B-176597, FEB 13, 1973, 52 COMP GEN 506

B-176597, FEB 13, 1973, 52 COMP GEN 506

GRATUITIES - REENLISTMENT BONUS - CRITICAL MILITARY SKILLS - FAILURE TO QUALIFY THE DISCHARGE AND REENLISTMENT OF A MEMBER OF A REGULAR COMPONENT BEFORE HE WAS ELIGIBLE FOR THE VARIABLE REENLISTMENT BONUS (VRB) HE WAS PROMISED MAY NOT BE DECLARED RETROACTIVELY INVALID, IN THE ABSENCE OF FRAUD, UNDER THE PRINCIPLE OF THE IRREVOCABILITY OF AN EXECUTED DISCHARGE BY COMPETENT AUTHORITY, EVEN SHOULD THE MEMBER CONSENT TO THE REVOCATION OF HIS REENLISTMENT CONTRACT, AND NOTWITHSTANDING THE MEMBER'S INELIGIBILITY FOR THE VRB WAS DISCOVERED SUBSEQUENT TO REENLISTMENT, AND RECOVERY OF THE BENEFITS RECEIVED BY THE MEMBER INCIDENT TO THE DISCHARGE AND REENLISTMENT IS NOT REQUIRED. HOWEVER, SINCE THE MEMBER DID NOT QUALIFY FOR A VRB AT THE TIME OF REENLISTMENT HE IS NOT ENTITLED TO THE BONUS EVEN THOUGH ERRONEOUSLY INFORMED THAT HE WAS, AND THE LATER ACQUISITION OF THE REQUIRED QUALIFICATIONS DOES NOT RETROACTIVELY ENTITLE THE MEMBER TO THE BONUS.

TO THE SECRETARY OF DEFENSE, FEBRUARY 13, 1973:

FURTHER REFERENCE IS MADE TO LETTER DATED JULY 21, 1972, WITH ENCLOSURE, FROM THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER) REQUESTING A DECISION WHETHER A REENLISTMENT OR EXTENSION OF ENLISTMENT CONTRACT MAY BE MODIFIED, WITH THE CONSENT OF THE MEMBER, WHERE THROUGH ERRONEOUS COMPUTATION OF SERVICE, THE MEMBER DID NOT AT THE TIME OF REENLISTMENT MEET THE ELIGIBILITY REQUIREMENTS ENTITLING HIM TO CERTAIN MONETARY BENEFITS.

THE QUESTIONS PRESENTED ARE CONTAINED IN DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCES COMMITTEE ACTION NO. 464 AS FOLLOWS:

1. MAY A REENLISTMENT CONTRACT, AND ANY PRECEDENT DISCHARGE GIVEN SOLELY FOR THE PURPOSE OF THE REENLISTMENT, BE DECLARED INVALID UPON DISCOVERY THAT A MEMBER IS NOT QUALIFIED FOR A SPECIFIC BENEFIT PROMISED AS A CONSIDERATION FOR THE REENLISTMENT, SO AS TO REQUIRE RECOVERY OF OTHERWISE PROPER BENEFITS - SUCH AS UNUSED LEAVE SETTLEMENT, MILEAGE ALLOWANCE, OR REENLISTMENT BONUS - PAID INCIDENT TO THE DISCHARGE AND REENLISTMENT?

2. MAY A RIGHT TO PAYMENT OF A BENEFIT - SUCH AS A VARIABLE REENLISTMENT BONUS (VRB) - BE CREATED BY RETROACTIVELY MODIFYING THE TERMS OF A REENLISTMENT CONTRACT WITH THE CONSENT OF THE PARTIES TO THE CONTRACT?

