[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
[H.A.S.C. No. 116-51]
PRIVATIZED HOUSING:
ARE CONDITIONS IMPROVING
FOR OUR MILITARY FAMILIES?
__________
HEARING
BEFORE THE
SUBCOMMITTEE ON READINESS
OF THE
COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
DECEMBER 5, 2019
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
__________
U.S. GOVERNMENT PUBLISHING OFFICE
41-473 WASHINGTON : 2021
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SUBCOMMITTEE ON READINESS
JOHN GARAMENDI, California, Chairman
TULSI GABBARD, Hawaii DOUG LAMBORN, Colorado
ANDY KIM, New Jersey, Vice Chair AUSTIN SCOTT, Georgia
KENDRA S. HORN, Oklahoma JOE WILSON, South Carolina
CHRISSY HOULAHAN, Pennsylvania ROB BISHOP, Utah
JASON CROW, Colorado MIKE ROGERS, Alabama
XOCHITL TORRES SMALL, New Mexico MO BROOKS, Alabama
ELISSA SLOTKIN, Michigan ELISE M. STEFANIK, New York
VERONICA ESCOBAR, Texas JACK BERGMAN, Michigan
DEBRA A. HAALAND, New Mexico
Jeanine Womble, Professional Staff Member
John Muller, Professional Staff Member
Sean Falvey, Clerk
C O N T E N T S
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Page
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS
Garamendi, Hon. John, a Representative from California, Chairman,
Subcommittee on Readiness...................................... 1
Lamborn, Hon. Doug, a Representative from Colorado, Ranking
Member, Subcommittee on Readiness.............................. 3
WITNESSES
Bliss, Jarl, President, Lincoln Military Housing................. 10
Ehle, John, President, Hunt Military Communities, Hunt Companies,
Inc............................................................ 6
Hickey, Denis, Chief Executive Officer, Lendlease Americas....... 7
Picerne, John G., Founder and Chief Executive Officer, Corvias
Group, LLC..................................................... 5
Taylor, Richard C., President, Facility Operations, Renovations
and Construction, Balfour Beatty Communities................... 9
APPENDIX
Prepared Statements:
Bliss, Jarl.................................................. 96
Ehle, John................................................... 53
Garamendi, Hon. John......................................... 33
Hickey, Denis................................................ 69
Lamborn, Hon. Doug........................................... 35
Picerne, John G.............................................. 37
Taylor, Richard C............................................ 82
Documents Submitted for the Record:
Representative Brown letter to COL Spragg.................... 111
Balfour Beatty, Attachment C, Temporary Relocation Policy.... 113
Lincoln Military Housing, Standard Procedures for Operations
and Maintenance of Asbestos and Lead Based Paint........... 116
Lincoln Military Housing, Water Intrusion/Mold Operations and
Maintenance Management System.............................. 168
Corvias, Work Order Priority Schedule........................ 185
Witness Responses to Questions Asked During the Hearing:
Ms. Houlahan................................................. 189
Ms. Stefanik................................................. 191
Questions Submitted by Members Post Hearing:
Mr. Brown.................................................... 212
Ms. Haaland.................................................. 208
Ms. Houlahan................................................. 197
Ms. Stefanik................................................. 205
.
PRIVATIZED HOUSING: ARE CONDITIONS IMPROVING FOR OUR MILITARY FAMILIES?
----------
House of Representatives,
Committee on Armed Services,
Subcommittee on Readiness,
Washington, DC, Thursday, December 5, 2019.
The subcommittee met, pursuant to call, at 1:00 p.m., in
room 2118, Rayburn House Office Building, Hon. John Garamendi
(chairman of the subcommittee) presiding.
OPENING STATEMENT OF HON. JOHN GARAMENDI, A REPRESENTATIVE FROM
CALIFORNIA, CHAIRMAN, SUBCOMMITTEE ON READINESS
Mr. Garamendi. My colleague, Mr. Lamborn, is definitely
tied up with voting that is going on in the Natural Resources
Committee. He will be along shortly. Mr. Scott will stand in
for him and we will pick up Mr. Lamborn. You can either----
Mr. Scott. I will read his statement.
Mr. Garamendi. You will read his statement. Very good.
Before we get started, I request unanimous consent that a
member of the full committee be allowed to join us, Mr. Brown
who is behind me, and participate in the questions. And there
is a formal way. I ask unanimous consent that a non-
subcommittee member be allowed to participate in today's
hearing after all the subcommittee members have had an
opportunity to ask questions. Is there an objection?
There being none, the non-subcommittee member is recognized
at the appropriate time for 5-minute question.
Okay, with that the committee will come to order. Ladies
and gentlemen, I call the committee to order, the Readiness
Subcommittee, the Armed Services Committee.
Since February of this year, this subcommittee has been
conducting extensive oversight of the privatized military
housing program. We first heard about the systemic failures in
the privatized military family housing program from a panel of
courageous military spouses who provided graphic and disturbing
testimony about lead, mold exposure, rodent infestations, rude
and dismissive house management, and ineffective oversight of
the program by the services.
Then we heard from the assistant military service
secretaries on their efforts to address the failures of
oversight that led to the privatized military housing crisis
and the plans of the services to continue to make improvements.
Today, we will hear from five of the private military housing
partners for their perspective and, importantly, their plans
for bringing family housing back to the level our military
families deserve.
I also want to make one thing clear. While we do not have
all of the privatized military housing partners present today,
that in no way means that those who are not here are off the
hook. We are watching them. We expect them to do right by the
military families that they provide services to. Our oversight
of this issue will continue, and we are watching not only those
five that are here, but those who are not.
I have heard troubling reports about the Michaels
Organization, Michaels Organization/Clark Realty Capital. I am
particularly concerned by reports about the abusive use of
nondisclosure agreements. For all of the housing partners,
whether you are here today, I am putting all of you on notice
that this committee will be watching, and we will not tolerate
in any way the abusive and problems that we have seen. It is
deeply troubling that I am still, after these months, getting
reports that certain partners continue to show a blatant
disregard for the seriousness of the issues facing our military
families and, frankly, a lack of respect for our service
members and their families. They deserve better. While it is
clear that the private partners and military services have been
working to improve conditions and processes since we first
heard from the families in February, this committee and many of
our members still hear from concerned military families who
continue to struggle with getting quality resolution of the
maintenance concerns and some of the unprofessional property
management staff. There is work yet to be done and we will
continue to follow up on these issues until they are resolved
to the satisfaction of the military families and this
committee.
One of the themes that has permeated our discussions about
privatized family housing is the issue of ineffective
management particularly at the installation level. The symptoms
of this problem have taken many forms including disrespectful
customer service personnel, inexperienced maintenance teams
performing low-quality maintenance, and negative consequences
resulting from wrong contract performance incentives. We have
heard about the Department of Defense initiatives to address
these issues, but because day-to-day management is within the
purview of the private partner, I am interested in hearing what
you have to say about what you are doing to change the culture
at the installation level.
As military services have recommitted to their oversight
role, they are working to improve their processes and refine
the metrics that we use to measure the performance of each
housing project. I am looking forward to hearing from our
witnesses today about the degree to which they are cooperating
with these initiatives and the steps that they are taking to
ensure that the housing enterprise is as transparent as
possible.
Counterproductive practices such as closing maintenance
work orders before the problems are resolved in order to
artificially bolster closure statistics or asking tenants to
sign nondisclosure agreements as a matter of routine when they
move out of a unit are simply unacceptable.
As we move into 2020, the focus now must be on action. Not
only must corrective policies and processes be instituted
across the enterprise, but you must develop mechanisms to
ensure the sustainment of positive change and the sharing of
best practices to ensure our families receive high-quality
housing regardless of where they live. We ask our service
members and their families to sacrifice enough in service to
their country. We will not accept substandard housing as well.
These families deserve better and this committee will demand
that they get the best.
[The prepared statement of Mr. Garamendi can be found in
the Appendix on page 33.]
Mr. Garamendi. Mr. Lamborn, thank you so much for joining
us. I have explained that you were in a committee markup
casting votes. I am sure that they were all to----
[Audio malfunction in hearing room.]
Mr. Garamendi. Mr. Lamborn, please.
STATEMENT OF HON. DOUG LAMBORN, A REPRESENTATIVE FROM COLORADO,
RANKING MEMBER, SUBCOMMITTEE ON READINESS
Mr. Lamborn. You will be just as satisfied. And thank you
for having this hearing. Thank you all for being here as
witnesses. Thank you for everyone in the audience showing your
concern.
Today, we will hear testimony from five of the companies
that make the privatized military family housing model work. As
someone whose district has almost 48,000 military members, and
like the chairman, I have also been deeply troubled by the lack
of oversight of this program and our military families deserve
better.
Our committee has heard significant concerns about
insufficient mold remediation and terrible customer service at
numerous military installations, most recently at MacDill Air
Force Base Florida and Fort Belvoir. We are not going to
address them today, but there have also been allegations of
fraud in a few extreme cases.
Now, according to a survey released earlier this year by
the Military Family Advisory Network, 63 percent of Fort Carson
respondents who live in my district said their units needed
better maintenance, repairs, or remediation. The committee has
heard horror stories about mold, rat infestations, and what
could generously be described as poor customer service.
The Military Housing Privatization Initiative began as
public/private ventures or P/PVs in 1996 as means to modernize
family housing, improve efficiency, and grow reserve accounts
for future investments. Oversight of the program is challenging
because each military department manages their programs
differently and the respective projects are governed by unique
legal agreements. The Army has a total of 35 projects, the Navy
and Marine Corps have 15, and the Air Force has 32.
Oversight is further complicated for Army and Navy projects
because they are partners with the developers in limited
liability companies with both sides investing capital. My
sincere hope is that the attention the military family housing
has received over the last year has served as a wake-up call to
both the military partners and to the housing partners. We need
this model to work, but not at the expense of military
families. Every dollar wasted through mismanagement or
incompetence diminishes the long-term viability of the reserve
accounts that are vital for future recapitalization.
The House and Senate both passed significant bipartisan
legislation in their defense bills this year and I look forward
to enacting meaningful reform. First and foremost among these
will be a tenant's bill of rights. The military departments
have an inherent responsibility to provide oversight for these
projects. A recent Air Force IG [Inspector General] report
found ``a pervasive misperception that when housing was
privatized it was effectively outsourced. Leaders at many
levels did not actively engage as they might have on other
issues, based upon misunderstanding of their authority.''
We have heard from Army families that some installation
commanders characterized the government as the weaker or 49
percent partner in these housing agreements, implying that they
have limited means to address shortcomings. Oversight is
inherently governmental, and it is not optional. On some
installations there is confusion regarding the identity of the
installation housing office and the office of the housing
partner or third-party management company. It should be crystal
clear to a family whether they are speaking to someone
representing the installation commander or to a representative
of the housing partner.
And we must simultaneously reform while preserving the
financial footing of the privatized housing projects. A 2018
GAO [Government Accountability Office] report highlighted and
found that the military departments vary in the extent to which
they use measure of future sustainment needs and funding to
assess project sustainability. I am beginning to question the
wisdom of the fiscal waterfall and why the recapitalization
accounts are only paid after P/PV management partners and bond
holders are paid. So, I look forward to hearing more from our
witnesses about their perspectives on the program overall, the
actions they have taken to address any health and safety
concerns and to improve customer service. We would also
appreciate their thoughts on improving the overall program
going forward.
Thank you, Mr. Chairman, and I yield back.
[The prepared statement of Mr. Lamborn can be found in the
Appendix on page 35.]
Mr. Garamendi. Thank you, Mr. Lamborn. It has been good to
work with you on this problem and I know that we will continue
to do so.
I would now like to welcome our witnesses: Mr. John
Picerne, CEO [Chief Executive Officer] of Corvias Group, LLC;
Mr. John Ehle, President of Hunt Military Communities; Mr.
Denis Hickey, CEO of Lendlease Americas; Mr. Rick Taylor,
President, Facility Operations, Renovations and Construction
for Balfour Beatty Communities; and, Mr. Jarl Bliss, President
of Lincoln Family Housing.
Gentlemen, your formal testimony will be put into the
hearing record. In the interest of time, which we are
unfortunately limited today because votes will occur sometime
after 2:00, perhaps hopefully as late as 2:30, I would ask you
to limit your testimony and summarize to 3 minutes.
So, let's start with Mr. Picerne. My apologies for the
pronunciation.
STATEMENT OF JOHN G. PICERNE, FOUNDER AND CHIEF EXECUTIVE
OFFICER, CORVIAS GROUP, LLC
Mr. Picerne. Perfect. Thank you, Mr. Chairman, Ranking
Member Lamborn, and members of the committee. Thank you for the
opportunity to appear before you today. My name is John Picerne
and I am the founder and CEO of Corvias. I am here on behalf of
950 dedicated team members who support our service members and
their families. Many of our employees are veterans or spouses
of Active Duty military members. These talented people are
generally committed to supporting those who protect and defend
our Nation. It is my honor to serve in this capacity.
When I was first introduced to the massive challenge facing
the Department of Defense with its struggling housing program,
I was moved by how poorly we as a Nation were caring for our
military personnel in what was the most personal way of all,
their homes. The DOD [Department of Defense] was committed to
creating a real long-term solution and with our experience I
believed we were well suited to help.
When I founded our company some 20 years ago, we set out to
create something that could fix the housing challenges that
were facing our military, and after 9/11 a very important job
became a vocation. When I was last on the Hill in February, I
said I was sorry in no uncertain terms. I apologized for the
issues some of the residents were dealing with. I said we would
do whatever it takes to do right by all of our residents.
Today, I want to tell you a few of the things that we have done
since I apologized nearly 10 months ago.
Since early in 2019, we have been making changes in a
concerted effort to get back to the gold standard. The gold
standard of resident service will be known when we have
deployed service members who are able to speak to their
families about their daily lives, what is happening at school
and not about problems they are experiencing within their
housing. We will know that we have achieved the gold standard
when our residents talk about Corvias and the things that they
are doing at resident events, strong sense of community, and a
team that has helped create a better living environment.
With that goal in mind, we added neighborhood staff to work
directly with families. We moved our resident service call
centers back onto the installations so that our residents talk
to somebody right down the street as opposed to a central call
station. We launched the Corvias resident portal so that
residents can use their smart phone or laptop to place service
calls, track progress, and let us know if we have gotten the
job done right. We established the role of resident advocate to
work as an ombudsman for those families with more challenging
issues. From the early days of the MHPI [Military Housing
Privatization Initiative] program it was well understood that
to give our service members the homes they deserved, the
program needed to operate in a consistent state of development,
construction, and financing.
Solving the housing challenges has always been based on a
regular investment in homes, building new homes while
maintaining homes both new and old and investment in these
homes is an investment in the service member. That is why we
have injected new money into the program, $325 million of
private capital in 2019 with another $150 million prepared for
2020. We are also putting close to $200 million to work from
our partnership reserves, $675 million all together at no cost
to the government.
These investments will be used to replace or completely
upgrade some of the most challenging homes we maintain. More
than 16,000 homes we brought up to higher energy standards,
like new heating and air conditioning systems that give
residents a better home experience while saving the program
nearly $300 million over the course of the next 30 years. As
someone who has been in the program for nearly 20 years, I can
say from personal experience that the homes that we inherited
were in terrible shape and in many cases uninhabitable.
Through the MHPI program we were able to upgrade or replace
thousands of older homes in the early years. However, to date,
46 percent of our homes in our military portfolio were built
before 1980 and some as old as 1870. As we look into the
future, there is a lot to be encouraged about and some real
challenges as well. The priority is to deliver gold standard
resident service, service older homes that cost more each year
to maintain, and drive constant investment in new homes and
renovations.
Corvias will continue to work tirelessly for our families.
We will keep innovating, finding new answers to give service
members the homes and residence experience they deserve. We are
proud to serve our military women and men as we believe there
is no higher calling in our industry. I thank you for this time
and look forward to your questions and dialogue.
[The prepared statement of Mr. Picerne can be found in the
Appendix on page 37.]
Mr. Garamendi. Thank you.
Mr. Ehle.
STATEMENT OF JOHN EHLE, PRESIDENT, HUNT MILITARY COMMUNITIES,
HUNT COMPANIES, INC.
Mr. Ehle. Chairman Garamendi, Ranking Member Lamborn, and
distinguished members of the subcommittee, good afternoon. My
name is John Ehle. I am president of Hunt Military Communities.
Thank you for the opportunity to be here.
At Hunt, we are entrusted to build quality communities for
America's heroes. We take that responsibility very seriously.
During the Senate hearing in February, it became obvious to us
that there were families living in our homes whose voices were
not being heard. We lost their trust, we are sorry, and we want
to get it right. We have heard our residents loud and clear and
we are singularly focused on rebuilding their trust in us and
improving their living experience.
Over the past year, we have been working diligently on that
front. First, we recognize that quality homes and resident
services depend on open and regular communication with our
residents. We need to hear from all of our military families in
order to address their issues. We have made a number of
improvements to make it easier for our residents to communicate
with us. In addition, we understand that maintenance is a
critical part of providing quality homes, and earlier this
year, it became clear to us that we had substantial room for
improvement.
While maintenance issues will inevitably arise, it is our
goal to provide professional, transparent, and timely service.
In the last year, we have enhanced maintenance processes, added
key positions, and improved training. Finally, we are actively
supporting reforms to ensure the long-term success of the MHPI
program. We are by no means perfect and there have been times
when our performance has fallen short of our residents'
expectations.
We are committed to taking the necessary actions to rebuild
the trust between Hunt and our residents. We have made progress
over the past year, but our work is far from done. Thank you
for the opportunity to testify today. I look forward to hearing
your thoughts and answering any questions.
[The prepared statement of Mr. Ehle can be found in the
Appendix on page 53.]
Mr. Garamendi. Thank you.
Mr. Hickey.
STATEMENT OF DENIS HICKEY, CHIEF EXECUTIVE OFFICER, LENDLEASE
AMERICAS
Mr. Hickey. Chairman Garamendi, Ranking Member Lamborn, and
distinguished members of the subcommittee, my name is Denis
Hickey. I am chief executive of Lendlease Americas. Lendlease
is a proud partner of the Department of Defense and----
Mr. Garamendi. Pull the microphone up closer.
Mr. Hickey. Sorry.
Lendlease is a proud partner of the Department of Defense
and we have the privilege of overseeing 40,000 homes that
contain over 130,000 people who call Lendlease communities
home.
Mr. Chairman, the issues being discussed here today are
critical for both Lendlease and for me personally. No family,
much less a military family, should be subjected to living in
substandard housing conditions and I reiterate our apology for
any creation that we have caused in this instance.
At Lendlease we are proud of the work we do to take care of
our military families. However, we realize we have more work to
do and we must continually improve. As an example, Lendlease
processed over 400,000 service orders per year. Last month, we
processed approximately 25,000 service orders across our homes.
Pleasingly, 97 percent of these orders were successfully
completed on time and function. We think this is a good result
and we are proud of that. However, it does mean that 3 percent
of those orders were not effectively processed on time and that
is the big issue.
So, Mr. Chairman, members of the committee, that 3 percent
is my central focus. What can we do to get that number down?
How can we take care of these families more quickly and more
effectively than we currently are? On the road to improve our
performance, we have recently taken the following steps.
Firstly, we have significantly increased our focus on
customer service. We have added new staff, new suppliers, new
contractors, and have instituted new training modules to train
our staff. For example, we have instituted a maintenance
academy to train all of our maintenance people. Secondly, we
have introduced new resident smart phone app. This contains a
volume of information easily accessible to residents, including
the ability for them to initiate and track service requests.
