(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