B-205395.OM, APR 7, 1982

B-205395.OM: Apr 7, 1982

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DIGEST: EMPLOYEE WAS TRANSFERRED TO PARTICIPATE IN PRESIDENT'S EXECUTIVE EXCHANGE PROGRAM. SINCE RELOCATION EXPENSES WERE REIMBURSED BASED ON 5 U.S.C. THE ONLY BASIS FOR REQUIRING SERVICE AGREEMENT IS 5 U.S.C. ALTHOUGH EMPLOYEE WAS ON LEAVE WITHOUT PAY WHILE IN THE PROGRAM. THAT PERIOD IS CONSIDERED TO BE GOVERNMENT SERVICE WITHIN MEANING OF SEC. 5724(I). THE EMPLOYEE HAS COMPLIED WITH SERVICE REQUIREMENT AND IS NOT REQUIRED TO REPAY EITHER THE REIMBURSEMENT HE RECEIVED OR THE PARTICIPATION FEE THAT GAO PAID TO OPM. BRYANT: THIS IS IN RESPONSE TO YOUR MEMORANDUM OF NOVEMBER 3. SET FORTH BELOW IS A SUMMARY OF YOUR SPECIFIC QUESTIONS. THE CONCLUSIONS WE HAVE REACHED. IMMEDIATELY FOLLOWING THIS SUMMARY IS OUR ANALYSIS OF THE ISSUES PRESENTED.

B-205395.OM, APR 7, 1982

SUBJECT: REQUEST FOR AN ADVANCE DECISION IN THE MATTER OF JOSEPH A. SCANDONE B-205395-O.M. DIGEST: EMPLOYEE WAS TRANSFERRED TO PARTICIPATE IN PRESIDENT'S EXECUTIVE EXCHANGE PROGRAM. AT THAT TIME, HE SIGNED SERVICE AGREEMENT REQUIRING 12-MONTHS SERVICE FOLLOWING COMPLETION OF TRAINING. AFTER YEAR WITH PRIVATE SECTOR COMPANY, EMPLOYEE DID NOT RETURN TO GOVERNMENT POSITION. SINCE RELOCATION EXPENSES WERE REIMBURSED BASED ON 5 U.S.C. SEC. 5724A, THE ONLY BASIS FOR REQUIRING SERVICE AGREEMENT IS 5 U.S.C. SEC. 5724(I). THAT SECTION ONLY REQUIRES EMPLOYEE TO AGREE TO REMAIN IN GOVERNMENT SERVICE FOR 1 YEAR. ALTHOUGH EMPLOYEE WAS ON LEAVE WITHOUT PAY WHILE IN THE PROGRAM, THAT PERIOD IS CONSIDERED TO BE GOVERNMENT SERVICE WITHIN MEANING OF SEC. 5724(I). THEREFORE, THE EMPLOYEE HAS COMPLIED WITH SERVICE REQUIREMENT AND IS NOT REQUIRED TO REPAY EITHER THE REIMBURSEMENT HE RECEIVED OR THE PARTICIPATION FEE THAT GAO PAID TO OPM.

DIRECTOR, OFFICE OF FINANCIAL MANAGEMENT - DAVID E. BRYANT:

THIS IS IN RESPONSE TO YOUR MEMORANDUM OF NOVEMBER 3, 1981, IN WHICH YOU REQUEST OUR DECISION CONCERNING THE POTENTIAL LIABILITY OF MR. JOSEPH A. SCANDONE FOR EXPENSES INCURRED BY GAO RELATED TO HIS PARTICIPATION IN THE PRESIDENT'S EXECUTIVE EXCHANGE PROGRAM. SET FORTH BELOW IS A SUMMARY OF YOUR SPECIFIC QUESTIONS, AND THE CONCLUSIONS WE HAVE REACHED. IMMEDIATELY FOLLOWING THIS SUMMARY IS OUR ANALYSIS OF THE ISSUES PRESENTED.

