B-180175, AUG 30, 1974

B-180175: Aug 30, 1974

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WHERE FORMER SERVICE MEMBER WAS ERRONEOUSLY INFORMED BY LOCAL ARMY OFFICIALS AT TIME OF REENLISTMENT ON JANUARY 30. WHICH CLAIMANT AND SUCH ARMY OFFICIALS WERE NOT AWARE OF AT TIME OF REENLISTMENT. MEMBER'S MAXIMUM ENTITLEMENT IS TO VRB-3. SINCE AGENTS AND EMPLOYEES OF THE GOVERNMENT ARE SPECIAL AGENTS OF LIMITED AUTHORITY AND ALL PERSONS DEALING WITH SUCH AGENTS AND EMPLOYEES ARE CHARGED WITH NOTICE OF THAT FACT AND OF LIMITATIONS UPON AUTHORITY OF SUCH PERSONS WITH WHOM THEY DEAL. THE GOVERNMENT IS NOT BOUND BY ANY UNAUTHORIZED OR INCORRECT STATEMENTS BY SUCH AGENTS. DOUGHERTY: THIS ACTION IS IN RESPONSE TO A LETTER DATED OCTOBER 18. THE MULTIPLIER FACTOR FOR HIS MILITARY OCCUPATIONAL SPECIALTY WAS REDUCED FROM FOUR TO THREE.

B-180175, AUG 30, 1974

WHERE FORMER SERVICE MEMBER WAS ERRONEOUSLY INFORMED BY LOCAL ARMY OFFICIALS AT TIME OF REENLISTMENT ON JANUARY 30, 1968, THAT VARIABLE REENLISTMENT BONUS (VRB) WOULD BE COMPUTED WITH A MULTIPLIER OF FOUR, BUT DEPARTMENT OF ARMY MESSAGE, DATED NOVEMBER 8, 1967, WHICH CLAIMANT AND SUCH ARMY OFFICIALS WERE NOT AWARE OF AT TIME OF REENLISTMENT, REDUCED MULTIPLIER FROM FOUR TO THREE EFECTIVE JANUARY 1, 1968, MEMBER'S MAXIMUM ENTITLEMENT IS TO VRB-3, SINCE SECTION 37 U.S.C. 308(G) PERMITS ISSUANCE OF REGULATIONS AUTHORIZING PAYMENT OF VRB BY SECRETARY OF DEFENSE WHO DELEGATED AUTHORITY TO SECRETARY OF ARMY TO ADMINISTER VRB PROGRAM AND ESTABLISH PROCEDURE TO BE USED IN CHOOSING MULTIPLIERS FOR VARIOUS MILITARY OCCUPATIONAL SPECIALTIES. FURTHER, SINCE AGENTS AND EMPLOYEES OF THE GOVERNMENT ARE SPECIAL AGENTS OF LIMITED AUTHORITY AND ALL PERSONS DEALING WITH SUCH AGENTS AND EMPLOYEES ARE CHARGED WITH NOTICE OF THAT FACT AND OF LIMITATIONS UPON AUTHORITY OF SUCH PERSONS WITH WHOM THEY DEAL, THE GOVERNMENT IS NOT BOUND BY ANY UNAUTHORIZED OR INCORRECT STATEMENTS BY SUCH AGENTS.

VARIABLE REENLISTMENT BONUS CLAIM - SP5 JOE R. DOUGHERTY:

THIS ACTION IS IN RESPONSE TO A LETTER DATED OCTOBER 18, 1973, FROM JOHN V. DOWDY, JR., ESQ., WRITTEN ON BEHALF OF SP5 JOE R. DOUGHERTY, CONCERNING HIS ENTITLEMENT TO THE DIFFERENCE BETWEEN A VARIABLE REENLISTMENT BONUS MULTIPLIER THREE (VRB-3) AND A MULTIPLIER FOUR (VRB 4) BELIEVED DUE INCIDENT TO HIS REENLISTMENT IN THE UNITED STATES ARMY IN 1968. THAT LETTER, IN EFFECT, REQUESTS RECONSIDERATION OF A SETTLEMENT BY THE TRANSPORTATION AND CLAIMS DIVISION OF THIS OFFICE, DATED APRIL 21, 1969, WHICH DISALLOWED THAT CLAIM FOR THE REASON THAT IN ACCORDANCE WITH THE ARMY REGULATION WHICH WENT INTO EFFECT SHORTLY BEFORE HIS REENLISTMENT, THE MULTIPLIER FACTOR FOR HIS MILITARY OCCUPATIONAL SPECIALTY WAS REDUCED FROM FOUR TO THREE. ADDITIONALLY, AN INITIAL CLAIM IS MADE IN THAT LETTER FOR AMOUNTS WITHHELD FROM MR. DOUGHERTY'S FINAL PAY UPON SEPARATION FROM THE ARMY IN DECEMBER 1969.

