are back into fixing this problem, Senator.

Thank you. And again, to our families, I want to thank you for your resiliency and your fortitude. I truly appreciate it. Thank you.

[Inhofe] Thank you, Senator Ernst. Senator.

Thank you, Mr. Chair and thanks to our witnesses. I want to thank the military families who’ve been so important in this effort. To Secretary McCarthy, thank you. Yesterday Secretary McCarthy asked me to accompany him to Fort Belvoir and we saw two houses there that had really serious problems. Fort Belvoir has 15 communities in it. Some of the houses were 1940s and ’50s and some are 10 years old. We visited two communities that were new communities. In one house we saw a family who were repeatedly told that they didn’t have a mold problem. The husband has some carpentry skills and he could remove some molding around a shower and find that no, indeed there was mold. And so, he was being told that there wasn’t a problem when there was. Even after the mold problem was discovered by him he couldn’t get a response until he said that place is so safe we need to move out. And then the housing company jumped into action. Maybe because there was gonna be a financial consequence if they moved out. A second family was having their home repaired. The spouse noticed that they weren’t bringing any new insulation into the home. They were supposed to clear out a mold situation and put in new insulation. They told her they had done it. She noticed that no new insulation had been brought into the home and she said open the wall, I think you’re lying to me. And the wall was opened up and the old insulation that was dirty had been put back in and it was already soaking wet because not only had they not put in new insulation, they hadn’t fixed the water problem behind the wall. And this is six months after we’ve had this hearing. Secretary McCarthy was not happy with this when he heard these stories, nor was the garrison commander. I think we’ve identified two main problems, the military chain of command abdicated responsibility for this when the contracts were entered into. And I can understand it especially given the ops tempo of war fighting in the last 15 or 20 years. There were priorities that maybe assumed front of mind and other priorities that didn’t get attention that they deserve and that they need to now get. But secondly, these housing companies, they had a double standard and the double standard was they all operate in the private sphere and they lease to private tenants and they have to compete hard to make sure that they have high occupancy rates. Because if they treat their private tenants badly, they’ll go elsewhere. But they treat military tenants like they’re captives, like it’s a captive audience. People who move from across the country to a place where they don’t know anyone, where they don’t know anything about the rental market, where they’re trying to find new schools and get accustomed to everything else there’s a natural tendency to want to live on base. And the occupancy rates will be high because of that tendency. And so, these companies who would compete hard and try to produce high quality product in another business unit of the identical company treat these folks as if they’re captives and that they don’t have to treat them in the same way they would treat private tenants and I find that outrageous. I want to ask you, Ms. Field, a question about your testimony because I find a couple things about it pretty shocking. The 87% satisfaction, that is in a report that Congress demands and so it’s a report to Congress and I feel mislead. And I’m trying to determine whether I’m accidentally mislead or intentionally mislead. So, if you read Ms. Field’s testimony pages 12 and 13 you will understand her conclusion that the data is unreliable. OSD gave an instruction to the military departments that in the annual satisfaction survey they were supposed to ask this question, would you recommend privatized housing? And it was yes, no, or I don’t know. That was the OSD instruction to the departments. Instead the departments on the survey, they didn’t ask that question. They asked this question, how much do you agree or disagree with the following statement, I would recommend this community to others? I would recommend this community to others. A reasonable person reading that question wouldn’t think it was a question about housing. What does that mean, my neighborhood? Fort Belvoir? Fairfax County? Northern Virginia? If people had a problem with housing, it might factor into their answer but the fact that the answer to that question is 87% tells us precisely nothing about what people think about their housing. And if I understand your report correctly, the military departments didn’t ask the question that the OSD told them to ask. Now I understand from a footnote that in 2019, finally, they’re gonna ask the question that they should have asked all along, are you satisfied with the condition of your unit? That’s the question that you need to ask to have an answer that you can count on. But the answer to the question of would you recommend this community to others tells us exactly nothing about housing. So, I definitely feel mislead by this 87% number. And I don’t know whether to feel intentionally mislead or accidentally mislead. I’m gonna conclude, Secretary McCarthy, you’ve raised a really important point that we may need to grapple with as a committee. If the companies, because of the dates they entered into these contracts and their bond arrangements structure the finances around a seven or eight percent interest rate, and right now if they could refinance and refinance to a much lower rate and free up capital that could be used to capitalize improvements in military housing, we should be doing what we can in a fiscally responsible manner to allow the refinancing of these contracts with the expectation that some of the money that’s freed up with the refinancing could be plowed back into houses. So many of us have probably refinanced our own houses during times of low interest rates and we’ve been able to do what the military and what these housing providers should be able to do. So, I hope we might explore as a committee, if there’s a fiscally sound way we could allow these companies to refinance and then use those monies to perform improvements. Thank you, Mr. Chair.

I want to thank each of you for being here and worrying about the housing for our families. Ms. Field you said in your testimony that there was changes that if we could make those changes that it would have a big impact. Is there legislation that we can pass right now that would force changes that would positively impact housing for these families?

Senator, I think the most important thing that this committee can do is to keep the pressure on both the Services as well as the partners. A lot of the things that are in, for example, the Bill of Rights are things that could be done right now, they don’t necessarily need to be legislatively mandated. We at GAO have been looking at MHPI almost from its inception and we have found problems throughout. It’s really that pressure that you can exert that will probably be most impactful.

So, there’s no legislation that you need that the Services need right now that would change the housing?

I don’t want to state that categorically, but I would say that some of the things that probably would be most helpful are not things that can be legislatively mandated because they have to do with the legal agreements between the Services and the private partners.

But we can pass legislation that requires the private companies to change right? We could pass.

I believe that that would still require a negotiation with the partners because of the existing standing legal agreements, many of which are 50-year agreements.

So, for all the Secretaries, what’s the limitation on issuing the Resident Bill of Rights today? Is there any limitation?

Senator, there’s a couple issues related to the NDAA language that we have that are different than the Department’s position. Specifically, I’ll cite two examples. With dispute resolution, we need to hire an outside firm to be a third-party mediator. And there’s a difference of opinion between us and the committee on how to best bring a third party into the fold. Another one would be on whether the Army could have on post quality assurance hosts to inspect the RCI partner’s homes through legal liabilities associated with it because we don’t own the assets. We’re working thorough that with the committee but I mean, we could step out but we want to do it in concert with the Congress to have the support of the Congress, sir.

