SECTION 20.585. Debarment

(a) Director actions. Under this subchapter, the director may, in order to protect the interests of the state:

(1) conduct an investigation upon a complaint regarding a contractor's acts and omissions in procurement or performance of that contract where the complaint may constitute cause for debarment;

(2) cancel one or more of the contractor's active or pending contracts upon a complaint regarding the contractor's acts and omissions in procurement or performance of that contract where the complaint may constitute cause for debarment;

(3) assess actual damages and costs incurred due to contractor's failure to perform as specified in the contract;

(4) debar a contractor for a specified period of time; and

(5) take any other action authorized by law.

(b) Any action under subsection (a) of this section shall occur upon notice as required under this subchapter. The director may, in its sole discretion, find that more than one of the actions in subsection (a) of this section is appropriate and necessary to protect the state's interests.

(c) Damages for failure to perform. The director may assess actual damages and costs incurred by the state when a contractor fails to perform as specified under a contract. The damages and costs may be assessed whether or not the contractor received notice of investigation or debarment under this subchapter. The director shall consider a failure to pay assessed damages in determining whether to debar a contractor under this subchapter.

(d) The director may debar a contractor for a period of no more than five years upon a finding that:

(1) continued acceptance of goods or services or contractor performance under the contract may constitute a hazard to health, safety, welfare or property;

(2) the contractor committed fraud in the procurement or performance of the contract, including submission of falsified documents by the contractor or any person under the direction or control of the contractor;

(3) there was financial participation by a person who received compensation from the governmental entity to participate in preparing the specifications or request for proposals on which the contract is based or there was any other violation of state ethics laws;

(4) the contractor has been debarred by another state or by the federal government;

(5) the contractor has been convicted of a crime related to fraud in the procurement or performance of any governmental contract including, but not limited to, a conviction for violation of antitrust, collusion, conspiracy, larceny, theft of services, bribery, coercion laws or any other criminal act based on an intent to defraud any governmental entity in the provision of goods or services; and

(6) the contractor has publicly indicated an unwillingness to honor a bid award.

(e) The director may debar a vendor for a period of no more than five years upon a finding that the contractor's performance was substandard. The comptroller shall consider:

(1) the accumulated scoring measured by the Vendor Performance Tracking System and:

(A) the number and severity of the contractor's performance failures in relation to the volume of goods and services provided;

(B) the effectiveness of remedial measures taken by the contractor; and

(C) the age and relevance of past performance information:

(2) the contractor's breach of contract where the breach results in:

(A) significant economic loss to the state; significant economic loss includes, but is not limited to, costs of delay, procurement from a different vendor, costs of initial procurement, contract administration and any other cost, direct or indirect, arising from or attributable to the breach;

(B) a hazard to health, safety, welfare or property; or

(C) damage to the state's reputation for integrity in procurement or honest, efficient administration.

(f) The director may debar a vendor for a period of no more than five years upon a finding that the contractor's performance has resulted in repeated unfavorable performance reviews under Government Code, §2155.089, or repeated unfavorable classifications received by the vendor under Government Code, §2262.055, after considering the following factors:

(1) the severity of the substandard performance by the vendor;

(2) the impact to the state of the substandard performance;

(3) any recommendations by a contracting state agency that provides an unfavorable performance review; and

(4) whether debarment of the vendor is in the best interest of the state.

(g) The director may bar a vendor from participating in state contracts that are subject to Chapter 2155, including contracts for which purchasing authority is delegated to a state agency, if more than two contracts between the vendor and the state have been terminated by the state for unsatisfactory vendor performance during the preceding three years.

(h) Failure to meet specifications: general. The director shall remove a vendor's name from all bidders lists and prohibit the contractor from responding to solicitations on and receiving any contracts from the state when the contractor's goods or services fail to meet specifications. The period of removal shall be less than one year. The period of time for removal shall be determined by evaluating the factors listed in §20.583 of this title (relating to Protecting the State's Interest: Failure to Meet Specifications).

(i) Failure to meet specifications: repeated complaints. If after the period of removal determined under subsection (h) of this section, the director determines that the same contractor or a successor in interest to the contractor has again responded to a contract with goods or services that do not meet specifications, the director shall remove the contractor's name and the contractor's goods and services from all bidders lists for a period of one year.

(j) Failure to meet specifications: debarment. If after the expiration of the one year removal under subsection (h) of this section, the director determines that the same contractor or a successor in interest to the contractor has again responded to a contract with goods or services that do not meet specifications, the director shall debar the vendor for a period of no more than five years.

Source Note: The provisions of this §20.585 adopted to be effective January 24, 2017, 42 TexReg 243