Board of Contract Appeals General Services Administration Washington, D.C. 20405 __________________ September 10, 1998 __________________ GSBCA 14045-RELO In the Matter of KENNETH H. HULICK Kenneth H. Hulick, Tucson, AZ, Claimant. Vincent Mullally, Staff Accountant, Accounting Operations Center, National Park Service, Reston, VA, appearing for Department of the Interior. VERGILIO, Board Judge. The agency had asked the Board to determine if the relocated claimant is entitled to recover real estate costs incurred in selling a home in which he did not reside when notified of the transfer. In an earlier decision, the Board concluded that the claimant was not entitled to reimbursement because he had not completed twelve months of service following the transfer. The agency now asserts that the claimant retired for reasons beyond his control. The record does not demonstrate that the claimant retired for a reason beyond his control. Further, the record demonstrates that the claimant is not entitled to the requested real estate expenses because the claimant was not returning from a "foreign area" and the residence he sold was not at the duty station associated with the relocation, but the duty station preceding the relevant relocation. In submitting this matter initially to the Board, the Department of the Interior, National Park Service, asked "that you review the facts in this case and determine whether Mr. Hulick [the claimant] is entitled to reimbursement of real estate expenses in the amount of $7,203.50." On April 17, 1997, the Board issued a decision. Based upon the facts in the record, the Board concluded that the claimant was not entitled to reimbursement of the expenses at issue. The claimant had failed to satisfy a condition of reimbursement- [Foot # 1 ] -he did not complete twelve months of service after the relocation. Kenneth H. Hulick, GSBCA 14045-RELO, 97-1 BCA 28,950. ****************** Footnote Begin ********** [Foot # 1 ] Statute establishes the prerequisites for payment by the Government, and for the indebtedness of employees, regarding relocation expenses. For transfers within the continental United States, a transferred employee must agree: in writing to remain in the Government service for 12 months after his transfer, unless separated for reasons beyond his control that are acceptable to the agency concerned. If the employee violates the agreement, the money spent by the United States for the expenses and allowances is recoverable from the employee as a debt due the United States. 5 U.S.C. 5724(i) (1994); 41 CFR 302-1.5(a) (1994). For transfers not wholly within the continental United States, a similar agreement is required. 5 U.S.C. 5724(d); 41 CFR 301- 1.5(b) (1994). This claimant had signed agreements prior to his relocations committing himself to twelve months of service unless separated for reasons beyond his control. ****************** Footnote End ************ By letter dated May 13, 1997, the agency sought reconsideration of the decision. The agency states that, because it had determined that the service agreement does not stand in the way of recovery, it requests the Board to resolve the question regarding the allowability, and claimant's recovery, of real estate expenses. Because a threshold question to entitlement and recovery is compliance with statute, and because the existing record did not address the agency's decision regarding the service agreement, the Board requested that the agency submit copies of any determinations relevant to its assertions and any statutory references which may support its actions. Although the agency has submitted no statutory reference, it appears that the claimant opted to retire under section three of the Federal Workforce Restructuring Act of 1994 (FWRA), 5 U.S.C. 5597 note (1994), which was signed March 30, 1994, so as to obtain an incentive for voluntary separation. That law makes no provision for altering the twelve- month service agreement required under 5 U.S.C. 5724(d) or (i). That is, a stated incentive for separation does not include a waiver of the indebtedness to the Government should separation result in fewer than twelve months of employment after a transfer. The Comptroller General, who decided relocation cases prior to this Board, held that the "voluntary separation of an employee upon satisfying the age and service requirements for optional retirement may be considered as a reason beyond the control of the employee" sufficient with respect to the service agreement. 46 Comp. Gen. 724, 726 (1967). The agency has relied upon that determination in concluding that every separation under the FWRA occurs for a cause beyond the control of the employee, because the employee has no control over the Government offering such programs. [Foot # 2 ] Even if one adopts, and the Board does not here do so, this view of the Comptroller General as being consistent with the language of the service agreement and with the intent underlying the requirement for the agreement, the agency has not here addressed how its policy conforms to the FWRA, which specifies that a voluntary separation incentive payment shall not be a basis for payment of any other type of Government benefit. ****************** Footnote Begin ********** [Foot # 2 ] Although the agency is correct that an employee lacks control over the Government's offering of incentives for voluntary separation, the election to