[Code of Federal Regulations]
[Title 29, Volume 4]
[Revised as of July 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR1450.17]

[Page 84-85]
 
                             TITLE 29--LABOR
 
         CHAPTER XII--FEDERAL MEDIATION AND CONCILIATION SERVICE
 
PART 1450_COLLECTIONS OF CLAIMS OWED THE UNITED STATES--Table of Contents
 
Subpart B_Administrative Offset_Consumer Reporting Agencies_Contracting 
                             for Collection
 
Sec.  1450.17  Contracting for collection services.

    (a) FMCS 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

[[Page 85]]

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 FMCS 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 FMCS for subsequent referral to the Department of Justice for 
litigation.
    (b) Funding of collection service contracts: (1) FMCS 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) FMCS 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) FMCS may enter into a contract under paragraph (b)(1) of this 
section only if and to the extent provided in advance in its 
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, FMCS 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) FMCS will consider the use of collection agencies at any time 
after the account is 61 days past due. In all cases accounts that are 
six months or more past due shall be turned over to a collection agency 
unless referred for litigation or unless arrangements have been made for 
a workout procedure, or the agency has exercised its authority to write 
off the debt pursuant to Sec.  1450.14.
    (d) FMCS 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.