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


05/22/2025

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Date

The claimant is a current Federal civilian employee of the U.S. Department of the Army (Army), assigned to the 21st Theater Sustainment Command, 266th Financial Management Center, in Kaiserslautern, Germany. She requests the U.S. Office of Personnel Management (OPM) reconsider her agency’s denial of living quarters allowance (LQA). We received the claim on August 12, 2024, and the agency administrative report (AAR) on December 31, 2024. For the reasons discussed herein, the claim is denied.

The claimant is currently assigned to an Information Technology Specialist (Systems Administration), GS-2210-11, position with the 21st Theater Sustainment Command, 266th Financial Management Center, in Kaiserslautern, Germany, effective January 14, 2024. The claimant previously held a position as an Information Management Support Technician (Information System Tech Analyst 1) with defense contractor Huntington Ingalls Industries in the Republic of Korea. On May 7, 2023, the claimant applied for her current position with Army and on July 17, 2023, the claimant accepted the agency’s tentative offer. On September 28, 2023, the agency determined the claimant ineligible for LQA because she did not meet the eligibility requirements as either a stateside or non-stateside hire. On March 29, 2024, the claimant appealed the agency’s LQA determination by resubmitting documentation to show that her former employer provided return transportation rights back to the United States. However, the agency declined to accept this new information, citing that the documents were not issued at the time of hiring with Huntington Ingalls Industries.

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, the claimant applied for the Information Technology Specialist (Systems Administration), GS-2210-11, position, outside the United States. Therefore, the claimant did not meet section 031.11 of the DSSR at the time of her selection and was ineligible for LQA as a stateside hire.

However, 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 claimant meets DSSR 031.12(a) in that her presence in Germany is fairly attributable to her current employment as an Information Technology Specialist (Systems Administration), GS-2210-11, position in Kaiserslautern, Germany.

DSSR section 031.12b stipulates that an employee recruited outside the United States 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. On August 10, 2023, the claimant filled out a Questionnaire for Living Quarters Allowance Determinations. In it, she states that she did not hold a transportation agreement for her position as an employee with Huntington Ingalls Industries. Therefore, although the claimant had been recruited in the United States by Huntington Ingalls Industries, she was not provided return transportation rights back to the United States. Thus, she cannot be considered to have been recruited outside the United States for the purposes of DSSR section 031.12b as she does not meet the employment conditions as described. Accordingly, the claim for LQA is denied.

Sometime after the agency’s denial of LQA, the claimant submitted documentation which showed that she now held return transportation rights back to the United States. However, the agency declined to accept this documentation citing Army in Europe Regulation (AER), 690-500.592, paragraph 7.e., which states:

e. Contractor Employees. Contractor employees selected for overseas Federal civilian employment who meet basic eligibility criteria in DSSR; [Department of Defense Instructions (DODI)] 1400.25, volume 1250; and this regulation, may be eligible for LQA. In making LQA determinations, the [Civilian Human Resources Agency (CHRA)] LQA Office will consider only documents showing the employment relationship and hiring circumstances with a U.S. firm executed at the time of hiring. Subsequent documents will not be considered unless they clearly show the correction of an error from the point of initial hire and pre-date the vacancy announcement for the DOD employment at issue. In case of a change of contractor companies during employment as a civilian contractor (for example, company A subsumes company B), the applicant must submit all relevant documents to the LQA Office showing the previous employment for the determination of LQA eligibility.

Although a Huntington Ingalls Industries employee representative certified in memorandum that the claimant “received reimbursement back for her relocation to the Republic of Korea,” and was “eligible for repatriation back to the United States,” AER 690-500.592, paragraph 7.e., states that Army will only accept hiring documents that were executed at the time of hiring. In addition, any subsequent documents will not be considered unless they show the correction of an error from the point of initial hire. Based on the claimant’s response in the Questionnaire for Living Quarters Allowance Determinations in August 2023, she did not hold return transportation rights back to the United States at this time. In addition, prior to October 24, 2023, none of the claimant’s initial hiring documentation showed she held any return transportation rights. Therefore, OPM concurs with the agency’s determination and the claim remains denied under DSSR 031.12.

Furthermore, the DODI 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 payments 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 upon 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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