THE RECORD IN MR DOUGHERTY'S CASE SHOWS THAT HE INITIALLY ENLISTED IN THE UNITED STATES ARMY ON FEBRUARY 1, 1965, AND WAS DISCHARGED ON NOVEMBER 21, 1967. ON JANUARY 30, 1968, HE REENLISTED AT ALBUQUERQUE, NEW MEXICO, FOR A PERIOD OF SIX YEARS. SPECIAL ORDERS NO. 21, DATED JANUARY 30, 1968, ISSUED TO THE MEMBER, INDICATE THAT HE WAS ENTITLED TO A VARIABLE REENLISTMENT BONUS WITH A MULTIPLIER FACTOR OF FOUR IN CONNECTION WITH HIS LISTED MILITARY OCCUPATIONAL SPECIALTY OF 23N20 (NIKE TRACK RADAR REPAIRMAN). THE FORMER MEMBER WAS NOT PAID ANY PORTION OF THE REENLISTMENT BONUS AT THE TIME OF REENLISTMENT, BUT IN FEBRUARY 1968, MR. DOUGHERTY RECEIVED A PORTION OF HIS VARIABLE REENLISTMENT BONUS COMPUTED ON THE BASIS OF A MULTIPLIER OF FOUR FROM THE FINANCE AND ACCOUNTING OFFICE, FORT ORD, CALIFORNIA.

THE MEMBER STATES THAT IN MARCH 1968, HE REQUESTED THAT THE BALANCE OF HIS BONUS BE PAID TO HIM IN A LUMP SUM AND SUCH REQUEST WAS APPROVED IN MAY 1968. HOWEVER, WHEN HE PRESENTED THE APPROVAL TO FINANCE OFFICIALS AT FORT ORD FOR PAYMENT, HE WAS INFORMED THAT HE WAS ONLY ENTITLED TO A VARIABLE REENLISTMENT BONUS WITH A MULTIPLIER OF THREE INSTEAD OF FOUR, THAT COLLECTION OF PART OF THE FIRST PAYMENT HE HAD RECEIVED IN FEBRUARY WOULD BE EFFECTUATED, AND THAT THE REMAINING LUMP SUM PAYMENT WOULD BE CONSIDERABLY LESS THAN HE HAD ANTICIPATED.

IT IS MR. DOUGHERTY'S CONTENTION THAT THE PRIMARY MOTIVATING FACTOR WHICH INFLUENCED HIS REENLISTMENT WAS THAT THE VARIABLE REENLISTMENT BONUS WOULD BE PAID AT A MULTIPLIER OF FOUR. HE FEELS THAT THE DEPARTMENT OF THE ARMY HAS A MORAL OBLIGATION TO PAY HIM AT THE VRB-4 LEVEL SINCE ARMY OFFICIALS AT BOTH ALBUQUERQUE AND FORT ORD INFORMED HIM THAT HIS REENLISTMENT BONUS WOULD BE PAID AT THE HIGHER LEVEL. ADDITIONALLY, THE MEMBER'S ATTORNEY CONTENDS THAT UNDER THE BASIC ELEMENTS OF CONTRACT LAW, A CONTRACT EXISTED BETWEEN MR. DOUGHERTY AND THE ARMY AND THAT SUCH CONTRACT WAS BREACHED BY THE ARMY.

THE VARIABLE REENLISTMENT BONUS IS AUTHORIZED BY 37 U.S.C. 308(G), WHICH WAS ADDED BY SECTION 3 OF THE ACT OF AUGUST 21, 1965, PUBLIC LAW 89-132, 79 STAT. 547, AND PROVIDES, IN PERTINENT PART, AS FOLLOWS:

"(G) UNDER REGULATIONS TO BE PRESCRIBED BY THE SECRETARY OF DEFENSE *** A MEMBER WHO IS DESIGNATED AS HAVING A CRITICAL MILITARY SKILL AND WHO IS ENTITLED TO A BONUS COMPUTED UNDER SUBSECTION (A) OF THIS SECTION UPON HIS FIRST REENLISTMENT MAY BE PAID AN ADDITIONAL AMOUNT NOT MORE THAN FOUR TIMES THE AMOUNT OF THAT BONUS. THE ADDITIONAL AMOUNT SHALL BE PAID IN EQUAL YEARLY INSTALLMENTS IN EACH YEAR OF THE REENLISTMENT PERIOD. HOWEVER, IN MERITORIOUS CASES THE ADDITIONAL AMOUNT MAY BE PAID IN FEWER INSTALLMENTS IF THE SECRETARY CONCERNED DETERMINES IT TO BE IN THE BEST INTEREST OF THE MEMBERS. ***"