The use of this app has doubled in the last 6 months across our
communities.
Thirdly, we have introduced new mold-inhibiting protocols.
These include new mold painting techniques, enhanced filter
protections, new ventilation systems, and other initiatives.
Fourthly, we are continuing to invest in digital technology to
improve all aspects of our business. This includes modules that
improve customer service, greater data analytics, and the
adoption of digital twin technology that better uses predictive
maintenance technology across new homes being built.
Finally, Mr. Chairman, I am particularly proud of the work
that we have done in establishing the resident advisory boards
in our communities. Our objective is to create an open and
transparent environment where residents work collaboratively
with us in order to create an active and engaged community. We
looked to other sectors for inspiration and identified the
school and PTA [Parent Teacher Association] model as the
benchmark. We all know that when you see a strong PTA, you see
a strong school.
Similarly, our resident advisory boards are designed to
allow residents to regularly engage with both Lendlease and the
local command to work together to ensure housing issues and
quality of life concerns are addressed and best practice is
shared. Our goal is to have one neighborhood representative for
every 400 homes and these representatives become members of the
resident advisory board. In addition, Lendlease project
director and garrison representative are members of this board.
We believe this initiative is already having great impact
and this is evidenced by the correspondence I received last
night from the Safe Military Housing Initiative which was
founded by some of those military spouses who appeared before
the Senate committee earlier this year who asked me to read
this statement on their behalf today.
``Lendlease and their team have embraced some of the
toughest critics by sitting down and building a relationship
with them. These relationships have benefited the project
companies and the residents on a micro and macro level.
Lendlease is leveraging their best staff to help build best
practice and better serve our military families. By closing
gaps and changing cultures at the local and corporate levels,
Lendlease has been able to build relationships with their
staff, government offices, project companies, family advocates
and, most importantly, the residents to improve program work
and its efficacy.''
Mr. Chairman, we appreciate the work this committee has
done to find sensible solutions to improve the quality of
privatized military housing and we remain committed to being
part of the solution. I look forward to your questions.
[The prepared statement of Mr. Hickey can be found in the
Appendix on page 69.]
Mr. Garamendi. Thank you.
Mr. Taylor.
STATEMENT OF RICHARD C. TAYLOR, PRESIDENT, FACILITY OPERATIONS,
RENOVATIONS AND CONSTRUCTION, BALFOUR BEATTY COMMUNITIES
Mr. Taylor. Good afternoon, Chairman Garamendi, Ranking
Member Lamborn, and distinguished members of the subcommittee.
My name is Rick Taylor, president of Facility Operations,
Renovations and Construction for Balfour Beatty Communities and
I appreciate the opportunity to testify before you today.
We take the responsibility of serving those who serve our
country very seriously. We have heard your concerns and those
of our residents loud and clear, and on behalf of Balfour
Beatty Communities I would like to apologize for having fallen
short of the high standards our military families deserve. We
are working hard to regain the trust and confidence of our
residents and our military partners. This has truly been a
humbling experience. We have learned a lot and we realize we
needed to transform many of the ways in which we do business in
order to improve our residents' daily living experiences. That
transformation is underway today and I would like to highlight
just three of our transformation efforts with you now.
First, we have reorganized. This includes my appointment as
president for Facility Operations, Renovations and
Construction. This means there is now a president in charge of
and responsible for all military housing maintenance
activities. The reorganization puts me at the table with our
most senior leaders in the company to ensure the highest levels
of oversight and the keen focus on maintenance issues and
resident support services.
As a former Navy Civil Engineer Corps officer, I am
especially sensitive to the types of challenges and concerns
and I am fully committed to providing solutions. Additionally,
we are appointing a senior executive to the role of
transformation director, another completely new position. This
individual will be responsible for ensuring that an effective
change management program is in place across our entire
military housing portfolio.
Second, we are transforming our approach to maintenance and
customer service. We have delivered live, mandatory code of
conduct training to our employees to underscore the importance
of business integrity and ethics. We have also delivered
enhanced customer service training to our employees to
reemphasize our commitment to best practices and high
standards. We recently appointed a new vice president of
training and we have added 130 professionals to our military
housing staff, and we are empowering our residents with more
transparency and control over their work order requests. Third,
we are improving our mandatory environmental training for all
facilities management employees, have increased monitoring of
all homes for life, health and safety, and particularly mold
and moisture issues. We have supplemented our local teams with
additional third-party specialists, teamed with a national HVAC
[heating, ventilation, and air conditioning] servicing and
maintenance company, and have hired regional environmental
specialists to advise our local teams, monitor environmental
processes and projects, and manage that communication with our
residents.
I also want to make myself clear on a particularly
sensitive issue for us. Balfour Beatty Communities takes the
issue of fraud very seriously, including the allegations that
certain members of our staff handled work orders
inappropriately. We are already cooperating with the Department
of Justice with respect to its own civil investigation into
these allegations. Simultaneously, we have instructed our
external counsel, Hunton Andrews Kurth, to lead an
investigation across our entire military housing portfolio.
Hunton, in turn, has engaged PriceWaterhouseCoopers, a leading
forensic accounting firm, to undertake an extensive review of
the work order system used to support our submission to request
incentive fees.
To summarize, over the last 9 months, we have made efforts
to transform and strengthen our management structure to
increase staffing in a strategic, focused, and smart way to
address our customers' concerns. Going forward, I remain
encouraged and 100 percent committed to the success of the MHPI
program.
I want to thank Members of Congress and your staff for
reforms you are undertaking in the fiscal year 2020 NDAA
[National Defense Authorization Act]. We support many of the
MHPI provisions offered in the House and Senate versions,
reforms that I believe will strengthen the program. For
example, we wholeheartedly support the creation of a resident
bill of rights, a common lease, a uniform mold policy, a
uniform resident displacement policy, and standardized
incentive fee metrics.
These are responsible and thoughtful reforms that will
focus everybody, the Department of Defense, military providers,
our residents, on standards and agreed-upon processes. The
reforms will minimize ambiguity, enforce oversight, clarify
responsibilities, and allow everybody's voice to be heard. I
support these efforts and I believe the MHPI program will be
improved because of them. Our customers deserve the very best
and we are determined to deliver for them.
Thank you for your time and I look forward to your
questions.
[The prepared statement of Mr. Taylor can be found in the
Appendix on page 82.]
Mr. Garamendi. Thank you.
Mr. Bliss.
STATEMENT OF JARL BLISS, PRESIDENT, LINCOLN MILITARY HOUSING
Mr. Bliss. Chairman Garamendi, Ranking Member Lamborn, and
members of the subcommittee, on behalf of Lincoln Military
Housing, thank you for the opportunity to testify before your
subcommittee today. My name is Jarl Bliss and I am the
president of LMH. Our company welcomes this subcommittee's
oversight of the Military Housing Privatization Initiative. We
hope you share our view that despite recent setbacks, the MHPI
is a valuable program that has improved the quality of military
housing over the DOD-managed housing of the last century. We
also welcome your oversight of LMH's ability to deliver the
high-quality housing and property management services our
Nation's heroes deserve.
Over the past year, our company has listened carefully to
the concerns some families have expressed about the quality of
their LMH housing. More than 1,200 LMH employees, many of whom
are veterans, military spouses, or have members serving in the
military, wake up every day to serve our families with honor
and integrity. But it is obvious that some of our families feel
we have come up short. As the president of the organization, I
apologize to our military families for the times that we have
failed to live up to expectations.
Beginning in 2017, working with military families and
advocacy organizations, LMH undertook a holistic review of our
policies and procedures to explore how we could improve. We
identified, developed, and implemented several reforms to
address two main goals. The first was to improve the quality of
our homes and services. The second goal was to make reforms
that establish a culture of trust, transparency, and dialogue
with our residents. I am pleased that as I sit here today, many
of those reforms have been implemented. Let me list a few of
these for you.
First, we have worked with a military family organization
to identify and place advocates in over a dozen of our
communities with more in the pipeline. These advocates seek to
identify issues before they become problems and try to work
with the families and Lincoln to resolve them. Second, our on-
the-ground property managers and personnel have set a goal of
proactively knocking on residents' doors even when there is no
work order pending, just to check in with the resident and ask
if there are any issues with the home that we need to address.
In addition to addressing issues with the home, this reform
also helps reestablish a culture of trust and dialogue with the
families.
Third, we have been responsive to requests from residents
for improved access to communications tools. We have
significantly improved our mobile phone app that enables
residents to submit and track work orders. We still maintain
our call center in San Diego for those who prefer to call in
work orders. And fourth, we have worked with our service branch
partners to get public health and medical experts involved in
cases involving environmental hazards more quickly, and Navy
and Army have given us access to doctors and specialists who
help both us and our families understand when a family should
be moved while remediation is performed. These are just a few
of the reforms we have undertaken. We are in the process of
making further reforms, many of which we believe are consistent
with several provisions in the HASC [House Armed Services
Committee] and SASC [Senate Armed Services Committee] marks of
the NDAA. As your subcommittees look at how LMH and other P/PVs
are performing, I look forward to working with you and our DOD
partners to explore new and creative ways to improve our
military families' experience in our housing. We understand
that the issues are not just about fixing drywall, but
repairing a culture of trust with our residents, a culture that
recognizes the dignity of their service to our Nation.
I look forward to your questions and, more importantly, to
working with you to address the concerns of military families.
[The prepared statement of Mr. Bliss can be found in the
Appendix on page 96.]
Mr. Garamendi. For the committee members and our guests, we
are scheduled votes probably about 15 minutes from now, so I am
going to pass on my questions and turn to Mr. Lamborn and then
take as many of our colleagues as possible.
Mr. Lamborn.
Mr. Lamborn. Thank you, Mr. Chairman, and for having this
hearing. Thank you all for being here. My first question or
two, I just want to go down the line and have a yes or no
answer for the sake of time.
From your perspective, do your companies have a 51 percent
controlling position in the privatized military housing
agreements?
Sir, if you start and go down the----
Mr. Picerne. The answer is no----
Mr. Lamborn. Okay.
Mr. Picerne [continuing]. Representative.
Mr. Ehle. The answer varies from property to property.
Mr. Lamborn. Okay.
Mr. Ehle. So it is not as simple as yes or no.
Mr. Lamborn. Okay.
Mr. Hickey. Whilst the structure may look like that, it
doesn't operate like that.
Mr. Taylor. No, sir, we do not.
Mr. Lamborn. Okay.
Mr. Bliss. As Mr. Hickey said, the structure may say that,
but the operating agreements don't call for that sort of
control.
Mr. Lamborn. Okay, thank you.
And do you agree that the government and the military has a
legitimate oversight responsibility for the P/PV initiatives?
Mr. Picerne. Absolutely. Yes, sir.
Mr. Ehle. Yes.
Mr. Hickey. Yes.
Mr. Taylor. Yes, sir.
Mr. Bliss. Yes, sir.
Mr. Lamborn. Okay, thank you. I am sure there are some
great questions about specific remediation progress or lack of
progress that you are making but let me jump into the financial
side of things. Should Congress intercede and require that we
restructure the waterfall agreements so that the result would
be that reinvestment accounts have to fully paid up before
everyone else gets paid?
That is something that would be a radical departure, but it
is the kind of reform that we may have to look at. Any thoughts
on that that you would like to offer?
Mr. Picerne. So, Representative, I think that as the
program is currently structured, it was set up and is set up so
that we can continue to advance investments and have continuous
investments if allowed to do so. Working with our DOD partners
and with support from Congress, I think we can get there
without having to go through tremendously radical changes. I do
believe though that an adjustment in the waterfall to make sure
that investment is consistent would be of benefit.
Mr. Lamborn. Okay, any other thoughts or comments? Thank
you. Mr. Taylor.
Mr. Taylor. Congressman, I think certainly it is worthwhile
to consider, you know, everything should be on the table for
consideration, but I would say that, you know, we have lending
agreements that, you know, would have to be maintained such
that debt services is paid where it is currently prescribed in
the waterfall.
So that being said, you know, if we didn't disrupt that
then I think that we should certainly be having that
conversation about figuring out a better way to ensure long-
term sustainability.
Mr. Lamborn. Okay. Any last thoughts on that and then I
will switch to another question.
Mr. Hickey. No, I support--Congressman, I support that
position. I think at the end of the day the objective is to
make sure there is sufficient capital in the reserve account to
undertake out-of-year development. There are a variety of
solutions to do that. I think, you know, the interest of
bondholders and debtholders need to be, you know, factored in
mind and so therefore it would be a complex arrangement to
undertake.
Mr. Lamborn. Okay. And, lastly, for the sake of time, I
will finish with this. Could someone comment on what we could
do here in Congress to make your job easier so that the
finances work better, so that the investments can be made to
keep properties as high of quality condition as possible, so is
there something, anything like with the scoring that OMB
[Office of Management and Budget] calls for that we should
reexamine?
Mr. Picerne. So, Mr. Representative, I think that if we
went back to the premise on the program, or the beginning of
the program was based on what was known as the ``Raines Memo''
from OMB that was rescinded over time, so we start out with the
right program and the right investment philosophy and the right
investment thesis, but then change the game midstream.
So, if we just went back to that original scoring
methodology that would continue to allow us to add additional,
which was always the premise, additional funding sources on a
going forward basis. So, if we kind of went back to the
original rules, I think we would be able to solve many of the
investment challenges.
Mr. Lamborn. Anyone else on that?
Mr. Hickey. No, Congressman, I agree with that. I think the
scoring process could be reviewed. I think at the end of the
day, looking for additional sources of funding is proactive if
we can do that, you know, across the structures. Also, I think
the other issue that is around the BAH [basic allowance for
housing] process and I think that process is set annually. And
whether it goes up or down regarding, you know, where it sits
within relative outside the base accommodation, I think
probably the optics about how that is determined is something
that is very vital because that is the revenue source of the
bases in its entirety. So maybe some transparency around the
optics of how the BAH is calculated would be beneficial.
Mr. Lamborn. Okay. Okay, I want to thank you all.
Oh, Mr. Bliss, did you want to finish?
Mr. Bliss. Yes, sir. I just wanted to add, I also would say
anything Congress could do to create flexibility on financing
that we could use private sector tools without having scoring
issues, I agree with Mr. Picerne on that.
Mr. Lamborn. Okay, thank you for your input.
Mr. Chairman, I yield back.
Mr. Garamendi. I thank you, Mr. Lamborn.
Presumably, votes will begin shortly. We are told that we
are expected to be off the floor and back here around 2:30. So
we will break and then, without objection, we will break and
then return.
Ms. Horn, you are next.
Ms. Horn. Thank you, Mr. Chairman. And I want to thank this
entire committee for the work that we have done on this
incredibly critical issue, in a bipartisan way, and I think the
beginning of the work that we have done in the NDAA for this
year is critically important.
But I want to dig in a little bit more to the issues that
we are talking about and what this means for our military
families, because the first time I heard about these issues was
at a town hall in January and a mother showed up and brought
pictures of the housing that they were living in, told me about
the conditions and the health impacts that their families at
Tinker Air Force Base which, Mr. Taylor, is a Balfour Beatty
property.
And I was angry and frustrated and hoping it was a limited
problem, but sadly found out that it was not and this is why we
are here today, because the issues that have already been laid
out, the infestations, are rampant across Tinker and it is one
of those things that is so outrageous to me that we are not
taking care of our service members and their families in the
way that they deserve, these people that are putting their
lives on the line.
And Balfour Beatty has responsibility for 55 different
facilities across 26 states, 43,000 homes and 150,000 people.
That is not an insignificant impact and I am incredibly
disappointed that you have failed to live up to your
responsibility for taking care of the people that are living in
these houses. It is cheating our military families and our
taxpayers, and I have seen it firsthand. My staff and the
Secretary of the Air Force and others were just out at Tinker
again, there are ongoing problems, and I wish that I could say
that things were all better, but they are not. Because while
things--while there has been some progress, it seems like every
other week there is something else that is coming out, toxic
mold, safety hazards, and just week before last, November 20th,
yet another report that maintenance records were being
falsified to get Balfour Beatty payments that they weren't
entitled to. This is not an isolated incident because there are
already 65 documented instances over 2016 and 2017 of falsified
maintenance records.
And according to this same November 20th report, employees
of Balfour Beatty had systematically doctored records, not just
at Tinker Air Force Base, but at two other bases. This is a
systemic problem and one that we have to fix, and you have a
lot of work to do to fix it. The image behind me is an image of
one of the homes that was brought to me by the families living
there at Tinker Air Force Base.
So, Mr. Taylor, my question to you is, even if times have
improved, is this someplace that you would want to live or
allow your family to live?
Mr. Taylor. Congresswoman, that picture is unacceptable,
absolutely unacceptable.
Ms. Horn. Thank you. I appreciate that. It is just, to me
this is unconscionable, and we have to fix it and it is going
to require a lot of effort. It is going to require getting down
to the heart of the problem. Not just putting Band-Aids and
painting over things and patching walls which may make it look
good for a few moments, but it is basically like putting Band-
Aid on a gaping wound and that is what people have been living
with in far too many places and we have to get to the heart of
this issue.
In fact, I just spoke to the Secretary of the Air Force
earlier today and what we talked about was the need to get
down--and this goes for everybody--we have got to get down to
the heart of this issue. We have got to stop putting Band-Aids
on gaping wounds. We have to identify and get down to the core
of the issue.
So my next question to you is, will you commit to making
whatever investments are necessary to put in place long-term
solutions, solutions of culture, solutions of reorganization,
and if it needs to be tearing down properties and starting over
to get to the heart of these issues so that we are doing right
by our military members and their families?
Mr. Taylor. Congresswoman, I alluded to it in my opening
remarks. We have made significant changes in the way that we
are conducting our business. Putting clear line of sight for
the technical issues, these fall in that area, a clear line of
sight all the way up to the top of the organization and that
rests on my shoulders. And so, I am committed to and I shall be
held accountable for the changes that we need to make.
Ms. Horn. I will be holding you accountable to that. And
since I only have a few seconds left, I also want to follow up
with one final question. From the documents I have seen it
appears that your company earns about $4.3 million in
performance bonuses each year on these properties. Over these
years that is tens of millions of dollars in performance
bonuses that were paid out while documented evidence that
Balfour Beatty--and it doesn't matter if it was an employee
down the line--Balfour Beatty was falsifying maintenance
records, tens of millions of dollars.
What I want to know is that will you commit to taking every
single penny at least of this money that was paid based on
falsified maintenance records to invest that in fixing the
problems at all of these housing units.
Mr. Taylor. Congresswoman, as I mentioned, those
allegations are quite shocking to us and we are undertaking a
thorough review. I mentioned that we have invested with outside
counsel to investigate that. The Department of Justice is
undertaking an investigation into those very same issues. We
have committed to providing the results of our findings to the
DOJ. In the event that we are found to have falsified records,
then we are absolutely committed to refunding any incentive
fees received back to those projects. And, further, in the
event that any of our individuals are found to be at fault, not
complying with our code of conduct which we take extremely
seriously, to the extent that we find that anybody has strayed
from our code of conduct, we will take appropriate disciplinary
action no matter where they sit in the organization.
Ms. Horn. Mr. Taylor, I am over time. I just think that it
is important for us to say we are going to continue to work on
this. But the confidence that our communities have and that our
service members have and their ability to trust their families
to your care, collective care, has been seriously eroded and it
is going to take a lot of work, transparency, and contrition to
get to the root of this. Thank you.
Mr. Garamendi. Thank you.
Mr. Scott.
