Board of Contract Appeals General Services Administration Washington, D.C. 20405 November 24, 1999 GSBCA 15114-RELO In the Matter of GEORGE S. PAGE George S. Page, Lawton, OK, Claimant. David M. England, Office of General Counsel, Headquarters, Defense Commissary Agency, Fort Lee, VA, appearing for Department of Defense. DANIELS, Board Judge (Chairman). The Defense Commissary Agency (DeCA) hired George S. Page in Texas and assigned him to a post in Livorno, Italy. In April 1999, the agency transferred Mr. Page to Fort Sill, Oklahoma, under orders which authorized reimbursement of real estate expenses he might incur in making this move. Mr. Page bought a house in Oklahoma and asked to be repaid the costs he incurred in making the purchase. He asserts, in a statement DeCA does not challenge, that he would not have bought the house if the agency had not promised to pay for these costs. The agency refused to make payment, however, and the employee has appealed its decision. We hold that DeCA's position is correct, but for a reason entirely different from the one advanced by the agency. DeCA believes that Mr. Page may not receive reimbursement, the travel order authorization notwithstanding, because his previous duty station (Livorno, Italy) was not located in the United States. In support of this position, the agency points to 5 U.S.C. 5724a(d)(1) (Supp. IV 1998), which states that under regulations promulgated by the Administrator of General Services -- an agency shall pay to or on behalf of an employee who transfers in the interest of the Government, expenses of the sale of the residence (or the settlement of an unexpired lease) of the employee at the old official station and purchase of a residence at the new official station that are required to be paid by the employee, when the old and new official stations are located within the United States. DeCA also cites several decisions by the Comptroller General of the United States, who was our predecessor in settling claims involving travel and relocation expenses of federal civilian employees: Fred L. Newhouse, B-222135 (Aug. 18, 1986); Robert E. Luther, B-193138 (Apr. 3, 1979); 54 Comp. Gen. 1006 (1975); Douglas B. Ruddle, B-176452 (Feb. 21, 1973); and Secretary of the Treasury, 47 Comp. Gen. 93 (1967). These decisions all applied a law essentially the same as this provision to deny residence transaction expenses to employees who relocated from a duty station abroad to one in the United States. The law considered in the Comptroller General decisions was amended by Congress in 1987 to allow reimbursement of the same sort of expenses, in certain circumstances, to most transferred employees whose previous duty station was located outside the United States. Pub. L. No. 100-202, 101(m) (tit. VI, 628(a)), 101 Stat. 1329, 1329-430 (1987). The amendment added provisions which are in substance now contained in the two paragraphs which directly follow the one noted by DeCA: (2) Under regulations prescribed [by the Administrator of General Services], an agency shall pay to or on behalf of an employee who transfers in the interest of the Government from a post of duty located outside the United States to an official station within the United States (other than the official station within the United States from which the employee was transferred when assigned to the foreign tour of duty) -- (A) expenses required to be paid by the employee of the sale of the residence (or the settlement of an unexpired lease) of the employee at the old official station from which the employee was transferred when the employee was assigned to the post of duty located outside the United States; and (B) expenses required to be paid by the employee of the purchase of a residence at the new official station within the United States. (3) Reimbursement of expenses under paragraph (2) of this subsection shall not be allowed for any sale (or settlement of an unexpired lease) or purchase transaction that occurs prior to official notification that the employee's return to the United States would be to an official station other than the official station from which the employee was transferred when assigned to the post of duty outside the United States. 5 U.S.C. 5724a(d)(2), (3). Had any of the situations in the cases cited by DeCA been subject to the law as it has been for the past dozen years, the Comptroller General would have had to apply that law, and not the earlier statute, to resolve the cases. The decisions are consequently of no import in resolving current claims. Under present law, if Mr. Page had been transferred in the interest of the Government from Texas to Italy to Oklahoma, he would be eligible for the expenses he incurred in purchasing a residence in Oklahoma -- and also for the expenses he might incur in selling his former residence in Texas. There is a fly in the ointment, however: Mr. Page was never transferred from Texas to Italy. Rather, Italy was his first duty station with the Government. The statute and the Federal Travel Regulation (FTR) (the "legislative regulation" which implements it, see Lorrie L. Wood, GSBCA 13705-TRAV, 97-1 BCA 28,707) provide for reimbursement of real estate transaction expenses only to federal employees who are already employed by the Government, and stationed in the United States, when they are transferred abroad. Neither the statute nor the FTR provides for such reimbursement to employees whose first duty station is located outside the United States. The Joint Travel Regulations (JTR), which supplement and implement the statute and the FTR with application to civilian employees of the Department of Defense (such as Mr. Page), make explicit what those laws leave unsaid: employees whose first duty station is abroad (again, such as Mr. Page) are not eligible for reimbursement of real estate transaction expenses when they are transferred from that station to a domestic location. The JTR state: The following employees are not eligible for real estate allowances when transferred from a foreign area PDS [permanent duty station] to a PDS in a nonforeign area. This is because they were not initially transferred from a PDS in a nonforeign area to the foreign area PDS as a civilian employee: . . . . (c) an employee hired in a nonforeign area for assignment to a first PDS and the PDS is in a foreign area. JTR C14000-C.2 note. This regulation precludes DeCA from providing reimbursement to Mr. Page for the costs he incurred in buying his home in Oklahoma. Mr. Page is understandably upset with DeCA's refusal to pay for his residence purchase expenses because he incurred these costs in reliance on the authorization in his travel orders and statements of agency employees that reimbursement would be forthcoming. In considering claims like this one, however, the arbiter must balance the harm the employee would suffer if the claim were denied against the damage which would result to our system of government if federal officials were free to spend money in ways which are contrary to the strictures of statute and regulation. In making this balance, the Supreme Court has clearly come down on the side of protecting our system of government. We follow the Court in holding that although Mr. Page has undeniably relied to his detriment on DeCA's promises, he may not be reimbursed because the law prevents the agency from honoring commitments made in its name by officials who do not have the power to make them. Chesley E. Kimbrel, GSBCA 13680-RELO, 97-2 BCA 29,043 (citing Office of Personnel Management v. Richmond, 496 U.S. 414 (1990); Federal Crop Insurance Corp. v. Merrill, 332 U.S. 380 (1947)). _________________________ STEPHEN M. DANIELS Board Judge