MILITARY HOUSING PRIVATIZATION INITIATIVE: A GUIDANCE DOCUMENT

FOR WADING THROUGH THE LEGAL MORASS

# C[aptain]{.smallcaps} S[tacie]{.smallcaps} A. [Remy]{.smallcaps} V[est\*]{.smallcaps}

> "The air-conditioning and heating vents are completely clogged. The
> only air or heat \[they\] get is from a narrow opening in a window
> frame between the kitchen and the dining room. To keep cool during the
> summer, they sleep on a fold-out futon downstairs in the family room.
> \[Trish\] has given up trying to scrub away the mold in her
> bathrooms....In their kitchen, the doors to the cupboards have been
> painted over so many times they no longer shut. They've given up
> trying to open a patio door in the kitchen because it's so clogged
> with paint."[^1]

## I. Introduction

### A. How to House the Families?

This news article describing the family housing conditions at Fort
Meade, Maryland, typifies the problem with much of the military family
housing across the Services. The problem is significant with nearly
two-thirds of the Department of Defense's (DoD) housing inventory
needing repair or complete rehabilitation.[^2] The severity of the
problem motivated the DoD to seek new ways to remedy the problem of old
and dilapidated housing. In 1996, Congress stepped in and enacted the
Military Housing Privatization Initiative (MHPI) as part of the National
Defense Authorization Act for Fiscal Year 1996.[^3] The MHPI gave the
DoD a number of special authorities aimed at eliminating its aging,
dilapidated and unsafe family housing.[^4]

The DoD claimed that the new housing privatization authorities would
allow it to repair, replace and rehabilitate over 200,000 inadequate
family housing units by fiscal year 2006, three to four times faster
than with traditional methods.[^5] In 1996, DoD projected it would award
eight to ten MHPI projects for 2,000 housing units within a year of the
authority being passed.[^6]

Nearly six years after MHPI was passed, DoD has discovered that
providing housing under MHPI is not as fast as it anticipated. As of
March 2002, the military services have awarded only fourteen housing
projects, with thirty more in various stages of solicitation.[^7] The
DoD claims implementation of the MHPI program has been slower than
anticipated because it is a new way of doing business for the military
and the private sector, with a significant learning curve.[^8]

#### B. Policy Promulgation is Needed

The MHPI has left a wake of new and unique issues in its path for policy
makers, commanders, and Judge Advocates at all levels to resolve. These
issues arise in both the contract formation and contract administration
stages. Housing privatization impacts many facets of installation
operations, and the resulting issues cross legal functional areas
involving contract and fiscal law, installation control and criminal
jurisdiction, ethics and environmental law. Only a few installations
have MHPI projects in the occupancy phase, but based on their
experience, MHPI changes the traditional way installations do business.
There is little formal guidance from DoD or the Service Secretaries, so
each installation is resolving issues that arise on an *ad hoc* basis.
The Services and DoD have failed thus far to formally capture and
disseminate the information or lessons learned from installations with
privatized housing.[^9] Consequently, installation attorneys across the
Services, and even within Services at different installations, are
"re-inventing the wheel" each time an issue arises. Complicating matters
further, installations are using different legal and contractual
structures that may affect the resolution of any given issue.

This article will attempt to reduce the information void surrounding
MHPI projects by exposing key legal issues and providing some guidance
for those working MHPI issues in the field. First, the military family
housing problem, the new legislation, and MHPI projects completed to
date will be addressed to provide the backdrop for later discussion of
MHPI legal issues.[^10] Second, the article will identify issues arising
out of the MHPI process at the contract formation stage. It will focus
on legal issues regarding the applicability of traditional procurement
policies, procedures and other laws, such as labor and contract laws, to
MHPI projects.[^11] Third, the article will examine issues arising
during contract performance.[^12] In the area of installation control,
this paper will examine how MHPI affects the installation commander's
ability to authorize searches and bar individuals from the
installation.[^13] Next is a discussion of the fiscal law questions
installation attorneys are fielding regarding the use of appropriated
funds on MHPI projects.[^14] This article will then examine several
ethics issues related to MHPI projects.[^15] Finally, it will briefly
address the applicability of the National Historical Preservation Act,
an environmental issue that has impacted a MHPI project and has the
potential to impact others.[^16] Overall, this article exposes a lack of
guidance for the field, demonstrating an obvious need for the Services
to develop a formal program for gathering and disseminating information,
providing guidance and setting policies.

## II. Background

#### A. How We Have Housed Our Families \-- Traditional Military Family Housing

The DoD owns, operates, and maintains an inventory of over 300,000
family housing units.[^17] Approximately one-third of all military
families live in these Government-owned or Government-leased units.[^18]
Unfortunately, the conditions at Fort Meade, Maryland, described in the
opening quote are typical of DoD's aging family housing on military
installations across the country. The problem is twofold: dilapidated
housing on the installations and insufficient affordable housing for
service members off the installation.[^19] Nearly two-thirds of DoD
housing units require renovation or replacement.[^20] The DoD estimates
it will cost approximately \$20 billion over thirty to forty years to
complete the work using traditional military construction dollars.[^21]
The military Services recognize that the housing situation has a
significant impact on the quality of life and retention of active-duty
service members.[^22]

Resolving this issue is more complex than simply moving service members
off the installation into private sector housing.[^23] Although all
Services prefer to rely on the private sector for housing, many young
airmen, soldiers, sailors and marines, cannot afford suitable private
sector housing.[^24] It is financially impossible for some young service
members to afford civilian housing offering them a decent standard of
living, and dilapidated military housing is their alternative.[^25] This
contributes to the decision by many service members to leave the
military to seek a better quality of life in the civilian sector.[^26]

The deterioration of military housing did not happen overnight.
Shrinking budgets and the increasingly rigid procurement processes
together have made major repair, renovation and replacement of houses
virtually impossible.[^27] Although defense budgets have increased in
recent years, the scope of the problem cannot be resolved using
traditional military construction funding and procurement methods.[^28]
Traditional methods of replacing and repairing military family housing
are expensive, slow and cumbersome.[^29]

The standard method of funding the repair and replacement of military
family housing is through military construction dollars.[^30] The
Government owns houses built with military construction dollars, and is
responsible for their operation and maintenance.[^31] Since 1989,
declines in defense budgets have impaired the ability of the Services to
make needed repairs to deteriorating military housing.[^32]

The costs to repair, replace, operate and maintain military family
housing are significant. In fiscal year 1997 alone, DoD spent \$3
billion to operate and maintain Government-owned and Government-leased
housing.[^33] Congress authorized an additional \$976 million that same
year to construct and renovate family housing units.[^34] Although a
significant amount of money, it is woefully inadequate considering that
it costs the Government an estimated \$123,550 to construct one new
housing unit using military construction dollars.[^35] Renovation of
each existing unit costs the Government approximately \$65,700.[^36]
With over 300,000 family housing units in the DoD inventory, it is clear
that traditional military construction dollars alone will not solve
DoD's housing problem at anything faster than a snail's pace.

Traditional methods for acquiring family housing, as mentioned, are slow
and cumbersome. Depending on the size of the project, it can take four
or more years from conception to occupancy of units.[^37] Government
procurement processes require significant amounts of time to design the
project, solicit potential contractors, negotiate, award the contract
and construct the houses.[^38]

Until recently, rigid statutory limitations also prescribed the type and
quality of military family housing units provided to service members.
For example, a member's pay grade controlled the number of bedrooms and
square footage authorized.[^39] Too, the individual Services have been
free to add additional limitations, requirements and constraints on the
construction or renovation of military family housing.[^40]

As a result of this highly regulated system, many contractors refuse to
compete for contracts to build or renovate family housing.[^41] Those
that do compete often raise their prices to cover the higher costs
associated with the Government procurement process and the statutory and
regulatory requirements applicable to military family housing
construction.[^42] By 1995, it was clear that the military services
needed new ways of doing business to reduce the cost to the Government
and the time involved in acquiring acceptable housing for service
members.

#### B. The Military Housing Privatization Initiative -- Slow Beginnings In Different Directions

By means of the National Defense Authorization Act for Fiscal Year 1996,
Congress reacted to DoD's housing problem by enacting the MHPI.[^43] In
order to salvage military family housing, Congress provided DoD a
variety of temporary authorities[^44] to obtain private sector
financing, expertise and management to repair, renovate, and construct
military family housing.[^45] In hearings on the legislation, DoD hailed
it as a virtual panacea, providing a faster and cheaper method to obtain
modern, affordable military family housing.[^46] The MHPI authorizes
direct loans and loan guarantees,[^47] rental occupancy guarantees,[^48]
conveyance or lease of existing properties and facilities,[^49]
differential payments to supplement service members' housing
allowances,[^50] and investments such as limited partnerships and
stock/bond ownership.[^51] These authorities provide flexibility in
structuring agreements with private developers to provide acceptable
housing for service members. They enable the Services to draw upon
private sector investment capital and housing construction
expertise.[^52] By using available Government assets, DoD seeks to
entice the private sector to use its capital to invest in construction
or renovation of military housing.[^53] The Government can reduce the
initial cost of construction, repair and renovation using MHPI
authorities.[^54]

In addition, the legislation exempts MHPI projects from many of the
statutory and regulatory limitations applicable to military construction
projects.[^55] The MHPI houses must simply conform to similar housing
units in the local community, allowing DoD to use commercial
specifications, standards and construction practices rather than the
traditional rigid requirements.[^56] The hope is that this flexibility
will streamline the process making houses available faster than under
traditional methods.

The flexibility of MHPI has resulted in housing privatization projects
with a variety of unique structures using one or a combination of
authorities under the statute. The projects awarded so far demonstrate
the range of possibilities. The MHPI project at Lackland Air Force Base
(AFB), Texas, was awarded in August, 1998.[^57] The project provided for
420 new housing units on the base by replacing 272 existing units and
adding 148 new units.[^58] The Government leased the land to the
developer for a nominal rent, made a direct loan to the developer for
\$10.6 million, and provided a guarantee for a private sector loan
against base closure, downsizing and deployment.[^59] The developer
owns, operates and maintains the units for the fifty-year term of the
lease.[^60] Eligible service members referred to the developer by the
Government rent directly from the developer.[^61]

The Army's first MHPI project was at Fort Carson, Colorado, an
installation in desperate need of housing rehabilitation, repair and new
construction. In September 1999, the Army awarded the Fort Carson
project for construction of 820 new units and renovation of 1,823
existing housing units, all situated on the installation.[^62] Fort
Carson executed an outright conveyance of the 1,823 existing units,
signed a fifty-year lease of the land to the developer, and provided a
loan guarantee for a private-sector loan.[^63] Similar to the Lackland
project, the developer owns, operates and maintains housing units and
rents them directly to eligible soldiers.[^64]

In 1996, the Navy entered into a ten-year limited partnership with a
private housing developer to construct 404 units off the installation at
Corpus Christi, Texas.[^65] The Navy provided \$9.5 million, and the
developer financed the remainder of the \$32 million project.[^66] At
the end of the partnership, the Navy anticipates it will be repaid its
equity share and receive one-third of the net value of the
development.[^67]

The military Services are also considering other types of arrangements
for installations in the process of developing and awarding MHPI
projects.[^68] Although the flexibility to enter into these MHPI
agreements was part of the legislation, the legislation left a large gap
in terms of implementation guidance. It also left a variety of legal
issues unanswered, and since implementation, the Services have been
struggling to identify and resolve these issues.

### III. Contract Formation Issues

Before any MHPI projects could commence, even before the first
solicitation could be issued, the Services had to resolve a number of
contract formation issues. This new MHPI authority appeared to offer the
Services significant flexibility, but the Services were slow in deciding
how to structure the projects.[^69] Fundamental questions of how to
structure a solicitation, what kind of transaction, what kind of
contract, what type of legal documents are required and what laws apply
had to be resolved before the Services could move forward.[^70]

Philosophically, the Services diverged on many of these issues. Perhaps
not surprisingly, each Service attempted to exploit the flexibility of
the new authorities and commercialize the acquisition process. The
result was a partial divergence from the traditional procurement
documents and procedures, with movement toward contractual arrangements
and hybrid procedures. This section will examine the Army and Air Force
approaches to contract formation in the new era of the MHPI.[^71]

#### 

#### A. FAR or Non-FAR Acquisition

#### *1. Initial Assessments*

The Services initially struggled with whether the Federal Acquisition
Regulation (FAR), with all its limitations, restrictions and procedures,
applied to MHPI transactions. By definition, the FAR applies to all
"acquisitions."[^72] An acquisition is "the acquiring by contract with
appropriated funds of supplies or services (including construction) by
and for the use of the Federal Government through purchase or lease,
whether supplies or services are already in existence or must be
created, developed, demonstrated and evaluated."[^73]

The Air Force concluded that the FAR did not necessarily apply to a MHPI
project.[^74] The Air Force makes determinations as to its applicability
on a case-by-case basis.[^75]

The Army concluded, however, that MHPI transactions were subject to the
FAR.[^76] As a result, the Army's first MHPI project was treated as a
FAR transaction.[^77]

In 1997, the Department of Defense General Counsel's office (DoD/GC)
issued a memorandum providing guidance on whether MHPI initiatives are
subject to the FAR. The memorandum stated that the applicability of the
FAR to the use of the MHPI authorities depended on the specific
authority used and the manner it was implemented.[^78] The DoD/GC
recommended that the Services determine whether each project involves
the direct obligation of appropriated funds to directly acquire military
housing or services, or direct involvement such that it constitutes an
acquisition for goods and services by the Government.[^79] If either of
these criteria exists, then the FAR applies.[^80] If not, the Services
have the discretion to use any structure that is appropriate to carry
out the intent of the project.[^81] The Services have used their
discretion to creatively structure the necessary procurement documents
and processes.

The solicitations for the first two MHPI projects (at Lackland Air Force
Base, Texas and Fort Carson, Colorado) were similar to traditional
FAR-type solicitations.[^82] Competitive procedures were used, and both
proceeded through a source selection process similar to a traditional
FAR procurement.[^83] However, after these initial solicitations, both
Services varied the processes for soliciting and selecting a developer.

#### *2. The Air Force Three-Step Negotiation Process*

The Air Force continued to use a FAR-type solicitation, and this process
is now the standard in the Air Force. For example, a later solicitation
at Elmendorf Air Force Base utilized a streamlined non-FAR solicitation
for maximum flexibility in proposal development.[^84] The first step was
submission of the offeror's proposal containing the proposed legal and
financial structure; design and development plan for individual units
and housing community; real estate management plan, to include facility
maintenance and capital repair and replacement; and past performance
information.[^85] The proposals were then evaluated and ranked in
accordance with the criteria outlined in the solicitation.[^86] Only the
highest ranked offeror proceeded to step two of the process,
negotiations with the Government.[^87]

If the parties had failed to reach an acceptable agreement within a
reasonable period of time, the Government would have terminated
negotiations with that offeror and commenced negotiations with the next
highest ranked offeror.[^88] This would have been repeated until an
acceptable agreement was reached.

Step three consisted of finalizing the financing and implementing the
agreement.[^89] This three-step solicitation and other unique processes
to "commercialize" traditional procurement processes are likely to
undergo continued exploration as the Air Force develops MHPI
projects.[^90]

#### *3. The Army Three-Step Request for Qualification Process*

Following the project at Fort Carson, the Army has engaged its own
creative tools to attempt to commercialize and streamline the
traditional FAR process. Fort Hood was the first to use the Request for
Qualification (RFQ) process in lieu of the traditional Request for
Proposals (RFP).[^91] The benefits of the RFQ over the traditional RFP
are that it is simpler and less expensive for developers, allows
flexibility in project development, maximizes opportunities for
innovation, and enables the Army to achieve the best financing and
highest return on investment.[^92]

The RFQ is fundamentally a three-phase process.[^93] During the first
phase, developers submit a Statement of Qualifications that contains
sufficient detail to enable the Government evaluators to reach a
reasoned judgment as to the developer's experience and overall
capability to perform.[^94] The Statements are evaluated according to
specified criteria. The developer demonstrating a capability to perform
whose submission is most advantageous to the Government is
selected.[^95]

The selected developer then moves into phase two, working closely with
the Army to develop a Community Development and Management Plan (CDMP).
The CDMP sets forth the details of the project, including scope, design,
management and legal and financial structure.[^96] If the developer
completes this phase, the Army pays it \$350,000 and receives unlimited
rights to use the CDMP.[^97] If the Army is dissatisfied with the CDMP,
it releases the developer following the \$350,000 payment.[^98] If the
Army accepts the CDMP, the developer implements it under the third
phase.[^99] Fort Hood has entered this latter stage and will be the
first Army installation to complete the entire process using an
RFQ.[^100]

The RFQ process is unique and, because it has not yet been tested on
many projects, its effectiveness and usefulness are still unknown.[^101]
In addition to practical questions regarding the RFQ's effectiveness,
questions about its legal permissibility remain unanswered. The Army has
largely structured its MHPI projects as FAR transactions. More recent
RFQ's state that the FAR applies only to phase one of each project,
which is when the selected developer works with the Army to create a
CDMP. The RFQ contains FAR numbered clauses, further indicating a FAR
transaction.[^102]

If the Army has determined the FAR applies because MHPI is an
acquisition of goods and services using appropriated funds, then the FAR
would apply to the solicitation and source selection process as
well.[^103] There are no explicit provisions in the FAR for the RFQ
process. The FAR clauses in the RFQ indicate it is being treated as a
commercial item acquisition.[^104] Commercial acquisitions should be
made competitively and may be accomplished through the use of negotiated
procedures.[^105]

The RFQ process appears to be a hybrid between a sole source acquisition
and a negotiated procurement with a competitive range of one. Developers
compete in the first qualification phase based on a virtually
non-existent statement of Government needs and non-specific evaluation
factors. It is difficult to understand how effective competition can be
achieved using the very general requirements and evaluation criteria as
in the Fort Hood RFQ.[^106] In addition, after this initial competition,
only one developer is selected to negotiate with the Army for the right
to be awarded the contract.[^107] This appears to be nothing more than
selecting a competitive range of one, a process subject to close
judicial scrutiny when challenged.[^108]

Although the Army's RFQ process has not been challenged to date, there
is some question as to whether it would be found legally permissible if
challenged. The simple solution would be an Army determination that the
FAR is not applicable to future MHPI projects, but that inclusion of
language from FAR provisions is permissible where in the Army's best
interests. If MHPI projects are properly conducted outside of the FAR,
new and flexible processes such as the RFQ can be further developed with
a reduced risk of legal challenge.

### B. Applicable Procurement Statutes

One of the more difficult tasks in moving from traditional procurement
processes to new processes instituted under the MHPI authority is the
application of various statutes to MHPI projects and contractual
arrangements.[^109] Whether or not the FAR applies, there are a number
of federal statutes that form the basis of most of the FAR provisions.
It is a separate inquiry for each project as to which statutes apply to
the project. The Davis-Bacon Act and the Contract Disputes Act of 1978
(CDA) have received considerable attention: there is a general consensus
that Davis-Bacon applies to MHPI agreements, or at least the current
policy is to include Davis-Bacon in the agreements;[^110] there is no
consensus regarding the applicability of CDA to MHPI agreements.[^111]

#### *1. Davis-Bacon Act*

The Davis-Bacon Act requires that every contract (to which the United
States is a party) in excess of \$2,000 for construction, alteration,
and/or repair of public buildings or public works shall state the
prevailing wage rate to be paid laborers and mechanics as determined by
the Secretary of Labor.[^112] The Act itself does not define "public
building" or "public work"; however, Department of Labor regulations
define a "public work" as a "building or work, the construction,
prosecution, completion or repair of which...is carried on directly by
authority of or with funds of a Federal agency to serve the interest of
the public regardless of whether title thereof is in a Federal
agency."[^113] This language has been broadly construed to apply
Davis-Bacon to a number of contractual arrangements that appear to be
clearly outside the plain language of the statute. Indeed, it has been
held that Davis-Bacon applies to work done on property belonging to the
United States and to all fixed work constructed for public use at the
expense of the United States.[^114]

In a bid protest decision addressing the applicability of Davis-Bacon to
Section 801 privatized housing, the General Accounting Office (GAO)
found that Davis-Bacon applied to Section 801 contracts.[^115]
Specifically, the GAO found that Davis-Bacon applied because the housing
was for a public purpose (to house military families) and the
construction costs were essentially being reimbursed through lease
payments.[^116]

While the MHPI projects are different from Section 801 housing in that,
under MHPI, the Government does not provide direct lease payments to the
contractor, the Government does nonetheless provide MHPI contractors
funding through direct loans or loan guarantees to finance
construction.[^117] This appears to fall within the scope of
Davis-Bacon. Moreover, Davis-Bacon has been interpreted to encompass any
construction that would not have been accomplished by the private
developer but for its contract with the agency.[^118] Applying the same
reasoning to MHPI projects, the private developers would not engage in
the housing construction and renovation but for the Federal authority
and direction. Therefore, it appears compliance with the Davis-Bacon Act
will be required in MHPI projects unless a unique contractual or
financial arrangement takes it outside the purview of the statute.

