_____________________________ December 16, 1997 _____________________________ GSBCA 14348-RELO In the Matter of PAUL F. HOFMANN Paul F. Hofmann, New Bern, NC, Claimant. D. Lisenby, Director, Financial Policy and Systems Directorate, Defense Finance and Accounting Service, Kansas City, Center, Kansas City, MO, appearing for Department of Defense. DeGRAFF, Board Judge. A transferred employee who was authorized to ship his household goods using a Government bill of lading and who decided to make his own shipping arrangements was not entitled to be reimbursed for more than the expenses he actually incurred. Background On March 2, 1994, the Department of Defense (DoD) issued permanent change of station orders to Paul F. Hofmann, transferring him from Virginia to North Carolina. Mr. Hofmann s orders authorized him to incur several types of expenses in connection with his transfer. Concerning shipment of Mr. Hofmann s household goods, his orders provided, AUTHORIZED SHIPMENT OF HHGOODS BY GOVT BILL OF LADING. When Mr. Hofmann saw his orders, he asked his travel office in Virginia whether he could move his household goods himself. The travel office told Mr. Hofmann that a self-move was always an option when travel orders authorized the use of a Government bill of lading (GBL). Mr. Hofmann says that his travel office told him that, if he moved himself, he should weigh the truck because payment would be based upon the weight of his household goods and the distance he moved. Mr. Hofmann decided to move his household goods to North Carolina himself instead of having DoD assume responsibility for moving the goods using a GBL. Mr. Hofmann rented a truck and moved his household goods in May 1994, and submitted a claim for reimbursement for the actual costs he incurred when he moved his household goods. Because his travel orders did not expressly state that he was authorized to move his household goods himself, DoD amended Mr. Hofmann s orders on July 26, 1994, to say AUTHORIZED SLEF [sic] MOVE BY (UHAUL) NOT TO EXCEED COST OF GOVERNMENT BILL OF LADING. In its response to Mr. Hofmann s claim, DoD says that the amendment to his orders was not necessary and made no real change to the orders, because Mr. Hofmann always had the option of moving his household goods himself instead of having DoD move the goods using a GBL. DoD reimbursed Mr. Hofmann for actual expenses he incurred in moving his household goods himself. Mr. Hofmann then learned of other employees who had formed a group and sought legal recourse in order to be paid more than the actual expenses they incurred in moving their household goods. In December 1996, Mr. Hofmann read our opinions in the claims of Jeffrey P. Herman, GSBCA 13832-RELO, 97-1 BCA 28,704 (1996); Michael D. Graves, GSBCA 13833-RELO, 97-1 BCA 28,703 (1996); and James M. Bowman, GSBCA 13830-RELO, 97-1 BCA 28,699 (1996). In January 1997, Mr. Hofmann submitted a claim to DoD for an unspecified amount, asking to be paid more than the actual expenses he incurred in moving his household goods, as were Mr. Herman, Mr. Bowman, and Mr. Graves. DoD performed a cost comparison and determined that shipment of Mr. Hofmann s household goods by GBL was more economical than shipment by some other method. Although we do not know precisely when DoD performed this cost comparison, it was after DoD prepared Mr. Hofmann's travel orders. DoD denied Mr. Hofmann s claim and he asks us to review the claim. Discussion Statute provides that under such regulations as the President may prescribe, an agency shall pay from Government funds the expenses of transporting, packing, crating, temporarily storing, draying, and unpacking the household goods of an employee moving to a new permanent duty station. The same statute also provides that for moves within the continental United States (CONUS), instead of being paid for the actual expenses of transporting, packing, crating, storing, and unpacking of household goods, an employee shall be reimbursed on a "commuted basis" at rates per 100 pounds that are fixed by zones in the regulations. The statute does, however, permit agencies to pay actual expenses in lieu of the commuted rate if a determination is made that payment of actual expenses is more economical to the Government. 5 U.S.C. 5724(a), (c) (1994). In Executive Order 11609 (July 22, 1971), the President delegated to the Administrator of General Services the authority to issue regulations implementing 5 U.S.C. 5724 and related statutes concerning travel and relocation of Government employees. This delegated authority underlies the Federal Travel Regulation (FTR) issued by the Administrator.[foot #] 1 The FTR applies to all civilian employees of Government executive agencies, including civilian employees of the Department of Defense. 41 CFR chs. 301-304 (1994). The FTR establishes two methods for reimbursing employees for the transportation of their household goods. One method is referred to as the "commuted rate" method. Using this method, the employee assumes the risks associated with transportation of his household goods and assumes the burden of making all necessary arrangements for transportation of the goods between points within CONUS. The employee selects and pays the carrier or else transports the goods by noncommercial means and is then reimbursed by the Government in accordance with schedules of commuted rates published by the General Services Administration. The other method of transporting goods within CONUS is referred to in the FTR as the "actual expense" method. Using this method, the Government assumes full responsibility for transporting the goods. The Government makes all of the arrangements for moving the employee's household goods, selects a carrier, prepares a GBL that establishes the conditions of the move, and pays the carrier for its services. 