SECTION 392.405. Accountability

(a) DSHS employees and officers may not have a conflict of interest in contracts management. An employee or officer has a conflict of interest when the employee, officer, or a person related within the second degree of consanguinity or affinity to the employee or officer, intends to have or has:

(1) actual employment with a respondent or contractor;

(2) paid consultation with a respondent or contractor;

(3) membership on a respondent's or contractor's board of directors;

(4) ownership of 10% or more of the voting stock of shares of a respondent or contractor;

(5) ownership of 10% or more or $5,000 or more of the fair market value of a respondent or contractor; or

(6) received funds from a respondent or contractor in excess of 10% of the employee's, officer's, or related person's gross income for the previous year.

(b) DSHS employees and officers who participate in contracts management may not:

(1) accept or solicit any gift, favor, service, or benefit from a respondent or contractor that might reasonably tend to influence the officer or employee in the discharge of official duties relating to contract management, or that the officer or employee knows or should know is being offered with the intent to influence the officer's or employee's official duties; or

(2) intentionally or knowingly solicit, accept, or agree to accept any benefit for having exercised official powers or for having performed official duties in favor of another respondent or contractor.

(c) DSHS employees who participate in contracts management shall comply with additional standards of ethical conduct contained in the DSHS manuals and applicable state law.

(d) A respondent and its officers and employees may not have a conflict of interest in the solicitation for which the respondent submits a response. A person has a conflict of interest when that person is related within the second degree of consanguinity or affinity to a DSHS employee or officer participating in the contract management for that contract.

(e) A respondent may not attempt to induce any business entity to submit or not submit a response.

(f) A respondent must arrive at its response independently and without consultation, communication, or agreement for the purposes of restricting competition.

(g) A respondent and its officers and employees may not have a relationship with any person, at the time of submitting the response or during the contract term, that may interfere with fair competition.

(h) A respondent and its officers and employees may not participate in the development of specific criteria for award of the contract, nor participate in the selection of the business entity to be awarded the contract.

(i) When contracting with former and retired employees and officers, DSHS must ensure compliance with applicable state law, including the Texas Government Code, §§572.054, 659.0115, and 2252.901.

(j) Except for the contracts management of construction contracts and performance contracts, all contracts management must be conducted in accordance with the requirements of the DSHS or HHSC Contracts Manual.

(k) All contracts must contain standard terms and conditions as described in the DSHS Contracts Manual unless an exception is granted by HHSC.

(l) DSHS is prohibited from contracting with a business entity that:

(1) is held in abeyance or barred from the award of a federal or state contract;

(2) is not in good standing for state tax, pursuant to the Texas Business Corporation Act, Texas Civil Statutes, Article 2.45;

(3) is not residing or located in Texas unless the business entity has a Texas sales tax permit or certifies that the entity does not sell taxable goods or services within Texas, pursuant to the Texas Government Code, §2155.004;

(4) is on warrant hold status, pursuant to the Texas Government Code, §403.055; or

(5) is ineligible to receive a contract, pursuant to the Texas Family Code, §231.006.

(m) DSHS must ensure that its contractors comply with all contract provisions regardless of whether a contractor subcontracts a portion of the contract.

(n) DSHS may make advance payments to a contractor provided the payments meet a public purpose, ensure adequate consideration, and are accompanied by sufficient controls to ensure accomplishment of the public purpose. With the exception of contracts paid on a capitated basis, at the end of each contract period the contractor must return to DSHS any state or federal funds received from or through DSHS that have not been expended or encumbered within the term of the contract.

(o) DSHS may recoup improper payments when it is verified that a contractor has been overpaid because of improper billing or accounting practices or failure to comply with the contract terms. The determination of impropriety is based on federal, state, and local laws and rules; DSHS procedures; contract provisions; or statistical data on program use compiled from paid claims and other sources of data. DSHS will recoup payments for contracted services not received by DSHS.

(p) DSHS shall ensure quality services are provided to consumers, including during the transition from one contractor to another.

(q) All purchases of goods and services may be made only pursuant to a contract.

Source Note: The provisions of this §392.405 adopted to be effective June 17, 2015, 40 TexReg 3638