Mr. Scott. Thank you, Mr. Chairman and Ranking Member
Lamborn. In February, we had a roundtable with the spouses and
military members affected by these housing issues, and I want
to tell you that I found those spouses and those soldiers that
were there, primarily spouses, to be extremely professional and
credible.
And I was a little taken back at a couple of things. One of
the things that I was taken back at--it is our fault or the
DOD's fault--I don't think our base commanders and I don't
think the DOD took this issue serious enough in many cases. I
think where we had good base commanders it was taken serious
and then in other areas maybe poor base command allowed part of
these things to happen.
But the primary issue that got my attention was the
complexity of the landlord/tenant contract written by lawyers
of extremely large corporations that you represent that is then
handed to a soldier who may be, quite honestly, just out of
high school in many cases. And so when you hand these service
members the contracts, there are provisions in these contracts
and the mediation contracts that are intentionally designed to
and have the impact of financial intimidation of our service
members and their families that say that if they take you to
mediation, if that is their only course of action where they
can resolve the issue and they don't win, then they have to pay
your legal fees.
And so, my question is this, are these provisions still in
your contracts? And we will just go down the line.
Mr. Picerne. To the best of my knowledge, Congressman, we
have been adapting the provisions to not have any forms of that
type of language, languages of intimidation or languages that
would provide remuneration back to us as a company if a suit
was filed and/or filed forcefully.
Mr. Scott. Let me move--Mr. Ehle, yes or no?
Mr. Ehle. All of our lease forms are under review and in
fact the industry is working on a common lease form that
would----
Mr. Scott. All right. That is not a yes or no, so I will
assume that you still have the intimidation provisions.
Mr. Hickey.
Mr. Hickey. Congressman, to the best of my knowledge they
don't exist in our contracts.
Mr. Scott. Mr. Taylor.
Mr. Taylor. I am not aware that they exist, but I can tell
you that we have never pursued recovery of those fees from
residents.
Mr. Scott. Mr. Bliss.
Mr. Bliss. They do still exist, but we are in the process
of working with the services with their approval of removing
those clauses.
Mr. Scott. Okay, thank you. I think though when we have our
landowners--I think when we have our soldiers' bill of rights,
housing bill of rights, I think those provisions will be
struck; that that is unacceptable to me to ask an 18-year-old
soldier straight out of high school to sign a contract that
makes him responsible for the legal fees of a multimillion-
dollar corporation.
With that, Mr. Chairman, I would like to yield the
remaining provisions to my colleague from North Carolina, Ms.
Stefanik. I am sorry. New York.
Ms. Stefanik. That is all right, Mr. Scott.
Mr. Scott. You talk like you are from North Carolina.
Ms. Stefanik. No, I talk like I am from New York Upstate.
Gentlemen, thank you for being here today. Earlier this
year, we heard from the services and military family members
and it was really stunning to hear about the challenges that
these military families have faced. I have the honor of
representing Fort Drum, home of the 10th Mountain Division, the
most deployed unit in the U.S. Army since 9/11, so these are
families that have faced multiple, multiple deployments in
Iraq, in Afghanistan, around the world, and it is extremely
important to me that they not have the stress that their family
members face at home because of housing issues. So, Mr. Hickey,
as you know, Lendlease is the primary private partner for the
Mountain Community Homes and the Timbers located at Fort Drum.
And I want to ask you, for the record, because this gets to
this feeling that people don't have a voice and they don't have
an adequate response time when there are complaints, if a
military tenant has a complaint or concern how can they
absolutely count on Lendlease to address this concern in a
timely, professional, and adequate manner? And, most recently,
snow removal has come up in the north country. I know some of
you don't face that, but that is a significant concern and came
up at a town hall just recently.
Mr. Hickey. Thank you, Congresswoman, for the question. You
know, we operate in actually very clear protocols of responding
to inquiries. We give residents multiple access points to of
any concerns they can come straight to our project director.
They can come through our customer service. They can come
through our resident apps. We monitor all of the requests
digitally, so it is all done through a system so it is not a
manual process, and we can track anything that is not monitored
or not assessed in time comes as an exception to us.
And so, we have a management regime looking at the things
that are not addressed in an appropriate manner. I think in
addition, the residents advisory board that we have actually
put in place, which we will be rolling out onto Fort Drum as
well very soon, is the other forum for which residents can get
voices and access in because we will have those community
representatives on small areas and making sure that there are
several opportunities for them to get heard and get opportunity
to voice their concerns or ideas proactively or negatively.
Ms. Stefanik. Thank you, yield back. I will do my round
after.
Mr. Garamendi. I thank--I will turn to Ms. Houlahan.
Ms. Houlahan. Thank you, Chairman. And thank you,
gentlemen, for joining us today. And just by way of background,
I am third-generation military. My mom was a resident of
military housing as was her six brothers and sisters. I was a
resident of military housing as was my brother. I have four
Active Duty cousins right now who serve. We represent the Army.
We represent the Navy. We represent the Air Force.
I also was an educator in a community that was very, very
underserved in the population and lived in very--housing
conditions that looked a lot like this. And as an educator and
a person who lived in housing like this, I can say that I
really worry for the children. You know, I worry for the
children who are exposed to lead and who are exposed to mold,
and I am worried that what I am hearing is that people are not
using the word ``mold'' because it would create problems and
they are creating, your organizations are creating kind of the
opportunity to sort of hide things.
And so the first thing that I would like to ask because of
time, for the record, would you guys be able to submit your
policies on lead and mold remediation and amelioration so that
we can understand what they are and what kind of--what you do
in terms of what timelines you expect to remediate those and
also what you do to make sure that people are--you talked a lot
about displacement. You know, what happens when they are
displaced?
[The information referred to can be found in the Appendix
beginning on page 189.]
Ms. Houlahan. And also, for the record again, what
compensation do families have when their home goods are
destroyed? Having had that experience as a child, I understand
that. So that I would like to have for the record.
[The information referred to can be found in the Appendix
beginning on page 189.]
Ms. Houlahan. The other thing I would like to understand,
maybe individually, is in the case where there is a child who
has been affected by this, who will permanently be disabled
because of this, what responsibility do you all have and do you
all plan for with your for-profit businesses to make sure that
those children and those families are being taken care of or do
you expect that the government will do that for you?
Mr. Picerne. So, Representative, in our case we work
directly with when an instance like this comes up, we work
directly with the medical community on the installation with
the garrison commander and we try to define where the--or
divine where the problem really is. We have had instances
where, although believe that it was the home causing it, it
turned out that it was lead in the munitions plant that the
soldier was actually working in.
So, if in fact----
Ms. Houlahan. Let's just assume that it is something that
is identified as a housing issue that happened in the past,
what is the process that you go through?
Mr. Picerne. So, if we find out that it is determined that
the home is in fact the cause of the illness, then we will
support that child or its medical costs.
Ms. Houlahan. And, Mr. Ehle, is that how you pronounce it,
Ehle?
Mr. Ehle. Yes, Ehle. Sorry.
Ms. Houlahan. Ehle.
Mr. Ehle. You know, if, you know, we are obviously
supportive of the process of determination and through dispute
resolution and so forth, if there is fault that is determined,
you know, we will certainly work with whatever the
determination is.
Mr. Hickey. Thank you, Congresswoman. We will provide you
with all our protocols.
Ms. Houlahan. Thank you.
Mr. Hickey. They are very clear. They are clearly outlined.
We have a 24-hour response time. Just to let you know that if
anything happens within that 24 hours once it is the residents
feel uncomfortable, we will relocate them immediately and so
forth.
Ms. Houlahan. Right.
Mr. Hickey. So, there is a whole clear regime around how we
deal with mold and lead-based paint, which I am happy to share
with you. You know, if in the instance that, yes, we are the
cause of any medical condition then we would absolutely look
to, you know, financially compensate through any structure that
is appropriate.
Ms. Houlahan. Thank you.
Mr. Taylor. Congresswoman, I would agree with the other
gentlemen. If we are found to be at fault, we are complicit,
then----
Ms. Houlahan. And you are planning for that, you know,
because you guys have been at this for a couple, a few decades
and there will be decades where the kids who are now presumably
grown that may have those problems that can be attributed
possibly back to that.
Mr. Taylor. If attributed to our conduct, then yes, ma'am.
Ms. Houlahan. Thank you.
Mr. Bliss. Congresswoman, we will also provide you the
protocols and whatnot.
Ms. Houlahan. Thank you.
Mr. Bliss. To answer your question about medical, again, if
we are proved to be at fault to that then we work with the
families and medical to figure out what is the best resolution
to solve that issue.
Ms. Houlahan. Thank you. And with the last kind of 45
seconds of my time, I just would like to know--I have heard a
lot of go down the line and say yes, yes, no, no, no. Having
been a former entrepreneur and businesswoman myself, I think
best practices are definitely something that you each are
talking about individually.
But do you have a group that you share your best practices
across all of your different organizations so that each one of
your standards is similar or the same and that you are sharing,
somebody who said they have an app that people can use, or you
said you have a roundtable, do you have a best practice
roundtable?
Mr. Picerne. Yes, Representative. We actually formed the
Military Housing Association, MHA, specifically to do that. As
an outcome of challenges we have had, we have realized that we
do share individual best practices, but we didn't share them or
weren't sharing them as an industry. So, we have started to do
that on a much grander scale, and I think it is starting to
provide some of the benefits that you will be seeing or have
been seeing thus far.
Ms. Houlahan. And I know I have run out of time and I want
to give everybody else their time, so I would love to just hear
if you guys could get together on that and get back to us.
Thank you. I yield back.
Mr. Garamendi. I thank you.
Mr. Wilson.
Mr. Wilson. Thank you, Mr. Chairman, and thank each of you
for being here today. And, Mr. Taylor, I am really grateful for
the leadership at Fort Jackson. Commander Brigadier General
Milford Beagle has conducted a town hall with your company with
Balfour Beatty. And to address the issues of housing,
complaints were raised about the broken sidewalks, long lines
for the completion of work orders, shoddy work repairs, and no-
shows by the maintenance staff. What have you done to correct
these deficiencies? Is there a residency advisory board
established and is there a project manager that you can report
to on a 24-hour basis?
Mr. Taylor. Thank you, Congressman. Yeah, I think
universally across all of our portfolio we are getting better
at forming resident groups that we can meet with and we do that
in concert with our military partners at the individual
installations as well. Town halls that are--we are starting to
see an increase in the frequency of town halls that we
participate again alongside our military partners. Those are
great ways for us to get the information to understand what
concerns our residents are facing.
In terms of processes, changes that we are undertaking, as
I indicated in my opening remarks, we certainly recognize that
we could do better in many locations. And so, we have addressed
that through a number of staffing level increases looking at
the policies and procedures that we do have in place and where
we saw that they were deficient we are addressing those. So, it
is not as simple as one, you know, addressing one area to
address, you know, a more broad problem, but we are taking on a
number of different areas to improve. But a lot of that is
through process, procedure, making sure that we have got
appropriate staffing at the level.
Mr. Wilson. Is there a hotline where a resident could
report an issue?
Mr. Taylor. Yes, sir. We have an 800 toll-free line that
any resident, employees, anybody can call to let us know at the
corporate level any issues that they are facing that aren't
being addressed locally.
Mr. Wilson. Thank you.
And, Mr. Ehle, Joint Base Charleston is a Hunt Military
Community; however, there is some confusion about the structure
of your deal with the military. I understand there is a 50-year
deal, the agreements are not contracts, and that you are
considered a partner not a contractor. Can you explain this and
how the system works?
Mr. Ehle. All of the LLCs we have are 50-year ground
leases, the land owned by the government. And the partnership
element is that, you know, these are meant to be true public-
private partnerships. With the Air Force, which is what JBC
[Joint Base Charleston] is, the Air Force is not a legal member
of the LLC like the Navy or the Army are in their projects, but
the Air Force does have an investment in the form of government
direct loans, so they have a financial interest in the project
and so there is a partnership. And, of course, none of these
can succeed without having a really good functioning
partnership, and a partnership is both cooperation, but also
mutual accountability and it works very well with the Air
Force.
Mr. Wilson. Thank you. And I yield the balance of my time
to Congresswoman Elise Stefanik.
Ms. Stefanik. Thank you. Just to follow up, one of the
aspects in the NDAA that we have focused on is the importance
of a common tenant bill of rights. And I want to hear from each
of you and I will start with you, Mr. Hickey, just because of
the importance of your answer to my district. What rights are
you proactively ensuring that are afforded to our military
families who are leasing your properties and how do you measure
that success?
Mr. Hickey. Thank you, Congresswoman, for the question. We
have all been working diligently with the services on a common
bill of rights, so we have participated, we have put forward
our suggestions, and so that is well-documented and I think
that might be a solution, but putting in the ability for
residents to receive a refund, for example, if they are in a
situation where they are in a house that has not been
maintained properly they can get refunded rent, putting in
plain English version contracts a right to actually terminate
contracts, you know, if there is something wrong with the
house, giving more flexibility back to our residents is
something that we have been focused on.
Ms. Stefanik. Sure. And I know you have communicated that
to the services. What about to the families? Have you solicited
feedback from military families for suggestions for that tenant
bill of rights?
Mr. Hickey. Yes, we have. Yes. As I said before, we have
been liaising with the Safe Military Housing Initiative. We
have been liaising directly. We have been holding town halls,
all of our, across all of our bases including Fort Drum, and
getting that feedback and asking, you know, what they would
like to see, so it has been a collaborative approach.
Ms. Stefanik. Okay. And the rest, I will take the answer
for the record because my time has expired.
[The information referred to can be found in the Appendix
beginning on page 191.]
Mr. Garamendi. Thank you.
Yes.
Ms. Haaland. Thank you, Chairman.
Mr. Garamendi. Ms. Haaland.
Ms. Haaland. Thank you, Chairman. Thank you. And thank you
all so much for coming. I appreciate you being here and taking
the time to be with us today.
My district is in New Mexico's First Congressional
District. I have Kirtland Air Force Base and we have 365 days
of sun per year and the climate is extremely dry and yet we
have still had reports of mold there for whatever reason. It
sounds kind of strange, but nonetheless that is one of the
issues that my constituents have reported to me.
I am a daughter of a 30-year career Marine so I grew up in
military housing all along Southern California and in Virginia
both and so I am, luckily I have nothing but good memories of
those times unlike many of the families who, unfortunately, do
not share that same--will not share the same memories that I
do.
So, I do hear some good things from my district. For
example, I hear the new maintenance comment cards include
information about the technicians coming into the homes as well
as what work they are doing and that quality of the repair work
has improved, their better communication and that is absolutely
vital, and I am glad to hear that Hunt is taking these steps,
also hear about the fall festival and other family activities
and those are all good things. Unfortunately, substantial
challenges remain. Families continue to receive inconsistent
treatment and information from Hunt staff. So, my first
question is for you, Mr. Ehle. Can you please share what steps
your company has taken to improve and standardize customer
service?
Mr. Ehle. Yes, Representative. The lack of consistency is
something that we are extremely focused on all across our
portfolio and it is one of the reasons why we are focused on
promoting standardization across not just our portfolio but the
industry. So, we look at things like variances in response and
completion standards, not just, you know, a property but across
the portfolio and across the industry. We are very much in
favor of doing that. In fact, we have already done that in our
own portfolio is establishing a Hunt standard for a standard
consistency, so our residents should start seeing that very
shortly.
You know, in terms of our environmental concerns,
environmental concerns are on the rise. In the last couple of
years we have seen mold in ways to the extent that we haven't
seen in a long, long time, primarily caused by some extreme
climatic conditions that haven't historically been seen, but I
don't think that is going to change in the future.
So, we are beefing up our environmental expertise on site
and at the corporate level. We are beefing up our environmental
training for our maintenance techs. We are adding maintenance
techs. We are adding QA/QC [qualilty assurance/quality control]
professionals to mainly ensure quality of work completion and
we have made a great deal of progress in filling all those
positions. And then, of course, the increased training across
all of our people.
Ms. Haaland. Thank you. Thank you.
I would like to turn to the issue of mold and thank you for
raising that yourself. It continues to be a major challenge and
we have heard that from my colleagues. Many families want to
have licensed and certified third-party experts conduct testing
in their homes. Some have been told that Hunt and other housing
companies won't accept these results or that third-party
experts would not be permitted to enter the homes.
Mr. Ehle, what is Hunt's policy regarding mold testing by
licensed third-party experts?
Mr. Ehle. We tend to follow the EPA [Environmental
Protection Agency] guidelines related to testing and the EPA
tends to advise against testing because they find it to be
inconclusive. And examples from elsewhere in our portfolio is
we have had tests on houses that don't readily apparently have
mold that the tests come back high. On the other hand, we have
been in houses where there is obvious mold all over a wall and
the test comes back that there is no mold in the house. So, we
have found that it is difficult to find a reliable test.
Ms. Haaland. Would you allow families to seek a second
opinion on the presence of mold in their homes by licensed,
third-party experts?
Mr. Ehle. We support anything that our residents choose to
do pursue for evidentiary purposes. You know, again, we have
found that testing is unreliable because it can go either way.
It could be a false positive or a false negative.
Ms. Haaland. Thank you. I would like to--how much time do I
have?
Chairman, I yield.
Mr. Garamendi. Thank you.
Ms. Stefanik.
Ms. Stefanik. Thank you. One of the aspects of this crisis
that I think is really important is prevention and mitigation.
And at Fort Drum, we have a relatively young population of
young soldiers, young military families, oftentimes this is the
first time that they are responsible for their home that they
are living in.
How are you, Mr. Hickey, investing and sort of providing
educational materials for those young family members and young
service members to know to contact you before something gets to
a crisis level that we have seen in some of these photos?
Mr. Hickey. Yeah. Thank you, Congresswoman, for the
question. Look, we actually share your same concern. Many
times, they are 18-, 19-year-old people who have just moved out
of home and they have to maintain a house and think about, you
know, issues about avoiding damp, you know, conditions arising
in a house and so forth. So, at every move and anytime someone
moves into a residence, you know, it is a personal hand-over.
We take a personal tour of the house with them. We explain some
of the issues. We explain how things work in the property. We
explain some of the maintenance obligations and how they go
about looking for things that are problematic.
We also do a 30-day and a 90-day check-in with them to make
sure that, you know, how are things going, what are we doing,
if they want any help in terms of looking after their home, and
we also do a yearly inspection on all of the properties. So in
all of those times, we seize the opportunity to help train them
or help educate them or give them visibility as to what they
can do better and we also tell them that the minute they have
got a concern is to ring us right away and then we will come
out and talk to them.
So, there is a little bit education, we can do more of it
and we would like to do more of it, but there is also training
them to help themselves at the same time. So, you know, that is
what we do, and we continue to invest in that.
Ms. Stefanik. Thank you, yield back.
Mr. Garamendi. Thank you.
Mr. Brown.
Mr. Brown. Thank you, Mr. Chairman, and I thank the
committee, the subcommittee, for allowing me to participate in
today's hearing. Let me just start by saying, look, I support
the Military Housing Privatization Initiative. I support things
like enhanced use lease on military installations. I support
public-private partnerships. In Maryland we have done a lot of
good things, from the Port of Baltimore, to the Purple Line, to
travel plazas on interstate roads, but I support them only when
we can ensure that we deliver quality, safety, reliable value
products and services to the public, what the public demands
and what they deserve. And in this case, when we are talking
about privatizing military housing, the public is that very
cherished public, our military families, and here we fell
short, and my concern is this. I get that circumstances may
have changed over the decade or so when we started the program
to where we are today. I hear about the drawdown. I hear about
the reductions in the BAH rates and how that put pressure on
the ability to deliver quality. But what concerns me is that it
took the courage of military spouses to come to Congress. The
Pentagon didn't come to Congress and say we have a problem. You
didn't come to Congress and say we have a problem. The
framework, the model, the formulas that we based these
agreements on years ago doesn't work because of a changed
environment. Instead, military families got squeezed and it was
military spouses who stepped up, and that is a shame on you. It
is a shame on the Pentagon, and we have got to fix it.
