Washington, DC

U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code

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Robert D. Hendler
Classification and Pay Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance

06/04/2015

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Date

The claimant is a current Federal civilian employee of the Department of the Army (DA) in Stuttgart, Germany.  He requests the U.S. Office of Personnel Management (OPM) reconsider his agency’s termination of his living quarters allowance (LQA).[1]  We received the claim on December 3, 2013, the agency administrative report (AAR) on January 28, 2015, and the claimant's response to the AAR on January 30, 2015.  For the reasons discussed herein, the claim is denied.

The claimant retired from active duty military service on April 30, 2010, in Kaiserslautern, Germany, and upon retirement, accepted employment in Kaiserslautern with the U.S. firm Lockheed Martin.  He was subsequently appointed to a Federal service position with DA on July 19, 2010, in Stuttgart, Germany, and was initially granted LQA.

In May 2013 the claimant was notified that, as a result of a Department of Defense (DoD)-directed LQA audit, it was determined he did not meet the LQA eligibility provisions in the Department of State Standardized Regulations (DSSR) section 031.12b, which requires that an employee recruited outside the United States must, prior to appointment, have been recruited in the United States by his or her previous employer and have been substantially continuously employed by such employer under conditions providing for return transportation to the United States.  The agency states in its AAR that the claimant is ineligible for LQA because "prior to his federal government position, [he] had not been recruited in the U.S. or one of the enumerated territories or possessions by his previous employer Lockheed Martin."

The DSSR contains the governing regulations for allowances, differentials, and defraying of official residence expenses in foreign areas.  Within the scope of these regulations, the head of an agency may issue further implementing instructions for the guidance of the agency with regard to the granting of and accounting for these payments.  Thus, Department of Defense Instruction (DoDI) 1400.25-M, cited by the claimant, implements the provisions of the DSSR, but may not exceed their scope; i.e., extend benefits that are not otherwise permitted by the DSSR.  Therefore, an LQA applicant must fully meet the relevant provisions of the DSSR before the DoD implementing guidance may be applied.

DSSR section 031.12 states, in relevant part, that LQA may be granted to employees recruited outside the United States under the following circumstances:

a. the employee's actual place of residence in the place to which the quarters allowance applies at the time of receipt thereof shall be fairly attributable to his/her employment by the United States Government; and

b. prior to appointment, the employee was recruited in the United States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the former Canal Zone, or a possession of the United States, by:

(1) the United States Government, including its Armed Forces;

(2) a United States firm, organization, or interest;

(3) an international organization in which the United States Government participates; or

(4) a foreign government

and had been in substantially continuous employment by such employer under conditions which provided for his/her return transportation to the United States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the former Canal Zone, or a possession of the United States; or 

c.  as a condition of employment by a Government agency, the employee was required by that agency to move to another area, in cases specifically authorized by the head of agency.

The claimant's place of residence in the place to which the quarters allowance applies (Stuttgart) is fairly attributable to his employment by the United States Government, and he thus meets DSSR section 031.12a.  However, prior to appointment, he was employed by Lockheed Martin, a qualifying employer under section 031.12b(2), but that firm had recruited him in Germany rather than in the United States or one of the enumerated territories or possessions.  The singular usage of "such employer" in section 031.12b requires that the employee have had only one such qualifying employer prior to appointment and consequently, the employer immediately preceding appointment be the same employer that recruited the employee in the United States or one of the other qualifying locations.  Further, section 031.12 also requires that the employee have been substantially continuously employed by such employer under conditions providing for return transportation to the United States.  The claimant included in his claim a copy of the "Questionnaire for LQA Determinations" signed by him on May 19, 2010, prior to his appointment.  Under Section D2: Contractor, where the claimant reported his "PAE-Lockheed Martin" employment, he responded "no" to statement 4: "I have a current transportation agreement."  Therefore, the claimant does not meet DSSR section 031.12b because he was neither recruited in the United States or other qualifying location nor provided return transportation to the United States by Lockheed Martin.[2]

