by Robin Kemp

U.S. Senator Rev. Raphael Warnock has sent the Department of Defense a letter asking how it will hold a housing contractor accountable after the company paid a $65 million settlement over substandard housing at 55 military bases.

Malvern, PA-based Balfour Beatty Communities (BBC), LLC provides housing for more than 18,900 Army soldiers, 15,500 Air Force airmen, and 8,600 Navy sailors and their dependents. In December, BBC pleaded guilty to one criminal count of major fraud against the United States after it faked maintenance and resident satisfaction records and ignored maintenance requests from servicemembers.

The company was fined more than $33.6 million and must pay over $31.8 million in restitution to the military, serve three years’ probation, and work with an engage an independent compliance monitor for a period of three years, according to the Justice Department. BBC also agreed to a False Claims Act civil settlement of $35.2 million, which will “be credited against the amounts owed under BBC’s criminal plea.”

Georgia bases potentially affected include Fort Gordon, Fort Benning, Fort Stewart-Hunter Army Airfield, Moody Air Force Base, and Kings Bay Naval Station.

BBC military housing developments at Georgia bases include:

In 2020, the Defense Department committed to a Military Housing Bill of Rights after Reuters conducted a two-year investigation of squalid conditions in privatized housing. That report won the 2019 Hillman Prize for Web Journalism.

The letter, cosigned by 16 other senators, is asking the Defense Department how it plans to hold the company, which has a multi-decade contract, responsible going forward:

Dear Secretary Austin,

We write regarding current Department of Defense (DoD) oversight of private housing contractors in the wake of the recent Department of Justice (DoJ) settlement with Balfour Beatty Communities LLC.

On December 22, 2021, the Department of Justice announced that the housing contractor Balfour Beatty Communities LLC (BBC) pleaded guilty to major fraud against the U.S. government and agreed to pay $65 million in fines and restitution. Following national publicity of pervasive concerns with privatized on-post military housing in 2018, the Department of Defense took steps to hold housing contractors to account for their failures to maintain adequate housing conditions for military families and to communicate with servicemembers and their families their rights. Congress also endeavored to improve military housing with the “Ensuring Safe Housing for our Military Act” as part of the Fiscal Year 2020 Defense Authorization Act. Despite these efforts, concerns persist, and bases and families continue to file lawsuits against the companies, including BBC, for many issues, including for repair delays, toxic mold, pests, unsealed windows and doors, and gas leaks.  We cannot expect our nation’s military families to suffer these conditions.    

In the DoJ release concerning the BBC plea and settlement, Deputy Attorney General Lisa O. Monaco said, “Instead of promptly repairing housing for U.S. servicemembers as required, BBC lied about the repairs to pocket millions of dollars in performance bonuses. This pervasive fraud was a consequence of BBC’s broken corporate culture, which valued profit over the welfare of servicemembers.” According to the release, for over six years, BBC employees falsified information to allow BBC to claim incentive fees for performance objectives primarily related to housing upkeep and resident satisfaction that had, in fact, not been met. These actions resulted in maintenance delays and an inability of the military services to accurately conduct oversight of the company and correct performance.

Given that BBC continues to manage housing communities at 55 installations across the nation and has several decades left on their long-term contracts, we ask the following questions about how this settlement will affect the management of these properties and how DoD plans to ensure quality housing for military families moving forward.

  • How will the December 2021 Department of Justice settlement with BBC affect the company’s current contracts with the Department of Defense?
  • According to the Department of Justice release, the settlement with BBC includes three years of probation and engagement with an independent compliance monitor. What does this mean for BBC’s current contracts at 55 installations? 
  • What mechanisms are in place to ensure similar fraudulent behavior will not happen again?
  • Does the Department of Defense plan to renegotiate or alter any of the existing terms of long-term contracts with private housing contractors to provide for more immediate and comprehensive oversight?
  • How does the Department of Defense plan to instill trust in military families that BBC and others will meet their housing needs?
  • What actions will the Department take to ensure BBC and other privatized housing companies are providing a sufficient quantity of quality housing for military families at bases where there is a serious need for additional housing? Has the Department considered increasing competition by allowing multiple companies to operate on bases, or by other means, to improve the availability and quality of housing for military families?

Thank you for your urgent attention to this critical issue. Our nation’s servicemembers and military families deserve to live in quality housing and trust that the U.S. government and private contractors will be responsive, respectful, and committed to meeting their needs.

The letter was signed by Warnock, Sen. Jon Ossoff, and U.S. Sens. Mark Warner (D-VA), Tammy Duckworth (D-IL), John Hickenlooper (D-CO), Kyrsten Sinema (D-AZ), Michael Bennet (D-CO), Jack Reed (D-RI), Mark Kelly (D-AZ), Ben Ray Luján (D-NM), Dianne Feinstein (D-CA), Chris Van Hollen (D-MD), Kirsten Gillibrand (D-NY), Martin Heinrich (D-NM), Patty Murray (D-WA), Bernard Sanders (I-VT), and Sherrod Brown (D-OH)

Read more about the Balfour Beatty settlement and base housing conditions at Task and Purpose

For more on military families who were afraid to report substandard living conditions, check out this report by NPR.

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