Mr. Picerne--did I get that right, Picerne? Close enough?
Yeah. In February of 2019, earlier this year, at a SASC hearing
you stated, we hire world-renowned specialists at no cost to
the government to renew our mold and mildew procedures so that
here too we are living up to the gold standard. Yet, today, you
are now saying it is ``going to take some time to get back to
the gold standard of communication and service that residents
enjoyed in the early years of our MHPI partnerships.''
Why have you--this is a question--why have you not been
able to return to the gold standard that you promised to
Congress and, more importantly, to our service members? Why has
your position changed?
Mr. Picerne. Mr. Congressman, our position has not changed.
We endeavor to return to the gold standard. As I mentioned in
my testimony, the gold standard really will be when a deployed
soldier is able to call back, which is one of the tenets that
we founded our business on, will call back from forward
deployment and talk to his family or her family about what is
happening in their lives and not deal with homeowner or home
issues.
We are getting closer and closer back to that standard. We
are not there yet. I don't want to----
Mr. Brown. Let me ask you this question.
Mr. Picerne [continuing]. I also don't want to accept the
fact that we got there because it is an ever----
Mr. Brown. Thank you. And let me ask you this question. At
Fort Meade, Maryland--and you had mentioned in your testimony
today that town halls and greater communication with service
members is a big part of it and their families. It is my
understanding that at least one service member has been denied
access to those town halls where those communications--are you
familiar with that?
Mr. Picerne. Congressman, I am not familiar with that.
Mr. Brown. Okay. I would ask you, please, to familiarize
yourself with that so that when we say that service members are
in both formal and informal communications with you that that
means all service members. Mr. Chairman, I would ask unanimous
consent to enter into the record a letter that I have sent
today to the installation commander at Fort Meade asking the
garrison commander, Colonel Spragg, to really step up his
oversight at Fort Meade, because I really believe that you guys
are not even making forward progress as you had committed
earlier this year. Without objection, Mr. Chairman, can we
enter this into the record?
Mr. Garamendi. Without objection, is my turn. There being
no objection.
Mr. Brown. Thank you.
Mr. Garamendi. So, ordered.
[The information referred to can be found in the Appendix
on page 111.]
Mr. Brown. Another question. Several of the service members
that are stationed at Fort Meade have conveyed to me that they
have experienced direct retaliation from your company in
response to their attempts to resolve maintenance issues with
their homes. These behaviors include obscene gestures, drive-by
harassment, denying access to the resident response group,
which I just mentioned, and a refusal to address maintenance
issues until service member receives a PCS [permanent change of
station].
First of all, are you aware of that? If so, whether you are
or are not, do you condone this behavior? And, finally, what
actions are you going to take to ensure that harassment
immediately ceases?
Mr. Picerne. So, Congressman, we absolutely take any form
of retaliation, retribution, or harassment seriously and do not
condone that behavior. I am not aware of any specific cases
where that has taken place. I will look into it immediately and
I will report back to you once we have our findings.
Mr. Brown. Well, I appreciate that because I mean these are
serious allegations. And, look, when military families are
stepping up and just protecting their own rights, they
certainly do not warrant retaliatory measures. With that, Mr.
Chairman, I yield back.
Mr. Garamendi. Thank you, Mr. Brown.
Ms. Escobar.
Ms. Escobar. Thank you so much, Chairman. I am very
grateful for this hearing. Thank you to our panelists. I
appreciate your presence here. I want to also recognize and
thank the military families who have expressed so much courage
in the face of potential retaliation and after years of
frustration and incredible difficulty. Thank you all so much
for being here. I am very, very grateful for your strength and
your courage.
The roundtable that we had with military families--and I
have had some of these conversations with you all personally,
not everyone but with most of you. Those conversations at the
roundtable were shocking, heartbreaking, difficult to hear and,
to be honest, infuriating. And I am very grateful that there
has been a spotlight placed on all of this and that there has
been a demonstrated desire to preserve the private-public
partnership but to improve it in order to sustain it and make
sure that we continue it.
Mr. Taylor, we had a conversation about all of this, but as
I mentioned to you all in my office, what was particularly
troubling on top of the many issues that families brought
forward, issues that literally meant that people's lives were
upended, that health was put at risk, children were put at risk
through mold and through everything else, what was particularly
troubling for me was the fraud allegations. And we talked about
everything that you all are doing to not just remedy but to
investigate and I appreciate the investigation. But I am going
to ask you here in this hearing publicly the same thing that I
asked you in my office and this is about accountability,
because too often accountability is swept under the rug or as I
mentioned to you, lower-level employees sometimes are fired,
but the high-paid, high-level folks who should have known and
who should have created a culture of accountability remain
untouched.
So I am going to ask you here in this hearing what I asked
you privately, which is I would like to know the number of
dismissals that have occurred as a result of the fraud
allegations, any other disciplinary actions that have been
taken, and how will leadership, how far up the chain will that
accountability go, how will leadership be held accountable?
And if you could answer all of those questions for me, I am
not asking for names of folks. I am not asking for you to
disclose anything that is in personnel files. This is important
to understand in terms of accountability, for me, the general
information, please.
Mr. Taylor. Thank you, Congresswoman. And I do recall the
conversation and it gave me an opportunity to go back and
interrogate our information so that I would be prepared to
respond. Before I give you the number, I will just say this and
I will repeat a comment, a remark that I made earlier. We are
all accountable. We are all accountable to provide the service
that we are entrusted to provide. It doesn't matter where we
sit in the organization.
Since the allegations of fraud were levied earlier this
year, you know, I went back and I asked our staff to look at
how many folks that were on our staff were let go because they
didn't comply with our policies, procedures, our code of
conduct, because that is really at the heart of our
organization. If we don't have staff members that are willing
to follow those policies and procedures, that is an obvious
weakness in any organization.
And since the beginning of this year, we have found 17
instances of where we have let people go because they were not
complying with the standards that we have set for our
employees. Where they sit in the organization, most of--from,
without naming specific positions, there were managers that
were let go. Those folks were at project sites, I grant you.
I will tell you this, that, and again to reiterate a
comment I made earlier, regardless of what the investigation
reveals, if it identifies wrongdoing by any member of our
staff, it doesn't matter if it is at the top of the
organization, the middle of the organization, or wherever it
sits, rest assured that we will take the appropriate action to
make sure that those folks no longer are employed by our
company.
Ms. Escobar. Thank you. And I am just about out of time,
but I will just say to all of you, it will be very important
that the improvements that you have made that you report back
to us. We need to know the number of calls, the number of
people using the apps, et cetera, that we need to see within a
time certain a reporting back, complete transparency, because
that is the only way that we can hold you all accountable as
well as hold ourselves accountable.
Mr. Chairman, I yield back.
Mr. Garamendi. Thank you, Ms. Escobar.
Votes have been called, so I am just going to wrap it up
with a couple of comments. I have noticed that the quality of
questions from both sides here have asked most everything I
would have asked, but I want to make a couple of comments.
First of all, this hearing is one of a series. We will not let
this issue go as long as, I am sure, the members of this
committee are still Members of the House of Representatives we
are going to stay on this. And, certainly, the committee will,
certainly during my chairmanship and I am sure should that
lapse and somebody else has it, it will carry on.
So be aware, gentlemen. And for those who are not here that
are part of this system, they too are going to be held
accountable along the lines of the questions asked by the
committee. Two things, or several things need to be noted.
First of all, we knew right at the outset that part of the
problem was that the base commanders did not take
responsibility. That is changing. That needs to be addressed.
The Pentagon is well aware of it from the previous Secretary
all the way down the line and we will see to it that that
accountability remains within the military and the base
commanders.
Secondly, there will be a bill of rights. It is in final or
near-final form. We have not had a chance to review it. I am
told the Pentagon is awaiting the passage of the NDAA and the
final version of it, which may have some impact on the bill of
rights itself. But it will be forthcoming, and it will in many
ways deal with many of the issues that we have heard here
today.
Secondly, the question of the lease contracts themselves,
we will push that all leases across the entire military reach
the highest standard of any State lease, a homeowners' and
tenants' laws and the highest standard, which I am told might
be Massachusetts, but I claim California. We will see. If any
of the members think that their tenant rights are better in
North Carolina, well, bring it forward and we will see. But in
any case, we will try to achieve consistent with the
multiplicity of contracts that do exist between the military
and the private housing providers. We will make sure that the
lease contracts protect the tenants so that tenants will be in
the first order.
Secondly, many questions about metrics, how do we observe
quality or lack thereof across the whole range of issues. Those
metrics are under review and I would ask any member that has
ideas about what should be in those metrics to bring it to us
and we will drive that forward. Finally, with regard to the
role of the tenants and the communities themselves, there are
efforts underway on many of the bases, but I suspect not all,
that there be formed within the homeowning, excuse me, the
rental community or the renters' programs in which they can
participate. The word ``PTA'' was used here. I am not sure that
that is the best model, but it certainly speaks to the
involvement of the families working together to assure that
their issues are fully dealt with at the base level and, if
necessary, here in Congress.
So, I think that covers many of the issues. Mr. Lamborn,
any further thoughts?
Then this meeting is adjourned and before I adjourn, we are
coming back, folks. We will do these hearings every 4 months or
so, so we will be back in the early spring for a review of
where we are, and we will ask the services as well as the
owners of the privatized housing. We are adjourned.
[Whereupon, at 2:27 p.m., the subcommittee was adjourned.]
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A P P E N D I X
December 5, 2019
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PREPARED STATEMENTS SUBMITTED FOR THE RECORD
December 5, 2019
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[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
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DOCUMENTS SUBMITTED FOR THE RECORD
December 5, 2019
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[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
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WITNESS RESPONSES TO QUESTIONS ASKED DURING
THE HEARING
December 5, 2019
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RESPONSES TO QUESTIONS SUBMITTED BY MS. HOULAHAN
Mr. Picerne. Over the last year, our property management group's
policy toward displaced families has evolved and been standardized
across our portfolio. Operations Directors at each installation have
the authority to make reasonable adjustments to our policy as is
determined to be appropriate upon consultation with our partners in the
Army and Air Force. Under all circumstances, we provide residents with
alternate housing, including either a fully furnished hospitality suite
on post or a hotel on or off-post as available, as well as an allowance
for food and personal items. If provided a hospitality suite on post,
then we may reimburse the family's BAH on a prorated basis depending on
how long they have been displaced. We only ask that families move into
a hotel suite if a fully furnished on-post hospitality suite is
unavailable, and if that is necessary, will reimburse them 100% of the
daily BAH rate for all days they are displaced, as well as provide a
per diem for food, additional expenses, and for pet lodging if
necessary. We expect that this policy will continue to evolve, as we
are working with the Services and other MHPI partners to standardize
our policies pursuant to Congressional direction in the recently-passed
National Defense Authorization Act for 2020. I have attached a copy of
our property management company's current standard operating procedures
with respect to lead-based paint and suspected mold. Please note that
these policies are also subject to revision as we, along with other
MHPI partners, continue to work with the Services to developed
standards policies and procedures. [See page 18.]
[The documents referred to are retained in the committee files and
can be viewed upon request.]
Mr. Picerne. ``If a family's personal belongings are damaged or
destroyed due to conditions in a home that our property management
group has not properly addressed, we will work with them to ensure that
they are compensated. We strongly encourage all of our residents to
obtain renters insurance, which will typically cover costs to replace
belongings damaged by weather, fire, and other common events. But, in
instances when a renter does not have insurance, or where insurance
does not cover damage, we will work with the resident to clean
belongings that we can, and replace those that cannot be preserved.''
[See page 18.]
Mr. Ehle. First and foremost, our goal at Hunt Military Communities
(``Hunt'') is to provide safe, healthy, and quality homes for military
families. To that end, Hunt has reviewed its policies and procedures
to, among other things, ensure close adherence to environmental
management plans, including mold operations and maintenance plans.
These plans address remediation of environment-related housing issues
and ensure that such issues are being handled in a consistent manner
with appropriate oversight from a corporate level. Hunt has also
enhanced and reinforced the training requirements of its maintenance
technicians for environmental conditions and, when necessary, deploys
licensed and certified third-party environmental experts. Hunt has also
added in-house environmental positions to augment support, oversight,
and compliance related to addressing environmental matters when they
arise in our homes.
Hunt's operations and maintenance plans for lead-based paint, mold,
and asbestos-containing material follow the published guidance of the
U.S. Environmental Protection Agency (``EPA''), Centers for Disease
Control and Prevention, and applicable state regulatory agencies.
Prescriptive remediation/abatement procedures are performed in
accordance with guidance documents and standards, such as the Institute
of Inspection, Cleaning and Restoration Certification (``IICRC'') S500-
Standard and Reference Guide for Professional Water Damage Restoration,
IICRC S520-Standard and Reference Guide for Professional Mold
Remediation, the EPA National Emission Standards for Hazardous Air
Pollutants, the Asbestos Hazard Emergency Response Act, and EPA's
Renovation, Repair, and Painting Rule.
Hunt believes it is important to educate its residents on health-
and safety-related issues. Upon move-in, we affirmatively provide new
residents with health and safety information regarding moisture and
mold, lead-based paint, asbestos, radon, and/or pesticides. We have
also redesigned for greater visibility and expanded the content of the
Hunt Safety Zone, an online library of safety information for residents
that is regularly updated with new or seasonally-specific information.
As part of its mission to keep its homes in good condition, Hunt
has an extensive inspection and preventative maintenance program at its
properties to ensure the homes are meeting applicable standards.
However, we recognize that there is no such thing as maintenance-free
housing and that issues will inevitably arise that must be remedied. In
these instances, we strive to address the situation in a professional,
transparent, and timely manner, with a focus on resident safety.
We classify resident-reported issues that pose an immediate danger
to life, safety, or health as ``emergencies,'' and we strive to respond
in one hour or less; other work orders are classified as ``urgent'' or
``routine'' with priority-appropriate target response and completion
times. If the nature of the repairs requires a resident to be out of
their home during a repair for a night or more, we will secure
temporary accommodations and may provide financial support to ensure
that the resident is not paying out-of-pocket during this time, for
example, by providing gift cards for meals or rent concessions.
Recognizing that confusion has arisen as a result of inconsistent
displacement accommodations, we are collaborating with the Services in
their efforts to establish a uniform resident displacement policy. We
fully support the adoption of such a policy across all Military Housing
Privatization Initiative (``MHPI'') communities to establish
consistency no matter where residents reside, and to avoid confusion
and missed expectations.
Hunt also supports a number of other industry-wide uniform
initiatives to promote the safety and health of residents with respect
to environmental conditions, and to provide for a more consistent
living experience across the entire MHPI portfolio, including:
A uniform approach to health and environmental
inspections;
A uniform moisture and mold program designed in
conjunction with licensed and accredited specialists;
Implementation of a radon testing program in conjunction
with the DOD;
Developing a process to identify, record, and resolve
environmental health hazards that is consistent with EPA and DOD
standards;
Conducting annual training for employees on the
identification and remediation of environmental hazards; and
Creating standard operating procedures to inspect and
remediate rodent waste in attic spaces.
[See page 18.]
Mr. Ehle. Compensation for families when their home goods are
damaged or destroyed depends on the particular circumstances. When, and
if, appropriate, Hunt may pay to clean or replace personal belongings.
[See page 18.]
Mr. Hickey. [No answer was available at the time of printing.]
[See page 18.]
Mr. Hickey. [No answer was available at the time of printing.]
[See page 18.]
Mr. Taylor. Balfour Beatty Communities' lead-based paint (LBP)
management policy describes policy and procedure for work around and
handling interior and exterior surfaces know to contain lead-based
paint. The policy also outlines procedures for compliance with LBP
disclosure and Renovation, Repair and Painting (PRP) regulations. A
copy of our policy is provided as Attachment A.
[The document referred to is retained in the committee files and
can be viewed upon request.]
We also maintain a mold management policy, which outlines our
policy and procedure regarding mold-related work orders submitted by
residents. A copy of this policy is provided as Attachment B.
[The document referred to is retained in the committee files and
can be viewed upon request.]
In certain circumstances, a tenant may need to be temporarily
relocated when repairs or maintenance are so significant that the
rental unit is unable to be occupied while work is undertaken. We
recognize the importance of having a comprehensive policy and a
consistent approach that outlines clear guidelines for managing
resident displacements across our military housing portfolio. A copy of
our Temporary Relocation Policy is provided as Attachment C.
[The document referred to can be found in the Appendix on page
113.]
While this information reflects BBC's Temporary Relocation Policy,
we are actively working with the Department of Defense and Services to
develop uniform displacement policies that ultimately may be applied
across all Military Housing Privatization Initiative (MHPI) projects.
[See page 18.]
Mr. Taylor. To the extent Balfour Beatty Communities is determined
to be at fault with respect to the damage or destruction of any
personal resident property, we would seek to provide reasonable
compensation to residents. [See page 18.]
Mr. Bliss. Attached is a copy of Lincoln Military Housing's Water
Intrusion/Mold Operations and Maintenance Plan. Lincoln commissioned an
independent third party mold expert to review this policy in 2019 and
it was found to meet, and in most cases exceed, industry standards in
every respect. Lincoln's Lead Based Paint Operations and Maintenance
Plans are site specific, and a representative sample is attached here.
[The documents referred to can be found in the Appendix beginning
on page 116.]
With regards to displacement, all of Lincoln's projects provide
allowances for residents who have been displaced from their homes
through no fault of the tenant, to include covering the costs of
temporary lodging in every case, and per diem for incidentals and meals
where appropriate. I am also pleased to report that Lincoln Military
Housing, in collaboration with the other privatized military housing
partners, has been working towards a standardized displacement policy
to ensure consistency across each of our projects, and the industry,
with regards to displacement allowances. This policy will be aligned
with the requirements in the 2020 NDAA, subject to additional
requirements in state and local law, and we expect it to be rolled out
industry-wide in the next few months. [See page 18.]
Mr. Bliss. This is dependent on the cause of the damage. If the
damage is the result of a failure of a system in the home (roof,
appliance, etc) that is included in the lease, an incident report will
be completed and the resident's items will be covered under our
insurance policy. If the failure is a natural disaster or the result of
an action attributed to the resident (i.e. house fire with a report
indicating resident responsibility, flood from a storm, etc), the
replacement cost would be the resident's responsibility, just as it is
in the economy where 80% of service men and women live today. We have
consistently worked with families and helped coordinate with those who
have personally owned renter's insurance. [See page 18.]
______
RESPONSES TO QUESTIONS SUBMITTED BY MS. STEFANIK
Mr. Picerne. We agree that empowering and enabling residents to
raise any concerns that they may have is the best way to ensure that we
are hearing their concerns, and meeting their needs. We have taken a
variety of steps to better serve residents at each of the installations
where we manage military family housing, including working with our
Army and Air Force partners to establish resident focus groups,
bringing back local call centers to help coordinate maintenance work
directly with residents at each installation, establishing the Corvias
Resident Portal to allow 24/7 online access to work order submission
and status, and hiring resident Ombudsmen to work directly with
residents to address their concerns. We will continue to work with our
partners to ensure that all of our residents are afforded every
opportunity to exercise their rights, and that we are providing the
gold standard of service that our residents deserve. [See page 21.]
