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EXHIBIT 10.23
COMPLIANCE AGREEMENT IN LIEU OF DEBARMENT
This Compliance Agreement in Lieu of Debarment ("Agreement") is made
between Southern Foods Group, Inc., ("Southern Foods") and the Food and
Consumer Service ("FCS") of the United States Department of Agriculture
("USDA").
PREAMBLE
A. Southern Foods is a corporation engaged in the processing,
sale, and distribution of dairy products in Texas, Louisiana, and Arkansas, and
is headquartered in Dallas, Texas. Southern Foods is the successor corporation
to Xxxxxxx-Foremost, Inc., (Xxxxxxx-Foremost). The two companies merged on
April 11, 1994. Southern Foods' business includes the provision of fluid milk
and other dairy products to school systems and other entities in connection
with USDA or other Federally assisted programs ("Government programs").
B. On July 18, 1991, Xxxxxxx-Foremost entered into a Consent
Judgment And Agreed Permanent Injunction resolving bidrigging claims made by
the State of Texas in the Tyler Division of the U.S. District Court for the
Eastern District of Texas. Xxxxxxx-Foremost entered into the Consent Judgment
in resolution of any and all antitrust claims, actions, or causes of action
which the State of Texas may have had or which may later accrue against
Xxxxxxx-Foremost in connection with the sale, distribution and marketing of
dairy products to the State of Texas, its agencies and the Free Public Schools
of Texas prior to July 18, 1991, in violation of section 1 of the Xxxxxxx Act
(15 U.S.C. Section 1). Xxxxxxx-Foremost agreed to pay a civil fine of $575,000,
and compensatory damages of $5,175,000, to be allocated to the Public Free
Schools of Texas.
C. Southern Foods engaged in bidrigging on contracts with school
districts for milk in the State of Texas. On August 16, 1994, Southern Foods
was convicted of bidrigging in the Dallas Division of the U.S. District Court
for the Northern District of Texas. Southern Foods was convicted of conspiring
to rig bids for contracts to supply fluid milk to public schools located in
North, North Central, and East Texas, beginning at least as early as 1975, and
continuing thereafter until at least June 1990, in violation of section 1 of
the Xxxxxxx Act (15 U.S.C. Section 1). Southern Foods was ordered to pay a
criminal fine of $1,900,000, and a special assessment of $600.
D. Southern Foods has pleaded guilty to bidrigging on contracts
with school districts for milk in the State of Louisiana. On May 27, 1994, a
Criminal Information was filed against Southern Foods in the
Lafayette-Opelousas Division of the U.S. District Court for the Western
District of Louisiana. Southern Foods pleaded guilty to conspiring to rig bids
for contracts to supply fluid milk products to public schools located in
western Louisiana in violation of the Section 1 of the Xxxxxxx Act (15 U.S.C.
Section 1). Southern Foods was ordered to pay a criminal fine of $1,000,000,
and a special assessment of $200.
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Compliance Agreement for Southern Foods 2
E. On October 6, 1994, the State of Louisiana, on behalf of
various school districts in Louisiana filed suit against Southern Foods. This
lawsuit was filed under the Louisiana Monopolies Law and seeks damages against
Southern Foods based on the matters referred to above in paragraph D.
F. On January 11, 1993, Mr. Xxxx Xxxxxxx ("Xxxxxxx"), a former
Branch Manager for Oak Farms, Inc., part of Xxxxxxx-Foremost, Inc., was
convicted in the Dallas Division of the U.S. District Court for the Northern
District of Texas of conspiring to rig bids for contracts to supply fluid milk
products to public school districts and certain public and private hospitals
located in North Central Texas. Compton was sentenced to six months
imprisonment and one year of probation and community service. On September 25,
1992, a civil settlement agreement was executed between Compton and the United
States. Compton agreed to pay to the United States $10 in settlement of all
residual Federal civil damages and penalties resulting from Xxxxxxx'x
bidrigging in Texas. On January 22, 1993, Xx. Xxxxxxx X. Xxxxxxx ("Xxxxxxx"),
former Zone Manager for Xxxxxx'x Dairy, part of Xxxxxxx-Foremost, Inc., was
convicted in the Tyler Division of the U.S. District Court for the Eastern
District of Texas of conspiring to rig bids for contracts to supply fluid milk
products to public school districts located in east Texas. Bullard was ordered
to pay a criminal fine of $20,000, and a special assessment of $50, and was
sentenced to two years probation, and community service. On October 26, 1992, a
civil settlement agreement was executed between Bullard and the United States.