SUMMARY OF QUESTIONS AND CONCLUSIONS

1. UNDER THE PROGRAM, A GAO EMPLOYEE, MR. SCANDONE, WAS REIMBURSED FOR TRAVEL AND RELOCATION ALLOWANCES FOR HIS TRANSFER FROM PHILADELPHIA, PENNSYLVANIA, TO ROCKVILLE, MARYLAND, WHERE HE WAS TO BEGIN HIS PARTICIPATION IN THE PROGRAM AT GENERAL ELECTRIC. AS A CONDITION OF RECEIVING THESE ALLOWANCES, MR. SCANDONE SIGNED A CONTINUED SERVICE AGREEMENT UNDER WHICH HE AGREED TO REMAIN IN THE SERVICE OF GAO FOR 12 MONTHS FOLLOWING THE COMPLETION OF HIS "TRAINING" OR, IF HE FAILED TO DO SO, TO REPAY GAO FOR THE EXPENSES INCURRED BY REASON OF HIS PARTICIPATION IN THE PROGRAM, UNLESS SUCH FAILURE WAS DUE TO CIRCUMSTANCES BEYOND HIS CONTROL. WE NOTE THAT THE AGREEMENT STATES THAT MR. SCANDONE IS REQUIRED TO REMAIN WITH GAO FOR 12 MONTHS FOLLOWING THE COMPLETION OF HIS TRAINING, AND THE STATUTORY AUTHORITY CITED IS 5 U.S.C. SEC. 4109(A)(2), WHICH GOVERNS REIMBURSEMENT OF EXPENSES FOR TRAINING PROGRAMS. HOWEVER, AFTER COMPLETING THE PROGRAM BUT PRIOR TO FULFILLING HIS SERVICE OBLIGATION UNDER THE AGREEMENT, MR. SCANDONE RESIGNED FROM GAO.

YOU ASK WHETHER MR. SCANDONE IS OBLIGATED TO REPAY TO GAO THE AMOUNTS EXPENDED IN RELOCATING HIM PURSUANT TO HIS PARTICIPATION IN THE PROGRAM.

CONCLUSION:

NOTWITHSTANDING THE TERMS OF THE CONTINUING SERVICE AGREEMENT, MR. SCANDONE MAY NOT BE REQUIRED TO REPAY THE TRAVEL AND RELOCATION ALLOWANCES.

2. AS A FEE FOR PARTICIPATING IN THE PROGRAM, GAO WAS BILLED $2,000 BY THE OFFICE OF PERSONNEL MANAGEMENT. YOU STATE, HOWEVER, THAT THE $2,000 WAS NOT A TUITION CHARGE RELATED TO ACTUAL TRAINING. MR. SCANDONE SIGNED A SUPPLEMENTAL AGREEMENT IN WHICH HE AGREED TO REIMBURSE GAO THE $2,000 SHOULD HE FAIL TO COMPLETE THE PROGRAM. YOU ASK WHETHER MR. SCANDONE IS LIABLE TO REPAY THE $2,000 EXPENSE INCURRED BY GAO, SINCE HE FAILED TO FULFILL THE TERMS OF THE CONTINUED SERVICE AGREEMENT.

CONCLUSION

MR. SCANDONE HAS NO OBLIGATION TO REPAY THE $2,000 EITHER UNDER THE CONTINUED SERVICE AGREEMENT OR THE SUPPLEMENTAL AGREEMENT.

3. FINALLY, YOU QUESTION WHETHER, AS A MEASURE TO PROTEST ITSELF IN THE FUTURE, GAO CAN LEGALLY REQUIRE THE EMPLOYEE TO SIGN A 2-YEAR SERVICE AGREEMENT IN CONNECTION WITH THE PERMANENT CHANGE OF STATION MOVE RELATIVE TO PARTICIPATION IN THE PROGRAM.

CONCLUSION

THERE IS NO LEGAL BASIS WHICH WOULD ALLOW GAO TO REQUIRE THE EMPLOYEE- PARTICIPANT IN THE PROGRAM TO SIGN A 2-YEAR SERVICE AGREEMENT.

WE NOTE THAT THE AGREEMENTS EXECUTED BY MR. SCANDONE ARE ON FORMS INTENDED TO BE USED TO COVER TRAINING ASSIGNMENTS. SINCE WE HAVE HELD THAT EMPLOYEE PARTICIPATION IN THIS PROGRAM IS MORE IN THE NATURE OF A WORK ASSIGNMENT THAN A TRAINING ASSIGNMENT, WE BELIEVE THE USE OF THESE FORMS IS INAPPROPRIATE. IN LIGHT OF THE UNIQUE NATURE OF THIS PROGRAM WE BELIEVE THAT A SPECIAL FORM SHOULD BE DEVELOPED THAT WILL CLEARLY IDENTIFY BOTH THE GAO'S AND THE EMPLOYEE'S RIGHTS AND OBLIGATIONS REGARDING GAO'S PAYMENT OF THE EMPLOYEE'S RELOCATION EXPENSES AND THE FEES CHARGED BY THE OPM FOR PARTICIPATION IN THE PROGRAM, AS WELL AS THE EMPLOYEE'S FULLFILMENT OF THE REQUIRED SERVICE AGREEMENTS.

