Board of Contract Appeals
                    General Services Administration
                         Washington, D.C. 20405
 
                           __________________
 
                             July 13, 1999
                           __________________
 
 
                            GSBCA 14898-RELO 
 
 
                  In the Matter of DOUGLAS J. PALMERI
 
 
        Douglas J. Palmeri, Fairfax, VA, Claimant.
 
        Douglas  M.  Browning,  Assistant  Commissioner,  Office  of
   International Affairs, United States Customs Service, Washington,
   DC, appearing for Department of the Treasury.
 
   HYATT, Board Judge.
 
        Claimant,  Douglas J.  Palmeri, a  computer  specialist, was
   hired by the Customs Service in Saudi Arabia.  At the time of his
   hire, Mr.  Palmeri was working  in Saudi Arabia for  a commercial
   contractor and was scheduled to be relocated to the United States
   by his  private sector  employer.  Rather  than returning  to the
   United States and then relocating back to  Saudi Arabia, claimant
   simply remained  in Riyadh.   He declared  Miami, Florida  as his
   home of record.  Six years  later he accepted a transfer back  to
   the United  States to the  Washington, D.C. area,  expecting that
   part of  his relocation  package would  include reimbursement  of
   real estate expenses.  When he applied for this benefit, however,
   he was  told  by the  agency's  accounting services  division  in
   Indianapolis,  Indiana that there  was no authority  to reimburse
   real estate expenses in his circumstances.  His office within the
   Customs Service has asked the Board to  review this determination
   and,  if possible, overturn the Treasury Department decision that
   claimant  is  not  eligible  for  reimbursement  of  real  estate
   expenses.   For the reasons  stated herein, we conclude  that the
   accounting  services  division is  correct and  that there  is no
   authority to reimburse the expenses in issue.
 
                               Background
 
        In 1984,  Mr.  Palmeri, who  then resided  in Illinois,  was
   hired by  Sysorex International  to work on  a contract  basis in
   Riyadh, Saudi  Arabia.  Sysorex relocated claimant and his family
   to  Saudi Arabia,  where he worked  for the next  eight years for
   various private sector companies.  In  1992, claimant applied for
   a  position with  the Customs  Service, also  in Riyadh,  and was
   selected.   He joined  the Customs  Service in  June 1992  at the
   completion of  his contract with  his last private employer.   He
   was scheduled at that  time to be relocated to  the United States
   by  his private sector  employer, but instead  remained in Riyadh
   with  his family  to avoid  the  unnecessary relocation  expenses
   associated  with  returning   to  the  United  States   and  then
   relocating back to Saudi Arabia.  
 
 
        At the  time of his hire by the Customs Service, Mr. Palmeri
   identified  Miami, Florida  as his  home  of record,  and he  was
   scheduled to return  there at the conclusion of his  tour.  Prior
   to his  return,  he was  selected for  a position  as a  computer
   specialist in the Customs Service Office of International Affairs
   in Washington, D.C.  Accordingly, the travel orders issued at the
   conclusion of  claimant's tour in  Saudi Arabia relocated  him to
   the new duty  station in Washington, D.C., rather  than to Miami,
   Florida.   These orders  authorized reimbursement of  real estate
   expenses incurred  in the purchase  of a home in  the Washington,
   D.C. area.   Mr. Palmeri has submitted a  claim for such expenses
   in the amount of $4539.50.
 
        The Customs Service's Accounting Services Division concluded
   that  the agency  had    no authority  to  reimburse real  estate
   expenses  in  these  circumstances.   Both  Mr.  Palmeri  and the
   agency's  Office of International  Affairs have objected  to this
   decision  and  requested  the  Board's  review.   The  Office  of
   International  Affairs argues in  its submission that  the agency
   saved some  $30,000 in  costs of relocating  Mr. Palmeri  and his
   family from the United States back to Saudi Arabia.  The decision
   to  leave Mr. Palmeri  in Saudi Arabia,  rather than to  have his
   private sector  employer return  him to the  United States  to be
   hired domestically  and then relocated to Saudi  Arabia, was thus
   cost effective.  The  Office of International Affairs thus  urges
   that the accounting service's decision is unjust.
 
                               Discussion
 
        Under  the applicable statute and the implementing provision
   of the  Federal Travel  Regulation (FTR),  reimbursement of  real
   estate  expenses incurred  incident  to  a  permanent  change  of
   station from an  overseas location is  authorized when a  federal
   employee  was  stationed  first in  the  United  States  or other
   nonforeign  area, transferred  overseas in  the  interest of  the
   Government, and then returned  to a different nonforeign  area or
   location  in the United  States.   5  U.S.C.   5724a(d)(2) (Supp.
   III 1997);  41 CFR   302-6.1(g) (1998);  Marcia A.  DeVine, GSBCA
   14878-RELO (July 12,  1999); Theresa F. Zuber,  GSBCA 13851-RELO,
   97-1   BCA     28,878.[foot #] 1     Because  he   was  initially
   hired by the Federal Government in an overseas location, claimant
   is not  covered by  these provisions  and is  not eligible  to be
   reimbursed for  the  expenses of  purchasing  a home  upon  being
   transferred by the  Customs Service to  the United States.    The
   language  of the  statute  is not  sufficiently  broad to  permit
   compensation for real estate expenses when an  employee was hired
   overseas and subsequently returned to the United States.  
 
 
         Mr. Palmeri argues that since his designated home of record
    was Miami, Florida,  this should  be treated  as his  nonforeign
    home for purposes of his hire and that the relocation from Saudi
    Arabia to the Washington, D.C. area should thus be regarded as a
    transfer to  a  different  non-foreign area than the  one he was
    located  at when  hired by  Customs.   The difficulty  with this
    analysis is that both the statute and the regulation contemplate
    that the employee be transferred initially from an official duty
    station  located in the  United States to an  overseas location.
    Mr. Palmeri  was not previously employed  by the Customs Service
    in Miami or at any other nonforeign location.  
 
         We  understand the  logic  of   the arguments  made  by the
    Office of  International Affairs  and by  claimant.   Certainly,
    hiring Mr. Palmeri in  Saudi Arabia, and avoiding the expense of
    relocating  an employee from  the United  States to  an overseas
    post  of duty,  was cost  effective.   Nonetheless, there  is no
    statutory or regulatory  authority that would permit  either the
    agency or  the Board to authorize  reimbursement of the expenses
    claimed. A change in  the relevant statute would be required for
    the Government to have the authority to pay these expenses.
    __________________________________
 
                                       CATHERINE B. HYATT
                                       Board Judge
 
 
 
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 1 As we explained in Zuber, at one time real estate
                                      _____
   expenses  were only reimbursed for employees who transferred from
   an official  duty station  in the United  States to  another duty
   station in the  United States.   Employees  who were  transferred
   overseas  for a tour  of duty were generally  returned to the old
   duty  station  and   were  not  authorized  to   recoup  expenses
   associated  with selling  or buying  a residence.   In  1987, the
   statute  was amended  to permit  reimbursement  of such  expenses
   where an  employee was returned to  a duty station in  the United
   States  other than  the  one  from which  the  employee had  been
   transferred.  97-1 BCA at 144,017.