540.002 Sanctioning an HIV/STD Contractor for Subcontractor Noncompliance

Policy Number  540.002
Effective Date  January 31, 2001
Revision Date  January 31, 2001
Approval Authority  TB/HIV/STD Section Director

1.0 Purpose

This policy establishes the process for imposing sanctions on an organization (Contractor) which contracts with the Texas Department of State Health Services (DSHS) TB/HIV/STD Section (Section) and is found to be out of compliance with contract requirements. The policy also outlines what optional actions may be taken by the Section before imposing a sanction; the reasons for imposing sanctions; how the Section imposes a sanction, and the time frame for imposing a sanction. Finally, the policy explains how the Contractor responds to either a required action or a sanction and the recourse available to a Contractor regarding that action or sanction.

2.0 Background

A contractor with the Section may enter into subcontracts to fulfill the scope of their contract with DSHS unless restricted. Section contractors agree to monitor the performance of Subcontractors, determine if services are being provided in an acceptable manner and take action if it is found that a Subcontractor is not performing properly. The contractor and/or staff from DSHS may evaluate the programs and services provided by a Subcontractor during the course of a contract review. That evaluation may reveal that a Subcontractor is failing to provide the services or programs according to its contract. These findings may warrant the imposition of a sanction.

3.0 Authority

As authorized in the Health and Safety Code, Chapter 85, §85.015, the DSHS provides for the delivery of services to clients through programs operated by the Section. The Section conducts reviews to evaluate the delivery of programs and services in accordance with 25 Texas Administrative Code §98.8. The application of sanctions is guided by HIV/STD Policy No. 540.001 and DSHS policy.

4.0 Definitions as Applied to this Policy

Noncompliance - A finding by a DSHS reviewer or other DSHS staff wherein a Contractor or Subcontractor fails to perform or inadequately performs contract provisions that may result in emergency actions, corrective actions and/or sanction(s).

Sanction - An intervention or adverse action taken by the Section or DSHS against or toward a Contractor due to noncompliance with contract provisions, program performance, or inability/unwillingness to resolve legitimate, substantiated complaints.

Subcontractor - A person or legal entity who enters into a contractual agreement with a Section contractor to fulfill a portion of the Contractor’s scope of work.

5.0 Subcontractor Noncompliance Found by DSHS

In the course of reviewing the operation of a Subcontractor, Section and other DSHS staff may discover irregularities or noncompliance in the administration and/or delivery of programs or services provided by the Subcontractor. In the situation where the Subcontractor noncompliance with contract provisions warrants a sanction, DSHS imposes the sanction on the Contractor following the processes outlined in HIV/STD Policy No. 540.001. It is the responsibility of the Contractor to ensure that Subcontractors are in compliance with the terms of their contract and that findings of noncompliance are resolved to the satisfaction of DSHS. The Contractor must provide the technical support and direction to the Subcontractor to aid in resolving the noncompliance. The Contractor may either impose a sanction on the Subcontractor in accordance with its own sanction policies, or the Contractor may impose the same sanction that was imposed by DSHS.

6.0 Section Notification of a Sanction Imposed by a Contractor

A Contractor who imposes a sanction on a Subcontractor must provide the Section with the following information:

  1. the name of the Subcontractor being sanctioned;

  2. a description of the sanction;

  3. a description of the compliance issue(s);

  4. the time line or deadline for resolution, and

  5. notification when the sanction is lifted.

Contractors are encouraged to use this policy and HIV/STD Policy No. 540.001, “Sanctions Imposed Upon a Contractor for Non-Compliance with Contracts Involving State/Federal Funds” as a model for developing their own sanctions policy. 

7.0 Revision History

Date Action Section
9/1/2017 Changed "TB/HIV/STD Unit" to "TB/HIV/STD Section" to reflect new program designation -
9/22/2014 Converted format (Word to HTML) -
11/13/2002 Converted format (WordPerfect to Word) -