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


11/30/2016

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Date

The claimant was a Federal civilian employee of the U.S. Air Forces, Europe; Department of the Air Force (AF); at Ramstein AB, Germany, during the claim period.  He subsequently returned to the United States upon his reassignment to a Federal civilian position with the Air Force Materiel Command effective May 15, 2016.  He requests the U.S. Office of Personnel Management (OPM) reconsider the agency’s termination of his living quarters allowance (LQA).  We received the request from the claimant on April 22, 2015, and the agency’s administrative report on May 21, 2015.  For the reasons discussed herein, the claim is denied.

The record shows the claimant retired from active duty military service on July 29, 1992, at Ramstein AB.  His employment history includes three contractor assignments after his retirement from active duty military service.  From July 20, 1992, to December 30, 1994, he was employed with a company identified as GTE at Ramstein AB.  From December 30, 1994, to February 2, 2005, he was employed with Science Applications International Corporation (SAIC) at Sembach AB, Germany.  The claimant was then employed with CACI International Inc. at Aviano AB, Italy, from January 17, 2005, to March 30, 2010.  The AF appointed him to his initial Federal service position on June 1, 2010, under the contractor-to-civilian (C2C) initiative.  In addition to receiving LQA at that time, the claimant was provided permanent change of station (PCS) orders to move from employment at Aviano AB to Ramstein AB.  When his Federal service position was identified to be abolished under a reduction in force, he was reassigned to another Federal service position in Sembach AB in January 2012.  That organization to which the claimant was reassigned subsequently realigned with another organization and moved to Kapaun Air Station, Germany, in August 2012.

The Department of State Standardized Regulations (DSSR) contain 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, dated July 31, 2009, and in effect at the time of the claimant’s initial appointment, 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 and other agency implementing guidance may be applied.

At the time of the claimant’s appointment to the Federal service, the record shows the agency waived applicable eligibility requirements of the DSSR and thus granted him LQA.  On April 29, 2013, the agency notified him that, as a result of a Department of Defense (DoD)-directed LQA audit, it was determined that he did not meet the LQA eligibility provisions in the DSSR, section 031.12b, which require 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.  Specifically, the agency’s April 2013 notification stated that their initial LQA eligibility determination was “erroneous” as the claimant had been “employed by more than one employer after coming overseas and before being hired as an AF civilian employee.”

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; or  [Italics added.]

Since the claimant does not directly respond to the agency’s determination that his situation fails to meet DSSR section 031.12b although he acknowledges that he “worked for multiple employers between the time [he] was recruited from the United States (on active duty with the USAF) and the time [he] entered federal service as a civilian employee,” we will briefly discuss his LQA eligibility relating to that criteria[1].  The claimant meets section 031.12a because his presence in Germany was attributable to his Federal service employment.

Section 031.12b allows LQA eligibility 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 (i.e., the singular usage of “such employer”) recruited the employee in and provided return transportation to the United States or its territories or possessions.  Therefore, by extension, an employee who has had more than one “employer” overseas prior to Federal appointment would be disqualified because the initial overseas employer rather than the employer immediately preceding appointment would have recruited the employee in the United States.

Immediately prior to appointment, the record shows the claimant was employed by CACI in Italy.  The claimant mentions no intervening residency in the United States between his employment with CACI and prior employer SAIC, during which he may have at some point been recruited there by CACI.  Since the record also shows no apparent break between employments, we conclude CACI recruited him for employment while employed in Germany with SAIC.  As such, prior to his Federal service appointment, he had not been recruited in the United States or one of its enumerated territories or possessions by a qualifying employer listed at DSSR section 031.12b.  Moreover, the record shows the claimant had additional contractor work.  Even assuming, arguendo, that GTE had recruited the claimant from the United States, any potential eligibility for LQA under DSSR section 031.12 would have ended upon his leaving the initial (singular) overseas contractor position (in Germany).  Therefore, the record shows the claimant, immediately prior to appointment, was not recruited in the United States or one of its territories or possessions by a qualifying employer listed at DSSR section 031.12[2].

The claimant had asserted LQA eligibility under the provisions of DSSR section 031.12c, which states:

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 provision is implemented in DoDI 1400.25-V1250, Enclosure 2, 1.c.2.g, which provides for the grant of LQA to employees required to move to another area as a condition of employment when the following questions in g.(1) through (3) are affirmed:

(1)   Will employment be ended if the employee fails to accept relocation?

(2)   Is the relocation caused by a management-generated action?

(3)   Must management request an employee not now in receipt of LQA to relocate to another area?

