Contract For Construction Permit Application

July 28, 2026

2025-17594

Audit

We performed an audit of costs billed to the Tennessee Valley Authority (TVA) by a contractor for services in connection with the construction permit application for deployment of a BWRX-300 small modular reactor at the TVA Clinch River Nuclear site.  Our audit objective was to determine if costs billed to TVA were in accordance with the contract’s terms.  Our audit scope included approximately $31.6 million in costs billed from July 1, 2022, through August 31, 2025.  In summary, we determined the contractor did not bill subcontractor costs in accordance with the contract terms.  During our audit period, the contractor billed TVA $9,883,052 in subcontractor labor costs.  Our review of $3,096,220 in subcontractor costs determined the contractor billed TVA up to $1,045,859 in excessive costs because it billed for subcontractors using the contractor’s time and material rates rather than the actual costs and markups, as required by the contract.  For the remaining subcontractor costs not reviewed, we estimated the contractor may have billed an additional $2.3 million in excessive costs because it billed TVA for subcontractors using the contractor’s time and material rates.  Additionally, we determined the contractor overbilled TVA a net $7,700 in other costs, including (1) an overbilling of $14,626 due to unauthorized costs that were not appropriately credited to TVA and (2) an underbilling of $6,926 in labor costs. 

No

Yes (agency-wide)

$0

$0