Board of Contract Appeals General Services Administration Washington, D.C. 20405 February 24, 1998 GSBCA 14398-TRAV In the Matter of MICHAEL S. KNEZEVICH Michael S. Knezevich, Levittown, PR, Claimant. Edgardo Aviles, Travel Team Leader, United States Customs Service, Indianapolis, IN, appearing for Department of the Treasury. DANIELS, Board Judge (Chairman). Michael S. Knezevich, an employee of the United States Customs Service, was on temporary duty during December 1994 and much of 1995. His adventures during this period have generated hard feelings and threatened litigation between him and agency officials. Only one of the disagreements is presented to us here: to what extent should Mr. Knezevich be paid for lodging, meals, and mileage driven in his privately-owned vehicle while he was on two separate stretches of temporary duty in Miami, Florida? Lodging Mr. Knezevich was on assignment in Miami from December 12, 1994, through February 1, 1995, and again from June 1, 1995, through August 16, 1995. The agency reimbursed him for lodging expenses only for the first two nights of the second period of time, when he stayed in a hotel. It denied reimbursement for expenses incurred for all other nights. On those other nights, Mr. Knezevich stayed at two different places. First location Throughout the first assignment, and on the second tour until July 4, Mr. Knezevich lived in a condominium owned and occupied by Ann Christine Ruda. Ms. Ruda has stated, "Since 1986 I have shared and/or rented parts of my condominium on several occasions." Mr. Knezevich says that before he moved into this dwelling, he "knew Ms. Ruda, but not very well. . . . Ms. Ruda had mentioned before that she needed extra income and was considering renting her condominium. She preferred a roommate, but wanted someone she could trust, not a total stranger." While Mr. Knezevich was living with Ms. Ruda, the claimant acknowledges, the two became intimately involved. They later quarreled over some personal matter and Ms. Ruda evicted him. Shortly thereafter, Mr. Knezevich returned to collect a debt she owed him and, according to Ms. Ruda, they had a physical altercation. She filed a report with the local police, accusing him of having committed various crimes against her; after an in camera hearing, a judge dismissed the case. Mr. Knezevich and Ms. Ruda never entered into a written agreement regarding payment for his living in her condominium. According to the claimant, before he moved into the residence, the two of them negotiated a rental price of $50 per day. Ms. Ruda's recollection was that "[h]e offered to rent my condominium, sharing both the expense and living accommodations for a negotiated fee of fifty dollars per day. A minimum of ten dollars would be paid daily, or at my option, one hundred and forty dollars every two weeks. The remainder of the monies would be paid prior to his proposed departure to [a permanent duty assignment]." Mr. Knezevich has provided us with handwritten receipts from Ms. Ruda marked "condo rental" which are in the amount of $50 per day. All but one of the receipts state that payment was made in cash. The receipts are not consistent with Ms. Ruda's version of the rental agreement; they indicate that payment was made in advance, on the first day of each month that the claimant lived with her, in the amount of $50 per day. Mr. Knezevich has also provided us with copies of canceled checks in the total amount of $1,685 to Ms. Ruda; each check was written at a time when he was not occupying her residence. He has additionally provided canceled checks for payments by him of $121 to the local utility for "Ruda's light bill" and of $247.07 to a plumber for "Condo-Ruda," and a receipt from a carpet cleaning company for $30 for "clean carpet (1 room)." The relationship of these checks to the purported rental of the condominium is not explained. The Federal Travel Regulation (FTR) provides that a federal employee traveling on official business shall be reimbursed for his actual cost of lodging through a "per diem allowance," up to a maximum daily amount. 41 CFR 301-7.6, -7.9(c) (1994). The regulation contains this constraint, however: Lodging with friends or relatives. When the employee obtains lodging from friends or relatives . . . with or without charge, no part of the per diem allowance will be allowed for lodging unless the host actually incurs additional costs in accommodating the traveler. In such instances, the additional costs substantiated by the employee and determined to be reasonable by the agency may be allowed as a lodging expense. Id. 301-7.9(c)(3). Of course, if the friend or relative is in the business of renting on a regular basis the living space for which the employee incurs occupancy costs (for example, if the friend or relative is a hotel operator), this limitation is not applicable. The critical factor in distinguishing one of these