THE COMMITTEE ACTION INDICATES THAT INSTANCES HAVE ARISEN IN THE MILITARY SERVICES WHERE AN ENLISTED MEMBER, INDUCED IN LARGE PART BY A PROMISE OF A BENEFIT SUCH AS A VARIABLE REENLISTMENT BONUS (VRB), HAS EXECUTED A REENLISTMENT AGREEMENT, BUT HAS LATER BEEN DENIED PAYMENT OF THE BONUS BECAUSE ERRONEOUS ADMINISTRATIVE COMPUTATIONS OF HIS SERVICE RESULTED IN HIS AGREEING TO REENLIST FOR A PERIOD NOT MEETING THE ELIGIBILITY REQUIREMENTS FOR VRB ENTITLEMENT. THE FOLLOWING SITUATION IS STATED TO BE TYPICAL OF SUCH INSTANCES:

A MEMBER IS DISCHARGED AND IMMEDIATELY REENLISTED AFTER COMPLETING 30 MONTHS OF CONTINUOUS ACTIVE SERVICE UNDER A THREE-YEAR TERM OF ENLISTMENT. HE IS ELIGIBLE FOR A FIRST REENLISTMENT BONUS, HOLDS AN APPROPRIATE GRADE, AND IS QUALIFIED AND SERVING IN A CRITICAL MILITARY SKILL. A PRIME INDUCEMENT TO HIS REENLISTMENT IS A PROMISE - MADE BY AN AGENT WITH THE APPARENT POWER AND AUTHORITY TO BIND THE GOVERNMENT - THAT HE WILL BE PAID A VRB IF HE REENLISTS FOR THREE YEARS. HE EXECUTES A THREE-YEAR REENLISTMENT CONTRACT IN RELIANCE ON THE PROMISE. AFTER THE CONTRACT IS CONSUMMATED, IT IS DISCOVERED THAT PAYMENT OF THE VRB IS NOT PERMITTED BECAUSE THE MEMBER'S OBLIGATED ACTIVE SERVICE, COMBINED WITH HIS PRIOR ACTIVE SERVICE, DOES NOT TOTAL AT LEAST 69 MONTHS, A VRB ELIGIBILITY REQUIREMENT IN THE REGULATIONS OF ALL SERVICES.

IN DISCUSSING THE QUESTIONS PRESENTED, THE COMMITTEE ACTION SETS FORTH TWO OPPOSITE VIEWS ON THE MATTER. UNDER THE FIRST VIEW, THE REENLISTMENT CONTRACT AND PRECEDENT DISCHARGE WOULD BE CANCELED AND THE MEMBER RESTORED TO THE STATUS QUO, WHEREAS UNDER THE SECOND VIEW, A REENLISTMENT CONTRACT AND PRECEDENT DISCHARGE MAY NOT BE DECLARED INVALID UPON DISCOVERY THAT A MEMBER IS NOT QUALIFIED FOR A SPECIFIC BENEFIT PROMISED IN CONNECTION WITH HIS REENLISTMENT. THE TWO VIEWS ARE QUOTED IN PERTINENT PART AS FOLLOWS:

ONE VIEW OF THE MATTER IS THAT IN A CASE OF THIS NATURE, NO BINDING AGREEMENT HAS IN FACT BEEN MADE.*** IN THE ILLUSTRATED CASE, FOR EXAMPLE, IT WOULD BE LEGALLY UNOBJECTIONABLE TO CANCEL THE MEMBER'S DISCHARGE AND REENLISTMENT AND RESTORE HIM TO HIS PREVIOUS ENLISTMENT OR, ALTERNATIVELY, TO RETROACTIVELY CHANGE, BY INTERLINEATION AND SUBSTITUTION, THE TERM OF REENLISTMENT REFLECTED IN THE CONTRACT FROM THREE TO FOUR YEARS, SO LONG AS THE MEMBER FULLY CONSENTS TO THE ALTERATION AND HIS CONSENT IS PROPERLY DOCUMENTED.

THE RATIONALE FOR THIS OPINION IS THAT MUTUAL CONSENT IS A PREREQUISITE TO THE CREATION OF A CONTRACT, AND IF THERE IS A MISTAKE OF FACT BY THE PARTIES GOING TO THE ESSENCE OF THE CONTRACT, NO AGREEMENT IS IN FACT MADE.*** IF THE REENLISTMENT IS INVALID, SO THEN IS THE PRECEDENT DISCHARGE, GIVEN SOLELY FOR THE PURPOSE OF REENLISTMENT. THUS, IT WOULD BE LEGALLY UNOBJECTIONABLE TO CANCEL THE EARLY DISCHARGE AND REENLISTMENT CONTRACT, THEN REINSTATE THE FORMER ENLISTMENT CONTRACT AND REQUIRE THE MEMBER TO SERVE THE REMAINING UNSERVED PORTION.

