WASHINGTON — A major U.S. military housing contractor that pleaded guilty last year to covering up shoddy work from 2013 through 2019, so that the company could keep earning millions of dollars in awards for performance, has continued its behavior into this year, a new Senate subcommittee investigation found.
The company, Balfour Beatty Communities LLC, pleaded guilty in federal district court in Washington in December to defrauding the armed forces by falsifying housing repair records in order to receive higher awards. The company paid $65 million in fines and restitution.
According to the plea agreement with the Justice Department, the company conceded that it doctored data in a work order database so as to appear to be promptly and effectively handling repair requests while, in reality, problems such as mold and rodents had continued to fester. Top executives were not convicted, though two lower-ranking company officials were.
The Justice probe covered company actions ending in 2019. But the Senate Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations, in a report made public Tuesday, said Balfour Beatty has kept up similar behavior through at least February at Fort Gordon, an Army base in Georgia, and Sheppard Air Force Base in Texas.
At those two facilities — where Balfour Beatty maintains a total of 1,700 homes — the company “failed to properly respond to both repairs and environmental hazards such as mold,” the report found. “Balfour’s failures in these instances exposed military service members and their families living on these bases to hazards that jeopardized their health and safety.”
The subcommittee’s eight-month investigation was pursued by both Georgia Democrat Jon Ossoff, the subcommittee chairman, and Republican Ron Johnson of Wisconsin, the ranking member.
The panel will convene a hearing Tuesday at which it will hear from Balfour Beatty executives, residents at the bases and an advocate for military families.
“Despite the company’s pledge to improve its housing services, Balfour continued to provide deficient services to military families at Fort Gordon,” the panel’s report said. And the company “failed to ensure the accuracy of its work order data” at the base, “even while under investigation for the same failures at other bases.”
‘Inaccurate or incomplete’ repair reports
Balfour Beatty is one of the largest of the 14 companies that operate on-base housing for U.S. military personnel and their families. The company runs 43,000 residences for 150,000 U.S. military family members in 26 states, the subcommittee report said.
A Reuters investigation in 2019 revealed the allegations of not only substandard upkeep of homes but also that the company maintained two separate maintenance records: an accurate one listing leaks, asbestos and the like — and a falsified one for the Pentagon.
Those reports led to multiple investigations culminating in the December 2021 conviction of Balfour Beatty based on its actions through 2019.
The subcommittee report documents “multiple instances” since 2019 of work order data that was “inaccurate or incomplete.” For instance, work done to repair mold would be referred to as “painting” in written reports, a subcommittee aide told reporters.
A former Balfour Beatty employee told Senate investigators that two successive Balfour Beatty facilities managers at Fort Gordon routinely told maintenance personnel to urge residents not to file requests for repair work online, where they would be part of a formal record, but instead to convey them verbally — and the requests were then ignored in some cases.
The report concluded pointedly that Paula Cook, a vice president at Balfour, “was aware of work order data discrepancies and data integrity concerns in 2020 and 2021, but she did not ensure that the issues were properly investigated or that appropriate corrective actions were taken.”
Cook is scheduled to testify Tuesday, alongside Richard Taylor, the company’s president for facility operations, renovation and construction.
Lack of leverage
U.S. military family on-base housing — which the armed services formerly owned and maintained — was privatized starting in 1996, with the goal of improving housing by outsourcing it to companies that specialize in such work.
Each of 14 housing companies has separate arrangements with local bases. The companies lease the land from the government for 50 years and then the companies, not the Defense Department, own and operate the homes, according to testimony last month by Elizabeth Field, GAO’s director of defense capabilities and management.
As such, the Pentagon’s leverage over the housing companies is not as great as it is with traditional contractors, Field suggested at a House Appropriations Military Construction-VA Subcommittee hearing.
Oversight of the family housing program “will likely continue to face challenges,” Field testified, “because DOD cannot unilaterally make changes to projects without the concurrence of the private companies, as demonstrated by DOD’s efforts to implement several legislative provisions.”
In particular, the fiscal 2020 National Defense Authorization Act required the companies to establish a Tenant Bill of Rights to institutionalize best practices. But, more than two years after that law was passed, the department had not secured agreement to implement it from housing companies at five U.S. military installations, Field testified.
Field gave the Pentagon and Congress credit for making some improvements to oversight of the program but indicated more work needs to be done.
The Defense Department’s oversight role in the program is, so far, not a focus of the Permanent Subcommittee on Investigations, aides said. But they stressed they are not done monitoring the issue.