THE LEGISLATIVE HISTORY OF SECTION 308(G) SHOWS THAT IT WAS ENACTED TO AUTHORIZE THE PAYMENT OF A VARIABLE REENLISTMENT BONUS AS AN ADDITIONAL INDUCEMENT TO FIRST-TERM ENLISTMENT PERSONNEL, WHO POSSESS MILITARY SKILLS WHICH ARE DEEMED TO BE IN CRITICALLY SHORT SUPPLY, TO REENLIST SO THAT SUCH SKILLS MAY CONTINUE TO BE UTILIZED AND NOT LOST TO THE SERVICE. ONE OF THE CONSIDERATIONS IN AUTHORIZING THIS SUBSTANTIAL BONUS WAS THE HIGH COST TO THE GOVERNMENT OF TRAINING A REPLACEMENT FOR SUCH A MEMBER WHO DOES NOT REENLIST, AN EXPENSE WHICH IS AVOIDED IF THE MEMBER REENLISTS TO CONTINUE SERVING IN THE CRITICAL RATING. IT IS TO BE NOTED THAT THE STATUTE DOES NOT, BY ITS OWN TERMS, CONFER ANY ENTITLEMENT TO THE VARIABLE REENLISTMENT BONUS ON A MEMBER OF THE MILITARY SERVICE. IT PERMITS THE ISSUANCE OF REGULATIONS AUTHORIZING ITS PAYMENT BY THE SECRETARY OF DEFENSE.

DEPARTMENT OF DEFENSE DIRECTIVE 1304.10, DECEMBER 18, 1965, DELEGATED THE AFOREMENTIONED ADMINISTRATIVE AUTHORITY VESTED BY SECTION 308(G) IN THE SECRETARY OF DEFENSE TO THE SECRETARIES OF THE MILITARY DEPARTMENTS, INCLUDING THE SECRETARY OF THE ARMY. THIS INCLUDED THE RESPONSIBILITY TO SUBMIT TO THE SECRETARY OF DEFENSE, FOR APPROVAL, THEIR PLANS FOR ADMINISTERING THE VARIABLE REENLISTMENT BONUS PROGRAM INCLUDING PROCEDURES TO BE USED IN DETERMINING THE NUMBER OF AWARDS, SELECTING SPECIALTIES, CHOOSING MULTIPLIERS, AND DETERMINING WHEN TO USE ANNUAL OR ACCELERATED PAYMENT METHOD. ARMY REGULATION 600-200, CHAPTER 10, ENTITLED "VARIABLE REENLISTMENT BONUS FOR ENLISTED PERSONNEL", IN EFFECT AT THE TIME OF MR. DOUGHERTY'S REENLISTMENT, PROVIDES IN SECTION I, PARAGRAPH 10-2, AS FOLLOWS:

"B. THE VRB PROGRAM IS DESIGNED FOR FLEXIBILITY AND IS SUBJECT TO CHANGE AS THE NUMBER OF CAREERISTS INCREASES OR DECREASES CAUSING THE CAREER RATIO TO BE HIGHER OR LOWER THAN DESIRED IN SELECTED MOS. REVISIONS IN THE PROGRAM TO INCLUDE MOS AUTHORIZED THE ADDITIONAL BONUS AND THE RESPECTIVE MULTIPLIERS, WILL BE MADE BY HEADQUARTERS, DEPARTMENT OF THE ARMY, AS REQUIRED, BUT NORMALLY WILL BE ACCOMPLISHED BY REPROGRAMING ON AN ANNUAL BASIS."

PARAGRAPH 10-10A OF THESE REGULATIONS PROVIDED THAT MILITARY OCCUPATIONAL SPECIALTY 23N COULD BE PAID A VARIABLE REENLISTMENT BONUS WITH A MULTIPLIER OF FOUR. HOWEVER, BY JOINT MESSAGE FORM DATED NOVEMBER 8, 1967, FROM HEADQUARTERS, DEPARTMENT OF THE ARMY, CERTAIN PORTIONS OF ARMY REGULATIONS 600-200 WHICH RELATED TO THE MULTIPLIER FACTOR FOR VARIOUS MILITARY OCCUPATIONAL SPECIALTIES WERE CHANGED EFFECTIVE JANUARY 1, 1968. THAT MESSAGE REDUCED THE MULTIPLIER OF THE VARIABLE REENLISTMENT BONUS FOR MILITARY OCCUPATIONAL SPECIALTY 23N FROM FOUR TO THREE. CONSEQUENTLY, THIS OFFICE IS WITHOUT AUTHORITY TO GRANT PAYMENT OF THE BONUS AT THE MULTIPLIER OF FOUR SINCE THE CHANGE IN THE REGULATIONS OCCURRED PRIOR TO THE DATE OF MR. DOUGHERTY'S REENLISTMENT.

