The Department of the Navy has abruptly changed course on a planned headquarters reorganization that would have created a powerful new Senate-confirmed position to oversee IT, cyber and data issues.

Navy Secretary Richard Spencer stopped short of saying he had completely abandoned the department’s plan to establish an assistant secretary for information management. But the path ahead was highly uncertain as of Friday.

As recently as three weeks ago, the Navy said its intent was to make room in its organizational chart for the new position by abolishing the job of assistant secretary for energy, installations and environment. Those duties, in turn, would have moved to the office of the assistant secretary for research, development and acquisition.

But the timing for that particular strategy could not have been worse.

On the same day Navy undersecretary Thomas Modly described the reorganization plan at a conference in San Diego, military families were giving vivid accounts of the substandard living conditions in their on-base housing before a hearing of the Senate Committee on Armed Services.

The new disclosures about how widespread the military’s housing problems are made it politically untenable to do away with the Navy’s top installations job.

At another hearing on Thursday, Sen. James Inhofe (R-Okla.), the chairman of the Senate Armed Services Committee asked Spencer: “Would you be in a position right now to commit to not dispose of the position that is responsible for the problems?”

Spencer gave his commitment, and the Navy followed up with a statement on Friday: “While Navy leadership has been recently evaluating options with this portfolio due to competing priorities, the Secretary of the Navy remains fully committed to the role and responsibilities.”

Also on Friday, the Navy announced the resignation of Phyllis Bayer, the current assistant secretary for installations, saying she was retiring from government “to pursue other opportunities.” A Navy spokesman said her departure was not related to the housing controversy, but could not say whether it was prompted by the previously-planned reorganization. Bayer is expected to depart at the end of the month; the Navy has not yet identified her replacement, but says it has begun a search.

During Thursday’s hearing, the secretaries of the Army, Navy and Air Force all testified that although they had been aware of some isolated problems with base housing, none of them had understood the full scope or seriousness of the issue until the Feb. 13 hearing, where military members and their families testified about black mold, toxic lead, rats, faulty wiring and other substandard living conditions.

“I think the media reports, coupled with the report of the National Military Family Association and then culminating in the hearing was what brought home to us the size and scale,” said Army Secretary Mark Esper.

And officials appeared to have been particularly caught off-guard by families’ accounts of how difficult it was for them to get landlords to fix serious problems even after multiple complaints, and that they had faced retaliation for raising the issues at all.

“What we really didn’t understand was the decline in trust and confidence in the airmen that problems would get fixed,” said outgoing Air Force Secretary Heather Wilson. “And that is, to me, the most important part of the hearing that you had that brought that forward to us.”

The secretaries and military service chiefs outlined a number of steps they planned to take to begin to fix the issues. Although they said the contractors that operate the homes under DoD’s housing privatization initiative had clearly failed to hold up their end of the bargain, they acknowledged that the services themselves had systematically failed to properly oversee their performance.

“This is part of our responsibility. It goes with being a commander, being a leader,” said Gen. Robert Neller, the Commandant of the Marine Corps. “You’re responsible for all your unit does or fails to do. I need everybody to understand why we’re doing this: it’s part of readiness. We need our families ready, and a Marine can’t be ready if he or she is not living in a secure, safe place … I think we took our eye off the ball.”

Service leaders said they would implement a “Tenant’s Bill of Rights” by renegotiating their contracts with housing providers. Among its proposed provisions, renters would be able to withhold the monthly housing allowances that currently go directly to landlords if complaints aren’t dealt with, and they would have the right to be moved to new housing if health and safety problems are not resolved promptly. It would also create housing ombudsmen in each of the services to help resolve disputes.

The services said they would also perform 100 percent inspections of all of their on-base housing units, work that is currently underway.

And they have tasked their inspectors general with a more systematic look at how the housing privatization initiative appears to have broken down in recent years, seemingly without attracting the attention of the military’s senior leaders until now.

But at least for now, the service secretaries are resisting the idea of putting all housing back under the military’s control. Until recently, the housing privatization initiative has been regarded in DoD circles as a poster child for successful public-private partnerships.

And despite the problems, they believe overall conditions are still better than when the initiative began in 1996, when all housing was run by the military.

“But that doesn’t mean we shouldn’t demand that when there is a problem it is promptly fixed, and fixed in a competent way,” Wilson said. “There are a few things that I think will help. The Tenants Bill of Rights I think will help, and it will allow us to have some leverage to work through these contracts and change the way things are managed. I think we do need to strengthen the role of the base commander so that they have input and control and leverage with the local contractor. I think we need to improve the communications and feedback loops for our airmen, so they have multiple ways to address problems, and if they’re not getting a response, to get somebody to help them in the chain of command.”

But Gen. David Goldfein, the Air Force Chief of Staff, said remedying the issues would take a sustained effort.

“Excitement in the near-term based on hearings is interesting, but it’s not compelling,” he said. “We’re going to have to keep our boot on the throat of the underperforming contractors and our command chain and leadership to make sure we get after this for the long-term, and we’re committed to do so.”

Officials said military installations will likely need additional staff to oversee their housing contracts and perform regular inspections of privatized housing. They added that they may ask Congress for new, direct-hiring authorities in order to build the workforce that would need to handle those tasks.

Spencer, the Navy secretary, said most of what the military services must do to improve conditions can be done simply by enforcing existing contract provisions.

“The standards are there. We need to enforce the standards. It’s not a brilliant flash of the obvious. We were not keeping our eye on the ball,” he said. “The housing office needed to be the quality control check. We have the processes. Now we have to live up to performing the processes.”

It remains unclear how the Navy’s new commitment to retain its assistant secretary for installations will affect its previous plans to establish the new cyber role.

Under current law, the installations position is the only assistant secretary that can be renamed within the Navy’s own discretion: each of its other assistant secretaries is mandated by statute, and adding another one would require an act of Congress.

But it turns out that lawmakers do not appreciate the Navy attempting to act within its own discretion, even when it’s technically allowed to.

At Thursday’s hearing, Inhofe said that the Navy had informally discussed its plans with committee staff before Spencer first publicly broached the subject of a new assistant secretary for information management last year.

“You said you wanted to make an announcement, but we told you not to, and you did it anyway,” he said. “I’d like to know why you did it.”

Spencer apologized, but seemed to indicate that his desire to elevate IT and cyber responsibilities has not lessened. The need, he said, is partly informed by a report the Navy will soon deliver to Congress about recent cyber exfiltrations.

“It’s a risk that we have to manage,” he said. “I apologize for my office getting ahead of the lights, that was not my intent. We are marching along, and we will keep everything in place as-is.”

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