Bullard agreed to pay to the United States $10 in settlement of all residual
Federal civil damages and penalties resulting from Xxxxxxx'x bidrigging in
Texas.
G. On June 9, 1989, Xx. Xxxxxx X. Xxxxxxx ("Xxxxxxx") was
convicted of bidrigging in the U.S. District Court for the Middle District of
Florida. Xxxxxxx was convicted of participating in a conspiracy to rig bids to
school boards within Peninsular Florida for the award and performance of
contracts to supply milk to county schools in Florida beginning at least as
early as the early 1970's, and continuing at least through December 1986, in
violation of section 1 of the Xxxxxxx Act (15 U.S.C. Section 1). Xxxxxxx was
sentenced to serve 180 days of imprisonment at a Federal prison camp, and was
ordered to pay a special assessment of $50. Xxxxxxx entered into a civil
settlement of $10 with the Federal Government in settlement of all residual
Federal civil damages and penalties resulting from Xxxxxxx'x bidrigging in
Florida. In December 1990, Xxxxxxx became employed as General Manager of Oak
Farms Dairy, which was a wholly-owned Houston, Texas operation of
Xxxxxxx-Foremost, Inc., and is now part of Southern Foods, as referred to above
in Paragraph A. On July 8, 1994, in accordance with 7 C.F.R. Part 3017, FCS
sent Xxxxxxx a Notice of Proposed Debarment from Federal nonprocurement
programs. The cause for the proposed debarment was the conviction referred to
above. Pursuant to Southern Foods' policy, Xxxxxxx is currently suspended from
his position as a result of FCS' Notice of Proposed Debarment and a final
decision on the proposed debarment is pending.
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Compliance Agreement for Southern Foods 3
H. Southern Foods cooperated fully with Federal and State
authorities and disclosed the identities and names of all its employees, or
those of its predecessor companies, known to have engaged in improper
anti-competitive activities. These were Compton and Xxxxxxx, both of whom also
cooperated with authorities.
I. On June 9, 1994, in accordance with 7 C.F.R. Part 3017, FCS
sent Xxxxxxx-Foremost, Inc., a Notice of Proposed Debarment from Federal
nonprocurement programs. The cause for the proposed debarment was the consent
judgment and agreed permanent injunction referred to above in Paragraph X.
X. On June 9, 1994, in accordance with 7 C.F.R. Part 3017, FCS
sent Southern Foods a Notice of Proposed Debarment from Federal nonprocurement
programs. The cause for the proposed debarment was the consent judgment and
agreed permanent injunction referred to above in Paragraph B and its imputation
to Southern Foods through its affiliation with Xxxxxxx-Foremost, Inc. referred
to above in Paragraph A.
K. On July 7, 1994, representatives of Southern Foods and counsel for
Southern Foods presented information and oral argument in opposition to the
proposed debarment to representatives of FCS, counsel for FCS, and the hearing
official.
L. Southern Foods has acknowledged the improper activities of its
employees, and those of its predecessor companies, has paid civil penalties and
damages to the State of Texas, and has instituted corrective action.
M. Southern Foods has expressed an interest in demonstrating to
FCS that, notwithstanding the misconduct underlying the consent judgment and
agreed permanent injunction, Southern Foods is presently responsible and will
deal fairly and honestly with respect to the Government programs for which they
submit bids to furnish dairy and/or other products.
N. Southern Foods represents that, to the best of its knowledge,
it is not currently the subject of any investigation or judicial proceeding by
any Federal, State, or local authority for suspected irregularities involving
Southern Foods' operations or activities, other than the judicial proceeding
referred to above in Paragraph E.
