Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Government Waste, Fraud, and Error Reduction Act of
1998’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
Sec. 3. Definition.
TITLE I—GENERAL MANAGEMENT IMPROVEMENTS
Sec. 101. Improving financial management.
Sec. 102. Improving travel management.
TITLE II—IMPROVING FEDERAL DEBT COLLECTION PRACTICES
Sec. 201. Miscellaneous technical corrections to subchapter II of chapter 37 of
title 31, United States Code.
Sec. 202. Barring delinquent Federal debtors from obtaining Federal benefits.
Sec. 203. Collection and compromise of nontax debts and claims.
TITLE III—SALE OF DEBTS OWED TO UNITED STATES
Sec. 301. Authority to sell debts.
Sec. 302. Requirement to sell certain debts.
TITLE IV—TREATMENT OF HIGH VALUE DEBTS
Sec. 401. Annual report on high value debts.
Sec. 402. Review by Inspectors General.
Sec. 403. Requirement to seek seizure and forfeiture of assets securing high
value debt.
TITLE V—FEDERAL PAYMENTS
Sec. 501. Transfer of responsibility to Secretary of the Treasury with respect
to prompt payment.
Sec. 502. Promoting electronic payments.
SEC. 2. PURPOSES.
The purposes of this Act are the following:
(1) To reduce waste, fraud, and error in Fed-
eral benefit programs.
(2) To focus Federal agency management at-
tention on high-risk programs.
(3) To better collect debts owed to the United
States.
(4) To improve Federal payment systems.
(5) To improve reporting on Government oper-
ations.
SEC. 3. DEFINITION.
As used in this Act—
(1) the term ‘‘nontax debt’’ means any debt
other than a debt under the Internal Revenue Code
of 1986 or the Tariff Act of 1930; and
(2) the term ‘‘nontax claim’’ means any claim
other than a claim under the Internal Revenue Code
of 1986 or the Tariff Act of 1930.
TITLE I—GENERAL
MANAGEMENT IMPROVEMENTS
SEC. 101. IMPROVING FINANCIAL MANAGEMENT.
(a) REPEAL.—Section 3515 of title 31, United States
Code, is amended—
(1) in subsection (a)—
(A) by striking ‘‘1997’’ and inserting
‘‘1999’’; and
(B) by inserting ‘‘Congress and’’ after
‘‘submit to’’;
(2) by striking subsection (e); and
(3) by striking subsections (f), (g), and (h).
(b) PRODUCTION OF DOCUMENTS.—
(1) AUTHORITY.—Section 5114(a) of title 31,
United States Code, is amended—
(A) by inserting ‘‘(1)’’ after ‘‘(a)’’; and
(B) by adding at the end the following new
paragraph:
‘‘(2) The Secretary of the Treasury may, if the
Secretary determines that it will not interfere with
engraving and printing needs of the United States—
‘‘(A) produce currency, postage stamps,
and other security documents for foreign gov-
ernments, subject to a determination by the
Secretary of State that such production would
be consistent with the foreign policy of the
United States; and
‘‘(B) produce security documents for
States and their political subdivisions.’’.
(2) REIMBURSEMENT.—Section 5143 of title
31, United States Code, is amended—
(A) in the first sentence, by inserting ‘‘,
foreign government, or individual State or any
political subdivision thereof’’ after ‘‘agency’’;
and
(B) in the last sentence, by inserting ‘‘,
foreign government, or individual State or any
political subdivision thereof’’ after ‘‘agency’’.
(d) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), this section shall take effect on the date
of the enactment of this Act.
(2) SECRETARY’S
WAIVER
AUTHORITY.—Sub-
section (a)(1) of this section shall take effect March
1, 1998.
SEC. 102. IMPROVING TRAVEL MANAGEMENT.
(a) LIMITED EXCLUSION FROM REQUIREMENT RE-
GARDING OCCUPATION OF QUARTERS.—Section 5911(e)
of title 5, United States Code, is amended by adding at
the end the following new sentence: ‘‘The preceding sen-
tence shall not apply with respect to lodging provided
under chapter 57 of this title.’’.
