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The Army Finance and Accounting Center submitted a claim of the German Federal Railway for settlement by GAO. The claim was for the cost of installing automatic safety equipment on U.S. controlled, German-owned railroad tracks. At the railroad's request, U.S. Forces performed certain earthwork necessary for the installation of the safety equipment; however, it did not agree to be liable for the costs of materials or construction. Later, the U.S. Forces received a claim from the German government for the cost of the safety improvements since the German government considered the work to be a U.S. responsibility under the North Atlantic Treaty Organization Status of Forces Agreement (SOFA). Following an Army determination that payment was not required by the treaty, the claim was submitted to GAO. GAO found that the U.S. Forces and the railroad did not enter into either a formal contract or a cooperation agreement concerning the railroad improvements. Furthermore, the work was not done at the request of the U.S. Forces but to satisfy a new German safety standard. Absent express statutory authority, appropriated funds may not be used for the permanent improvement of property which is not owned by the U.S. government, except when the improvements are for the principal benefit of the U.S. government and are reasonably proportionate to the U.S. government's interest. Since the claim was not payable under the SOFA, it was denied.

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