WE RECOMMEND THE USE OF A SINGLE FORM CONTAINING:

(1) A SECTION INDICATING THAT AS A CONDITION OF THE GAO'S PAYMENT OF HIS RELOCATION EXPENSES FROM HIS THEN PRESENT PERMANENT DUTY STATION TO THE PLACE WHERE HE IS TO BEGIN HIS PARTICIPATION IN THE PROGRAM, THE EMPLOYEE MUST AGREE TO REMAIN IN THE GOVERNMENT SERVICE FOR 1 YEAR AFTER THE EFFECTIVE DATE OF THE TRANSFER, AS PROVIDED FOR IN 5 U.S.C. SEC. 5724(I);

(2) A SECTION SIMILARLY INDICATING THAT AS A CONDITION OF THE GAO'S PAYMENT OF THE EMPLOYEE'S RELOCATION EXPENSES FROM THE PLACE OF HIS PROGRAM PARTICIPATION TO THE PLACE WHERE HE WILL RESUME HIS SERVICE WITH GAO, HE MUST AGREE TO REMAIN IN THE GOVERNMENT SERVICE FOR 1 YEAR AFTER THE EFFECTIVE DATE OF THIS SECOND TRANSFER; AND

(3) A SECTION INDICATING THAT GAO'S PAYMENT FOR THE EMPLOYEE'S PARTICIPATION IN THE PROGRAM IS CONDITIONED ON HIS SUCCESSFUL COMPLETION OF THE PROGRAM.

ANALYSIS OF ISSUES PRESENTED

QUESTION 1.

TRAVEL AND RELOCATION EXPENSES OF EMPLOYEES TRANSFERRED IN THE INTEREST OF THE GOVERNMENT FROM ONE OFFICIAL DUTY STATION TO ANOTHER, ARE PAYABLE BY THE GOVERNMENT IN ACCORDANCE WITH 5 U.S.C. SEC. 5724A. IN ADDITION, 5 U.S.C. SEC. 5724(I) AND PARAGRAPH 2-1.5A.(1)(A) OF THE FEDERAL TRAVEL REGULATIONS (FPMR 101-7) (SEPTEMBER 1981), PROVIDE THE STATUTORY AND REGULATORY BASIS FOR THE "SERVICE AGREEMENTS" UNDER WHICH AN EMPLOYEE MUST AGREE TO REMAIN IN THE SERVICE OF THE GOVERNMENT FOR 12 MONTHS AFTER A TRANSFER IN RETURN FOR THE GOVERNMENT'S PAYMENT OF THE TRAVEL AND RELOCATION EXPENSES.

IN FINN V. UNITED STATES, 428 F.2D 828 (CT.CL. 1970), THE COURT OF CLAIMS HELD THAT, WITHOUT THE AUTHORITY OF 5 U.S.C. SEC. 5724(I), THERE WAS NO AUTHORITY FOR AN AGENCY TO REQUIRE THAT AN EMPLOYEE EXECUTE A SERVICE AGREEMENT AS A CONDITION TO ITS PAYMENT OF THE EMPLOYEE'S TRAVEL AND RELOCATION EXPENSES. THE COURT FURTHER HELD THAT THE LIMIT OF THE CONTRACTUAL AUTHORITY GRANTED AN AGENCY UNDER SEC. 5724(I) IS TO REQUIRE THAT THE EMPLOYEE REMAIN IN GOVERNMENT SERVICE FOR 12 MONTHS AFTER HIS TRANSFER.