situations from the other is whether the host and the traveler have an arm's-length business relationship. Guy E. Mercier, GSBCA 13795-RELO, 97-1 BCA 28,925. The above facts establish that the relationship between Mr. Knezevich and Ms. Ruda was not one of arm's length; at least until the final episode recounted here, it was founded on friendship, not business. The two individuals were acquainted before he moved into her condominium, and she was willing to accept his cohabitation because he was not a stranger. Although Ms. Ruda may have had other roommates previously, she was not in the business of regularly renting space in her residence. The absence of a written rental agreement also indicates that the relationship was not founded on business purposes. There is no indication that while Mr. Knezevich was living with her, she incurred any additional financial costs in accommodating him. Thus, even if the claimant actually paid Ms. Ruda fifty dollars per night for staying in the condominium, the agency acted properly in not reimbursing him for this expense.1 Second location On July 3, 1995, Mr. Knezevich agreed in writing to rent a room from Leonidas A. Solorzano for the months of July, August, and September, at the rate of $400 per month. Mr. Solorzano had advertised the availability of this room in a newspaper. At the time Mr. Knezevich signed this agreement, he believed that his temporary duty in Miami would extend through September 30. The agency does not contend that this belief was erroneous. In early August, Mr. Knezevich's supervisor directed him to return to his permanent duty station in Key West, Florida, as soon as possible. The claimant lived in the room until August 16, when he reported to Key West. He paid Mr. Solorzano the entire amount for which he was obligated under the lease, $1,200. Mr. Knezevich claims that he is entitled to be reimbursed this amount, which, when divided by the number of days he actually lived in the room, comes to $28.57 per day. The agency should have paid this lodging expense. The relationship between the landlord and the traveler was at arm's length and was entered into for only business purposes. Mr. Solorzano was in the business of renting the room, and there is no indication that the rent charged was unreasonable. Regulation authorizes the rental of living space on a monthly basis, in appropriate circumstances, by employees on temporary duty assignments. 41 CFR 301-7.14(a). A three-month rental for an expected three-month assignment seems prudent. Although the rental period turned out to be longer than the traveler's actual residence in the room, agency liability for the entire rental amount is appropriate. The temporary duty assignment was curtailed for reasons beyond the employee's control that were acceptable to the agency; there is no indication that the employee could have minimized rental payments; and the daily lodging costs did not exceed the maximum rate allowable. Id. 301-7.14(c)(1). Allowance for meals and incidental expenses Generally, agencies pay employees who are traveling on official business a fixed daily allowance for meals and incidental expenses. 41 CFR 301-7.3. In the midst of Mr. Knezevich's first temporary assignment in Miami, the claimant took annual leave from January 4 to 6, 1995. The Customs Service did not pay him a per diem allowance for any of these three days -- or for either of the following weekend, or "nonwork," days, either. This action was half right. Because the claimant was on annual leave for all of January 4, 5, and 6, in accordance with the FTR, he should not have been paid a per diem allowance for any of those days. Id. 301-7.15(a)(1). If he had remained on annual leave for even a portion of the following workday, the FTR provides, he should not have been paid the allowance for the ____________________ 1Further, although Ms. Ruda affirms that she "was compensated at the amounts indicated on [her handwritten] receipts," the record does not establish that Mr. Knezevich's payments were for rental of living space. The receipts do not square with her version of the rental agreement or with the amounts contained in his proof of payments to her. We do not know whether the payments were for rent, for some other good or service, or loans. weekend "nonworkdays," either. However, because he was on duty for all of Monday, January 9, per diem should have been paid for Saturday the 7th and Sunday the 8th. Id. 301-7.15(a)(2)(i). The Customs Service also disallowed Mr. Knezevich's request for an allowance for meals and incidental expenses on August 15, 1995, at the end of his second stay in Miami. The agency did not explain why it took this action, and the claimant does not say why he believes he should be paid. Under our Rules of Procedure, "The burden is on the claimant to establish . . . the liability of the agency[] and the claimant's right to payment." Rule 