The claimant asserts eligibility under the DoDI 1400.25-M provision that "[u]nder the provisions of Section 031.12b of [the DSSR], former military and civilian members shall be considered to have "substantially continuous employment" for up to 1 year from the date of separation or when transportation entitlement is lost, or until the retired and/or separated member or employee uses any portion of the entitlement for Government transportation back to the United States, whichever occurs first."  However, as noted previously, agency implementing regulations such as DoDI 1400.25-M supplement but do not supplant the requirements of the DSSR.  Therefore, the requirements of DSSR section 031.12b must still be met before the DoDI's "substantially continuous employment" provision may be applied (hence its prefacing as "under the provisions of Section 031.12b").  Within this context, the DoDI 1400.25-M essentially allows former military and civilian employees a period of up to one year of unemployment after separation (or loss of transportation entitlement) to be considered "substantially continuously employed" by the military or civilian employer, but that military or civilian employer is presumed to have recruited the employee in the United States consistent with DSSR section 031.12b.  The claimant's intervening employment with Lockheed Martin thus renders the DODI "substantially continuous employment" provision inapplicable to his circumstances. 

The claimant alternatively asserts eligibility under DSSR section 031.12c on the basis that when he was appointed by DA, he "was living in Kaiserslautern, Germany and was hired to a position in Stuttgart, Germany, over 200 km away,"[3] and that "PCS [permanent change of station] was not only a condition of [his] employment; it was paid for by the DoD."  However, section 031.12c clearly applies to existing Federal employees rather than new hires in both its language that the employees have been required by the agency to move to "another area" as opposed to, for example, the "initial duty station," and that the move be "in cases specifically authorized by the head of agency."  The latter would apply, for instance, to base closures or transfers of function that are specifically authorized by agency heads (in this case the Secretary of the Army), which authorization is not required for routine Federal appointments.

The claimant further bases his claim on an assertion of "detrimental reliance" in that he relied on "the written promise of LQA" in "changing careers and moving to Stuttgart," and thus "the Government's original promise must be enforced."  However, it is well settled by the courts that a claim may not be granted based on misinformation provided by agency officials, such as that resulting in DoD’s erroneous granting of LQA to the claimant.  Payments of money from the Federal Treasury are limited to those authorized by statute, and erroneous advice given by a Government employee cannot bar the Government from denying benefits not otherwise permitted by law.  See OPM v. Richmond, 496 U.S. 414, 425-426 (1990); Falso V. OPM, 116 F.3d 459 (Fed.Cir. 1997); and 60 Comp. Gen. 417 (1981).  Therefore, that the claimant was erroneously determined to be eligible for LQA upon his appointment and had received LQA based on that determination does not confer eligibility not otherwise permitted by statute or its implementing regulations.

The statutory and regulatory languages are permissive and give agency heads considerable discretion in determining whether to grant LQAs to agency employees.  Wesley L. Goecker, 58 Comp. Gen. 738 (1979).  Thus, an agency may withhold LQA payments from an employee when it finds that the circumstances justify such action, and the agency’s action will not be questioned unless it is determined that the agency’s action was arbitrary, capricious, or unreasonable.  Under 5 CFR 178.105, the burden is upon the claimant to establish the liability of the United States and the claimant’s right to payment.  Joseph P. Carrigan, 60 Comp. Gen. 243, 247 (1981); Wesley L. Goecker, 58 Comp. Gen. 738 (1979).  As discussed previously, the claimant has failed to do so.  Since an agency decision made in accordance with established regulations as is evident in the present case cannot be considered arbitrary, capricious, or unreasonable, there is no basis upon which to reverse the decision.[4] 

This settlement is final.  No further administrative review is available within the OPM.  Nothing in this settlement limits the claimant’s right to bring an action in an appropriate United States court.

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