TINKER AIR FORCE BASE, Oklahoma – Here, near the heart of America’s “Tornado Alley,” an Air Force contractor built 398 new homes less than a decade ago, bankrolled as part of the U.S. government’s vow of safe shelter for the men and women who serve.

Today the collection of cookie-cutter duplexes is showing declines more typical of aged and neglected housing. Last spring, just six years after landlord Balfour Beatty Communities finished construction, the company was forced to start replacing every foot of water line in each house to fix systemic plumbing failures. In September, the company and Air Force inspected the tiny rooms where heating, ventilation and air-conditioning equipment is housed. Half had mold or water damage. Residents complain of leaks, mold, rodents and cockroaches.

While living in her new house on base, Stephanie Oakley’s five-year-old son underwent 42 weeks of chemotherapy, 33 days of pelvis radiation and 10 days of full-lung radiation this year. Doctors removed his adenoids, the hospital says, and then his tonsils.

The cancer treatment severely weakened his immune system. Any infections from mold, the family’s doctor warned, could be lethal. So when Oakley found mold in the vents of her home in August, she instantly called Balfour Beatty.

Yet the cleanup worsened the problem, she said. A contractor cleaned the vents but failed to cover the Oakleys’ possessions. She returned home to find fungus throughout the house. Green webs of mold stretched across the Batman emblems of her son’s sheets.

“I never felt hopeless about him getting cancer. I had faith,” she said. “But this right here is harder to deal with.”

Her story is part of a largely hidden reality about life on America’s military bases. The U.S. Department of Defense has privatized most of the living quarters on bases around the country, partnering with private companies to manage the vast system. What the Pentagon touts as privatization’s signature achievement – the building of new housing for military families – is marred by faulty construction and poor upkeep, Reuters found.

The Pentagon has never publicly released a definitive assessment of its two-decade old new construction program covering some 150 bases. But three years ago, the Pentagon’s Inspector General spot-checked housing units at five U.S. military bases, finding 282 deficiencies at 89 homes, including dwellings built or renovated under the privatization program. The problems, including “pervasive” fire hazards, faulty electrical wiring and unmitigated mold growth, were caused by “improper installation, insufficient inspection and inadequate maintenance,” the IG found.

A Reuters review – built from court records, interviews and Defense Department Inspector General documents obtained through the Freedom of Information Act – found serious construction problems with new or renovated housing on at least 17 bases. The flaws include water damage, improper electrical wiring, missing smoke alarms, and construction errors requiring residents to leave new homes. At six bases, the developer, unable to complete construction, was dismissed from the project.

The building program, some tenants say, has failed to meet the goal the Pentagon set two decades ago of building adequate homes for “the most dedicated” members of the armed services.

“The service members risk their lives,” said Andrea DeLack, whose husband, a retired Marine first sergeant, served in the wars in Iraq and Afghanistan. They were housed in a new, mold-ridden home on an Air Force base in Mississippi run by another landlord. “And in return, the organization as a whole doesn’t even give back with safe housing for us and our kids.”

Over the past two decades, the Defense Department has transferred ownership of more than 200,000 homes to private landlords. It also contributed $3.4 billion to help finance the renovation of 52,000 old homes and the construction of 80,000 new ones nationwide. The decaying homes in Oklahoma and Mississippi are among that new housing stock.

The military says the overall quality of housing has improved under the privatization program, but the Pentagon’s massive financial outlay has come with limited federal oversight and little accountability for the companies that run the gargantuan system. The contracts under which landlords operate, their revenues, inspection records and resident complaints are kept secret or heavily redacted by the Defense Department and the companies. The Pentagon says the details are proprietary.

In a statement to Reuters, the Air Force said it inspects a sampling of homes annually or when concerns arise, and that it requires private operators to employ third parties to ensure homes meet local building codes. The Air Force did not provide the results of its inspections, but noted, “results of these visits vary.”

“The Air Force places the health and safety of its members as a top priority,” wrote spokeswoman Laura McAndrews.

Balfour Beatty declined to discuss conditions at specific homes at the Oklahoma Air Force base. In a statement, the London-based company said most residents are pleased with its work. “We are steadfastly committed to making things right in these homes,” it said.

BIG BUSINESS, BASE TROUBLES

Balfour Beatty manages 43,000 housing units at Air Force, Army and Navy bases across the country, making it one of the biggest players in the industry. The company won the Tinker contract in 2008. Overall, the base has 660 homes.

At Tinker and two other bases, the Air Force contributed $137 million in loans to help finance new and renovated housing. The Defense Department does not reveal how much its partner landlords earn in rent. But Reuters estimates the rental revenue is $10.5 million annually at Tinker and $800 million at all the bases where Balfour Beatty is a housing partner. The figures were calculated using Pentagon data on military housing stipends. Neither the military nor Balfour Beatty challenged these estimates.