#### *2. Contract Disputes Act*

The second statute for which applicability is in question is the
Contract Disputes Act of 1978 (CDA).[^119] The CDA applies to express or
implied contracts entered into by an executive agency for procurement of
property, services, construction, alteration, repair or maintenance of
real property or disposal of personal property.[^120] The CDA does not
apply to procurement of real property in being, but the Act is silent
regarding the disposal of real property.[^121] The Army has specifically
made its MHPI contracts subject to the CDA through insertion of a CDA
clause in the MHPI contract.[^122]

In contrast to the Army's inclusion of the CDA in its solicitations, Air
Force solicitations issued to date do not contain such provisions. The
Air Force position is that MHPI agreements are not subject to the CDA
because the agreement is for the disposal of real property.[^123] While
the CDA specifically covers disposal of personal property, it is silent
regarding disposal of real property.[^124] The only case directly
addressing the applicability of the CDA to a federal agency's disposal
of real property to a private party is *Korman Corporation*, [^125] out
of the Housing and Urban Development Board of Contract Appeals.

In that case, Housing and Urban Development (HUD) entered into a
contract with a private contractor for the bulk sale of 120
houses.[^126] The contract required the contractor to rehabilitate all
of the houses within 180 days, in accordance with the repair
specifications in the contract.[^127] Once HUD inspected and approved
the repairs, it was to issue a commitment to insure the mortgage of each
of the properties, which would be sold to lower income citizens.[^128]
The contract did not contain the CDA disputes clause or any other
indication the contract was subject to the CDA.[^129]

The Board of Appeals found the contract was a dual purpose contract
covering both the sale of 120 houses and the repair of the houses.[^130]
The repair portion of the contract was found to be directly encompassed
within the CDA. The Board then considered the CDA's silence with respect
to its applicability to the sale or disposal of real property[^131] and
concluded the primary purpose of the contract was for rapid repair of
the houses to enable them to be sold to low income families.[^132] The
sale of the units to the private contractor was incidental to the
repair.[^133] In reaching this conclusion, the Board noted the
contractual control reserved by the Government over the inspection and
approval of the repairs even after the conveyance.[^134] Finding repair
to be the primary purpose of the contract, the Board concluded the CDA
applied to the contract, and that it had jurisdiction to hear the
dispute.[^135]

In the case of MHPI projects, the primary purpose is to provide
financial incentives to developers to repair and construct houses for
occupancy by active-duty service members.[^136] The conveyance of the
houses and lease of the land to the developer are largely incidental to
the construction and repair portions of the agreement. In addition,
under most MHPI agreements, the Government continues to exercise
approval authority over designs and specifications and provides
inspections during construction.[^137] Thus, under the reasoning in
*Korman*, the CDA applies to MHPI agreements, and a board of appeals
would likely assume jurisdiction over any disputes arising under the
agreements.[^138]

#### IV. Issues During Contract Performance

Once the MHPI project is finalized, and the developer begins
performance, the installation takes over administration of the
agreement.[^139] The installation is then responsible for ensuring
developer performance over the term of the agreement, typically fifty
years. The installation inspects construction/renovation, and is
expected to enforce the agreement's requirements for long-term operation
and maintenance. A number of issues may arise in performance as a result
of actions taken, or not taken, in the formation phase.

#### A. Installation Control Issues

The majority of MHPI projects either in progress, or in the planning
stages, will be located on military installations.[^140] The developer
will own, operate and maintain the houses, and lease the underlying land
from the agency for a term of fifty years.[^141] Unlike housing owned
and operated by the Government, occupancy of MHPI units is not initially
restricted to active-duty military members.[^142] Occupancy rates may
drop such that civilians will occupy the MHPI housing units, raising a
number of questions regarding their status on the installation, and the
ability of the commander to exercise control over the installation. This
section will address two specific concerns regarding civilian tenants in
MHPI housing. First, does the installation commander have authority to
authorize searches of civilian-occupied homes on the installation for
evidence of criminal misconduct? Second, if civilian tenants engage in
misconduct on the installation, what are a commander's boundaries in
taking action involving or impacting those civilians?

#### *1. Search Authorization*

The question of whether the installation commander may legally authorize
searches of civilian-occupied privatized housing on the installation is
a concern for the Services because it goes to the very heart of a
commander's traditional responsibility for and authority over the
installation. Presently, the Army and the Air Force have MHPI housing
projects occupied by military families. Although no civilians currently
occupy installation housing, and long active-duty waiting lists for
housing indicate it may not happen for some time, a split in the
Services on this issue indicates a need for discussion and eventually
formal guidance.[^143]

The critical question is whether a search conducted pursuant to a
commander's search authorization is a violation of a civilian's Fourth
Amendment rights.[^144] Installation commanders have the inherent
authority and obligation to ensure good order and discipline on the
military installation. It has long been recognized that military
commanders have the power to search military persons and property within
their jurisdiction.[^145] The Military Rules of Evidence recognize the
power of the commander to authorize searches of military property and
"property situated on or in a military installation or any other
location under military control...."[^146]

In MHPI housing, the issue is whether houses owned by a private
developer on Government land leased to the private developer, but
physically located within the confines of the installation, are property
under military control. If a commander-authorized search of
civilian-occupied privatized housing was challenged, the outcome of the
case might depend more on the language in the agreements than
traditional notions of military authority.

No court has yet addressed the search issues presented by MHPI housing
projects on the installation. However, the U.S. District Court for the
Eastern District of Virginia has upheld search of a civilian employee's
apartment on the installation.[^147] The facts of the case do not
indicate whether the Government owned the housing, but because the
installation was in Cuba, the court held it was clear that the military
had control over all the property within the confines of the
installation.[^148] In another case, a military commander's search of a
civilian-occupied home that was part of a military compound overseas was
held to violate the civilian's Fourth Amendment rights.[^149] However,
in that case, the court's analysis focused on the unreasonableness of
the search and lack of probable cause rather than the authority of the
military commander to direct the search.[^150]

Courts have upheld a commander's ability to search off-base apartments
leased by the military and occupied by military personnel.[^151] In
those cases, the courts focused on lease language specifically stating
that the apartments were under the control of the military.[^152]

Notably, there is a judicial reference relating to privatized housing
projects (known as "Wherry" or "Capehart" housing) from the 1950s. The
Court of Military Review noted that the Judge Advocate General of the
Air Force had "expressed doubt whether a base commander could lawfully
order a search of a Wherry Housing unit situated on the base occupied by
a military person and recommended that in such a case, the search should
be conducted in accordance with the authority granted by a lawful search
warrant."[^153]

In the case of MHPI housing, the potential exists that civilians
completely unaffiliated with the military may be occupying housing units
on the installation. Although it may seem unlikely that this possibility
will occur, it should be addressed with the developer before an
agreement is signed. The Services can address it in a number of
different ways.

First, the Service could anticipate the possibility prior to determining
which installations will receive MHPI housing. The Air Force considers
the severability of the MHPI housing project from the installation as a
mandatory factor in selecting installations to receive MHPI housing
projects.[^154] If civilians begin occupying the units in increasing
numbers, the Air Force may simply sever the project from the base,
putting it outside the installation fences.[^155]

Fort Carson has attempted to deal with the problem a second way,
inserting a provision in the lease between the developer and the tenant
stating that MHPI houses are in an area of exclusive federal
jurisdiction and the premises are under military control.[^156] The
agreement between the developer and the Government contains no such
specific language, however, and the effect of inserting it into the
tenant lease is questionable. The case law suggests that clear language
in the agreement between the Government and the developer may be
sufficient to extend the commander's authority to search property not
owned by the Government.[^157]

Ultimately, it is also clear that to have any chance of being upheld,
searches of civilian occupied houses by military authorities must comply
with the basic requirements of the Fourth Amendment.[^158] This may
require new training for commanders and military law enforcement
personnel to enable them to effectively and correctly handle situations
involving the civilian occupants of MHPI housing on the installation.

The fact of exclusive or concurrent jurisdiction is another factor to
consider in determining the exercise of search authority in MHPI housing
on the installation.[^159] If civilians occupy housing units on the
installation, installations may choose to convert the housing areas to
areas of concurrent, rather than exclusive jurisdiction.[^160] This
permits local civilian law enforcement to handle problems,
investigations, searches and seizures when civilians are involved. It
would mitigate the potential uncertainty regarding a commander's search
authority by allowing civilian law enforcement to deal with problem
civilians. It may also alleviate the potential for *Bivens*[^161] suits
against military law enforcement officers.

#### *2. Barment*

Another issue related to a commander's authority to control activities
on the installation is the ability to bar individuals from entering the
installation. If a civilian rents an MHPI house and engages in
misconduct on the installation, can the installation commander bar the
individual from the installation?

The power of an installation commander to exclude individuals, including
civilians, from the installation has traditional, historical and
statutory bases.[^162] The Services view this authority as necessary for
the installation commander to protect personnel and property and to
maintain good order and discipline on the installation.[^163]

Courts have upheld the authority of installation commanders to bar
civilians from the military installation in numerous cases.[^164]
However, the power to exclude civilians from military installations is
not without limitation.[^165] The courts look to the area where the
civilian was ordered not to enter to determine if it was an area
sufficiently under the military commander's control. The courts also
balance the interests of the civilian in entering the installation
against the military's interest in preventing entry.

Commanders can only exercise barment authority in areas where the United
States has absolute ownership, or an exclusive right to the possession
of the area where the civilian is barred from entering.[^166] Criminal
jurisdiction over the area alone is insufficient.[^167] What does and
does not constitute absolute ownership or exclusive right to possession
is a factual determination.

In *United States v. Watson*, the installation commander for the Marine
barracks at Quantico, Virginia, barred a civilian from using a road that
linked Quantico, a military reservation, to the outside community.[^168]
The road was on land the United States had acquired in fee.[^169]
However, the road had traditionally been used as a public thoroughfare
to provide ingress and egress to Quantico.[^170] The Court found that
the United States had ownership of and criminal jurisdiction over the
road, but it did not have exclusive right to possession because it was
not the exclusive user of the road.[^171] Therefore, the conviction of
the civilian under 18 U.S.C. § 1382 was overturned.[^172] However, in
another case, a different court found ownership and exclusive right of
possession in a housing area that was owned by the United States and
part of the military reservation, but was outside the gates of the
installation.[^173]

In the case of MHPI housing, it is unclear whether the installation
commander has the authority to bar civilians residing in those houses
from the installation. The MHPI houses located on the installation sit
on Government- owned land, but that land is leased to the
developer.[^174] Further, the houses themselves are conveyed in fee to
the developer, and are therefore owned, operated and maintained by the
developer.[^175] Although law enforcement typically patrols these
housing areas, the developer shares possession with the Government,
perhaps exercising a greater presence and control in these areas than
the Government.[^176] It is unlikely that in such circumstances the
United States has the requisite exclusive right to possession of these
housing units and housing areas to enable the commander to bar civilian
occupants from that portion of the installation. Clearly, civilians
could be barred from any areas on the installation other than those
leased to the developer in an MHPI project, but barment from the MHPI
housing area will likely exceed the installation commander's authority
in that area.[^177]

Indeed, barment of civilians from MHPI installation housing has
potential constitutional implications. Courts have balanced the
interests of the civilian against those of the military in determining
the extent of the military commander's authority to bar civilians from
the installation.[^178] Constitutional implications may affect a
commander's ability to unilaterally bar an individual from the
installation if the civilian's interest in entering the installation is
so great that it brings with it the Fourteenth Amendment's protection of
due process.[^179]

Barring a civilian occupant of MHPI housing from the installation would
result in a *de facto* eviction from the housing unit.[^180] The Supreme
Court has stated that the Constitution does not require a trial-type
hearing in every conceivable case of Government impairment of a private
interest.[^181] However, the procedures due process may require will
depend on the nature of the Government function involved and the private
interest affected.[^182] Where a private individual's interest can be
characterized as a "mere privilege subject to the Executive's plenary
power, it has traditionally been held that notice and hearing are not
constitutionally required."[^183]

An individual's ability to enter a military installation is generally
viewed by the courts as a privilege, not a right, and therefore not
subject to due process requirements.[^184] The Government's interest in
barring individuals from the installation is in managing the internal
operation of the military installation.[^185] To outweigh this interest,
the civilian's interest in entering the installation has to rise to one
that is constitutionally protected, such as a liberty or property
interest.[^186] Whether access to a home currently rented by the
civilian in the MHPI housing area rises to the level of a liberty or
property interest that would outweigh the Government's interest is
uncertain.

The courts have held that a civilian's interest in employment with a
Government contractor on the installation does not rise to a level
requiring barment due process.[^187] Similarly, the interests of a
military dependent in entering the installation to use the recreational
facilities and the base exchange is a privilege and does not amount to a
constitutionally protected interest requiring due process.[^188]

In contrast, outside of the context of the military installation, the
courts have held that the expectation of individuals to utility services
rises to the level of a property right such that the Fourteenth
Amendment requires due process before deprivation of that right.[^189]
If receiving utility services rises to the level of a constitutionally
protected property interest, it is difficult to see how a court could
find otherwise regarding access to a home. If a civilian tenant's
interest in access to the rented home rises to the level of a
constitutionally protected property interest, it is likely an
installation commander could not bar the person without, at a minimum,
notice and an opportunity to be heard.

As previously stated, barring a civilian from the installation would be
the equivalent of an eviction, raising a number of contractual issues
regarding the Government's right to preclude civilian tenants from the
housing area. The Government would essentially be interfering in a
contractual relationship between the developer and a civilian
tenant.[^190] It would disrupt the developer's income stream, and may
constitute a Government breach of its contract with the developer. These
issues should be considered before executing the agreement between the
Government and the developer.

The agreement should be drafted to preclude the problems discussed
above. The agreement between the developer and the Government should
expressly set forth that the premises remain under military control. The
agreement should further recognize the ability of the installation
commander to bar civilians engaged in misconduct on the installation.

The Air Force has included a statement in the Operating Agreement that
is part of the lease with the developer stating that the commander's
rights are not impaired and that the commander has the right to bar
anyone from the installation.[^191] This wording may alleviate concerns
about breach of contract, but it will not impact the problems of
exclusive control or constitutional issues.

In order to address these latter issues, the agreement should set forth
the circumstances that would be grounds for a barment action and require
that notice of the installation commander's decision to bar a civilian
tenant be provided to the developer, who must then initiate eviction
action against the tenant.[^192] In the meantime, the installation
commander should tailor a barment order for the civilian tenant
excluding him from the installation except for the purpose of accessing
the MHPI housing unit. In this way the installation commander can
exercise authority over areas clearly within military control, and
continue to protect Government personnel and property by keeping the
problem civilian out of most of the installation. It also avoids the
potential constitutional issues because the civilian would still be able
to access the home, thereby avoiding allegations that the Government
interfered with a constitutionally protected property right. More
importantly, it provides a contractual basis for the installation
commander to ensure the eviction of the tenant in a manner consistent
with law and the contract.

##### B. Fiscal Law Issues

A unique challenge, and perhaps the most difficult one for attorneys at
MHPI installations, is educating commanders, service members, and even
the developers that the rules that used to apply to "Government housing"
do not necessarily apply to MHPI housing.[^193] This is particularly
true in the fiscal law arena.

Congress annually enacts public laws appropriating funds for the support
of traditional military family housing. When the Government owns the
housing, the Government is responsible for upkeep of common grounds,
maintenance of the houses, landscaping, playgrounds, sports areas, and
pest control, all of which are provided through the expenditure of
appropriated funds (APFs).

There are a number of specific types of APFs used to develop and support
traditional military family housing, and the purpose of an expenditure
controls whether a particular type of APF is properly available for
obligation.[^194] Generally speaking, Operations and Maintenance (O&M)
funds are available for the daily expenses of operating a traditional
military family housing area.

Once the Government conveys the houses to the private developer, the
ability of the Government to use APFs for anything related to the
housing project is severely limited.[^195] This section will examine
fiscal law issues that may be encountered by installation attorneys,
including whether APFs can be used for the following purposes once the
award is made: moves of Government personnel into MHPI houses, resident
relations programs, facilities improvements and repairs, and services
such as pest control and landscaping.

#### 

#### *1. Personnel Moves*

The first fiscal law issue likely to arise in the MHPI context is who
pays to move personnel into MHPI housing from their current residences.
Generally, absent a Government direction to move, service members who
choose to move from one house to another house, off or on the
installation, must pay for the move themselves.[^196] However, the MHPI
program and applicable regulations allow the Government to use APFs to
move service members into MHPI houses in most circumstances.[^197]

There are four primary circumstances under which moves into MHPI housing
might occur. First, intra-installation moves may be required to move
families from one MHPI house to another as a result of the contractual
obligations of the Government under MHPI agreements to vacate houses
slated for rehabilitation or demolition. Second, families in houses that
will be conveyed to the developer under MHPI agreements may not wish to
continue living in those houses, preferring to live in Government-owned
quarters or commercial housing off the installation. Third, individuals
living off the installation, and formerly on waiting lists for
Government housing, may wish to rent MHPI housing and want to be moved
into MHPI housing at Government expense. Finally, individuals living in
Government-owned housing or newly conveyed MHPI housing may request to
move into newly constructed or renovated MHPI housing.

The MHPI legislation allows MHPI housing to be considered "Government
quarters" and authorizes the Service Secretaries to assign members to
MHPI housing.[^198] The Joint Federal Travel Regulation (JFTR)
authorizes the Government to fund local moves when moving to or from
Government quarters.[^199] Recent changes to the JFTR specifically
address assignment to privatized housing.[^200] With regard to
intra-installation moves, the Government may be contractually obligated
to vacate houses conveyed to the contractor that are designated for
rehabilitation or demolition.[^201] In some cases units may be unfit for
occupancy.[^202] The Government may pay for local moves when the member
is directed by competent authority to vacate quarters because they are
unfit or to meet some other unusual operational requirement.[^203]
Regardless of the condition of the units, the contractual requirement to
vacate would constitute an unusual operational requirement. Thus, the
Government may use APFs to move occupants from houses requiring
renovation or demolition into other housing on the installation, whether
MHPI or Government-owned.[^204] Similarly, service members may be moved
into MHPI housing based on reassignment by the Service after conditions
in the units are rectified or once they become available for occupancy
following construction.[^205] Accordingly, there is authority for
Government funded moves of personnel dislocated by MHPI repairs or
demolition to be moved to other quarters during repair/construction and
then back into newly repaired or constructed MHPI houses.

Service members currently living in Government-owned housing set for
conveyance to the developer under an MHPI agreement may not wish to
continue living there. Similar to the above analysis, if the houses are
unfit or set for major rehabilitation, then the JFTR allows the
Government to move their occupants to other quarters at Government
expense upon the direction of competent authority. [^206]

It is more difficult to justify using APFs in the third type of
personnel move where individuals living off the installation in civilian
housing want to move into MHPI housing. [^207] The JFTR allows the
Government to pay for personnel moves "directed by competent authority
on the basis of a Service requirement such as...assignment to privatized
housing."[^208] The problem with using this as authority to fund
"volunteer" moves is that the Services have specifically declined to
"direct" service members into MHPI quarters, allowing them instead to
choose whether to occupy the quarters.[^209] Thus, in addition to lack
of direction, it would appear that there is also a lack of any service
requirement given that such moves are based on members' personal
preference or convenience. Use of APFs to fund such moves is prohibited.
[^210]

The moves described above are similar to the fourth type of personnel
move possible in the MHPI context. These include requests by service
members to move from Government-owned quarters, or older (newly
conveyed) MHPI houses on the installation, into newly constructed or
rehabilitated MHPI units. Absent some health or safety concern regarding
the habitability of the member's current house, these are typically
going to be convenience moves. As noted, the JFTR specifically prohibits
Government funding of any moves purely for the convenience of the
individual member.[^211]

#### *2. Spending APFs on the MHPI Project*

Service members may be motivated to move to a MHPI housing area because
of the "extras" it may offer. Most MHPI projects contemplate more than
just a conveyance of houses to the developer. They envision an entire
community, complete with playgrounds, sports facilities, and common
gathering areas, all owned, operated, maintained, and managed by a
private developer.[^212] There may be instances when housing residents
or installation authorities wish to make improvements or repairs not
provided for in the original agreement. These situations present fiscal
law problems.

For example, may the installation commander use APFs to purchase new
equipment for the playgrounds? If the Government wants all MHPI housing
on the installation to display the rank and name of the service member
occupying the houses, may the commander use APFs to purchase nameplates
or signs? Who funds purchases for the traditional resident relations
programs? Many of the answers will be determined by the contractual
agreement between the Government and the developer, and the applicable
fiscal law principles.

The Fort Carson legal office has fielded a number of questions that
implicate fiscal law issues. This section will use them as examples of
the fiscal law issues that may arise at the installation level and will
describe a method for analyzing them.