Senator Scott, just let me add to that. The Service Secretaries have all agreed on the tenant Bill of Rights that we’ve negotiated with the PPV partners. So, we’re ready to go and to sign we’re just being deferential to the committee and what they’re trying to put in legislation and make sure that we’re in sync on that.

Senator, it’s exactly the same with the Air Force, we’re ready to go. Could have issued it earlier but don’t want to issue something today that then lies in contrast with what the NDAA might come out with.

Why don’t we just do and then if the committee ever gets it done then change it?

We could but then I think that for our troops, we’d rather have, or our airmen would rather have a consistency of what that Bill of Rights entails.

So, the dollars that has been held back on performance, can you take those dollars and mitigate the problem? Are you allowed to do that? Like in a private contract, if somebody violates the contract, I can go spend the dollars and eventually get the money back. Do you have the ability to that under existing contracts? So, if you want to take the dollars, any dollars, but take for sure the performance dollars and say I’ve got 15 homes that need mold repair, I’ll go ahead and take the money and spend it. Can you do that?

Senator, I’d have to get the answer for that specifically. I’m not familiar enough with what the negotiations with the PPV partners say. But when the fees are not paid out they stay within the Service. So, I have to look and see exactly what our legal rights are in terms of what we can do with that and I don’t know the answer to that but we’ll get the answer for you, sir.

I’m not sure of the contract language on whether that’s held in escrow or withheld but not available to the Air Force. In the Air Force’s instance, we have, however, spent $25 million in remediation that may be brought against the contractor fees.

Senator, it’s my understanding the funding is held in escrow but I don’t think it can be converted to other projects.

[Scott] Will you find out when you get back and just let me know?

Yes, sir.

‘Cause why wouldn’t you spend those dollars if you can do it and take it away from the money you had to pay the companies? And have any of these companies said to you all that they don’t have the, because of their finances, they don’t have the financial wherewithal to make the changes?

Yes, sir. I mean the last discussion we specifically addressed how do we increase the ceiling on capital for investment? As I mentioned in my opening statement, a third of our housing is gonna be required recapitalization. We need substantially more funding. And if you have economics from the mid ’90s, there’s like eight, nine percent interest on the bonds.

So, they’re never gonna fix this? If they don’t have the capital to do it and they can’t get the capital to do it.

We have to do, General McConville and I sent a letter to the director of the Office of Management and Budget to change the scoring criteria on projects so that they can go back to capital markets, get lower interest rates, which they very much have a desire to do that obviously from a business perspective. But to be able to increase the capital so we can be much more aggressive on investment projects.

Thank you, Mr. Chairman.

Senator Scott, let me just interject here that we have had the Bill of Rights language in the defense authorization bill. Our problem is we’ve been bogged down mostly because of the House on the defense authorization bill. Now we’re dealing with an absolute deadline now and of course that language is in there. It was our thinking at that time to not encourage the Bill of Rights to be put together until we had a chance to do that in the NDAA.

That makes sense. You sure would think, though, that they could take the money that’s been held on performance and go spend it to go fix the problem that these companies are responsible for.

[Inhofe] That makes sense. Thank you. Senator Heinrich.

Thank you, Chairman. I want to start by saying that I share Senator’s Kaine’s frustration with the data that we’ve been given and frankly how that data has been characterized. And we need to understand, as Ms. Field points out, exactly what the situation is and the way questions have been asked has really obscured that. So, I want to ask each of you, one, are you currently, as Service Secretaries, are you asking the question that OSD suggested that you ask, would you recommend privatized housing? And in addition are you asking the question that was also referenced in the GAO report, are you satisfied with the condition of your housing unit?

Yes, Senator, we’re making the changes to the customer survey.

And is that current or is that in process?

I believe it’s in process, sir.

Senator, we’re looking at that as well to ensure that the surveys are asking the right questions. In terms of what’s happened in the past, in terms of how we followed the guidance of OSD, I don’t have information about that. I will say that we did an out of cycle survey immediately after this situation came to the forefront last year and we discovered that we actually have much lower rates than we thought before. So, I think we’re looking at this and we want to make sure, and this is my point that I made earlier about data and understanding what the data is telling us and making sure we’re asking the right questions and measuring these PPV partners properly.

Well I will say that I think that Ms. Field and the GAO were able to get to the heart of a lot of data very quickly and to implement other tools like focus groups to understand the nature of this problem. And all of us up here need to be able to have reliable, consistent data. So, for the remaining two Secretaries, I’d also ask are you asking those two questions today or when will you be asking those two questions?

Senator, we are asking the questions as directed by the Secretary in the form that is the requested form. One of the key issues on the data is that we really are challenged when we don’t disaggregate the data, when you put it all together it looks like 87% sounds like a really good number, that’s 90 plus percent on many bases, but it’s much, much lower and that’s where we really need to focus our attention. But when we aggregate the data it’s harder to find the real answers and the real problems.

Secretary McCarthy, you mentioned the need to fix the model, I think those were your words, but we also heard a third of housing is in poor condition. So, you know, it forces me to ask the question, was privatizing our military housing a mistake? And to put that another way, do we at least need to take a step back and analyze whether this model is actually working for our men and women in uniform?

Senator, if we hadn’t privatized, we would not have been able to bring the investment capital to bear to have the current housing portfolio in the shape that it’s in, $13 billion worth of investment has been put in place since 1996. We wouldn’t have had those funds for example. I think that the challenge is that over a 50 year relationship you have to adjust over time the flexibility of the contract, the manner in which to restructure debt when economic conditions are better, you have to present these opportunities so that’s where the challenge is.

Do we have the tools and the knowledge built into your Services to actually implement those contracts to hold people to account because those things happen every day in private real estate business but that’s not an expertise that is necessarily something that I think the Services have spent a lot of time thinking about. And if we’re not doing that we certainly owe it to the men and women who live in these homes to get that right.

Great question, Senator. It really hits home to the point Secretary Modly mentioned before. Our ability to analyze the depreciating assets, when to make the right investments, are we capturing the appropriate data to know the health of these homes? The oversight, the quality assurance, it requires substantially more resources but also to your point the right skill sets associated to manage that. In many cases we need to improve across the board on all those areas.

