Board of Contract Appeals General Services Administration Washington, D.C. 20405 October 8, 1998 GSBCA 14654-RELO In the Matter of RALPH M. MARTINEZ Ralph M. Martinez, Cameron, NC, Claimant. Gary L. Anderson, Director of Logistics, United States Corps of Engineers, Washington, DC, appearing for Department of the Army. DANIELS, Board Judge (Chairman). When the Army Corps of Engineers transferred Ralph M. Martinez from Spokane, Washington, to Fort Bragg, North Carolina, it authorized reimbursement of temporary quarters subsistence expenses (TQSE) to Mr. Martinez and his family for a period not to exceed sixty days. Before leaving for North Carolina in early 1998, and for some time after arriving there, Mr. Martinez attempted unsuccessfully to sell his former home in Washington State. Without the money he would receive from selling the house (or at least a contract for sale of the house which would promise such money in the near future), he did not have the financial wherewithal to buy or rent a home in North Carolina. He asked the Corps to extend the TQSE period for as much as sixty additional days, but the agency refused to do so. Mr. Martinez has asked us to review the Corps' decision. Statute prescribes that when an agency transfers an employee from one permanent duty station to another in the interest of the Government, the agency must pay to or on behalf of the employee subsistence expenses the employee and his immediate family incur while occupying temporary quarters, for a period of up to sixty days. (Alternatively, but not of relevance here, the agency may pay a fixed daily amount for subsistence expenses.) 5 U.S.C.A. 5724a(c)(1) (West Supp. 1997). The sixty-day period "may be extended for up to an additional 60 days if the head of the agency concerned or the designee of such head of the agency determines that there are compelling reasons for the continued occupancy of temporary quarters." Id. 5724a(c)(2). The regulation which implements this statute, the Federal Travel Regulation (FTR), explains that "[a] 'compelling reason' is an event that is beyond [the employee's] control and is acceptable to [his] agency." 41 CFR 302-5.105 (1997). The Joint Travel Regulations (JTR), which supplement the FTR with applicability to civilian employees of the Department of Defense, are to like effect. JTR C13115B.1. Because statute and regulation make the grant of additional time in which an employee may receive TQSE contingent on the existence of "compelling reasons" for the continued occupancy of temporary quarters, and afford an agency broad discretion in deciding whether such reasons are present, we will not overturn an agency's determination as to an extension of the period unless we find it to have been arbitrary, capricious, or contrary to law. Audrey J. Shegog, GSBCA 14621-RELO (Sept. 25, 1998); Rifat A. Ajjuri, GSBCA 14506-RELO, 98-2 BCA 29,788; Daniel A. Rishe, GSBCA 14444-RELO, 98-1 BCA 29,677. The FTR gives four examples of events which are beyond an employee's control and may be acceptable to an agency as compelling reasons for extending the TQSE period. These are: (a) Delivery of [the transferred employee's] household goods to [his] new residence is delayed due to strikes, customs clearance, hazardous weather, fires, floods or other acts of God, or similar events. (b) [The employee] cannot occupy [his] new permanent residence because of unanticipated problems (e.g., delay in settlement on the new residence, or short-term delay in construction of the residence). (c) [The employee is] unable to locate a permanent residence which is adequate for [his] family's needs because of housing conditions at [his] new official station. (d) Sudden illness, injury, or death of employee or immediate family member. 41 CFR 302-5.105; see also JTR C13115B.1. We have characterized these examples as "involv[ing] events over which the employee had no say, and which either were catastrophic or essentially affected the physical availability of permanent housing at the new [permanent duty station]." Baron L. Hudson, GSBCA 14284-RELO, 98-1 BCA 29,527. The reason Mr. Martinez presented to the Corps of Engineers as justification for an enlargement of the period is that the housing market in Spokane had recently and unexpectedly "flattened out," so that even at reduced prices, houses were not selling. The agency did not act in a fashion which was arbitrary, capricious, or contrary to law, in concluding that this circumstance was not sufficient cause for extending the employee's period of eligibility for TQSE, and that the evidence presented by the employee does not support his assertions.