(b) USE
OF
TRAVEL
MANAGEMENT
CENTERS,
AGENTS, AND ELECTRONIC PAYMENT SYSTEMS.—
(1) REQUIREMENT TO ENCOURAGE USE.—The
head of each executive agency shall, with respect to
travel by employees of the agency in the perform-
ance of the employment duties by the employee, re-
quire, to the extent practicable, the use by such em-
ployees of travel management centers, travel agents
authorized for use by such employees, and electronic
reservation and payment systems for the purpose of
improving efficiency and economy regarding travel
by employees of the agency.
(2) PLAN FOR IMPLEMENTATION.—(A) The Ad-
ministrator of General Services shall develop a plan
regarding the implementation of this subsection and
shall, after consultation with the heads of executive
agencies, submit to Congress a report describing
such plan and the means by which such agency
heads plan to ensure that employees use travel man-
agement centers, travel agents, and electronic res-
ervation and payment systems as required by this
subsection.
(B) The Administrator shall submit the plan re-
quired under subparagraph (A) not later than March
31, 1999.
TITLE II—IMPROVING FEDERAL
DEBT COLLECTION PRACTICES
SEC. 201. MISCELLANEOUS TECHNICAL CORRECTIONS TO
SUBCHAPTER II OF CHAPTER 37 OF TITLE 31,
UNITED STATES CODE.
(a) 
CHILD
SUPPORT
ENFORCEMENT.—Section
3716(h)(3) of title 31, United States Code, is amended
to read as follows:
‘‘(3) In applying this subsection with respect to
any debt owed to a State, other than past due sup-
port being enforced by the State, subsection
(c)(3)(A) shall not apply.’’.
(b) CHARGES
BY DEBT COLLECTION CONTRAC-
TORS.—
(1) COLLECTION
BY
SECRETARY
OF
THE
TREASURY.—Section 3711(g) of title 31, United
States Code, is amended by adding at the end the
following:
‘‘(11) The amount received by a person for perform-
ance of collection services under this section shall not be
limited by State law, and reasonable collection costs may
be charged to the debtor notwithstanding any provision
of State law. The preceding sentence shall not apply to
the collection of child support debt by any person.’’.
(2) COLLECTION BY PROGRAM AGENCY.—Sec-
tion 3718 of title 31, United States Code, is amend-
ed by adding at the end the following:
‘‘(h) The amount received by a person for perform-
ance of collection services under this section or section
3711(g) of this title shall not be limited by State law.’’.
(c) DEBT SALES.—Section 3711 of title 31, United
States Code, is amended by striking subsection (i).
(d) GAINSHARING.—Section 3720C(b)(2)(D) of title
31, United States Code, is amended by striking ‘‘delin-
quent loans’’ and inserting ‘‘debts’’.
(e) PROVISIONS RELATING TO PRIVATE COLLECTION
CONTRACTORS.—
(1) COLLECTION
BY
SECRETARY
OF
THE
TREASURY.—Section 3711(g) of title 31, United
States Code, is further amended by adding at the
end the following:
‘‘(12) In attempting to collect under this subsection
through the use of garnishment any debt owed to the
United States, a private collection contractor shall not be
precluded from verifying the debtor’s current employer,
the location of the payroll office of the debtor’s current
employer, the period the debtor has been employed by the
current employer of the debtor, and the compensation re-
ceived by the debtor from the current employer of the
debtor.
‘‘(13)(A) The Secretary of the Treasury shall provide
that any contract with a private collection contractor
under this subsection shall include a provision that the
contractor shall be subject to penalties under the con-
tract—
‘‘(i) if the contractor fails to comply with any
restrictions under applicable law regarding the col-
lection activities of debt collectors; or
‘‘(ii) if the contractor engages in unreasonable
or abusive debt collection practices in connection
with the collection of debt under the contract.