O. Southern Foods represents that it does not have any business
relationship with individuals who have been convicted of the misconduct
referenced in Paragraphs B and C except for those post-employment benefit
relationships required by law, such as health and pension benefits required
under the Employee Retirement Income Security Act of 1974 ("ERISA"). Business
relationships, including employer-employee, creditor-debtor, and
principal-business entity (shareholder-corporation and other ownership
relationships are not included unless the shareholder/owner is also a principal
as defined in 7 C.F.R. Section 3017.105(p)).
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Compliance Agreement for Southern Foods 4
P. Southern Foods represents that it has established a Compliance
Program which includes the following:
a) A written Code of Business Conduct and Ethics
("Code") which has been distributed to all managers and supervisors and all
sales and administrative employees and consultants;
b) A Code of Business Conduct and Ethics, and Ethics
Compliance Program, including Antitrust Guidelines, which has been distributed
to all managers, and supervisors, and other employees, and consultants involved
in contract bidding or other similar duty areas and designed to assist
employees in recognizing conduct which may violate the antitrust laws;
c) Certification by respective employees that they have
received copies of the Code of Business Conduct and Ethics, and the Code of
Business Conduct and Ethics Compliance Program, and that they agree to comply
with the code or be subject to disciplinary measures;
d) Annual ethics and compliance training seminars for
all managers, and supervisors, and other employees and consultants involved in
contract bidding or other similar duty areas;
e) A Business Conduct and Ethics Compliance Committee
("Compliance Committee"), consisting of the company CEO, president,
secretary/treasurer, and the Business Conduct and Ethics Compliance Officer
("Compliance Officer"), which is responsible for maintaining the compliance
program and reporting annually to the president of the company;
f) A Compliance Officer, who is responsible for
monitoring and investigating questions and issues raised via a toll-free (800)
confidential "hotline" which employees are directed to call when and if any
suspected wrongdoing or other suspected Code violation occurs. The number for
the hotline is included in the Code and is posted on notices in each plant
location;
g) Compliance coordinators at each plant facility, who
have been trained to answer questions regarding the Code and to serve as a
confidential point of contact for employees to report suspected violations of
the Code and who consult outside counsel where appropriate;
h) Availability of outside counsel by phone to all
company employees involved in bidding or pricing to advise on any questions or
concerns which may arise regarding proper bidding priorities or other
competitive relationship issues;
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Compliance Agreement for Southern Foods 5
i) A bid analysis of all contract bids which covers bid
amount by dairy and item. Conducted by outside counsel, the bid analysis is
designed to spot questionable bids or unusual bid trends and may result in
counsel contacting the person responsible for the bid to obtain any needed
information regarding bids.
Q. The FCS has determined that the consent judgment and agreed
permanent injunction referred to in Paragraph B are causes for debarment;
however, FCS has determined that, at this time, debarment is not in the public
interest, and is not necessary for the Federal Government's protection as the
terms and conditions of this Agreement provide adequate assurance that Southern
Foods' future business dealings with respect to Government programs, if any,
will be conducted with the highest degree of responsibility, honesty, and
integrity.
R. FCS and Southern Foods ("parties") therefore agree to the
following terms and conditions:
ARTICLES
1. With the exception of the record retention provisions of
Article 3, and the reporting provisions of Articles 8, 12, and 18, the period
of this Agreement and the obligations of the parties thereunder shall be for
three (3) years from the date of execution by FCS.
2. Failure to comply with the terms of the State consent judgment
and agreed permanent injunction referenced in Paragraph B and the Federal
judgment referred to in Paragraph C the Preamble to this Agreement shall
constitute a material breach of this Agreement.