Senator, I think it was absolutely the right decision at the time to go in this direction and as Secretary McCarthy said we would not have been able to recapitalize these homes at the time we did it. That does not mean that it’s worked out great and I would say that it’s not horrible performance but I just think it’s very uneven performance. And I just, from personal experience, I have a son in law and daughter who are on active duty and they’ve lived in privatized housing and it was fantastic. I’ve gone and visited several different bases and some of it’s fantastic and some of it’s not. And the problem we have right now is really understanding the differences because we don’t have good access and visibility into what’s actually going on on a unit by unit basis. So, when you accumulate data and it says 87%, well what about the people that aren’t happy and how are we finding out about that and not just finding out about it every.

But how are we fixing it?

Right, so, we’re also finding out about it a year after, sometimes a year after it’s happened. And so, we need to be much more in a real time monitoring of this problem and that’s what we’re trying to do. And we certainly have the tools to do it. Data is being captured, it’s just not standardized. Once we have that and we have real time information we can act a lot more appropriately and a lot more quickly and we certainly have the tools to do that given some of the tools that exist because of the revolution in technology that we’ve seen. So, we can address this. I think the model needs tweaking and as Secretary McCarthy said, there may be some structural challenges with the debt that we need to look at as well but this is a problem where when you outsource something I think there was a cultural shift where people thought it wasn’t their problem anymore. But it’s always gonna be our problem to worry about the health and wellbeing of our military families and we just have to reinforce those messages. And I’m sure we will.

Thank you, Mr. Chairman. And I also want to recognize our military families that are here today. It’s hard enough to serve in the military, it’s hard enough to be a spouse of someone who serves in the military, but you add on to it the challenges that we’re talking about here today and the types of stories that we’ve heard for what families have had to put up with and as someone who has served myself this pisses me off. And again, what you endure is hard enough. This is a leadership issue. I appreciate our Service leaders being here today and your commitment to address this issue. This is also a leadership issue by these companies. You know in America we just came past Veteran’s Day, we’re very patriotic, we want to say thank you for your service and all you do, yet climate and culture in these companies starts at the top, too, and the culture that they have from the top all the way down, whether they are gonna be customer service oriented, whether they are gonna be responsive 24/7 to the needs of those families, whether they’re going to do whatever they can to make sure they are addressing the health and welfare of these families, I mean that’s a climate issue. So, maybe some of the CEOs need to move into some military housing over the holidays? What do you guys think about that? And see how they feel about trying to figure out where they’re gonna put up their Christmas tree or where they’re gonna be serving Christmas dinner. Ms. Field, thank you for all you work on this. I see there’s basically 14 companies that have been involved in privatized military housing. Are any of them not acting like slumlords at this point? Are any of them doing a good job? Any of ’em?

Senator, I wouldn’t want to characterize any individual company as good across the board or bad across the board. I would say that at almost every installation we visited, we found that the military housing officials on the ground were extremely frustrated with the private partner personnel on the ground, were not getting the cooperation or support they needed. There were some exceptions to that which I would be happy to talk about. But I think it’s fair to say as we’ve discussed earlier whether tenants are satisfied at an 87% rate or not, there’s clearly a problem here.

So, one thing I read in some of the testimony is that sometimes families were confused when they went to the office as to who was advocate for them that’s paid by the taxpayer and who’s actually a representative of the slumlord. So, maybe they could wear their own t-shirts that say slumlord on them, I’m not trying to be facetious here, but actually identify themselves as whether they’re with the company or whether they’re with the housing office. There has to be some sort of distinguishing factor. I’d encourage our Service Chiefs just to ask them to do that. They need to know who’s who, that they’re not talking to the contractor when they’re making a complaint. General Goldfein did you want just say something about that?

Ma’am, I’d just offer that there’s a trifecta approach to this. There’s the command team, there’s the housing management office, and then there’s the privatized owner. And all three of those have to be engaged and where we have good engagement by those three and ownership and responsiveness, it’s working. Where one of those is not there, it doesn’t work.

And just a family member, though, needs to know if they’re coming in to vent their frustration whether they’re talking to somebody who’s representing the company versus somebody who’s supposed to be their advocate. You guys agree? I’m trying to get audience engagement here. But one other factor is, you know, we specifically put language in as you’re trying to hire more individuals in the housing offices and to be advocates is to prioritize military spouses for those positions. Now, I don’t think you need NDAA language for that. Is that something that each of the Services are looking to do? Because they are at depression level unemployment as well. This is something we’ve been working on this committee as well related to military spouse employment. But pretty quickly, I bet, you’d have a number of military spouses who would love to serve in that role. I’d like to hear from each of the Services whether that’s a priority.

Secretary Esper prioritized that early on in his tenure to give the opportunities for military spouses to have preference for hiring opportunities on the installation.

Are there positions that are open that are unfilled right now, though, that could quickly be filled with military spouses? Any of the other Services want to jump in?

Senator, we’ve added 300 additional positions, and this is one of the problems that we discovered in our discovery this last year was that to your point, we didn’t feel like we had enough advocates out there. And so, we’re adding 300. We’re in the process of hiring them. We’re also waiting on the appropriations bill to pass so that we can fund those positions. But prioritizing military spouses for those jobs is something that we’re going to do.

Great, thanks. Secretary Barrett you want to?

We have also established 219 new positions for resident’s advocates and those would be great jobs for military spouses.

So, thanks. I’m almost out of time but I want to just make sure that everybody understands that the NDAA is being held up for political games. The defense appropriations bill is being held up for political reasons that have nothing to do with our troops. So, I just want to make sure everybody understands that without an NDAA and without the defense appropriations bill at the level that we have agreed to, or that we have been fighting for, this is going to hurt fixing some of these issues that military families are dealing with in military housing. Is that, can I get a yes from everybody? Thank you. So, let’s get everybody on both sides of the aisle to vote those out and get them done this week. Thank you, I yield back.