IT IS ALSO CONSIDERED THAT ALTHOUGH THE LEGAL EFFECT OF DISCOVERY OF MUTUAL MISTAKE IS RESTORATION OF THE STATUS QUO, SINCE THE MEMBER HAS REENLISTED IN GOOD FAITH AND IS BEING DEPRIVED OF THE BENEFIT FOR WHICH HE REENLISTED THROUGH NO FAULT OF HIS OWN, AS AN ALTERNATIVE HE SHOULD BE ALLOWED TO MODIFY THE REENLISTMENT TO EITHER ACHIEVE THE BENEFIT OR CONTINUE UNDER THE CONDITIONS OF THE REENLISTMENT WITH MODIFIED BENEFITS.

A SECOND VIEW OF THE MATTER IS THAT A MEMBER'S CONSIDERATION FOR A CONTRACT OF ENLISTMENT IS HIS AGREEMENT TO SERVE FOR A STIPULATED LENGTH OF TIME, AND THE GOVERNMENT'S CONSIDERATION IS PAYMENT OF THE PAY AND ALLOWANCES DUE THE MEMBER IN THE GRADES TO WHICH HE MAY FROM TIME TO TIME BE ASSIGNED. CONSIDERATIONS SUCH AS A PROMISE OF A VRB, NOT INCLUDED IN THE CONTRACT, DO NOT AFFECT THE VALIDITY OF THE CONTRACT ITSELF.

THE OPINION THAT A PROMISE OR INDUCEMENT NOT INCLUDED IN A CONTRACT DOES NOT GO TO THE VALIDITY OF THE CONTRACT IS PREDICATED ON THE WELL ESTABLISHED PRINCIPLE THAT NO MATTER HOW SINCERE THE GOVERNMENT'S AGENTS MAY BE IN THE ASSUMPTION THAT THEY ARE ACTING WITHIN THEIR AUTHORITY, AND NO MATTER HOW IMPLICITLY A MEMBER MAY RELY ON THAT ASSUMPTION, NEITHER SINCERITY OF PURPOSE ON THE AGENTS' PART NOR GOOD FAITH ON THE MEMBER'S IS SUFFICIENT TO OBLIGATE THE GOVERNMENT IN ANY WAY.***

LEGAL REMEDIES ARE AVAILABLE TO AMELIORATE THE HARSH EFFECT OF AN ENLISTMENT CONTRACT FOUND TO HAVE BEEN SUBSTANTIALLY MOTIVATED BY MISTAKEN EXTRACONTRACTUAL PROMISES OR INDUCEMENTS MADE AND ACCEPTED IN GOOD FAITH BUT IMPOSSIBLE OF PERFORMANCE BECAUSE OF STATUTORY OR REGULATORY PROHIBITIONS. THE CONTRACT MAY BE TERMINATED BY DISCHARGING THE MEMBER, THE ERROR OR INJUSTICE MAY BE REMOVED BY CORRECTING THE MEMBER'S RECORDS, INCLUDING MODIFYING HIS ENLISTMENT CONTRACT, UNDER THE PROCEDURES AUTHORIZED BY 10 U.S.C. 1552, OR, IN APPROPRIATE CASES, ANY INDEBTEDNESS FLOWING FROM THE ERROR MAY BE REMITTED OR CANCELED UNDER 10 U.S.C. 4837(D), 6161, OR 9837(D).

MANY DECISIONS OF THE COMPTROLLER GENERAL HAVE HELD OR NOTED THAT ENLISTED MEMBERS WERE NOT, BECAUSE OF MISTAKES OF FACT OR LAW, ENTITLED TO REENLISTMENT BONUSES OR VRB'S WHICH THEY WERE PROMISED, AND OFTEN ERRONEOUSLY PAID. SEE, FOR EXAMPLE, 42 COMP. GEN. 173; 47 ID. 414; 49 ID. 51.*** BECAUSE OF THESE FACTORS, THE SECOND VIEW IS THAT A REENLISTMENT CONTRACT AND PRECEDENT DISCHARGE MAY NOT BE DECLARED INVALID UPON DISCOVERY THAT A MEMBER IS NOT QUALIFIED FOR A SPECIFIC BENEFIT PROMISED IN CONNECTION WITH HIS REENLISTMENT.