*a. Signs*

Among the issues a new MHPI project may encounter is the proper use of
APFs to fund traffic signs and resident name signs. Responsibility for
various types of signs may be set forth in the contract between the
Government and the developer.[^213] To the extent that the MHPI
agreement has exercised MHPI statutory authority to confer
responsibility for an expenditure to the contractor, then the Government
cannot use APFs for the purchase because APFs may only be applied to the
objects for which the underlying appropriation was made. Funds
appropriated for maintenance of traditional military family housing
cannot be applied to MHPI requirements without violating the purpose of
the family housing O&M appropriation.[^214] Such expenditures are the
developer's responsibility under the MHPI agreement, and use of APFs
constitutes a violation of the Purpose Statute.[^215] It is no longer a
necessary expense of the Government as the expense is assigned to the
developer.

If the contract is silent regarding signs in the housing area, and the
installation wants to use APFs to fund the purchase, then fiscal law
principles should be examined to determine whether this use of funds is
for a proper purpose.[^216] For example, if the agreement is silent on
responsibility for street signs, but the agreement indicates the
developer is responsible not only for the renovation/construction of
houses, but also for roads, utilities, area lighting and other
infrastructure, then perhaps the developer's responsibility for street
signs can be inferred.[^217] If it can, then the use of APFs to purchase
the signs and install them is improper. However, if the agreement is
silent and no inferences can be drawn regarding responsibility, as might
be the case with name signs for each unit, then the installation
attorney must determine whether use of APFs to provide signs is for a
proper purpose. For example, if the installation has a legitimate need
to have the occupant's name and rank on the unit, such as for security
reasons, then use of APFs may be appropriate.[^218]

*b. Resident Relations Programs*

Recognition for yard-of-the-month and other resident relations programs
may be the most problematic in terms of fiscal law issues. Resolution of
this issue will depend heavily on the terms of the individual MHPI
agreements. Traditionally, installations used APFs to fund resident
relations programs, such as yard-of-the-month signs, free move-out
cleaning for five-time yard-of-the-month winners and housing "mayors,"
and free landscaping to "best village" winners.[^219]

MHPI agreements may shift responsibility to develop, finance, and
operate resident relations programs to the developer.[^220] Although
such agreements may not contain an itemized listing of what is included
in the developer's program, the program as a whole is the contractual
responsibility of the developer.[^221] More specifically, the MHPI
agreements do typically shift responsibility for landscaping in the MHPI
housing area to the developer.[^222] Thus, as explained in the
immediately preceding subsection, any expenses associated with
yard-of-the-month signs or awards would no longer be a proper
expenditure of APFs under the Purpose Statute.[^223]

*c. Housing Upgrade, Maintenance, and Repair*

As previously explained, the installation can no longer expend APFs for
anything that is the developer's contractual responsibility. Generally,
MHPI agreements shift responsibility for services traditionally provided
by the Government in Government-owned housing to the developer,
including housing maintenance, grounds maintenance, landscaping and pest
control.[^224] The developer assumes responsibility for the construction
and upkeep of playgrounds, common areas and sports areas, community
centers or other ancillary facilities included in the MHPI
agreement.[^225] This means that if the residents want a new piece of
equipment for the playground in the MHPI housing area, the installation
cannot purchase it with APFs. Similarly, if the developer is responsible
for pest control in the MHPI housing area, the Government cannot provide
that service using a Government contractor or using the installation's
pest control shop from civil engineering.[^226] The same analysis
applies to repair of buildings. Repair and maintenance is generally the
responsibility of the developer, as are upgrades to the units such as
garage door openers or ceiling fans.[^227]

The fiscal law issues addressed in this section do not represent a
comprehensive listing of all the issues that have arisen or may arise in
the future in the context of MHPI housing.[^228] However, these examples
serve three purposes. First, they evidence significant fiscal law
implications in MHPI housing that did not exist with Government-owned
housing. Second, they show the need for installation attorneys to work
closely with the drafters of MHPI agreements to ensure the obligations
of the parties are clearly defined. Third, armed with knowledge of
fiscal law issues that may arise, installation attorneys can examine the
MHPI agreements affecting their installations, assess the potential
effect on the way their installation has been doing business and begin
the process of educating commanders, contracting personnel and future
tenants. Hopefully, early education will prevent surprises once the
units are occupied and operational under the MHPI developer.

##### C. Ethics Issues

The previous section discussed the fact that the ability of the
Government to spend APFs on resident relations programs will generally
be precluded or severely curtailed in MHPI projects because the
developer will usually be contractually responsible for these programs.
It might logically follow that the developer can now fund these programs
without limitation or further inquiry. However, the fact that the
developer is contractually responsible for the program does not preclude
the need for installation attorneys to ensure that the developer's
actions under such a program do not violate the Standards of Ethical
Conduct regulations (SOC)[^229] and the Joint Ethics Regulation
(JER).[^230] In fact, a number of initiatives a developer may want to
institute on the MHPI project, initiatives that would be considered
normal commercial practice in a typical commercial housing development
in the private sector, must first be examined for compliance with the
SOC and the JER.[^231] This section addresses the ethics implications of
MHPI resident relations programs.

Developers may wish to provide MHPI housing tenants with special items
as part of their resident relations programs. These might include
welcome baskets upon move-in, free turkeys at Thanksgiving, block
parties, tickets to local sporting events, and free house cleanings at
move out for yard-of-the-month winners.[^232] Currently, all tenants in
MHPI projects are exclusively active-duty military members and their
families.[^233] Military members are federal employees subject to the
ethics regulations regarding gifts from outside sources.[^234] Absent an
exception, regulations prohibit employees from directly or indirectly
accepting a gift from a prohibited source or one given because of the
employee's official position.[^235] The developer would appear to have
the same status as any other Government contractor and is, by
definition, a prohibited source.[^236] "Gift" is broadly defined, and
would appear to encompass all the items listed above and any number of
other items a developer might wish to give tenants in the context of a
resident relations program.[^237] Therefore, unless the item is excluded
from the definition of a gift or falls into one of the exceptions, the
tenants could not accept it without violating the JER.[^238]

#### *1. Move-in Incentives*

Developers of MHPI housing are commercial entities and, like other
commercial housing providers, may want to provide incentives to entice
tenants to occupy certain units.[^239] This is particularly likely on
installations where large numbers of housing units will be newly
constructed or renovated. As the newly constructed or renovated units
become available, it may be difficult to rent the older, as-yet
unrenovated units.

Developers may wish to provide incentives for these hard-to-rent units
in the form of reduced rent for the first month or free cable for a
specified number of months.[^240] The incentives are provided by a
prohibited source, making the threshold issue whether the incentive is a
gratuity or gift under the SOC and therefore prohibited from employee
acceptance.[^241]

The definition of "gift" includes any discount having monetary
value.[^242] However, not every discount is a gift.[^243] Specifically
excluded from the definition of a gift are "opportunities and benefits,
including favorable rates and commercial discounts, available to the
public or to a class consisting of all Government employees or all
uniformed military personnel, whether or not restricted on the basis of
geographic considerations."[^244] In the case of MHPI move-in
incentives, assuming they are available to anyone eligible to occupy the
houses, they may fall under this commercially available discount
exclusion.[^245]

Another possible exclusion that would permit incentives as part of MHPI
resident relations programs is the exclusion for items paid for by the
Government or secured by the Government under contract.[^246] This
exclusion has been applied to items secured under lease
agreements.[^247] In a situation similar to move-in incentives in the
MHPI context, the exclusion allows employees to accept discounted
memberships to a health club built during the lease term in a building
where the agency leases space.[^248] The Office of Government Ethics
(OGE) has stated that it is largely within the agency's discretion to
determine whether a benefit is "secured by Government contract."[^249]
When a determination is made that the discount or benefit was secured
under Government contract, that determination allows employees to accept
such discounts without running afoul of the gift prohibition.[^250] In
the case of MHPI projects, where a resident relations program is the
developer's responsibility under the MHPI agreement with the Government,
the Government may determine that move-in incentives are part of the
resident relations program and therefore secured by the Government under
the MHPI agreement. This determination would exclude such incentives
from the definition of a gift and allow employee tenants to accept them.

In the alternative, if such incentives were found to be gifts, employees
might accept them under the commercial discounts exception to the gift
prohibition.[^251] This exception provides that in addition to the
opportunities and benefits excluded from the definition of gifts,
employees may accept opportunities and benefits, including favorable
rates and commercial discounts offered to members of a group or class in
which membership is unrelated to Government employment.[^252] The
analysis here is focused on who is being offered the discount or benefit
and the purpose or motive of the offeror.[^253] In the case of MHPI
housing, the developer is offering incentives to eligible tenants,
typically a subgroup of military members. The question is whether the
offer is related to Government employment.

The OGE has developed a three-part test to determine whether a discount
or benefit is unrelated to Government employment. First, being a federal
employee must not be a pre-requisite to be included in the group to
which the discount is offered.[^254] Under a resident relations program
in an MHPI housing area, assuming that anyone eligible to occupy the
houses is eligible for the incentives, then this prong is met.[^255]

Second, it must not appear that federal employees are being
targeted.[^256] Again, assuming that the incentives are available to all
tenants in the MHPI housing area, this prong is met.[^257]

Third, the employee seeking to accept the discount or benefit is not in
a group or class that has some perceived or actual power, influence, or
status associated with their jobs or positions in Government.[^258] In
the case of MHPI projects, the motivation of the developer in providing
move-in incentives is purely commercial: to ensure that all units are
rented, even those that are in undesirable locations within the project,
or those that have yet to be rehabilitated. In addition, eligible
tenants will be varied in their occupation and status, and will not
generally be in a position to influence the business of the
developer.[^259] Thus, the third part of the test is met, and in most
cases move-in incentives will qualify under the commercial discount
exception, and may be offered by MHPI developers and accepted by MHPI
tenants.

#### *2. Resident Relations "Perks"*

In addition to move-in incentives, MHPI developers may want to provide
any number of "perks" as part of its resident relations program, such as
welcome baskets, yard-of-the-month awards, and other benefits to
tenants. The exclusions and exception discussed above are applicable to
these extras as well as to the move-in incentives. In addition, some of
these items may fall under the *de minimus* exception to the prohibition
against accepting gifts from outside sources.[^260] This exception
permits the developer to give, and tenants to accept, gifts with an
aggregate market value of \$20 per occasion, with a \$50 limit for the
calendar year.[^261] This would allow the developer to provide the
tenants some "perks" as part of the resident relations program, but
would limit the scope of the developer's program if that was the only
applicable exception.[^262]

If OGE determines the above exclusions and exceptions to the gift
prohibition are inapplicable, the result will be a tenuous situation
where the developer is required to provide a resident relations program
for MHPI housing tenants, but as a practical matter is precluded or
limited by the SOC and JER from carrying out those obligations. To date,
neither OGE nor the Services have issued ethics opinions or guidance
regarding the applicability of the SOC and JER to MHPI projects. This
uncertainty may cause installations to err on the side of caution,
advising developers against carrying out resident relations programs,
regardless of the fact that they appear to be permissible under the
exclusions and exceptions discussed above.[^263]

If installations wish to provide more certainty regarding the
permissibility of various resident relations programs, there are three
possible methods of doing so. The first is to request an exception to
SOC and JER prohibitions for resident relations programs in the context
of MHPI projects.[^264] This would allow MHPI developers to provide
gifts and incentives, and tenants to accept them, without violating the
gift prohibitions. This solution will take time to forward through the
appropriate agencies for approval and may not be implemented
expeditiously, if at all.

The second method can be implemented immediately but will only be useful
for installations whose MHPI projects have not yet been finalized by
award or closing. Using the Government contract exclusion to the gift
prohibition,[^265] the MHPI agreement can specifically define the
nature, scope and extent of the resident relations program the developer
will provide.[^266] It should be clear that it is part of the
Government's benefit of the bargain and part of the consideration for
its financial participation. Although not necessary, ideally the
solicitation should include a resident relations program as one
consideration in the overall evaluation of the proposal. Thus, by
contracting for the resident relations program as part of the MHPI
project and defining its scope, it becomes more difficult to argue that
it does not fall under the Government contract exclusion.[^267]

The final solution is an interim fix for installations whose MHPI
projects were finalized without the inclusion of a resident relations
program. As discussed above, installations should take advantage of the
various exclusions and exceptions that are applicable to a particular
benefit, discount or gift developers may wish to provide to tenants. In
addition, the developer may be able to co-sponsor events with DoD
components or organizations that MHPI tenants could attend, along with
the rest of the community.[^268] For example, Fort Carson co-sponsored a
groundbreaking ceremony with its MHPI developer as a community event
under the JER provisions authorizing co-sponsorship and logistical
support of non-federal entities.[^269]

If the developer wants to contribute to community events or participate
in installation celebrations such as open houses or air shows, two
possible authorities exist to accommodate such requests. First, each of
the Services has regulations governing Morale, Welfare and Recreation
(MWR) programs and Non-Appropriated Fund Instrumentalities (NAFI).
Depending on the specific Service regulations, the developer may be able
to participate in MWR programs by providing items of support for the
program. This is an ideal way for the developer to contribute to annual
MWR programs and support the installation community as a whole.[^270]

Commercial sponsorship is the second way a developer might participate
in community events on the installation. Commercial sponsorship programs
differ in each Service, but generally permit commercial entities to help
finance enhancements for MWR events, activities and programs.[^271]
Commercial sponsors are typically permitted to advertise, distribute
literature, display signs and are recognized as a commercial sponsor of
the event.[^272] Commercial sponsorship is an appropriate way for an
MHPI developer to support the installation community at open houses, air
shows, and other large events hosted by the installation.

Although the ethics regulations may limit what a developer can do in
terms of resident relations programs, particularly if such programs were
not included in the MHPI agreement, there are a variety of ways to
resolve these complications. The preferable resolution is a long term
one in the form of a general exception to the stringent SOC and JER
limitations for MHPI developers when performing resident relations
programs. This exception should apply regardless of whether the resident
relations program is specifically included in the agreement between the
parties, or can be inferred from the developer's overall responsibility
for the operation and maintenance of the MHPI housing area. However,
even in the short-term, MHPI developers can legally initiate resident
relations programs and participate in community events with a little
careful planning and attention to the SOC, JER and other Service
regulations.

#### D. Environmental Law Issue \-- Historic Preservation

The DoD has been dealing with environmental compliance issues throughout
its history, especially since the 1970s and 1980s when the country
witnessed an explosion of environmental legislation.[^273] With a number
of installations on the National Priority List for environmental
clean-up, environmental awareness and monitoring of installation
operations and of actions taken on and off the installation are routine.
The Services have learned to deal with environmental issues associated
with common activities such as construction and equipment maintenance as
part of their daily responsibilities.[^274] However, when a new process,
procedure or activity is introduced, the Services must step back and
determine the applicability of the environmental statutes and potential
liability for failing to comply.

The MHPI authority, whereby the Government conveys houses to a
developer, leases land to the developer and contributes financially to
the project, has given rise to a new way of doing business.[^275] The
Services need to assess how different environmental statutes apply to
MHPI transactions. As was illustrated, for example, by the Fort Carson
project, the applicability of the National Historic Preservation Act
should be considered.[^276]

The National Historic Preservation Act of 1966 (NHPA) is a procedural
statute similar to the National Environmental Policy Act (NEPA).[^277]
It requires federal agencies to consider the effect of any federal or
federally assisted undertaking on any district, site, building,
structure or other object included in, or eligible for inclusion in, the
National Register.[^278] If the NHPA applies to the agency's activity,
then a consultation process referred to as the Section 106 process is
triggered.[^279] In order to comply with the law, the agency must
identify properties or areas that are eligible for inclusion on the
National Register, determine whether the proposed activity may adversely
affect the property or area, and consult with the State Historic
Preservation Officer (SHPO).[^280]

To determine whether NHPA applies to MHPI projects, the agency must
first determine whether MHPI is a federal or federally assisted
undertaking.[^281] Second, the agency must determine whether the houses,
or any areas encompassed by the MHPI project, are eligible for inclusion
in the National Register.[^282]

As is the case with NEPA and other environmental statutes, the NHPA is
broadly written to maximize its protections. NHPA defines, for example,
a federal or federally assisted undertaking as any --

> project, activity, or program funded in whole or in part under the
> direct or indirect jurisdiction of a Federal agency, including those
> carried out by or on behalf of a Federal agency; those carried out
> with Federal financial assistance; those requiring a Federal permit,
> license or approval; and those subject to State or local regulation
> administered pursuant to a delegation or approval by a Federal
> agency.[^283]

Based on the financial structure of MHPI projects, with the Government
providing direct loans and loan guarantees, it is difficult to argue
MHPI projects are exempt from the definition of a federal or federally
assisted undertaking.[^284] Courts have found Federal undertakings to
include building leases,[^285] direct financial assistance for housing
projects,[^286] and loan guarantees.[^287]

Additionally, MHPI projects do not proceed without agency approval
regarding the details of the housing construction/renovation, community
design, and other aspects of the project.[^288] It is likely that this
agency approval is sufficient to qualify MHPI projects as a federal
undertaking under NHPA.

The second prerequisite for NHPA applicability to MHPI projects is that
the houses, or areas involved in the project, are eligible for inclusion
in the National Register.[^289] The criteria used in determining whether
buildings, districts, sites, structures or other objects are eligible
for inclusion in the National Register include the quality of their
significance in American history and culture.[^290] It can include
structures and areas associated with events that have made a significant
contribution to the broad patterns of our history, or property achieving
significance within the past 50 years if it is of exceptional
importance.[^291]

Many current MHPI projects require the demolition or renovation of
houses that were built in the Cold War Era (1949-1989).[^292] The Cold
War was exceptionally important in American history and was significant
in the development of the American culture. Military installations were
central in the Cold War; consequently various buildings, structures,
sites and objects, including housing areas located on military
installations may meet the eligibility criteria for inclusion on the
National Register.[^293]

Even if the houses themselves are not eligible, the agency must use
caution if the houses are in the area of any listed or eligible
structures or districts. Housing alteration, new construction or
demolition could have an adverse effect on other eligible or listed
structures or districts.[^294] In that case, the MHPI project would be
subject to the Section 106 process even though the houses themselves
were not eligible properties.

Fort Carson considered whether the NHPA applied given that houses had
been transferred to the developer.[^295] The "undertaking," however, is
the commencement of the MHPI project, the awarding of the contract, or
closing of the real estate transaction; and the NHPA requires
consideration of the effect of federal undertakings that may result in
changes to eligible or listed buildings or areas *before* approval of
the undertaking.[^296] Thus, the relevant time period for determining
applicability of the NHPA is necessarily prior to the conveyance of the
houses and lease of the land.

Fort Carson faced one other NHPA challenge that deserves mention as a
lesson learned for other installations. Under its agreement with the
developer, Fort Carson agreed to provide the developer a Government
building as a base of operations for the first two years of the
project.[^297] The building selected was part of a listed Historic
District under a preservation plan between the installation and the
SHPO.[^298] The developer wished to make modifications to the building
that could not be made because of the building's status.[^299] Fort
Carson had to comply with the Section 106 consultation process and work
with the SHPO to get agreement regarding the modifications after the
building had already been selected and turned over to the
developer.[^300]

Prior to commencement of any MHPI project, the installation must
consider the impact of the NHPA on the proposed project. It should
examine the houses and other areas projected to be part of the MHPI
project, as well as any surrounding eligible structures or areas
potentially affected by MHPI. The exact terms of the MHPI financial
structure should be considered to determine if it qualifies as a federal
undertaking. If the NHPA is applicable, the Section 106 process must be
followed, including notification to and consultation with the SHPO
regarding any adverse effects. In addition, if the Government provides
Government buildings to the developer as part of the MHPI arrangement,
they should be ones not subject to NHPA requirements. If that is not
possible or practical, then the developer must be notified and the
installation should begin coordination with the SHPO early in the
process to minimize delays and frustration.

### V. Conclusion

This article addresses only a very small fraction of the MHPI-related
issues that challenge policy makers, attorneys, commanders, contracting
personnel, MHPI tenants and developers. The issues encompass the entire
spectrum of law, requiring examination of contract, fiscal, criminal,
ethical, and environmental law implications. If recognized early in
planning an MHPI project, they can be squarely and effectively
addressed. It is important for legal advisors to understand that, at
present, what MHPI guidance does exist is both informal and
non-centralized, coming from diverse activities across the DoD. While
this environment may make effective planning difficult for Air Force
organizations, it represents an opportunity for legal counsel to serve
an indispensable role in identifying and resolving issues, thereby
significantly contributing to the success of MHPI projects.

[^1]: \* *Captain Stacie A. Remy Vest (B.A., University of Denver; J.D.,
    Drake University; LL.M., The Army Judge Advocate General School) is
    a trial attorney assigned to the Alternative Dispute Resolution
    Division, Directorate of Contract Dispute Resolution, Air Force
    Material Command Law Office, Wright-Patterson AFB, Ohio. She is a
    member of the Colorado and New Mexico State Bars.*

    ^?^ Ellen Sorokin, At Home, A Losing Battle; Military Personnel
    Leaving Service Over Poor Housing, T[he]{.smallcaps}
    W[ashington]{.smallcaps} T[imes]{.smallcaps}, July 23, 2000, at C1.