[foot #] 1 The General Accounting Office, our predecessor in settling federal civilian employees' claims for travel and relocation expenses, held that a transferred employee's inability to sell a residence is not, by itself, necessarily a compelling reason for an extension of TQSE. Blanch Brown, B-260580 (Nov. 13, 1995); Michael F. Locke, B-221751 (July 11, 1986). This Board has adopted and reiterated this rule on several occasions. Michael T. Horan, GSBCA 14522-RELO, 98-2 BCA 29,806; Hudson; Roland J. Landis, GSBCA 13690-RELO, 97-2 BCA 29,157; Thomas H. Potts, GSBCA 13700-RELO, 97-1 BCA 28,938. An inability to sell a residence is clearly different from the examples given in the regulations as events which are beyond an employee's control and may be acceptable to an agency as compelling reasons for ----------- FOOTNOTE BEGINS --------- [foot #] 1 Reasons the agency gave earlier for denying Mr. Martinez's request were not consistent with the requirements of the FTR and the JTR. The initial justification given by a Corps employee was that "the funds account for your position can not [sic] withstand the addition[al] cost of a 60 day TQSE extension." Within a week, a higher-ranking official rejected that rationale, correctly noting that the regulations do not permit denial of a request for a longer period of TQSE on budgetary grounds. Later, the agency evaluated the request applying a standard contained in section C13004-A.2 of the JTR, as issued on August 1, 1995: "Extensions of the temporary quarters [subsistence expense allowance] may be authorized only in situations where there is a demonstrated need for additional time in temporary quarters due to circumstances which have ___________________________________ occurred during the initial 60-day period of temporary quarters ----------- FOOTNOTE BEGINS --------- occupancy and which are determined to be beyond the employee's _________ control and acceptable to the [Department of Defense] components concerned" (emphasis added). The Corps denied the request because Mr. Martinez had not provided evidence of a sudden drop in the Spokane housing market within the initial TQSE period. Review under this standard was improper because Mr. Martinez raised the matter in March 1998 and the JTR were amended, effective March 1 of this year, to delete the requirement that the circumstances justifying an extension of the TQSE period must have occurred during the initial period. Section C13115 of the JTR now provides simply: "TQSE may be authorized for an additional period of up to 60 consecutive days if the head of the DOD component concerned, or designee, determines there are compelling reasons (due to circumstances beyond the employee's control) for the continued temporary quarters occupancy." The Corps' errors in considering the claim under inapplicable standards are immaterial, however, because the agency has now reasonably applied the correct standard in denying the claim. ----------- FOOTNOTE ENDS ----------- extending the TQSE period. A homeowner generally has some control over his ability to sell his residence -- primarily by lowering the asking price, modifying other terms of prospective sale, and improving the appearance of the house. Changes in market conditions are not usually catastrophic events, and when they occur at an employee's old duty station they can hardly be said to affect the physical availability of permanent housing at the new station. As we said in Hudson, "Although the regulation does not appear to preclude the agency from granting an extension under the circumstances described by claimant, neither does it require the agency to extend the time for TQSE." There may be conditions under which a sudden change in the real estate market at an employee's old duty station would constitute a compelling reason for extending the TQSE period. The Corps has suggested two examples which in its opinion would qualify: "a plant or factory closure in a specific geographical area, causing immediate unemployment, or a similar situation of a base closure of a nearby military installation or Government agency," and "an area struck by an act of God resulting in devastation such as a Presidentially declared disaster area." The General Accounting Office, in Locke, said that an extension would be justified in circumstances including "anything from natural disasters affecting the physical condition of the property to legal action affecting the marketability of title to the property." Nothing like any of these situations occurred here. In response to our request that he document his assertions about an unanticipated change in the Spokane real estate market, Mr. Martinez submitted articles from Spokane newspapers and statements from realtors about efforts to sell his own dwelling. The newspaper articles state that houses in the Spokane area increased significantly in value during the early 1990's, but that following a peak in 1993, sales and prices began a three- year decline in 1994, stabilized in 1997, and slowed again during the first quarter of 1998. The papers quoted one "long-time economic observer" as saying in retrospect about the 1997 performance, "We predicted housing sales to be flat. That's pretty much the pattern we've projected." The realtors believe that Mr. Martinez was unable to sell his house because he set the asking price unrealistically high, the home had "some functional obsolescence . . . which can also increase market time," and "[t]he house does not show as well since being vacant." In short, the agency's denial of the claim was reasonably based. We therefore do not disturb it. Mr. Martinez makes an additional request that his "numerous days of annual and sick leave resulting from the stress associated with the extension process" be restored. We have no authority to consider this personnel matter, which is not governed by the laws dealing with federal civilian employees' travel and relocation expenses. See 31 U.S.C.A. 3702(a). _________________________ STEPHEN M. DANIELS Board Judge