3. Southern Foods shall maintain complete records including
original documents and, upon request, will provide or otherwise furnish
information and documents to FCS, to assure FCS that Southern Foods is
complying with this Agreement. Additionally, Southern Foods shall maintain
records sufficient to provide complete information on all transactions related
to Government programs. Such information shall include, but is not limited to,
cost analyses, bid computations, bid submissions, contracts, purchase and
shipment documents and receipts, and other documents that are in any way
related to the determination and submission of bids and the fulfillment of
contracts by Southern Foods with respect to any Government program. The records
required by this Article shall be maintained for not less than four (4) years
after the end of the calendar year to which they apply with the exception that
documents related to school dairy product bids and contracts shall be
maintained for not less than four (4) years after the end of the school year to
which they apply.
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Compliance Agreement for Southern Foods 6
4. In addition to any other right FCS may have by statute or
regulation, Southern Foods shall provide FCS or its duly authorized
representative the right to examine Southern Foods' books, records, and other
company documents and supporting materials, and to interview, with their
consent, employees of Southern Foods for the purpose of evaluating: (a)
Southern Foods' compliance with the terms of this Agreement; (b) Southern
Foods' business conduct in its dealings with all of its customers; (c) Southern
Foods' compliance with accepted business practices; and, (d) Southern Foods'
compliance with the requirements of contracts involving Government programs.
These materials shall be made available to FCS at all reasonable times for
inspection, audit, or reproduction.
5. Southern Foods shall maintain as part of this Agreement a
Compliance Program composed of the Compliance Program voluntarily adopted prior
to the date of this Agreement and discussed in Paragraph P of the Preamble and
such other additional measures as may be necessary to comply with the
requirements of this Agreement. The Compliance Program shall involve all
company employees, officers, and consultants so as to insure that Southern
Foods and each of its employees, officers, and consultants maintains the
business honesty and integrity required of a Government program contractor and
that Southern Foods' performance of each Government program contract is in
strict compliance with all applicable laws, regulations and the terms of the
contract. The Compliance Program shall include, at a minimum, the following
components:
a) The written Code of Ethics and Standards of Conduct
("Code"). If not already included in the Code provided to all employees,
Southern Foods' Code shall include (i) a statement of Southern Foods'
commitment to comply with all applicable statutes and regulations in the
conduct of its business; (ii) guidelines for Southern Foods' employees to follow
in their business dealings on behalf of Southern Foods; (iii) a notice that,
consistent with Articles 6 and 14 of this Agreement, Southern Foods shall
immediately take disciplinary action, including termination, against any
employee, officer, or consultant of Southern Foods whose conduct violates
applicable laws, regulations, contract terms, Southern Foods' Compliance
Program, this Agreement, or basic tenets of business honesty and integrity;
(iv) a requirement that employees report to the compliance coordinator or the
Compliance Officer any misconduct of which they have knowledge whether
committed by an employee of Southern Foods or any other person, whether the
misconduct relates to violations of applicable law, regulations, contracts
terms, Southern Foods' Compliance Program, this Agreement, or basic tenets of
business honesty and integrity; (v) a notice that employees may report
misconduct anonymously; and (vi) a notice that employees may report misconduct
directly to appropriate Government officials in lieu of a compliance
coordinator or the Compliance Officer. Prior to any modification of the Code,
Southern Foods shall obtain FCS approval.
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Compliance Agreement for Southern Foods 7
b) The distribution of the Code, through Southern Foods' Employee
Handbook or otherwise, to each employee of Southern Foods. After reading the
Code, each current employee, officer, and consultant shall certify in writing
on an annual basis, in records to be maintained by Southern Foods and open to
inspection by FCS, that the employee, officer, or consultant has read and
understood the import of the document. Southern Foods' Compliance Committee
shall verify compliance with this requirement annually and shall report its
action to Southern Foods' Board of Directors.
c) The posting of Notices, in prominent places accessible to each
of Southern Foods' employees, detailing the company's commitment to complying
with all applicable laws, regulations, Southern Foods' Compliance Program, this
Agreement, and basic tenets of business honesty and integrity in the conduct of
its operations and activities. The Notices shall designate that the Compliance
Officer and the respective plant compliance coordinator may be contacted by an
employee regarding any reports of misconduct about which an employee may have
knowledge, whether committed by an employee of Southern Foods or any other
individual or business entity; state that any report may be made anonymously or
directly to Government officials in lieu of the Ethics Compliance Officer; and
designate the Compliance Officer and the respective plant compliance
coordinator to be available for consultation on any questions the employee may
have concerning Southern Food's business practices. Also, Southern Foods shall
promptly investigate and take corrective action with respect to any misconduct
reported to the Compliance Officer by means of the hotline discussed in
Paragraph P(f) of the Preamble to this Agreement.
