§2885 Oversight and Accountability for Privatization Projects

Summary

Each military department secretary must make rules to watch over and manage privatized military housing while units are being built or fixed up. The rules must make the installation asset manager visit the site every month and send progress reports every three months to the assistant secretary for installations and environment. Project managers, owners, developers, contractors, bondholder reps, and consultants must meet regularly to check progress, schedules, performance, and lease agreements. If new construction is 90 days or more behind or is clearly failing contract milestones, the assistant secretary must send a notice of deficiency to the Defense installations official, the department secretary, the managing member, and the trustee. Within 15 days the secretary must give the owner or contractor a summary of the problems. If they do not make progress within 60 days, the secretary must notify the congressional defense committees electronically and recommend fixes. The rules must also require that chosen owners, developers, or contractors have the right construction experience and have payment and performance bonds or similar instruments for each phase equal to at least 50 percent of that phase’s value before work starts. If a project defaults, the assistant secretary must report to Congress every 90 days on efforts to pick a new manager. The department must keep records of all deficiency notices and related entities and use those records when judging bidders. After construction finishes, the rules must check the project’s financial health (debt-coverage ratio and occupancy) and backlog of repairs. If debt coverage drops below 1.0 or occupancy stays under 75 percent for more than one year, the secretary must require a plan to fix the financial risk.