The Army has launched an investigation into the actions of Balfour Beatty Communities, the privatized housing company at Fort Gordon, Georgia, the Army’s top installation official told lawmakers Thursday.
“I take very seriously any report of substandard conditions that compromise the life, health and safety of soldiers and families,” said Rachel Jacobson, assistant secretary of the Army for installations, energy and environment.
But Jacobson is digging deeper than Fort Gordon, looking at what authorities the Army has to take enforcement actions against privatized housing companies — a question raised by military families and lawmakers alike.
“When a privatized housing provider fails to meet its performance obligations, the Army will be aggressive in using all tools available to hold the provider accountable,” she said.
Her action was prompted by the April 26 release of a Senate report citing mismanagement by Balfour Beatty, and continued problems for military families. Jacobson said she notified Balfour Beatty the day after the report was released that she had directed an immediate investigation at Fort Gordon. Those actions came three weeks after she was sworn in to her new job.
The Senate report’s findings “are very disturbing,” she told lawmakers during Thursday’s hearing before the House Appropriations Committee’s subcommittee on military construction, veterans affairs and related agencies.
Officials are also suspending any requests from Balfour Beatty for incentive fees, she said, and are performing an audit of Balfour Beatty’s property management records at Fort Gordon.
In a statement provided to Military Times, Balfour Beatty Communities officials said, “we are working diligently to respond to the issues raised in the Army’s letter and will provide detailed answers on their questions.”
The eight-month probe by the Senate centered on Balfour Beatty communities at Fort Gordon and Sheppard Air Force Base, in Texas. But the company operates military housing at 55 Army, Navy and Air Force installations in 26 states, encompassing about 43,000 homes and 150,000 residents.
The report alleged that many of the same housing problems brought to light more than three years ago and addressed with congressional reforms in 2019 continue to plague military family housing managed by Balfour Beatty.
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At a Senate hearing April 26, a housing advocate called for the removal of Balfour Beatty from privatized housing. Two service members testified about the mold, their families’ health problems, and their difficulties in getting the company to fix those issues.
Lawmakers have questioned why Balfour Beatty should be trusted to provide housing for military families after a Department of Justice fraud investigation led to a December guilty plea by Balfour Beatty, $65 million in fines and penalties, and three years of probation. A Balfour Beatty official told senators in that April 26 hearing that the company has taken corrective action, that there is no systemic failure and that the company should remain in a position of trust.
Jacobson said she has asked the Army general counsel to provide her with a legal opinion outlining all the enforcement options available under the law.
“Included in that analysis will be an assessment of when we can amend contracts with privatized housing providers to give us additional leverage as necessary,” Jacobson said. If the assessment concludes that officials need more authority by law, they will work with Congress toward that goal, she added.
DoD and service officials have implemented oversight reforms as required by Congress. Officials perform more inspections, meet more frequently with company CEOs, and tenants have more rights and a voice under the tenant bill of rights.
“But we have to do more, and we certainly have to keep ensuring that the privatized housing companies remain accountable,” Jacobson said. “And so for this reason, I want to understand my authorities better.”
The housing privatization initiative began in the 1990s as a result of the widespread deterioration of family housing, which had suffered from years of maintenance backlogs.
Before housing privatization, housing was owned and maintained by the service branches, and the bulk of housing allowances for troops living on the installation went back to the services for the operation and maintenance of government housing. But the services had to take money from housing operation and maintenance accounts for other priorities, leading to the deterioration.
Karen has covered military families, quality of life and consumer issues for Military Times for more than 30 years, and is co-author of a chapter on media coverage of military families in the book "A Battle Plan for Supporting Military Families." She previously worked for newspapers in Guam, Norfolk, Jacksonville, Fla., and Athens, Ga.