IN B-166943, FEBRUARY 16, 1971, WE SAID THAT UNDER THE PRESIDENT'S EXECUTIVE INTERCHANGE PROGRAM - THE PREDECESSOR TO THE PRESENT PROGRAM "TRAVEL AND RELOCATION EXPENSES ARE PAYABLE ON THE SAME BASIS AS IN THE CASE OF ANY GOVERNMENT EMPLOYEE WHO IS TRANSFERRED IN THE INTEREST OF THE GOVERNMENT ON A PERMANENT CHANGE OF STATION." SEE ALSO 54 COMP.GEN. 87 (1974). WE HAVE ALSO HELD THAT EVEN THOUGH A PARTICIPANT IS IN A LEAVE WITHOUT PAY STATUS FROM HIS GOVERNMENT POSITION, HE IS STILL A GOVERNMENT EMPLOYEE ON A WORK ASSIGNMENT IN THE INTEREST OF THE GOVERNMENT. COMP.GEN. 87 (1974); B-166943, JULY 14, 1981, 60 COMP.GEN.(1981). FINALLY, WE HAVE CONSISTENTLY HELD THAT TIME SPENT BY AN EMPLOYEE IN A LEAVE WITHOUT PAY STATUS IS CONSIDERED GOVERNMENT SERVICE WITHIN THE MEANING OF 5 U.S.C. SEC. 5724(I). LEON C. SHELLEY, 59 COMP.GEN. 25 (1979).

FROM THESE DECISIONS IT FOLLOWS THAT SINCE SEC. 5724(I) IS THE ONLY AUTHORITY UNDER WHICH AN AGENCY CAN REQUIRE A SERVICE AGREEMENT FROM A TRANSFERRED EMPLOYEE, AND SINCE THE SERVICE AGREEMENT TO BE VALID MUST CONFORM TO THE PROVISIONS OF SEC. 5724(I), THE CONTINUED SERVICE AGREEMENT IN QUESTION HERE HAS NO OPERATIVE EFFECT OTHER THAN TO IMPOSE UPON MR. SCANDONE THE OBLIGATIONS OF 5 U.S.C. SEC. 5724(I). "IF OFFICIALS OF THE GOVERNMENT MAKE A CONTRACT THEY ARE NOT AUTHORIZED TO MAKE, THE OTHER PARTY IS NOT BOUND BY ESTOPPEL OR ACQUIESCENCE OR EVEN FAILING TO PROTEST." FINN. 428 F.2D AT 831.

THE YEAR MR. SCANDONE SPENT IN A LEAVE WITHOUT PAY STATUS, WHILE PARTICIPATING IN THE PROGRAM, IS CREDITABLE SERVICE TOWARD MEETING HIS OBLIGATIONS UNDER SEC. 5724(I). SINCE THE YEAR IS ENOUGH TO SATISFY THOSE OBLIGATIONS, THERE IS NO LEGAL BASIS BY WHICH HE COULD BE REQUIRED TO REPAY THE TRAVEL AND RELOCATION ALLOWANCES RELATED TO HIS TRANSFER TO ROCKVILLE, MARYLAND.

QUESTION 2.

UNDER THE SUPPLEMENTAL AGREEMENT MR. SCANDONE AGREED TO REIMBURSE GAO FOR TUITION AND RELATED FEES IF HE VOLUNTARILY LEFT THE OFFICE PRIOR TO THE COMPLETION OF HIS TRAINING. THERE IS SOME QUESTION WHETHER THIS AGREEMENT IMPOSED ANY LEGAL OBLIGATIONS ON MR. SCANDONE IN LIGHT OF OUR DECISION IN 54 COMP.GEN. 87 (1974) WHICH HELD THAT AN EMPLOYEE-PARTICIPANT IN THE PROGRAM WAS ON A WORK ASSIGNMENT RATHER THAN A TRAINING ASSIGNMENT. HOWEVER, WE NEED NOT REACH THAT QUESTION BECAUSE HERE MR. SCANDONE HAS COMPLETED HIS PARTICIPATION IN THE PROGRAM AND HAS SATISFIED HIS OBLIGATIONS UNDER THE SUPPLEMENTAL AGREEMENT.

QUESTION 3.

AS WAS DISCUSSED IN THE ANALYSIS OF YOUR FIRST QUESTION, THE COURT OF CLAIMS IN FINN V. UNITED STATES HAS HELD THAT, WITH RESPECT TO TRANSFERRED EMPLOYEES, 5 U.S.C. SEC. 5724(I) SETS OUT THE LIMITS WITHIN WHICH AN AGENCY MAY REQUIRE AN EMPLOYEE TO EXECUTE A SERVICE AGREEMENT FOR A TRANSFER WITHIN THE CONTINENTIAL UNITED STATES. SINCE THAT STATUTE ONLY AUTHORIZES A 12-MONTH SERVICE AGREEMENT, AN AGENCY DOES NOT HAVE THE AUTHORITY TO REQUIRE A SERVICE AGREEMENT OF GREATER LENGTH.