§  1.1919   Contracting for collection services.

   (a) Subject to the provisions of paragraph (b) of this section, the
   Commission may contract with private collection contractors, as defined
   in 31 U.S.C. 3701(f), to recover delinquent debts. In that regard, the
   Commission:

   (1) Retains the authority to resolve disputes, compromise debts,
   suspend or terminate collection activity, and refer debts for
   litigation;

   (2) Restricts the private collection contractor from offering, as an
   incentive for payment, the opportunity to pay the debt less the private
   collection contractor's fee unless the Commission has granted such
   authority prior to the offer;

   (3) Specifically requires, as a term of its contract with the private
   collection contractor, that the private collection contractor is
   subject to the Privacy Act of 1974 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, including but not limited to
   the Fair Debt Collection Practices Act, 15 U.S.C. 1692; and

   (4) The private collection contractor is required to account for all
   amounts collected.

   (b) Although the Commission will use government-wide debt collection
   contracts to obtain debt collection services provided by private
   collection contractors, the Commission may refer debts to private
   collection contractors pursuant to a contract between the Commission
   and the private collection contractor in those situations where the
   Commission is not required to transfer debt to the Secretary of the
   Treasury for debt collection.

   (c) Agencies may fund private collection contractor in accordance with
   31 U.S.C. 3718(d), or as otherwise permitted by law.

   (d) The Commission may enter into contracts for locating and recovering
   assets of the United States, such as unclaimed assets, but it will
   first establish procedures that are acceptable to Treasury before
   entering into contracts to recover assets of the United States held by
   a state government or a financial institution.

   (e) The Commission may enter into contracts for debtor asset and income
   search reports. In accordance with 31 U.S.C. 3718(d), such contracts
   may provide that the fee a contractor charges the Commission for such
   services may be payable from the amounts recovered, unless otherwise
   prohibited by statute. In that regard, fees for those services will be
   added to the amount collected and are part of the administrative
   collection costs passed on to the debtor. See § 1.1940.