Washington, DC
U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code
Defense Security Cooperation Agency
Garmisch, Germany
Robert D. Hendler
Classification and Pay Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance
06/11/2015
Date
The claimant is a Federal civilian employee of the George C. Marshall Center (Center), Defense Security Cooperation Agency, in Garmisch, Germany. He requests the U.S. Office of Personnel Management (OPM) reconsider his agency’s termination of his living quarters allowance (LQA). We received the claim on March 5, 2014, additional information from the claimant on April 8, 2014, including a designation of representation and a copy of a Memorandum of Law, and the agency administrative report (AAR) on May 16, 2014. For the reasons discussed herein, the claim is denied.
The claimant was a military professor at the Center prior to his retirement from active duty military service on July 31, 1998. He accepted an offer in August 1998 from the Department of Defense (DoD) to serve as a contractor at the Center. Effective February 2, 1999, the claimant was appointed to his current Federal service position. He further explains in his claim request to OPM:
In the months preceding my retirement, the Dean of the College of the [Center] and the senior official authorized to make offers of employment, [name], offered me a position on the faculty as a civilian professor, with precisely the same duties that I had been performing as a military professor. [The Dean of the College] first made this offer in March of 1998, followed by several other discussions. [The Dean of the College’s] intent was that I would begin my duties as a civilian professor immediately after my retirement…
I accepted [the Dean of the College’s] offer of civilian employment in May of 1998, but informed him that, due to then-extant regulation ([DoD Directive 1402.1, Employment of Retired Members of the Armed Forces], dated 21 Jan 1982), retired members of the Armed Forces were prohibited from commencing civilian employment in the DOD until a 180-day waiting period had expired. [The Dean of the College] agreed to commence my employment as a DOD civilian on the earliest possible date consistent with the regulation…
Upon acceptance of the claimant’s current Federal position in February 1999, the agency initially concluded he was eligible for and thus granted him LQA. On May 1, 2013, the agency notified the claimant that a review of his records had determined he had been erroneously found eligible for LQA, and that the allowance was therefore being terminated. The basis for this determination was that he did not meet LQA eligibility provisions in the Department of State Standardized Regulations (DSSR) section 031.12b. The agency further explains in its AAR to OPM, “Prior to his appointment as a federal government employee [the claimant] was employed directly as a contractor (a service provider). He was not recruited from the United States nor did his contract provide for his return to the United States.”
The claimant appears to rest his assertion of LQA eligibility on three bases: (1) that he meets DSSR section 031.12b as he had no intervening employer since he was “recruited from the United States by the [DoD], employed as a soldier, a civilian employee and a contractor by the [DoD],” (2) he is considered substantially continuously employed, for a period of one year following separation from military service, as provided for under provisions of Department of Defense Instruction (DoDI) 1400.25-M, and (3) the “Memorandum of Law in Support of Appeal to OPM to Dispute Denial of LQA” signed by his duly appointed representative.
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, DoDI 1400.25-M 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 supplemental requirements of the DoDI or other agency 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 provided that:
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. [Italics added.]
The claimant disagrees with his agency’s determination that he does not meet LQA eligibility provisions in DSSR section 031.12b, stating in his claim request to OPM:
The language of the DSSR is clear and unmistakable. The DSSR makes no distinctions regarding the nature of the employment; rather, it refers only to the nature of the employer (“by such employer”). The Agency would substitute the word “employment” for the word “employer”. There is no basis in law or policy for doing so. The wording of the DSSR and DODI is precise and not subject to the reinterpretation employed by the Agency. My employer remained the same for the entire period. My employer was, and is, the DOD.
However, the claimant’s assertion that his military service and subsequent work as an independent contractor with DoD represent a single employer conflicts with the plain language of DSSR section 031.12b. The record shows that prior to his Federal service appointment in February 1999, he was under a personal services contract with DoD to serve as a professor at the Center. Personal services contractors are considered self-employed; they are not Federal employees since they are not appointed into the civil service. See OPM File Number 10-0016. Service provider work performed under contract establishes a contractual rather than an employment (i.e., a wage or salary-based) relationship, and the claimant's attempt to conflate the two has no merit. Thus, his assertion that the "DSSR makes no distinctions regarding the nature of the employment" disregards the essential meaning of the term "employment." Self-employment is not identified as a qualifying employment condition under DSSR section 031.12b. Secondarily, there is no indication that DoD had extended to the claimant an offer of return transportation to the United States or other enumerated location as a condition of his personal services contract. That his military-based return transportation benefit remains intact has no bearing on and cannot substitute for this requirement. As such, the claimant does not meet section 031.12b, which allows for eligibility only in those instances where the employee, prior to appointment, had “substantially continuous employment” with one of the entities listed under b(1) through b(4), and which entity recruited the employee in and provided return transportation to the United States or one of its territories or possessions; and on this basis alone he is ineligible for LQA.
In addition, the claimant asserts he maintained “substantially continuous employment” as provided for by the DoDI 1400.25-M, dated December 1996 and in force at the time of his LQA eligibility determination, which states in relevant part:
Under the provisions of Section 031.12b of the DSSR (reference (a)), former military and civilian members will 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.
Because the basic qualifying provisions of the DSSR must be met before agency implementing regulations may be applied, the claimant’s intervening contractor employment with the DoD following his military retirement supersedes any consideration of LQA eligibility under the “substantially continuous employment” provision of DoDI 1400.25 based on the conditions of his separation from military service. This provision supplements but does not replace provisions of DSSR section 031.12b.
