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Reuters: Balfour Beatty faked military housing repair records to win millions in incentives

Military Privatized Housing (U.S. Air Force/Released)
November 21, 2019

An investigation of a U.K.-based property company’s records alleges the company gave Oklahoma Air Force base one record they were making living-space repairs, while keeping another record that showed they were actually pocketing maintenance bonuses.

An investigative report by Reuters, in partnership with CBS News, uncovered signs of a discrepancy between the maintenance work Balfour Beatty Communities reported to Tinker Air Force Base, and there more detailed internal records. While the U.K.-based company allegedly presented a near-perfect maintenance record to the Air Force while a true record of their work found slowness to make repairs to homes dealing with asbestos, leaks and mold.

Roxanne Roellchen, who moved into one Balfour Beatty property with her active-duty husband and five children, said the company took four weeks to address their concerns about a leaking roof, as well as mold and pest control problems. While the company put them up in a hotel and then temporary base housing, Roellchen said Balfour Beatty still did not put in the requested work orders to repair the home.

Multiple Balfour Beatty employees said they took part in an effort to forge maintenance records provided to the Air Force, even as the company fell behind its home repair goals. The pattern of inconsistent maintenance records also reportedly occurred at Lackland Air Force Base in San Antonio, Texas. The correct maintenance records have not been shared with the Air Force but have been disclosed, in part, to Reuters reporters.

Stacy Nelson, an employee for Balfour Beatty from 2013 to 2016, said she went along with the record forgery out of fear for her employment. She has been diagnosed with multiple sclerosis and said she needed to keep her job and benefits. It was for those reasons she said she modified maintenance records to indicate the company met its goals.

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“You either make these numbers match so we can get the incentive fees, or you may not have a job tomorrow,” she said. “We fudged the numbers, and even now it’s not easy to say that. I hate to admit it.”

Teresa Anderson, another employee of the company, said she altered the completion dates on maintenance items. Nelson and Anderson were both reportedly fired, though not for their admitted records falsifications.

Many private companies manage military base housing and they are often paid incentive fees for meeting quarterly and annual maintenance goals. At Lackland Air Force Base, from 2009 through 2018, Balfour Beatty received up to $3 million in incentive payments.

Company emails appeared to confirm Nelson and Anderson’s allegations. In 2015, one internal report showed the company had completed 65 percent of repairs on time. At the request of a Balfour Beatty manager, those scores ended up above 95 percent, which resulted in a bonus for the company.

Five company employees at three different U.S. bases attested to the record falsification efforts, which may have unfairly helped Balfour Beatty profit millions. The company said it has started its own internal audit of the alleged forgeries as well as the Air Force bonuses paid to incentivize their maintenance performance.

John Henderson, the Air Force assistant secretary for installations, confirmed the Air Force Office of Special Investigations and the FBI are both pursuing fraud investigations at various military installations, including Tinker Air Force Base.

The Army is also pursuing an investigation of the Balfour Beatty investigations, according to Lieutenant Colonel Crystal Boring.