THE COMPTROLLER GENERAL HAS CONSISTENTLY HELD THAT A MEMBER'S RIGHT TO RECEIVE A VRB VESTS AT THE TIME OF HIS REENLISTMENT. 45 COMP. GEN. 379; 46 ID. 322; 48 ID. 624. HE HAS ALSO HELD THAT, SINCE A MEMBER'S RIGHT TO A VRB VESTS AT THE TIME OF REENLISTMENT, AN AFTER-THE-FACT MEETING OF VRB ELIGIBILITY CRITERIA DOES NOT OPERATE TO GIVE HIM A RIGHT TO BONUS PAYMENTS. MS COMP. GEN. B-160096 OF 4 MARCH 1969.*** IN LIGHT OF THE CITED DECISIONS, THE SECOND VIEW IS THAT ANY VRB PAYMENT THAT MIGHT ARISE FROM A MODIFICATION OF THIS NATURE WOULD BE IMPROPER, EVEN IF BOTH PARTIES CONSENTED TO THE MODIFICATION.

SECTIONS 1169 AND 1171 OF TITLE 10, U.S. CODE, PROVIDE THE AUTHORITY WHEREBY ENLISTED MEMBERS MAY BE DISCHARGED FROM AN ARMED FORCE. UNDER 10 U.S.C. 505(E) AND 508(B) A PERSON DISCHARGED FROM A REGULAR COMPONENT MAY, UNDER SUCH REGULATIONS AS THE SECRETARY CONCERNED MAY PRESCRIBE, BE REENLISTED IN A REGULAR ARMED FORCE. AND, PURSUANT TO THE PROVISIONS OF 10 U.S.C. 509, UNDER SUCH REGULATIONS AS THE SECRETARY CONCERNED MAY PRESCRIBE, THE TERM OF ENLISTMENT OF A MEMBER OF AN ARMED FORCE MAY BE EXTENDED OR REEXTENDED WITH HIS WRITTEN CONSENT.

THE PAYMENT OF REENLISTMENT AND VARIABLE REENLISTMENT BONUSES IS AUTHORIZED BY 37 U.S.C. 308. TRAVEL ALLOWANCES PAYABLE UPON SEPARATION FROM SERVICE ARE AUTHORIZED BY 37 U.S.C. 404(A)(3) AND (F), AND PAYMENTS FOR UNUSED ACCRUED LEAVE AT TIME OF DISCHARGE ARE AUTHORIZED BY 37 U.S.C. 501(B). SECTION 906 OF TITLE 37, U.S. CODE, PROVIDES THAT A MEMBER WHO EXTENDS HIS ENLISTMENT IS ENTITLED TO THE SAME PAY AND ALLOWANCES AS THOUGH HE HAD REENLISTED.

THE SITUATION DESCRIBED IN THE COMMITTEE ACTION IS SOMEWHAT ANALOGOUS TO THE CIRCUMSTANCES INVOLVED IN OUR DECISION 42 COMP. GEN. 317(1962). THAT CASE AN AIR FORCE ENLISTED MEMBER WITH A DISABILITY RATING OF 20 PERCENT WAS HONORABLY DISCHARGED AND PAID DISABILITY SEVERANCE PAY UNDER CHAPTER 61 OF TITLE 10. U.S. CODE, SINCE AT THE TIME OF HIS DISCHARGE, HIS PERSONNEL FILE INDICATED THAT HE HAD LESS THAN 20 YEARS OF ACTIVE SERVICE. IT WAS LATER ESTABLISHED THAT HE DID IN FACT HAVE 20 YEARS OF SERVICE AND THAT HAD THAT FACT BEEN KNOWN AT THE TIME OF HIS DISCHARGE, HE WOULD HAVE BEEN RETIRED FOR PHYSICAL DISABILITY. SUBSEQUENT TO HIS DISCHARGE THE AIR FORCE ISSUED SPECIAL ORDERS PURPORTING TO REVOKE THE MEMBER'S DISCHARGE AND TO PLACE HIM ON THE RETIRED LIST.