Mr. Ehle. Hunt has been a leading voice for ongoing industry-wide
reform and standardization, and supports a number of initiatives to
standardize and improve the MHPI program in partnership with the
Services, including a uniform resident lease, a resident bill of
rights, resident responsibilities, uniform dispute resolution
guidelines, and a uniform resident displacement policy.
Hunt recognizes and appreciates the unique challenges our military
families face and Hunt is committed to ensuring our families are
afforded an equal or better experience than residents may find in the
conventional rental market. Each Hunt resident enters into a resident
lease approved by our military partners that affords our military
families detailed rights and obligations similar to those found in the
conventional rental market, yet recognizing and addressing the unique
circumstances of living on or in the vicinity of a military
installation, including the military policies and procedures that
govern the installation and its residents. For example, Hunt lease
forms generally provide residents with a detailed description of, among
other things, their monthly rent, the term of their lease, the
utilities included in their monthly rent, move-in/moveout procedures,
the circumstances under which a resident may terminate their lease
early, conditions under which pets may occupy the housing unit, the
delineation of maintenance and other responsibilities between Hunt and
the resident, conditions under which Hunt may enter the housing unit,
procedures for residents to submit maintenance requests, community
amenities, conditions under which a resident may operate a business
from their home, and the process for landlord-resident dispute
resolution.
With respect to our goal to provide safe, healthy, and quality
homes for military families, we measure our success in a number of
ways. For example, we look at whether military families are choosing to
reside in Hunt homes rather than in other housing in the marketplace,
as well as customer satisfaction via resident surveys. We have
implemented an enhanced resident survey tool run by a third party,
SatisFacts, to measure customer satisfaction at move-in, move-out, and
after work order completion. It is a very quick 5-star survey that is
automatically sent to the resident at the conclusion of each of these
events to ask the resident about their satisfaction. The resident
completes the survey, and the results go immediately to the site
management team at the resident's property. If the response yields a
score of less than 3.5 (in the SatisFacts scale, a 3 is ``Satisfied''),
the Community Director at the property is to contact that resident the
same day to ascertain where we fell short of expectations so we can
better resolve the issue and make improvements going forward. [See
page 21.]
Mr. Taylor. Balfour Beatty Communities believes that all military
housing residents are entitled to:
A well-maintained and comfortable home
A clean, attractive community and well-maintained amenity
spaces
Responsive, knowledgeable and friendly customer service
Convenient methods to communicate with our team, express
concerns and provide feedback
Treatment with integrity, respect and professionalism by
our team at all times, including honest and straightforward
communications
Fair treatment within Fair Housing guidelines
To continuously ensure our residents have the best possible living
experience, we send out a comprehensive Resident Satisfaction Survey
annually that is designed to gather your opinions, ideas and concerns
regarding our community, service and staff. In addition, we issue
quality check surveys after move-in and every completed work order to
confirm our performance has met or exceeded your expectation and there
are no outstanding issues or concerns.
Any resident who is not satisfied with their living experience with
us at any of our military housing communities is encouraged to reach
out to our senior management team via our BB Cares Helpline. The BB
Cares Helpline is a dedicated resident relations system providing
residents with direct assistance from our corporate management team.
We also are actively working with the Department of Defense and
Services to develop a uniform bill of rights that will be incorporated
into resident leases and applied across all Military Housing
Privatization Initiative (MHPI) projects. [See page 21.]
Mr. Bliss. Lincoln Military Housing has recently, or previously,
implemented the below provisions outlined in the NDAA/DOD proposed
Tenant Bill of Rights.
Proposed Military Housing Privatization Initiative Tenant Bill of
Rights
1. The right to reside in a housing unit and a community that
meets applicable health and environmental standards.
2. The right to reside in a housing unit that has working
fixtures, appliances, and utilities and to reside in a community with
well-maintained common areas and amenity spaces.
3. The right to a written lease with clearly defined rental terms
to establish tenancy in a housing unit, including any addendums and
other regulations imposed by the Landlord regarding occupancy of the
housing unit and use of common areas--LMH has been the lead on
assisting Partners and the DOD with the appropriate language.
4. The right to have sufficient time and opportunity to prepare
and be present for move-in and move-out inspections, including an
opportunity to obtain and complete necessary paperwork.
5. The right to report inadequate housing standards or deficits
in habitability of the housing unit to the Landlord, the chain of
command, and housing management office without fear of reprisal or
retaliation, including reprisal or retaliation in the following forms:
(A) unlawful recovery of, or attempt to recover, possession of the
housing unit; (B) unlawfully increasing the rent, decreasing services,
or increasing the obligations of a Tenant; (C) interference with a
Tenant's right to privacy; (D) harassment of a Tenant; (E) refusal to
honor the terms of the lease; or (F) interference with the career of a
Tenant.--While we can support this, we feel examples and more detailed
definitions are required.
6. The right of access to a Military Tenant Advocate or a
military legal assistance attorney, through the housing management
office of the installation of the Department at which the housing unit
is located to assist in the preparation of requests to initiate dispute
resolution.
7. The right to receive property management services provided by
a Landlord that meet or exceed industry standards and that are
performed by professionally and appropriately trained, responsive and
courteous customer service and maintenance staff.
8. The right to have multiple, convenient methods to communicate
directly with the Landlord maintenance staff, and to receive
consistently honest, accurate, straightforward, and responsive
communications.
9. The right to have access to an electronic work order system
through which a Tenant may request maintenance or repairs of a housing
unit and track the progress of the work.
10. With respect to maintenance and repairs to a housing unit, the
right to the following: (A) prompt and professional maintenance and
repair; (B) to be informed of the required time frame for maintenance
or repairs when a maintenance request is submitted; and (C) in the case
of maintenance or repairs necessary to ensure habitability of a housing
unit, to prompt relocation into suitable lodging or other housing at no
cost to the Tenant until the maintenance or repairs are completed.
11. The right to receive advice from military legal assistance on
procedures involving mechanisms for resolving disputes with the
property management company or property manager to include mediation,
arbitration, and filing claims against a Landlord.
12. The right to have reasonable, advance notice of any entrance
by a Landlord, installation housing staff, or chain of command into the
housing unit, except in the case of an emergency or abandonment of the
housing unit.
13. The right to not pay non-refundable fees or have application
of rent credits arbitrarily held.
14. The right to expect common documents, forms, and processes for
housing units will be the same for all installations of the Department,
to the maximum extent applicable without violating local, State, and
Federal regulations. [See page 21.]
?
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QUESTIONS SUBMITTED BY MEMBERS POST HEARING
December 5, 2019
=======================================================================
QUESTIONS SUBMITTED BY MS. HOULAHAN
Ms. Houlahan. It is our understanding the agreements made between
the services and public private partner give majority ownership to the
P3. We are aware that DOD cannot unilaterally change the deal
agreements they have with private companies and every contractual
change must be negotiated and agreed upon by the housing companies.
What liberties are you afforded as the majority partner in the
partnerships? What decisions are you allowed to make as a company that
the services may not have say in?
Do the services have a say in who is subcontracted out to do
maintenance work/renovations? Can the services fire a subcontractor or
property manager hired by the P3?
If you had a subcontractor who was underperforming or being alleged
of fraud, waste, abuse or called to testify in front of Congress for
these issues, how would you handle the future of that relationship?
Mr. Picerne. We work closely with our Army and Air Force partners
with respect to all of the substantive operational decisions with
respect to housing on each of the military installations we serve. Our
partners are directly involved in ongoing budget decisions, have direct
oversight over all major expenditures, and receive daily updates with
respect to our work with residents. While our partners do not typically
schedule maintenance, engage in direct leasing activity, or otherwise
direct our employees' day-to-day activity, they do maintain regular
operational oversight, and receive daily updates regarding our work.
They have access to our maintenance and leasing systems, and regularly
coordinate with us regarding work undertaken by contractors on behalf
of the partnerships. The specific obligations of each Member may vary
depending on the specific partnership at issue. These roles and
responsibilities are spelled out in the Operating Agreement, Property
Management Agreement, and other agreements applicable to each of the
partnerships.
A Service may, in accordance with the agreement between the Service
and the private MHPI partner, request that a contract between the MHPI
project company (P3) and a subcontractor or property manager be
terminated, and in such case, in accordance with the private MHPI
partner's agreement with the Service, it is required to terminate that
subcontract or property management agreement.
The Services may request that the Partnership terminate a
relationship with a contractor or subcontractor and Partnership will do
so. If we had a subcontractor who was underperforming or being alleged
of fraud, waste, abuse or called to testify in front of Congress for
these issues, we would investigate anything that was appropriate for us
to investigate directly, and await the results of any investigations
conducted by Congress or other authorities, and then, after considering
all facts and circumstances, determine the appropriate response and
actions we'd take regarding the future of that relationship.
Ms. Houlahan. The GAO recently found several concerning data
anomalies in the work order systems for MHPI projects, including
duplicates, closed out work orders prior to submission date, and work
orders open for over 18 months. Additionally, there have been recent
reports that Balfour Beatty employees have intentionally rigged work
orders so their company could receive incentive fees.
Were any of you, as senior leaders in your companies, aware of
intentional data rigging to receive incentive fees? How can you ensure
this will not happen moving forward?
GAO also found that measures for satisfaction and quality of
housing used were invalid measures. What have your companies done to
update these metrics to ensure health and safety are accurately
measured?
Mr. Picerne. I was not aware of any intentional attempts to
increase incentive fees by prematurely closing work orders prior to
public allegations of such behavior on the part of Balfour Beatty.
Since hearing of these allegations, Corvias has taken proactive steps
to work with our Air Force and Army partners to ensure that work orders
are being addressed and closed appropriately.
While our Army and Air Force partners develop and deliver the
satisfaction surveys used to evaluate our performance, we will continue
to work with them to accurately measure resident satisfaction. We rely
heavily on this data to help us better serve our residents, and we
share your concerns that this data may not accurately reflect
resident's opinions due to the specific questions, format, or delivery
methods adopted by our partners. For this reason, in addition to the
annual resident satisfaction surveys, we ask residents to complete a
survey after every work order, and watch those results closely to
ensure that we are responding to their needs.
Ms. Houlahan. It is our understanding the agreements made between
the services and public private partner give majority ownership to the
P3. We are aware that DOD cannot unilaterally change the deal
agreements they have with private companies and every contractual
change must be negotiated and agreed upon by the housing companies.
What liberties are you afforded as the majority partner in the
partnerships? What decisions are you allowed to make as a company that
the services may not have say in?
Do the services have a say in who is subcontracted out to do
maintenance work/renovations? Can the services fire a subcontractor or
property manager hired by the P3?
If you had a subcontractor who was underperforming or being alleged
of fraud, waste, abuse or called to testify in front of Congress for
these issues, how would you handle the future of that relationship?
Mr. Ehle. Hunt's MHPI partnership agreements with its military
partners generally do not specify the percentage interests owned by
each of the partners. Accordingly, Hunt is not characterized as the
``majority partner.'' The military partner is entitled to a majority of
the remaining cash flow proceeds (after the payment of operating
expenses, debt service and reserves) and the military partner exercises
major decision rights over project decisions. Hunt typically manages
the dayto- day operations of the privatized military housing project,
subject to rights and controls afforded to the military partner. In
addition, consistent with its role as ``day-to-day'' manager of these
projects, affiliates of Hunt are responsible for property management
and asset management at most of its properties. At certain properties,
where Hunt and other private parties own an interest in the
partnership, management of the project is delegated to Hunt's partner
or a third party.
Hunt works collaboratively with its military partners, including on
maintenance work and renovations. Full transparency is a hallmark of
these partnerships. Our military partners have multiple controls in
place to oversee and monitor Hunt's performance, and we encourage such
engagement. Hunt is subject to various reporting and inspection
requirements that occur on a weekly, monthly, quarterly, and annual
basis. Our military partners have access to our maintenance software,
Yardi, and can review work orders and survey responses. They are also
able to inspect homes and follow up directly with residents. Each of
our military partners has its own unique requirements for reporting and
inspection.
For example, Hunt is required to provide monthly reports to its
military partners on the financial health of the project, including an
analysis of the approved annual operating budget. On a quarterly or
semi-annual basis, Hunt conducts a meeting with military leadership at
the base, command, and housing levels, as well as with the military's
independent consultants. These meetings are intended to maintain open
and consistent communication between the partners by facilitating
discussion of the financial health of the project, sustainment of the
project, resident issues, military partnership issues, events,
occupancy, and/or strategic initiatives. On an annual basis, Hunt
submits to its military partners, for example, (a) audited financials
on a per-project basis, (b) verifications to uphold insurance,
environmental, and document compliance, and (c) environmental reports
relating to lead-based paint or asbestos-containing materials.
Hunt's military partners on the projects also have extensive major
decision and other approval rights. For example, Hunt generally must
obtain approval from its military partners prior to encumbering or
financing a project, distributing cash flow from a project, entering
into or amending material project documents, including existing
financing documents and management, construction and/or consultant
agreements, or amending resident lease forms and related materials. The
military partners also must approve the annual operational and
renovation budgets for each project. In addition, among other
deliverables, Hunt is required to provide detailed information on a
project's operations, capital repair and replacement activities,
executive home budgets, and long-term out-year sustainment plans for
review and approval by its military partners and their independent
consultants.
Hunt is also subject to financial or other penalties if it fails to
perform under its contracts. Under the terms of our project agreements,
a military partner may terminate our agreements in certain situations,
including, without limitation, if we are in material default of our
obligations. Alternatively, if we are not in material default of our
agreements, but we have, nevertheless, failed to meet performance
expectations, a military partner may withhold all, or a portion of, our
incentive fees.
Hunt sometimes engages third-party subcontractors or vendors to
provide services such as painting, HVAC maintenance, lawn care, and
snow removal. The Managing Member of a project owner and affiliated
entities has the right to engage contractors or subcontractors, subject
to certain controls. These controls include, but are not limited to,
(a) bidding requirements and consent rights for contracts exceeding
specified amounts, and (b) specific requirements for contracts with
affiliates.
If we had a subcontractor who was not meeting its contractual
obligations or facing allegations of fraud, waste, or abuse, we would
take action to address the issue, up to and including terminating our
relationship with that subcontractor, if warranted.
Ms. Houlahan. he GAO recently found several concerning data
anomalies in the work order systems for MHPI projects, including
duplicates, closed out work orders prior to submission date, and work
orders open for over 18 months. Additionally, there have been recent
reports that Balfour Beatty employees have intentionally rigged work
orders so their company could receive incentive fees.
Were any of you, as senior leaders in your companies, aware of
intentional data rigging to receive incentive fees? How can you ensure
this will not happen moving forward?
GAO also found that measures for satisfaction and quality of
housing used were invalid measures. What have your companies done to
update these metrics to ensure health and safety are accurately
measured?.
Mr. Ehle. We are not aware of any Hunt properties that are engaged
in practices of the type alleged elsewhere in terms of ``off the
books'' maintenance logs and deliberate falsification in order to
obtain unearned incentive fees. Falsifying work orders would be wholly
unacceptable and against our code of conduct.
Because the privatization of properties that comprise the MHPI
program took place over a 15- to 20-year period, the standards for
response and completion of resident-initiated service requests vary
greatly among the Services and across properties for a particular
Service. At any given property, the applicable standards may simply be
unclear. Hunt supports ongoing efforts to engage with the DOD and the
Services to develop and adopt uniform, clear, and workable standards
for all Services, across the industry, and at all properties. In the
meantime, Hunt has adopted a company-wide ``Hunt Standard'' for work
order response and completion. We expect these efforts to promote
consistent and improved maintenance practices and performance.
We have implemented an enhanced resident survey tool run by a third
party, SatisFacts, to measure customer satisfaction at move-in, move-
out, and after work order completion. It is a very quick 5-star survey
that is automatically sent to the resident at the conclusion of each of
these events to ask the resident about their satisfaction. The resident
completes the survey, and the results go immediately to the site
management team at the resident's property. If the response yields a
score of less than 3.5 (in the SatisFacts scale, a 3 is ``Satisfied''),
the Community Director at the property is to contact that resident the
same day to ascertain where we fell short of expectations so we can
better resolve the issue and make improvements going forward. These
satisfaction surveys also help us assess the extent to which we are
achieving our goal to provide safe, healthy, and quality homes for
military families.
Ms. Houlahan. It is our understanding the agreements made between
the services and public private partner give majority ownership to the
P3. We are aware that DOD cannot unilaterally change the deal
agreements they have with private companies and every contractual
change must be negotiated and agreed upon by the housing companies.
What liberties are you afforded as the majority partner in the
partnerships? What decisions are you allowed to make as a company that
the services may not have say in?
Do the services have a say in who is subcontracted out to do
maintenance work/renovations? Can the services fire a subcontractor or
property manager hired by the P3?
If you had a subcontractor who was underperforming or being alleged
of fraud, waste, abuse or called to testify in front of Congress for
these issues, how would you handle the future of that relationship?
Mr. Hickey. As a standard fee for service provider, the Project
Companies are vested with the day-to-day operations of administering
the projects, including but not limited to qualifying the companies
under applicable federal or state laws, paying its debts, refinancing
its debts, contracting for various professional services such as
managers, accountants, attorneys, and consultants, purchasing
insurance, paying the Project Company's operating expenses in
accordance with lockbox agreements and commencing or responding to any
litigation. However, the Project Companies do not have unfettered
rights to operate the project without the express consent and direct
approval of our military partner with respect to most material matters.
Despite being the managing or sole member of the respective Project
Companies, the Military Services retain integral governance oversight
and control over a litany of major issues impacting each Project
Company through contractual rights contained in the various project
documents. This is evident by the fact that the Project Companies are
subject to many government consent rights and other limitations on what
they can do under the terms of the negotiated ground leases, the
respective company and project operating agreements for the Military
Services, and the master development and management agreements under
the respective Air Force deals. For example, the Project Companies have
to obtain the approval from the pertinent Military Service to incur
indebtedness (beyond certain permitted daily operating expenses), to
execute any construction, development management, asset management or
property management and maintenance agreements, to terminate or replace
the contractors under those respective arrangements, to alter funding
levels of certain operating and development accounts and reserves, to
make any expenditure that deviates from already approved project budget
and business plan by certain thresholds, to award any incentive fees,
to change the guaranteed scope of work, to change the unit online
schedule, to make any expenditure from the replacement reserve
subaccount, and to enter into any affiliated contracts (which in any
event must be on prevailing market terms to prevent self-dealing). The
foregoing list represents merely an abbreviated version of some of the
salient areas where the Project Companies are constrained from acting
unilaterally; however, there are many more areas of control exercised
by our Military Service partners, which we have not included in
response to this inquiry.
We are similarly constrained by what we can do under our financing
documents (i.e., the loan agreements and trust indentures) with our
lenders who frequently have consent rights with the respect to the same
or similar matters as those examples noted above.
Do the services have a say in who is subcontracted out to do
maintenance work/renovations? Can the services fire a subcontractor or
property manager hired by the P3?
As the Military Services are not the contractual counterparties,
they do not have a direct contractual right to fire such a service
provider. However, the Military Services did require they approve such
service providers and their negotiated form contracts be subject to
service approval at each project's inception. In addition, on a number
of Lendlease's projects, the Property Manager can be removed based on
unsatisfactory performance, which gives the Military Service, recourse
when appropriate. For instance, the Navy expressly reserves the right
to send (or direct the Project Company to send) notices of
dissatisfaction with such performance. If multiple notices of
dissatisfaction are sent within a specific period, the Navy can then
direct the Project Company to terminate and replace the Property
Manager or the individual acting as the Director of Property
Management. In addition to the foregoing, management agreements
typically have termination rights for, among other things, the failure
of the manager to perform in accordance with its contractual
obligations.
