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Pryor, Chambliss Introduce Legislation to Enhance Oversight of Military Housing Privatization Process

Press Release

Location: Washington, DC

U.S Senators Mark Pryor, D-Arkansas, and Saxby Chambliss, R-Georgia, both members of the Senate Armed Services Committee, today introduced legislation to enhance oversight of military housing privatization projects. The legislation is also cosponsored by U.S. Senator Blanche Lincoln, D-Arkansas.

"I look forward to hearing from the Air Force and Department of Defense regarding how they will change their oversight and management for these projects," said Chambliss. "I believe that this process can work, but in certain cases it didn't work, and we need assurances that it will not happen again. The Air Force is the pro-active agent in this process and needs to ensure that the proper oversight and management procedures are in place and adhered to."

"In Little Rock, we have rows of cement floors, unfinished housing and unpaid bills to subcontractors when we should have brand new, affordable housing in place for our Air Force families," Pryor said. "Our bill helps the Pentagon establish better oversight and accountability procedures before, during and after doling out millions of dollars in taxpayer money."

Specifically, the bill, titled "The Military Housing Privatization Initiative Oversight and Accountability Act of 2007":

* Mandates that the Department of Defense (DoD) establish and adhere to a robust, effective oversight plan to successfully manage and maintain project performance and schedule.
* Ensures more effective oversight of funding and that any payments are consistent with the amount of work performed on a project
* Requires a more vigorous process in vetting project bidders and developers before selecting awardees and approving transactions.
* Mandates increased communication between bondholders and DoD to ensure that the bondholders act more rapidly when project performance is inadequate.
* Requires DoD to ensure bidders' guaranteed maximum price proposals are reasonable.
* Requires a higher level of bonding to protect the rights of subcontractors and ensure they can re-coup expenses in the event of project default.
* Ensures that developers or project owners that create LLC's to execute specific projects receive unsatisfactory performance ratings if the LLC itself fails to perform according to standards.
* Requires DoD to certify that project owners or developers who are awarded projects have the construction experience commensurate with executing the project
* For project owners or developers awarded a project who have previously declared bankruptcy, requires DoD to specify the extent to which issues related to the bankruptcy impact their ability to execute the project in question.

Last week Pryor and Chambliss led a bipartisan group of senators in sending a letter to Secretary of the Air Force Michael Wynne criticizing the Air Force's oversight of housing privatization projects in Arkansas, Georgia, Florida, and Massachusetts and urged the Air Force to explain how they plan to quickly restore the current failing projects as well as how they will change their privatized housing oversight and management processes. The letter was also signed by U.S. Senators Blanche Lincoln, D-Arkansas, Johnny Isakson, R-Georgia, Bill Nelson, D-Florida, Mel Martinez, R-Florida, Edward Kennedy, D-Massachusetts and John Kerry, D-Massachusetts, and is in response to failing privatized housing projects at Little Rock, Moody, Patrick, and Hanscom Air Force Bases in the lawmakers' home states.

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