Board of Contract Appeals

                 General Services Administration

                      Washington, D.C. 20405







                                                 



                          April 17, 2003

                                                 





                         GSBCA 16028-RELO





               In the Matter of NICHOLAS A. CARLSON





     Nicholas A. Carlson, Moscow, Russia, Claimant.



     Helen O. Sherman, Director, Office of Finance & Accounting Policy, Washington,

DC, appearing for Department of Energy.



DANIELS, Board Judge (Chairman).



     The Government may not reimburse a new appointee whom it sends abroad for

property management service fees he incurs in renting his United States residence.



                            Background



     Nicholas A. Carlson was hired by the Department of Energy (DOE) in August 2000,

to serve as the representative of that agency's National Nuclear Security Administration in

Moscow, Russia.  The agency sent him to Russia in the following month.



     When DOE offered this position to Mr. Carlson, it said that it would pay the property

management service fees he incurred in renting his United States residence while he was

serving abroad.  Two weeks later, evidently after someone in authority had read the Federal

Travel Regulation (FTR), DOE retracted this commitment.  DOE would like to fulfill its

promise but believes that the FTR precludes it from doing so.



     Mr. Carlson has been serving in Russia since joining the agency.  Upon the expiration

of his initial two-year tour of duty, he agreed to stay on for another year.



     Mr. Carlson acknowledges that the relevant FTR provision prevents DOE from paying

his property management fees.  He questions why the regulation is written as it is, however. 

In particular, he questions why the agency should be prevented from paying these fees after

he extended his overseas assignment.  He notes that by remaining in Russia, he has saved the

Government the expenses of sending him home and sending another individual to Russia to

replace him.



                            Discussion



     Property management services are defined by the FTR as   



          programs provided by private companies for a fee, which help

          an employee to manage his/her residence at the old official

          station as a rental property.  These services typically include, but

          are not limited to, obtaining a tenant, negotiating the lease,

          inspecting the property regularly, managing repairs and

          maintenance, enforcing lease terms, collecting the rent, paying

          the mortgage and other carrying expenses from rental proceeds

          and/or funds of the employee, and accounting for the

          transactions and providing periodic reports to the employee.



41 CFR 302-15.1 (2000).



     As the parties to this case both recognize, the FTR states very clearly:



          Who is not eligible for payment for property management

          services?



          New appointees . . . are not eligible.



41 CFR 302-15.4.



     Prior to March 1997, agencies lacked authority to reimburse any employees for

property management service fees.  In the National Defense Authorization Act for Fiscal

Year 1997, however, Congress allowed agencies to pay these fees for "an employee who

transfers in the interest of the Government," as long as the employee is at a post of duty

outside the United States to which he has been transferred.  Pub. L. No. 104-201,   1714(2),

110 Stat. 2422, 2755 (1996).  The amendment affected 5 U.S.C.   5724a, a provision dealing

with benefits for employees who are relocated by the Government.  See 5 U.S.C.   5724a(e)

(2000).  The amendment did not impact 5 U.S.C.   5722, which deals with benefits for new

appointees.  That section has never authorized payment of property management service fees.



     We conclude that the FTR faithfully implements the relevant statutes by permitting

agencies to reimburse some employees for property management service fees they incur, but

expressly forbidding such reimbursement to new appointees.  Unfortunately for Mr. Carlson,

when he was hired to work in Russia in 2000, he was a new appointee, and when he extended

his tour of duty there in 2002, he was not transferred to that post.  He is ineligible for receipt

of property management fees.



     The fact that DOE promised to reimburse Mr. Carlson for those fees does not change

the outcome of this case.  In similar situations of advice by agency representatives which is

contrary to law, we have consistently followed the Supreme Court's direction that the

Government cannot be held to its representatives' promises; subjecting the Government to

estoppel in these circumstances would allow it to spend money in ways which have been

forbidden by Congress.  E.g., Louise C. Mƒsse, GSBCA 15684-RELO, 02-1 BCA   31,694

(2001) (citing Office of Personnel Management v. Richmond, 496 U.S. 414 (1990); Federal

Crop Insurance Corp. v. Merrill, 332 U.S. 380 (1947)).



     Mr. Carlson is surely correct in observing that the amount of property management

services fees he incurs in one year is far less than the amount DOE would have to pay to send

him home and send a replacement to Russia.  Whether an agency should be permitted to pay

the fees, as a cost-saving measure, for similarly-situated employees in the future is a policy

matter which the Congress may wish consider.  Our authority is limited, however, to

enforcing the rules which the legislature has established in the past.  Under those rules, Mr.

Carlson's claim must be denied.











                              _________________________

                              STEPHEN M. DANIELS 

                              Board Judge