Thank you, Mr. Chairman. I thank all the Secretaries and the Chiefs and the families and advocates who are here. This is a continuing addressing of a concern that is gonna be ongoing. And as you noted that we have to be vigilant not just today, tomorrow, but going forward. So, Ms. Field, you said that the Department can’t make unilateral changes to these long-term contracts to address some of these issues that have been brought forth. Can you give me an example of a limitation in a contract that would make it really difficult for the Department of Defense to unilaterally make a change or require a change? Sure, Senator. So, most of the agreements, although not all, do have a performance incentive fee built into the agreement. What we’ve determined through our work is that a number of the metrics that underlie those performance incentive fees are not good ways to measure the condition or the quality of the homes. So, they’re looking at things like rewarding the partner for occupancy rate which again has nothing to do necessarily with the condition of the home. Or with things like timeliness in reporting. Our understanding is that to change those underlying metrics as written in the agreements, the partners will have to agree with the Services to make those changes.

There’s no underlying metric for habitability of units?

I can’t say uniformly across all of the agreements because they’re all different but when we looked at them we found that they were overwhelmingly more focused on the financial health of the project and the partner as opposed to the quality of condition of the home and holding the partner accountable for that.

So, for the Secretaries or the Chiefs, are any of your agreements relating to habitability of the units, is there anything that allows you to negotiate regarding habitability in any of your contracts? Anybody can answer.

Senator, the metrics, the incentive award fees at reference, they were not the uniform across all of the installations first off. Second, with respect to habitability, I don’t know if it’s on any of the installations if we have that today. But as I mentioned in my opening statement, we’re changing the incentive award structure and starting that on January 1st.

So, you’re able to change the incentive structure by focusing on habitability even if somehow there’s not reference to that in your long-term contract?

We’ve gone back to the partners and we’re changing the incentive award fees. We had to go back to the partners to do that.

And are your partners cooperating with changing the metrics?

It’s been a negotiation but that’s how we’re initiating it on January 1st.

What about the other Service Secretaries? What are you doing regarding? Obviously, we’re here because of the non-habitability of some of these units, it’s a huge issue. And so, are you imposing habitability as a factor in your incentive payments?

Senator, yes, we’re going through that process just as Secretary McCarthy said. We’ve restructured our incentive fee and what we’re measuring for incentive fee and prior to this we did not have that sort of health and habitability thing as a factor that we look at but now we will. And our partners have worked with us on this and they are accepting that.

We are in the process of restructuring our incentive fees and that will include elements of commanders overview or observation. Habitability would be probably one of the elements that they would put. In addition, 100% of our units have had a health and safety review prior to people moving in and so that habitability would be another word for the health and safety of that.

Yes, I’m using the word habitability to cover the broad range of issues of concern to all of us. There was a mention made, I think it was Secretary Modly, that the data is not, the data is input in such a way that it’s really not terribly helpful in terms of what’s actually going on. So, what are you all doing to make sure that there’s, for one thing, shouldn’t all of the contracts, these housing contracts, be the same in terms of the terms of the contract across the Services? Ms. Field can you answer yes or no on that one?

Because they were entered into at different times, and by different Services, they created them with different terms and different levels of accountability built into them.

Yeah, that’s a problem, but okay, be that as it may. What about the data, the insufficiency of the data? Do the rest of you besides Secretary Modly agree that that is an issue? Anybody.

Of course, Senator. We’ve addressed that at the quarterly discussions and that process is starting to improve.

We do agree that the data is an issue and disaggregating it, working to improve the quality of the data is one of the key things that we’re looking at.

May I just ask one more follow up question with Secretary McCarthy. So, the condition of the housing that you went to see with Senator Kaine very clearly that if they’re putting back molding that should never have been back that sounds like fraud to me. So, you have testified that you did not refer any matter for prosecution, is this the kind of thing that you are considering sending on for prosecution?

Senator, after what I saw yesterday, I was very concerned and it is something that I addressed specifically with General Perna and we’re gonna take a very hard look at that, yes, ma’am.

Please do so and that goes for all the Services. Thank you, Mr. Chairman.

Thank you, Mr. Chairman and I want to thank the Chairman and the Ranking Member for the participation today. I’ve been here five years, I’ve never seen a panel of military leadership that we have today. I think that sends a message to the families but also says how serious this problem is. So, I want to thank everybody here. I have a question for the panel and your staffs that are here, if you’ve ever lived in base housing anytime in your career, would you raise your hand please? Alright, there’s the issue. So, these people understand. I grew up in base housing. I understand what it means to be dislocated. This is unacceptable what is happening right now. But I want everybody in this hearing to understand the hypocrisy that you heard this morning. We’re pointing fingers at contractors and, yes, there’s culpability there and it needs to be dealt with. There’s leadership issues maybe within the DOD that needs to be dealt with. But the one thing we’re not talking about is the responsibility we have right here in Congress. This is the third month, this is the end of the first quarter of our fiscal year, we have not funded our men and women in uniform period. We can talk about a continuing resolution all we want to but we’ve sent a message to Putin and Xi and everybody else in the world that political games here are more important than our men and women in uniform. That’s unacceptable and it directly affects housing capability. The U.S. Army did a study recently, Secretary McCarthy, that you guys said that specifically right now 4,400 new units are being held up from construction because of this continuing resolution. And by the way this is like the 10th out of 11 years, this the 10th year that the first quarter has been spent under a continuing resolution where no contracts can be, no follow up can be made, no accountability can be accomplished, and my question is are these numbers right? I think there are 269 other maintenance housing units for something like $69 million which I don’t understand those numbers. That’s $250,000 a unit. So, somewhere offline I want to get at these numbers because they don’t make any sense. But would you give us an update as to the impact that continuing resolutions have on this specific issue of getting this problem fixed?

So, specifically on military construction for barracks projects, Senator, we have about $239 million held up. Fort Sill $73 million, Joint Base Langley Eustis $55 million, Jacksonville $54 million. So, barracks is being impacted across the force. The family housing projects overseas.

Look, I can interrupt you, I’m sorry to interrupt, we can do this all day. I don’t want to give you guys a pass ,but I want full accountability here and we bear the brunt of this at the very get go here. Had we funded this prior to September, the continuity of the programs that you guys have already started could be continued right now. I just want the people who have been affected to understand that the fix cannot be accomplished as long as these political games are being played right now. And that’s the point I want to make. So, can you give us the other impact that may be caused by this insidious practice that we have here. 187 times since the budget act was put in place in 1974. This is our 187th continuing resolution that this Congress has used and it devastates you guys and it hurts these families. So, can you give us a little more detail around that?