d) Southern Foods' Compliance Committee, referred to in Paragraph
P(e) of the Preamble, shall annually verify compliance with the requirements in
Article 5(c) above and shall report the results of this review to Southern
Foods' Board of Directors.
e) A formal Information and Education Program designed to assure
that all Southern Foods employees are appropriately aware of all applicable
laws, regulations, Southern Foods' Compliance Program, the terms of this
Agreement, and basic tenets of business honesty and integrity that they are
expected to follow, and the consequences, both to the employee and the company,
that will ensue from any violation thereof. The information and Education
Program shall include, but not be limited to, annual ethics and antitrust
compliance training seminars for all managers and supervisors and other
employees and consultants involved in contract bidding or other similar duty
areas as well as appropriate annual training for all employees using suitable
training methods as determined by Southern Foods. An annual schedule and
subject outline for the Information and Education Program (to include agendas
for all training seminars/sessions) shall be provided to FCS no later than 30
days from date of this agreement and annually thereafter. Any significant
change(s) to schedules, outlines, or agendas shall be promptly reported to FCS.
FCS retains the right to approve or disapprove schedules, outlines and agendas
and any changes thereto. Furthermore, FCS and its authorized representatives
have the right to be present at all training sessions.
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Compliance Agreement for Southern Foods 8
6. Southern Foods shall establish promotion of Southern Foods'
Compliance program as an element of each manager's and supervisor's performance
standards. In addition to the certifications required by Paragraph P(c) of the
Preamble, Southern Foods shall require an annual certification whereby all
managers and supervisors involved in contract bidding or other similar duty
areas will attest that they personally have annually: (a) discussed with each
employee under their supervision the content and application of the company's
Compliance Program; (b) informed each such employee that strict compliance with
the Program is a condition of employment; and (c) informed each such employee
that Southern Foods will take disciplinary action, including termination, for
violation of applicable laws, regulations, Southern Foods' Compliance Program,
the terms of this Agreement, and basic tenets of business honesty and
integrity. Southern Foods' Compliance Committee shall verify compliance with
this requirement annually and shall report its action to Southern Foods' Board
of Directors.
7. Southern Foods shall continue to maintain a Compliance
Committee which shall be responsible for overseeing the Compliance Program, for
oversight in the maintenance and updating of the Code by the Compliance
Officer, and for monitoring Southern Foods' compliance with this Agreement. The
Compliance Committee shall meet not less often than quarterly, consult with
whatever advisors it deems appropriate in matters relating to the Compliance
Program, compile reports concerning Southern Foods' compliance with the
Compliance Program, and take whatever actions are appropriate and necessary to
insure that Southern Foods conducts its activities in compliance with
applicable laws, regulations, Southern Foods' Compliance Program, this
Agreement, and basic tenets of business honesty and integrity. The Compliance
Committee shall report to the Board of Directors, in writing and not less often
than quarterly, the actions the Compliance Committee has taken since the last
report. Such reports and minutes of the Compliance Committee's meetings shall
be maintained as part of Southern Foods' records referenced in Article 3 of
this Agreement.
