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


09/18/2015

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Date

The claimant is a Federal civilian employee of the U.S. Army Installation Management Command in Vicenza, Italy.  He requests the U.S. Office of Personnel Management (OPM) reconsider the agency’s denial of his request for living quarters allowance.  We received the request from the claimant on September 8, 2014, and the agency administrative report (AAR) on December 16, 2014.  For the reasons discussed herein, the claim is denied.

The claimant’s employment history is outlined in the resume included as an enclosure to the AAR, supplemented by additional information provided by him and the agency.  Following his military discharge in Hanau, Germany, on November 19, 1996, his resume shows he has been employed overseas since 1999, beginning with his employment with the U.S. firm Halliburton in the Republic of Macedonia.  The agency states the claimant then occupied a number of Federal civilian positions for which he was not eligible to receive LQA, from June 2001 to November 2004, including a two-year period as a Supply Supervisor in Wiesbaden, Germany, a six-month period as a Property Book Officer in Iraq, followed by a six-month period as a Supply Technician in Wiesbaden, Germany.  He resigned his Federal service position, effective November 20, 2004, to accept employment with the U.S. firm Dimensions International in Iraq.  On July 17, 2007, he resigned from this position to accept employment with the U.S. firm Serco Inc. in Iraq.  While employed with Serco Inc., the claimant applied for, was selected, and subsequently appointed to his current Federal service position effective February 12, 2012, and later promoted on November 2, 2014.

The local Civilian Personnel Advisory Center (CPAC) determined the claimant ineligible for LQA prior to his appointment.  He requested reconsideration of the local CPAC’s denial from the Civilian Personnel Directorate of the U.S. Army, Europe.  Their December 10, 2012, decision sustaining the CPAC’s LQA determination was based on the claimant not meeting LQA eligibility provisions in the Department of State Standardized Regulations (DSSR) as either a U.S. or local hire.

The crux of the claimant’s rationale is that he meets LQA eligibility provisions as a U.S. hire, stating in his claim request to OPM, “I was not a local hire and I was not outside of the United States during the recruitment process!!!”  The agency explains in its AAR to OPM:

[The claimant] cannot be considered a US hire.  It is unclear whether or not the residence that he claims as his in Columbia, South Carolina is, indeed, his home-of-record; what is clear, however, is that he has not resided in the United States as a civilian since at least July 1999.  Independent records suggest that [the claimant] re-enlisted for a 4-year term in 1995 for an assignment in Europe (at that time, his home-of-record was identified as Los Angeles, California).  Therefore, [the claimant’s] presence in the overseas area may be dated back to the early 1990s, and not as he suggests in the LQA questionnaire since July 2007.

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-V1250 implements the provisions of the DSSR but may not exceed their scope; i.e., extend benefits that are not otherwise permitted under 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 031.11 states LQA may be granted to employees recruited in the U.S.:

Quarters allowance prescribed in Chapter 100 may be granted to employees who were recruited by the employing government agency in the United States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, and the possessions of the United States.

The plain language of “recruited by the employing government agency in the United States” clearly connotes physical presence in the U.S. at the time of recruitment.  Whether an employee is deemed to be recruited in the U.S. or outside the U.S. is dependent solely on the geographic location of the employee when recruited, not on the existence of a residence at some place other than where the employee is actually located at that time.  See OPM File Number 10-0037.

This is reinforced by DoDI 1400.25-V1250, which defines “U.S. hire” as:

A person who resided permanently in the United States, or the Northern Mariana Islands, from the time he or she applied for employment until and including the date he or she accepted a formal offer of employment.

