A little more than a year after the Army moved to privatize its lodging facilities, the transition has been largely successful, but not without some glitches. According to a July 30 report by the Government Accountability Office (GAO), the Army and the private developer who operate the facility had to "delay the start of major renovations and new construction by two years," because of "life-safety and critical system deficiencies" at the locations, according to GAO. Meanwhile, the developer of that project is performing the necessary repairs at its own expense. The contractor will use the expense as collateral to obtain the necessary financing to complete other renovations at the Army’s 10 facilities that now fall under its responsibility. But more holdups could loom, because the Army still has not "fully assessed the costs and benefits of performing these repairs," according to GAO. Other issues center around the lack of a good transition plan for the facilities, and the climate of economic downturn that has made it difficult for contractors to obtain credit necessary to maintain cash flow. The other services opted against privatizing their lodging facilities with the Army last year, fearing the possibility of unwanted rate hikes.
