41 C.F.R. PART 302–12—USE OF A RELOCATION SERVICES COMPANY
Title 41 - Public Contracts and Property Management
Authority: 5 U.S.C. 5738 and 20 U.S.C. 905(c).
Source: FTR Amdt. 98, 66 FR 58196, Nov. 20, 2001, unless otherwise noted.
Note to subpart A: Use of pronouns “I”, “you”, and their variants throughout this subpart refers to the employee. Yes, if you are an employee who is authorized to transfer and such transfer includes residence transaction. Your agency must determine if you may use a relocation services company. You may use a relocation services company if you: (a) Meet all conditions required for you to be eligible for an allowance contained in this chapter for which a service provided by the relocation services company would serve as a substitute, and you are authorized to use a specific relocation service provided by the company as a substitute; (b) Have signed a service agreement; and (c) Meet any specific conditions your agency has established. Your agency will pay the relocation services company's fees/expenses for the services you are authorized to use. If your agency pays the relocation services company for actual expenses the company incurs on your behalf, payment to the company is limited to what you would have received under the direct reimbursement provisions of this chapter. No, if you use a contracted-for relocation service that is a substitute for reimbursable relocation allowance, you will not be reimbursed for the relocation as well. If you use a relocation services company to ship HHG in excess of the maximum weight allowance, your agency will pay the portion of the fee attributable to 18,000 pounds net weight. You must pay the rest. If you use a relocation services company to sell or purchase a residence for which you and/or a member(s) of your immediate family do not have full title, your agency will pay the portion of the relocation services company's fee attributable to your pro rata share of the residence, in accordance with §302–11.103 of this chapter. You must pay any portion of the fee attributable to other than your pro rata share of the residence. No, if your agency authorizes you to enter a homesale program, your agency must give you the option to accept or reject an offer from the relocation services company. You may incur income taxes on relocation services provided by a relocation services company and paid for by your agency. Section 82 of the Internal Revenue Code states there shall be included in gross income (as compensation for services) any amount received or accrued, directly or indirectly, by an individual as a payment for or reimbursement of expenses of moving from one residence to another residence which is attributable to employment. You will receive a relocation income tax (RIT) allowance if your agency determines that such expenses are taxable. The Government does not assume responsibility for payment of your taxes, however, and you may wish to consult a tax professional on income tax reporting. Note to subpart B: Use of pronouns “we”, “you”, and their variants throughout this subpart refers to the agency. “Relocation services” are services provided by a private company under a contract with an agency to assist a transferred employee in relocating to the new official station. Examples include homesale programs, home marketing assistance, home finding assistance, and property management services. Yes, you may enter into a contract with a relocation services company for the company to provide relocation services. You may pay for contracted relocation services that are substitutes for reimbursable relocation allowances authorized throughout this chapter. For example, you may pay for homesale services as a substitute for residence sale expenses, or household goods management services as a substitute for transportation of household goods. Yes, you may separately contract for each type of relocation service or you may combine several types of relocation services in a single contract. The purpose of contracting for relocation services is to improve the treatment of employees who are directed to relocate to facilitate the retention of a well-qualified workforce. You must balance the positive effects that availability of relocation services has on employee mobility and morale with any increased costs your agency may experience as a result of providing relocation services. When offering your employees the services of a relocation services company, you must establish policies governing: (a) The conditions under which you will authorize an employee to use a relocation services company; (b) Which employees you will allow to use a relocation services company; (c) What relocation services you will offer an employee; and (d) Who will determine in each case if an employee may use a relocation services company and what services will be offered. You must follow the rules contained in the Federal Acquisition Regulations (FAR) (48 CFR) and/or other procurement regulations applicable to your agency. Amounts you pay to a relocation services company on behalf of an employee may be taxable to the employee. In some cases, such as certain homesale programs, the amounts may not be taxable. You must determine the taxability of such payments, and pay a relocation income tax (RIT) allowance in accordance with part 302–17 of this chapter on payments you determine to be taxable to the employee. You may contact the: Assistant Chief Counsel (Income Tax & Accounting), Internal Revenue Service, 1111 Constitution Avenue, NW., Room 5501, Washington, DC 20224, for information on the income tax consequences of payments you make to a relocation services company. You must consider the following factors in deciding whether to use the fixed-fee or cost-reimbursable contracting method: (a) Risk of alternative methods. Under a fixed fee contract, the relocation services company bears all risks not expressly contained in the contract. Under a cost-reimbursable contract, you must assume some or all risks and, therefore, must assume some management responsibilities under the contract as well. For example, under a fixed fee homesale program you are not directly liable for losses incurred if a residence does not sell immediately, while under a cost-reimbursable homesale program you assume some or all risks of selling the residence. (b) Cost of alternative methods. Under the fixed fee method of contracting, the fee includes a cost component for risks assumed by the relocation services company. Under the cost-reimbursable method of contracting, you are directly responsible for some or all of the costs associated with management of the contract. In deciding whether to use cost-reimbursable contracting you, therefore, must consider the cost of resources you would require (including personnel costs) to manage a cost-reimbursable relocation services contract. (c) Effect on the obligation of funds. You must obligate funds for a relocation in the fiscal year in which the purchase order is awarded under the contract. Under the fixed fee contracting method, the amount of the relocation services fee is fixed and you have a basis for determining the amount of funds to obligate. Under the cost-reimbursable contracting method, you must obligate funds based on an estimate of the costs that will be incurred. When opting for cost-reimbursable contracting you, therefore, should establish a reliable method of computing fund obligation estimates. No, you may not take title to an employee's residence except as specifically provided by statute. The statutes which form the basis for the provisions of this part do not provide such authority. Yes, if a home exceeding the maximum value above which you will not pay is sold under your homesale program, the employee will be responsible for any additional costs. You must establish a maximum amount commensurate with your agency's experience. You may consider, among other factors, budgetary constraints, the value range of homes in areas where you have offices, and the value range of homes previously entered in your program. No, under a home sale program, you may not pay an employee for losses he/she incurs on the sale of a residence, but this does not preclude you reimbursing a relocation service's company for losses incurred while the contractor holds the property. No, under a homesale program, you may not direct the relocation services company to pay an employee more than the fair market value (as determined by the residence appraisal process) of his/her home. No, you may not use a relocation services contract to which you are contractually bound to obtain the services of another relocation service provider or to circumvent the travel and transportation expense payment system contract if you are a user of that contract.