[^2]: This represents approximately 200,000 housing units across all
    branches of the military. *Military Housing Privatization
    Initiative: Hearings Before the Subcomm. on Military Installations
    and Facilities of the House Comm. on National Security*, 102nd Cong.
    (1996) \[hereinafter 1996 *Hearings*\] (statement of Robert E.
    Bayer, Deputy Assistant Secretary of Defense, Installations),
    accessible through the Congressional Testimony 1997 page of the
    congressional testimony link at the Military Housing Privatization
    web site of the Office of the Deputy Under Secretary of Defense
    (Installations and Environment) (DUSD(I&E)),
    http://www.defenselink.mil/acq/installation/hrso/.

[^3]: National Defense Authorization Act for Fiscal Year 1996, Pub. L.
    No. 104-106, § 2801(a)(1), 110 Stat. 186 (February 1996), amended
    chapter 169 of title 10, United States Code, to add a new subchapter
    entitled Alternative Authority To Construct and Improve Military
    Housing (codified as amended at 10 U.S.C.A. §§ 2871-2885 (West
    2001).

[^4]: *Id*.

[^5]: G[eneral]{.smallcaps} A[ccounting]{.smallcaps}
    O[ffice]{.smallcaps}, M[ilitary]{.smallcaps} H[ousing]{.smallcaps}:
    C[ontinued]{.smallcaps} C[oncerns]{.smallcaps} [in]{.smallcaps}
    I[mplementing]{.smallcaps} [the]{.smallcaps}
    P[rivatization]{.smallcaps} I[nitiative]{.smallcaps},
    GAO/NSIAD-00-71 (Mar. 30, 2000),
    [http://www.gao.gov](http://www.gao.gov/) (GAO Reports, Fiscal 2000,
    National Defense) \[hereinafter 2000 GAO R[eport]{.smallcaps}\]. The
    DoD revised this estimate to fiscal year 2010. *Id.*

[^6]: 1996 *Hearings, supra* note 2 (statement of Robert E. Bayer,
    Deputy Assistant Secretary of Defense, Installations). The DoD also
    anticipated MHPI projects would cost the Government less than using
    traditional military construction funds for building and repairing
    housing units. *Id.* The DoD planned to leverage Government
    construction dollars, with a goal of spending no more than \$1 for
    every \$3 of private capital invested in MHPI projects.
    G[eneral]{.smallcaps} A[ccounting]{.smallcaps} O[ffice]{.smallcaps},
    M[ilitary]{.smallcaps} H[ousing]{.smallcaps}: P[rivatization Off to
    a Slow Start and Continued Management Attention Needed]{.smallcaps},
    GAO/NSIAD-98-178 at ch. 1:2.1 (Jul. 17, 1998),
    [http://www.gao.gov](http://www.gao.gov/), link to GAO Archive at
    GPO (GAO Reports, Fiscal 1998, National Defense) \[hereinafter 1998
    GAO R[eport]{.smallcaps}\].

[^7]: Office Of The Under Secretary Of Defense For Acquisition,
    Technology And Logistics, Competitive Sourcing and Privatization
    Office*, Military Housing Privatization Web Site,* at
    [http://www.defenselink.mil/acq/installation/hrso/index.htm](http://www.acq.osd.mil/installation/hrso/hrsohome.htm)
    (last visited Jun. 24, 2002). The projects awarded to date represent
    renovation or construction of 17,478 housing units. *Id.* The
    projects in solicitation consist of 47,802 housing units. *Id.*
    Across the Services, there are an additional thirty projects in the
    planning stages, consisting of an estimated 47,448 units. *Id.*
    Lackland AFB, Texas and Fort Carson, Colorado were the first two
    installations to award MHPI projects. *Id.* The Navy has projects
    near Naval installations in Texas and Washington. *Id.* Camp
    Pendleton, California, will be the first use of the MHPI authority
    by the Marines. *Military Housing Privatization Initiative: Hearings
    Before the Subcomm. on Military Installations and Facilities of the
    House Comm. on Armed Services*, 106th Cong. (2000) \[hereinafter
    2000 *Hearings*\] (statement of Randall A. Yim, Deputy Under
    Secretary of Defense, Installations),
    http://www.defenselink.mil/acq/installation/hrso/.

[^8]: 2000 GAO R[eport,]{.smallcaps} *supra* note 5.

[^9]: In 2002, the Air Force Judge Advocate General School and Air Force
    Material Command jointly hosted a family housing privatization
    workshop. As of early 2002, the Army's housing privatization web
    site contained links to current housing privatization solicitations,
    but provided little information or guidance for attorneys in the
    field regarding MHPI issues. *See* Office of the Assistant Secretary
    of the Army for Installations and the Environment, *The Army's
    Residential Communities Initiative*, *at*
    [http://www.rci.army.mil](http://www.rci.army.mil/). The Army's
    Office of General Counsel and Judge Advocate General web sites are
    similarly without guidance. *See, e.g.,* Army Judge Advocate
    General's Corp, *at* <http://www.jagcnet.army.mil/databases;>
    General Counsel of the Army, *at* http://www.hqda.army.mil/ogc *.*
    The Navy's housing privatization web site contains a few of the
    guidance documents developed by the Department of Defense relevant
    to MHPI projects concerning utilities and property taxes. *See*
    Public Private Ventures, *Navy & Marine Corp Housing*, *at*
    [http://ppv.hsgnavfac.com/](http://ppv.hsgnavfac.com/ppv)policy/index.htm.
    However, it contains little of direct relevance to an installation
    level attorney attempting to develop an MHPI agreement. *Id.* MHPI
    related information can be found at a number of Air Force
    organizational web sites, as there presently is not any central
    organization responsible for MHPI related information. *See, e.g.,*
    Air Force Center of Environmental Excellence, *Housing
    Privatization*, *at*
    [http://www.afcee.brooks.af.mil/dc/dcp/news/](http://www.afcee.brooks.af.mil/dc/private/private.htm;);
    Air Force Deputy Chief of Staff for Installations and Logistics,
    *Office of the Civil Engineer*, *at* http://www.il.hq.af.mil/ile/*.*
    The Air Force Judge Advocate General has designated the Air Force
    Material Command Law Office Real Estate Division (AFMC LO/JAVR) as
    the Office of Primary Responsibility for all legal matters in the
    area of housing privatization. TJAG Special Subject Letter 2001-09
    (7 Dec. 2001). The JAVR website is the most detailed and potentially
    helpful Air Force web site. It provides a listing of the various
    statutes, regulations, and DoD memoranda related to MHPI projects.
    *See* Wright Patterson AFB, *Privatization Legal Issues*, *at*
    https://www.afmc-mil.wpafb.af.mil/HQ-AFMC/JA/lo/lojav/privatization/housing/index3.htm.
    It also contains a variety of informal point papers, background
    papers and memoranda addressing issues that may arise at the
    installation level. *See id.* However, these resources raise more
    questions than they answer and fail to provide specific guidance
    that would help the attorney in the field effectively analyze issues
    that arise on the installation.

[^10]: *See infra* Part II.

[^11]: *See infra* Part III.

[^12]: *See infra* Part IV.

[^13]: *See infra* Part IV.A.

[^14]: *See infra* Part IV.B.

[^15]: *See infra* Part IV.C.

[^16]: *See infra* Part IV.D.

[^17]: 1996 *Hearings, supra* note 2 (statement of Robert E. Bayer,
    Deputy Assistant Secretary of Defense, Installations). The Air Force
    alone operates and maintains approximately 110,000 housing units at
    military installations in the United States and overseas. Draft Air
    Force Housing Privatization Policy and Guidance Manual, section 2.1
    (HQ USAF/ILEHM, 10 Oct. 2001)(on file with author).

[^18]: 1996 *Hearings, supra* note 2 (statement of Robert E. Bayer,
    Deputy Assistant Secretary of Defense, Installations).

[^19]: Office of the Under Secretary of Defense for Acquisition,
    Technology and Logistics, *The Privatization of Military
    Housing*[,]{.smallcaps} *at*
    <http://www.acq.osd.mil/installation/hrso/hrsohome.htm>. The Air
    Force indicated it would take 24 years at current funding levels to
    accomplish the major renovation and replacement required for 60,000
    of their 114,000 family housing units. 1996 *Hearings, supra* note 2
    (statement of Jimmy Dishner, Deputy Assistant Secretary of the Air
    Force). It now is estimated that approximately 59% of the Air Force
    military family housing does not meet standards and will require
    either major improvement or replacement. Draft Air Force Housing
    Privatization Policy and Guidance Manual, *supra* note 17. The Navy
    stated that housing allowances provided to members who live off the
    installation are grossly inadequate, leaving significant
    out-of-pocket expenses for military members. 1996 *Hearings, supra*
    note 2 (statement of Duncan A. Holaday, Deputy Assistant Secretary
    of the Navy, Installations and Facilities).

[^20]: This represents approximately 200,000 housing units across all
    branches of the military. 1996 *Hearings, supra* note 2 (statement
    of Robert E. Bayer, Deputy Assistant Secretary of Defense,
    Installations).

[^21]: *Id*. In addition, approximately 62% of 400,000 unaccompanied
    housing spaces require repair estimated at \$9 billion. Office of
    the Under Secretary of Defense for Acquisition, Technology and
    Logistics, *The Privatization of Military Housing*, *at*
    <http://www.acq.osd.mil/installation/hrso/about.htm>.

[^22]: *Military Housing Privatization Initiative: Hearings Before the
    Subcomm. on Military Installations and Facilities of the House Comm.
    on Armed Services*, 105th Cong. (1999) \[hereinafter 1999
    *Hearings*\] (statement of Randall A. Yim, Acting Deputy Under
    Secretary of Defense, Installations),
    http://www.acq.osd.mil/installation/hrso.

[^23]: 1996 *Hearings, supra* note 2 (statement of Duncan A. Holaday,
    Assistant Secretary of the Navy, Installation and Facilities).

[^24]: Service members who choose to live off the installation, those
    who are not eligible for military housing and those who cannot get
    military housing due to unavailability receive a Basic Allowance for
    Housing (BAH) each month to pay for housing. G[eneral]{.smallcaps}
    A[ccounting]{.smallcaps} O[ffice]{.smallcaps}, M[ilitary
    Family]{.smallcaps} H[ousing]{.smallcaps}:
    O[pportunities]{.smallcaps} E[xist]{.smallcaps} [to]{.smallcaps}
    R[educe]{.smallcaps} C[osts]{.smallcaps} [and]{.smallcaps}
    M[itigate]{.smallcaps} I[nequities]{.smallcaps}, GAO/NSIAD-96-203 at
    ch. 1:1 (Sept. 13, 1996). By law, BAH rates are based on the costs
    of adequate housing for civilians of comparable income in the same
    area, but cannot fall below rates based on the national average
    monthly housing costs. 37 U.S.C.A. § 403(b) (West 2001). Using these
    statutory factors, the DoD seeks to set BAH rates that cover 85% of
    a service member's housing costs, but they currently only cover
    80.5%, leaving members to pay an average of 19.5% of their housing
    costs out-of-pocket. 1996 *Hearings, supra* note 2 (statement of
    Duncan A. Holaday, Assistant Secretary of the Navy, Installation and
    Facilities). The DoD estimates that 15% of military families living
    in housing in the civilian community are considered unsuitably
    housed because the cost of their housing is significantly higher
    than their BAH. 1998 GAO R[eport]{.smallcaps}, *supra* note 6, at
    ch. 1:1. A DoD-sponsored initiative would increase BAH for service
    members each year and eliminate the gap between actual housing costs
    and the housing allowance by 2005. 2000 *Hearings, supra* note 7
    (statement of Randall A. Yim, Deputy Under Secretary of Defense,
    Installations).

[^25]: 1996 *Hearings, supra* note 2 (statement of Paul W. Johnson,
    Deputy Assistant Secretary of the Army, Installations and Housing).

[^26]: 1999 *Hearings, supra* note 22 (statement of Randall A. Yim,
    Acting Deputy Under Secretary of Defense, Installations).

[^27]: 1996 *Hearings, supra* note 2 (statement of Paul W. Johnson,
    Deputy Assistant Secretary of the Army, Installations and Housing).

[^28]: 1996 *Hearings, supra* note 2 (statement of Duncan A. Holaday,
    Assistant Secretary of the Navy, Installation and Facilities).

[^29]: 1998 GAO R[eport]{.smallcaps}, *supra* note 6, at ch. 1:2.1.

[^30]: Each year Congress appropriates funds for military housing
    construction for each of the armed services. *See, e.g.,* Military
    Construction Appropriations Act for Fiscal Year 2002, Pub. L No.
    107-64, 114 Stat. 474 (Nov. 2001) (providing specific appropriations
    for family housing operation and maintenance and construction). In
    that Act, Congress appropriated funds for each department to use for
    construction of military family housing, to include its acquisition,
    replacement, addition, expansion, extension and alteration.

[^31]: 1998 GAO R[eport]{.smallcaps}, *supra* note 6, at ch. 2:2.

[^32]: 1996 *Hearings, supra* note 2 (statement of Duncan A. Holaday,
    Assistant Secretary of the Navy, Installation and Facilities).

[^33]: 1998 GAO R[eport]{.smallcaps}, *supra* note 6, at ch. 1.

[^34]: *Id*.

[^35]: *Id.* at app. IV.

[^36]: *Id.* Operations and maintenance costs between \$6,000 and
    \$8,000 each unit, each year. *Id.* GAO also estimates that at year
    25 after construction, every unit will require renovation costing
    \$65,700 per unit. *Id.*

[^37]: 1996 *Hearings, supra* note 2 (statement of Duncan A. Holaday,
    Assistant Secretary of the Navy, Installation and Facilities).

[^38]: In procurements for military family housing, the Government uses
    the methods set forth in the Federal Acquisition Regulation to
    acquire the housing needed. Title 48, C.F.R, hereinafter "FAR." The
    FAR applies to all acquisitions conducted by Government agencies for
    construction. FAR. 2.101 (Jan. 1, 2001). Traditionally, the
    Government conducts an acquisition to retain an architect and
    engineering firm to develop designs and specifications for housing
    units, indicating exactly how they are to be built. The Government
    then conducts another negotiated acquisition, issuing a solicitation
    structured under FAR Part 36 to obtain offers from construction
    contractors. Once received, the Government will negotiate with the
    offerors regarding the specifications of the project, price, and
    other factors, make a selection decision and award a contract to the
    offeror whose proposal represents the best value to the Government.
    The contractor then builds the houses on the installation.

[^39]: Prior to amendment on October 30, 2000, by section 2803(a)(1) of
    Public Law No. 106-398, 10 U.S.C. § 2826 provided that an 0-6
    (Colonel or equivalent) was entitled to a four bedroom home with a
    maximum of 1,700 square feet. An E-2 (junior enlisted) was entitled
    to two to five bedrooms depending on the number of children or other
    dependents, with square footage ranging from 920 square feet for a
    two-bedroom home to 1550 square feet for a five-bedroom home. *Id.*

[^40]: *See, e.g.,* U.S. D[ep't]{.smallcaps} [of]{.smallcaps}
    A[ir]{.smallcaps} F[orce,]{.smallcaps} S[ecretary]{.smallcaps} [of
    the]{.smallcaps} A[ir]{.smallcaps} F[orce]{.smallcaps}
    I[nstr.]{.smallcaps} (AFI) 32-6002, F[amily]{.smallcaps}
    H[ousing]{.smallcaps} P[lanning]{.smallcaps},
    P[rogramming]{.smallcaps}, D[esign]{.smallcaps} [and]{.smallcaps}
    C[onstruction]{.smallcaps} (27 May 1997) (limiting how funding may
    be used for amenities, renovations and repairs of family housing).

[^41]: 1998 GAO R[eport]{.smallcaps}, *supra* note 6, at app. IV (Jul.
    17, 1998).

[^42]: *Id.*

[^43]: 10 U.S.C.A. § 2871 (West 2002). Each Service has its own name for
    its housing privatization program under the 1996 authorities. The
    Army calls it the Residential Communities Initiative (RCI), formerly
    the Capital Venture Initiatives (CVI). 1999 *Hearings*, *supra* note
    22 (statement of Mahlon Apgar, IV, Assistant Secretary of the Army,
    Installations and Environment). The Navy's program is the
    Public/Private Ventures (PPV) program. *Id.* (statement of Duncan
    Holaday, Deputy Assistant Secretary of the Navy, Installations and
    Facilities). The Air Force refers to it as the Military Housing
    Privatization Initiative (MHPI). 1996 *Hearings*, *supra* note 2
    (statement of Jimmy Dishner, Deputy Assistant Secretary of the Air
    Force, Installations).

[^44]: The MHPI authority was initially given for a five-year test
    period ending February of 2001. 10 U.S.C. § 2885. In October 2000,
    Congress extended the authority until December 31, 2004. National
    Defense Authorization Act for Fiscal Year 2001, Pub. L. No. 106-398,
    § 2806, 114, Stat. 1654 (2000). In 2002, it was further extended
    until December 31, 2012. National Defense Authorization Act for
    Fiscal Year 2002, Pub. L. No. 107-107, § 2805, 115 Stat. 1012
    (2001). The extension of authority is codified at 10 U.S.C.A. § 2885
    (West 2002).

[^45]: *Id*. The conference report for the 1999 Appropriations Act for
    Military Construction, Family Housing, and Base Realignment and
    Closure for the Department of Defense makes clear that Congress
    intended the 1996 authorities to complement, not replace,
    traditional methods of providing adequate, safe and affordable
    family housing. H.R. R[ep]{.smallcaps}. 105-647, 105^th^ Cong.,
    2^nd^ Sess., (1998). The committee stated specifically that

    > \[t\]he conferees strongly believe that the Department needs to
    > use all available tools to address the family housing program in
    > an optimum manner. This includes the traditional construction
    > program, privatization, and adequate use of existing private
    > sector housing. The conferees remind the Department that Congress
    > approved the new privatization authorities as a pilot project, and
    > that these authorities will expire on February 10, 2001. It was
    > never the intent of the House and Senate Appropriations Committees
    > for this program to become a substitute for the traditional
    > housing construction program. *Id.*

[^46]: 1996 *Hearings, supra* note 2 (statement of Robert E. Bayer,
    Deputy Assistant Secretary of Defense, Installations). Mr. Bayer
    stated that he believed that MHPI would "...result in faster
    construction of more housing built to market standards....
    Commercial construction and operation is not only faster and less
    costly than military construction, but private sector funds will
    also significantly stretch and leverage the Department's limited
    housing resources, achieving more improved housing from the same
    funding level." *Id.*

[^47]: 10 U.S.C. § 2873.

[^48]: *Id.* § 2876.

[^49]: *Id.* § 2878.

[^50]: *Id.* § 2877.

[^51]: *Id.* § 2875. The legislation limits the Government's investment
    in an eligible private developer to 33 1/3% of the capital cost of
    the project, or 45% if the Government conveys land or facilities to
    the private developer. *Id.* § 2875(c). Government funding for
    investments in privatization projects comes from the Family Housing
    Improvement fund, created by the 1996 legislation. *Id.* § 2883.
    Military construction dollars appropriated to the Services may be
    transferred to this fund and used to fund the Government's
    contribution to the projects. *Id.*

[^52]: 2000 GAO R[eport]{.smallcaps}, *supra* note 5.

[^53]: *Id*. Available assets may include existing housing units and
    land. 10 U.S.C. § 2878. It may also include BAH members are
    authorized to receive when renting MHPI housing units. *Id.* § 2882.

[^54]: 2000 GAO R[eport]{.smallcaps}, *supra* note 5.

[^55]: For example, under 10 U.S.C. § 2880(b), the now-repealed
    limitations on space by pay grade that had been set forth in 10
    U.S.C. § 2826 applied to all military construction projects for
    military housing, but were inapplicable to MHPI housing. *Supra*,
    note 39. The MHPI authority specifically exempts MHPI projects from
    the requirements of 10 U.S.C. § 2627 dealing with leases of
    non-excess Government property. *Id.* § 2878(d). In addition, MHPI
    projects are exempt from the provisions of the Federal Property and
    Administrative Services Act of 1949, 40 U.S.C. § 471, regarding the
    management and disposal of Government property, and Section 501 of
    the Stewart B. McKinney Homeless Assistance Act, 42 U.S.C. § 11411,
    requiring the use of suitable excess federal buildings and real
    property to assist the homeless. *Id.*

[^56]: *Id.* § 2880(a). *See also* 1998 GAO R[eport]{.smallcaps},
    *supra* note 6, at ch. 1:2.1.

[^57]: 2000 *Hearings, supra* note 7 (statement of Randall A. Yim,
    Deputy Under Secretary of Defense, Installations).

[^58]: *Id. See also* 1998 GAO R[eport]{.smallcaps}, *supra* note 6, at
    app. II.

[^59]: 2000 *Hearings, supra* note 7 (statement of Randall A. Yim,
    Deputy Under Secretary of Defense, Installations).

[^60]: *Id*. *See also* Lackland AFB Solicitation No. F41689-96-R0025,
    <http://www.afcee.brooks.af.mil/dc/dch/hpdata/hpdata.asp> (last
    visited Aug. 21, 2000) \[hereinafter Lackland solicitation\].