‘‘(B) Notwithstanding any other provision of law, a
private collection contractor under this subsection—
‘‘(i) shall not be subject to any liability or con-
tract penalties in connection with efforts to collect a
debt pursuant to a contract under this subsection by
reason of actions that are required by the contract
or by applicable law or regulations; and
‘‘(ii) shall not be subject to payment of statu-
tory damages or attorney’s fees by reason of any ac-
tion in connection with efforts to collect such debt,
except in a case of bad faith or intentional mis-
conduct by the contractor.
‘‘(14) Performance of a contractor under any con-
tract entered into under this subsection, including without
limitation any contract in effect on the date of enactment
of the Government Waste, Fraud, and Error Reduction
Act of 1998, shall be measured, and allocation of account
placements and bonus compensation shall be determined,
solely through an evaluation methodology that bases not
less than 50 percent of the contractor’s score under such
evaluation on the contractor’s gross collections net of com-
missions (as a percentage of account amounts placed with
the contractor) under the contract. The frequency of valid
borrower complaints shall be considered in the evaluation
criteria.
‘‘(15) In selecting contractors for performance of col-
lection services, the Secretary of the Treasury shall evalu-
ate bids received through a methodology that bases not
less than 50 percent of the bidder’s score in such evalua-
tion on the bidder’s prior performance in terms of net
amounts collected under government collection contracts
of similar size. The frequency of valid borrower complaints
shall be considered in the evaluation criteria.’’.
(2) COLLECTION BY PROGRAM AGENCY.—Sec-
tion 3718 of title 31, United States Code, is further
amended by adding at the end the following:
‘‘(i) In attempting to collect under this subsection
through the use of garnishment any debt owed to the
United States, a private collection contractor shall not be
precluded from verifying the current place of employment
of the debtor, the location of the payroll office of the debt-
or’s current employer, the period the debtor has been em-
ployed by the current employer of the debtor, and the com-
pensation received by the debtor from the current em-
ployer of the debtor.
‘‘(j)(1) The head of an executive, judicial, or legisla-
tive agency that contracts with a private collection con-
tractor to collect a debt owed to the agency, or a guaranty
agency or institution of higher education that contracts
with a private collection contractor to collect a debt owed
under any loan program authorized under title IV of the
Higher Education Act of 1965, shall include a provision
in the contract that the contractor—
‘‘(A) shall be subject to penalties under the con-
tract if the contractor fails to comply with any re-
strictions imposed under applicable law on the collec-
tion activities of debt collectors; and
‘‘(B) shall be subject to penalties under the
contract if the contractor engages in unreasonable or
abusive debt collection practices in connection with
the collection of debt under the contract.
‘‘(2) Notwithstanding any other provision of law—
‘‘(A) a private collection contractor under this
section shall not be subject to any liability or con-
tract penalties in connection with efforts to collect a
debt owed to an executive, judicial, or legislative
agency, or owed under any loan program authorized
under title IV of the Higher Education Act of 1965,
by reason of actions required by the contract, or by
applicable law or regulations; and
‘‘(B) such a contractor shall not be subject to
payment of statutory damages or attorney’s fees by
reason of any action in connection with efforts to
collect such a debt, except in a case of bad faith or
intentional misconduct by the contractor.
‘‘(k) Performance of a contractor under any contract
for the performance of debt collection services entered into
by a Federal agency, including without limitation any con-
tract in effect on the date of enactment of the Government
Waste, Fraud, and Error Reduction Act of 1998, shall be
measured, and allocation of account placements and bonus
compensation shall be determined, solely through an eval-
uation methodology that bases not less than 50 percent
of the contractor’s score under such evaluation on the con-
tractor’s gross collections net of commissions (as a per-
centage of account amounts placed with the contractor)
under the contract. The frequency of valid borrower com-
plaints shall be considered in the evaluation criteria.
