SECTION 7.62. Remedies and Sanctions for All Contracts Except Construction Contracts

(a) TDMHMR may impose remedies and sanctions for a contractor's default. Default by a contractor includes:

(1) submitting falsified documents or fraudulent invoicing or making false representations or certifications relating to the contract;

(2) endangering the life, health, welfare, or safety of consumers served under the contract;

(3) failing to perform or comply with any provision, term, or condition of the contract, including:

(A) failing to perform according to the terms and conditions or within the time limit(s) specified in the contract;

(B) failing to comply with applicable federal and state statutes and TDMHMR rules;

(C) failing to notify and reimburse TDMHMR for services TDMHMR paid for when the contractor received reimbursement from a liable third party;

(D) failing to disclose or make available, upon demand, to TDMHMR or its representatives any records the contractor is required to maintain;

(E) failing to correct contract performance deficiencies after receiving written notice about them from TDMHMR; and

(F) failing to repay or make and follow through with arrangements satisfactory to TDMHMR to repay identified overpayment or other erroneous payments.

(b) Remedies may include:

(1) requesting the contractor to respond in writing to identified problems;

(2) requiring the contractor to submit to extensive monitoring by TDMHMR;

(3) requiring the contractor to obtain training or technical assistance; and

(4) requiring the contractor to submit financial and/or programmatic reports.

(c) Sanctions may include:

(1) terminating the contract;

(2) withholding contract payments;

(3) reducing the total allowable payment or rate(s) of payment;

(4) reducing scope of contracted services or contract term;

(5) assessing damages or financial penalties as allowed by law; and

(6) requiring the contractor to correct performance to comply with contract at no additional cost to TDMHMR.

Source Note: The provisions of this §7.62 adopted to be effective July 1, 2001, 26 TexReg 4719; transferred effective September 1, 2004, as published in the Texas Register September 10, 2004, 29 TexReg 8841