IN THAT CASE, CITING SEVERAL OF OUR DECISIONS AND DECISIONS OF THE COURTS, WE APPLIED THE PRINCIPLE OF THE IRREVOCABILITY OF AN EXECUTED DISCHARGE BY COMPETENT AUTHORITY AND STATED THAT THE MEMBER'S DISCHARGE WAS NOT INVALID; THAT THE SUBSEQUENT ORDERS PURPORTING TO REVOKE HIS DISCHARGE WERE WITHOUT EFFECT; THAT HE WAS NOT ELIGIBLE FOR RETIRED PAY RETROACTIVE TO THE DISCHARGE DATE; AND THAT THE PURPORTED RETIREMENT DATE WAS NOT PROPER. HOWEVER, WE INDICATED THAT UNDER THE CIRCUMSTANCES THE SECRETARY CONCERNED HAD THE AUTHORITY TO ACHIEVE THE DESIRED RESULT BY CORRECTING THE MEMBER'S RECORDS PURSUANT TO 10 U.S.C. 1552.

IN REGARD TO AN ENLISTMENT OR REENLISTMENT CONTRACT WE RECOGNIZE THAT IN CERTAIN CASES IN WHICH THE APPLICABLE LAWS AND REGULATIONS ARE NOT COMPLIED WITH OR WHEN THERE IS FRAUD INVOLVED, SUCH A CONTRACT MAY BE REVOKED. SEE, FOR EXAMPLE, 31 COMP. GEN. 357(1952) AND 31 ID. 562(1952). HOWEVER, IN THE ABSENCE OF SUCH EXTRAORDINARY CIRCUMSTANCES IT IS OUR VIEW THAT A VALIDLY EXECUTED ENLISTMENT CONTRACT MAY NOT BE REVOKED.

THE PAY AND ALLOWANCES OF MEMBERS OF THE UNIFORMED SERVICES, INCLUDING BONUSES PAYABLE INCIDENT TO A REENLISTMENT, ARE PROVIDED BY STATUTES AND THE REGULATIONS ISSUED PURSUANT TO SUCH STATUTES. UNDER AN ENLISTMENT OR REENLISTMENT CONTRACT, A MEMBER IS ENTITLED TO ANY LEGALLY AUTHORIZED PAY AND ALLOWANCES. HOWEVER, THERE IS NO LEGAL BASIS FOR APPLYING EITHER A REGULATION ISSUED PURSUANT TO ANY PAY OR ALLOWANCES STATUTE, OR A PROVISION OF THE ENLISTMENT CONTRACT, AS AUTHORIZING PAYMENTS NOT PROVIDED BY THE STATUTE.

MOREOVER, THE RULE IS WELL-ESTABLISHED THAT A SOLDIER'S ENTITLEMENT TO PAY IS DEPENDENT UPON A STATUTORY RIGHT (BELL V. UNITED STATES, 366 U.S. 393, 401(1961)) AND THAT THE COMMON LAW GOVERNING PRIVATE EMPLOYMENT CONTRACTS HAS NO PLACE IN THE AREA OF MILITARY PAY (UNITED STATES V. WILLIAMS, 302 U.S. 46(1937)). A VALID SEPARATION AND DISCHARGE TERMINATES THE SPECIAL STATUS OF AN ENLISTED MAN CREATED BY HIS ENLISTMENT CONTRACT, AND IT ENDS WHATEVER ENTITLEMENT TO PAY AND EMOLUMENTS THAT HE MAY HAVE HAD DURING AN ENLISTMENT. THIS RULE WAS FOLLOWED BY THE COURT OF CLAIMS IN THE CASE OF KEEF V. UNITED STATES, 185 CT. CL. 454, 471(1968), WHERE THE PLAINTIFF ALLEGED, AMONG OTHER THINGS, THAT HIS DISCHARGE WAS A BREACH OF HIS ENLISTMENT CONTRACT.

