Current through Register Vol. 49, No. 9, September, 2024
1088.0.0
DHHS PARTICIPANT EXCLUSION
RULE
1088.1.1 DHHS shall
conduct business only with responsible participants. Participants will be
excluded from participation in DHHS programs not as penalty, but rather to
protect public funds, the integrity of publicly funded programs, and public
confidence in those programs.
1088.1.2 Participant exclusion is a serious
action that shall be used only in the State's best interests and for the
protection of the public and DHHS. DHHS shall impose exclusion only in
accordance with this rule.
1088.2.0
Substantive Rules
1088.2.1 Definitions:
A.
Administrative
Adjudication - an adjudication conforming to the Administrative
Procedure Act, codified as Ark. Code Ann. §
25-15-201
et seq.
Administrative adjudications must be limited to the extent necessary to avoid
compromising any ongoing criminal investigation.
B.
Appropriation -
the authority granted by the Arkansas General Assembly to expend public funds
for specified purposes.
C.
Automatic Exclusion -
exclusion imposed following and based upon a final
adjudication of one or more acts or omissions described in 1088.2.3.1 below.
Participants automatically excluded cannot have an administrative adjudication
of the facts or law determined by the final adjudication.
D.
Civil Judgment -
the disposition of a civil action by any court of competent jurisdiction,
whether entered by verdict, decision, settlement,
stipulation, or otherwise creating a civil liability for a wrongful
act.
E.
Collateral
Exclusion - exclusion from one program based upon a previous final
exclusion from another program as provided in 1088.2.3.4 below.
F.
Common Ownership
- when an entity, entities, an individual or individuals possess 5% or more
ownership or equity in the participant.
G.
Control - where
an individual or an organization has the power, directly or indirectly,
significantly to influence or direct the actions or policies of a
participant.
H.
DHHS - the Arkansas Department of Health and Human
Services, including all divisions, offices, and units thereof.
I.
Director - the
DHHS Director or the Director's designee.
J.
Due Process - a
full and fair opportunity to be heard, including the right to call and cross
examine witnesses, as part of a civil, criminal, or administrative
adjudication.
K.
Final
Determination - Unless provided otherwise in federal law or
regulation, a final determination exists when, with respect to a determination
upon which the exclusion is based, the deadline to appeal that determination
has passed or all appeals have been exhausted.
L.
Immediate Family
Member - spouse; natural or adoptive parent, child, or sibling;
step-parent, child, or sibling; father, mother, brother, sister, son or
daughter-in-law; grandparent or grandchild.
M.
Nonconforming Commodities or
Services - goods and services not in accordance with the
obligations under the contract.
N.
Participant - a person or entity that is a party or is
seeking to become a party to a contract, grant or agreement with DHHS to
furnish commodities or services to, on behalf of, or as a grantee or
sub-grantee or recipient of DHHS.
O.
Preponderance of the
Evidence - proof of any nature that, when compared with that
opposing it, leads to the conclusion that the fact in issue is more probably
true than not.
P.
Related Party - an immediate family member or a person
or an entity associated or affiliated with, or which shares common ownership,
control, or common board members, or which has control of or is controlled by
the participant.
Q.
Temporary Exclusion - exclusion pending an
investigation and adjudication (if the participant timely requests
adjudication) imposed upon a finding that there is a reasonable basis to
believe that one or more grounds for exclusion as specified in this rule
exist.
1088.2.2
Application
This rule applies to all contracts, grants, and agreements
between DHHS and participants involving the expenditure of appropriated funds.
The rights, obligations, and remedies created and imposed by this rule are in
addition to any other laws and rules pertaining to contracts and grants.
1088.2.3 Causes for Exclusion
1088.2.3.1 DHHS shall
automatically exclude a participant if the participant is the subject of final
determination that the participant has wrongfully acted or failed to act with
respect to, or has been found guilty, or pled guilty or nolo contendere, to any
crime related to:
A. Obtaining, attempting to
obtain, or performing a public or private contract or subcontract
B. Embezzlement, theft, forgery, bribery,
falsification or destruction of records, any form of fraud, receipt of stolen
property, or any other offense indicating moral turpitude or a lack of business
integrity or honesty
C. Dangerous
drugs, controlled substances, or other drug-related offenses when the offense
is a felony
D. Federal antitrust
statutes
E. The submission of bids
or proposals
F. Any physical or
sexual abuse or neglect when the offense is a felony
1088.2.3.2 DHHS shall exclude each
participant upon learning that within the past year the participant was
debarred, terminated, suspended, or otherwise excluded from being a participant
by any unit of the federal government or any unit of a state government,
provided that the debarment or exclusion was imposed after an opportunity for
due process, and provided that federal law does not expressly prohibit
collateral exclusion under the circumstances.