Pertinent to the claimant’s assertion that he is eligible for LQA as a “U.S. hire” pursuant to section 031.11 above, the agency provided his Questionnaire for LQA Determinations, completed and signed by him on August 23, 2011.  We considered his responses therein to determine where he permanently and physically resided from the time he applied for employment (the vacancy was open from May 5 to 9, 2011) until and including the date he accepted the formal employment offer (August 11, 2011).  The claimant makes various statements in the questionnaire, namely that he resided at a Columbia, South Carolina, address for the previous 12 months; he applied for the position, and received and accepted the job offer while residing in the U.S.; he had not worked in the overseas area for the previous 12 months; and Serco Inc. originally recruited him from his Columbia, South Carolina, address.  However, we address below the veracity of the claimant’s LQA questionnaire responses and other statements in determining where he physically resided specifically during the three-month recruitment period from May to August 2011.

The claimant states in the LQA questionnaire that he lived in a South Carolina residence for the previous 12 months and thus in the U.S. when he applied for the position, and received and accepted the formal Federal employment offer.  However, his resume shows he was employed from July 2007 to August 2011 with Serco Inc. as a Lead Property Management Analyst, “overseeing the LOGCAP Program Property Division section in various locations in Iraq.”  Based on the description and nature of his work, we conclude his employment with Serco Inc. did not permit his working remotely but rather required his physical presence in Iraq until his August 2011 resignation from the firm.  This is supported by the September 28, 2012, email from the claimant’s wife to the agency provided in the AAR and stating, “My husband returned from Iraq in the first week of August 2011 flying directly to Indiana in order to turn in his TA-50 gear…”  We conclude, based on the claimant’s resume and his wife’s email statements, that he was employed and overseas immediately prior to August 2011 and thus not physically residing in the U.S. from the time he applied for Federal employment until and including the date he accepted the job offer.

For the same reasons discussed above, we also reject the claimant’s assertions that he had not worked in the overseas area for the previous 12 months.  In the claim request to OPM, he states:

I was on R&R when I applied for the position and on R&R again in August when I resigned from Serco (August 9, 2011) when I received the tentative offer letter and the subsequent final offer in January 2012.

However, the record also includes a March 29, 2012, letter from the “Director” of Serco Inc. stating:

I have reviewed our employment records concerning your employment with Serco in Iraq between 17 July 2007 and 25 August 2011.  According to Serco’s records, you departed Iraq on August 9, 2011 on R&R and prior to returning to Iraq submitted your resignation.

In direct contradiction to his LQA questionnaire responses, the claimant’s statements above apparently acknowledge he was employed in Iraq with Serco Inc. prior to August 2011.  This is supported by the letter from the Serco Inc. “Director” stating his employment with the firm, in Iraq, extended from July 17, 2007, to August 25, 2011.  The claimant also asserts in his LQA questionnaire that Serco Inc. hired him from a Columbia, South Carolina, address.  However, his resume includes no break in service between his employment with Dimensions International and Serco Inc., thus showing no apparent window of time when the claimant returned to the U.S. and gave the latter firm the opportunity to recruit him there.  In the absence of supporting documentation to show Serco Inc. recruited him from the U.S. as he asserts, we can only surmise the U.S. firm had recruited, interviewed, and selected him for employment while overseas based on a review of his resume and other information presented and discussed later in the decision.

For these and other reasons, we find the claimant’s responses to his LQA questionnaire so problematic as to render the entire document unreliable.  For example, his questionnaire responses conflict with the employment history documented in his resume, statements made by his wife and others, and even his own statements in his claim request to OPM, such as:

I did not reside anywhere other than the United States from 2004 until 2012.

…during my deployment in Iraq (7 years) as a contractor I put my life on the line every day, going outside the “wire” the same as the soldiers.