401(c) (48 CFR 6104.1(c) (1997)). Because Mr. Knezevich has not met his burden, this portion of the claim must be denied. Use of privately-owned vehicle Mr. Knezevich claims that the Customs Service owes him money for his use, on every one of the days that he was in Miami while on temporary duty, of a vehicle owned by him. He asks for payment based on distances traveled -- thirty-three miles on each of July 25 and 26, 1995; 165 miles on August 16, 1995 (the day on which he drove to Key West); and sixty-five miles on each other day. According to Mr. Knezevich, sixty-five is the average number of miles he drove each day during the time in question; it includes travel made for personal reasons and on nonworkdays. He asks that payment be made at a rate of twenty-five cents per mile until December 31, 1994, and thirty cents per mile thereafter. The Customs Service appears to have rejected this portion of the claim in its entirety. The agency's explanation for this action is: Although Mr. Knezevich was in sick leave/annual leave status, he submitted claims for mileage expenses for such periods. He also claimed mileage . . . for non work days. Additionally, his approving official confirmed that notwithstanding a Government furnished automobile was available, Mr. Knezevich used his privately owned (pov) vehicle and claimed excessive mileage. As a result, . . . mileage was reduced and computed at the appropriate rate. This explanation makes good sense (though the record does not show that the Customs Service ever reimbursed Mr. Knezevich for any of the travel he made for official business in his own car). The Government reimburses employees for the use of their own vehicles only if that use is for the purpose of conducting official business. 41 CFR 301-2.2(a), (b), (d)(2). "Nonworkdays" are by definition days on which an employee is not conducting official business. The agency has noted that two days during Mr. Knezevich's first tour of temporary duty in Miami, and ten days during his second such tour, were such days. In addition, Mr. Knezevich took three days of annual leave during the first tour and seventeen days of sick leave and one day of administrative leave during the second; he could hardly have been conducting official business while on leave, either. Any use of his automobile during these thirty-three days must have been for personal reasons. The agency properly did not provide any reimbursement for any of these days. When a car is required for the conduct of business by Government employees, "[a] Government-furnished automobile is the first resource when an automobile is required for official travel performed locally or within commuting distance of an employee's designated post of duty." 41 CFR 301-2.2(d)(2)(ii), -2.6(c). "The use of a privately owned conveyance shall be authorized only when its use is advantageous to the Government." Id. 301-2.2(d)(3). Employees may also be allowed to use such "conveyances" as a matter of personal preference where "such use is compatible with the performance of official business." Id. 301-2.2(e). Whenever an employee uses his own car while on official business, "payment shall be made on a mileage basis unless payment on an actual expense basis is specifically authorized by law." 41 CFR 301-4.1(a). The FTR establishes three different mileage rates to be used in calculating amounts for which employees should be reimbursed for the use of their cars. When the use is authorized or approved as advantageous to the Government, the highest rate applies; it was twenty-five cents per mile in 1994 and thirty cents per mile in 1995. Id. 301-4.2(a)(1) (1994); id. (1995). When the use is allowed "even though use of a Government-furnished automobile would be more advantageous to the Government, reimbursement to the employee shall be limited to the cost which would be incurred for use of a Government-furnished automobile." Id. 301-4.4(a). This cost was 18.0 cents per mile in 1994 and 23.5 cents per mile in 1995. Id. 301-4.4(b). Finally: When an employee who is committed to using a Government-furnished automobile, or who because of the availability of Government-furnished automobiles, would not ordinarily be authorized to use a privately owned conveyance instead of a Government-furnished automobile, nevertheless requests use of a privately owned conveyance, reimbursement may be authorized or approved. The rate of reimbursement shall be [9.5 cents per mile in 1994, 10.5 cents per mile in 1995], which is the approximate cost of operating a Government-furnished automobile, fixed costs excluded. Id. 301-4.4(c). The record in this case contains a statement that the claimant's use of his own car was authorized by his supervisor (with reimbursement amounts subject to audit). The authorization does not indicate whether it was based on a determination that use of that car was most advantageous to the Government (in which case