$1.1 billion requested specifically on housing restoration and modernization is being held up right now.

What does that mean?

We cannot start the projects, we cannot initiate the projects, we don’t have the funding.

So, the projects that are already underway, does it affect any of those?

In some cases, yes, sir.

So, all projects that are being directed toward this problem are being affected right now during this three-month period, is that correct?

Any new projects and then existing ones are being funded at the previous level so the buying power is reduced, yes, sir.

Thank you. General McConville I visited Benning, it’s one of our great heritage sites in the country really, happens to be in my home state of Georgia. I’ve got red clay under these nails like you do I’m sure from your time in that part of our state. I just met with General Brito down there and he’s doing a fabulous job here. You have, you know, a different problem in Columbus, you have these historic homes. And, of course, they have lead, they probably had asbestos before and all that. Some of this has been dealt with in the past. Give us an update on how that lead problem is being dealt with. And by the way, you know, we deploy a significant percentage of our men and women in uniform today, from Air Force, Marines, we have a significant percentage across more than 100 countries right now today. So, most of our people who are on these bases have a spouse overseas. And so, can you help us understand the progress being made there and the displacement that we’ve incurred there and what we can expect?

Yeah, I can, Senator. First of all, on the historical homes, we’ve taken the philosophy old is not historical. And what I mean by that is we have homes, we have to replace them or restore them to the level they were at. There may be a house that’s 100 years old that a captain lived in and we have a whole bunch of these type homes, somewhere from 50 to 100 years old. We don’t want to have to go back and restore them with the original materials and those type of things that are sometimes required. So, we’re actually working our way through that right now. We have a way ahead so we’re not gonna have to go back and get original materials and we can actually modernize some of these homes so they’re not living in old homes. I grew up in an old home, 100 years old, but it’s old, it’s not historic. And what we need to do with these homes is modernize them so they’re what we need for the families. As you know, we’re going through the homes right now, lead is a huge issue. We’re very, very concerned with our families. We are going back and getting in these homes and remediating the homes but it just takes time. I think we’re working about eight to nine homes a week and it’s gonna take us some time, it’s gonna take us to two to three years with these homes to get them to the level that we want them to be.

Would you get your staff just to keep us updated each month about the progress of that project specifically because I think that’s a bellwether for the rest of the, of all the bases out there?

It is, Senator, and we will.

Thank you, thank you, Mr. Chairman.

[Jones] Mr. Chairman, with the Chair’s permission I’m gonna yield a couple minutes to Senator Manchin who’s got to leave for a committee hearing.

Thank you so much, Mr. Chairman. Thank all of you. And this is to the Secretaries and Ms. Field to you. Just listening to everybody and the concerns we have, there’s not a person up here, and I’m sure you all feel the same way, who are not concerned. Service members should have better quality of life and their families and they should not be in this jeopardy. Homeowner’s association is something I’m familiar with and homeowner’s association works this way, you’re the developer. If you’re the developer, any of you all are the developers and basically when you have the, and turn it over after a period of time to the homeowners, then we have a responsibility to basically evaluate are you doing your job or not? Have you lived up to your part of the bargain when it was turned over? And we have the right to bring civil actions against you. Why can’t we do the same here? Every member of the Service and their family that moves into one of the homes basically would be part of a homeowner’s association. That association develops their own board and they’re able to bring civil suit if they haven’t performed. That’s the best way to do it. Much better than what the military and everybody else will spend millions and millions of dollars for the people on the front line that can tell you immediately. And if you’re the contractor that’s awarded basically one of these exclusive contracts for 50 years, then you have a responsibility. If that’s the responsibility and you haven’t lived up to it, let ’em go to civil court, not through the military court, let ’em go directly to the civil court. You’ll never have this problem. This will eliminate and remedy this immediately. And we can put this right into the Bill of Rights. Mr. Chairman we could do this as we’re going right now and it’ll basically take care of, I think, a remedy of how you can cure this quickly. And they’ll step up to the plate, they don’t want these civil lawsuits brought against them. That’s my input. Thank you, Mr. Chairman.

Mr. Chairman, thank you. Thank you, Mr. Chairman, thank you, Senator Manchin. Two comments before I ask a couple of questions. Number one, I agree with Senator Perdue completely about the CR and about where we are and the politics and the NDAA and appropriations. I just want there to be any impression of anybody in this room that the politics that are being played is only on one side of the aisle. That is a process that is ongoing and there is too much politics being played not only in Congress but with the administration as well. We need to get it done. I completely agree with him and we need to get it done. The second thing I’d like to comment on is I’m hearing a lot in these hearings where these companies are being referred to as our partners. They’re not our partners. They provide a service. We pay them for their service. They’re not a partner where there’s a give and take and issues like that. They are providing a service to these people and their military and their families and we should be demanding and make sure that we’re demanding that they deliver the excellent services that we’re paying them for and that we don’t consider them a partner like I would my spouse or a law partner. They are providing services. Now, just with the time remaining I’d like to ask each of the Secretaries, Secretary McCarthy you’ve mentioned General Perna, I’m a big fan of General Perna so I commend you for getting him engaged in this ’cause he can get it done. When we had the companies here, one of the things I asked them if they would agree to withhold incentive fees and I think you mentioned in your testimony that General Perna is working on that. Has any incentive fees been withheld yet or is that still part of the process that’s ongoing?

Yes, sir, we’ve withheld fees at Fort Benning and Joint Base Lewis McChord. And we will be doing it at others here in the very near future.

So, you already got a process in place for that?

Yes, it’s being formalized on the 1st of January but some of these instances were pretty extreme and we’ve done that here just in the last couple of months.

How about the Navy?

Senator, we have not given an award fee, incentive fee, this year. We’re evaluating all those individually to determine what they earned.

Is there a process in place to withhold incentive fees that you’ve got in place then?

There is.

Alright, thank you. How about the Air Force?

Senator, we are withholding all fees from one contractor on the basis of misperformance or performance problems on some of their bases. And the other contractors, we’re observing their performance and they are aware of the contract withholding, the process, the fact that we’re withholding fees on others.