41 CFR 302-8.3. The FTR provides that, as a general policy, agencies will use the commuted rate method for shipping an employee's household goods. The goods can be shipped using the actual expense method, however, if the costs to be incurred by the agency for packing and other services are determined in advance and if the actual expense method is expected to result in a savings of $100 or more. 41 CFR 302-8.3. The Joint Travel Regulations (JTR) supplement the provisions of the FTR for civilian employees of the Department of Defense. The JTR provide that the cost of shipping by the actual expense method, which the JTR also refer to as the "GBL" method, will be compared to the cost of shipping by the commuted rate method. If the estimated cost of one method exceeds the estimated cost of the other method by more than $100, the more economical method will be used. The JTR provide that if shipment by the actual expense (GBL) method is more economical and the employee chooses to make his own arrangements for shipping his household goods, the agency will reimburse the employee for his actual expenses, not to exceed what it would have cost if the goods had been shipped using a GBL. JTR C8001-4c(3) (Jan. 1, 1993). DoD's position is that Mr. Hofmann's travel orders, as originally issued, provided that his household goods would be shipped using a Government bill of lading. The travel orders as ----------- FOOTNOTE BEGINS --------- [foot #] 1 After the time relevant to this claim, the Administrator's authority to issue the FTR was confirmed by statute. Pub. L. No. 104-201, 1722, 110 Stat. 2752, 2758 (1996). ----------- FOOTNOTE ENDS ----------- amended after Mr. Hofmann moved provided that if Mr. Hofmann made his own arrangements for moving his household goods, DoD would pay no more than it would have paid if he had shipped the goods using a Government bill of lading. Mr. Hofmann s travel orders never mention the use of the commuted rate system. The amended travel orders add nothing to the original travel orders, says DoD, and are consistent with the JTR s provision concerning an employee s option to perform a self-move. Mr. Hofmann says that his circumstances are the same as those of Mr. Herman, Mr. Bowman, and Mr. Graves. As a result, he says, he should be reimbursed at the commuted rate. There is one similarity between Mr. Hofmann s circumstances and those of Mr. Herman, Mr. Bowman, and Mr. Graves. In each case, before preparing the employee s travel orders, the agency failed to prepare a cost comparison to determine whether it was more economical to move the employee by the actual expense (GBL) method or by the commuted rate method. There are, however, important differences between Mr. Hofmann s circumstances and those of Mr. Herman, Mr. Bowman, and Mr. Graves. In the other claims, the agency expressly authorized the employees to be reimbursed at the commuted rate, and the employees moved believing that they would be reimbursed at the commuted rate. After the employees moved, the agency attempted to use a belatedly prepared cost comparison to justify limiting the employees' reimbursement to their actual expenses. In considering the claims of Mr. Herman, Mr. Bowman, and Mr. Graves, we decided that the agency had to reimburse the employees in accordance with their travel orders and could not rely upon an after-the-fact cost comparison to avoid reimbursing the employees at the commuted rate. If the agencies had performed cost comparisons at the appropriate time for Mr. Herman, Mr. Bowman, and Mr. Graves, the employees would not have been misled into believing that they would be reimbursed at the commuted rate. Mr. Hofmann s agency never authorized him to be reimbursed at the commuted rate. Instead, Mr. Hofmann s original travel orders expressly authorized him to move his goods using a GBL. If the agency had performed a cost comparison at the appropriate time for Mr. Hofmann, his travel orders, if properly prepared, would not have been prepared any differently. When Mr. Hofmann moved his household goods, he was not authorized to be reimbursed at the commuted rate and he was not directed to take responsibility for his own move. The agency never led Mr. Hofmann to believe that he would be reimbursed at the commuted rate. The differences between Mr. Hofmann's circumstances and those of the other three claimants are more important than the similarity in their circumstances. The regulations require agencies to prepare cost comparisons so that they can decide whether it is more economical for them to use the commuted rate method or the actual expense (GBL) method for shipping employees' household goods. We must read the regulations reasonably in order to determine the consequences of an agency's failure to prepare a cost comparison at the appropriate time. If an agency authorizes an employee to move using the actual expense method, if the authorization would have been correct had the agency performed a cost comparison at the appropriate time, and if the employee moves without having a rational belief that the agency will reimburse him at the commuted rate, we cannot reasonably read the regulations to say that an agency is required to reimburse an employee at the commuted rate, which is less economical for the agency. Thus, Mr. Hofmann is not entitled to be paid at the commuted rate. The agency correctly decided to reimburse Mr. Hofmann for the actual expenses he incurred when he moved his household goods. _______________________________ MARTHA H. DeGRAFF Board Judge