8. During the 3-month period of May-July of each full or partial
calendar year covered by this Agreement starting with calendar year 1995,
Southern Foods' Compliance Committee shall select, on a random basis, at least
twenty (20) bid proposals that have been or are to be submitted in response to
school district solicitations for the upcoming school year and shall conduct a
pre-award audit of each selected bid proposal to determine whether it has been
prepared in accordance with Southern Foods' internal procedures and is
consistent with applicable statutory and regulatory requirements. During each
of the remaining three (3) periods of the year (August-October,
November-January, and February-April), Southern Foods' Ethics Committee shall
select, on a random basis, at least twelve (12) different current Southern
Foods contracts with school districts for each 3-month period and shall conduct
a post-award audit of each selected contract to determine if the underlying bid
proposal was prepared in accordance with Southern Foods' internal procedures
and applicable laws, regulations, Southern Foods' Compliance Program, the terms
of this Agreement, and basic tenets of business honesty and integrity. A
contract shall not be selected for postaward audit if its underlying bid
proposal was selected for pre-award audit during the prior
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Compliance Agreement for Southern Foods 9
May-July period. To the extent that either a pre-award or post-award audit
discloses any misconduct, Southern Foods shall notify FCS within fifteen
(15) days of disclosure.
9. As part of Southern Foods' program of self-governance Southern
Foods shall voluntarily disclose to FCS suspected misconduct involving or
affecting Southern Foods' operations relating to Government programs within
fifteen (15) days after such misconduct is disclosed to the Compliance Officer
or any compliance coordinator or otherwise brought to the attention of the
company management. Southern Foods shall immediately investigate and take
corrective action with respect to any such suspected misconduct, notify FCS of
any action taken, and promptly make restitution for any damage or loss
resulting from such misconduct.
10. Southern Foods shall prepare and submit periodic written
compliance reports to FCS.
a) The compliance reports shall be prepared by the
Compliance Committee and reviewed, approved, and signed by the President of
Southern Foods.
b) The first report is due six (6).months following the
date that FCS executes this Agreement with remaining reports due every (6) six
months thereafter.
c) The report shall contain the following information:
i) An overall assessment and progress statement
concerning implementation of Southern Foods' Compliance Program and compliance
with this Agreement. The assessment and progress statement shall include
supporting information for each of the following areas as appropriate:
A) Ethics and compliance training seminars -
description of activity conducted (training session, etc.), date and location,
subject matter covered, and number and type of employees participating;
B) Compliance Committee's annual verification
regarding the requirements of Articles 5(b) and 6 of this Agreement;
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Compliance Agreement for Southern Foods 10
C) A summary of any instances of misconduct
reported to the Compliance Officer or any compliance coordinator or otherwise
brought to the attention of company management or a negative report if
applicable. Summaries shall include: number of instances and type of misconduct
reported (NOTE: Article 9 of this Agreement requires that suspected misconduct
relating to Government programs also be reported to FCS within fifteen (15)
days of disclosure.), source of reports if known (employee, customer, etc. -
not individual names), status of internal investigation (completed or ongoing),
and results of investigations (number of reports confirmed and number not
supported); (NOTE: More detailed information on confirmed reports shall be
provided pursuant to Article 10(c)(ii) below.);
D) A summary of the Ethics Committee's pre-award
and post-award audits required by Article 8 of the Agreement to include for each
type of audit: names of school districts involved and whether or not the audits
revealed any discrepancies; (NOTE: More detailed information on discrepancies
shall be provided in Article 10(c)(ii) below. Furthermore, Article 7 of this
Agreement requires that any misconduct disclosed through pre-award or
post-award audits also be reported to FCS within fifteen (15) days of
disclosure.); and
E) Any other information that the Compliance
Committee deems to be supportive of the assessment and progress statement.
ii) Problems or weaknesses found, corrective action
proposed, and status of corrective action. This Part shall include information
for each of the following areas as applicable:
A) Misconduct reported to the Compliance
Officer, or any compliance coordinator, or otherwise brought to the attention
of company management and confirmed by company internal investigation;
B) Discrepancies revealed through pre-award and
post-award audits conducted by the Compliance Committee pursuant to Article 8
of this Agreement;
C) Problems or weaknesses found by any other
means - internal audits, the audit required by Article 12 of this Agreement,
other independent audits, etc.
11. In submitting any bid proposal for Government programs
business, Southern Foods shall include a Certificate of
Non-Collusion/Independent Price Determination. In making such certification,
Southern Foods shall utilize the form specified in the bid solicitation or, if
no form is specified, a form developed by Southern Foods and approved by FCS.
