FOR IMMEDIATE RELEASE
FRIDAY, NOVEMBER 20, 1998
TDD (202) 514-1888
JUSTICE DEPARTMENT FILES $45 MILLION SUIT AGAINST TEXAS COMPANY FOR BUILDING UNINHABITABLE HOUSING AT SOUTH DAKOTA AIR FORCE BASE
WASHINGTON, D.C. -- The Department of Justice today filed a multi-million dollar damages suit against a Texas-based corporation, alleging that faulty construction made more than half of the military family housing units it constructed at a South Dakota Air Force base uninhabitable.
The suit was filed today in U.S. District Court in Rapid City, South Dakota against Hunt Building Corporation of El Paso, Tex., the country's largest builder of military family housing, and a South Dakota-based subsidiary. Assistant Attorney General Frank W. Hunger of the Civil Division said the suit claims violations of the False Claims Act in Hunt's design, construction, and lease to the United States Air Force of the housing units, which were constructed on federally-owned land on the air base.
The suit seeks civil damages that could total $45 million for violations of federal law in the construction of an 828-unit military family housing complex at Ellsworth Air Force Base, near Rapid City, South Dakota.
"No contractor should be able to get away with such shabby construction at taxpayer expense," said Karen Schreier, United States Attorney for South Dakota.
The Air Force leased the land for the project to Hunt and its South Dakota subsidiary, Ellsworth Housing Limited Partnership. The units, known as Centennial Estates, were constructed at Hunt's expense and leased back to the Air Force. Under the contract, the Air Force makes lease payments to Hunt of approximately $8.2 million per year for 20 years. Since the Air Force occupied the first completed phase of the units in December 1990, it has paid approximately $60 million in rent under the lease. An additional $7 million has been spent to permit evacuated families to move to off-base housing.
The lawsuit alleges that Hunt knowingly failed to comply with the obligations of its contract by failing to design and construct the units in compliance with applicable codes and by failing to have a comprehensive quality control program. The alleged structural and design defects included violations of fire-safety requirements and flawed heating systems that leave lower-level bedrooms unheated. The suit also claims that improper design and construction caused the units to twist and break apart in the high, sustained winds in western South Dakota, a condition known as "racking." In some units, pipes were simply inserted into the ground to make it look like mandatory sewer clean-outs had been installed. Improperly vented plumbing has caused sewer gases to back up into some units.
The government attributes part of the problem to the hasty construction of the units. The contract allowed for 1,440 days of construction, but the buildings were completed in less than 500 days. The suit alleges that the acceleration in construction did not permit subcontractors to comply with the construction requirements and did not permit adequate inspection and quality control.
The suit claims damages under several legal theories in addition to the False Claims Act.