Board of Contract Appeals

                 General Services Administration

                      Washington, D.C. 20405







                   ___________________________



                        February 27, 2004

                   ___________________________





                         GSBCA 16275-RELO





               In the Matter of HENRY H. ARNOLD IV





     Henry H. Arnold IV, Fairfield, CA, Claimant.



     Vicki J. Halley, Finance Accounting Officer, United States Army Corps of Engineers,

San Francisco, CA, appearing for Department of the Army.



HYATT, Board Judge.



     A Government employee who was initially hired overseas is not eligible to be

reimbursed for real estate expenses upon being transferred to the United States.



                            Background



     Claimant, Henry H. Arnold IV, a civilian employee of the Department of Defense, 

was transferred from Kelley Barracks in Stuttgart, Germany, to the Corps of Engineers' San

Francisco District September 2002.  Mr. Arnold states that his original home of record in the

United States was Tampa, Florida.  He served in the military and was stationed in Ansbach,

Germany, when he completed his military service.  Instead of returning to the United States,

Mr. Arnold stayed in Germany and accepted a civilian position with the Army and Air Force

Exchange there.  He paid for his own move from Ansbach, where he had been stationed in

the military, to Garmisch.  He transferred several times within the Defense Department while

working as a civilian in Germany, and eventually was placed on the Priority Placement

Program for transfer back to the United States.  His permanent change of station orders for

the transfer to San Francisco were issued in September 2002.     Mr. Arnold states that when

he met with the local personnel office to go over his permanent change of station

entitlements, he was advised that he was eligible for real estate transaction expenses. 

Moreover, his travel orders authorized real estate transaction expenses.  Accordingly, after

returning to the United States, Mr. Arnold purchased a home in California and submitted a

claim for $6699.23 in real estate transaction expenses.



     The Corps' San Francisco District reviewed his voucher and disapproved the claim.

The reason provided was that Mr. Arnold was hired as a civilian employee of the Federal

government for the first time in Germany.  As such, he was a local overseas hire and not

eligible for real estate transaction expenses under applicable regulations.  Mr. Arnold has

asked the Board to review the disallowance of these expenses, noting that he was assured by

agency personnel that he would be compensated for these expenses and he bought a house

based on this advice.



                            Discussion



     Under the Joint Travel Regulations (JTR), in most circumstances, civilian employees

of the Department of Defense who are transferred in the interest of the Government are

entitled to reimbursement of certain expenses incurred in connection with the purchase of a

new residence at the new permanent duty station.  The JTR explain, however, that there are

exceptions to this rule.  One such exception is when an employee is initially hired overseas

and subsequently is transferred to a permanent duty station in the United States.  In these

circumstances, the employee is not eligible to be reimbursed for real estate expenses.  JTR

C14000-C2.  This regulatory provision is based upon a statute that provides agencies with

the authority to reimburse real estate expenses incurred by an employee who transfers to the

United States from an overseas duty station, but only so long as the employee was first

transferred overseas in the interest of the Government from a duty station in the United

States. 5 U.S.C.   5724a(d)(2) (2000).   Because Mr. Arnold was first hired as a civilian

employee of the Army in Germany, he is not eligible to be reimbursed for the expenses

associated with the purchase of a home upon return to the United States.  Wilbert J. Haggray,

GSBCA 16139-RELO, 03-2 BCA   32,387; see also Douglas J. Palmeri, GSBCA 14898-

RELO, 99-2 BCA   30,499; Marcia A. Devine, GSBCA 14878-RELO, 99-2 BCA   30,498;

Theresa F. Zuber, GSBCA 13851-RELO, 97-1 BCA   28,878.  



     The agency is also correct in its determination that the erroneous travel authorization

does not allow it to reimburse Mr. Arnold.  Since there was no authority to issue the orders,

they cannot be given effect.  Haggray (citing Kevin S. Foster, GSBCA 13639-RELO, 97-1

BCA    28,688 (1996); Office of Personnel Management v. Richmond, 496 U.S. 414 (1990);

Federal Crop Insurance Corp. v. Merrill, 332 U.S. 380 (1947)).  Nor can claimant's reliance

on the incorrect advice of the Army personnel who counseled him concerning his move 

serve to create an entitlement where none exists.  Joseph E. Connelly, GSBCA 16101-RELO,

04-1 BCA   32,430 (2003); Jacques E. Moss, GSBCA 16150-RELO, 03-2 BCA   32,392; 

Aman B. Kay, GSBCA 15543-RELO, 01-2 BCA   31,508.   The claim is denied.







                              _______________________________________

                              CATHERINE B. HYATT

                              Board Judge