Alright, well, thank you, thank you all three. I think that’s a good stop. I will say, Secretary Barrett, I’m still hearing issues. I visited the Maxwell Air Force Base and there are particular issues with historic properties, and I get that but I’m still hearing from constituents down there having serious problems, so please take a look. Thank you, Mr. Chairman.

Thank you, Mr. Chairman. Thank you all for being here. And special thanks to the military families who are in attendance. Back in March when we had the last hearing I didn’t have a very happy discussion because we had a revelation come up about these nondisclosure agreements that the housing providers were requiring the tenants to sign on to before they’d settle anything that seemed to be a legitimate tenant complaint. And at that time I asked everyone to go back and make sure over the next 30 days to have all those NDAs rescinded and if there was any private property housing provider that thought they had a great case to call me up and come to my office and explain to me why they should have these nondisclosure agreements. I had nobody come to my office. I thought that I was assured that these had been rescinded but this week I got an email and another nondisclosure agreement from Monterey Bay where the practice has continued at least up until August. And Secretary McCarthy, we’ll have a discussion about this because it’s in your lane. But look, Ms. Field, I think when you were responding to Senator Kaine’s question about the satisfaction surveys, if you have a nondisclosure agreement that says you can’t speak even about the existence of the agreement and you can’t speak disparagingly about the housing provider than how does the answer to that question go?

That’s a great question.

Right, which is why these damn things have to be eliminated. Now I want to ask you all right now, can I get your assurance that you can go through your chain of command and go to your housing providers and say this ends immediately and if you think you have a legitimate reason for having one, contact me. I’d love to hear the basis for that. I don’t think there can be one. And I want your assurance that we’re gonna move forward with this. This is a part of the problem. Look, I have tried to be balanced every time I come in here. If you look at, when these contracts started getting initiated back in 1996, you were moving, you were conveying property that was owned by the government to a private housing provider. They were to fix some of them, the old units, maybe upfit them, they were to build new units. And they had to make a financial decision that ultimately resulted in an investment that private sector investors invested in, great. Hopefully they made a good decision. Now it may have been but in some cases they simply didn’t know what they were buying. Everybody that flips a house, sometimes you buy something and it worked out well and sometimes it didn’t work out so well. There may be a rational basis to go back to some of these housing providers and say, look, we may have sold you a bill of goods and we have some responsibility for trying to smooth out the economic consequences of that decision. In other cases, they build houses that are the subject of the problem. We owe them not a dime to fix that. That’s on them. So, my question to you all is, when is enough enough? When do we finally look at these contracting vendors consistent with what Senator Inhofe opened up with, and say, you know, it’s time just to recognize that you’re in breach of contract, we gotta go a different way? Your business practices are to a point where we’ve got to go to a court of law and settle this. When is enough enough? Secretary McCarthy?

We might be there right now, sir.

[Tillis] Secretary Modly?

Senator, I think that in certain cases we may be there. In other cases, I think there is a pretty heavy responsibility on the Navy and Navy leadership over the last couple years in terms of not paying attention to it, so.

Secretary Barrett?

Senator, enough is enough, we have had enough. On some of these properties, they have worn out the patience of the Air Force. In other instances, they’re doing a great job and we’re.

I agree and I don’t want to go too far over time but I want to be fair, I don’t want to all of a sudden let our passions sweep up private housing providers that seem to be doing a good job, trending in the right direction. But we probably need to make an example out of a couple of ’em and just draw the line and move forward. And then the other cases, go back and figure out, Secretary Ryan, I think you’re right, if we don’t look at recapitalization, I’m not one who thinks that we should take this back over and go to the old ways because it wasn’t working. And then Senator Perdue’s point is well taken. Then all of a sudden you guys have to rely on us to give you resources and how’s that worked out for you? So, I think it makes more sense to provide some certainty by having these contracts in place but we have to look at recapitalization, we have to go back and rationalize what should be a consistent model to Senator Hirono’s point. I know that these contracts were negotiated over time and there were differences. Some of them were learning from the past contracts. But at some point we’ve got to go back and reopen those and aggressively pursue it. And I’m gonna leave you with this. I don’t know what other members have done but I’ve had town halls at Camp Lejeune, I’ve had town halls at Fort Bragg, I’ve had multiple sessions. I’ve literally met with hundreds of military families down on those two bases. And things were improving there. But I had at least one military spouse drive up from Fort Benning and she said we were here when you all started really shining light down at Fort Bragg. But now I’m down at Benning and it’s not so good, sounds like it’s improving. But I would encourage all of my colleagues in the Senate and the House to go on base and cast light on these folks, it makes a difference. We’re making progress but we’re not making it nearly as quickly as we should and I really do believe it’s time to draw a line with some of these vendors and some of these contracts and say enough is enough. Thank you, Mr. Chair.

Thank you, Mr. Chairman. Ms. Field. Don’t want to step on your recognition, Senator Tillis, which is appropriate. Ms. Field, I want to get to the sort of basic question. Are these contracts adequate or inadequate? Is the problem the contracts or the enforcement of the contracts?

I think it’s both, Senator. In many cases, the contracts were not written in such a way that the Services could truly hold the partners accountable for everything they should be holding them accountable for.

Well, let me stop you there, though. I want to follow up on Senator Hirono’s question. I can’t believe that the fundamental nature of the contract doesn’t require that the contractor, and by the way, I agree with Senator, these aren’t partners, they’re contractors. Banish that word will ya? Quit referring to them as partners, they’re contractors. But I can’t believe the basic requirement of that contract wasn’t safe and healthy habitable units.

The partners.

[King] What were we buying?

The companies, pardon me, are required under all of the projects to comply with all federal, state, and local environmental health and safety codes. So, that is a requirement that is in all of the contracts. And to your second point, I think part of what we have found through our ongoing review is that the Services at many of the installations have not done everything they could to perform oversight to make sure that that was happening. When it comes to things like incentives to really get the companies to pay attention, that’s where there are problems in the contracts.

But I don’t think they should be paid even the basic rent if they’re not renting safe and habitable units. Forget about incentives.

Well, the Services do have the option of rescinding these contracts and that is an option available to them.