[^61]: Lackland solicitation, *supra* note 60. Rent for service members
    is capped at BAH. *Id.* at sec. 3.1.10. The Government does not
    provide any rental guarantees to the developer, and service members
    are not obligated to rent from the developer. *Id.* at sec. 1.0. It
    is possible for families other than active-duty families to occupy
    the houses, even members of the general public. *Id.* at sec. 3.1.9.
    The lease contains a priority list regarding who may occupy the
    houses if certain vacancy levels are reached. *Id.*

[^62]: 2000 *Hearings, supra* note 7 (statement of Randall A. Yim,
    Deputy Under Secretary of Defense, Installations).

[^63]: *Id*.

[^64]: Telephone Interview with Major (Maj) Dru Brenner-Beck, Chief,
    Administrative and Civil Law, Fort Carson, Colorado (Nov. 17, 2000)
    (notes on file with author). The Government provides no rental
    guarantees and rent is capped at BAH. *Id.*

[^65]: 2000 *Hearings, supra* note 7 (statement of Randall A. Yim,
    Deputy Under Secretary of Defense, Installations). It should be
    noted that the Corpus Christi project was not constructed under MHPI
    authority, but under the limited partnership authority codified at
    10 U.S.C. § 2837 that initially applied exclusively to the Navy, but
    was extended to all the Services in 1996. National Defense
    Authorization Act for Fiscal Year 1995, Pub. L. No. 103-337, §
    2803(a)(1) (October 1994), as amended by Pub. L. No. 104-106, § 2802
    (1996). *See* 2000 GAO R[eport]{.smallcaps}, *supra* note 5.
    However, the Navy is now classifying those projects as MHPI
    projects. *See* Public Private Ventures, *Navy & Marine Corp
    Housing*, *at* <http://ppv.hsgnavfac.com/policy/>. The Navy is also
    now using Limited Liability Companies in place of the limited
    partnerships used in earlier projects. *Id*.

[^66]: 2000 *Hearings, supra* note 7 (statement of Randall A. Yim,
    Deputy Under Secretary of Defense, Installations).

[^67]: *Cf. id.*

[^68]: For example, the MHPI project at Elmendorf AFB, Alaska, includes
    an arrangement for repair, replacement and new construction
    resulting in 828 housing units owned, operated and maintained by the
    developer. Telephone Interview with Mr. Ted Franklin, Leased Housing
    Office Manager, Elmendorf AFB, Alaska (Jan. 5, 2001) (notes on file
    with author). The units currently needing no work will provide an
    immediate rental income stream for the developer. *Id.* They will
    also provide an available inventory for relocating families
    presently in units designated for renovation or demolition. *Id.*
    Elmendorf will convey 208 units needing no work and 200 units
    needing mid-level renovation to the developer. *Id.* The developer
    will demolish 56 existing units and construct 300 new units. *Id.*
    The project awarded at Dyess AFB, Texas in September of 2000, will
    be the first Air Force project located off the installation. The
    Dyess AFB project consists of a 402 housing unit complex located off
    the installation on land owned by the developer. Telephone Interview
    with Captain (Capt) Craig Crimmons, Chief, Contract Law, Dyess AFB,
    Texas (Feb. 7, 2001) (notes on file with author). The Navy has
    projects located off the installation in Texas and Washington. 1999
    *Hearings*, *supra* note 22 (statement of Duncan Holaday, Deputy
    Assistant Secretary of the Navy, Installations and Facilities). The
    Navy projects did not use the MHPI authority, but were built
    pursuant to the 1995 authority at 10 U.S.C.§ 2837 for the Navy to
    enter into limited partnerships. *Supra*, note 65.

[^69]: 2000 GAO R[eport]{.smallcaps}, *supra* note 5.

[^70]: *Id*.

[^71]: The Navy's projects have by and large utilized limited
    partnership agreements under their special 1995 legislation. 2000
    GAO R[eport]{.smallcaps}, *supra* note 5. Although the Navy has
    awarded new projects under the MHPI authority consisting of phase II
    of the Corpus Christi, TX, and Everett, WA, projects, they will not
    be examined in this section.

[^72]: FAR, *supra* note 38, at 1.104.

[^73]: *Id.* at 2.101.

[^74]: Interview with Dorothy Loeb, Attorney, SAF/GCN, in Washington
    D.C. (Feb. 7, 2001) (notes on file with author).

[^75]: *Id.* In fact, the Air Force determined its first MHPI project at
    Lackland AFB was a real estate transaction not subject to the FAR.
    *Id.* FAR procedures and clauses generally are not applicable to but
    often are used in structuring real estate transactions. Cf. 48
    C.F.R. Part 570. The Air Force concluded that this was a real estate
    transaction rather than a FAR transaction because the Air Force's
    role in the project was nothing more than a commercial lessor of
    land. *Id.* This is distinguishable from a 1984 Air Force legal
    opinion from the Air Force General Counsel's office that concluded
    privatization projects constructed under Section 801 of the FY84
    Military Construction Authorization Act were subject to the FAR, and
    should comply with the FAR. Memorandum from Grant C. Reynolds,
    Assistant General Counsel to AF/RDC, subject: Hanscom AFB
    Build/Lease Housing Project (Nov. 27, 1984) (on file with author)
    \[hereinafter Reynolds Memo\]. That opinion was based on the
    specific language in the Act and the financial and contractual
    structure of those projects. *Id.* The same reasoning cannot be
    extended to the MHPI legislation.

[^76]: Memorandum from Harvey J. Nathan, Deputy General Counsel
    (Acquisition & Logistics) to the Deputy Under Secretary of Defense
    (Industrial Affairs & Installations), subject: Alternative Authority
    for Acquisition and Improvement of Military Housing; Applicability
    of the Federal Acquisition Regulation (Mar. 5, 1997) (on file with
    author) \[hereinafter Nathan FAR Memo\].

[^77]: Fort Carson was the Army's first MHPI project. The Army concluded
    the FAR was applicable and preferable because the project involved
    conveyance of existing units to the developer and a contractual
    instrument was the central element of their project. *Id.* The Army
    also felt that having a FAR contract would simplify modifications
    over the term of the agreement and provide greater oversight of the
    developer's performance. *Id.*

[^78]: *Id*. In discussing the Lackland and Fort Carson projects, the
    DoD/GC recognized that they were nearly identical in their overall
    structures. *Id.* In both projects, the developer would construct
    and/or rehabilitate the housing units and lease them directly to
    service members. *Id*. The developer is conveyed title to existing
    houses and has title in newly constructed units. *Id.* The
    Government leases land to the developer for the housing project.
    *Id.* In both projects, tenants pay rent directly to the developer,
    and the Government does not provide occupancy guarantees. *Id.* The
    units are built to broad Government requirements and the Government
    conducts inspections. *Id.* Appropriated funds are provided to the
    developer in the form of a loan or loan guarantee. *Id.* The DoD/GC
    characterized the role of the military department as that of a
    "facilitator" marrying a private developer with prospective military
    housing occupants. *Id.* The DoD/GC concluded that use of the FAR
    was not required in either project. *Id.*

[^79]: *Id.*

[^80]: *Id.*

[^81]: This is not to say that if the FAR does not apply, the Services
    must abandon the FAR structure entirely. In fact, the Air Force
    routinely uses language from FAR clauses, but not the actual FAR
    clause itself, in their MHPI solicitations. *See, e.g.,* Lackland
    solicitation, *supra* note 60. In addition, the Lackland project
    used a competitive source selection procedure that mirrored those
    contemplated under the FAR. *Id.*

[^82]: Unlike the solicitations used at Fort Carson and another early
    Army MHPI project at Fort Hood, FAR clauses are notably absent from
    the Lackland solicitation. *See id.*

[^83]: *See* E-mail from Major Dru Brenner-Beck, Chief, Administrative
    and Civil Law, Fort Carson, Colorado to author (Feb. 1, 2001, 11:23
    AM) (on file with author); Lackland solicitation, *supra* note 60,
    at sec. 2.0(d). Generally this includes an evaluation of proposal
    received in response to the solicitation, with an initial evaluation
    determining which proposals are in the competitive range. Offerors
    in the competitive range then engage in discussions with the
    Government and submit Best and Final Offers. The contract is awarded
    to the offeror who represents the best value to the Government based
    on the evaluation criteria. The Lackland project added an initial
    qualification step that required potential offerors to submit
    documentation showing they had the requisite financial capacity and
    technical expertise to develop, own, finance and operate a large
    housing community. Lackland solicitation, *supra* note 60, at sec.
    2.0(d). The Fort Carson project proceeded as a typical FAR
    procurement source selection. Irregularities in the source selection
    process, deviations from stated criteria and an eventual competitive
    range of one offeror resulted in a protest of the solicitation.
    Pikes Peak Family Hous. v. United States, 40 Fed. Cl. 673 (1998).

[^84]: Elmendorf AFB, Solicitation No. FXSB2001-00-01, at sec. 5.1.1,
    [http://www.eps.gov](http://www.eps.gov/) (last visited Jan. 15,
    2001) \[hereinafter Elmendorf solicitation\].

[^85]: *Id.* at sec. 5.2. This initial submission contains all the
    information that is required in a typical FAR proposal.

[^86]: *Id.* at sec. 5.1.2.1.

[^87]: *Id.* at sec. 5.1.2.2.

[^88]: *Id.*

[^89]: *Id.* at 5.1.2.2, 5.1.2.3.

[^90]: The more recent Air Force MHPI solicitations contemplate a
    slightly modified procedure. There is an initial pre-qualification
    of offerors and no more than five are selected to compete for the
    project. Those pre-qualified offerors then compete for the final
    award.

    The Air Force is currently developing a template Request for
    Proposals document as well as standardizing all the documents used
    in MHPI transactions. The Air Force has also engaged the assistance
    of outside consultants in the MHPI process. The Air Force Center for
    Environmental Excellence (AFCEE) has been designated as the Housing
    Privatization Center of Excellence. Distribution Memorandum from
    Gary M. Erickson, Director, AFCEE, subject: Final Charter, Air Force
    Center for Environmental Excellence (AFCEE), Housing Privatization
    Center of Excellence (Worldwide Action Item 98-6) (Jul. 7, 1999) (on
    file with author). AFCEE is analogous to the Army Corps of Engineers
    in that it is a DoD organization chartered to provide advisory and
    assistance services on a reimbursable basis, in AFCEE's case to Air
    Force organizations concerning a number of environmental, utility
    and housing privatization issues. An installation involved in a MHPI
    project can choose to use AFCEE or hire outside consultants if
    expertise is not available at the installation or Major Command.
    AFCEE has developed a Privatization Support Contractor (PSC)
    program. Telephone Interview with Gordon Tanner, Legal Counsel, Air
    Force Center for Environmental Excellence (Jan. 23, 2001) (notes on
    file with author).

    PSCs are companies with real estate and commercial development
    expertise that can provide consultant services to installations
    slated for MHPI projects. *Id.* Each PSC is selected through FAR
    competitive procedures and has a FAR contract with AFCEE. *Id.*
    These PSCs are designed to be the arms and legs of the Air Force in
    privatization projects. *Id.* Once the Air Force decides and
    specifies what it needs, the PSC ensures that plan is compatible
    with base and local community standards and is provided to the
    public in language that is easy for the commercial sector to
    understand. *Id.* The PSC can assist, recommend or review financial
    structures and debt transactions. *Id.* The PSC will then seek out
    capable and interested developers. *Id.* The Air Force supervises
    the PSC and makes the ultimate selection decision, but the process
    is significantly more flexible and streamlined than anything the Air
    Force has done previously. *Id.*

[^91]: *See* Fort Hood, Request for Qualifications,
    http://www.rci.army.mil/rfq/ \[hereinafter Fort Hood RFQ\].

[^92]: 1999 *Hearings, supra* note 22 (statement of Mahlon Apgar, IV,
    Assistant Secretary of the Army, Installations and Environment).

[^93]: Fort Hood RFQ, *supra* note 91, at pt. I, sec. 1.1. Note that the
    RFQ is organized into two phases, a project planning phase and a
    project implementation phase. In the discussion that follows, the
    initial project planning phase is conceptually described as
    consisting of two phases: submission of a Statement of
    Qualifications and development of a Community Development and
    Management Plan.

[^94]: *Id.* at pt. I, sec. 4.1. The RFQ requires the Statement to
    demonstrate the developer meets the minimum experience requirements
    set forth in the RFQ. *Id.* at pt. I, sec. 4.2. In addition, it
    requires a detailed listing of relevant experience, preliminary
    concept statement, documentation of financial capability, background
    and structure of the developer's organization, past performance
    information, statement of expected financial return on the project
    and information regarding the developer's use of small business
    concerns as subcontractors. *Id.* at pt. I, sec. 4.3. This
    information is similar in type to the information required in an
    RFP, but is significantly less detailed and therefore less expensive
    for developers to prepare. An RFP details explicitly the project
    requirements, and the Government selects the contractor based on
    what is contained in the developer's proposal. 1999 *Hearings,
    supra* note 22 (statement of Mahlon Apgar, IV, Assistant Secretary
    of the Army, Installations and Environment). In contrast, the idea
    of the RFQ is to formulate explicit criteria for selecting the
    developer and then work jointly with the developer to devise the
    best plan for project execution. *Id.*

[^95]: Fort Hood RFQ, *supra* note 91, at pt. I, sec. 4.0.

[^96]: *Id.* at pt. I, sec. 1.1.

[^97]: *Id.*

[^98]: *Id.*

[^99]: *Id.*

[^100]: E-mail from Mike Finn, Staff Judge Advocate, Fort Hood, Texas to
    author (Nov. 30, 2000, 4:36 PM) (on file with author). The project
    status page at the DUSD(I&E)'s Military Housing Privatization web
    site reports that transfer of operations to the private developer
    took place on October 1, 2001. *Supra*, note 2.

[^101]: The RFQ process unquestionably saves the potential offerors time
    and money initially, but the selected developer is taking
    significant risks. Judging from Fort Hood's experience, the selected
    developer spends many times the \$350,000 sum to prepare the CDMP,
    so if an agreement cannot be reached, the developer suffers a
    significant loss. E-mail from Mike Finn, *supra* note 100. That has
    not happened at Fort Hood, but the selection of the developer in
    June of 2000 failed to immediately yield a final acceptance of the
    CDMP, which did not occur until some months later. E-mail from Mike
    Finn, Office of the Staff Judge Advocate, Fort Hood, Texas, to
    author (Nov. 14, 2000, 5:34 PM) (on file with author); project
    status page at the DUSD(I&E)'s Military Housing Privatization web
    site, *supra*, note 2. This raises questions regarding whether the
    RFQ process is any faster or more streamlined than the traditional
    FAR process. Fort Lewis and Fort Meade MHPI projects were solicited
    using the RFQ process. *See* Office of the Assistant Secretary of
    the Army for Installations and the Environment, *The Army's
    Residential Communities Initiative*, *at*
    [http://www.rci.army.mil](http://www.rci.army.mil/). In addition,
    the Army is combining projects into a large multi-project RFQ that
    allows developers to submit offers for one or more of the projects
    included in the RFQ. *Id*. For example, several projects for the
    northeast were wrapped into one RFQ that included MHPI projects at
    Fort Detrick, Maryland; Fort Hamilton, New York; Picatinny Arsenal,
    New Jersey; and Walter Reed Army Medical Center, District of
    Columbia. *Id*.

[^102]: Fort Hood RFQ, *supra* note 91, at pt. II, app. E. For example,
    the RFQ includes FAR clause 52.212-1, Instructions to Offerors --
    Commercial Items; and FAR clause 52.212-2, Evaluation Commercial
    Items. *Id.*

[^103]: *See supra* Part III.A.

[^104]: Fort Hood RFQ, *supra* note 91, at pt. II, app. E.

[^105]: FAR, *supra* note 38, at 12.203.

[^106]: Competing developers on the Fort Hood project referred to the
    RFQ process as a beauty contest. E-mail from Mike Finn, *supra* note
    101.

[^107]: Fort Hood RFQ, *supra* note 91, at pt. I, sec. 4.0.

[^108]: Pikes Peak Family Hous. v. United States, 40 Fed. Cl. 673, 678
    (1998); Birch & Davis Int'l Inc. v. Christopher, 4 F.3d 970, 974
    (Fed. Cir. 1993).

[^109]: For example, Fort Hood grappled with the applicability of
    Housing and Urban Development statutes requiring comprehensive lead
    paint abatement procedures upon the sale of Federal housing. E-mail
    from Mike Finn, Fort Hood Office of the Staff Judge Advocate,
    *supra* note 100. They determined that as long as the conveyance was
    not a "sale" the statutes did not apply. *Id.* A number of
    environmental and other statutes are potentially applicable to MHPI
    projects, and their impact on MHPI projects may not be known until
    litigation is initiated.

[^110]: The Air Force has not provided a written legal opinion
    indicating that Davis-Bacon applies to MHPI agreements, but as a
    matter of policy, it has included Davis-Bacon in all MHPI
    solicitations to date. Interview with Dottie Loeb, *supra* note 74.

[^111]: The Contract Disputes Act of 1978 is codified at 41 U.S.C.A. §§
    601-613 (West 2001). The Army has consistently included the CDA
    clause in its RFQ. *See, e.g.,* Fort Hood RFQ, *supra* note 91, at
    pt. II, app. E, FAR clause 52.212-4(d). The Air Force policy is that
    the CDA is not applicable to MHPI projects. Interview with Dottie
    Loeb, *supra* note 74.

[^112]: 40 U.S.C.A. § 276a (a) (West 2001).

[^113]: 29 C.F.R. § 5.2(k) (2001).

[^114]: Peterson v. United States, 119 F.2d 145 (6th Cir. 1941).

[^115]: Fischer Eng'g. & Maint. Co., Comp. Gen., B-223359, Sep. 26,
    1986, 86-2 CPD ¶ 359. Section 801 housing projects were typically a
    build/lease arrangement. Military Construction Authorization Act for
    Fiscal Year 1984, Pub. L. No. 98-115 § 801, 97 Stat. 757, 782-83
    (codified at 10 U.S.C. § 2828) (repealed 1991). Generally, the
    Government leased the land to the developer and the developer built
    new units that the developer owned. *Id.* The Government then leased
    the houses directly from the developer at a set rate and used the
    houses for military families. *Id.* Appropriated funds were used to
    pay rent. *Id.*

[^116]: *Id.*

[^117]: The Government provided a direct loan to the developer in the
    Lackland MHPI project, in addition to loan guarantees. 2000
    *Hearings, supra* note 7 (statement of Randall A. Yim, Deputy Under
    Secretary of Defense, Installations). The Fort Carson MHPI project
    utilized a loan guarantee. *Id.* The Navy projects, although
    constructed under a different authority, required the Navy to
    provide an equity contribution to the projects of \$9.5M on the
    Corpus Christi, Texas, project and \$5.9M on the Everett,
    Washington, project. *Id.*

[^118]: Comp. Gen., B-234896, (Jul. 19, 1989)(available through FLITE
    database)(holding development agreements under the Judiciary
    Building Act were subject to Davis-Bacon wage rates because the
    building would serve the general public and it would not have been
    built by the developer on federal land without the authority). The
    GAO has recognized the cases indicating a broad construction for
    applicability of Davis-Bacon Act (DBA) to a number of contracts
    involving some type of construction. While the U.S. Department of
    Justice's Office of Legal Counsel initially believed the DBA was
    *per se* not applicable to any lease contract (regardless of whether
    such a contract also called for construction of a public work or
    building), it has since concluded that the applicability of the DBA
    to any specific lease contract depends upon the facts of the
    contract at issue. Reconsideration of Applicability of the
    Davis-Bacon Act to the Veteran Administration's Lease of Medical
    Facilities, 18 Op. Off. Legal Counsel 109 (May 23,
    1994)("determination whether a particular lease-construction
    contract is a 'contract . . . for construction' of a public work or
    building within the meaning of the Davis-Bacon Act will depend upon
    the details of the particular agreement"), *available at*
    http://www.usdoj.gov/olc/1994opinions.htm.

[^119]: 41 U.S.C.A. § 601-613 (West 2001). The CDA provides a framework
    for resolving disputes between Government agencies and Government
    contractors following award of a contract. *See* FAR, *supra* note
    38, at subpt. 33.2. One key feature is its procedural requirements
    prior to allowing contractors to seek redress at a Board of Contract
    Appeals (BCA) or the Court of Federal Claims. 41 U.S.C. A. § 605. In
    addition, the CDA vests jurisdiction in the agency BCAs to resolve
    disputes between the parties to the contracts. *Id.* at § 607.

[^120]: *Id.* at § 602(a).

