Board of Contract Appeals General Services Administration Washington, D.C. 20405 __________________________ August 11, 1998 __________________________ GSBCA 14622-RELO In the Matter of KATHRYN M. VERNON Kathryn M. Vernon, Tacoma, WA, Claimant. Ronald L. Page, Manager, External Relations Branch, Office of Financial Services, Federal Aviation Administration, Washington, DC, appearing for Department of Transportation. DeGRAFF, Board Judge. If reimbursement for expenses incurred by an employee would be disallowed under the relocation regulations that apply to residence transactions and quarters expenses, then the expenses are not reimbursable as miscellaneous expenses. Background Kathryn Vernon, an employee of the Federal Aviation Administration (FAA), transferred from Washington, D.C. to Auburn, Washington in October 1997. Ms. Vernon owned a house in the Washington, D.C. area and she decided to lease the house instead of selling it when she moved. Ms. Vernon explained that she made this decision because there was a poor market for home sales in the Washington, D.C. area and she anticipated that she would have to incur a significant loss in order to sell her house within a reasonable time. Ms. Vernon employed a management company to manage and to lease the house, and agreed to pay the company a monthly fee for management services as well as a leasing fee when a tenant signed a lease. The leasing fee that Ms. Vernon paid amounted to $1,200. Ms. Vernon signed an agreement to rent a house in Washington for ten months and she paid $796.50 in rent for October 5 through October 31, 1997. Ms. Vernon explained that she decided to begin renting the house on October 5, even though she was not scheduled to report to her new duty station until October 26, because she needed to establish residency in Washington in order to enroll her children in school. Ms. Vernon and her family arrived in Washington on October 25, and stayed with relatives until her household goods were delivered to the rented house on October 31, 1997. The FAA viewed Ms. Vernon's rented house as her permanent quarters. In her submission to us, Ms. Vernon says that the quarters were temporary. Ms. Vernon submitted a claim to the FAA for the $1,200 leasing fee and for the $796.50 in rent. Ms. Vernon asked to be reimbursed for these amounts as miscellaneous expenses. The FAA decided to deny Ms. Vernon s claim, and she asked us to review that decision. Discussion In legislation that took effect on April 1, 1996, Congress exempted the FAA from large parts of title 5, United States Code, including the provisions of that title concerning reimbursement of relocation expenses. Pub. L. No. 104-50, 347, 109 Stat. 436, 460 (1995). Ms. Vernon asks whether title 5 applies to her because she relocated after April 1, 1996. In order to answer Ms. Vernon's question, we looked at the FAA Personnel Management System, which the FAA issued on March 28, 1996, in response to the legislation. The FAA Personnel Management System explains that, until September 30, 1997, the FAA would determine permanent change of station benefits in accordance with the standards and procedures that were in effect on March 31, 1996, which included title 5 of the United States Code and the Federal Travel Regulation (41 CFR parts 301 and 302). The Personnel Management System also explains that the FAA expected to adopt a plan on September 30, 1997, addressing reimbursement of relocation expenses, among other items. When Ms. Vernon relocated in October 1997, the FAA had not yet adopted its plan addressing reimbursement of relocation expenses, and so the FAA continued to apply the standards and procedures that were in effect on March 31, 1996, including title 5 of the United States Code and the Federal Travel Regulation. The FAA apparently read its Personnel Management System as meaning that it would continue to use the standards and procedures contained in title 5 of the United States Code and the Federal Travel Regulation until it implemented a plan concerning relocation expenses, regardless of whether that plan was implemented on September 30, 1997. The FAA's reading was reasonable because it was clearly consistent with the FAA's intent at the time it issued its Personnel Management System. In addition, the FAA's reading was reasonable because, without its own plan in place, if the FAA had read the Personnel Management System to say that the provisions of title 5 and the Federal Travel Regulation did not apply to FAA employees after September 30, 1997, the FAA would have had no basis for reimbursing its employees for any relocation expenses after that date. Applying the provisions of title 5 of the United States Code and the Federal Travel Regulation, we conclude that the FAA correctly decided not to reimburse Ms. Vernon. The leasing and rent expenses that she incurred cannot be reimbursed as miscellaneous expenses because they would be disallowed under the relocation regulations that apply to residence transactions and quarters expenses. Employees are entitled to be reimbursed by their agencies for the miscellaneous expenses that they incur in connection with a relocation. 5 U.S.C.A. 5724a(f) (West Supp. 1998); 41 CFR pt. 302-3 (1997). Miscellaneous expenses include items such as fees for disconnecting and connecting appliances and utilities, fees for cutting and fitting rugs and curtains, non-refundable utility fees and deposits, and costs of automobile registration and drivers' licenses. An agency cannot use its authority to pay for miscellaneous expenses as a means of reimbursing an employee for expenses that are disallowed under some other provision of the relocation regulations. 41 CFR 302-3.1(c). Therefore, in order to determine whether the FAA can reimburse Ms. Vernon for her leasing fee and her rent, we will look to see whether those expenses are covered by any other provisions of the relocation regulations. The relocation regulations provide for paying expenses in connection with residence transactions at an old duty station. In order to be reimbursed for the expenses of relinquishing a former residence at an old duty station, an employee must either sell the residence or terminate an unexpired lease for the residence. The regulations do not permit an agency to reimburse an employee for expenses incurred as the result of the employee s decision to lease the former residence instead of selling it. 41 CFR pt. 302-6; Donald E. Muldoon, B-179079 (Nov. 13, 1973); Mary E. Smith, 46 Comp. Gen. 705 (1967). Ms. Vernon points out that the $1,200 she requests is less than the amount that the FAA would have reimbursed her if she had sold her former residence. Although we do not doubt that this is true, the fact remains that the regulations governing residence transactions do not permit the FAA to reimburse Ms. Vernon for the leasing fee, and so the FAA cannot reimburse Ms. Vernon for this amount as a miscellaneous expense. The relocation regulations also provide that agencies may reimburse employees for temporary quarters subsistence expenses when they occupy temporary quarters. 41 CFR pt. 302-5. If Ms. Vernon is correct that the house she rented was temporary quarters, the relocation regulations do not permit the FAA to reimburse her for the rent that she paid for October 5 through 31, 1997, because she did not occupy the house during that time. If the FAA is correct that the rented house was Ms. Vernon's permanent quarters, it cannot reimburse her because the relocation regulations do not permit an agency to reimburse an employee for rent paid for permanent quarters at a new duty station. 41 CFR 302-5.1, -5.2; Eric J. Ransick, B-209217 (Nov. 16, 1982); Ronald A. Noller, B-204939 (Apr. 5, 1982); Lt. Col. R.E. VanDerLike, B-171808 (Mar. 31, 1971). Because the regulations governing temporary quarters do not permit the FAA to reimburse Ms. Vernon for the rent that she paid, the FAA cannot reimburse Ms. Vernon for this amount as a miscellaneous expense. The FAA correctly decided to deny Ms. Vernon's claim. __________________________________ MARTHA H. DeGRAFF Board Judge