My experience in this kind of work is that implementation is as important as vision. And my sense is there are differences in the contracts but they’re clearly, as you say, there are basic provisions that they have to be safe and healthy, they have to meet codes, and that, I believe, not having seen the contracts myself, but I believe that this is really mostly an implementation problem. And then my question is, who’s in charge? Is it the base commander? Is it a base housing officer? Is it the Secretary of the Navy? Is it the Secretary of Defense? There’s got to be somebody who can be held accountable here in what looks like endemic non-enforcement.

If I may, it is the Service Secretaries that signed the agreements with the companies so I would say that the Service Secretaries are ultimately responsible. Part of what we.

Ultimately responsible means not so responsible. I want somebody that can be fired.

Well, I think that would have to be done on a case by case basis but I do want to point out two examples of where there was a break in leadership. At Camp Lejeune, for example, and at Tinker Air Force Base, we learned from the military housing offices that they had recommended to senior leadership, to NAVFAC and to AFCEC, to withhold either part or all of the performance incentive for years and had never gotten support for that. So, that’s an example of where there was a break in leadership.

So, was that a break, was that the base command or was it a regional command? I think part of something you all should do, the Secretaries, is assign somebody who’s in charge of this and hold them accountable. And I don’t know whether it can be a one person at each base or it can somebody in the Department or in the Army, the Air Force, the Navy. But somebody’s gotta, I mean we have this diverse, diffuse responsibility and therefore nobody really is held responsible. Can these things like, Secretary McCarthy, you’ve talked about the Bill of Rights. Can that be imported into these agreements without permission if you will or a negotiation with the contractors? Is that something that can just be stuck into the agreements?

We had to work through the language with the companies in question, Senator. With respect to your earlier comment, it is the chain of command on the installation. Those installation commanders have not been, in the Army’s case, have not been empowered.

Wouldn’t that be the logical place? It seems to me the base commander would be the logical place to lodge this responsibility.

The senior commanders are now back part of the process and they rate the garrison commander who manages the housing relations.

Is that true in the other departments? I’m getting a yes. Let the record show affirmative nods.

[Barrett] Yes.

Final question, sort of a detailed question on this refinancing. I don’t understand why they need our permission to refinance. I mean people refinance all the time. If interest rates have gone down, they can go in, raise more capital. What’s the hold up there?

In the contract they have to have a scoring criteria for the projects. And that’s managed by the Office of Management and Budget. What we’ve referenced earlier is we would like to rescind the Raines memorandum from the ’90s so that we can adjust the scoring criteria so that they can go back to capital markets to raise the capital.

So, this is something that’s within the control of the government, we can fix that? Does it take an act of Congress?

No, Senator, we’re working with the Office of Management and Budget on that.

Would you please let us know if that gets bogged down because that would be one way to get a lot of new capital into these projects?

Yes, sir, I will.

Please. Thank you all very much. And I would like for the record statements from the Secretaries about where you are lodging the responsibility for the enforcement of these contracts, the name of the person, the position, and what the arrangements are to be sure that the enforcement takes place. You can have the best contract in the world, if it’s not enforced and implemented properly, people are gonna suffer for it and that’s exactly what’s happened in this case. Thank you. Thank you, Mr. Chairman.

[Inhofe] Do any of you feel that’s an unreasonable expectation? Okay, we recorded the nods.

[King] Affirmative nods.

[Inhofe] Yes. Senator Hawley.

Thank you, Mr. Chairman. I want to start by also thanking the military families who are here, first of all for your service to this country. Thank you for the sacrifices that you’ve made. Your service members, your family members, thank you for doing what you’ve done to defend this country. Thank you for being here today, thank you for making the trek and for showing up and for advocating. And I just want to say that what you have been through, after the service that you have rendered to this country is absolutely outrageous. And it is absolutely unacceptable. It wouldn’t be acceptable for anybody to be treated like this in this way, but for you as service members and families who are sacrificing day in and day out for this country, to have been through what you’ve been through is really a breach of faith in what this country owes to you. So, thank you for being here, I’m sorry for what you’ve been through and you have my commitment that my office and I will do everything we can to see that this does not continue. So, thank you for being here. Let me ask a few questions specifically about Fort Leonard Wood and Whiteman Air Force Base in my home state of Missouri. I want to start by saying that many military families in Missouri are worried that base housing on those installations may still be a risk. I want to thank the leadership, the base leadership, at both of those installations for doing their part to ensure that our service members are getting high quality on base housing. But let me ask about some of the concerns that military families in the state have expressed to me, in particular military families in Missouri have raised concerns to me that as Balfour Beatty and other companies shift their attention to fix problems in other states, that those companies might take their eyes off the ball in Missouri and let things slip. So, Secretary McCarthy, Secretary Barrett, let me ask you in particular, what are your Services doing to ensure that Fort Leonard Wood and Whiteman respectively will not be shortchanged as these companies reallocate resources to address these glaring deficiencies elsewhere. Go ahead, Secretary Barrett, we’ll start with you.

Well, Balfour Beatty has had very poor performance in some settings but very fine performance in others. The base commander having responsibility and authority over the housing topic will mean that there will be careful attention given to the local base by the local leadership. So, distractions by outside, at other bases will not be a distraction from performance at Whiteman.

Thank you. Secretary McCarthy.

We are watching it very closely, Senator, and we’ll ensure that there’s no change with the performance, if anything it’ll be to improve it.

Thank you. Let me ask you both again, Secretary McCarthy, we’ll start with you maybe this time. Families in my state have also raised concerns about insufficient tenant’s rights for service members who live off base. And with that in mind I want to ask you what the Army’s doing to ensure that military families have access to high quality off base housing in Missouri and elsewhere? Can you address that?

Specifically to Missouri, I would have to get back to you on that, sir. But in other instances like yesterday at Fort Belvoir, with respect to Fort Benning and Bragg, and others that I’ve visited over the last 90 days, 100 days, they work very hard with the local communities to get additional opportunities for off post housing. So, we’re doing this in all of our installations, and I will get back to you specifically on what we’re doing in Fort Leonard Wood, sir.

Thank you, I’d appreciate that. Secretary Barret, can I ask you the same question as regards Whiteman?

