BNUMBER:  B-276403 
DATE:  May 19, 1997
TITLE:  [Letter], B-276403, May 19, 1997

**********************************************************************

B-276403

May 19, 1997

Catherine C. Cook, Esq.
General Counsel
Railroad Retirement Board
844 North Rust Street
Chicago, Illinois 60611-2092

Dear Ms. Cook:

This is in response to your letter dated February 26, 1997, requesting 
advice as to whether frequent flyer miles earned through an employee's 
personal travel on one airline may be exchanged for frequent flyer 
miles earned through official travel financed with appropriated funds 
on a different airline where the exchange would allow the agency and 
the employee to each obtain a usable ticket at the time of the 
exchange.

You state that consistent with travel regulations, Railroad Retirement 
Board policy requires that frequent flyer miles earned through 
official business travel may be used only for official business.  Your 
question arises because some employees have frequent flyer accounts on 
several airlines containing miles earned on both personal and 
government travel, but without sufficient government or personal 
mileage alone to qualify for a ticket.[1]  You have provided an 
example of an employee who will be leaving the agency this year who 
has frequent flyer accounts with Delta Airlines and Trans World 
Airlines, each account containing both government and personal 
mileage.  While the total government and personal mileage in each 
account is sufficient to qualify for a free ticket, neither account 
has sufficient government or personal mileage alone to qualify for a 
ticket.  The employee involved would like to trade the personal 
mileage from one account for the government mileage in the other 
account.  This would enable the employee to qualify for a ticket for 
personal use on one airline and for a ticket for official business use 
on the other airline.  

You have indicated that if this trade is not permissible, the 
alternatives would be to allow the miles to expire, or never use them 
if they are non-expiring miles; or for the employee to use his 
personal miles combined with government miles to obtain tickets for 
official business, which he would prefer not to do.

We understand that it is your view that not only the employee, but 
also the agency, would benefit from such a trade, since each would 
obtain a usable ticket.  It is also your view that since the agency 
would obtain a ticket in the exchange, this arrangement would not 
appear to violate the rule that mileage earned on official travel 
belongs to the government and may be used only for official travel.  
You ask our opinion, however, because you have not found a decision of 
our office addressing this issue.

As you know, frequent flyer miles earned on government-financed travel 
are the property of the government and may not be retained by the 
employee for personal use.  63 Comp. Gen. 229 (1984).  See also, 
Federal Travel Regulation (FTR),         41 C.F.R.  sec.  301-1.103(b) and 
(f); and Federal Property Management Regulations,    41 C.F.R.  sec.  
101-25.103-2, promulgated by the General Services Administration 
(GSA).  In the absence of GSA property disposal regulations providing 
otherwise, an employee may not retain such miles for his or her own 
use even if, ultimately, the government is unable to take advantage of 
the miles.  69 Comp. Gen. 643 (1990).  What you propose, however, is 
not simply allowing the employee to retain for personal use miles 
earned on government travel; you propose an exchange of such miles in 
consideration for miles rightfully belonging to the employee with a 
resulting benefit to both the agency and the employee. 

It is relevant to note that in an effort to encourage cost savings in 
official travel, Congress enacted section 6008, Public Law No. 
103-355, 108 Stat. 3367 (1994),[2] which directs the Administrator of 
GSA to issue guidelines to ensure that agencies promote, encourage, 
and facilitate the use of frequent traveler programs offered by 
airlines, hotels, and car rental vendors by federal employees who 
engage in official travel, for the purpose of realizing to the maximum 
extent practicable cost savings for official travel.  Section 6008 
further provides that any awards granted under such a frequent 
traveler program accrued through official travel shall be used only 
for official travel.  To inform agencies of methods available to 
comply with the requirements of section 6008, GSA issued Bulletin FTR 
17, October 24, 1995, in which GSA referred to its instructions in FTR  sec.  
301-1.103(f) directing agencies to avail themselves of cost savings 
opportunities by encouraging employees to participate in frequent 
traveler programs, and authorizing agencies to reimburse employees for 
the cost of entering such programs when it is expected to result in 
savings to the government.[3]  Bulletin FTR 17 also encouraged 
agencies to use their authority under the Government Employees 
Incentives Awards Act, 5 U.S.C.          sec.  4501-4507, to develop 
incentive awards programs under which cash awards may be paid to 
employees who accrue travel savings to the agency through 
participation in frequent traveler programs.  

While GSA's guidance and regulations do not address trading frequent 
flyer miles between an agency and an employee, we believe that a trade 
of mileage credits which would otherwise go unused and which results 
in savings to the agency by enabling it to obtain free transportation, 
and also provides a benefit to the employee, falls within the spirit 
and intent of the GSA guidance.  In addition, such a trade appears 
consistent with the purposes of section 6008, Pub. L. No. 103-355, to 
encourage participation in, and to use awards under, frequent traveler 
programs to realize cost savings for official travel to the maximum 
extent practicable.  Also, in our view, the fact that some of the 
government mileage would be traded to the employee would not violate 
the requirement of section 6008 that such mileage be used only for 
official business travel since ultimately its use in this manner would 
result in the government obtaining a free ticket on another airline 
for use on official business, thus securing the cost saving at which 
section 6008 is directed.  Accordingly, we have no objection to the 
trade of mileage credits you propose.  

Since agencies' use of frequent flyer programs and the disposition of 
mileage credits accrued on official travel under such programs are 
matters within GSA's purview, we suggest you also bring the matter to 
the attention of appropriate GSA officials.  

Sincerely yours,

Robert P. Murphy
General Counsel

B-276403

May 19, 1997

DIGEST

GAO has no objection to an agency's proposal to allow an employee who 
has frequent flyer accounts with several airlines in which he has both 
government and personal mileage credits (separately accounted for), to 
trade personal mileage in one account for government mileage in 
another account thereby providing sufficient mileage for a free ticket 
for use on official business from one account and for personal use 
from the other account.  In this case, without the trade, the agency 
will lose the benefit of the government mileage because the employee 
plans to leave the agency shortly, after which the government mileage 
will become useless.  A trade in these circumstances does not violate 
the rule against allowing an employee to retain government mileage for 
personal use since it will result in the agency obtaining a free 
ticket on another airline, and it is consistent with legislative and 
GSA guidance directing agencies to encourage employees' participation 
in frequent flyer programs to reduce agency travel costs.

1. We understand that Railroad Retirement Board employees are required 
to file quarterly reports with the agency, separately accounting for 
the government and personal miles in each account, in conformance with 
the requirements set out in our decision, Panama Canal Commission, 
B-257525, Nov. 30, 1994. 

2. 5 U.S.C.  sec.  5702, note.

3. By its own terms, Bulletin 17 expired December 31, 1996.