ACCORDINGLY, AND IN LIGHT OF THE FOREGOING, A VALIDLY EXECUTED DISCHARGE AND SUBSEQUENT REENLISTMENT MAY NOT BE DECLARED RETROACTIVELY INVALID SO AS TO REQUIRE RECOVERY OF BENEFITS TO WHICH THE MEMBER WAS ENTITLED BY LAW INCIDENT TO SUCH DISCHARGE AND REENLISTMENT. THIS IS OUR VIEW WHETHER OR NOT THE MEMBER AGREES TO A REVOCATION OF HIS REENLISTMENT CONTRACT, AND THE FACT THAT SUBSEQUENT TO THE REENLISTMENT IT IS DISCOVERED THAT THE MEMBER WAS NOT ENTITLED TO A VARIABLE REENLISTMENT BONUS TO WHICH IT WAS BELIEVED HE WAS ENTITLED AT THE TIME HE ENLISTED WOULD NOT CHANGE THAT VIEW. QUESTION 1 IS ANSWERED IN THE NEGATIVE.

IN REGARD TO QUESTION 2, AS IS INDICATED IN THE COMMITTEE ACTION, THIS OFFICE HAS CONSISTENTLY HELD THAT THE RIGHT TO A VARIABLE REENLISTMENT BONUS VESTS IN THE MEMBER AT THE TIME OF REENLISTMENT PROVIDED HE POSSESSES THE REQUIRED QUALIFICATIONS FOR SUCH A BONUS. SEE 45 COMP. GEN. 379(1966) AND 46 ID. 322(1966). IF THE MEMBER DOES NOT POSSESS THOSE QUALIFICATIONS AT THE TIME OF REENLISTMENT, HE IS NOT ENTITLED TO THE VARIABLE REENLISTMENT BONUS AND THIS IS TRUE EVEN THOUGH HE MAY HAVE BEEN ERRONEOUSLY INFORMED AS TO HIS QUALIFICATIONS BY AN AGENT OF THE GOVERNMENT. SEE KENDALL GORDON PARKER V. UNITED STATES, CT. CL. NO. 297- 71, DECIDED JUNE 16, 1972; 51 COMP. GEN. 261(1971); 49 ID. 51(1969); 47 ID. 414(1968); AND 42 ID. 172(1962). LATER ACQUISITION OF THE QUALIFICATIONS WILL NOT RETROACTIVELY ENTITLE A MEMBER TO SUCH A BONUS. SEE 48 COMP. GEN. 624(1969)(ANSWER TO QUESTION D), AND B-160096, MARCH 4, 1969, CITED IN THE COMMITTEE ACTION. ACCORDINGLY, QUESTION 2 IS ALSO ANSWERED IN THE NEGATIVE.

AS INDICATED IN THE COMMITTEE ACTION, APPROPRIATE REMEDIES ARE AVAILABLE TO ALLEVIATE SITUATIONS SUCH AS DESCRIBED ABOVE. FOR EXAMPLE, 10 U.S.C. 1552 ESTABLISHES PROCEDURES WHEREBY MILITARY RECORDS MAY BE CORRECTED TO CORRECT AN ERROR OR REMOVE AN INJUSTICE AND TO PAY AMOUNTS FOUND DUE INCIDENT TO SUCH CORRECTIONS. ALSO, THE INDEBTEDNESS OF ENLISTED MEMBERS MAY BE CANCELED OR REMITTED, PURSUANT TO 10 U.S.C. 4837(D), 6161, 9837(D) AND 14 U.S.C. 461, WHEN THE SECRETARY CONCERNED CONSIDERS IT IN THE BEST INTERESTS OF THE UNITED STATES. SEE, ALSO, 10 U.S.C. 2774 AND 32 U.S.C. 716 AS ADDED BY THE ACT OF OCTOBER 2, 1972, PUBLIC LAW 92-453, AUTHORIZING THE WAIVER OF CLAIMS OF THE UNITED STATES ARISING OUT OF CERTAIN ERRONEOUS PAYMENTS.