[^121]: *Id.*

[^122]: *See, e.g.,* Fort Hood RFQ, *supra* note 91, at pt. II, app. E,
    FAR clause 52.212-4(d). The only question is when the CDA becomes
    applicable in the context of the RFQ. Generally, the CDA only
    applies to disputes arising after award. United States v. John C.
    Grimberg, Inc., 702 F.2d 1362 (Fed. Cir. 1983). The phased method
    under the RFQ, where one developer is selected and proceeds into
    further negotiations resulting in a final agreement, may constitute
    two different awards and therefore two different contracts. The
    first award and contract occurs when the developer is selected and
    awarded the right to develop the CDMP and to receive consideration
    for doing so. This first award appears to fall squarely within the
    act as procurement of services. 41 U.S.C. § 602(a)(2). The Army is
    procuring a CDMP for \$350,000 that the Army has the full right and
    title to use if it terminates negotiations with the developer. That
    being true, any disputes that may arise during the CDMP development
    phase, including the Army's decision to terminate the negotiations,
    would appear to be subject to the CDA procedural requirements and
    ultimately to jurisdiction of the Armed Services Board of Contract
    Appeals (ASBCA). The second award and contract occurs when the Army
    accepts the developer's completed CDMP and proceeds to phase three
    to implement the plan. As is typical in traditional procurement
    contracts, any disputes that arise during the term of the contract
    will be subject to CDA requirements and will fall under the
    jurisdiction of the ASBCA.

[^123]: Interview with Dottie Loeb, *supra* note 74. Interestingly, the
    Elmendorf solicitation contained a unique disputes clause that
    varies significantly from the CDA. Elmendorf solicitation, *supra*
    note 84, at app. I, para. 23. It provides that disputes under
    \$10,000 will be decided by the Commander whose decision is final
    and conclusive and not otherwise appealable or subject to challenge.
    *Id.* at app. I, para. 23.1. For disputes over \$10,000, the
    developer must exhaust its administrative remedies. *Id.* at app.I,
    para. 23.2. Exhaustion of administrative remedies includes
    submission to the Commander for a decision that is final unless
    appealed to the Secretary of the Air Force within 30 days of the
    date the developer receives the Commander's written decision. *Id.*
    at app. I, para. 23.2.1. If timely appealed to the Secretary, the
    Secretary's decision is final unless appealed to a court of
    competent jurisdiction in a timely manner. *Id.* at app. I, para.
    23.2.2. What is "timely" and what is a "court of competent
    jurisdiction" are not defined anywhere in the MHPI agreement. Once
    the developer exhausts its administrative remedies, it may "pursue
    any remedy available to it under the law" and/or submit to
    alternative dispute resolution with the Government. *Id.* at app. I,
    para. 23.3. This is now the standard clause used by the Air Force in
    MHPI projects. Air Force Generic RFP, Operating Agreement to the
    Lease, Condition 24,
    <http://www.afcee.brooks.af.mil/dc/dcp/news/download/genericrfp.pdf>
    (last visited April 1, 2002). Unlike the provisions of the CDA, the
    process set forth under this clause leaves a number of questions
    unanswered, such as timing, jurisdiction, and procedure.

[^124]: 41 U.S.C. § 602(a)(4).

[^125]: Korman Corp., HUD BCA No. 81-563-C5, 82-2 BCA ¶ 16,044 (Sep. 26,
    1982).

[^126]: *Id.*

[^127]: *Id.*

[^128]: *Id.*

[^129]: *Id.*

[^130]: *Id.*

[^131]: *Id.*

[^132]: *Id.* The board also noted that other agency boards of contract
    appeals had considered their jurisdiction over hybrid contracts
    involving elements of CDA covered and non-covered matters. *Id.*
    (citing Lea Co., GSBCA No. 5697, 81-2 BCA ¶ 15,207 (Jun. 25, 1981);
    Sierra Pacific Indust., AGBCA No. 79200, 80-1 BCA ¶ 14,383 (Apr. 11,
    1980)). In those cases, the boards determined the contracts were
    subject to the CDA. In *Lea Company*, the board determined that a
    Government lease of an interest in real property was a contract and
    that the board had jurisdiction to hear the dispute under the CDA.
    Lea Co., 81-2 BCA ¶ 15,207. In *Sierra Pacific Industries*, the
    contract at issue involved the sale of timber and the construction
    of a road. Although the board decided the case based on a
    determination that the sale of timber constituted disposal of
    personal property therefore subjecting the contract to the CDA and
    the board's jurisdiction, the board suggested that the road
    construction portion of the contract may have been sufficient to
    subject it to the CDA. Sierra Pacific Indust., 80-1 BCA ¶ 14,383;
    s*ee also* Forman v. United States, 767 F.2d 875 (Fed. Cir. 1985)
    (holding that even if lease is not subject to CDA, lease was part of
    larger contract with private party to construct a building for the
    Post Office making the entire contract subject to the CDA).

[^133]: *Korman Corp.*, 82-2 BCA ¶ 16,044.

[^134]: *Id.*

[^135]: *Id.* The board noted that the CDA is sufficiently broad to
    encompass contracts that have one or more of the enumerated
    procurement purposes that are specifically covered by the CDA. *Id.
    But see* Bonneville Assocs. v. United States, 43 F.3d 649 (Fed. Cir.
    1994) (suggesting that the CDA may be applicable to dual purpose
    contracts only if the dispute arises under the purpose covered by
    the CDA).

[^136]: The statute authorizing MHPI indicates the purpose of the
    statute is to provide for the acquisition or construction of family
    housing units on or near military installations in the United
    States, its territories and possessions by private developers. 10
    U.S.C. § 2872.

[^137]: For example, under the Elmendorf solicitation, the developer and
    the Government participate in a 35%, 65% and 100% design review
    conference, with the Government retaining the right to accept or
    reject the final plans. Elmendorf solicitation, *supra* note 84, at
    sec. 3.2.6.1. In addition, the developer must receive a Certificate
    of Occupancy from the Government before occupying the units. *Id.*
    at sec. 3.2.6.5. The Government will only provide the Certificate
    once it is satisfied the developer has complied with all applicable
    codes, standards, regulations, drawings, plans and specifications.
    *Id.* The Lackland solicitation sets forth pervasive mandatory
    Government inspection requirements. Lackland solicitation, *supra*
    note 60, at app. A, exhibit G. In the Fort Hood MHPI project, the
    Army works with the developer to plan the project including its
    design, and reserves the right to accept or reject the developer's
    plan. Fort Hood RFQ, *supra* note 91, at pt. I, sec. 2.1.

[^138]: By way of analogy, this conclusion is similar to that regarding
    the applicability of bid protest jurisdictional provisions of the
    Competition in Contracting Act of 1984 (CICA), 31 U.S.C. § 3551, to
    dual purpose contracts. In a 1999 bid protest before the GAO, the
    GAO determined that a contract for privatization of government
    utilities was a dual purpose contract. Government of Harford County,
    Maryland, B-283259, B-283259.3, Oct. 28, 1999, 99-2 CPD ¶ 81. The
    contract in that case was for the sale of Aberdeen Proving Ground's
    water and wastewater treatment facilities and the provision of
    potable water and wastewater services. *Id.* The Army argued that
    GAO had no jurisdiction to resolve the protest because the RFP was
    for the sale or transfer of government property, not for the
    procurement or award of a contract for property or services. *Id.*
    Therefore, the Army argued, the contract was not subject to CICA,
    and because CICA was the source of the GAO's bid protest
    jurisdiction, the GAO had no authority to hear the protest. *Id.*
    The GAO stated that CICA conferred it with authority to review
    procurements or awards of contracts for property or services. *Id.*
    It found that the Army's procurement had a dual purpose, that is, to
    transfer ownership of the water and wastewater facilities and to
    contract for water and wastewater treatment services for 10 years.
    *Id.* The GAO concluded that it had jurisdiction under CICA to hear
    the protest because one of the main objectives of the procurement
    was to obtain water and wastewater services. *Id.* It would appear
    that whenever there is a dual purpose procurement or contract, if a
    statute conferring jurisdiction to hear protests or disputes is
    applicable to one or the other purpose, the GAO, courts and boards
    will find jurisdiction to consider the entire protest or dispute.

[^139]: Although representatives from the installation may participate
    in some aspects of the formation stage, much of the initial policy
    decisions, document formation, financial structure of the agreement
    and even the negotiations and selection of a developer are handled
    at the level of the Service Secretaries and the Major Commands. The
    financial instruments are usually Service or Major Command-level
    documents and generally controlled from that level for modification
    purposes. Telephone Interview with Gordon Tanner, *supra* note 90.
    The Lackland AFB project had a significant amount of involvement
    from the Air Staff, as it was the first MHPI project. Telephone
    Interview with Gregory Petkoff, Attorney, SAF/GCQ (Feb. 1, 2001)
    (notes on file with author). The Elmendorf AFB project has been
    handled by attorneys, contracting personnel and hired consultants at
    the Pacific Air Forces, Elmendorf's Major Command. Telephone
    Interview with Captain (Capt) Jennifer Bell-Towne, Chief, Contract
    Law, Elmendorf AFB, Alaska (Dec. 5, 2000) (notes on file with
    author). Contract and solicitation and award on the Fort Carson
    project was done by the Corps of Engineers and then transferred to
    the installation for administration. E-mail from Maj Dru
    Brenner-Beck, *supra* note 83.

[^140]: Currently, the Dyess AFB project and the Navy projects at
    Kingsville, Texas and Everett, Washington, are located off the
    military installation.

[^141]: *See* Lackland solicitation, *supra* note 60, at sec. 1.0;
    Elmendorf solicitation, *supra* note 84, at sec. 1.3.2; Telephone
    Interview with Maj Dru Brenner-Beck, *supra* note 64.

[^142]: 2000 GAO R[eport]{.smallcaps}, *supra* note 5. Each agreement
    contains a priority list of unit occupancy, with the highest
    priority given to active-duty military members referred to the
    developer by the installation housing office. In most agreements, if
    occupancy drops below a certain percentage for a set period of time,
    the developer is allowed to rent the units to non-active-duty
    members. For example, in the Air Force solicitations for Lackland
    and Elmendorf, military families referred through the installation's
    housing office are given priority for the developer's units. If the
    occupancy rate drops below 95% for more than three months, vacant
    units are available to other tenants in order of the priority set
    forth in the solicitation. *See* Lackland solicitation, *supra* note
    60, at sec. 3.1.9; Elmendorf solicitation, *supra* note 84, at sec.
    3.3.4.6. Fort Carson's contract also has a priority list under which
    civilians could occupy the housing units. Telephone Interview with
    Maj Dru Brenner-Beck, *supra* note 64. The agreements will generally
    include a list of occupant priorities that include federal civil
    service employees, military retirees, military reservists, armed
    forces veterans, and members of the public. The Elmendorf list
    prioritizes in descending order of priority, beginning with
    active-duty Air Force members referred by the base housing office
    and continues with other active-duty Air Force members, other
    active-duty military members, federal civil service employees,
    military retirees, military Reserve and Guard, military veterans and
    the general public. Elmendorf solicitation, *supra* note 84, at
    amend. 2. Lackland is similar, beginning with military families
    referred by the base housing office and then to federal civil
    service employees, military retirees, Lackland AFB contractors, and
    the public. Lackland solicitation, *supra* note 60, at sec. 3.1.9.
    As a result of long waiting lists for housing at the installations,
    the services are doubtful occupancy rates will drop low enough that
    civilians will occupy the units. *See* Memorandum for Record,
    Lieutenant Colonel (Lt Col) Daniel K. Poling, Deputy Staff Judge
    Advocate, Fort Carson, Colorado, para. 7(b) (Apr. 5, 2000) (on file
    with author); Telephone Interview with Maurice Deaver, Chief,
    Contract Law, Lackland AFB, Texas (Feb. 9, 2001) (notes on file with
    author).

    However, none of the projects completed to date require military
    families to accept the MHPI housing. *See* Elmendorf solicitation,
    *supra* note 84, at sec. 3.3.4; Lackland solicitation, *supra* note
    60, at 1.0(c); Fort Hood RFQ, *supra* note 91, at pt. I, sec. 3.2.
    They are free to accept the houses, seek private sector houses, or
    remain on the waiting list for Government-owned housing on the
    installation. Depending on how MHPI houses compare to houses in the
    local community in terms of size, amenities, upkeep and costs, it is
    conceivable that military families may choose not to occupy MHPI
    houses. 1998 GAO R[eport]{.smallcaps}, *supra* note 6, at ch. 2:3.3.
    In addition, if DoD is successful in its program to close the gap
    between BAH and actual housing costs, more military families may
    choose to live off base rather than in MHPI housing. A 1999 Rand
    study found that the strong demand for military housing is primarily
    due to the benefit gap. *An Evaluation of Housing Choices Among
    Military Families,* Study MR-1020-OSD (Rand, 1999),
    <http://www.rand.org/publications/MR/MR1020/index.html> (last
    visited Feb. 5, 2001). (The benefit gap is the financial difference
    between living in a Government-owned house where rent and utilities
    are at no cost to the member, versus the out of pocket expenses
    involved with living in the civilian community. *Id.* This is the
    result of the difference between housing allowances and actual
    costs. *Id.*) The study found that very few military families would
    prefer to live in Government-owned housing on base if this benefit
    gap was eliminated. *Id.*

[^143]: The Fort Carson legal office concluded that the installation
    commander has authority to authorize searches of civilian-occupied
    privatized housing on the installation. Memorandum for Record, Lt
    Col Daniel K. Poling, *supra* note 142. In contrast, at least one
    legal opinion from the Air Force concluded that once the property is
    conveyed to the developer, the installation commander may no longer
    authorize searches of MHPI housing, but may continue to authorize
    searches of individuals subject to the UCMJ. Overview of Legal
    Authorities and Issues Associated with Housing Privatization, Lt Col
    Steve Hatfield, AFMC LO/JAV, Wright Patterson AFB, Ohio (undated),
    [https://www.afmc-mil.wpafb.af.mil/HQ-AFMC/JA/lo/lojav/privatization/housing/index3.htm](http://www.afmc-mil/wpafb.af.mil/organizations/HQ-AFMC/JA/lo/lojav/privatization/housing/index3.htm).

[^144]: Saylor v. United States, 374 F.2d 894, 898 (Ct. Cl. 1967).

[^145]: United States v. Walsh, 21 C.M.R. 876, 883 (1956).

[^146]: M[anual]{.smallcaps} [for]{.smallcaps}
    C[ourts]{.smallcaps}-M[artial]{.smallcaps} \[hereinafter MCM\],
    U[nited]{.smallcaps} S[tates]{.smallcaps}, M[il.]{.smallcaps} R.
    E[vid]{.smallcaps}. 315(b) (1998).

[^147]: United States v. Rogers, 388 F. Supp. 298 (E.D. Va. 1975).

[^148]: *Id.* at 301.

[^149]: *Saylor*, 374 F.2d 894.

[^150]: *Id.*

[^151]: *See* United States v. Reppert, 76 F. Supp. 2d 185 (D. Conn.
    1999); Donnelly v. United States, 525 F. Supp. 1230 (E.D. Va. 1981).

[^152]: In one case, the lease provided that the apartments were under
    the control of the Navy, even to the exclusion of the owner.
    Donnelly, 525 F. Supp. at 1232.

[^153]: United States v. Walsh, 21 C.M.R. 876, 884 (1956) (citing Op
    JAGAF 88-11.2, 6 August 1952; Op JAGAF 88-11.2, 5 April 1955).
    Wherry and Capehart housing were privatized housing projects
    prevalent in the 1950s. Private businessmen constructed, operated
    and maintained these housing projects on or near military
    installations, and military families could rent the houses using
    their housing allowance. William C. Baldwin, *Wherry and Capehart:
    Army Family Housing Privatization Programs in the 1950s,*
    E[ngineer]{.smallcaps} M[agazine,]{.smallcaps} *available at*
    <http://www.wood.army.mil/ENGRMAG/PB5961/PB5962/pastview.htm> (last
    visited Jun. 28, 2000).

[^154]: Telephone Interview with Lieutenant Colonel (Lt Col) Brian
    Huizenga, AF/ILEIP (Feb. 2, 2001) (notes on file with author). *See
    also* Draft Air Force Housing Privatization Policy and Guidance
    Manual, *supra* note 17, at section 5.2.1.

[^155]: *Id.* It should be noted, however, that this contingency has not
    been listed in the solicitations, and if not set forth in the
    agreement itself, could constitute a breach of contract. Whereas the
    contractor bargained for houses on the installation, complete with
    the conveniences and reduced costs associated with that location,
    moving the fences could be viewed to change the bargain entirely. In
    most of these projects, the installation provides fire protection,
    law enforcement, and the security and convenience of the
    installation itself. Moving the housing project outside the gates
    may change the costs to the developer and the willingness and desire
    of military members to occupy the units.

[^156]: Fort Carson Tenant Lease, para. 13 (on file at the Fort Carson
    Legal and Housing Offices). One potentially complicating factor is
    that the tenant lease specifically states that the Army retains the
    ability to authorize and conduct inspections in all areas leased or
    owned by the developer on Fort Carson. *Id.* It does not, however,
    specifically reference searches for the purpose of investigating
    criminal activity rather than mere inspections of the premises. See
    *id.*

[^157]: *See supra* notes 147-153 and accompanying text.

[^158]: *See* United States v. Rogers, 388 F. Supp. 298 (E.D. Va. 1975);
    Saylor v. United States, 374 F.2d 894, 898 (Ct. Cl. 1967).

[^159]: In areas of exclusive federal jurisdiction, such as Fort
    Carson's housing project, individuals committing crimes in housing
    will be prosecuted in federal, rather than state court.
    Additionally, only federal law enforcement authorities have
    jurisdiction in areas of exclusive federal jurisdiction. In areas of
    concurrent jurisdiction, however, both the state and the federal
    Government have law enforcement and prosecutorial power. See U.S.
    D[ep't]{.smallcaps} [of]{.smallcaps} A[ir]{.smallcaps}
    F[orce,]{.smallcaps} [Handbook]{.smallcaps} (AFHB) 31-218, [Law
    Enforcement Missions and Procedures,]{.smallcaps} para 3.3 (1 Sept.
    1997).

[^160]: "Notwithstanding any other provision of law, the Secretary
    concerned may, whenever he considers it desirable, relinquish to a
    State, or to a Commonwealth, territory, or possession of the United
    States, all or part of the legislative jurisdiction of the United
    States over lands or interests under his control in that State,
    Commonwealth, territory, or possession. Relinquishment of
    legislative jurisdiction under this section may be accomplished (1)
    by filing with the Governor (or, if none exists, with the chief
    executive officer) of the State, Commonwealth, territory, or
    possession concerned a notice of relinquishment to take effect upon
    acceptance thereof, or (2) as the laws of the State, Commonwealth,
    territory, or possession may otherwise provide." 10 U.S.C.A. §
    2683(a) (West 2001). The complicating factor under this alternative
    is that the state must consent and accept the change in jurisdiction
    for something other than exclusive jurisdiction. If the houses are
    not providing any income to the state in terms of property taxes and
    the like, the state may be reluctant to accept a change in
    jurisdiction that will increase the burden on its services without
    providing income to offset the increased demand.

[^161]: Bivens v. Six Unknown Named Agents of Federal Bureau of
    Narcotics, 403 U.S. 388 (1971). In *Bivens*, the Supreme Court held
    that a federal law enforcement agent may be held personally liable
    if he violates an individual's Fourth Amendment rights. *Id.* The
    agent can be held personally liable even if he was acting within the
    scope of his employment and under color of his authority. *Id*.
    *Bivens* has application to MHPI housing in that military law
    enforcement officials may be subject to personal liability if they
    violate the Fourth Amendment rights of civilian occupants. If
    military police conduct a search of a civilian-occupied MHPI house
    pursuant to the installation commander's search authorization that
    is later found to be a violation of the civilian's constitutional
    rights, the individual law enforcement officers and the commander
    could be held personally liable for monetary damages*.* This is a
    particularly significant concern because of the absence of case law
    indicating the boundaries of the commander's authority to authorize
    searches of civilian occupied privatized housing on the
    installation. As a result, it may be prudent for commanders to
    exercise restraint where civilians are concerned and allow federal
    magistrates or civilian judges to authorize searches, depending on
    jurisdiction in the MHPI housing areas.

[^162]: Cafeteria & Restaurant Workers Union v. McElroy, 367 U.S. 886
    (1961) (stating a military commander's ability to exclude persons
    from the installation at will was recognized as early as 1837 in an
    Attorney General's opinion). The commander's authority also arises
    from 18 U.S.C. § 1382, which sets forth criminal penalties for
    entering military installations after being previously ordered not
    to reenter by the installation commander. *See also* United States
    v. Jelinski, 411 F.2d 476 (5th Cir. 1969).

[^163]: Barment, Op JAGAF, Air Force, No. 188 (12 Dec 1996).

[^164]: Holdridge v. United States, 282 F.2d 302 (8th Cir. 1960);
    Cafeteria & Restaurant Workers Union v. McElroy, 367 U.S. 886
    (1961); United States v. Packard, 236 F. Supp. 585 (N.D. Ca. 1964).

[^165]: United States v. Watson, 80 F. Supp. 649 (E.D. Va. 1948); United
    States v. Jelinski, 411 F.2d 476 (5th Cir. 1969).

[^166]: United States v. Watson, 80 F. Supp. 649 (E.D. Va. 1948); United
    States v. Packard, 236 F. Supp. 585 (N.D. Ca. 1964); Holdridge v.
    United States, 282 F. 2d 302 (8th Cir. 1960).

