Better inspection oversight is needed as the Army oversees a massive effort by a private housing company to renovate, demolish or build thousands of homes on six posts by 2027, a report from the Government Accountability Office says. 

Part of the Army’s ongoing efforts to improve on-post housing, Lendlease, a private housing company, is expected to “renovate more than 12,000 existing homes, build over 1,200 new homes and demolish over 1,000 homes” across six Army installations by 2027, the report says. The effort will cost about $1.1 billion, the report says. However, three of the installations have already “ encountered some construction delays due in part to new home design changes,” according to the report. 

The congressional watchdog agency interviewed Army officials and housing officials and analyzed performance data from April 2022 to July 2023 for its report.

Under the Military Housing Privatization Initiative, which Congress enacted in 1996, the Army and the other services can have long-term partnerships with private housing companies to support privatized housing projects on installations. As of May, six companies manage 34 housing projects on 43 Army installations, the report says, and more than 86,000 homes, or 99% of the Army’s U.S.-based family housing inventory, are privatized through the Army Residential Communities Initiative.

In the case of the Lendlease project, though the Army receives construction progress reports, they lack detail and are not shared consistently, the GAO report says. “We found that these reports lack sufficient inspection detail, as required by the integrated development plan,” the report says. “We also found … that Lendlease has not consistently provided construction reports to the Army housing offices at the garrisons.”  

While U.S. Army Garrison-Hawaii and Fort Campbell, Kentucky, receive monthly construction reports, officials at Fort Drum, New York, Fort Knox, Kentucky, Fort Cavazos, Texas, and Fort Wainwright, Alaska, did not consistently receive them, according to the report. 

Overall, there are benefits to the integrated development plan with Lendlease, the report says. “By consolidating privatized housing project reinvestment accounts, the Army and Lendlease have secured private financing and accelerated housing improvements that would otherwise take multiple years for individual privatized housing projects to fund,” GAO says. 

The report recommends including an updated estimate of future funds “when submitting development plans for Army review and approval” and standardizing construction reports to improve oversight. 

Standardized construction reports “would enable Army housing offices to monitor construction for appropriate quality and safety standards and ensure the privatized housing projects’ compliance with the integrated development plan quality assurance terms,” the report says. 

Read the report here.