WHILE WE DO NOT DOUBT MR. DOUGHERTY'S STATEMENT THAT ARMY OFFICIALS AT BOTH ALBUQUERQUE AND FORT ORD INFORMED HIM THAT HIS VARIABLE REENLISTMENT BONUS WOULD BE PAID USING THE MULTIPLIER OF FOUR, IT IS WELL ESTABLISHED THAT THE GOVERNMENT IS NOT BOUND BY THE UNAUTHORIZED OR INCORRECT STATEMENT OF ITS AGENTS. POSEY V. UNITED STATES, 449 F.2D 228, 234 (1971). IT IS ALSO WELL SETTLED THAT ALL GOVERNMENT AGENTS AND EMPLOYEES ARE SPECIAL AGENTS OF LIMITED AUTHORITY, AND THAT ALL PERSONS DEALING WITH SUCH AGENTS AND EMPLOYEES ARE CHARGED WITH NOTICE OF THAT FACT AND OF THE LIMITATIONS UPON THE AUTHORITY OF THE AGENTS WITH WHOM THEY DEAL. UNITED STATES V. THOMPOSN, 293F.SUPP. 1307, 1313 (1967), AFFIRMED, 408 F.2D 1075 (1969). COMPARE PARKER V. UNITED STATES, 198 CT. CL. 661 (1972). IT IS REGRETTABLE THAT MR. DOUGHERTY WAS MISLED BY THE ERRONEOUS INFORMATION GIVEN HIM BY ARMY OFFICIALS, NEVERTHELESS, HIS RIGHTS ARE FOR DETERMINATION ON THE BASIS OF THE LAW AND REGULATIONS IN EFFECT AT THE TIME OF HIS REENLISTMENT RATHER THAN ON THE BASIS OF SUCH ERRONEOUS INFORMATION.

WITH REGARD TO THE CONTENTION OF MR. DOUGHERTY'S ATTORNEY THAT UNDER THE BASIC ELEMENTS OF CONTRACT LAW A CONTRACT EXISTED BETWEEN HIS CLIENT AND THE ARMY, WHICH CONTRACT WAS BREACHED BY THE ARMY, SEE BELL, ET AL. V. UNITED STATES, 366 U.S. 393 (1961). IN THAT CASE THE SUPREME COURT, IN DETERMINING THE PAY AND ALLOWANCE ENTITLEMENTS OF CERTAIN ENLISTED MEMBERS OF THE UNITED STATES ARMY WHO WERE CAPTURED BY THE ENEMY DURING HOSTILITIES IN KOREA IN 1950 AND 1951, EXPRESSLY DISREGARDED CONTRACTUAL CONSIDERATIONS. IN THIS RESPECT, THE COURT SAID:

"PRELIMINARLY, IT IS TO BE OBSERVED THAT COMMON-LAW RULES GOVERNING PRIVATE CONTRACTS HAVE NO PLACE IN THE AREA OF MILITARY PAY. A SOLDIER'S ENTITLEMENT TO PAY IS DEPENDENT UPON STATUTORY RIGHT. ***"

IN VIEW OF THE FACT THAT THE MULTIPLIER FACTOR FOR THE MEMBER'S MILITARY OCCUPATIONAL SPECIALTY (23N) WAS CHANGED FROM FOUR TO THREE WELL BEFORE MR. DOUGHERTY REENLISTED AND SINCE THE RECORD SHOWS THAT HE RECEIVED THE PROPER VARIABLE REENLISTMENT BONUS BASED ON THAT CHANGE, IT IS OUR VIEW THAT THERE IS NO LEGAL BASIS UPON WHICH HE MAY BE PAID THE DIFFERENCE BETWEEN A VRB-3 AND VRB-4.

ACCORDINGLY, THE ACTION TAKEN BY OUR TRANSPORTATION AND CLAIMS DIVISION IS SUSTAINED.

THE QUESTION PRESENTED WITH RESPECT TO THE DEDUCTIONS MADE FROM MR. DOUGHERTY'S PAY AT TIME OF SEPARATION FROM THE SERVICE, REQUIRES FURTHER INVESTIGATION IN ORDER TO CLARIFY THE ENTITLEMENTS DUE HIM AT THAT TIME. UPON COMPLETION OF THAT INVESTIGATION BY OUR TRANSPORTATION AND CLAIMS DIVISION, APPROPRIATE ACTION WILL BE TAKEN.