Senators Saxby Chambliss, R-Ga., and Mark Pryor, D-Ar., members of the Senate Armed Services Committee, today called on the Air Force to reimburse subcontractors in their states who have been left with thousands of dollars in unpaid bills. The Senators said the Air Force's poor decision to award multi-million dollar contracts to a questionable company has now led to stalled military housing projects and unpaid subcontractors in Arkansas, Georgia, Florida and Massachusetts.
"The Air Force should have been more proactive to fix this problem before it got to this point," said Chambliss. "After almost four years on this project and millions of dollars spent, only two houses have been built. This is unacceptable and will hinder the base's ability to meet the needs of new personnel expected to arrive in 2009. This is an Air Force project and Air Force personnel are suffering because they have yet to identify a solution."
"Families at Little Rock Air Force Base deserve safe, quality and affordable housing. Instead, the Air Force chose a rogue contractor that left behind rows of cement floors, unfinished housing and unpaid bills," Pryor said. "It's time for the Air Force to step up, take responsibility, pay their bills, and get this project back on track. None of us want our airmen and women worried about their family's living situation when they need to be focused on their mission."
In separate press events at their respective bases, Chambliss and Pryor announced they would continue to mount pressure on the Secretary of the Air Force to swiftly reimburse the subcontractors. In addition, they are working together on a legislative fix to prevent similar problems from occurring in the future. They are considering a number of options, including steps to require performance bonds on all housing privatization projects, performance incentives, a Department of Defense rating system where a parent company would receive a negative rating for unsatisfactory work in federal contracting, improved oversight to prevent unrealistically low bids that have the potential to default, and a requirement that developers resolve all outstanding claims against a project before entering a new agreement.
The Moody project in Georgia was initiated in March 2004. Carabetta, the Property Manager, created Moody Family Housing, LLC, to be the developer and project owner. 400 new homes were to be constructed and 206 homes were to be remodeled as stated by the terms in the project. To date, only two homes have been completed. The estimated cost of the project has exceeded available funding by $25 million, and the project lenders stopped funding in March 2007 to prevent all funds from being expended.
American Eagle Communities, LLC, created under the parent company Carabetta, was awarded a $127 million contract to build 468 new homes and remodel 732 homes by 2011 for the Little Rock Air Force Base. Only 25 homes were completed and occupied, and an estimated 70 concrete slabs were poured before the company stopped construction in May due to unpaid bills. As a result of the company's financial problems, at least 25 Arkansas subcontractors and suppliers have not been paid and the housing project is now stalled.