(a) The Agency may impose an adverse action when the contractor fails to follow the terms of the contract or fails to comply with Agency rules, policies, and procedures. The Agency may impose adverse actions for reasons including, but not limited to:
  (1) the Agency's determination that one or more customers' health and safety has been or is jeopardized;
  (2) the contractor's failure to submit an acceptable written corrective action plan as requested by the Agency or failure to comply with an accepted corrective action plan;
  (3) the contractor's failure to follow an agreed-upon audit resolution payment plan;
  (4) the contractor's failure to submit an acceptable cost report, if applicable;
  (5) the contractor's failure to comply with the contract requirements;
  (6) the contractor's failure to maintain a current required license or the contractor allowing the expiration of any required license, if applicable;
  (7) the contractor's relocation to a new facility address that does not have the appropriate license, if applicable;
  (8) the contractor's exclusion from contracting with the Agency or any health and human services program;
  (9) debarment or exclusion from a federal program;
  (10) a validated report or reports of abuse, neglect, or exploitation where an owner, employee, or volunteer who has direct access to customers is the perpetrator of, or enables, the abuse, neglect, or exploitation of a customer;
  (11) substantiated claims of fraud against a contractor; and
  (12) any other cause of so serious or compelling a nature that it affects the contractor's ability to perform under the contract or presents an imminent risk of harm to or liability for the Agency.
(b) The Agency may take the following adverse actions:
  (1) Recoup money that the contractor owes as a result of overpayments or other billing irregularities;
  (2) Place a vendor hold on one or all the contractor's contracts, which must be released when the Agency determines that the contractor has resolved the issue or issues causing the hold;
  (3) Deny all or part of a claim;
  (4) Direct the contractor to suspend or terminate a subcontractor's participation in the provision of goods or services;
  (5) Terminate a contract for cause before its expiration date;
  (6) Suspend the contractor's right to conduct business with the Agency;
  (7) Debar the contractor's right to contract or conduct business with the Agency, in any capacity, for a specified period of time; or
  (8) Take any other less severe action or actions that the Agency determines necessary to ensure the contractor's compliance with the underlying contract, after considering the circumstances of a particular case.

Source Note: The provisions of this §858.9 adopted to be effective June 17, 2015, 40 TexReg 3638; duplicated effective September 1, 2016, as published in the Texas Register September 2, 2016, 41 TexReg 6773; amended to be effective July 6, 2020, 45 TexReg 4532