Furthermore, the Military Services have the right to approve any
new asset management, property management and/or maintenance agreement
to the property as a whole, unless the agreement can be terminated on
thirty (30) days' notice or less without cost.
If you had a subcontractor who was underperforming or being alleged
of fraud, waste, abuse or called to testify in front of Congress for
these issues, how would you handle the future of that relationship?
In addition to the notices of dissatisfaction and potential
termination process described above found in the projects, the
agreements also provide for various performance metrics and we
regularly audit our projects and have quarterly meetings with senior
leadership in property management to address issues or problems that
need to be escalated and rectified.
We take allegations of fraud, waste or abuse very seriously.
Any such allegations levied against one of the Project Company's
subcontractors would be immediately and thoroughly investigated and if
the allegations were proven to be true, we would pursue our rights to
terminate the relevant contract. All of our vendor agreements include
termination for cause provisions, which include matters such as breach
for fraud or illegal conduct. Lendlease does not tolerate such
behavior.
Ms. Houlahan. The GAO recently found several concerning data
anomalies in the work order systems for MHPI projects, including
duplicates, closed out work orders prior to submission date, and work
orders open for over 18 months. Additionally, there have been recent
reports that Balfour Beatty employees have intentionally rigged work
orders so their company could receive incentive fees.
Were any of you, as senior leaders in your companies, aware of
intentional data rigging to receive incentive fees? How can you ensure
this will not happen moving forward?
GAO also found that measures for satisfaction and quality of
housing used were invalid measures. What have your companies done to
update these metrics to ensure health and safety are accurately
measured?
Mr. Hickey. No. We are not aware of intentional data rigging to
receive incentive fees.
Lendlease has very robust policies and procedures in place to
ensure that data rigging does not occur. We regularly assess and review
these policies and procedures. For instance, it is standard operating
procedure that each of the project teams verify preliminary data by the
property/community manager before final submission to the applicable
Military Service for billing/credit. Also, as stated previously, we
have quarterly meetings with senior leadership in property management
to learn of any issues they have encountered and to keep abreast of any
concerns. In addition, we may, from time to time, elect to cause the
books and financial operations of the Property Manager to be audited by
an independent auditor that we select.
As part of our incentive fee submission process, the Director of
Property Management and their team prepare quarterly or semi-annual
incentive fee submissions in accordance with the guidance provided by
the Military Service partner. The submission package is then reviewed
and approved by the Lendlease Project Director prior to submission to
the local DOD partner for review and approval. This review process
imposes multiple layers of verification to identify any potential
inaccuracies or issues prior to final DOD leadership submission.
Army: Each Project Company must submit documentation of incentive
performance with a recommendation of score to the local Residential
Communities Initiative (RCI) partner who reviews and provides feedback.
The local Garrison Commander approves the package locally prior to
project owner submitting to IMCOM a formal request for payment with
ultimate signoff at the IMCOM level. Funding approval is based on a
review of performance against DOD established performance metrics that
are part of Project Company contractual agreements.
Air Force: Each Project Company must submit documentation of
incentive performance with a recommendation of score to the local HMO
partner who reviews and provides feedback. The local Wing Commander
approves the package locally prior to project owner submitting to AFCEC
a formal request for payment with ultimate signoff at the AFCEC level.
Funding approval is based on a review of performance against DOD
established performance metrics that are part of Project Company
contractual agreements
Navy: The Project Company must submit documentation of incentive
performance with a recommendation of score to NAVFAC partner who
reviews and provides feedback. Funding approval is based on a review of
performance against DOD established performance metrics that are part
of Project Company contractual agreements.
Measures to Ensure Accuracy in Submissions
We have reviewed our policies, procedures and reporting systems
with the goal to ensure our project teams are properly executing
company policy, particularly around the service order reporting
process. Here are a few examples of how our systems are designed to
maintain the integrity of Service Order reporting:
All resident work orders are generated directly in Yardi
through a call center or via our Military Cafe portal/app to ensure
they are created real-time directly by the resident;
All technicians use mobile devices to track all
activities including their time, parts, notes and work status. Their
time is validated against the HRIS system, which is also electronic, to
ensure time is captured accurately; and
Resident receives an email and survey request upon
completion of work order, which is system-generated
Additionally, we have added new monthly reviews and tools,
including a new Business Intelligence Dashboard that is reported to
senior Lendlease executives as part of a monthly business review. This
provides transparency and visibility to the senior most levels of the
organization around work order response and completion times.
Isolated Incident Disclosed
Reverting back to the question raised above in 35A, after
learning of the alleged incentive fee manipulation by another private
developer in the media, we further assessed all our projects and
learned of only one isolated incident at a project in fiscal year 2009
where a community manager duplicated callback cards.
This former employee of our property manager was
attempting to expedite her work by transcribing survey card responses
contemporaneously and directly to the feedback tracking sheets, rather
than performing the required follow-up phone calls to residents in
accordance with the transaction documents. This issue was identified
during review and preparation of the fee package with the Lendlease
Project Director prior to submission. It was based upon the verbatim
wording of resident comments appearing in both comment cards from
residents and feedback sheets during said quarter. The feedback call
sheets for the quarter in question were discarded and none of the
inaccurate data was reported to the Air Force or claimed as
justification for incentive fee or other compensation. Nevertheless, we
disclosed this finding to the Senate.
Our process for preparation of our incentive fees
includes the Director of Property Management and their team preparing
the quarterly or semi-annual submissions. It is then reviewed and
approved by the Lendlease Project Director and approved prior to
submission to the local DOD partner for review and approval. This
review process is how the above isolated incident was identified.
While this was an anomaly, we include it in the interests
of full transparency and to demonstrate how stringent our checks and
balances are.
GAO also found that measures for satisfaction and quality of
housing used were invalid measures. What have your companies done to
update these metrics to ensure health and safety are accurately
measured?
Lendlease has developed several new exception reports that
proactively identify data anomalies so they can be researched and
corrected in a timely fashion. As the GAO report pointed out, even with
the best IT systems and enterprise software, the human element provides
opportunities for data entry mistakes (dates transcribed incorrectly
and spotty mobile coverage areas that may produce syncing errors
between the technicians' mobile tablets and the database of record),
which necessitates data validation. These new tools look for anomalies
such as:
Labor Finish before Call Date
Labor Finish with no Start Date/Time
Labor Start before Call Date
Labor Start with no Finish Date/Time
Labor Start with Future Date
WO Completed with Future Date
Labor Finish before Labor Start
Though Lendlease has independently developed this report, we have
offered this improved protocol to the Yardi platform so it may be used
by other developers.
Additionally, Lendlease has enhanced internal key performance
indicator dashboards and reporting tools with a broadened review and
distribution program. Lendlease uses business intelligence platforms
through a proprietary solution to synthesize data between multiple data
sources to evaluate customer experience, service order performance and
other key metrics. We internally monitor qualitative metrics for
service order satisfaction based on indicators of excellent service
including open work order aging, repeat work orders, service order
response and completion time averages, and work order exceptions.
Lendlease has also been working with our Military Service partners
and the other developers towards the modification and standardization
of performance incentive metrics in order to provide consistent
measures to assess resident satisfaction and our performance. These
metrics provide objective focus on service order response and
completion, resident feedback, preventive maintenance and focus on
business success factors from within the annual survey rather than
subjective criteria.
Ms. Houlahan. It is our understanding the agreements made between
the services and public private partner give majority ownership to the
P3. We are aware that DOD cannot unilaterally change the deal
agreements they have with private companies and every contractual
change must be negotiated and agreed upon by the housing companies.
What liberties are you afforded as the majority partner in the
partnerships? What decisions are you allowed to make as a company that
the services may not have say in?
Do the services have a say in who is subcontracted out to do
maintenance work/renovations? Can the services fire a subcontractor or
property manager hired by the P3?
If you had a subcontractor who was underperforming or being alleged
of fraud, waste, abuse or called to testify in front of Congress for
these issues, how would you handle the future of that relationship?
Mr. Taylor. BBC is not the majority owner of the project companies
that operate the Military Housing Privatization Initiative (MHPI)
projects from an economic or control perspective. Each project has a
set of legal agreements that govern the rights of the project owners
and what actions require government and/or third-party lender approvals
to enter into subcontracts, make changes to lease forms or policies and
procedures that govern operation of the properties, or cause amendments
to any of the project agreements themselves. As a result of the
complicated structure of the MHPI projects and different terms
negotiated on a project by project basis, it is difficult to address
these questions without providing a distinct response for each of BBC's
21 projects. In an attempt to address these questions on a universal
basis, however, we provide the following:
Generally, BBC is the manager/managing member of each project
company, which means it has the responsibility to perform the day-to-
day management of the project (i.e., the power to make and execute
contracts and agreements on behalf of the company; and the obligation
to maintain the books and records of the company, to ensure compliance
with the project agreements (i.e., ground lease, construction or
renovation agreements, property management agreement, lease agreements,
financing/lender agreements), and to enforce contractual rights against
contractors or third parties). In addition, for each project, there are
agreements that identify certain material matters or major decisions
that require the government's consent, such as: approving the project's
budget; permitting additional capital contributions to the project
company; selling any assets of the project; refinancing the project;
approving, terminating or amending any major project agreement
(including the property management agreement and development
agreement); expending project funds for capital repairs or replacement
in excess of certain amounts outside of the approved budget; consenting
to changes in scope of work under material construction or renovation
agreements; entering into material contracts; approving or authorizing
disbursements from project accounts under the project trust indenture/
lockbox agreement other than pursuant to the terms of those agreements;
approving of contracts with affiliates that are not otherwise on market
terms; and approving of certain material contractors). Since BBC is not
permitted to make major decisions without the government's consent, it
is not deemed as controlling the projects. In addition, it should be
noted that the project's third-party lenders have similar rights to
consent to the above-referenced material matters relating to the
projects.
Generally, the Services (and third-party lenders) are required to
approve of any major contracts for capital repairs and replacements
that are not otherwise approved in the annual project budget or where
funding is through the reinvestment account of the project. Contracts
for routine maintenance work/renovations are not required to be
consented to by the Services unless they contain non-market terms or
fail to meet the standards as required under the project agreements -
which contain minimum requirements for contract terms and insurance and
require contractors to comply with applicable law, among other things.
Where a subcontractor fails to perform its services in compliance with
law or materially breaches its contract, it is the obligation of the
property manager/project owner to ensure that the project enforces its
rights to take action against the subcontractor (including possible
termination after any relevant cure periods). The third-party lenders
to the projects also have ``step-in'' rights under the property
management agreement that enable them to take control of the property
management/renovation services where the existing property manager is
deemed in default.
To the extent a subcontractor is underperforming or being alleged
to have committed fraud, waste, or abuse, BBC would seek to investigate
the matter; and where substantiated, the project owner would seek to
enforce all remedies available under the contract or law in light of
the facts and circumstances (including, as applicable, notice of
default, right to cure and/or termination), as well as report any
criminal behavior to government authorities. BBC incorporates
provisions in each of its project agreements with contractors that
require them to comply with a code of conduct and acknowledge they
shall not participate in any criminal act or anti-competitive behavior,
including, but not limited to, bribery, fraud or cartels. We also
expect that subcontractors will comply with their own obligations to
respond to Congress in connection with any invitation or subpoena to
testify.
Ms. Houlahan. The GAO recently found several concerning data
anomalies in the work order systems for MHPI projects, including
duplicates, closed out work orders prior to submission date, and work
orders open for over 18 months. Additionally, there have been recent
reports that Balfour Beatty employees have intentionally rigged work
orders so their company could receive incentive fees.
Were any of you, as senior leaders in your companies, aware of
intentional data rigging to receive incentive fees? How can you ensure
this will not happen moving forward?
GAO also found that measures for satisfaction and quality of
housing used were invalid measures. What have your companies done to
update these metrics to ensure health and safety are accurately
measured?
Mr. Taylor. We have engaged Hunton Andrews Kurth LLP (Hunton) to
investigate allegations that work orders were handled inappropriately
and the way in which work orders were processed. To assist them in
their investigation, Hunton has appointed PricewaterhouseCoopers
Advisory Services LLC to perform a forensic audit work plan under AICPA
consulting standards relating to our submission of requests for
incentive fee payments. When broad allegations about the inappropriate
handling of work orders were made in June 2019, we proactively reached
out to the Department of Justice (DoJ) to notify them of Hunton's
review. The DoJ subsequently issued a Civil Investigative Demand and we
have been cooperating with their investigation. If it is determined
that we did not properly earn incentive fees paid to us, we will refund
those amounts. If the investigation determines wrong-doing by any
member for our staff, we will take appropriate action. As this
investigation is still ongoing, it would be inappropriate for us to
comment any further on the subject matter at this time.
To ensure confidence in our management of the work order process
going forward, we also have undertaken an extensive internal review of
our work order processes. Based on this review, we already have
implemented several important changes and improvements across our
military housing portfolio, including providing a mobile device app for
residents to enter, track and sign-off on work orders, and changes to
our staffing and remediation processes to ensure we have appropriate
resources and checks and balances in place regarding management of our
military housing portfolio. The findings from the Hunton investigation
will be used to inform further decisions about improvements once the
work is complete, which is expected to take several more months.
With regard to the GAO findings, we are committed to working with
the Services to design measurements for satisfaction and quality of
housing that are considered appropriate. To that point, we have been
reviewing proposed changes from the Services to the incentive fee
performance metrics that apply to our projects. At this time, we
already have agreed with the Department of the Army to a new 2020
incentive fee metric plan, and to take actions necessary to update our
project agreements to reflect this new plan. We expect to negotiate
similar updated plans with the Departments of the Air Force and the
Navy as well.
Ms. Houlahan. It is our understanding the agreements made between
the services and public private partner give majority ownership to the
P3. We are aware that DOD cannot unilaterally change the deal
agreements they have with private companies and every contractual
change must be negotiated and agreed upon by the housing companies.
What liberties are you afforded as the majority partner in the
partnerships? What decisions are you allowed to make as a company that
the services may not have say in?
Do the services have a say in who is subcontracted out to do
maintenance work/renovations? Can the services fire a subcontractor or
property manager hired by the P3?
If you had a subcontractor who was underperforming or being alleged
of fraud, waste, abuse or called to testify in front of Congress for
these issues, how would you handle the future of that relationship?
Mr. Bliss. The services do not have a say in who is subcontracted
to do maintenance work or renovations, nor can they fire a
subcontractor, as the property manger is solely responsible for the
hiring and oversight of the subcontractor. Under the project documents,
to which the services are a party, the partnership can fire the
property manager. Upon discovery of the underperformance or alleged
fraud, waste or abuse by a subcontractor, the subcontractor would be
terminated. In the case of a subcontractor called to testify in front
of Congress, that fact and the substance of their testimony would have
no bearing on Lincoln Military Housing's relationship with that
subcontractor.
Ms. Houlahan. The GAO recently found several concerning data
anomalies in the work order systems for MHPI projects, including
duplicates, closed out work orders prior to submission date, and work
orders open for over 18 months. Additionally, there have been recent
reports that Balfour Beatty employees have intentionally rigged work
orders so their company could receive incentive fees.
Were any of you, as senior leaders in your companies, aware of
intentional data rigging to receive incentive fees? How can you ensure
this will not happen moving forward?
GAO also found that measures for satisfaction and quality of
housing used were invalid measures. What have your companies done to
update these metrics to ensure health and safety are accurately
measured?
Mr. Bliss. Lincoln Military Housing takes very seriously our role
in ensuring the integrity of the MHPI program and our senior leadership
has no knowledge of employees intentionally manipulating work orders in
an effort to receive incentive fees. In 2008, Lincoln Military Housing
did independently identify one employee, a mid-level manager, who
manipulated data to receive a personal bonus. That employee was
terminated, and to ensure that Lincoln did not unfairly receive
incentive fees as a result, Lincoln reported it to the Navy and waived
our fee for that time period. We have additional controls in place to
ensure that data on the local level cannot be manipulated, and our
internal incentives are now even more aligned with resident
satisfaction. In an effort to better assess resident satisfaction and
work quality, we added a survey service, SatisFacts, in 2014 to
supplement the annual survey referenced by the GAO. That survey
provides additional opportunities for residents to provide feedback and
reviews about the service they receive: at move-in, at each work order,
and at move out. In addition, they have an opportunity so submit a
service survey through our website anonymously.
______
QUESTIONS SUBMITTED BY MS. STEFANIK
Ms. Stefanik. One of the common concerns among military families,
regardless of the specific housing issue, is that family members felt
they did not have a voice. I would like to hear from the private
partner witnesses how your companies are empowering and enabling
military families throughout the leasing and residency process. For
example, this Committee emphasized the necessity for a common ``Tenant
Bill of Right'' in our NDAA bill. What rights are you ensuring are
afforded to military families leasing your properties, and how are your
measuring your success?
Mr. Picerne. We agree that empowering and enabling residents to
raise any concerns that they may have is the best way to ensure that we
are hearing their concerns, and meeting their needs. We have taken a
variety of steps to better serve our residents, including working with
our partners to establish resident focus groups, bringing back local
call centers to help coordinate maintenance work directly with
residents at each installation, establishing the Corvias Resident
Portal to allow 24/7 online access to work order submission and status,
and hiring resident Ombudsmen to work directly with residents to
address their concerns. We will continue to work with all of our
residents to ensure that they are afforded every opportunity to
exercise their rights, and that we are providing the gold standard of
service that our residents deserve.
Ms. Stefanik. One of the common concerns among military families,
regardless of the specific housing issue, is that family members felt
they did not have a voice. I would like to hear from the private
partner witnesses how your companies are empowering and enabling
military families throughout the leasing and residency process. For
example, this Committee emphasized the necessity for a common ``Tenant
Bill of Right'' in our NDAA bill. What rights are you ensuring are
afforded to military families leasing your properties, and how are your
measuring your success?
Mr. Ehle. Hunt Military Communities (``Hunt'') recognizes that
quality homes and resident services depend on open and regular
communications with residents. We want to hear from all of our
residents in order to be made aware of issues so we can address them.
We also need to make it as easy and comfortable as possible for our
residents to communicate with us. To that end, we have made significant
improvements to our resident communication processes throughout our
portfolio over the last year, including:
Work Order Mobile Application: We have launched the
RENTCafe mobile app for the real-time submission and tracking of
routine work orders and to access select historic work order data. The
app also encourages convenient communication between on-site Hunt
employees and residents by (i) facilitating direct calls or emails to
on-site staff; (ii) providing community announcements at sign-in; (iii)
announcing emergencies by the leasing office; and (iv) featuring
community events on a calendar.
Surveys: We have implemented an enhanced resident survey
tool run by a third party, SatisFacts, to measure customer satisfaction
at move-in, move-out, and after work order completion. It is a very
quick 5-star survey that is automatically sent to the resident at the
conclusion of each of these events to ask the resident about their
satisfaction. The resident completes the survey, and the results go
immediately to the site management team at the resident's property. If
the response yields a score of less than 3.5 (in the SatisFacts scale,
a 3 is ``Satisfied''), the Community Director at the property is to
contact that resident the same day to ascertain where we fell short of
expectations so we can better resolve the issue and make improvements
going forward.
Hunt Promise Helpline: This 24/7, toll-free hotline makes
it easier for residents to voice concerns about issues they feel have
not been resolved at the property level by facilitating direct contact
between residents and Hunt Military Communities senior management.
