Board of Contract Appeals
                    General Services Administration
                         Washington, D.C. 20405
 
                            ________________
 
                             April 21, 1998
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                            GSBCA 14299-RELO
 
 
                   In the Matter of CHARLES E. PIPER
 
 
        Charles E. Piper, Orlando, FL, Claimant.
 
        Gerald L.  Matney, Chief, Travel and  Transportation, Office
   of Inspector  General,  Department  of  Defense,  Arlington,  VA,
   appearing for Department of Defense.
 
   PARKER, Board Judge.
 
        When  Mr.  Charles   Piper,  a  civilian  employee   of  the
   Department of  Defense (DoD), was transferred  from Collierville,
   Tennessee to  Orlando, Florida, he  incurred a three  percent "VA
   funding fee" in connection  with the purchase of his  new home in
   Orlando.  According to literature from the Department of Veterans
   Affairs  (VA) submitted  along  with Mr.  Piper's  claim, the  VA
   generally charges  a funding  fee of two  percent to  persons who
   obtain  VA loans in purchasing homes,  and a funding fee of three
   percent  to veterans  who are  using their  VA entitlement  for a
   second or  subsequent time.  The VA loan which Mr. Piper obtained
   to purchase the  house in Orlando  was the second  use of his  VA
   entitlement.
 
        DoD  disallowed Mr. Piper's  claim for reimbursement  of the
   three   percent  fee  because,  according  to  the  Joint  Travel
   Regulations (JTR),  VA funding  fees are not  reimbursable.   Mr.
   Piper has  asked the Board to  review DoD's decision.   Mr. Piper
   argues that the additional  one percent fee charged by the  VA is
   not really  a funding  fee but a  penalty for  using the  VA loan
   benefit  a second  time.   Mr.  Piper maintains  that, since  the
   Government  forced him  to incur  this  penalty (by  transferring
   him), the Government should reimburse him for it.
 
                               Discussion
 
        Paragraph  C14002 of  the  Joint Travel  Regulations  (JTR),
   entitled  "ALLOWABLE EXPENSES FOR SALE OR PURCHASE OF RESIDENCE,"
   provides as follows:
 
        b.   Nonreimbursable  Items.     Except   as  otherwise
             provided in  subpar.  A, the  following  items  of
             expense aren't reimbursable:
 
             (7)  VA funding fee (64 Comp. Gen. 674 (1985)).
 
   The  citation  in  the  regulation   is  to  a  decision  by  the
   Comptroller  General which  held that  a  VA funding  fee is  "'a
   guarantee  or  insurance  protecting  the  creditor  against  the
   consumer's default o[r] other credit loss,' and, thus, a  finance
   charge . . . ."  Anders Flodin, 64 Comp. Gen. 674, 678 (1985).
 
        Mr. Piper's argument that  the extra one percent  charged by
   the VA for second and subsequent uses of the  VA loan entitlement
   is really  a   penalty and not  a funding  fee is  simply without
   support.  The VA clearly refers to  the three percent charge as a
   funding fee; Mr. Piper has  provided no evidence to the contrary.
   Because  the  JTR  specifically  prohibits  reimbursement  of  VA
   funding fees, Mr. Piper's claim must be denied.
 
                                      _________________________
                                      ROBERT W. PARKER
                                      Board Judge