reimbursement would be at the highest of the three above rates), or whether it constituted an allowance to use the car even though the use of a Government-furnished vehicle would be more advantageous (in which case reimbursement would be at the middle of the three rates). There is no indication in the record that Mr. Knezevich ever was committed to using a Government- furnished automobile, or that he used his own car on official business at his request. As noted above, the agency states that a Government- furnished vehicle was available for Mr. Knezevich's use while he was on temporary duty in Miami. The claimant contends that no such vehicle was available to him. Mr. Knezevich has submitted, in support of his position, a memorandum from a Customs Service employee which states that the agency "did not have any spare government vehicles to issue Mr. Knezevich after his vehicular accident," which occurred on July 25, 1995. We conclude, from the evidence before us, that a Government-furnished vehicle was available to Mr. Knezevich on all relevant dates through July 25, but on no relevant dates thereafter. We further conclude that the supervisor's approval should be construed to allow the claimant to use his own car even though the use of a Government- furnished vehicle would have been more advantageous to the Government through July 25, and to allow the use of his own car as most advantageous to the Government after that date. Consequently, to the extent that the claimant used his car for official business, reimbursement should be at the highest of the three above rates for days beginning on July 26, and at the middle rate for days before that date. To determine reimbursement amounts, for each day, the appropriate rate must be multiplied by the number of miles driven on official business. "[D]istances between points traveled shall be as shown in standard highway mileage guides or actual miles driven as determined from odometer readings." 41 CFR 301-4.1(b). Mr. Knezevich did not make any odometer readings as to the distances he traveled. (His "averaging" technique is unacceptable, since it includes trips for personal reasons as well as those for Government purposes.) The claimant asserts, and the agency does not deny, that he used the car at least for transportation between his temporary places of lodging and his office. We must leave to the agency the task of determining, through the use of standard guides or odometer readings of the agency's own making, the distances of those trips. (Even if Mr. Knezevich's statement that the round-trip distance was sixty-two miles is true as to one of his lodging-places, this does not end the inquiry, since the claimant lived in three different places -- Ms. Ruda's condominium, the room he rented from Mr. Solorzano, and a hotel -- while he was on temporary duty in Miami.) Temporary duty in February 1996 Mr. Knezevich also asks us to review the Customs Service's determination as to reimbursement of expenses he incurred while on official travel in February 1996. From February 27 to 29, Mr. Knezevich drove from his home in Big Pine Key, Florida, to Plantation, Florida, and returned home. He requested reimbursement in the amount of $240.33 (though the individual entries on his voucher total only $239.58). The Government paid him $232.16. Its only explanation for paying less than the full amount is a note on Mr. Knezevich's voucher: "Differences: Per Diem + tolls (8.17)." The voucher contains an error regarding the per diem allowance for meals and incidental expenses. For February 27, Mr. Knezevich requested an allowance of $22.50. At the time, the daily meals and incidental expenses allowance rate for Broward County, where Plantation is located, was $34. 41 CFR 301 app. A (1995). The rule regarding proration of the rate for days which were only partially devoted to travel was that the day was to be divided into four parts, with the employee entitled to one-fourth of the rate for each part in which he was in travel status. Id. 301-7.8(e) (1995).2 Mr. Knezevich was in travel status during three of the four quarters of February 27. Thus, he is entitled to $25.50 in per diem allowance for meals and incidental expenses for that date. His allowance for the full travel day of February 28 and the two partial (three-quarters) travel days of February 27 and 29, plus his lodging expenses, amount to $237.58. The amount of tolls for which Mr. Knezevich seeks reimbursement is five dollars. The claimant has not explained, however, where or why tolls were incurred on this trip. On this point, consequently, the claim fails for want of proof. ____________________ 2The rule is now that an employee is entitled to three- fourths of the applicable meals and incidental expenses allowance rate on the day travel begins and on the day travel ends. 41 CFR 301-7.8(a), (c)(3) (1997). _________________________ STEPHEN M. DANIELS Board Judge