1088.2.3.3 DHHS shall exclude participants
for any of the following acts or omissions that are of a character regarded by
the Director to be so serious as to justify exclusion:
A. Deliberate failure, without good cause, to
perform in accordance with the requirements or within the time provided in the
contract or grant
B. Failure to
perform or unsatisfactory performance, provided that the failure to perform or
unsatisfactory performance beyond the control of the contractor or grantee
shall not be considered to be a basis for exclusion
C. Failure to post any surety bond, or to
provide similar guarantees acceptable to DHHS required under any contract or
grant
D. Substitution of
commodities or services without prior written approval of DHHS
E. Failure to cure nonconforming commodities
or services within the lesser of a reasonable time, or the time specified in
the contract or in a corrective action plan
F. Refusal to accept a contract or grant
awarded in accordance with the request for proposal or invitation for
bid
G. Making material
misrepresentations or failing to make representations when required or when a
reasonable person would naturally have been expected to affirm or deny the
existence of a material fact
H.
Collusion or collaboration with any bidder, proposer, or applicant in the
submission of any proposal, bid, or grant application for the purpose of
lessening or reducing competition
I. Failure to submit to or to supply an audit
as required by federal or state law or rule
J. Failure or refusal, after request by DHHS,
to supply records related to the contract, proposal, bid, or
application
K. Any act or omission
that causes or materially contributes to placement of a lien upon the assets of
the State
L. Conviction related to
the use of illegal drugs, controlled substances, or other drug-related offenses
when the offense is a misdemeanor
M. Any physical or sexual abuse or neglect
when the offense is a misdemeanor
N. Submitting, without good cause, a bill or
claim for payment exceeding the amount to which the participant is
entitled
O. Failure to make
repayment arrangements acceptable to the Department to repay any funds owed the
Department, or failure to strictly adhere to the terms of any agreed-to
repayment arrangements.
1088.2.3.4 Effect of Exclusion: Exclusion
applies to all participants, related parties, and the heirs and assigns of the
participants and related parties. Excluded participants may not receive
appropriated funds except to the extent such funds are for proper charges
approved before the date of exclusion and provided that any payments are
limited to the amount by which the proper charges exceed the amount of any
indebtedness to DHHS.
1088.2.3.5
DHHS shall maintain a list of excluded participants. Upon being listed as an
excluded participant, the participant cannot continue as a party to any DHHS
contract or grant, and is ineligible to submit proposals, bids, or applications
to DHHS for the term of the exclusion.
1088.2.3.6 Term of Exclusion: The term of the
exclusion shall be set after consideration of the nature and seriousness of the
wrongful act or omission warranting exclusion, the length of time since any
wrongful act or omission warranting exclusion, and the goals and purposes
underlying this rule. The term of exclusion must be stated in the exclusion
determination. Exclusion shall be for not less than one year and at least until
all appropriated funds, costs, and penalties owed to DHHS by the participant
are paid in full and the participant meets all contract or grant requirements
as well as all applicable requirements in federal rules and laws.
1088.3.0
Procedural
Rules
1088.3.1 DHHS must
prove the act or omission upon which the exclusion is based by a preponderance
of the evidence. The participant must prove the elements of any defense by a
preponderance of the evidence.
1088.3.2 Administrative due process shall be
accomplished via existing DHHS processes for appeals by participants.
1088.3.3 If a participant is entitled to an
administrative hearing, the hearing must be held within a reasonable time after
temporary exclusion, and before any exclusion other than a temporary
exclusion.
DEPARTMENT CONTACT
Office of Finance and Administration
Policy and Administrative Program Management
P.O. Box 1437 - Slot W403
Little Rock, Arkansas 72203-1437
Telephone: (501) 682-6476