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Compliance Agreement for Southern Foods 11
12. Southern Foods shall retain an independent auditor or
consulting firm to annually evaluate Southern Foods' compliance with the terms
of this Agreement and Southern Foods' system of selecting solicitations for
bid, preparing, and presenting bid proposals, and fulfilling contracts for
Southern Foods' Government program business. The plan for each audit or review
must be submitted to FCS for review and approval prior to initiation of the
audit or review. A report of the auditor's findings for each full or partial
calendar year covered by this Agreement shall be provided to FCS within thirty
(30) days following each such year with the first report to be provided by
January 30, 1996.
13. Southern Foods shall establish a written internal operating
policy dealing with suspended or debarred individuals or entities. All
operating policy shall reflect the requirements of 7 C.F.R. Part 3017. In
addition, this policy shall provide that Southern Foods shall not knowingly
enter into any business relationship, as defined in Paragraph O of the
Preamble, including employment with or without pay, with an individual or other
entity who has been suspended, debarred, or otherwise declared ineligible for
participation in Federal procurement or nonprocurement programs by any Federal
department or agency, except as provided in Article 14 of this Agreement. In
addition to obtaining any certifications required by 7 C.F.R. Part 3017,
Southern Foods shall make reasonable inquiry into the status of any potential
employee or other business partner including, at a minimum, review of the
General Services Administration's List of Parties Excluded from Federal
Procurement or Nonprocurement Programs. Unless otherwise required by Article
15, Southern Foods is not required to terminate the employment of individuals
who become suspended, proposed for debarment, debarred, or otherwise declared
ineligible for participation in Federal procurement or nonprocurement programs
during their employment at Southern Foods, but shall immediately remove such
employees from responsibility for or involvement with Southern Foods'
Government program business until the resolution or conclusion of such actions.
14. Southern Foods may, as part of the operating policy
established pursuant to Article 13 of this Agreement and pursuant to 7 C.F.R.
Section 3017.215, enter into a particular transaction with a person who has
been suspended, debarred, or otherwise declared ineligible for participation in
Federal procurement or nonprocurement programs by any Federal department or
agency, only upon a written determination by the Administrator of FCS, or
another agency head or authorized designee, that such an exception is
warranted.
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Compliance Agreement for Southern Foods 12
15. Southern Foods shall not enter into or resume any business
relationships, as defined in Paragraph O of the Preamble, with the individuals
who have been convicted of the misconduct referenced in Paragraph C of the
Preamble, except for those post-employment benefit relationships required by
law, such as health and pension benefits required under the ERISA.
Additionally, if any other individual is charged by Federal, State, or local
authorities with a criminal offense relating to Southern Foods' past, current
or future business with Government programs, Southern Foods voluntarily agrees
that the individual shall immediately be removed from any responsibility for or
involvement with Southern Foods' Government program business and, if convicted,
shall immediately terminate any business relationship with such individual,
including employment with or without pay, except for those post-employment
benefit relationships required by law.
16. Southern Foods shall submit to FCS, in advance of
distribution, copies of all directives, instructions, and procedures issued
and/or implemented in furtherance of Southern Foods' compliance with this
Agreement. FCS, retains the right to approve or disapprove such documents and
procedures.
17. Southern Foods hereby releases the United States, its
instrumentalities, agents and employees, in their official and personal
capacities, of any and all liability or claims (including legal expenses)
arising out of the proposed debarment of Southern Foods or the discussions
leading to this Agreement.
18. In addition to the requirements in Article 12 of this
Agreement pertaining to an annual compliance audit, within thirty (30) days
following each full or partial calendar year covered by this Agreement,
Southern Foods shall provide FCS, a list of all other internal audit reports
generated by or for Southern Foods during the previous calendar year and make
available to FCS, copies of any such audit reports requested by FCS,
19. In the event that the sale and transfer of Southern Foods'
stock or assets results in a change in the legal status, or a significant
change in ownership, of the company, Southern Foods shall notify FCS, in
advance and shall require by the terms of the sale or transfer that the new
owner, in addition to Southern Foods, shall be bound by the terms and
conditions of this Agreement.