The first statement suggests the claimant resided exclusively in the U.S. from 2004 to 2012, while the latter suggests within the same document that he was employed and thus resided in Iraq for seven years as a contractor working “every day.”  To be presented with such contradictory and hence unreliable information, we are unable to confirm the recruitment actions taken by the agency, from job announcement to job offer, occurred while the claimant was physically residing in the U.S.  The claimant alludes to his residing in the U.S. when he applied for the position, received the job offer, and presumably during the approximate six-month period immediately prior to his February 12, 2012, appointment to the Federal service.  He makes such assertions in his LQA questionnaire which we have deemed unreliable, as well as in his claim request to OPM where he states he was on “R&R” when he applied for the position and on “R&R again” when he received an employment offer.  In addition to providing no supporting documentation that he resided in the U.S. at that time, we note his claim request to OPM does not specifically identify the U.S. as the destination of his R&R periods nor does the March 2012 letter from the “Director” of Serco Inc. specify the U.S. or any other locale as the R&R destination.  Even assuming the claimant produced sufficient documentation to show he was physically residing in the U.S. at milestones in the recruitment process, like the dates he applied for and accepted the position, the record nonetheless shows he was employed and resided in Iraq for portions of the recruitment process and thus was not permanently or physically residing in the U.S. from the time he applied for employment until and including the date he accepted the formal job offer.  Therefore, the claimant may not be considered a “U.S. hire” for LQA eligibility purposes under DSSR section 031.11 as defined by DoDI 1400.25-V1250.

The claimant also states in the claim request to OPM that his “Visa, official passport, and the plane tickets for [him] and [his] wife travelling to Italy were all subsequently issued at Ft. Jackson, South Carolina,” in addition to his household goods being shipped from a South Carolina address.  Based on his statements and the Request/Authorization for DoD Civilian Permanent Duty Travel provided, we presume he and his wife returned to the U.S. in preparation for the move to Italy at some point prior to his Federal service appointment.  Regardless, transitory returns to the U.S. at junctures in the recruitment process, and in this case post-recruitment process, are not qualifying under DSSR section 031.11.  The term “recruitment” is not defined in section 5923 of title 5, United States Code (U.S.C.), the statutory provision authorizing LQA; 5 U.S.C. 5922, the provision granting the President authority to promulgate regulations governing the administration of LQA; or the DSSR.  Deference, however, is to be afforded to an agency’s interpretation of regulations drafted by another agency where, as here, the interpreting agency adopts and administers the subject regulations, and particularly when an agency is given the authority to implement the regulations of another agency.  Bortone v. U.S., 110 Fed.Cl. 668 (2013).  The Department of the Army’s interpretation of the term “recruitment” as encompassing the entire recruitment process, from applying for up to and including accepting the position, is consistent with the purpose of LQA as an incentive for prospective employees to move overseas to work for the Federal Government; i.e., those individuals already living abroad when applying for a position do not need such an incentive.  Therefore, the claimant’s assertion that he was in the U.S. immediately prior to appointment, as evidenced by the agency shipping his household goods from a South Carolina residence and paying for his and his wife’s travel to Italy, as rendering him eligible for LQA is unsupportable as transitory returns to the U.S. are not qualifying under DSSR section 031.11.  See OPM File Number 15-0022.

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 asserts he is eligible for LQA as a U.S. hire under DSSR section 031.11 and alternatively under section 031.12, based on his having been recruited by Serco Inc. from the U.S.  The agency, however, states in its AAR to OPM:

…[the claimant] did not meet the provisions of the DSSR Section 031.12b., whereby, prior to the appointment to the federal position, he was not hired in the United States by Serco, but rather while he was in Iraq with his previous employer, Dimensions International, who in turn, hired him in Germany in 2004.  Therefore, his statement in e-mail correspondence of 11 October 2012 and submitted as Encl 9, is further deceptive, if not to say false as his employment history shows.  In said e-mail communication, [the claimant] states that “[m]y deployment as a contractor to Iraq with Dimensions and then subsequently Serco, was directly from my home address in the United States.”

The agency further states:

The issue of [the claimant] having been employed by more than one employer prior to his federal civilian appointment is of a lesser importance because his employment with Dimensions International between November 2004 and July 2007 already disqualified him for LQA under the DSSR Section 031.12b as that firm did not recruit him in the United States but rather in Germany.

The claimant disagrees with the agency’s rationale, stating in his claim request to OPM:

Regarding [the agency’s] statement per DSSR Section 031.12b the singular nature of employment – my leaving Dimensions was not by choice but, again for clarification, Dimensions was purchased by another contracting firm which brought their own management on board and since I was management, I had to either take a lesser position or return to the U.S. and be unemployed.

