Defense Infrastructure: Army Has a Process to Manage Litigation Costs for the Military Housing Privatization Initiative Page: 4 of 17
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G AO U.S. GOVERNMENT ACCOUNTABILITY OFFICE
441 G St. N.W.
Washington, DC 20548
April 3, 2014
Congressional Committees
The Department of the Army uses private-sector partners to help manage
military family housing at 44 installations in the United States, including
management of accounts paying for construction, repairs, renovations,
and any litigation costs. In 1996, Congress enacted the Military Housing
Privatization Initiative (MHPI),1 which provided the Department of Defense
(DOD) with a variety of authorities that may be used to obtain private-
sector financing and management to repair, renovate, construct, and
operate military family housing. The Army's goal for the MHPI is to
significantly improve the quality of housing offered to military members
and their families so the Army can continue to attract and retain military
personnel. Section 2803 of the National Defense Authorization Act for
Fiscal Year 2013 was intended to strengthen the oversight of the MHPI by
implementing a series of measures for financial integrity and
accountability, and requires the Secretary of Defense to submit expanded
reports to Congress on expenditures and receipts related to the MHPI.
Furthermore, section 2806 of the National Defense Authorization Act for
Fiscal Year 2014 added a requirement that these expanded reports
specifically include any unique variances associated with litigation costs.
The Senate report accompanying a proposed version of the National
Defense Authorization Act for Fiscal Year 20142 mandated GAO to
examine the Army's litigation costs related to the MHPI, specifically any
litigation costs not accounted for during the MHPI's annual budget
process.3 In this report, we (1) examine the extent to which the Army has
implemented its process to manage funds for litigation not accounted for
during the MHPI projects annual budget process, and (2) identify any
effects that the litigation and audit costs have had on managing the MHPI
projects.
1National Defense Authorization Act for Fiscal Year 1996, Pub. L. No. 104-106, 2801-
2841 (1996), codified as amended at 10 U.S.C. 2871-2885.
2S. Rep. No. 113-44, at 223-224 (2013).
3Army officials interpret this to mean any litigation costs that exceed the lesser of 5 to 10
percent of the operating budget for an MHPI project or $250,000 over budget.GAO-14-327 Defense Infrastructure
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United States. Government Accountability Office. Defense Infrastructure: Army Has a Process to Manage Litigation Costs for the Military Housing Privatization Initiative, report, April 3, 2014; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc301854/m1/4/: accessed April 25, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.