1. (a) General. Any bidder or contractor to the State of Arkansas who, except for good cause shown, has engaged in any of the conduct listed in subsection (b) of this section may be suspended or debarred from consideration for award of contracts.

2. (b) Causes for debarment or suspension. The causes for debarment or suspension include, but are not limited to, the following:

   1. (1) Conviction for commission of a criminal offense as an incident to obtaining or attempting to obtain a public or private contract or subcontract, or in the performance of such contract or subcontract;
   2. (2) Conviction under state or federal statutes of embezzlement, theft, forgery, bribery, falsification or destruction of records, receiving stolen property, or any other offense indicating a lack of business integrity or business honesty which currently, seriously, and directly affects responsibility as a state contractor;
   3. (3) Conviction under state or federal antitrust statutes arising out of submission of bids or proposals;

   4. (4) Violation of contract provisions, as set forth below, of a character which is regarded by the State Procurement Director or the head of a procurement agency to be so serious as to justify debarment action:

      1. (A) Deliberate failure without good cause to perform in accordance with the specifications or within the time limit provided in the contract; or
      2. (B) A recent record of failure to perform or of unsatisfactory performance in accordance with the terms of one (1) or more contracts, provided that failure to perform or unsatisfactory performance caused by acts beyond the control of the contractor will not be considered to be a basis for debarment;
   5. (5) Continuous failure to post bid or performance bonds, or to provide an alternate bid or a performance guarantee in the form acceptable to the procurement agency in lieu of a bond, as required by an invitation for bids or a solicitation for proposals;
   6. (6) Substitution of commodities without the prior written approval of the contracting authority;
   7. (7) Failure to replace inferior or defective commodities within a reasonable time after notification by the procurement agency or the agency to which such commodity has been delivered;
   8. (8) Refusal to accept a contract awarded pursuant to the terms and conditions of the contractor’s bid;
   9. (9) Falsifying invoices, or making false representations to any state agency or state official, or untrue statements about any payment under a contract or to procure award of a contract, or to induce a modification in the price or the terms of a contract to the contractor’s advantage;
   10. (10) Collusion or collaboration with another bidder or other bidders in the submission of a bid or bids for the purpose of lessening or reducing competition;
   11. (11) Falsifying information in the submission of an application for listing on a state vendor’s list;

   12. (12)

       1. (A) Repeated failure of a vendor or any of its owners to pay all outstanding tax liabilities to the State of Arkansas.
       2. (B) “Repeated failure” shall include, but not be limited to:

3. (i) The existence of seven (7) or more certificates of indebtedness, liens, or other evidence of tax indebtedness that are in the public record during any biennial period;

   1. (ii) The suspension or revocation of a state excise tax permit or any other state permit for nonpayment of taxes; or

      1. (iii) The existence of three (3) or more writs of garnishment issued for nonpayment of taxes during any biennial period.

      2. (C) This section does not apply to:

         1. (i) Tax debts that are the subject of an administrative or judicial proceeding contesting the validity of such debt until such proceedings are concluded and such tax debts are adjudicated to be valid; or
         2. (ii) Any outstanding individual tax liability of a nonowner employee of a vendor or that of noncontrolling, individual shareholders in a Subchapter C corporation; or

   2. (13) Any other cause the director or head of a procurement agency determines to be so serious and compelling as to affect responsibility as a state contractor, including debarment by any other governmental entity for any cause, or violation of the ethical standards set forth in Arkansas Code § 19-11-708.

      1. (c) Debarement.
   3. (1) Prior to any action for debarment, the Office of State Procurement or agency procurement official must notify the bidder of the opportunity for a hearing at least fourteen (14) days prior to said hearing.
   4. (2) Such notification must state the facts of any allegation or claim.

   5. (3) The director or the head of a procurement agency must consult with the Attorney General or his or her designee prior to debarring a person for cause from consideration for award of contracts.

      1. (d) Debarment hearing.
   6. (1) The director or head of a procurement agency shall form a committee composed of three (3) qualified individuals from government and private industry to hear the debarment proceedings.
   7. (2) The Attorney General or his or her designee representing the director or the head of a procurement agency will have the right to present evidence and elicit testimony from witnesses and cross-examine opposing witnesses before the committee.

   8. (3)

      1. (A) The contractor may be heard in person or by counsel, may cross-examine witnesses and may offer witnesses, documentary evidence, and/or evidentiary depositions in defense of the debarment charges.
      2. (B) The committee will subpoena witnesses for the contractor upon timely request.
      3. (C) Should the contractor fail to appear, the committee shall proceed to hear the state’s evidence and make its recommendations to the director or head of a procurement agency.
   9. (4) After hearing the evidence, the committee will make recommendations to the director or head of the procurement agency.
   10. (5) The director or head of a procurement agency will receive the recommendation and review the record of the hearing and make a decision regarding the debarment.
4. (e) Decision. The written decision concerning debarment will be sent to the contractor within fourteen (14) days and must state the reasons for the action taken and inform the debarred person involved of his or her rights to judicial review.
5. (f) Other remedies. The procedures in this section do not preclude the taking of other action by the state, based on the same facts, as may be otherwise available, either at law or in equity.
6. (g) Distribution of decisions. All agency procurement officials must send a copy of any determination of debarment to the office and the office must post the results of any debarment on the office website.

Codification Notes: This section was promulgated as R3:19-11-245 of the Procurement Rules prior to codification into the Code of Arkansas Rules.