The claimant meets section 031.12a because his presence in Italy is attributable to his employment by the U.S. Army Installation Management Command.  The plain language of DSSR section 031.12b of “recruited in the United States” clearly connotes physical presence in the U.S. at the time of recruitment.  To determine where the claimant was physically residing circa July 2007 (i.e., when he began employment with Serco Inc.), we consider his above statements revealing.  Although asserting Serco Inc. had recruited him from the U.S., he states above that Dimensions International had been bought out by another company and we presume he therefore accepted employment with Serco Inc. to preclude accepting a “lesser position” or returning unemployed to the U.S.  Based on his own account, we conclude he was physically residing in Iraq between his employment with Dimensions International and Serco Inc. as he would have stated he would “remain” or “stay” unemployed in, instead of “return” to, the U.S. if he had been physically residing in the U.S. at the time.  Further, his resume includes no break in service between his Iraq-based employment with Dimensions International and Serco Inc.  As a result, we conclude the claimant had not been recruited (i.e., he did not apply, interview, or get selected for the Serco Inc. position) while physically residing in the U.S. or one of its enumerated territories or possessions as required by DSSR section 031.12b and on this basis alone is ineligible for LQA[1].

Even assuming he was able to establish that he was recruited by Serco Inc. from the U.S., the claimant has submitted no documentation indicating the company provided for his return transportation to the U.S. or one of the enumerated locations as an employment benefit.  The claimant states in his LQA questionnaire that Serco Inc. provided him with an agreement for return transportation to the U.S., but we find his questionnaire responses problematic for the reasons discussed previously.  The March 2012 letter from Serco’s “Director” states that “according to Serco policies [the claimant was] entitled to transportation to [his] home of record in the Continental United States.”  Letters from Serco Inc. representatives, who may or may not be authorized to speak for the firm regarding its employment benefit obligations and purporting past benefits, do not establish that the firm had committed itself at the time of hire to provide return transportation to the U.S. and are not acceptable for purposes of LQA determination.  The agency, however, refers to the silence in the offer letter on the issue of return transportation in its AAR to OPM by stating, “Whether or not Serco employed [the claimant] under conditions that would provide for return transportation to the United States, which is not apparent in the employment offer letter of 26 June 2007, but only alluded to in Serco’s follow-on correspondence of 29 March 2012…”  At our request, the agency forwarded the employment offer letter from Serco Inc. to the claimant, which states the firm would “provide [the claimant] with roundtrip transportation from [his] permanent residence…” at the time of his hire.  However, the offer letter does not state the firm would provide return transportation to the United States nor does it identify the locale considered by the firm as his “permanent residence.”  Since the claimant has provided no documentation or other evidence to establish he was recruited in the U.S. prior to appointment by his previous employer (Serco Inc.), under conditions that provided for his return transportation to the U.S., he does not meet basic LQA eligibility requirements under the DSSR for locally hired employees.  See OPM File Number 13-0048.

In addition, the claimant asserts his eligibility for LQA based on Section 7.a.(1) of Army in Europe Regulation (AER) 690-500.592, dated November 18, 2005.  Agency implementing guidance such as that contained in the AER may impose additional requirements but may not be applied unless the employee has first met the basic DSSR eligibility criteria, which in his case have not been met.  However, the claimant misconstrues the application of Section 7.a.(1) of AER 690-500.592 as it relates to the facts of his claim.  He is not covered by provisions of this regulation which stipulates a one-year residency requirement for employees recruited in the U.S. or its possessions for the Federal service position.  Since we conclude, as described above, that he was not physically residing in the U.S. from the time he applied for employment until and including the date he accepted the formal employment offer, the claimant cannot be considered an employee recruited in the U.S. or its possessions as provided for under Section 7.a.(1) of AER 690-500.592.

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.

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.

 

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