Notice of Development of Rulemaking

DEPARTMENT OF CHILDREN AND FAMILY SERVICES
Mental Health Program
RULE NO.: RULE TITLE:
65E-14.012: Contract Closeout, Suspension, and Termination
PURPOSE AND EFFECT: The purpose of this rule development is to repeal unnecessary language concerning contract closeout and contract termination from the community substance abuse and mental health services financial rules that conflicts with the Department’s standard contract.
SUBJECT AREA TO BE ADDRESSED: Proposed changes to the community substance abuse and mental health services financial rules.
RULEMAKING AUTHORITY: 394.74, 397.03 FS.
LAW IMPLEMENTED: 394.74, 397.03 FS.
IF REQUESTED IN WRITING AND NOT DEEMED UNNECESSARY BY THE AGENCY HEAD, A RULE DEVELOPMENT WORKSHOP WILL BE NOTICED IN THE NEXT AVAILABLE FLORIDA ADMINISTRATIVE WEEKLY.
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE DEVELOPMENT AND A COPY OF THE PRELIMINARY DRAFT, IF AVAILABLE, IS: Frank Dichio Substance Abuse and Mental Health Program Office, 1317 Winewood Boulevard, Building 6, Room 231, Tallahassee, FL 32399-0700, frank_dichio@dcf.state.fl.us, (850)717-4345

THE PRELIMINARY TEXT OF THE PROPOSED RULE DEVELOPMENT IS:

65E-14.012 Contract Closeout, Suspension, and Termination.

(1) Closeout.

(a) Each contract shall be closed out as promptly as is feasible after expiration or termination.

(b) In closing out department contracts, the following shall be observed:

1. Upon request, the department shall pay the contractor within 120 days for any allowable reimbursable costs not covered by previous payments up to the limits of the amounts specified in the contract.

2. The contractor shall, within 120 days, refund any unearned state funds advanced to the contractor.

3. The contractor shall submit, within 120 days of the date of expiration, all financial, performance, and other reports required by the terms of the contract. The department may extend the due date for any report upon receiving a justified request from the contractor and may waive any report which is not needed.

4. If a contract is closed out without audit, the department retains the right up to five years to disallow and recover an appropriate amount, after fully considering any recommended disallowances resulting from an audit which may be conducted later.

5. The closeout of a contract does not affect the contractor’s responsibilities with respect to property under Rule 65E-14.010, F.A.C., or with respect to any program income for which the contractor is still accountable.

(c) Amounts payable to the State. For each contract, the following sum shall constitute a debt or debts owed by the contractor to the State, and shall be recovered from the contractor or its successor or assignees by setoff or other action as provided by law: any contracted funds paid to the contractor by the State in excess of the amount to which the contractor is determined to be entitled under the terms of the contract.

(d) Violation of terms. When a contractor has materially failed to comply with the terms of a contract, the department may suspend the contract in accordance with subsection (2), below, terminate the contract for cause, as provided in subsection (3), below, or take such remedies as may be legally available and appropriate in the circumstances.

(1)(2) Suspension.

(a) When a contractor has materially failed to comply with the terms of a contract, the department may, upon written notice to the contractor, suspend the contract in whole or in part. The notice of suspension will state the reasons for the suspension, any corrective action required of the contractor, and the effective date. The suspension may be made effective at once if a delayed effective date would be unreasonable considering the department’s responsibilities to protect the State’s interest. Suspensions shall remain in effect until the contractor has taken corrective action satisfactory to the department or given evidence satisfactory to the department that such corrective action will be taken, or until the department terminates the contract.

(b) New obligations incurred by the contractor during the suspension period will not be allowed unless the department expressly authorizes them in the notice of suspension, or an amendment to it. Necessary and otherwise allowable costs which the contractor could not reasonably avoid during the suspension period will be allowed if they result from obligations properly incurred by the contractor before the effective date of the suspension and not in anticipation of suspension or termination. At the discretion of the department, third-party in-kind contributions applicable to the suspension period may be allowed in satisfaction of matching requirements.

(c) Appropriate adjustment to payments under the suspended contract will be made either by withholding subsequent payments or by not allowing the contractor credit for disbursements made in payment of unauthorized obligations incurred during the suspension period.

(2)(3) Termination. Any contract may be terminated, with or without cause, in accordance with the terms of the contract.

(a) Termination for cause. The department may terminate any contract in whole, or in part, at any time before the date of expiration, whenever it determines that the contractor has materially failed to comply with the terms of the contract. The department shall promptly notify the contractor in writing of the determination and the reasons for the termination, together with the effective date.

(b) Termination on other grounds. Except as provided in paragraph (3)(a) of this rule, contracts may be terminated in whole, or in part, only as follows:

1. By the department with the consent of the contractor, in which case the two parties shall agree upon the termination conditions, including the effective date and in the case of partial termination, the portion to be terminated, or

2. By the contractor, upon written notification to the department, setting forth the reasons for such termination, the effective date, and, in the case of partial termination, the portion to be terminated. However, if, in the case of a partial termination, the department determines that the remaining portion of the contract will not accomplish the purposes for which the contract was made, the department may terminate the contract in its entirety under either paragraph (3)(a) or (3)(b), above.

(c) Termination settlements. When a contract is terminated, the contractor shall not incur new obligations for the terminated portion after the effective date, and shall be responsible for all outstanding obligations after the effective date of the termination. The department shall not allow credit to the contractor for the state’s share of any obligations incurred by the contractor after termination.

Rulemaking Specific Authority 394.74, 397.03 FS. Law Implemented 394.74, 397.03 FS. History–New 2-23-83, Amended 2-25-85, Formerly 10E-14.12, 10E-14.012, Amended________.