separate generally is fully within the control of the employee, hence the phrase "voluntary separation." The situation is akin to that of a recently relocated employee who receives a job offer from outside the Government, with or without a bonus or pay increase. The employee may lack control over the offer, but acceptance or not is within the employee's control. The service agreement is not affected, even if the employee fully intended to remain with the Government at the time of the transfer. No factors apart from the FWRA have been put forward in the record as a basis for the separation. ****************** Footnote End ************ Deeming every voluntary retirement under the FWRA to have arisen from a cause beyond the control of the employee, without regard to other factors, creates an incentive for retirement not identified in the FWRA. However, the Board need not here seek comments from the agency or expressly resolve this fundamental basis for entitlement which appears to be lacking, because on the more particular question asked by the agency, the claimant is unable to be reimbursed real estate expenses. Moreover, reasons apart from the FWRA may exist, which demonstrate that reasons beyond the control of the employee led to the separation prior to completing twelve months of service. Real estate expenses In August 1993, the agency approved a transfer for the claimant from Hendersonville, North Carolina, to Panama City, Panama. This was a permanent change of station, with a projected end date of August 1995 (as revealed on a travel authorization, although the claimant maintains that a four-year assignment was anticipated). The claimant relocated; his permanent duty station became Panama City. He and his family ceased occupying the residence in North Carolina. However, he did not sell the residence in North Carolina; he rented it out. In April 1994, the claimant departed Panama City. He obtained a ninety-day temporary duty assignment in Arizona, after a brief stay in Washington, D.C. In June 1994, the claimant accepted a permanent duty assignment in Arizona. In September 1995, the claimant sold his residence in North Carolina. As part of his relocation to Arizona, the claimant sought reimbursement for real estate expenses related to the sale of the residence. The agency is seeking to determine if the claimant is entitled to the reimbursement requested in connection with the sale of the North Carolina residence. The agency references the Federal Travel Regulation (FTR), 41 CFR 302-6.1(d) (1994), which provides that, with exceptions not here relevant, a prerequisite to reimbursement is that the dwelling for which reimbursement of selling expenses is claimed must have been the employee's residence at the time he was first officially notified of his transfer to the new duty station. [Foot # 3 ] The agency is aware that the claimant was not occupying the residence since departing for Panama, and therefore not at the time he was notified of the transfer. With a reference to some Comptroller General decisions, the agency inquires if the transfer to Panama and the temporary assignment to Arizona prior to accepting a permanent position may provide a basis for entitlement. ****************** Footnote Begin ********** [Foot # 3 ] Statute and regulation treat the former Canal Zone (i.e., certain areas in the Republic of Panama) as a non-foreign area for purposes of reimbursing an employee relocation expenses. 5 U.S.C. 5724a(a)(4)(A); 41 CFR 302-6.1(g). ****************** Footnote End ************ The record does not demonstrate that North Carolina was the claimant's duty station after departing from Panama. Immediately prior to arriving in Arizona, the claimant's official duty station was Panama, not North Carolina. Thus, statute, 5 U.S.C. 5724a(a)(4)(A) (1994), and regulation, 41 CFR 302-6.1(d), suggest that entitlement is not available. The sale of the North Carolina residence was not incident to the transfer from Panama to Arizona. John J. Cody, GSBCA 13701-RELO, 97-1 BCA 28,694. Although outside the continental United States, Panama is not a foreign area under the regulations, such that the relocation upon return to other than the old duty station does not entitle the claimant to reimbursement. 41 CFR 302-6.1(g). The Comptroller General has deemed the occupancy requirement to be constructively satisfied if a claimant was not occupying the residence at his old official duty station because a training or temporary duty assignment or travel (each of which would occur for the benefit of the Government) precluded such occupancy which otherwise would have occurred. Charles P. Ball, B-223407 (June 18, 1987); Frank M. Lindeen, B-188657 (Dec. 30, 1977); R.P. Hogan, B-164043 (May 28, 1968). Under the rationale in these decisions, the claimant could attempt to recover expenses for the sale of a residence in Panama, the last official duty station before the temporary duty assignment in Arizona. Here, however, because North Carolina was not the claimant's duty station after departing Panama, the rationale of the cases does not benefit the claimant. The record fails to establish the claimant's entitlement to recover real estate expenses for the sale of a residence in North Carolina. Under statute and regulation, the agency is required to disallow the claim based upon the information presented. ____________________________ JOSEPH A. VERGILIO Board Judge