Washington, D.C.

U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code

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Kimberly A. Steide, DPA
Principal Deputy Associate Director
Agency Compliance and Evaluation
Merit System Accountability and Compliance

07/07/2025

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Date

The claimant is a Federal civilian employee of the U.S. Department of the Army (hereafter referred to as “agency” or “Army”), assigned to the Mission Support Element, Europe G-4, Sustainment Operations Division in Kaiserlautern, Germany. He requests the U.S. Office of Personnel Management (OPM) reconsider his agency’s denial of his living quarters allowance (LQA) request. We received the claim on June 3, 2024, and the agency administrative report on June 10, 2024. For the reasons discussed herein, the claim is denied.

The claimant is currently assigned to a position as a Logistics Management Specialist, GS-0346-12, step 3, with the Mission Support Element, Europe G-4, Sustainment Operations Division in Kaiserlautern, Germany, effective May 23, 2022. Prior to appointment, the claimant was an active-duty member of the U.S. Armed Forces. The claimant separated from the U.S. Armed Forces in Germany on April 30, 2018. Before the claimant separated from the U.S. Armed Forces, the claimant was offered and accepted a position as a Senior/Lead Field Service Technician with defense sub-contractor USFalcon in Illeshiem, Germany. He began working in this position in March 2018. In early 2022, the claimant applied and was given a tentative offer of employment for his current position with the Army. At this time, the claimant was still employed at USFalcon, with a contract end date of March 7, 2022. On March 19, 2022, the claimant returned to the United States using an airline ticket provided to him by USFalcon. While in the United States, the claimant awaited the final offer of employment from the Army. On March 21, 2022, the agency determined the claimant ineligible for LQA because he did not meet the eligibility requirements as either a stateside or non-stateside hire. The claimant requested a review of the agency’s initial LQA determination. The claimant states that LQA should be granted because he “was hired by his contractor employer while still on military leave in anticipation of his separation from the military.” However, in their agency administrative report to OPM dated November 7, 2024, the agency declined the claimant’s request citing that his position with USFalcon was considered “intervening employment.”

The Department of State Standardized Regulations (DSSR) set forth basic eligibility criteria for the granting of LQA. The DSSR contains the governing regulations for allowances, differentials, and defraying of official residence expenses in foreign areas. Under DSSR section 031.11, LQA may be granted to employees recruited in the United States. It states in part:

Quarters allowances prescribed in Chapter 100 may be granted to employees who were recruited by the employing government agency in the United States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, and the possessions of the United States

According to the record, there is no dispute that the claimant applied for the Logistics Management Specialist, GS-0346-12, step 1, position, outside the United States. Therefore, the claimant did not meet section 031.11 of the DSSR at the time of his selection and was ineligible for LQA as a stateside hire.

The agency also determined the claimant did not meet the basic requirements of a non-stateside hire under DSSR section 031.12, which states:

Quarters allowances prescribed in Chapter 100 may be granted to employees recruited outside the United States, provided that:

a. the employee’s actual place of residence in the place to which the quarters allowance applies at the time of receipt thereof shall be fairly attributable to his/her employment by the United States Government; and

b. prior to appointment, the employee was recruited in the United States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the former Canal Zone, or a possession of the United States, by:

1. the United States Government, including its Armed Forces;
2. a United States firm, organization, or interest;
3. an international organization in which the United States Government participates; or
4. a foreign government

and had been in substantially continuous employment by such employer under conditions which provided for his/her return transportation to the United States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the former Canal Zone, or a possession of the United States.

The record shows that the claimant arrived in the overseas area as a member of the U.S. Armed Forces. Although the claimant briefly returned to the United States in early 2018, it is clear from the record that the claimant was recruited by the U.S. based firm, USFalcon, while in the overseas area. Moreover, the claimant was not separated from the U.S. Armed Forces prior to beginning work with the defense sub-contractor. On the contrary, the claimant began working with the firm during the first week of March 2018, while on military leave. In addition, on an application for a North Atlantic Treaty Organization Status of Forces Agreement for his employment with USFalcon, the claimant lists Freihung, Germany, as his place of residence.Therefore, the claimant’s actual place of residence at the time of his appointment cannot be fairly attributed to his employment by the United States Government, and, thus, he does not meet DSSR section 031.12a.

DSSR section 031.12b stipulates that an employee recruited in the overseas area must immediately, prior to appointment, have been recruited in the United States by one of the enumerated entities which provided return transportation back to the United States. It must be noted that there exists no documentation that shows the claimant was provided return transportation benefits back to the United States from USFalcon at the start of his employment. Nevertheless, during the recruitment process with the Army, the claimant traveled back to the United States using an airline ticket purchased by USFalcon. Therefore, even if the claimant previously held return transportation rights back to the United States from an enumerated entity, the claimant’s choice to travel back to the United States before receiving the official job offer from Army also means he could no longer be considered to have been recruited outside the United States for the purposes of the DSSR section 031.12b. Therefore, DSSR 031.12b is not met.

Furthermore, the Department of Defense Instruction 1400.25 V1250 specifies that overseas allowances are not automatic salary supplements, nor are they entitlements. The statutory and regulatory languages are permissive and give agency heads considerable discretion in determining whether to grant LQA to agency employees. Thus, an agency may deny LQA when it finds that the circumstances justify such action, and the agency’s action will not be questioned unless it is determined that the agency’s action was arbitrary, capricious, or unreasonable. Under section 178.105 of title 5, Code of Federal Regulations, the burden is upon the claimant to establish the liability of the United States and the claimant’s right to payment. Joseph P. Carrigan, 60 Comp. Gen. 243, 247 (1981); Wesley L. Goecker, 58 Comp. Gen. 738 (1979). In this case, the claimant failed to do so. Since an agency decision made in accordance with established regulations and within its discretionary authority as is evident in the present case cannot be considered arbitrary, capricious, or unreasonable, there is no basis on which to reverse the agency’s decision, and the claim is therefore denied.

This settlement is final. No further administrative review is available within the OPM. Nothing in this settlement limits the claimant’s right to bring an action in an appropriate United States court.

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