Propriety of Deductions From Retired Pay

A decision was requested concerning the propriety of deductions from the retired pay of a retired officer of the Regular Army. The Army made deductions from the officer's pay as repayment for retirement pay that he received while he was employed as a contract administrator for a private firm, in violation of post-employment selling restrictions of the U.S. Code. The officer claimed that he should not be penalized since his duties had been purely administrative in nature and because he had no knowledge of the post-employment selling restriction when he took the job. When the record indicates that a retired officer actually participated in some phase of the procurement process, such activities are within the definition of selling as defined by statute. Since the officer signed and submitted bids while employed by the firm, he was selling within the meaning of the statute. Further, the fact that the officer was ignorant of the law did not provide a legal basis for the retention of retired pay during a period of employment prohibited by statute. Accordingly, GAO found that the officer was not entitled to retired pay for that period of employment and that such pay should be recovered by deductions from future retired pay entitlements.