Board of Contract Appeals
                 General Services Administration
                      Washington, D.C. 20405




                       ____________________

                          April 5, 2006
                       ____________________


                         GSBCA 16819-RELO


                 In the Matter of SHANE DOUTHITT


     Shane Douthitt, Kennewick, WA, Claimant.

     Shirley L. Autry, Deputy Director, Finance Center, United States Army Corps of
Engineers, Millington, TN, appearing for Department of the Army.

PARKER, Board Judge.

                            Background

     In connection with his September 2005 transfer from Mead, Washington, to Umatilla,
Oregon, Shane Douthitt was authorized a real estate expense allowance.  When Mr. Douthitt
purchased a home at his new duty station, he filed a claim that included, among other items,
a request for reimbursement of an "underwriting fee" of $395 charged by the lender.  His
employer, the Army Corps of Engineers, denied that portion of the claim on the basis that
the fee was an unallowable finance charge.  Mr. Douthitt has asked the Board to review the
agency's decision, pointing out that the lender did not charge a loan origination fee, but
instead charged the underwriting fee.

                            Discussion

     Although the Federal Travel Regulation (FTR) provides for reimbursement of certain
real estate-related expenses incurred by a transferred employee, the regulation specifically
prohibits reimbursement for interest on loans, points, and mortgage discounts, as well as any
fee, cost, charge, or expense determined to be a part of the finance charge under the Truth
in Lending Act and Regulation Z issued by the Board of Governors of the Federal Reserve
System.  41 CFR 302-11.202(d), (g) (2005).  The Department of Defense's Joint Travel
Regulations (JTR) are to the same effect.  JTR C14002-A(4)(b)(2), (5). 

     An exception to the general rule prohibiting reimbursement of finance charges allows
the agency to reimburse:

     loan origination fees and similar charges such as loan assumption fees, loan
     transfer fees or other similar charges not to exceed 1 percent of the loan
     amount without itemization of the lender's administrative charges . . . if the
     charges are assessed in lieu of a loan origination fee and reflects charges for
     services similar to those covered by a loan origination fee[.]

41 CFR 302-11.200(f)(2); see JTR C14000-A(4)(a)(2).  A loan origination fee is a finance
charge paid by the borrower to compensate the lender for administrative-type expenses
incurred in originating and processing a loan.  Michael L. Rivera, GSBCA 16488-RELO,
05-1 BCA   32,817 (2004).

     The Board, following a long line of decisions by the Comptroller General, has held
repeatedly that an underwriting fee is considered to be part of the finance charge and,
consequently, not reimbursable.  E.g., Willo D. Lockett, GSBCA 16391-RELO, 04-2 BCA 
 32,722; Craig A. Czuchna, GSBCA 15799-RELO, 02-2 BCA   31,898.  Moreover, such a
fee, which is "generally charged by a lender to cover the cost of having a loan underwritten,"
Czuchna, has traditionally been treated as a charge which is neither similar to, nor an element
of, a loan origination fee.  See Lockett; Virginia Wensley Koch, GSBCA 16277-RELO,
04-1 BCA   32,625.    Accordingly, under the FTR, an underwriting fee may not be
reimbursed in lieu of a loan origination fee.



                                        _____________________
                                        ROBERT W. PARKER
                                        Board Judge