Well, off base housing is covered, there is an allowance that members get and maybe the Chief would have further detail on that.

Yes, sir, as you know we do routine housing allowance surveys and we also go out and look at the basic allowance for housing. Something that the Service Secretaries all signed a memo to governors last year and it was a really important memo that said as we are looking at your bases, there are two issues that are top shelf for our families. And that is number one, reciprocity and licensure for spouses so that they can, as they move around the country, they can continue to work. And the second is the quality of their schools. And that letter has had a fairly significant impact and so I want to thank this committee for all the work that’s been done because it’s definitely improved the quality of life for our spouses.

Thank you. In my time remaining, let me just, Ms. Field, ask you at the current rate of decline of the housing inventory, I’m wondering if you think the MHPI program is financially viable and will survive the full 50-year term?

The Department has determined that the MHPI portfolio across the board is healthy. We issued a report last year where we found that while the Services had good mechanisms in place to assess the financial strength of the projects in the near term, they don’t in the long term. So, I think your concern is well-founded. Quite frankly, though, what concerns me more is that there are more mechanisms in place for the Services to assess the financial health of the projects and hold the partners accountable for financial health than there are for assessing and holding the partners accountable for the quality of the housing.

Thank you for that, that’s a very, very important point and something I think that we’ve absolutely got to rectify. Thank you, Mr. Chairman.

[Inhofe] Thank you. Senator Duckworth.

I just don’t buy this argument that the chain of command can’t really be held accountable in the past ’cause we haven’t empowered them to enforce these contracts because by nature of being in command or especially being a garrison commander, you’re responsible. I mean, if you had troops in barracks where they continually complained that the ceiling is collapsing and hurting these soldiers and that garrison commander did nothing about it, you’d hold him accountable. If you had a tank gunnery range an aerial gunnery range or a door gunnery range that was constantly hurting the troops who were operating that range, and that range was not up to standard, that garrison commander would be held responsible for whether or not he, whatever contractor that was running that range for you and keeping it safe for our troops to use. So, I don’t understand why not a single garrison commander to my knowledge has yet been fired over a failure to maintain these standards period. And so, okay, that’s the past, let’s look forward. I’d like to ask each of the Service Chiefs is maintaining the highest quality of housing for your troops and their family members a line item on every person’s evaluation report all the way up the chain for garrison commanders up to and including yourself right now? Is it a line?

[McConville] Senator, it’s not.

[Berger] Ma’am it is at the flag level, looking at doing that down at the O-6 level and below.

[Duckworth] So, no, so far?

[Berger] No.

How many years has it been? Why is it not? Sorry General.

[Goldfein] No.

Well, I would like to recommend that it be one on there for every single garrison commander and all the way up to and including the Service Chiefs. Because until you’re being evaluated on it, you can just walk away. And I’ve looked. I can’t find a single person who’s been fired over this. Ms. Field, you looked like you want to say something.

I do, thank you. And you know, with all due respect to Secretary McCarthy, because I know this is not a decision that you made. I think it’s important to point out that in 2013 the Army issued a clear instruction to installation commanders and garrison commanders not to perform inspections of homes for the life, health, and safety of those service members. That has since been reversed but to me I can see how commanders during that time period would have been confused about what it was they were and were not supposed to do because they were getting an instruction that told them not to perform inspections.

Well, I think that’s a good point and since that’s been reversed that’s good, but that’s not enough. I think it should be on their OERs that they will be evaluated on this period for every single person up the chain. I want to touch on one other topic which is the family members who live in this housing. There is no safe level of lead especially for children to be exposed to, none. Are we doing anything to track the children, the family members who have lived in these housing units and are we keeping and maintaining a database so that we may track their health over the course of their lifetime and so that they can themselves receive benefits and or healthcare that can be, over the course of their lifetime? ‘Cause we know that children cannot be exposed to any level of lead safely so what are we doing to protect these children and the family members in general who have lived in all of these housing units? Mr. McCarthy?

Senator, we have the Army health registry so when the family members come forward and put that into the database we can capture that data and then track each of these cases.

Well, have you, does that come as part of the briefing for every single family member who moves into housing that you should come forward? I feel like you should know and be able to track and have records of every single family member who has lived in every single one of these units in order to track them. I don’t see why we’re putting the responsibility on the family members, they’ve got enough on their plates. The Services should be doing this and we have those records. Certainly, the contractors do, right? ‘Cause we’re paying them for it so they know who lived in these housing units. Why are we not maintaining this? Have we done this for any of the Services, a database?

[Inhofe] You’re out of time.

[Duckworth] I’m so sorry. Go ahead.

Senator, we’re capturing that information in individual health records for members and their families. The challenge we have is that they go out of and they go outside of the military health system for their health care. We don’t have an ability to get that so we are looking at developing a database to do that.

I’m not talking about on the health care side, I’m talking about you know who’s lived in every single one of these housing units. You can go back into the housing records, not into the medical records but in the housing record, and make a list of every single person. You know every single person who’s been stationed at Fort Bliss, at Fort Bragg, at wherever. Why do we not have a list of every single person that has lived in these units? We have them. Don’t put it on the family members and on the medical side to wait until the health condition happens. Do it on the front end so that everybody can, later on some child comes up and has a problem, they can say, hey, I was at Fort Bragg, they’re in the system without them having to come forward. I’m out of time. I yield back, Mr. Chair.

Thank you, Senator Duckworth. Anything further, any other member, any other comment? Alright, first of all, as I mentioned in my opening statement, we’ll have another housing hearing as early as possible next year and at a minimum we need the companies back, maybe even some of the new ones that seem to be part of this problem and the Services so that you can let us know and we can reflect on, if we ever get our NDAA passed, the language. We are out of time so that is a serious problem. First, I do want to thank all the, it’s a very large number of people, went to a lot of inconvenience to be here. And you have been heard and you have heard us and so I appreciate very much your being here. I’d like to, the record will stay open until close of business Wednesday December 4th for any additional questions. Now what I’d ask of our witnesses, respond no later than Friday December 20th. Do I have your commitment to respond to the committee’s additional questions by that time? All of you nod?

[All] Yes, sir.

That’s good. Appreciate it very much, appreciate your testimony. And I thank you very much. We’re adjourned.

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