The US Air Force (USAF) has suspended work-order incentive payments to Balfour Beatty across the company’s entire US military housing estate amid allegations that maintenance records had been falsified to make it appear that jobs were getting done faster than they were.
The decision affects 21 bases where the company’s unit, Balfour Beatty Communities, provides and maintains housing for military families, a business line worth $33m a year in net income. Incentive payments are a small subset of that revenue.
A Balfour Beatty spokesperson told GCR the company recognises allegations at two bases, and that the company’s US military clients "should see that we’re taking the allegations very seriously".
Balfour Beatty has hired global law firm Hunton Andrews Kurth LLC to work with authorities investigating the matter.
Last month, a Reuters-CBS investigation claimed to uncover double record-keeping at Tinker USAF base in Oklahoma, which disguised true work performance. USAF has been withholding incentive payments at Tinker since an earlier Reuters investigation.Â
But yesterday Reuters reported that USAF had suspended incentive payments to all of Balfour Beatty’s 21 bases after allegations of impropriety emerged at another base, Mountain Home Air Force Base in Idaho.Â
The Balfour Beatty spokesperson said the company had been notified that one employee at Mountain Home "may not have followed proper procedures for a maintenance work order", adding: "As soon as we were made aware of this matter, the employee was suspended pending investigation."
According to Reuters, the Air Force Office of Special Investigations and the Federal Bureau of Investigation (FBI) are investigating fraud allegations at three Balfour Beatty bases, Tinker in Oklahoma, Fairchild in Washington and Travis in California. Mountain Home has now been referred to the Office of Special Investigations, said Reuters.
The spokesperson said Balfour Beatty recognised two allegations, at Mountain Home and Tinker, noting that Tinker is part of the company’s AMC West group of bases, which includes Fairchild and Travis.
In a statement to GCR, Balfour Beatty said: "The allegations in relation to work orders at Tinker Air Force Base and Mountain Home Air Force Base are being taken seriously and are in the process of being investigated. We are cooperating fully with the US Air Force and relevant authorities on these matters.
"Balfour Beatty Communities has been notified that the Air Force will withhold property management incentive fees across its Air Force portfolio pending this investigation.
"The allegations made do not reflect the culture or the work ethic of over 1,200 employees across Balfour Beatty Communities who are dedicated to maintaining the highest standards of conduct and service at all the military facilities for which we are proud to be responsible."
Image: Balfour Beatty Communities built 837 new homes for its AMC West Military Housing Privatisation project (Balfour Beatty Communities)