Social Media Coordinator: We now have a dedicated
specialist to liaise with each Hunt community online to make sure
issues are identified and addressed in a timely manner. 2 This
initiative has improved our ability to monitor resident complaints and
concerns made on social media and follow up accordingly.
Resident Resolution Tracker: As part of our quality
assurance efforts, if we learn that a resident is not completely
satisfied after his or her work order has been completed, the resident
is added to this tracker for follow up from our management team through
issue resolution.
Community Advisory Board (``CAB''): Residents serve as
volunteer members of CABs and meet with the Hunt property leadership on
a monthly basis to discuss what they see happening in their
neighborhoods and offer to Hunt suggestions for improving processes and
service. In addition, the CAB will be involved in identifying
opportunities to deploy the resources and services offered by the Hunt
Heart program. This program is designed to address the needs of our new
residents, deployed spouses, recently returned spouses, those suffering
a family crisis, and those who may be in need of information about or
access to social services through military or civilian sources.
Secret Shopping: We will be launching an independent
third-party ``secret shopping'' service in January 2020 to engage with
Hunt employees to assess customer service. Training plans will be based
on the results obtained.
Hunt has also been a leading voice for ongoing industry-wide reform
and standardization, and supports a number of initiatives to
standardize and improve the Military Housing Privatization Initiative
(``MHPI'') program in partnership with the Services, including a
uniform resident lease, a resident bill of rights, resident
responsibilities, uniform dispute resolution guidelines, and a uniform
resident displacement policy. Hunt recognizes and appreciates the
unique challenges our military families face and Hunt is committed to
ensuring our families are afforded an equal or better experience than
residents may find in the conventional rental market.
Each Hunt resident enters into a resident lease approved by our
military partners that affords our military families detailed rights
and obligations that are substantially similar to those in the
conventional rental market, yet recognizes and addresses the unique
circumstances of living on or in the vicinity of a military
installation, including the military policies and procedures that
govern the installation and its residents. For example, Hunt lease
forms generally provide residents with a detailed description of, among
other things, their monthly rent, the term of their lease, the
utilities included in their monthly rent, the security deposit (if any)
that may be required, move-in/move-out procedures, the circumstances
under which a resident may terminate their lease early, conditions
under which pets may occupy the housing unit, the delineation of
maintenance and other responsibilities between Hunt and the resident,
conditions under which Hunt may enter the housing unit, procedures for
residents to submit maintenance requests, community amenities,
conditions under which a resident may operate a business from their
home, and the process for landlord-resident dispute resolution.
With respect to our goal to provide safe, healthy, and quality
homes for military families, we measure our success in a number of
ways. For example, we look at whether military families are choosing to
reside in Hunt homes rather than in other housing in the marketplace,
as well as customer satisfaction via resident surveys, as discussed
above.
Ms. Stefanik. One of the common concerns among military families,
regardless of the specific housing issue, is that family members felt
they did not have a voice. I would like to hear from the private
partner witnesses how your companies are empowering and enabling
military families throughout the leasing and residency process. For
example, this Committee emphasized the necessity for a common ``Tenant
Bill of Right'' in our NDAA bill. What rights are you ensuring are
afforded to military families leasing your properties, and how are your
measuring your success?
Mr. Taylor. Balfour Beatty Communities (BBC) property teams work
diligently to deliver an exceptional living experience to every
resident. We repeatedly reinforce to residents that we want to know if
their expectations are not being met so that we have the opportunity to
make things right. Residents are actively encouraged to first contact
our local management team if they have any issues or concerns with
their home so we can promptly deploy the necessary resources to assist.
If they've contacted our local team and are not satisfied with the
outcome, we encourage them to reach out to our senior leadership team
via the BB Cares Helpline at 1-877-253-6988. The BB Cares Helpline is a
dedicated resident relations system providing residents with direct
assistance from our corporate office team. All calls are transcribed
and sent real-time to the head of our Military Housing Division for
immediate action. It is our commitment to residents that we will fully
review all concerns to ensure our team is doing everything possible to
deliver an exceptional living experience. If residents are still not
satisfied with our response, we also ensure they are aware of how to
directly contact their local military housing office. This three-step
issue resolution process is posted on our Resident Portals and is
actively communicated to residents at move-in and periodically
throughout the year via email and social media. We actively participate
in all Command-sponsored Housing Town Halls and work closely with
Resident Councils at locations where they have been established. These
outlets provide our teams with important opportunities to interact
directly with residents, answer their questions and better understand
their issues and concerns. After Town Hall events, we send all
residents a summary of topics discussed to provide overall awareness
and reinforce any BBC action plans going forward. As I mentioned in my
written testimony, we have been working with the Department of Defense
in crafting a Tenant Bill of Rights and are fully supportive of this
initiative. We further empower our residents during the maintenance
work order process. For each work order, our maintenance technician
and/or subcontractor takes a photograph of the before and after work
performed (where applicable). These photos are uploaded into our work
order management system, which is accessible to both residents and our
military housing partners for review. On all emergency/urgent work
orders, our Quality Control Specialist also conducts a follow-up
inspection to confirm the work was completed to our standards and
contacts the resident to review and ensure satisfaction. Upon
completion, residents are requested to `sign-off' on the work order to
indicate their satisfaction. In situations where the resident is not
satisfied, the work order remains open and we dispatch our Maintenance
Supervisor and/or Facility Manager to review and continue to work the
issue until the resident is satisfied; if validated by our managers as
properly completed, we engage military housing office representatives
to assist in resolving with the resident.
Ms. Stefanik. One of the common concerns among military families,
regardless of the specific housing issue, is that family members felt
they did not have a voice. I would like to hear from the private
partner witnesses how your companies are empowering and enabling
military families throughout the leasing and residency process. For
example, this Committee emphasized the necessity for a common ``Tenant
Bill of Right'' in our NDAA bill. What rights are you ensuring are
afforded to military families leasing your properties, and how are your
measuring your success?
Mr. Bliss. Lincoln Military Housing has a multi-faceted customer
service and work-order request system, and has also created a separate,
dedicated process to address resident concerns that gives tenants a
clear voice in their military housing. Specifically, Lincoln Military
Housing's work-order request system allows tenants to submit work
orders by phone via a dedicated ``Lincoln At Your Service'' hotline, on
the internet via the Lincoln Resident Portal, or via a smart device
through the Lincoln Military Housing Resident App. For customer service
issues extending beyond maintenance requests, the local District Office
is always open to tenants during business hours, and the Lincoln At
Your Service hotline is available to residents 24/7. Lincoln has also
instituted a Three-Step Resolution process throughout our enterprise.
Through this three-step process, residents are encouraged to first
attempt to resolve the issue at the District Office or by calling
Lincoln At Your Service. If the issue is still unresolved they are
encouraged to contact the General Management Office or Regional
Property Manager for their district, and if the issue still remains
unresolved they are encouraged to contact the Government Family Housing
Office, who will reach over to Lincoln. At resident move-in, this
Three-Step Resolution process is shared, and the appropriate phone
numbers are provided. We also provide a refrigerator magnet that is
placed on their appliance before they receive keys. Because we know
move-in is a busy time for families, we also send a reminder about the
Three-Step Resolution process once a quarter and include an invitation
to a ``Meet the Manager'' event where they can sit and talk with a
District Manager one-on-one. As a final matter, residents always have
the ability to communicate by phone via the Lincoln Leadership Line,
which puts them in contact with Lincoln Military Housing's Senior
Executive Team.
______
QUESTIONS SUBMITTED BY MS. HAALAND
Ms. Haaland. Families from across the country have contacted my
office with heartbreaking stories of being displaced from their homes
while housing companies make much needed renovations to raise them to
livable standards. While pleased that companies are finally acting to
address these issues, this process has highlighted appalling
inconsistencies in the treatment. What is your company's policy
regarding per diem or other allowances for displaced families?
Mr. Picerne. Over the last year, our policy toward displaced
families has evolved and been standardized across our portfolio. Our
Operations Directors at each installation have the authority to make
reasonable adjustments to our policy as appropriate. Under all
circumstances, we provide residents with alternate housing, including
either a fully furnished hospitality suite on post or a hotel on or
off-post as available, as well as an allowance for food and personal
items. If provided a hospitality suite on post, then we may reimburse
the family's BAH on a prorated basis depending on how long they have
been displaced. We only ask that families move into a hotel suite if a
fully furnished on-post hospitality suite is unavailable, and if that
is necessary, will reimburse them 100% of the daily BAH rate for all
days they are displaced, as well as provide a per diem for food,
additional expenses, and for pet lodging if necessary. We expect that
this policy will continue to evolve, as we are working with the
Services and other MHPI partners to standardize our policies pursuant
to Congressional direction in the recently-passed National Defense
Authorization Act for 2020.
Ms. Haaland. Generally, displaced tenants do not have to pay rent
when they cannot live in their homes. Does your company collect the
rent/BAH from families while they are displaced?
Mr. Picerne. Over the last year, our policy toward displaced
families has evolved and been standardized across our portfolio. Our
Operations Directors at each installation have the authority to make
reasonable adjustments to our policy as appropriate. Under all
circumstances, we provide residents with alternate housing, including
either a fully furnished hospitality suite on post or a hotel on or
off-post as available, as well as an allowance for food and personal
items. If provided a hospitality suite on post, then we may reimburse
the family's BAH on a prorated basis depending on how long they have
been displaced. We only ask that families move into a hotel suite if a
fully furnished on-post hospitality suite is unavailable, and if that
is necessary, will reimburse them 100% of the daily BAH rate for all
days they are displaced, as well as a per diem for food, additional
expenses, and for pet lodging if necessary. We expect that this policy
will continue to evolve, as we are working with the Services and other
MHPI partners to standardize our policies pursuant to Congressional
direction in the recently-passed National Defense Authorization Act for
2020.
Ms. Haaland. Can you confirm today that a minimum of 5% of the
homes at each installation where your company has a contract to manage
housing is accessible to people with disabilities?
Mr. Picerne. We are in compliance with our contractual obligations
to ensure that a minimum of 5% of all homes we have built are either
fully accessible or readily adaptable for special accessibility
features.
Ms. Haaland. Families from across the country have contacted my
office with heartbreaking stories of being displaced from their homes
while housing companies make much needed renovations to raise them to
livable standards. While pleased that companies are finally acting to
address these issues, this process has highlighted appalling
inconsistencies in the treatment. What is your company's policy
regarding per diem or other allowances for displaced families?
Mr. Ehle. First and foremost, our goal is to provide safe, healthy,
and quality homes for military families. However, we recognize that
there is no such thing as maintenance-free housing and that issues will
inevitably arise that must be remedied. In these instances, we strive
to address the situation in a professional, transparent, and timely
manner, with a focus on resident safety. If the nature of the repairs
requires a resident to be out of their home during a repair for a night
or more, we will secure temporary accommodations and may provide
financial support to ensure that the resident is not paying out-of-
pocket during this time, for example, by providing gift cards for meals
or rent concessions. Recognizing that confusion has arisen as a result
of inconsistent displacement accommodations, we are collaborating with
the Services in their efforts to establish a uniform resident
displacement policy. We fully support the adoption of such a policy
across all MHPI communities to establish consistency no matter where
residents reside, and to avoid confusion and missed expectations.
Ms. Haaland. Generally, displaced tenants do not have to pay rent
when they cannot live in their homes. Does your company collect the
rent/BAH from families while they are displaced?
Mr. Ehle. The collection of BAH from families while they are
displaced depends on the particular circumstances. For example, Hunt
may continue to collect BAH when Hunt pays for alternate housing or
provides a hospitality home that requires maintenance, furnishing, and
utilities. Alternatively, if Hunt does not pay for or provide housing
to a displaced family, Hunt may suspend the collection of BAH.
Ms. Haaland. Can you confirm today that a minimum of 5% of the
homes at each installation where your company has a contract to manage
housing is accessible to people with disabilities?
Mr. Ehle. Depending on the property, the standard is not
necessarily that a minimum of 5% of all the homes at each installation
be accessible to people with disabilities. For example, the standard
may be that at least 5% of homes be accessible or readily adaptable to
be accessible to those with disabilities. In addition, the 5% standard
only applies to neighborhoods built or fully renovated after the
effective date of the Americans with Disabilities Act (``ADA''), and we
have legacy preprivatization neighborhoods in our portfolio that pre-
date the ADA. For these and other reasons, the percentage of homes at a
given property that are accessible today to those with disabilities may
vary across Hunt's portfolio.
Ms. Haaland. Families from across the country have contacted my
office with heartbreaking stories of being displaced from their homes
while housing companies make much needed renovations to raise them to
livable standards. While pleased that companies are finally acting to
address these issues, this process has highlighted appalling
inconsistencies in the treatment. What is your company's policy
regarding per diem or other allowances for displaced families?
Mr. Hickey. We have been working closely with the Army and the
other private partners to develop a formal resident displacement
policy. Once that policy is finalized, we intend to immediately apply
that policy across our entire portfolio.
Our current process for displaced families is applied consistently
across our portfolio. Residents are entitled to the following
reimbursements or benefits, depending on the length of displacement:
[GRAPHIC] [TIFF OMITTED] T1473.078
.epsLength of displacement More than one day and fewer than
fourteen days More than fourteen days Reimbursement for meals based on
a set per diem for each location Lodging costs Reimbursement of
incidentals of $5 per day Refund/waiver of rent from date of
displacement* Other reimbursements Assessed on a case-by-case basis.
If a resident repair exceeds thirty (30) days and an alternate
home(s) is offered that meets the resident's bedroom and rank eligible
requirements, but the resident refuses the alternative home(s),
continued reimbursement of BAH may cease.
Reimbursement of clothing and/or other household/personal items if
they are found to have visible mold will be assessed on a case by case
basis by the DPM and Project Director (in conjunction with any
appropriate independent third-party subject matter experts).
Based on input from an independent third party's recommendations,
the Project Company retains responsibility for the reimbursement or
cleaning/remedying, as applicable, of any contamination of personal
belongings or furnishings with visible mold which is caused by the acts
or omissions of the Project Company and/or project employees (including
as it relates to service order response/resolution, preventive
maintenance, etc.). Details and proper course of action to be
determined by the DPM and Project Director in consultation with the
independent third party.
If relocation is required in order to properly clean the
home and remedy any potential issues, the Project Company pays for the
documented and substantiated expenses exclusive of Excluded Expenses.
``Excluded Expenses'' include:
Cable, phone and internet bills at primary residence;
Purchase of clothing and other household/personal items
that exceeds level of incidental reimbursement identified above;
Accommodation at luxury hotels; and
Kenneling costs for pets (unless temporary lodging
arrangements do not allow for pets)
Ms. Haaland. Generally, displaced tenants do not have to pay rent
when they cannot live in their homes. Does your company collect the
rent/BAH from families while they are displaced?
Mr. Hickey. As noted above, if a family is displaced for more than
fourteen (14) days, the rent/BAH is refunded or waived effective as of
the date of initial displacement.
Ms. Haaland. Can you confirm today that a minimum of 5% of the
homes at each installation where your company has a contract to manage
housing is accessible to people with disabilities?
Mr. Hickey. Five (5%) of all new homes designed and constructed on
Lendlease MHPI project sites are ``ADA Adaptable.'' An ``ADA
Adaptable'' unit has all the accessible features that a fixed
accessible unit has but allows some items to be omitted or concealed
until converted so the dwelling units can look the same as others and
be better matched to the specific and unique needs or preferences of
the occupant.
Ms. Haaland. Families from across the country have contacted my
office with heartbreaking stories of being displaced from their homes
while housing companies make much needed renovations to raise them to
livable standards. While pleased that companies are finally acting to
address these issues, this process has highlighted appalling
inconsistencies in the treatment. What is your company's policy
regarding per diem or other allowances for displaced families?
[Question #17, for cross-reference.]
Mr. Taylor. In certain circumstances, a tenant may need to be
temporarily relocated where repairs or maintenance are so significant
that the rental unit is unable to be occupied during such work. This
could be due to anything from damage caused by extreme weather events
to flooding from a broken water pipe or a toilet overflow. We recognize
the importance of having a comprehensive policy that outlines clear and
effective guidelines for managing resident displacements across our
military housing portfolio. Our current policy, which was developed
with input from military leaders and representatives from military
family advocacy groups as well as to ensure compliance with applicable
state landlord-tenant laws, provides the following guidelines for
taking care of residents that are temporarily displaced from their home
due to a maintenance/repair issue:
1. The landlord will provide temporary accommodation in a fully-
furnished (including cable and internet service) `Patriot Home' at our
cost, to the extent such a unit is available. Patriot Homes are housing
units within the housing project community that are set aside
specifically for the purpose of housing residents needing temporary
accommodation. We also provide the family with a $300 weekly stipend.
2. Where a Patriot Home is not available, the landlord will provide
for accommodation in a local hotel/temporary lodging facility. If the
family has approved animals living in the home and a pet-friendly
hotel/temporary lodging facility is not available, the landlord will
pay for reasonable costs to board the animals. Families staying in a
hotel/temporary lodging facility are provided a $300 weekly stipend if
the facility contains a kitchen, and a $100 per diem if the facility
does not contain a kitchen.
3. To the extent a resident elects not to utilize temporary housing
provided by the landlord and instead opts to stay with family or
friends (or another place of their choosing), the landlord will credit
tenant's rent the daily rate for the days the tenant is unable to
occupy the rental unit. Daily rent is calculated as 1/30 of the monthly
rent value, or as otherwise stated in the lease agreement.
4. If the repairs to the home are expected to take longer than
thirty (30) days:
a) the landlord will offer the resident a permanent transfer to
a comparable home (i.e., similar number of bedrooms/bathrooms)
where such home is readily available within the housing
community; and
b) If the resident does not elect to transfer to another
available unit, or where the landlord does not have another
available unit, then the resident may elect to terminate the
lease agreement without penalty.
In addition to BBC's current Temporary Relocation Policy, we also
are continuing to work with the Branches of Service to develop uniform
displacement policies that ultimately may be applied across all
Military Housing Privatization Initiative (MHPI) projects.
Ms. Haaland. Generally, displaced tenants do not have to pay rent
when they cannot live in their homes. Does your company collect the
rent/BAH from families while they are displaced?
Mr. Taylor. Per landlord-tenant laws, landlords are required to
provide a habitable dwelling in exchange for rent and are entitled to a
reasonable timeframe to complete necessary repairs. Where the dwelling
requires repairs that are significant enough to result in displacement
of the resident, the landlord is entitled to collect rent/BAH to the
extent it continues to provide a habitable dwelling and performs the
repairs within a reasonable timeframe. As a result, BBC's Temporary
Relocation Policy, as described in response to Question #17 [above],
provides that the landlord will continue to provide the resident with a
temporary Patriot Home/lodging while the resident is temporarily
displaced from their assigned rental unit and the landlord continues to
collect rent/BAH. In addition, BBC's policy also provides compensation
to resident in the form of a monetary allotment; and where the repairs
are expected to extend beyond 30 days, the resident may be offered a
permanent relocation to another unit or the option to terminate the
lease without penalty.
Ms. Haaland. Can you confirm today that a minimum of 5% of the
homes at each installation where your company has a contract to manage
housing is accessible to people with disabilities?
Mr. Taylor. In connection with BBC's Military Housing Privatization
Initiative projects, the project owners (which, in the case of Army/
Navy projects, are joint ventures in which the Army/Navy is itself a
member or partner), were both (i) conveyed existing housing previously
owned by the government and (ii) required to construct an agreed number
of homes in accordance with the project agreement terms. In accordance
with the project agreement requirements as issued by the government, 5%
of the new construction homes were built to Uniform Federal
Accessibility Standards.