[^167]: *Watson*, 80 F. Supp. at 651.

[^168]: *Id*.

[^169]: *Id*. at 650.

[^170]: *Id.* at 651.

[^171]: *Id.*

[^172]: *Id.*

[^173]: *Packard*, 236 F. Supp. 585. In this case, a salesman violated
    the commander's order not to re-enter a military housing area
    located just outside the gates of the installation. *Id.* at 586.
    The court found that signs indicating United States ownership of the
    area, coupled with regular military patrols of the area, were
    sufficient to constitute exclusive possession so that the salesman's
    conviction under 18 U.S.C. § 1382 was proper. *Id.*

[^174]: The Elmendorf AFB project, for example, included conveyance of
    504 housing units in three housing areas on the installation, with
    an accompanying lease of 128 acres of land on which the houses are
    situated. Elmendorf solicitation, *supra* note 84, at sec. 1.3. The
    Lackland project leased 30 acres of land to the developer, upon
    which 272 housing units were situated that were conveyed to the
    developer. Lackland solicitation, *supra* note 60, at sec. 1.0(b).

[^175]: *See* Lackland solicitation, *supra* note 60, at sec. 1.0;
    Elmendorf solicitation, *supra* note 84, at sec. 1.3.2; Fort Hood
    RFQ, *supra* note 91, at pt. I, sec. 1.1.

[^176]: The Lackland solicitation explicitly states that military
    security forces personnel will provide law enforcement for the MHPI
    housing development. Lackland solicitation, *supra* note 60, at sec.
    3.1.4. Similarly, the Operating Agreement in the Elmendorf
    solicitation provides that Elmendorf Security Forces personnel will
    provide law enforcement and security assistance in MHPI housing
    area. Elmendorf solicitation, *supra* note 84, at app. I, exhibit E,
    para. 5(c). It also specifically states that Elmendorf will provide
    fire protection services. *Id.* at app. I, exhibit E, para. 6. The
    Fort Carson tenant lease states that the Landlord, United States
    Government, Army, and Fort Carson military authorities all have the
    right to enter the premises to make repairs or to inspect. Fort
    Carson Tenant Lease, para. 13, *supra* note 156.

[^177]: An Air Force Judge Advocate General's Opinion concluded that in
    the case of non-DoD personnel residing in on-base family housing
    privatization projects, the installation commander's authority under
    18 U.S.C. § 1382 to bar those civilians from the installation is
    unaffected. OpJAGAF 1996/188, *supra* note 163. The opinion provided
    no discussion of how the structure of the MHPI program might affect
    a court's determination of Government ownership or exclusive
    possession of such housing areas on the installation. *Id.*
    Additionally, it contained only brief mention of the interests of
    the civilian residents in remaining in their rented home, another
    factor that may impact the ability or methodology of an installation
    commander seeking to bar a civilian resident from the installation.
    *Id. See* Cafeteria & Restaurant Workers Union v. McElroy, 367 U.S.
    886, 895 (1961).

[^178]: *Id.*; United States v. Jelinski, 411 F.2d 476, 478 (5th Cir.
    1969).

[^179]: *Cafeteria & Restaurant Workers Union*, 367 U.S. at 895.

[^180]: An "actual eviction" is defined as "\[a\]n actual expulsion of
    the tenant out of all or some part of the demised premises."
    B[lack's]{.smallcaps} L[aw]{.smallcaps} D[ictionary]{.smallcaps} 35
    (6th ed. 1990). "Eviction" is defined as "the act of depriving a
    person of the possession of land or rental property which he has
    held or leased." *Id.* at 555. If a civilian renting a home on the
    installation cannot access the installation, then he can no longer
    live in the house. This is tantamount to an eviction. In addition,
    the Supreme Court held that depriving a person of access to his
    mobile home in the absence of a lawful eviction order was an
    unlawful seizure of property in violation of the Fourth Amendment.
    Soldol v. Cook County, 506 U.S. 53 (1992).

[^181]: *Cafeteria & Restaurant Workers Union*, 367 U.S. at 895.

[^182]: *Id.*

[^183]: *Id.*

[^184]: *Id.* at 891.

[^185]: *Id.* at 896.

[^186]: *Id.* at 894.

[^187]: *Id.* at 896. The Court held that Government employment can be
    revoked at will, absent legislation to the contrary. It found that
    the barment did not deprive the civilian of the ability to work,
    only the opportunity to work at the one installation. She was free
    to obtain employment anywhere else.

[^188]: United States v. Jelinski, 411 F.2d 476 (5th Cir. 1969).

[^189]: Memphis Light, Gas & Water Div. v. Croft, 436 U.S. 1 (1978).
    Water service to residences has been found to be a property right
    requiring due process before denial of service. Ransom v. Marrazzo,
    848 F.3d 398 (3rd Cir. 1988).

[^190]: Pursuant to the MHPI agreements, service members enter into
    lease agreements with the developer, pay rent directly to the
    developer, and the Government is not a party to the tenant lease
    agreement. *See* Fort Carson Tenant Lease, *supra* note 156.

[^191]: Air Force Generic RFP, Operating Agreement to the Lease,
    Condition 28,
    <http://www.afcee.brooks.af.mil/dc/dcp/news/download/genericrfp.pdf>.
    This provision specifically states "\[n\]othing in this Lease shall
    be construed to diminish, limit or restrict any right, prerogative,
    or authority of the commander as established in law, regulation,
    military custom or elsewhere." *Id.* It further provides that the
    "Commander has the right at all times to order the permanent removal
    and barment of anyone from the installation, including but not
    limited to tenants, if he or she believes, in his or her sole
    discretion, that the continued presence on the installation of that
    person represents a threat to the security or mission of the
    installation, poses a threat to the health, welfare, safety or
    security of persons occupying the installation or compromises good
    order and/or discipline on the installation." *Id*.

[^192]: These grounds should then be inserted in the lease between the
    developer and the civilian tenants as grounds for eviction. The
    Elmendorf solicitation contains a debarment provision that is
    helpful, but does not go far enough to require the developer to
    initiate eviction action. It states that the "Commander has the
    right at all times to order the permanent removal and debarment of
    anyone from Elmendorf AFB, including but not limited to tenants, if
    he or she believes in his or her sole discretion that the continued
    presence of that person represents a threat to the security or
    mission of Elmendorf AFB, poses a threat to the health, welfare,
    safety or security of persons occupying Elmendorf AFB or compromises
    good order and/or discipline on Elmendorf AFB." Elmendorf
    solicitation, *supra* note 84, at app. I, para. 29.2.

[^193]: *See* Telephone Interview with Capt Craig Crimmons, *supra* note
    68. *See also* Telephone Interview with Maj Dru Brenner-Beck,
    *supra* note 64.

[^194]: The Military Construction Appropriations Act contains separate
    appropriations for each of the Services for family housing
    operations and maintenance and for family housing construction.
    *E.g.*, Military Construction Appropriations Act for Fiscal Year
    2002, Pub. L No. 107-64, 114 Stat. 474 (Nov. 2001) (provides
    specific appropriations for family housing operation and maintenance
    and construction); *cf.* the Department of Defense Appropriations
    Act for Fiscal Year 2001, Pub. L No. 106-259, 114 Stat. 656, § 8098
    (Aug. 2000) (explicitly prohibiting expenditure of funds
    appropriated by the act for the purpose of performing repairs or
    maintenance to military family housing). In addition to the annual
    appropriations acts, the annual DoD authorization acts set forth
    enumerable and often program-specific conditions and authorizations
    that specify the purposes for which the individual appropriations
    may be expended. See National Defense Authorization Act for Fiscal
    Year 2002, *supra*, note 44. Any resident relations programs the
    installation may offer are typically funded with APFs. For example,
    most installations sponsor a yard-of-the-month program with the
    winner receiving a sign to display in their yard, sometimes coupled
    with a small prize for winning a specified number of times. At Fort
    Carson, if someone won yard-of-the-month five times, they received a
    free cleaning of their quarters upon vacating them. Memorandum from
    Maj Dru Brenner-Beck, Chief, Administrative and Civil Law, Fort
    Carson, to Harrison Cole, Contracting Officer, Fort Carson, subject:
    Use of Appropriated Funds (APFs) for Housing Purposes and the
    Capital Venture Initiative (CVI) Contract (19 Jul. 2000) (on file
    with author) \[hereinafter Brenner-Beck APF Memo\]. *See also* U.S.
    D[ep't]{.smallcaps} [of]{.smallcaps} A[ir]{.smallcaps}
    F[orce,]{.smallcaps} H[andbook (AFHB)]{.smallcaps} 32-6009,
    C[ivil]{.smallcaps} E[ngineering]{.smallcaps} (1 June 1996).

[^195]: Appropriated funds are limited in their use by the Purpose
    Statute. 31 U.S.C.A. § 1301(a) (West 2001). The Purpose Statute
    limits the use of appropriated funds to those objects for which the
    appropriation was made. *Id.*

[^196]: 1 Joint Fed. Travel Reg. ¶ U5355 (1 Jan. 2001).

[^197]: The Army and the Air Force have made similar conclusions. *See*
    Memorandum from Lieutenant Colonel (Lt Col) Kathryn Stone, Chief,
    General Law Branch, Administrative Law Division to Lana Swearingen,
    Office of the Asst. Chief of Staff for Installation Management,
    subject: Payment of Local Moves UP Military Housing Privatization
    Initiative (28 Jan. 1998) (on file with author) \[hereinafter Stone
    Memo\]; Memorandum from Jackson A. Hauslein, Jr., Associate General
    Counsel, SAF/GCA to Col. Smith, AF/ILEH, subject: Drayage and
    Storage of Household Goods in Connection with Moves into Privatized
    Housing (9 Jun. 1999) (on file with author) \[hereinafter Hauslein
    Memo\]. The Army has also concluded that APFs may be used to fund
    telephone and cable TV disconnect and reconnect costs in local moves
    between Government housing units due to MHPI construction or
    maintenance and repair projects. Stone Memo, *supra* (citing U.S.
    D[ep't]{.smallcaps} [of]{.smallcaps} A[rmy, Reg. (AR)]{.smallcaps}
    210-50, [Housing Management]{.smallcaps}, paras. 2-8, 2-9 (26 Feb
    1999)). Additionally, the Air Force concluded that while certain
    personnel moves may be funded with APFs, there was no authority to
    fund storage of household goods in connection with MHPI project
    moves. Hauslein Memo, *supra* (finding that JFTR authorization for
    Government funded storage only applies in very limited
    circumstances).

[^198]: Specifically, the statute provides that MHPI housing "shall be
    considered as quarters of the United States...." 10 U.S.C. §
    2882(b)(1). It should be noted that although the authority exists to
    assign members into MHPI housing, the current projects have not
    taken that approach. Service members are being given the choice to
    move into MHPI houses or to choose other housing, either on or off
    the installation. *See* Elmendorf solicitation, *supra* note 84, at
    sec. 3.3.4 (the Government will not guarantee occupancy of the units
    and freedom of housing choice for members shall be preserved); Fort
    Hood RFQ, *supra* note 91, at pt. I, sec. 3.2 (Army does not intend
    to use mandatory housing assignments).

[^199]: 1 Joint Fed. Travel Reg. ¶ U5355(A)(2) (1 Mar. 2001), *available
    at* http://www.dtic.mil/perdiem/jftr.html.

[^200]: *Id.* at ¶ U5355(C)(1)(d)..

[^201]: For example, the Lackland project required the demolition of 272
    units on a 30-acre site and the construction of new housing units on
    a 66-acre unimproved site. Lackland solicitation, *supra* note 60,
    at sec. 3.1.2. The agreement specifically required new construction
    on the 66-acre site begin first so that the 272 units on the 33-acre
    site could be vacated into the new units. *Id.* This required the
    Government to move personnel in the units set for rehabilitation
    into the newly constructed units so the Government could give the
    developer possession of that 30 acre improved site. *Id.*

[^202]: The Elmendorf project contained a number of units it deemed
    uninhabitable and had identified for demolition as part of the MHPI
    solicitation. Elmendorf solicitation, *supra* note 84, at sec.
    2.4.2.

[^203]: 1 Joint Fed. Travel Reg. ¶¶ U5355(C)(1)(b), U5355(C)(2).

[^204]: *Id.* at ¶ U5355(C).

[^205]: *Id*.

[^206]: *Id.*

[^207]: The Army and Air Force guidance does not specifically address
    this difficult issue. The Army opinion states that provided "local
    moves are directed by competent authority IAW the JFTR \[Joint
    Federal Travel Regulation\], paragraph U5355...there are no legal
    objections to the Government paying for such moves." Stone Memo,
    *supra* note 197. Similarly, the Air Force memo indicates "...the
    Air Force may approve on a case-by-case basis government funding for
    a member's move from local economy quarters to privatized housing
    when competent authority ...determines such a move is for the
    convenience of the Government." Hauslein Memo, *supra* note 197.

[^208]: 1 Joint Fed. Travel Reg. ¶ U5355(C)(1)(d).

[^209]: *See* Elmendorf solicitation, *supra* note 84, at sec. 3.3.4
    (the Government will not guarantee occupancy of the units and
    freedom of housing choice for members shall be preserved); Fort Hood
    RFQ, *supra* note 91, at pt. I, sec. 3.2 (Army does not intend to
    use mandatory housing assignments).

[^210]: *See* 1 Joint Fed. Travel Reg. ¶ U5355(C)(1).

[^211]: *Id.* The Air Force has indicated it will be Air Force policy
    that the developer is responsible for funding local moves when moves
    are for the convenience of the developer. *See* Draft Air Force
    Housing Privatization Policy and Guidance Manual, *supra* note 17,
    at section 5.4.2.

[^212]: For example, the Elmendorf AFB solicitation sets forth "desired
    enhancements" including a self-help store, snow sled hill, outside
    ice skating area, and community recreation hall. Elmendorf
    solicitation, *supra* note 84, at sec. 3.2.2. The Fort Hood
    solicitation indicates its evaluation factors will include ancillary
    supporting facilities (child care centers, tot lots, community
    centers, dining facilities, schools, unit offices) and the extent to
    which they are incorporated into the overall development vision for
    the project. Fort Hood, RFQ, *supra* note 91, at pt. I, sec. 4.5.2.
    The MHPI legislation specifically allows ancillary facilities as
    part of MHPI projects, with some limitations. 10 U.S.C. § 2881.

[^213]: In Fort Carson's case, responsibility for signs was set forth in
    the contract, with the developer assuming responsibility for
    particular types of signs. Brenner-Beck APF Memo, *supra* note 194.

[^214]: The Purpose Statute. 31 U.S.C. A. § 1301(a)(West 2001). Congress
    does not detail each and every item the Government is authorized to
    use an appropriation for, but rather leaves the agencies some
    discretion in use of a particular appropriation. *See* HUD Gun
    Buyback Initiative, B-285066 (May 19, 2000). An expenditure is for a
    proper purpose if it meets a three-part test. Secretary of Interior,
    B-120676, 34 Comp. Gen. 195 (1954). First, the expenditure of an
    appropriation must be for a particular statutory purpose, that is,
    it is necessarily incident to accomplishing the purpose. *Id.* *See
    also*, Secretary of State, B150074, 42 Comp. Gen. 226, 228 (1962).
    Second, the expenditure must not be prohibited by law. Secretary of
    Interior, 34 Comp. Gen. 195. Third, the expenditure must not be
    otherwise provided for; it must not fall within the scope of some
    other appropriation. *Id.* To the extent that operation and
    maintenance and construction of traditional military family housing
    continues to be the purpose of O&M funds appropriated by the annual
    military construction appropriations acts, *see* note 194, *supra,*
    applying such funds for MHPI housing requirements would be for
    purposes other than those for which the O&M appropriations were
    made. *But see* 10 U.S.C. 2872a, *infra* at note 226, which allows
    the Government to use APFs to furnish utilities and enumerated
    services for MHPI housing on a reimbursable basis.

[^215]: 31 U.S.C. § 1301(a).

[^216]: For a discussion of the Purpose Statute and basic fiscal law
    principles, see The Army Judge Advocate General School, 62^nd^ and
    63^rd^ Fiscal Law Course Deskbook, ch. 2 (2002) *available at*
    https://www.jagcnet.army.mil/TJAGSA.

[^217]: The Elmendorf solicitation does not appear to directly address
    responsibility for street signs, but it does transfer responsibility
    for essentially all of the housing area infrastructure and common
    areas, including covered bus stops, parks, sports areas, street
    lighting, and roads, to the developer. Elmendorf solicitation,
    *supra* note 84, at sec. 2.5. Although street signs may not be at
    issue in the Elmendorf project, it is illustrative of how
    responsibility can be inferred when an agreement is silent on a
    particular issue.

[^218]: In most MHPI agreements where the housing units are situated on
    the installation, the agreement will provide that the Government is
    responsible for providing security and fire protection services in
    some form and to some extent. *See* Lackland solicitation, *supra*
    note 60, at sec. 3.1.3, 3.1.4; Elmendorf solicitation, *supra* note
    84, at app. I, exhibit E, paras. 5-6. The installation may argue
    that having the name and rank of the current occupant of each
    housing unit is essential for security reasons. In the event of a
    security or potential criminal matter, such as an emergency response
    to a domestic disturbance or a search, nameplates may be necessary
    to ensure security personnel have the right house to reduce the
    possibility of an error in the house number. The installation may
    also argue that, because it no longer controls who occupies the
    houses, it has a legitimate security interest in ensuring name
    identification is on the houses, particularly with the possibility
    of non-military tenants. In these cases, use of APFs to purchase
    letters and nameplates for individual housing units, even when owned
    by a private party, would likely be for a proper purpose.

[^219]: Fort Carson funded these programs pursuant to U.S.
    D[ep't]{.smallcaps} [of]{.smallcaps} A[rmy, Reg. (AR)]{.smallcaps}
    210-50, [Housing Management]{.smallcaps}, ch. 8 (26 Feb 1999). *See*
    Brenner-Beck APF Memo, *supra* note 194.

[^220]: It may be explicit or implicit in the agreement. Fort Carson's
    MHPI agreement specifically shifted responsibility for resident
    relations programs to the developer. Brenner-Beck APF Memo, *supra*
    note 205. The Air Force MHPI solicitations and agreements, although
    clearly turning over all responsibility for operating and
    maintaining the MHPI housing development, indicate no specific
    requirement for the developer to provide a resident relations
    program for tenants. *See* Lackland solicitation, *supra* note 60;
    Elmendorf solicitation, *supra* note 84.

[^221]: This is the case with the Fort Carson MHPI agreement. E-mail
    from Maj Dru Brenner-Beck, Chief, Administrative and Civil Law, Fort
    Carson, to Maj Holly Cook, Army Judge Advocate General School (Jan.
    9, 2001, 3:18 PM) (on file with author).

[^222]: Fort Carson's agreement is typical in requiring the developer to
    assume responsibility for all operations and maintenance in the MHPI
    housing area, including what the Government previously provided as
    part of the installation's grounds maintenance contract. Telephone
    Interview with Maj Dru Brenner-Beck, *supra* note 64. The Lackland
    project also shifted the responsibility for landscaping to the
    developer, and that provision is typical in the Air Force
    agreements. *See* Lackland solicitation, *supra* note 60, at sec.
    3.3.7.

[^223]: *See supra* note 214.

[^224]: Fort Carson is one example of a contract that shifted all
    responsibility for the housing area's operation and maintenance to
    the developer. Telephone Interview with Maj Dru Brenner-Beck,
    *supra* note 64. *See also* Elmendorf solicitation, *supra* note 84,
    at sec. 3.2. The Lackland and Elmendorf projects make it clear that
    operation and maintenance of the housing areas are the
    responsibility of the developer. Lackland solicitation, *supra* note
    60, at sec. 1.0(b); Elmendorf solicitation, *supra* note 84, at sec.
    1.3.2. Specifically, Elmendorf's solicitation required perspective
    developers to submit as part of their proposals, a Facilities
    Maintenance Plan addressing how they would handle grounds
    maintenance and pest control, among other maintenance issues.
    Elmendorf solicitation, *supra* note 84, at sec. 3.2.4.3.

[^225]: *See* Fort Hood RFQ, *supra* note 91, at pt. I, sec. 4.5.2;
    Elmendorf solicitation, *supra* note 84, at sec. 3.2.