‘‘(3) In selecting contractors for performance of col-
lection services, the head of an executive, judicial, or legis-
lative agency shall evaluate bids received through a meth-
odology that bases not less than 50 percent of the bidder’s
score in such evaluation on the bidder’s prior performance
in terms of net amounts collected under government col-
lection contracts of similar size. The frequency of valid
borrower complaints shall be considered in the evaluation
criteria.’’.
(3) CONSTRUCTION.—None of the amendments
made by this subsection shall be construed as alter-
ing or superseding the provisions in section 362 of
title 11, United States Code.
(f) CLERICAL AMENDMENT.—Section 3720A(h) of
title 31, United States Code, is amended—
(1) beginning in paragraph (3), by striking the
close quotation marks and all that follows through
the matter preceding subsection (i); and
(2) by adding at the end the following:
‘‘For purposes of this subsection, the disbursing official
for the Department of the Treasury is the Secretary of
the Treasury or his or her designee.’’.
(g) CORRECTION
OF REFERENCES
TO FEDERAL
AGENCY.—(1) Sections 3716(c)(6) and 3720A(a), (b), (c),
and (e) of title 31, United States Code, are each amended
by striking ‘‘Federal agency’’ each place it appears and
inserting ‘‘executive, judicial, or legislative agency’’.
(2) Section 3716(h)(2)(C), of title 31, United States
Code, is amended by striking ‘‘a Federal agency’’ and in-
serting ‘‘an executive, judicial, or legislative agency’’.
(h) CLARIFICATION OF INAPPLICABILITY OF ACT TO
CERTAIN AGENCIES.—Notwithstanding any other provi-
sion of law, no provision in this Act, the Debt Collection
Improvement Act of 1996 (chapter 10 of title III of Public
Law 104–134; 31 U.S.C. 3701 note), chapter 37 or sub-
chapter II of chapter 33 of title 31, United States Code,
or any amendments made by such Acts or any regulations
issued thereunder, shall apply to activities carried out pur-
suant to a law enacted to protect, operate, and administer
any deposit insurance funds, including the resolution and
liquidation of failed or failing insured depository institu-
tions.
(i) CONTRACTS FOR COLLECTION SERVICES.—Sec-
tion 3718 of title 31, United States Code, is amended—
(1) in the first sentence of subsection (b)(1)(A),
by inserting ‘‘, or any monetary claim, including any
claims for civil fines or penalties, asserted by the At-
torney General’’ before the period;
(2) in the third sentence of subsection
(b)(1)(A)—
(A) by inserting ‘‘or in connection with
other monetary claims’’ after ‘‘collection of
claims of indebtedness’’;
(B) by inserting ‘‘or claim’’ after ‘‘the in-
debtedness’’; and
(C) by inserting ‘‘or other person’’ after
‘‘the debtor’’; and
(3) in subsection (d), by inserting ‘‘or any other
monetary claim of’’ after ‘‘indebtedness owed’’.
SEC. 202. BARRING DELINQUENT FEDERAL DEBTORS FROM
OBTAINING FEDERAL BENEFITS.
(a) IN GENERAL.—Section 3720B of title 31, United
States Code, is amended to read as follows:
‘‘§ 3720B. Barring delinquent Federal debtors from
obtaining Federal benefits
‘‘(a)(1) A person shall not be eligible for the award
or renewal of any Federal benefit described in paragraph
(2) if the person has an outstanding nontax debt that is
in a delinquent status with any executive, judicial, or legis-
lative agency, as determined under standards prescribed
by the Secretary of the Treasury. Such a person may ob-
tain additional Federal benefits described in paragraph (2)
only after such delinquency is resolved in accordance with
those standards.
‘‘(2) The Federal benefits referred to in paragraph
(1) are the following:
‘‘(A) Financial assistance in the form of a loan
(other than a disaster loan) or loan insurance or
guarantee.
‘‘(B) Any Federal permit or license otherwise
required by law.
‘‘(b)(1) The Secretary of the Treasury may exempt
any class of claims from the application of subsection (a)
at the request of an executive, judicial, or legislative agen-
cy.