In addition, we work closely with the Services to actively support
the Exceptional Family Member Program (EFMP) and maintain a Fair
Housing Policy that requires the grant of reasonable accommodations or
modifications by residents with a related disability need.
Ms. Haaland. Families from across the country have contacted my
office with heartbreaking stories of being displaced from their homes
while housing companies make much needed renovations to raise them to
livable standards. While pleased that companies are finally acting to
address these issues, this process has highlighted appalling
inconsistencies in the treatment. What is your company's policy
regarding per diem or other allowances for displaced families?
Mr. Bliss. All Lincoln Military Housing projects provide allowances
for residents who have been displaced from their homes through no fault
of the tenant, to include covering the costs of temporary lodging in
every case, and per diem for incidentals and meals where appropriate. I
am also pleased to report that Lincoln Military Housing, in
collaboration with the other privatized military housing partners, has
been working towards a standardized displacement policy to ensure
consistency across each of our projects, and the industry, with regards
to displacement allowances. This policy will be aligned with the
requirements in the 2020 NDAA, subject to additional requirements in
state and local law, and we expect it to be rolled out industry-wide in
mid-to-late January.
Ms. Haaland. Generally, displaced tenants do not have to pay rent
when they cannot live in their homes. Does your company collect the
rent/BAH from families while they are displaced?
Mr. Bliss. Lincoln Military Housing's policy with regards to the
payment of rent by displaced residents is governed by state and local
landlord-tenant law. As a general rule, the majority of jurisdictions
in the United States allow a landlord to continue to collect rent
during periods of temporary displacement through no fault of the
tenant, though the landlord is generally required to cover the
reasonable costs of temporary lodging during that displacement. As
noted in answer 5 above, Lincoln Military Housing's policy is to cover
the costs of temporary lodging while a resident is displaced from their
home, subject to additional requirements in state and local law.
Ms. Haaland. Can you confirm today that a minimum of 5% of the
homes at each installation where your company has a contract to manage
housing is accessible to people with disabilities?
Mr. Bliss. A minimum of 5% of the homes at each installation that
Lincoln Military Housing manages are accessible to people with
disabilities, and all homes constructed by Lincoln Military Housing
meet state and federal requirements under the Americans with
Disabilities Act (ADA). Legacy neighborhoods built via military
construction (MILCON) funding prior to privatization are generally not
built to the 5% requirement, but the number of those homes do not bring
the total ratio of ADA compliant homes at each installation below 5%.
Further, Lincoln Military Housing complies with all ADA reasonable
accommodation requests as necessary for homes that were not
specifically built to meet accessible home standards.
______
QUESTIONS SUBMITTED BY MR. BROWN
Mr. Brown. You stated in your written testimony that you report a
92 percent satisfaction rating on work performed and 95 percent of work
orders completed on time.
How do you determine when work performed is ``complete'' and do the
service members have the ability to concur with that disposition?
What metrics do you use as a basis for satisfaction rating?
How do you disposition a work order when a family is PCS'd to a new
base? Is that work order logged as complete?
How do you measure satisfaction for a work order that is still open
when a family is PCS'd to a new base?
What's the average duration for a work order that isn't
accomplished in the first 24 hours?
Mr. Picerne. Our maintenance teams consider a work order to be
complete when the issue identified in the work order request has been
successfully addressed. In those limited instances where an emergency
work order has been submitted due to a health concern or potential
structural damage to the home, the emergency work order is closed once
the situation has been stabilized to eliminate the hazard, and a new
work order is opened and coded for priority response based on any
additional work necessary to fully address the resident's concerns.
Attached, please find the work order priority schedule applied in these
situations, which has been adopted in coordination with our partners in
the Army and Air Force, and previously shared with the GAO in January,
2019.
[The document referred to can be found in the Appendix on page
185.]
Following closure of the work order, each resident is provided the
opportunity to respond by completing a survey, which scores the overall
response. If a family permanently moves from a home before a work order
can be completed, then existing work orders are typically closed,
allowing for completion of this survey. At that point, a new work order
will also be entered for turnover of the unit, which involves a
comprehensive inspection, and subsequent painting, flooring, or other
activities necessary to make a home ready for a new family. The amount
of time necessary to address a work order will vary substantially
depending on the type of work and any supplies that may be required,
particularly if a third party vendor must be engaged to complete work,
if permission is required to conduct work (as is often the case in
historic homes), or if parts or fixtures are not readily in stock to
complete the work. We strive to complete all work within the timeframes
outlined in the work order priority schedule, and typically do so
consistently.
Mr. Brown. In February 2019 at a SASC hearing, you stated that
``But specifically to the family that moved to Fort Meade expecting to
have their child brought into a single-family or single-story home, it
is unacceptable. And my company will stand up and will help and support
that family and every family going forward in trying to make these
things better.'' Yet, just one month later, a service member at Fort
Meade in the Exceptional Family Member Program who required a single-
story home was pressured by Corvias to accept a two-story home, to the
detriment of the health and safety of their child.
Why was this action allowed to occur?
What actions have you taken following your testimony in February to
ensure your company took action on your statement?
Mr. Picerne. At Corvias, we take our responsibility under the
Exceptional Family Member Program (EFMP) extremely seriously. This
program provides a critical avenue for family members with exceptional
needs to enhance their quality of life by making homes readily
available, usable, and accessible to persons with disabilities. At the
same time, we can only provide homes that are available at the time a
request is made. As you may be aware, one former resident who has filed
suit against Corvias and Meade Communities has made allegations
regarding being pressured to accept a two-story home family home at
Fort Meade. We disagree with the resident's characterization of these
events, and intend to contest these allegations vigorously.
Mr. Brown. You stated in response to a question from Rep. Houlahan
that you work ``directly with the medical community on the
installation, with the garrison commander, and we try to define where
the problem really is.''
Can you please expand upon this engagement you have with the
medical community? Is this a formal or informal process? Please
explain.
Are you obtaining consent forms from service members and their
families before speaking to military medical providers about their
particular cases?
If a medical provider recommends testing or mold remediation, are
you following their guidance?
Mr. Picerne. We work closely with our Army and Air Force partners,
including installation health officials, to help them respond when
residents express a health concern that may be related to their
environment, but we do not request or share protected health
information from or with medical professionals. For instance, when a
resident reports an elevated blood lead level, we typically assist
public health officials to gain access to inspect the resident's home
and surroundings to identify potential causes, which often include
common environmental factors like imported lead-painted toys, dishes,
or other sources of lead. As an alternate example, following mold-
related home-inspections at Fort Meade, we partnered with the Kimbrough
Ambulatory Care Center to ensure that a qualified medical professional
was available during public forums scheduled for residents to ask any
questions they may have had with respect to the findings of third-party
inspection reports.
To the extent that an individual resident's medical provider has
requested specific types of testing or remediation, we have and will
take that into account to the extent practicable, pursuant to the
policies and procedures adopted in conjunction with our Service
partners.
Mr. Brown. You stated in response to a question from Rep. Houlahan
on the health of children living on base that if its determined that
the home is the house of a health issue ``we will support that child or
its medical costs.''
Are you confirming that you will financially support the treatment
of a child who become sick living in a Corvias-run home on base?
Who would determining that the child became sick from a Corvias-run
home? Would you accept that conclusion from a military doctor, a
civilian doctor, or both? What about from a mold test showing a high
level of toxic mold in the home?
Mr. Picerne. We understand and accept our responsibility to ensure
that all of the homes that we provide to our residents are fit for
occupancy. We appreciate Congress's effort to work with the Department
of Defense to develop a standardized process for evaluation of
potential medical claims from residents, and are working with our
military partners to adopt practices that ensure the best interest of
our residents, while recognizing our fiduciary obligations to our
investors and government partners.
Mr. Brown. How do you determine when work performed is ``complete''
and do the service members have the ability to concur with that
disposition?
What metrics do you use as a basis for satisfaction rating?
How do you disposition a work order when a family is PCS'd to a new
base? Is that work order logged as complete?
How do you measure satisfaction for a work order that is still open
when a family is PCS'd to a new base?
What's the average duration for a work order that isn't
accomplished in the first 24 hours?
Mr. Ehle. Hunt considers a resident-initiated work order to be
complete when all work required to address the issue is completely
finished. In the case of Emergency or Urgent work orders, the Emergency
or Urgent condition must be addressed and any follow-on work must be
completely finished for the work order to be considered complete.
We have implemented an enhanced resident survey tool run by a third
party, SatisFacts, to measure customer satisfaction at move-in, move-
out, and after work order completion. It is a very quick 5-star survey
that is automatically sent to the resident at the conclusion of each of
these events to ask the resident about their satisfaction. The resident
completes the survey, and the results go immediately to the site
management team at the resident's property. If the response yields a
score of less than 3.5 (in the SatisFacts scale, a 3 is ``Satisfied''),
the Community Director at the property is to contact that resident the
same day to ascertain where we fell short of expectations so we can
better resolve the issue and make improvements going forward. If a
resident receives a survey after work order completion and does not
believe all of the work has been done, the survey response is one means
by which the resident can communicate their disagreement.
It is not Hunt policy for a resident family's move to a new base to
impact the disposition of a work order. As noted above, Hunt considers
a resident-initiated work order to be complete when all work required
to address the issue is completely finished. The survey discussed above
is automatically sent to the resident's email address upon work order
completion, regardless of whether a resident has moved to a new base.
In the regular course of business, Hunt does not generally
calculate the average duration of work orders that are not completed in
the first 24 hours. Each property generally has its own target times,
as agreed-upon by our military partners, for work order response and
completion (e.g., 1 hour to respond and 24 hours to complete for
Emergency work orders). Hunt strives to meet those target times.
Mr. Brown. How do you determine when work performed is ``complete''
and do the service members have the ability to concur with that
disposition?
What metrics do you use as a basis for satisfaction rating?
How do you disposition a work order when a family is PCS'd to a new
base? Is that work order logged as complete?
How do you measure satisfaction for a work order that is still open
when a family is PCS'd to a new base?
What's the average duration for a work order that isn't
accomplished in the first 24 hours?
Mr. Hickey. Our process of initiating and closing work orders as
```complete''' includes the following:
A. All resident work orders are generated directly in Yardi
through a call center or via our Military Cafe portal/app to ensure
they are created real-time directly by the resident.
B. All technicians use mobile devices to track all activities
including their time, parts, notes and work status. Their time is
validated against the HRIS system, which is also electronic, to ensure
time is captured accurately.
C. The technician enters the status of a work order, including if
the work is complete. If a resident is at home during completion of the
work, the technician requests a resident signoff of the completion and
satisfaction.
D. The resident receives an email and survey request upon
completion of work order, which is system-generated after the
technician enters the work order ``complete.''
To summarize the above, Lendlease implemented the 360 Degree
Service Order touchpoints program for enhanced service order quality:
[GRAPHIC] [TIFF OMITTED] T1473.079
.epsThis process ensures residents have multiple opportunities
during the service request process to ask questions, track progress,
and sign off on service order completion and provide satisfaction
feedback. Technicians record all labor, materials, work progress and
completion directly on a mobile application, which drives these
touchpoints for residents.
Resident satisfaction with service orders is measured through both
point of service and annual satisfaction surveys. The Insite survey by
SatisFacts (a nationally recognized third-party survey firm) is
generated and delivered to the resident vie e-mail or text (at the
residents' selection) within 24 hours of service order completion. The
survey results are immediately available to maintenance and project
management. There are multiple questions on the survey that provide
analysis and trends on maintenance management.
Lendlease fared very well regarding the satisfaction ratings of its
projects. To illustrate, for the 2019 portfolio average score on a
scale of 1-5, Lendlease received:
Service Request Experience = 4.48 (Army & Marines Corps
consolidated score)
Service Request Experience Survey (Air Force, reported
separately due to the use of a different though similar survey question
set) = 4.34
The Annual CEL Resident Satisfaction surveys (from the Military
Services) also measure work order satisfaction and provide higher
response rates and broader feedback about resident satisfaction in that
area.
Additionally, we monitor internal qualitative metrics for service
order satisfaction based on indicators of excellent service including
open work order aging, repeat work orders, service order response and
completion time averages, work order exceptions, and other similar
metrics.
If there are work orders generated but not completed prior to a
family moving out of the home, those work orders are completed during
the Change of Occupancy Maintenance (COM) unless they are part of a
larger, planned project (e.g., gutter replacement, roof replacements,
etc.). We are not aware of any other instances where work previously
identified by a resident would not be completed prior to a resident
moving out of a home. Any work orders that constitute normal wear and
tear identified prior to the resident leaving would be completed on the
COM and the resident would not be charged.
Our policy is that work orders are not closed until all work is
complete.
Work completed during COM is not considered as part of the resident
satisfaction survey. Residents would have an opportunity to provide
feedback about their experience at the move out as another point of
service survey is generated based on that activity.
Our policy is that work orders are not closed until all work is
complete.
Work orders are generated when a resident calls the 24-hour
maintenance line routing them to a local dispatch or call center,
submits online via the web portal or mobile app., as well as in-person
at a maintenance office, community center or employee.
As work orders are generated, they are classified in the following
categories:
Emergency--Immediate danger to life, health or property.
Urgent--Not an emergency, but if not corrected could
become an emergency (e.g. toilet or sink(s) clogged, partial power
outage)
Routine--Failures or deficiencies that do not immediately
endanger occupants or property (e.g. screen repair)
Resident Scheduled--The resident is unable to accommodate
the offered time a technician is available to respond to a routine work
order and requests an appointment to occur at the resident's
convenience.
During the three-month period between September 1, 2019 through
November 30, 2019, the following statistics demonstrate our
responsiveness:
74,802 total service orders were completed. This includes
emergency, urgent, routine, emergency after-hours and urgent after-
hours. This does not include resident scheduled maintenance.
32.0% (23,940) of the total service orders completed took
longer than 24 hours to complete:
For these calls, the average completion time was 3.48
days.
For these calls, 20,509 (85.7%) were routine service
orders which include issues that do not immediately endanger occupants
or property (e.g. screen repair) and which typically have a three (3)
to thirty (30) day completion requirement.
Mr. Brown. How do you determine when work performed is ``complete''
and do the service members have the ability to concur with that
disposition?
What metrics do you use as a basis for satisfaction rating?
How do you disposition a work order when a family is PCS'd to a new
base? Is that work order logged as complete?
How do you measure satisfaction for a work order that is still open
when a family is PCS'd to a new base?
What's the average duration for a work order that isn't
accomplished in the first 24 hours?
Mr. Taylor. Currently, for each work order, a maintenance
technician and/or third-party contractor takes a photograph of the
before and after work performed. These photos are uploaded into our
management system, allowing both residents and our military housing
partners to access and review online via computer or mobile app. On all
emergency/urgent work orders (and a sampling of all routine work
orders), our Work Order Administrators conduct follow-up calls with
residents to confirm the work was properly completed and that they are
fully satisfied and have no further concerns. In addition, residents
are requested to `sign-off' on the work order to indicate their
satisfaction before the work order is officially deemed completed. In
situations where the resident is not satisfied, the work order remains
open and we dispatch a Maintenance Supervisor and/or Facility Manager
to review and continue to work the issue until the resident is
satisfied; and if the work is validated by our Maintenance Supervisor
and/or Facility Manager as properly completed, we engage Military
Housing Office representatives to resolve with the resident.
If the work order involves a life/health/safety issue, the repair/
remediation work performed is inspected by one of our Quality Control
Specialists to ensure that it meets all required standards. Our Quality
Control Specialists also conduct spot checks on all other completed
work orders to further ensure the work was performed properly.
When a work order is closed in our system, the resident receives an
automated, third-party survey (administered by SatisFacts Research,
LLC) that includes a series of questions related to the quality of the
work performed, level of customer service and overall resident
satisfaction with the experience. Ratings in these areas are provided
on a scale of 1 to 5, with 5 being highly satisfied. All survey results
are reported real-time to both local and regional Balfour Beatty
Communities management and the Military Housing Office. If a resident
rates our service below 3.5 (average), our management team contacts the
resident to better understand the concern and address any outstanding
issues.
Open work orders remain open until the work is properly completed,
regardless of whether the family is still in the home or has PCS'd to a
new base. In the event there are open work orders after a resident has
vacated the home, the work will be completed during the ``Change of
Occupancy'' process that occurs prior to a new resident moving in to
the home. When the work is completed, the work order is closed in our
system with a note documenting the reason there is no resident sign-
off.
Prior to a new resident signing a lease, he/she accompanies a BBC
team member to the home and jointly perform a move-in inspection. BBC
goes through a comprehensive checklist and review of the home with the
new resident to ensure the home is in good condition and ready for
occupancy. After a new resident moves in, he/she receives an automated
third-party satisfaction survey and the same follow-up process
described above for work order surveys is followed here. On many of our
sites, as an additional quality control measure, the Military Housing
Office now also performs a home inspection prior to a new resident
move-in and provides their sign-off that all outstanding work has been
completed and the home is ready for move-in.
Most of BBC's projects have defined response and completion
timeframes associated with work order requests; and these timeframes
are typically based on classification of the work order as emergency,
urgent or routine. For example, a routine work order may require
completion time of four (4) days, whereas an emergency work order may
require completion within 24 hours (barring extenuating circumstances
outside of the property manager's control). The majority of our work
orders are successfully completed during the first visit. The average
duration to complete more extensive work orders varies widely. In some
instances, we cannot complete a work order because the resident has
requested that the work be performed at a later date, the resident is
not home and has not given us permission to enter when not present, or
where the resident has given permission to enter but an unsecured pet.
In other instances, work orders may require our team to order new
equipment or parts that take time to special order or receive or
require our team to engage and schedule a licensed, third-party
contractors with a specific area of expertise. We consistently follow-
up with residents to keep them informed throughout the process and
clearly document the circumstances in our work order system. We also
provide a mobile device app to residents that allows them to track work
orders.
Mr. Brown. How do you determine when work performed is ``complete''
and do the service members have the ability to concur with that
disposition?
What metrics do you use as a basis for satisfaction rating?
How do you disposition a work order when a family is PCS'd to a new
base? Is that work order logged as complete?
How do you measure satisfaction for a work order that is still open
when a family is PCS'd to a new base?
What's the average duration for a work order that isn't
accomplished in the first 24 hours?
Mr. Bliss. Once a work order is complete, Lincoln Military Housing
will offer the resident the opportunity to sign-off on the completed
work. If the resident is not available to sign, the work order is
closed, though an immediate e-mail is sent to notify the resident that
the work was completed and request their feedback via a survey
(SatisFacts). The notice of work-order completion encourages the
resident to contact Lincoln Military Housing if they are not satisfied
with the work completed. The survey format has twelve questions to
assess the level of satisfaction. Work orders opened by residents are
generally completed within one business day. Even if the work order
remains open after a resident's Permanent Change of Station move (PCS),
Lincoln Military Housing will continue to keep the work order open
until the work is complete. When a family moves out, they receive a
satisfaction survey about their residency and the move-out process,
though it is not related to any specific work order. Lincoln Military
Housing has a multi-faceted work-order request system. Specifically,
Lincoln Military Housing's work-order request system allows tenants to
submit work orders by phone via a dedicated ``Lincoln At Your Service''
hotline, on the internet via the Lincoln Resident Portal, or via a
smart device through the Lincoln Military Housing Resident App. As a
result, the majority of work orders are completed within the first 24
hours. For those that take longer, which may be for a specialized part,
or a specific vendor or trade that may be needed, the average time to
completion is 13 days.
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