[^226]: This question arose at Fort Carson. The legal office issued a
    legal opinion finding that pest control was the developer's
    responsibility under the terms of the contract. Memorandum from
    Phillip J. Wolf, Attorney-Advisor, Administrative and Civil Law
    Division, Fort Carson to Director of Environmental Compliance and
    Management, Fort Carson, subject: Use of Government Resources in the
    Privatized Housing Area -- Tree Pruning/Removal and Pest Control (24
    Apr. 2000) (on file with author). The opinion concluded that
    allowing the installation's Directorate of Environmental Compliance
    and Management office to spray for mosquitoes in the MHPI housing
    area would be an improper use of APFs and a violation of the Purpose
    Statute. *Id.* Interestingly, the Fort Carson developer suggested
    the possibility of using the Government's pest control office as a
    subcontractor. *Id.* The legal memo stated that this would also be
    impermissible for a variety of reasons, most importantly the lack of
    authority for the Government to be a subcontractor in this type of
    situation. *Id.* The opinion also concluded that APFs could not be
    used to remove or prune trees at the Commanding General's quarters
    because they were part of the MHPI housing area and the developer
    was contractually responsible for grounds maintenance. *Id.* Grounds
    maintenance under the contract specifically included tree pruning
    and removal/replacement. *Id.* The specific terms of the agreement
    must be reviewed before a determination is made on any fiscal law
    question. The MHPI statute was amended in 2000 to allow the
    Government to furnish utilities and enumerated services for MHPI
    housing located on the installation, and it now provides a mechanism
    for reimbursement for those services. National Defense Authorization
    Act for Fiscal Year 2001, Pub. L. No. 106-398, 114, Stat. 1654
    (2000) (codified at 10 U.S.C. § 2872a). Specifically, the Government
    may furnish pest control and snow and ice removal, services that the
    Government typically provides in military family housing areas.

[^227]: *See* Lackland solicitation, *supra* note 60, at sec. 1.0(b);
    Elmendorf solicitation, *supra* note 84, at sec. 1.3.2.

[^228]: Fort Carson's legal office has compiled a list of lessons
    learned from its MHPI project. *See* E-mail from Maj Dru
    Brenner-Beck, Chief, Administrative and Civil Law, Fort Carson, to
    author (Nov. 9, 2000, 6:58 PM) (on file with author). Although this
    author has contacted other installations with current MHPI projects,
    it does not appear that similar efforts have been made to capture
    lessons learned at other MHPI installations. It is possible that
    other installations have not experienced fiscal law issues, or
    perhaps these issues were not identified as such and therefore were
    not coordinated with the legal offices. The Air Force has a growing
    collection of point papers and background papers identifying
    possible fiscal law and other issues associated with MHPI projects
    at its Wright-Patterson Air Force Base web site. Unfortunately, they
    generally provide little detail and little analysis, and so they are
    of differing levels of usefulness. Wright Patterson AFB,
    *Privatization Legal Issues*,
    [https://www.afmc-mil.wpafb.af.mil/HQ-AFMC/JA/lo/lojav/privatization/housing/index3.htm](http://www.afmc-mil/wpafb.af.mil/organizations/HQ-AFMC/JA/lo/lojav/privatization/housing/index3.htm).

[^229]: Standards of Ethical Conduct for Employees of the Executive
    Branch, 5 C.F.R. § 2635 (2001).

[^230]: U.S. D[ep't]{.smallcaps} [of]{.smallcaps} D[efense]{.smallcaps},
    R[eg.]{.smallcaps} 5500.7-R, J[oint]{.smallcaps}
    E[thics]{.smallcaps} R[egulation]{.smallcaps}, (Aug. 30, 1993)
    \[hereinafter JER\]. The JER is essentially a code of ethical
    conduct for Department of Defense employees, expanding upon and
    including the Standards of Conduct regulations. JER, Foreword (Aug.
    30, 1993). It is grounded in the basic obligation of public service,
    which requires that "each employee has a responsibility to the
    United States Government and its citizens to place loyalty to the
    Constitution, laws and ethical principles above private gain." 5
    C.F.R. § 2635.101. It sets forth a number of tenants Government
    employees must adhere to based on the notion that public office is a
    public trust. *Id.*

[^231]: Particularly relevant are the rules regarding gifts from outside
    sources. *Id.* §§ 2635.201-2635.204.

[^232]: Although not a complete list of the types of items a developer
    might wish to provide, these were actually proposed by the developer
    at Fort Carson. Telephone Interview with Maj Dru Brenner-Beck,
    *supra* note 64. It might be difficult to imagine why a developer
    would be interested in providing these "extras" when they have a
    ready-made tenant pool with significant waiting lists in most MHPI
    installations. They are provided for purely commercial reasons.
    First, the items might be the type of incentives the developer
    provides to other commercial developments it owns in the local
    community and it may want to provide them to military tenants so
    there is no perceived unequal treatment. More likely, however,
    because no MHPI contracts to date have provided rental guarantees,
    the developer may want to attract military tenants to ensure maximum
    occupancy in the units to maximize income to the developer.

[^233]: Telephone Interview with Maj Dru Brenner-Beck, *supra* note 64;
    Telephone Interview with Maurice Deaver, *supra* note 142.

[^234]: The JER defines a DoD employee as any DoD civilian officer or
    employee of any DoD component, active-duty Regular or Reserve
    military officer (including warrant officers), active-duty enlisted
    member of the Army, Navy, Air Force or Marine Corps and any Reserve
    or National Guard member on active duty under orders issued pursuant
    to title 10 of the United States Code. JER at 1-211. This definition
    includes a number of individuals eligible to occupy MHPI projects
    according to the priority lists set forth in the MHPI agreements.
    *See, e.g.,* Lackland Solicitation, *supra* note 60, at sec. 3.1.9;
    Elmendorf solicitation, *supra* note 84, at sec. 3.3.4.6.

[^235]: 5 C.F.R. § 2635.202(a).

[^236]: Prohibited sources include, among others, any person who does
    business with the employee's agency. *Id.* at § 2635.203(d)(2).
    Nothing in the regulations indicates housing privatization
    developers are exempt from the definition of a prohibited source.

[^237]: "Gift" is defined as a "gratuity, favor, discount,
    entertainment, hospitality, loan, forbearance, or other item having
    monetary value. It includes services as well as gifts of training,
    transportation, local travel, lodgings and meals, whether provided
    in kind, by purchase of a ticket, payment in advance, or
    reimbursement after the expense has been incurred." *Id.* at §
    2635.203(b).

[^238]: There are a number of exceptions to the definition of a "gift."
    *Id.* at § 2635(b). Most relevant to the MHPI developer's resident
    relations program are the exceptions for commercially available
    discounts and benefits at 5 C.F.R. § 2635.203(b)(4) and items
    secured by Government contract at 5 C.F.R. § 2635.203(b)(7).

[^239]: For example, the Fort Carson MHPI developer requested permission
    to provide move-in incentives for hard--to-rent housing units. These
    included units in undesirable locations, such as units near street
    intersections and those next to units with multiple dogs. Telephone
    Interview with Maj Dru Brenner-Beck, *supra* note 64.

[^240]: Fort Carson's developer requested the ability to provide similar
    incentive programs. *Id.*

[^241]: Office of Government Ethics, Opinion 99 X 1, Memorandum from
    Stephen D. Potts, Director, to Designated Agency Ethics Officials,
    subject: Employee Acceptance of Commercial Discounts and Benefits
    under the Standards of Ethical Conduct 5 C.F.R. Part 2635(Jan.5,
    1999),
    <http://www.usoge.gov/papers/advisory_opinions/advop_files/1999/99x1.txt>
    \[hereinafter OGE Opinion 99 X 1\].

[^242]: 5 C.F.R. § 2635.203(b) (2001).

[^243]: OGE Opinion 99 X 1, *supra* note 241.

[^244]: 5 C.F.R. § 2635.204(b)(4).

[^245]: The pool of people eligible for the incentives may change
    depending on occupancy rates and priority lists, and this may change
    the analysis. At one extreme it would include military members
    eligible for Government housing; at the other extreme it would be
    open to the public. There is no question that discounts in the form
    of move-in incentives available to the general public are excluded
    from the definition of a gift. *Id.* at § 2635.203(b)(4); *see also*
    OGE Opinion 99 X 1, *supra* note 241. However, if the incentives
    were available only to a subgroup of military members, such as only
    those eligible for Government housing, the exclusion may not apply.
    *See* Office of Government Ethics, Informal Advisory Letter 92 X 26
    (Dec. 10,
    1992),http://www.usoge.gov/papers/advisory_opinions/advop_files/1992/92x26.txt
    (indicating that the commercially available discount exclusion does
    not cover discounts or benefits to subgroups of employees).

[^246]: 5 C.F.R. § 2635.203(b)(7). The rationale for this exclusion is
    that items secured under a Government contract accrue to the
    employee from the Government, and therefore are not gifts from an
    outside source. OGE Opinion 99 X 1, *supra* note 241).

[^247]: Acceptance of discounted parking fees or concierge services
    provided for in an agency's lease agreement for building spaces
    would fall under this exclusion. *Id.*

[^248]: *Id.*

[^249]: *Id.* Agencies have considered whether cellular phone service
    discounts offered to employees in their personal capacities by
    companies seeking to provide cellular service to the agency fall
    under the Government contract exclusion. *Id.* Some agencies have
    allowed such discounts, others have not. *Id.* However, the agency's
    determination is what authorizes the exclusion. *Id.*

[^250]: *Id.* In making such a determination, the agency is responsible
    for ensuring that the determination is otherwise appropriate under
    law, including procurement law and fiscal law regarding augmentation
    of appropriations. *Id.*

[^251]: 5 C.F.R. § 2635.204(c) (2001). If an employee accepts a gift
    that meets the criteria of a commercial discount or similar benefit
    under this section, it is deemed not to violate the gift
    prohibition, including those dealing with appearances. *Id.* at §
    2635.204.

[^252]: *Id.* at § 2635.204(c)(2)(i).

[^253]: Note that gifts under this exception can be accepted even if the
    offeror of the gift is a prohibited source. OGE Opinion 99 X 1,
    *supra* note 241. *See* *also* Office of Government Ethics, Opinion
    85 X 13, Memorandum from David H. Martin, Director, to Designated
    Agency Ethics Officials, subject: Acceptance of Commercial Discounts
    (Sept. 17, 1985),
    <http://www.usoge.gov/advisory_opinion/advop_files/1985/85x13.txt>
    \[hereinafter OGE Opinion 85 X 13\].

[^254]: *Id.* This prong focuses on the criteria for inclusion in the
    group.

[^255]: The priority lists contained in the MHPI agreements authorize
    other than federal employees to occupy the MHPI housing units, so a
    tenant does not necessarily have to be a federal employee. *See,
    e.g.,* Lackland Solicitation, *supra* note 60, at sec. 3.1.9;
    Elmendorf solicitation, *supra* note 84, at sec. 3.3.4.6. Thus, the
    group being offered the incentive is the pool of eligible tenants,
    who may or may not be federal employees.

[^256]: OGE Opinion 99 X 1, *supra* note 241.

[^257]: In the case of MHPI housing, if the incentives are targeted to
    the entire pool of eligible tenants, federal employees or civilians,
    then regardless of who the tenants are in actuality, federal
    employees are not being targeted.

[^258]: *Id.* This part of the test focuses on the offeror's perceived
    motivation for offering the discount or benefit. *Id.* It attempts
    to prevent appearances of impropriety.

[^259]: Caution may still be needed regarding appearances, which may
    preclude certain tenants from accepting incentives even if all
    prongs are met. Concerns about the appearance of impropriety may
    preclude a particular employee from accepting an incentive or a gift
    that is offered to the general public or would otherwise be
    appropriate as a technical matter under the regulations. OGE Opinion
    85 X 13, *supra* note 253. For example, military members working on
    contract administration or inspection for the MHPI contract should
    not take advantage of such incentives simply because of the
    appearance problems. *See* OGE Opinion 99 X 1, *supra* note 241
    (indicating that even though federal employees are not being
    targeted, and even if there is no improper motive, employees should
    not accept discounts or benefits that appear to be offered because
    of the employee's official job or position).

[^260]: 5 C.F.R. § 2635.204(a).

[^261]: *Id.*

[^262]: It would also create a need for tenants to be educated on the
    details of the ethics regulations to ensure they do not run afoul of
    the law. Additionally, it could become a record-keeping nightmare
    for the developer as well as the tenants to police the yearly limit.

[^263]: Fort Carson has addressed its ethics concerns by using other
    methods for its MHPI developer to participate in the community, such
    as commercial sponsorship and co-sponsorship, rather than using the
    exclusions and exceptions to the gift prohibition that would allow a
    substantially more robust resident relations program. *See*,
    Memorandum from Captain (Capt) James A. Barkei, Administrative Law
    Attorney, Fort Carson to McDonald Kemp, Directorate of Community
    Activities, Fort Carson, subject: Proposed Joint Events with
    Directorate of Community Activities and J.A. Jones (5 Apr. 2000) (on
    file with author) \[hereinafter Barkei Joint Events Memo\].

[^264]: The exception should apply whether the resident relations
    program is specifically defined in the MHPI agreement or simply part
    of the developer's overall responsibility for the operation and
    maintenance of the housing project. Fort Carson has requested a JER
    exception for privatized housing projects, which has been forwarded
    to the Department of the Army's General Counsel's office for review.
    *Id.*

[^265]: 5 C.F.R. § 2635(b)(7).

[^266]: If a resident relations program is part of the MHPI agreement
    from the outset, and if it is defined broadly, it would seem to fall
    within the exception as something secured by the Government under
    contract. *Id.* Fort Carson is exploring the possibility of defining
    the scope of the resident relations program that was part of the
    original contract. E-mail from Maj Dru Brenner-Beck, *supra* note
    221. Although Fort Carson may have bargained for a resident
    relations program, the contract provided no detail regarding what it
    included. *Id.*

[^267]: Installations may want to consider placing limits on the
    resident relations program rather than allowing the developer's
    initiatives to go unchecked. The Government must still be conscious
    of appearances of improper or unethical conduct by its employees.
    However, as long as the resident relations program at the MHPI
    project is similar to what this or other commercial developers
    provide to tenants of private sector housing projects, there should
    be no perception problems.

[^268]: JER at 3-206.

[^269]: *Id.* and at 3-211. The groundbreaking was a community focused
    celebration and was unrelated to the construction business of the
    developer. Memorandum from Captain (Capt) James A. Barkei,
    Administrative Law Attorney, Fort Carson to Garrison Commander, Fort
    Carson, subject: CVI Groundbreaking Ceremony (25 Feb. 2000) (on file
    with author) \[hereinafter Barkei Groundbreaking Memo\].

[^270]: The MHPI developer at Fort Carson donated Easter eggs to the
    NAFI for an MWR sponsored Easter egg hunt that was open to MWR
    eligible patrons, not just the developer's tenants. Barkei Joint
    Events Memo, *supra* note 263.

[^271]: U.S. D[ep't]{.smallcaps} [of]{.smallcaps} A[ir]{.smallcaps}
    F[orce]{.smallcaps}, I[nstr]{.smallcaps}. (AFI) 34-407,
    A[ir]{.smallcaps} F[orce]{.smallcaps} C[ommercial]{.smallcaps}
    S[ponsorship]{.smallcaps} P[rogram]{.smallcaps}, para. 1.1 (17 Feb.
    1999).

[^272]: [U.S. Dep't of Army, Reg.]{.smallcaps} (AR) 215-1, Morale,
    Welfare, and Recreation Activities and Nonappropriated Fund
    Instumentalities, para. 7-47 (25 Nov. 1998).

[^273]: *See, e.g.,* National Environmental Policy Act, Pub. L. No.
    91-190, 83 Stat. 852 (1970) (codified at 42 U.S.C.A. § 4321 (West
    2000)); Endangered Species Act of 1973, Pub. L. No. 93-205, 87 Stat.
    884 (codified at 16 U.S.C.A. § 1531 (West 2000)); Comprehensive
    Environmental Response, Compensation, and Liability Act of 1980, 42
    U.S.C.A. § 9601 (West 2000).

[^274]: *See, e.g.*, U.S. D[ep't]{.smallcaps} [of]{.smallcaps}
    A[ir]{.smallcaps} F[orce,]{.smallcaps} I[nstr. (AFI)]{.smallcaps}
    40-201, M[anaging]{.smallcaps} R[adioactive]{.smallcaps}
    M[aterials]{.smallcaps} [in the]{.smallcaps} U.S. A[ir]{.smallcaps}
    F[orce]{.smallcaps} (Sept. 1, 2000); U.S. D[ep't]{.smallcaps}
    [of]{.smallcaps} A[ir]{.smallcaps} F[orce,]{.smallcaps}
    P[am]{.smallcaps}. (AFPAM) 32-7043, H[azardous]{.smallcaps}
    W[aste]{.smallcaps} M[anagement]{.smallcaps} G[uide]{.smallcaps}
    (Nov. 1, 1995); U.S. D[ep't]{.smallcaps} [of]{.smallcaps}
    A[ir]{.smallcaps} F[orce,]{.smallcaps} I[nstr.]{.smallcaps} (AFI)
    21-202, C[ombat]{.smallcaps} A[mmunition]{.smallcaps}
    S[ystem]{.smallcaps} P[rocedures]{.smallcaps} (July 1, 1995); U.S.
    D[ep't]{.smallcaps} [of]{.smallcaps} A[rmy,]{.smallcaps} P[am.
    200-1, Handbook for Environmental Impact Analysis]{.smallcaps} (July
    4, 2000); U.S. D[ep't]{.smallcaps} [of]{.smallcaps}
    A[rmy,]{.smallcaps} R[eg. (AR) 200-1, Environmental Protection and
    Enhancement]{.smallcaps} (Feb. 21, 1997); U.S. D[ep't]{.smallcaps}
    [of]{.smallcaps} A[rmy,]{.smallcaps} R[eg. (AR) 200-2, Environmental
    Effects of Army Actions]{.smallcaps} (Dec. 23, 1988).

[^275]: 10 U.S.C. § 2871.

[^276]: Telephone Interview with Maj Dru Brenner-Beck, Chief, *supra*
    note 64.

[^277]: 16 U.S.C.A. § 470 (West 2000).

[^278]: *Id.* at §470(f). The "National Register" is the National
    Register of Historic Places that is maintained by the Secretary of
    the Interior. 36 C.F.R. § 800.16(q) (2001).

[^279]: 36 C.F.R. § 800.16(f).

[^280]: 16 U.S.C. § 470(f).

[^281]: *Id.*

[^282]: *Id.*

[^283]: 36 C.F.R. § 800.16(y) (2001).

[^284]: On the Lackland project, the Government provided a direct loan
    to the developer for \$10.6 million. 2000 *Hearings, supra* note 7
    (statement of Randall A. Yim, Deputy Under Secretary of Defense,
    Installations). Fort Carson's MHPI agreement included a loan
    guarantee to the developer for a private sector loan. *Id.* The Navy
    provided its developer with \$9.5M as capital for its joint venture
    to build housing in Corpus Christi, Texas. *Id.*

[^285]: Birmingham Realty Co. v. General Servs. Admin., 497 F. Supp.
    1377 (N.D. Ala. 1980).

[^286]: Wicker Park Historic Dist. Preservation Fund v. Pierce, 565 F.
    Supp. 1066 (N.D. Ill. 1982).

[^287]: Carson v. Alvord, 487 F. Supp. 1049 (N.D. Ga. 1980).

[^288]: *See, e.g.*, Fort Hood RFQ, *supra* note 91, at pt. I, sec. 2.1
    (requiring completion of CDMP acceptable to the Government);
    Lackland solicitation, *supra* note 60, at app. A, exhibit G
    (setting forth requirements for substantial Government inspection
    and oversight of construction and renovation); Elmendorf
    solicitation, *supra* note 84, at sec 3.2.6.5 (requiring Government
    to issue a Certificate of Occupancy to developer when developer has
    complied to Government's satisfaction with all applicable codes,
    standards, regulations, drawings, plans and specifications).

[^289]: 16 U.S.C.A. § 470(f) (West 2000).

[^290]: 36 C.F.R. § 60.4 (2001).

[^291]: *Id.*

[^292]: Lackland AFB project included demolition of 272 Wherry housing
    units constructed under 1950s privatization legislation. Lackland
    solicitation, *supra* note 60, at sec. 3.1.1. The Elmendorf AFB MHPI
    project contemplates conveying 176 units built in 1965 to the
    developer, 24 of which would be demolished. Elmendorf solicitation,
    *supra* note 84, at sec. 2.4.2. Fort Hood and Fort Carson both have
    significant numbers of housing units that involved in MHPI projects
    that were constructed during the Cold War. Fort Hood RFQ, *supra*
    note 91, at pt. II, app. A, sec. 1.2.

[^293]: Ronald Forcier and David Hoard, The National Historic
    Preservation Act Environmental Law Primer, para. 3, *at*
    <https://aflsa.jag.af.mil/groups/air_force/envlaw/primers/nhpaprim.htm>.
    *See also* Hatfield Memo, *supra* note 143 (indicating Cold War
    resources may be eligible for inclusion on the National Register).

[^294]: Pursuant to regulation, adverse effects include the introduction
    of visual or audible elements that diminish the integrity of the
    property's significant historic features. 36 C.F.R. §
    800.5(a)(2)(v). It also includes any change of the character of the
    property's use or of physical features within the property's setting
    that contributes to its historic significance. *Id.* §
    800.5(a)(2)(iv).

[^295]: Telephone Interview with Maj Dru Brenner-Beck, *supra* note 64.

[^296]: 16 U.S.C. § 470(f).

[^297]: Telephone Interview with Maj Dru Brenner-Beck, *supra* note 64.

[^298]: *Id.*

[^299]: *Id.*

[^300]: *Id.*