1. (a) Purpose. In addition to the procedures for debarment of certain contractors from bidding on and/or contracting for highway improvement contracts set forth in §9.6 of this title (relating to Procedure for Debarment of a Contractor), or from participating as a subcontractor under any such contract, the commission may consider suspending a contractor from bidding on and/or contracting for highway improvement contracts or participating as a subcontractor under any such contract under the circumstances and procedures outlined as follows.

2. (b) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

   1. (1) Affiliates--Two business entities are affiliates if they are so closely connected or associated that one of them, either directly or indirectly, controls or has the power to control both of them, or if they have been so closely allied through an established course of dealings, including but not limited to, the lending of financial assistance, engaging in joint ventures, etc., as to create a public perception that the two firms are a single entity.
   2. (2) Bidding crime--Any act prohibited by state or federal law, committed in any jurisdiction, and involving fraud, conspiracy, collusion, perjury, or material misrepresentation with respect to bidding on any public contract.
   3. (3) Commission--The three-member body appointed by the Governor of Texas to compose the State Highway and Public Transportation Commission.
   4. (4) Contractor--An individual, partnership, corporation, or other business entity which is eligible through prequalification to bid on any contract let by the department or which functions or seeks to function as a subcontractor under any such contract, or as a supplier of materials or equipment to be used in the construction or maintenance of a part of the state highway system.
   5. (5) Department--The State Department of Highways and Public Transportation.
   6. (6) State antitrust case--A legal proceeding instituted by the Attorney General of Texas on behalf of the State of Texas against one or more defendants alleging one or more violations of the state or federal antitrust laws, Texas Business and Commercial Code Annotated, §15.01 et seq. (1968 and Supplement 1982) and 15 United States Code §1 et seq. (1976).
   7. (7) Subcontractor--An individual, partnership, corporation, or other business entity to which the prime contractor sublets or proposes to sublet any portion of a highway improvement contract.
   8. (8) Suspend, suspension--To disqualify (the disqualification of) a contractor from bidding on and/or contracting for contracts with the state that are the responsibility of the department or from participating as a subcontractor, under any such contract, or as a supplier of materials or equipment to be used in the construction or maintenance of a part of the state highway system.

3. (c) Suspension.

   1. (1) A contractor and/or its affiliates may be suspended by the commission from bidding on and/or contracting for highway improvement contracts let by the department, from participating as a subcontractor under any such contract and/or from supplying materials or equipment to be used in the construction or maintenance of a part of the state highway system for any of the following reasons:

      1. (A) the contractor's conviction of a bidding crime or any plea of guilty or nolo contendere by the contractor to a charge of a bidding crime;
      2. (B) the contractor's being named a defendant in a state antitrust case;
      3. (C) conviction of the contractor of any offense, including but not limited to, the bribery of or the payment of kickbacks or secret rebates to officials, employees, or agents of any state, which indicates a lack of moral or ethical integrity and which reasonably relates to or reflects upon the business practices of the contractor.
      4. (D) disqualification of the contractor by any state and/or by an agency of the federal government for substantially any of the reasons listed in this paragraph or in §9.8 of this title (relating to Supplemental Procedures for Suspension or Debarment of a Contractor).
   2. (2) Suspension shall remain in effect until cancellation of the suspension, until the conclusion of the state antitrust case by the filing of a judgment, or until imposition of debarment, pursuant to §9.6 of this title (relating to Procedure for Debarment of a Contractor).

4. (d) Hearing regarding suspension.

   1. (1) It is the policy of the commission that a contractor be afforded the opportunity for a hearing regarding his suspension within 30 days of the date of suspension.
   2. (2) When a contractor is suspended, the department shall notify the contractor by registered mail within five days that he has been suspended. Said notice shall contain the general reasons supporting the suspension and shall state that the contractor is entitled to a hearing within 30 days of the date of suspension if so requested.
   3. (3) In the event a hearing is requested, and subject to an agreement between the commission and a contractor who has been suspended concerning some alternative procedure, the commission shall follow §§1.21-1.63 of this title (relating to Contested Case Procedure), in making its decision whether to continue the suspension of a contractor.
5. (e) Reinstatement. At the discretion of the commission a suspension may be lifted, modified, or temporarily abated at any time, if it is in the public interest to do so.

6. (f) Factors considered in suspension decisions. Any mitigating circumstances may be considered by the commission in making its decision whether to impose or continue the suspension of a contractor. Such circumstances may include, but are not limited to:

   1. (1) the degree of the contractor's culpability;
   2. (2) whether under the facts and circumstances of the contractor's case a lengthy suspension is necessary to protect the interests of the state;
   3. (3) any restitution paid by the suspended contractor for any perceived overcharges or other damages suffered by any unit of government as a result of the contractor's bidding crime;
   4. (4) cooperation by the suspended contractor with the state, the United States, or any other sovereign body in the investigation of bidding crimes, including the contractor's providing a full and complete account of his or its particular involvement therein; and
   5. (5) the contractor's disassociation from individuals and firms that have been involved in a bidding crime.

Source Note:The provisions of this §9.7 adopted to be effective August 19, 1982, 7 TexReg 2894; amended to be effective June 1, 1987, 12 TexReg 1608; amended to be effective July 21, 1988, 13 TexReg 3412.