‘‘(2) The Secretary of the Treasury may waive the
application of subsection (a) with respect to any Federal
permit or license otherwise required by law.
‘‘(c)(1) The head of any executive, judicial, or legisla-
tive agency may waive the application of subsection (a)
to any Federal benefit that is administered by the agency
based on standards promulgated by the Secretary of the
Treasury.
‘‘(2) The head of an executive, judicial, or legislative
agency may delegate the waiver authority under para-
graph (1) to the chief financial officer of the agency.
‘‘(3) The chief financial officer of an agency to whom
waiver authority is delegated under paragraph (2) may re-
delegate that authority only to the deputy chief financial
officer of the agency. The deputy chief financial officer
may not redelegate such authority.
‘‘(d) As used in this section—
‘‘(1) the term ‘nontax debt’ means any debt
other than a debt under the Internal Revenue Code
of 1986 or the Tariff Act of 1930; and
‘‘(2) the term ‘nontax claim’ means any claim
other than a claim under the Internal Revenue Code
of 1986 or the Tariff Act of 1930.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 37 of title 31, United States
Code, is amended by striking the item relating to section
3720B and inserting the following:
‘‘3720B. Barring delinquent Federal debtors from obtaining Federal benefits.’’.
(c) CONSTRUCTION.—The amendment made by this
section shall not be construed as altering or superseding
the provisions in section 525 of title 11, United States
Code.
SEC. 203. COLLECTION AND COMPROMISE OF NONTAX
DEBTS AND CLAIMS.
(a) USE OF PRIVATE COLLECTION CONTRACTORS
AND FEDERAL DEBT COLLECTION CENTERS.—Para-
graph (5) of section 3711(g) of title 31, United States
Code, is amended to read as follows:
‘‘(5)(A) Nontax debts referred or transferred under
this subsection shall be serviced, collected, or com-
promised, or collection action thereon suspended or termi-
nated, in accordance with otherwise applicable statutory
requirements and authorities.
‘‘(B) The head of each executive agency that operates
a debt collection center may enter into an agreement with
the Secretary of the Treasury to carry out the purposes
of this subsection.
‘‘(C) The Secretary of the Treasury shall—
‘‘(i) maintain a schedule of private collection
contractors and debt collection centers operated by
agencies that are eligible for referral of claims under
this subsection;
‘‘(ii) maximize collections of delinquent debts by
referring delinquent debts promptly;
‘‘(iii) maintain competition between private col-
lection contractors;
‘‘(iv) ensure, to the maximum extent prac-
ticable, that a private collection contractor to which
a debt is referred is responsible for any administra-
tive costs associated with the contract under which
the referral is made.
‘‘(D) As used in this paragraph—
‘‘(i) the term ‘nontax debt’ means any debt
other than a debt under the Internal Revenue Code
of 1986 or the Tariff Act of 1930; and
‘‘(ii) the term ‘nontax claim’ means any claim
other than a claim under the Internal Revenue Code
of 1986 or the Tariff Act of 1930.’’.
(b) LIMITATION ON DISCHARGE BEFORE USE OF
PRIVATE COLLECTION CONTRACTOR OR DEBT COLLEC-
TION CENTER.—Paragraph (9) of section 3711(g) of title
31, United States Code, is amended—
(1) by redesignating subparagraphs (A) through
(H) as clauses (i) through (viii);
(2) by inserting ‘‘(A)’’ after ‘‘(9)’’;
(3) in subparagraph (A) (as designated by
paragraph (2) of this subsection) in the matter pre-
ceding clause (i) (as designated by paragraph (1) of
this subsection), by inserting ‘‘and subject to sub-
paragraph (B)’’ after ‘‘as applicable’’; and
(4) by adding at the end the following:
‘‘(B)(i) The head of an executive, judicial, or legisla-
tive agency may not discharge a debt or terminate collec-
tion action on a debt unless the debt has been referred
to a private collection contractor or a debt collection cen-
ter, referred to the Attorney General for litigation, sold