|(a) All purchases of goods and services must be made pursuant to a contract. (b) Conflicts of interests and standards of conduct for local authority employees and officers. (1) Conflicts of interest. Local authority employees and officers may not have a conflict of interest in contracts management. An employee or officer has a conflict of interest when the employee, officer, a partner of the employee or officer, or a person related within the second degree of consanguinity or affinity to the employee or officer, has or intends to have: (A) employment with a respondent or contractor; (B) paid consultation with a respondent or contractor; (C) membership on a respondent's or contractor's board of directors; (D) ownership of 10% or more of the voting stock of shares of a respondent or contractor; (E) ownership of 10% or more or $5,000 or more of the fair market value of a respondent or contractor; or (F) income from a respondent or contractor in excess of 10% of the employee's, officer's, or related person's gross income for the previous year. (2) Standards of conduct. The local authority must develop and enforce standards of conduct governing its employees' and officers' who participate in contracts management, which prohibits such employees and officers from: (A) accepting or soliciting any gift, favor, service, or benefit from a business entity, respondent, or contractor that might reasonably tend to influence the employee or officer in the discharge of official duties relating to contract management, or that the employee or officer knows or should know is being offered with the intent to influence the employee's or officer's official duties; or (B) intentionally or knowingly soliciting, accepting, or agreeing to accept any benefit for having exercised official powers or for having performed official duties in favor of another business entity, respondent, or contractor. (c) Conflicts of interests and standards of conduct for a respondent and its officers and employees. (1) Conflict of interest. A respondent and its officers and employees responsible for development of a response or performance of a contract for which the respondent is submitting a response may not be related within the second degree of consanguinity or affinity to a local authority employee or officer participating in the contract management for the contract for which the respondent is submitting a response. (2) Standards of conduct. (A) A respondent and its officers and employees may not attempt to induce any business entity to submit or not to submit a response. (B) A respondent and its officers and employees must arrive at its response independently and without consultation, communication, or agreement for the purposes of restricting competition. (C) A respondent and its officers and employees may not have a relationship with any person, at the time of submitting the response or during the contract term, that may interfere with fair competition. (D) A respondent and its officers and employees may not participate in the development of specific criteria for award of the contract, nor participate in the selection of the response to be awarded the contract. (d) The local authority may not contract with a former officer or employee of the local authority if the contract relates to a particular matter (as defined) in which the former officer or employee participated (as defined) during the period of employment, either through personal involvement or because the case or proceeding was a matter within the officer's or employee's official responsibility, unless: (1) the former employee was compensated on the last day of service or employment below the amount prescribed by the General Appropriations Act for salary group 17, Schedule A, or salary group 9, Schedule B, of the position classification salary schedule; or (2) the former officer or employee is employed by a state agency or another local authority. (e) The local authority must ensure that its contractors comply with all contract provisions regardless of whether a contractor subcontracts some or all of the contract. (f) A local authority may make advance payments to a contractor provided the payments meet a public purpose, ensure adequate consideration, and sufficient controls are in place to ensure accomplishment of the public purpose. With the exception of contracts paid on a capitated basis, at the end of each contract term the contractor must return to the local authority any state or federal funds received from or through TDMHMR which have not been encumbered. (g) The local authority is prohibited from contracting with a business entity that is currently: (1) held in abeyance or barred from the award of a federal or state contract; or (2) is not in good standing for state tax, pursuant to the Texas Business Corporation Act, Texas Civil Statutes, Article 2.45. (h) The local authority must ensure each contractor is provided information relating to the local authority's policies and procedures that are relevant to the contractor. (i) The local authority shall ensure quality community services are provided to consumers, including during the transition from one contractor to another. (j) When purchasing goods and services, the local authority shall comply with the Uniform Grant and Contracts Management Standards (UGMS) promulgated by the Governor's Office of Budget and Planning (pursuant to the Texas Government Code, Chapter 783, and 1 TAC, Part 1, Chapter 5, Subchapter A, Division 4), except to the extent that any provision in §412.55(a)(2) of this title (relating to Contract Procurement) conflicts with UGMS, Part III (State Uniform Administrative Requirements for Grants and Cooperative Agreements), Subpart C (Post-Award Requirements; Changes Property, and Subawards), Section __.36(d) (Procurement), then §412.55(a)(2) of this title (relating to Contract Procurement) shall control. In UGMS: (1) the terms "recipient" and "grantee" apply to TDMHMR; (2) the terms "subrecipient" and "subgrantee" apply to the local authority; and (3) the terms "vendor" and "subcontractor" apply to a contractor (as defined in this subchapter), unless the contractor operates as a "subgrantee" as defined under UGMS, Part III (State Uniform Administrative Requirements for Grants and Cooperative Agreements), Subpart A (General), Section __.3 (Definitions).