Included in the claim to OPM was the aforementioned Memorandum of Law submitted by legal counsel on behalf of individuals challenging the “Department of Defense’s … recent determination that they are not eligible to receive living quarters allowance (“LQA”) in the future due to the fact that DoD has now decided that the LQA it had granted to these employees for the past several decades – pursuant to its consistently applied interpretation of its own regulations – was in error…” We note the Memorandum relates exclusively to the termination of LQA grants on the basis of the employee having had more than one overseas employer prior to appointment to his or her Federal position. Since the claimant is not eligible for LQA for the reasons outlined above, the Memorandum is inapplicable to the merits of this claim. However, since the claimant has included the Memorandum in his claim, we will address certain assertions made in it.
OPM adjudicates compensation claims for certain Federal employees under the authority of section 3702(a)(2) of title 31, United States Code (U.S.C.). The authority in 31 U.S.C.§ 3702(a)(2) is narrow and limited to deciding if the governing statutes and regulations have been properly interpreted and applied in determining the pay and/or benefits which an employee may be entitled to or granted.
When OPM adjudicates a claim for compensation submitted pursuant to 31 U.S.C. § 3702(a)(2), OPM starts by reviewing the relevant statutory authority. In this case, the Overseas Differentials and Allowances Act of 1960 (Act) establishes the statutory authority for Federal agencies to provide LQA to employees serving overseas. 5 U.S.C. § 5921 et seq. One of the stated purposes of the Act is to “facilitate[e] for the Government the recruitment and retention of the best qualified personnel for civilian service overseas” in order “to improve and strengthen the administration of overseas activities of the Government[.]” Section 101 of Pub. Law. 86-707, 74 Stat. 792 (1960); Trifunovich v. United States, 196 Ct. Cl. 301, 305 (1971)
The Act provides in relevant part:
(a) When Government owned or rented quarters are not provided without charge for an employee in a foreign area, one or more of the following allowances may be granted when applicable:
(1) A temporary subsistence allowance . . .
(2) A living quarters allowance for rent, heat, light, fuel, gas, electricity, and water . . .
(3) Under unusual circumstances, payment or reimbursement for extraordinary, necessary, and reasonable expenses . . .
5 U.S.C. § 5923(a) (emphasis added).
Section 5922 (“General Provisions”), which governs all allowances and differentials authorized under the Act, reiterates that such allowances “may be granted to an employee officially stationed in a foreign area.” 5 U.S.C. § 5922(a) (emphasis added). It also provides that the allowances “shall be paid under regulations prescribed by the President.” 5 U.S.C. § 5922(c).
The Act specifically authorizes the President to promulgate regulations governing “(1) payments of the allowances and differentials and the respective rates at which the payments are made; (2) the foreign areas, the groups of positions, and the categories of employees to which the rates apply; and (3) other related matters.” Id. The President has delegated his authority to issue such regulations to the Secretary of State. (Exec. Order 10903, 26 Fed. Reg. 217 (Jan. 9, 1961)). The Secretary of State discharged this responsibility by promulgating the DSSR, which prescribes the allowances and benefits available to civilian employees assigned to foreign areas. Section 031 of the DSSR sets a baseline for employee eligibility for LQA and emphasizes in numerous subsections that LQA “may be granted” to employees serving overseas. (DSSR §§ 031.11, 031.12, 031.14).
Since the language of the statute makes clear the granting of LQA is discretionary, we then look to the DSSR as the controlling basic regulations implementing the provisions of law pertaining to specific allowances and differentials. “The statute [5 U.S.C. § 5922] and DSSR regulations, standing alone, are only money-authorizing and are not money-mandating” and therefore, are discretionary. Roberts v. United States, 745 F.3d 1158, 1165 (Fed. Cir. 2014). Where the DSSR gives discretion to employing agencies to issue implementing regulations, we look to those which may further restrict the granting of the discretionary allowance. See, e.g., DSSR §§ 013, 40(d)-(e). However, if agency implementing regulations or policies conflict with the DSSR, the DSSR controls. Also, where the DSSR is silent on an issue, agency implementing regulations or policies control unless they are in conflict with the statute.
The claimant’s representative alleges that “nothing in the words ‘substantially continuous employment’ can be read to limit the number of qualified employers an employee could have prior to appointment to one employer” and cites various definitions from multiple editions of Black’s Law Dictionary in support of his argument. We find these arguments unpersuasive. Substantially continuous employment, as used in DSSR 031.12b(4), must be with an employer (singular) which recruited the employee in the United States and induced the employee to accept overseas employment. Therefore, the claimant does not meet LQA eligibility criteria under DSSR section 031.12b that prior to appointment, he was recruited in the United States by one of the listed employers, and was in substantially continuous employment by “such employer” (singular) under conditions providing for his return transportation back to the United States by that employer. Accordingly, his claim is denied. See OPM File Numbers 08-0009, 09-0021, 10-0018, 10-0037, 11-0005, 11-0012, 12- 0019, and 12-0020 at http://www.opm.gov/policy-data-oversight/pay-leave/claimdecisions/decisions/.
DoDI 1400.25-V1250 specifies that overseas allowances are not automatic salary supplements, nor are they entitlements. They are specifically intended as recruitment incentives for U.S. citizen civilian employees living in the United States to accept Federal employment in a foreign area. If a person is already living in a foreign area, that inducement is normally unnecessary. Furthermore, 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.
Further, it is well settled by the courts that a claim may not be granted based on misinformation provided by agency officials. 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 Office of Personnel Management v. Richmond, 496 U.S. 414, rehearing denied, 497 U.S. 1046, 111 S. Ct. 5 (1990). Therefore, that the claimant was erroneously determined to be eligible for LQA upon his appointment to the Federal service and had received LQA based on that determination does not confer eligibility not otherwise permitted by statute or its implementing regulations.
This settlement is final. No further administrative review is available within OPM. Nothing in this settlement limits the claimant’s right to bring an action in an appropriate United States court.