At the claimant’s request to re-evaluate the results of his LQA audit, the agency responded to his request for application of DSSR section 031.12c to his situation (i.e., the agency provided him with PCS orders to move from Aviano AB to Ramstein AB upon initial appointment) in its September 4, 2013, memorandum as follows:

Your argument is based on an erroneous conclusion.  The PCS orders issued to move you from Italy to Ramstein are not an automatic indicator that the action is “management generated” in the context of LQA eligibility and the DSSR.  In essence you applied for and were competitively appointed to a vacancy.  The PCS authorization that was given subsequently in no way constitutes a management directed action – you were in no way involuntarily forced to move your household – rather the hiring unit provided PCS entitlements as a hiring incentive.

The agency further states in its September 2013 memorandum that the three-question test is applicable only to current Federal Government employees but, nonetheless, considered and responded “no” to all the questions when compared to the claimant’s situation.

DSSR section 031.12c 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, which authorization is not required for routine Federal appointments.  See OPM File Number 14-0016, June 4, 2015.  We further note the claimant was not eligible for LQA while employed by AF when his Federal service position at Ramstein AB was first abolished and reassigned to Sembach AB, and then eventually realigned to Kapaun Air Station.  Since the distance from Ramstein AB to Sembach AB is an estimated 19 miles and 11 miles from Sembach AB to Kapaun Air Station, the changes to duty stations occurred within the local area and did not require moving to another area as described by DSSR section 031.12c.

The agency initially authorized LQA to the claimant, although he did not meet DSSR section 031.12b requirements, based on guidance in an August 18, 2009, memorandum from U.S. AF in Europe Headquarters, Subject:  Appointment of [outside contiguous United States] US Government Contractor Employees as Air Force Civil Service Employees, which stated that, for former contractor personnel, DSSR section 031.12b may be waived in accordance with DoDI 1400.25-V1250, Enclosure 2, 1.e., which provides:

Section 031.12b of Reference (b) [DSSR] will be waived for locally-hired U.S. citizen employees who have, immediately prior to appointment, been directly employed by the United States as foreign nationals under third-country contracts or agreements that provided them with LQA or housing at no cost.

On May 15, 2013, the U.S. AF in Europe Headquarters rescinded the August 2009 memorandum, instructing its offices to “cease using the policy memorandum as an authority to authorize LQA for locally hired civilian employees.”[3]  The letter further explained:

Due to the 2013 LQA audit and impact to members of our workforce, we requested legal review of the validity of the 2009 policy when issued.  Legal advisories confirmed that the policy was not valid based on the fact that the quoted waiver provision was not applicable.  Therefore, it never constituted a basis for granting LQA.

The claimant disagrees with the agency’s decision to rescind the waiver, asserting in his claim request:

I would offer an alternate view that this section was chosen by the local Head of Agency because they felt it actually consisted of two parts.  That the “foreign nationals under third-party contracts” was completely separate from “agreements that provided them with a living quarters allowance or housing at no cost,” because all C2C hires had travel agreements and housing allowances.

The claims jurisdiction authority of OPM is limited to consideration of statutory and regulatory liability.  OPM adjudicates compensation claims by determining whether controlling statute, regulations, policy, and other written guidance were correctly applied to the facts of the case.  Therefore, the claimant’s speculations on the agency’s reasons for citing those particular waiver provisions in DoDI 1400.25-V1250, Enclosure 2, 1.e., in its August 2009 policy memorandum has no bearing on our claim determination and will not be addressed further.  However, we note his argument suggesting the waiver provision should be read as a compound sentence with two independent clauses, with the verb “have” being used as both a transitive verb and an auxiliary verb within the context of the same sentence, such that waivers are allowable for “locally-hired U.S. citizen employees who have, immediately prior to appointment, been directly employed by the United States as foreign nationals under third-country contracts” as well as to “locally-hired U.S. citizen employees who have…agreements that provided them with LQA or housing at no cost,” is contrary to rules of plain language where sentences are organized logically and read in whole.

The claimant suggests the agency used their discretion and authority to provide him with a waiver, stating that “[i]f there was any mistake, it was in how they crafted that waiver, but that does not remove their authority [to issue the waiver] nor does it release them from their intent to provide such a waiver.”  However, whether the agency would have granted a waiver outside the provisions of DoDI 1400.25-V1250, Enclosure 2, 1.e., is speculative and does not confer eligibility for LQA under controlling policy and regulations.  He further states the agency’s decision to “reverse that waiver in such an arbitrary manner, they have acted capriciously and to ill effect.”  However, the granting of allowances and benefits such as LQA derives from the relevant authorizing statutes and regulations governing the expenditures of public funds.  No entitlement exists for an employee to continue receiving an allowance or benefit that is found to have been granted improperly; i.e., contrary to the specific provisions of the authorizing statute or regulations.  Thus, AF is responsible for ensuring that any continuance of LQA on their part is based on proper application of the authorizing regulations, as is expressly provided by the implementing LQA guidance.

