SECTION 392.321. Causes and Conditions of Debarment

(a) DARS or HHSC may remove contractual rights from an individual, a corporation, a partnership, or a division of a contractor or legal entity for causes including the following:

(1) being found guilty, pleading guilty, pleading nolo contendere, or receiving a deferred adjudication in a criminal court relating to:

(A) obtaining, attempting to obtain, or performing a public or private contractor subcontract;

(B) engaging in embezzlement, theft, forgery, bribery, falsification or destruction of records, fraud, receipt of stolen property, or any other offense indicating moral turpitude or a lack of business integrity or honesty;

(C) being involved with dangerous drugs, controlled substances, or other drug-related offense;

(D) violating federal antitrust statutes;

(E) committing an offense involving physical or sexual abuse or neglect;

(2) being debarred from contracting by any unit of the federal government or any unit of a state government;

(3) violating DARS or HHSC contract provisions including failing to perform according to the terms, conditions, and specifications or within the time limit(s) specified in a DARS or HHSC contract, including the following:

(A) failing to abide by applicable federal and state statutes, such as those regarding persons with disabilities and those regarding civil rights;

(B) having a record of failure to perform or of unsatisfactory performance according to the terms of one or more contracts or subcontracts, if that failure or unsatisfactory performance has occurred within five years preceding the determination to debar. This subparagraph applies only for actions occurring after the effective date of these rules. Failure to perform and unsatisfactory performance includes the following:

(i) failing to correct contract performance deficiencies after receiving written notice about them from DARS, HHSC, or their authorized agents;

(ii) failing to repay or make and follow through with arrangements satisfactory to DARS or HHSC to repay identified overpayments or other erroneous payments, or assessed liquidated damages or penalties;

(iii) failing to meet standards that are required for licensure or certification, or that are required by state or federal law, DARS or HHSC rules or standards incorporated in contracts concerning DARS contracts;

(iv) failing to execute contract amendments required by DARS or HHSC;

(v) billing for services or merchandise not provided to the consumer;

(vi) submitting cost reports containing costs not associated with or not covered by the contract or DARS rules and instructions. Intent to increase individual or statewide rates or fees by submitting unallowable costs must be shown for a single cost report, but intent may be inferred when a pattern of submitting cost reports with unallowable costs is shown;

(vii) submitting a false report or misrepresentation which, if used, may increase individual or statewide rates or fees;

(viii) charging consumer or patient fees contrary to DARS or HHSC rules or policy;

(ix) failing to notify and reimburse DARS or its agents for services DARS paid for when the contractor received reimbursement from a liable third party;

(x) failing to disclose or make available, upon demand, to DARS or its representatives (including appropriate federal and state agencies) records the contractor is required to maintain;

(xi) failing to provide and maintain services within standards required by statute, regulation, or contract; or

(xii) violating the Human Resources Code provisions applicable to the contract or any rule or regulation issued under the Code;

(4) submitting an offer, bid, proposal, or application that contains a false statement or misrepresentation or omits pertinent facts or documents that are material to the procurement;

(5) engaging in abusive or neglectful practice that results in or could result in death or injury to the consumer served by the contractor; or

(6) knowingly and willfully using a debarred person or legal entity as an employee, independent contractor, or agent to perform a contract with DARS or HHSC.

(b) In accordance with terms specified by DARS or HHSC, individuals, parts of entities, and entities that have been debarred may not:

(1) receive a contract;

(2) be allowed to retain a contract that has been awarded before debarment;

(3) bid or otherwise make offers to receive a contract or subcontract;

(4) participate in DARS programs that do not require the contractor to sign a contract or agreement;

(5) either personally or through a clinic, group, corporation, or other association, bill to or receive payment from DARS for any services or supplies provided by the debarred entity on or after the effective date of the debarment. Additionally, DARS will not pay for any services ordered, prescribed, or delivered by the debarred entity for DARS recipients after the date of debarment. No costs associated with a debarred entity, including the salary, fringe, overhead, payments to, or any other costs associated with an employee, owner, officer, director, board member, independent contractor, manager, or agent who was debarred may be included in a DARS cost report or any other document that will be used to determine an individual payment rate, a statewide payment rate, or a fee; or

(6) provide goods or services to DARS consumers either directly or indirectly while working for a DARS contractor.

(c) Debarment may be applied against an individual, a corporation, a partnership, a division of a contractor, or an entire legal entity, or a specified part of a legal entity.

(d) Even a single occurrence of a violation may result in debarment or suspension if it is severe. Other adverse actions may be taken if the violation is isolated or less severe.

Source Note: The provisions of this §392.321 adopted to be effective June 17, 2015, 40 TexReg 3638