April 17, 2007                         
                                                                 

                          CBCA 644-RELO


                 In the Matter of BYRON P. FRANZ


     Byron P. Franz, Waukesha, WI, Claimant.

     Karyn R. Jones, Acting Chief, Accounting Section, Finance Division, Federal Bureau
of Investigation, Washington, DC, appearing for Department of Justice.  

PARKER, Board Judge.

                            Background

     FBI Special Agent Byron P. Franz was transferred from Indianapolis, Indiana, to
Milwaukee, Wisconsin, in September 2006.  Prior to his transfer, Agent Franz had entered
into a contract with a security company pursuant to which Agent Franz received a home
security system valued at about $1300 in return for a three-year commitment to have the
system monitored at a cost of $39 per month.  When he moved to Wisconsin, Agent Franz
was unable to use the system because the security company was unable to monitor it in that
state.

     The purchaser of Agent Franz's house in Indiana did not want the security system,
so Agent Franz removed it and placed it in storage.  The security company refused to relieve
Agent Franz of his obligation to pay for the remaining months of the three-year monitoring
obligation, and Agent Franz claimed this amount as a miscellaneous expense.  The FBI
would like to reimburse Agent Franz for the payments and asks the Board whether it may
do so.
                            Discussion

     The miscellaneous expenses allowance (MEA) is for defraying various costs
associated with discontinuing residence at one location and establishing residence at a new
location in connection with a permanent change of station.  41 CFR 302-16.1 (2006).  The
MEA "is related to expenses that are common to living quarters, furnishings, household
appliances, and to other general types of costs inherent in relocation of a place of residence." 
Id. 302-16.2.  Reimbursable expenses include, but are not limited to, such things as fees for
disconnecting and connecting appliances, equipment, and utilities; fees for cutting and
fitting rugs, draperies, and curtains moved from one residence to another; and the costs of
utility deposits or utility fees not offset by eventual refunds.  Id. 302-16.1.  The MEA does
not cover, among other things, "[l]osses in selling or buying real and personal property and
cost related to such transactions" or "[l]osses as the result of sale or disposal of items of
personal property not considered convenient or practicable to move."  Id. 302-16.203(a), (h).

     Whether the lost security monitoring fees are allowable as a miscellaneous expense
turns on whether they are more like the disconnecting/connecting fees, cutting/fitting fees,
and lost utility deposits that are listed as examples of allowable costs, or losses related to sale
or disposal of real or personal property, which are specifically unallowable.  There is not
much law on the issue.  In Richard E. Backlund, GSBCA 14646-RELO, 98-2 BCA
 30,045, the General Services Administration Board of Contract Appeals (GSBCA)
disallowed as a miscellaneous expense a $785 monitoring charge owed to a security
company for a security system the transferred employee left for the buyer of his house.  The
GSBCA held that the fee was not reimbursable because "[i]n essence, it was an agreement
to lower the price of the house by $785 or, alternatively, to sell personal property with that
value in conjunction with the sale of the house."  Id. at 148,653.  In Mary Sue Hay,
GSBCA 16104-RELO, 03-2 BCA  32,355, the GSBCA denied as a miscellaneous expense
the cost of furnishing and installing in the new residence a security system comparable to
the one the transferred employee had left behind.  There, the GSBCA explained, "[i]f
Ms. Hay had had the system in her old house uninstalled, shipped to Tennessee, and installed
in her new house, the charges for disconnecting and reconnecting the system would have
been allowable expenses under the allowance."  Id. at 160,061.

     Neither Backlund nor Hay directly addresses the precise situation that Agent Franz
faced -- lost security monitoring fees where the purchaser of the transferred employee's
house did not purchase the old security system.  Nevertheless, the cases hint at a general rule
that the costs of purchasing and monitoring a security system are unallowable costs related
to real or personal property, and the costs of disconnecting and connecting a security system
moved from the old residence to the new residence are allowable.  Security system
monitoring fees are not similar to fees for disconnecting and connecting appliances,
equipment, and utilities or to fees for cutting and fitting rugs, draperies, and curtains moved
from one residence to another.  Nor are they similar to lost utility deposits or utility fees not
offset by eventual refunds; a security system is not a utility, and the monitoring fee at issue
here is not a deposit or fee that has already been paid and cannot be refunded.  By signing
a contract for three years of security monitoring, Agent Franz received both a security system
and the right to receive three years of monitoring services.  This type of property-related loss
is not covered by the miscellaneous expense allowance.

                             Decision

     The FBI may not pay the claim.



                                   ______________________
                                   ROBERT W. PARKER
                                   Board Judge