The claimant asks OPM to “override” the agency’s decision to reverse the waiver of DSSR section 031.12b requirements under provisions established by DSSR section 031.12c which states:

Subsection 031.12b may be waived by the head of agency upon determination that unusual circumstances in an individual case justify such action.

OPM’s claims adjudication authority under 31 U.S.C. 3702(a)(2) does not include the authority to waive provisions of the DSSR, which determine LQA eligibility.  Since DSSR section 031.12c authorizes the head of the employee’s agency to waive the eligibility requirements of section 031.12b, OPM may not consider the claimant’s waiver-related issues within the context of the claims adjudication function it performs under section 31 U.S.C. 3702(a)(2).  The authority to waive the requirements of DSSR section 031.12b is reserved to the head of the employing agency, and OPM will not review such determinations.  However, we note the claimant is attempting to assert the legitimacy of the C2C waiver based on “unusual circumstances” cited by DSSR section 031.12c.  He suggests there are different “kinds” of waivers allowable by the DSSR and its implementing regulations.  One kind of waiver includes situations specifically listed, for example, by DoDI 1400.25-V1250, Enclosure 2, 1.c., identifying situations that “must” have occurred for a waiver to be approved such as the sponsoring spouse dies, the sponsoring spouse becomes physically or mentally incapable of continued employment with the Government, the couple is divorced or legally separated, the sponsoring spouse left the post or area permanently, or the spouse could not maintain a common dwelling due to the relocation of either spouse’s workplace.  According to the claimant, another kind of waiver is based on variable situations falling under the category of “unusual circumstances.”  Regardless, as noted previously, agency implementing guidance may be more restrictive than the DSSR but not more permissive since LQA is a discretionary allowance.  Accordingly, the plain language of DoDI 1400.25-V1250, Enclosure 2, 1.c., makes clear that a waiver of DSSR section 031.12b may only be approved under the specifically identified circumstances.  As such, the claimant has provided no information to indicate his situation is eligible for waiver of DSSR section 031.12b requirements established by the agency under DoDI 1400.25-V1250, Enclosure 2, 1.c., as “must” occurring for approval of a waiver.  Moreover, the recruitment and appointment of former contactor employees to the Federal service is neither listed nor would it be characteristic of an unusual circumstance.

The claimant states he would not have accepted the Federal service position without LQA and that salary alone would have been insufficient to induce him to relocate to another overseas location.  However, the necessity of LQA is not a basis for granting LQA.  Review of LQA eligibility must be based on controlling statute and its implementing regulations.

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 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).  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.

The claimant asks OPM to order the agency to “remove” approximately $75,000 of his LQA debt and reimburse him the $5,000 already paid.  As a result of legislative and executive action, the authority to waive overpayments of erroneous payments and allowances now resides with the heads of agencies, regardless of the amount.  See the General Accounting Office Act of 1996, Pub. L. No. 104-316, 110 Stat. 3826, approved October 19, 1996, and the Office of Management and Budget (OMB) Determination Order of December 17, 1996.  Neither Pub. L. No. 104-316 nor OMB’s Determination Order of December 17, 1996, authorizes OPM to make or to review waiver determinations involving erroneous payments of pay or allowances.  Under 5 U.S.C. 5584(a), an authorized agency official may waive the requirement for an employee to repay LQA when collection of the excess payments from the employee would be against equity and good conscience and not in the best interests of the United States.  Therefore, OPM does not have jurisdiction to consider, or issue a decision on, the request for a waiver of a claimant’s indebtedness to the United States.

The claimant also requests entitlement to a temporary quarters subsistence allowance (TQSA) in a March 15, 2016, email to OPM.  DSSR section 111 defines “quarters allowance” as an allowance granted under sections 120 (TQSA) or 130 (LQA) of these regulations.  Eligibility requirements for quarters allowances set forth in Section 031 do not distinguish between LQA and TQSA, the latter of which covers only transient quarters occupied before the permanent quarters covered by LQA are secured.  Thus, eligibility for TQSA is dependent on eligibility for LQA and may not be considered separately.  However, we may not render a decision on this matter in that TQSA is a lodging expense.  As such, TQSA claims fall under the jurisdiction of the General Services Administration’s Civilian Board of Contract Appeals.

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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