Title 41: Public Contracts and Property Management
PART 302–12—USE OF A RELOCATION SERVICES COMPANY
Section Contents
§ 302-12.1 Am I eligible to use a relocation services company?
§ 302-12.2 Who determines if I may use a relocation services company?
§ 302-12.3 Under what conditions may I use a relocation services company?
§ 302-12.4 For what relocation services expenses will my agency pay?
§ 302-12.5 If I use a contracted-for relocation service that is a substitute for reimbursable relocation allowance, will I be reimbursed for the relocation allowance as well?
§ 302-12.6 What expenses will my agency pay if I use a relocation services company to ship household goods in excess of the maximum weight allowance?
§ 302-12.7 What expenses will my agency pay if I use a relocation services company to sell or purchase a residence for which I and/or a member(s) of my immediate family do not have full title?
§ 302-12.8 If my agency authorizes me to enter a homesale program, must I accept a buyout offer from the relocation services company?
§ 302-12.9 What are the income tax consequences if I use a relocation services company?
§ 302-12.100 What are “relocation services”?
§ 302-12.101 May we enter into a contract with a relocation services company for the company to provide relocation services?
§ 302-12.102 What contracted relocation services may we provide at Government expense?
§ 302-12.103 May we separately contract for each type of relocation service?
§ 302-12.104 What is the purpose of contracting for relocation services?
§ 302-12.105 How must we administer a relocation services contract?
§ 302-12.106 What policies must we establish when offering our employees the services of a relocation services company?
§ 302-12.107 What rules must we follow when contracting for relocation services?
§ 302-12.108 What are the income tax consequences that we must consider when offering relocation services?
§ 302-12.109 What must we consider in deciding whether to use the fixed-fee or cost-reimbursable contracting method?
§ 302-12.110 May we take title to an employee's residence?
§ 302-12.111 Under a homesale program, may we establish a maximum home value above which we will not pay for homesale services?
§ 302-12.112 Under a homesale program, may we pay an employee for losses he/she incurs on the sale of a residence?
§ 302-12.113 Under a homesale program, may we direct the relocation services company to pay an employee more than the fair market value of his/her residence?
§ 302-12.114 May we use a relocation services contract for services which we are contractually bound to obtain under another travel services contract?
Subpart A—Employee's Use of a Relocation Services Company
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§ 302-12.1 Am I eligible to use a relocation services company?
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§ 302-12.2 Who determines if I may use a relocation services company?
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§ 302-12.3 Under what conditions may I use a relocation services company?
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§ 302-12.4 For what relocation services expenses will my agency pay?
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§ 302-12.5 If I use a contracted-for relocation service that is a substitute for reimbursable relocation allowance, will I be reimbursed for the relocation allowance as well?
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§ 302-12.6 What expenses will my agency pay if I use a relocation services company to ship household goods in excess of the maximum weight allowance?
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§ 302-12.7 What expenses will my agency pay if I use a relocation services company to sell or purchase a residence for which I and/or a member(s) of my immediate family do not have full title?
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§ 302-12.8 If my agency authorizes me to enter a homesale program, must I accept a buyout offer from the relocation services company?
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§ 302-12.9 What are the income tax consequences if I use a relocation services company?
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Subpart B—Agency's Use of a Relocation Services Company
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§ 302-12.100 What are “relocation services”?
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§ 302-12.101 May we enter into a contract with a relocation services company for the company to provide relocation services?
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§ 302-12.102 What contracted relocation services may we provide at Government expense?
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§ 302-12.103 May we separately contract for each type of relocation service?
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§ 302-12.104 What is the purpose of contracting for relocation services?
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§ 302-12.105 How must we administer a relocation services contract?
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§ 302-12.106 What policies must we establish when offering our employees the services of a relocation services company?
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§ 302-12.107 What rules must we follow when contracting for relocation services?
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§ 302-12.108 What are the income tax consequences that we must consider when offering relocation services?
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§ 302-12.109 What must we consider in deciding whether to use the fixed-fee or cost-reimbursable contracting method?
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§ 302-12.110 May we take title to an employee's residence?
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§ 302-12.111 Under a homesale program, may we establish a maximum home value above which we will not pay for homesale services?
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§ 302-12.112 Under a homesale program, may we pay an employee for losses he/she incurs on the sale of a residence?
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§ 302-12.113 Under a homesale program, may we direct the relocation services company to pay an employee more than the fair market value of his/her residence?
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§ 302-12.114 May we use a relocation services contract for services which we are contractually bound to obtain under another travel services contract?
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