20. When requested, Southern Foods shall cooperate fully with any
investigation of suspected irregularities involving Southern Foods' operations
or activities and shall encourage present and past employees of Southern Foods
to make full and candid disclosure of their personal knowledge of the facts and
circumstances of any such suspected irregularities.
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Compliance Agreement for Southern Foods 13
21. Southern Foods agrees to promptly inform FCS if it learns
during the period of this Agreement that it is the subject of any investigation
or judicial proceeding by any Federal, State, or local authority for suspected
irregularities involving Southern Foods' operations or activities.
22. Provided that the terms of this Agreement are faithfully
fulfilled, FCS shall not take further action to suspend or debar Southern Foods
based on the misconduct identified in Paragraphs B and C of the Preamble of
this Agreement.
23. Southern Foods' compliance with this Agreement shall
constitute an element of Southern Foods' present responsibility. Southern
Foods' failure to meet any of the obligations pursuant to this Agreement
constitutes a cause for suspension and/or debarment in addition to, and
independent of, those set forth in 7 C.F.R. Part 3017 and shall result in the
immediate suspension of Southern Foods in accordance with 7 C.F.R. Sections
3017.400-.420 and the simultaneous proposal to debar Southern Foods for three
years in accordance with 7 C.F.R. Sections 3017.300-.325.
24. FCS' decision not to debar Southern Foods based upon the
misconduct referenced in Paragraphs B and C of the Preamble shall not restrict
FCS from instituting administrative actions, including, without limitation,
suspension and/or debarment, should other facts forming a separate basis
indicating the need for such action, including material misrepresentations of
information relied upon as set forth in Article 25, come to the attention of
FCS. Furthermore, the provisions of this Agreement in no way alter or diminish
the rights and responsibilities of any agency of the Federal Government to
carry out its lawful function in a proper manner.
25. Southern Foods represents that all written materials and other
information supplied to FCS by its authorized representatives during the course
of discussions with FCS preceding this Agreement are true and accurate, to the
best information and belief of the Southern Foods signatories to this
Agreement. Southern Foods understands that this Agreement is executed on behalf
of FCS in reliance upon the truth and accuracy of such representations.
26. This Agreement constitutes the entire agreement between the
parties and supersedes all prior agreements and understandings, whether oral or
written, relating to the subject matter hereof. This Agreement shall be binding
upon and enure to the benefit of and be enforceable by the parties to this
Agreement and their respective successors and assigns.
27. Southern Foods represents that F.T. Xxxxxxxx is fully
authorized to execute this Agreement and represents that he/she has the
authority to bind Southern Foods. This Agreement is signed by F.T. Xxxxxxxx
on behalf of Southern Foods.
14
Compliance Agreement for Southern Foods 14
28. As used in this Agreement, Southern Foods means the Southern
Foods Corporation Group, Inc., and all of its operating sectors, groups,
divisions, units and subsidiaries.
29. In the event that any one or more of the provisions contained
in this Agreement shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect other provisions of this Agreement.
30. All submissions, reports, notices, and approvals required
hereunder shall be in writing and delivered via certified mail, as follows:
If to Southern Foods, to:
F.T. Xxxxxxxx
Southern Foods Group, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
If to FCS, to:
Xx. Xxxxxx Xxxxxxx
Regional Administrator
Food and Consumer Service
Southwest Regional Xxxxxx
0000 Xxxxxxxx Xxxxxx, Xxxx 0X00
Xxxxxx, XX 00000
or such other address as either party shall have designated by notice in
writing to the other party. All notices mailed shall be deemed given on the
date indicated by the postmark.
31. This Agreement is a public document and may be distributed by
FCS throughout the Federal Government as appropriate and to other interested
persons upon request.
32. This Agreement may be amended or modified only by a written
document signed by both parties.
Dated: 1-13-95 Dated: 12-21-94
Food and Consumer Service Southern Foods Group, Inc.
By: /s/ By: /s/ F.T. XXXXXXXX
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