Sec. 1.1919  Contracting for collection services.

    (a) The Commission has authority to contract for collection services 
to recover delinquent debts, provided that the following conditions are 
satisfied:
    (1) The authority to resolve disputes, compromise claims, suspend or 
terminate collection action, and refer the matter for litigation is 
retained by the agency;
    (2) The contractor shall be subject to the Privacy Act of 1974, as 
amended, to the extent specified in 5 U.S.C. 552a(m), and to applicable 
Federal and State laws and regulations pertaining to debt collection 
practices, such as the Fair Debt Collection Practices Act, 15 U.S.C. 
1692;
    (3) The contractor must be required to account strictly for all 
amounts collected;
    (4) The contractor must agree that uncollectible accounts shall be 
returned with appropriate documentation to enable the Commission to 
determine whether to pursue collection through litigation or to 
terminate collection efforts; and
    (5) The contractor must agree to provide any data contained in its 
files relating to paragraphs (a) (1), (2), and (3) of Sec. 105.2 of the 
Federal Claims Collection Standards (4 CFR part 105) upon returning an 
account to the Commission for subsequent referral to the Department of 
Justice for litigation.
    (b) Funding of collection service contracts. (1) The Commission may 
fund a collection service contract on a fixed-fee basis, that is, 
payment of a fixed fee determined without regard to the amount actually 
collected under the contract. Payment of the fee under this type of 
contract must be charged to available agency appropriations.
    (2) The Commission may also fund a collection service contract on a 
contingent-fee basis, that is, by including a provision in the contract 
permitting the contractor to deduct its fee from amounts collected under 
the contract. The fee should be based on a percentage of the amount 
collected, consistent with prevailing commercial practice.
    (3) The Commission may enter into a contract under paragraph (b)(1) 
of this section only if and to the extent provided in advance 
appropriation acts or other legislation, except that this requirement 
does not apply to the use of a revolving fund authorized by statute.
    (4) Except as authorized under paragraph (b)(2) of this section, or 
unless the receipt qualifies as a refund to the appropriation, or unless 
otherwise specifically provided by law, the Commission must deposit all 
amounts recovered under collection service contracts (or by agency 
employees on behalf of the agency) in the Treasury as miscellaneous 
receipts pursuant to 31 U.S.C. 3302.
    (c) The Commission will consider the use of collection agencies at 
any time after the account is 61 days past due. In any case where an 
account is six months or more past due, the Commission may turn it over 
to a collection agency unless referred for litigation or unless 
arrangements have been made for a workout procedure or the Commission 
has exercised its authority to write off the debt pursuant to 
Sec. 1.1916.
    (d) The Commission will generally not use a collection agency to 
collect a delinquent debt owed by a currently employed or retired 
Federal employee, if collection by salary or annuity offset is 
available.

                              Salary Offset