Air Force Withholds $4.3M from Military Housing Operator After Reports of Falsified Logs

A maintenance worker for Balfour Beatty Housing power washes the driveway of a home at Marsh Cove, a military residential community at Naval Station Mayport. (U.S. Navy photo by Mass Communication Specialist 3rd Nathan T. Beard)
A maintenance worker for Balfour Beatty Housing power washes the driveway of a home at Marsh Cove, a military residential community at Naval Station Mayport. (U.S. Navy photo by Mass Communication Specialist 3rd Nathan T. Beard)

WASHINGTON -- The Air Force has paused incentive fee payments to a company that runs its on-base housing at 21 installations amid allegations Balfour Beatty Communities LLC employees falsified maintenance work logs delivered to the service.

John Henderson, the assistant secretary of the Air Force, said in a statement that he has ordered the fees -- about $4.3 million -- withheld until Balfour Beatty conducts an independent review of the maintenance that it has completed at Air Force installations and the work orders documenting those actions. He gave the company 90 days to complete that assessment.

The Air Force initially suspended maintenance incentive payments last month to Balfour Beatty at three installations after allegations surfaced an employee had provided service officials falsified maintenance logs at Tinker Air Force Base in Oklahoma. Those logs showed maintenance work completed in the time allotted for the company to receive the incentive pay, while other logs held by Balfour Beatty showed the work took longer to complete, according to Reuters and CBS News, who first reported the falsified logs in a joint report June 18. They reported some military family members living in those housing locations were exposed to sewage spills, vermin and mold outbreaks.

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It marked the latest in a laundry list of allegations of abhorrent conditions in privatized on-base U.S. military housing across the globe that has garnered the ire of Congress and top Pentagon officials in recent months.

On Monday, the Air Force said a new allegation had been brought to its attention this month of similar falsified maintenance records at Mountain Home Air Force Base in Idaho.

"The Air Force takes these allegations very seriously and is taking immediate action to ensure housing management controls are in place at Mountain Home and other locations managed by" Balfour Beatty, Henderson, the service's installation management chief, said in a statement. "In addition, the Air Force has communicated the gravity of the situation to [Balfour Beatty] leadership and notified the Air Force Office of Special Investigations."

A spokesperson for Balfour Beatty said Tuesday that the company had suspended an employee at Mountain Home AFB who might have improperly filed maintenance work orders amid an investigation. The spokesperson said the company is also probing allegations of wrongdoing at Tinker AFB.

"We are cooperating fully with the U.S. Air Force and relevant authorities on these matters," the company said in a statement. "The allegations made do not reflect the culture or the work ethic of over 1,200 employees across Balfour Beatty Communities who are dedicated to maintaining the highest standards of conduct and service at all the military facilities for which we are proud to be responsible."

Balfour Beatty oversees some 15,500 homes at Air Force installations. The company is responsible for another 18,900 homes on Army posts and 8,600 Navy homes.

Officials with those services declined to comment specifically on the allegations raised at Air Force installations, but they said Tuesday that reviews would be conducted on maintenance logs.

In a joint statement issued late Monday, Sens. Jim Inhofe, R-Oklahoma, and Jack Reed, D-Rhode Island, blasted the new allegations against Balfour Beatty and pledged further crackdowns from Capitol Hill on military housing landlords if conditions do not quickly improve. Inhofe is the chairman of the Senate Armed Services Committee, and Reed is the committee's ranking Democrat.

"Balfour Beatty's allegedly widespread use of fraudulent work order practices is unacceptable, period," Inhofe said in the statement. "... If these allegations are substantiated, my committee will do everything within its power to ensure any wrong-doers are punished to the fullest extent of the law."

Reed applauded the Air Force's decision to withhold funds from Balfour Beatty.

"It appears that military families were getting short-changed so that some of these managers could pocket bonuses. If that is the case, they need to be held accountable and taxpayer money should be clawed back," Reed said. "...These landlords need to get the message that we won't tolerate substandard treatment for our troops and their families."

The Pentagon in recent months has said it has addressed major problems at tens of thousands of privatized, on-base homes after issues including mold, pest infestations, shoddy workmanship and unresponsive maintenance officials surfaced last year at installations around the world.

Top service leaders have worked to forge better relationships with landlord companies and to establish new guidelines meant to empower the tenants of military housing to hold those companies accountable when they do not provide adequate living conditions.

Lawmakers, meanwhile, have heard extensively from military leadership, on-base housing companies and from tenants about the issues and plans to address them.

The military for most of its history ran its own on-base housing. But in 1996, the Pentagon and Congress agreed to move its housing into the hands of private companies to own, maintain and run. That effort, the result of the Military Housing Privatization Initiative, was meant to address squalid living conditions in military housing raised in a Defense Department internal report.

Some lawmakers in Congress in recent months have called for the military to take back ownership of on-post housing in hopes that commanders would better care for their troops and families.

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