Date Issued
Report Number
2026-17626
Report Type
Audit
Description
We performed an audit of costs billed to the Tennessee Valley Authority (TVA) by a contractor for below grade inspection, maintenance, and repair of electrical transmission structures on the TVA system. The contract provided for TVA to pay the contractor in accordance with the pricing schedule, covering both the time spent performing the work and the cost of any materials provided. The pricing schedule included rates for a wide range of tasks performed on TVA’s steel towers, steel poles, and wood poles. In addition to the task-based pricing, when labor-related costs were not included within the task unit rates, the pricing schedule included (1) hourly labor rates for general foremen and general laborers and (2) daily crew rates. The daily crew rates were to consist of, among other things, one general foreman and five general laborers for ten hours per day. Our objective was to determine if costs billed were in accordance with the contract’s terms. Our audit scope included $15.2 million in costs paid to the contractor from October 1, 2023, through January 23, 2026.
In summary, we determined the contractor billed TVA $1,152,839 in unsupported and ineligible costs. Specifically, we determined the contractor billed TVA:
$1,027,664 in daily crew rates in which the contractor could not provide documentation supporting the number of crews billed each day or the number of workers to meet the crew composition requirements.
$9,522 in labor costs in which the contractor could not provide documentation supporting the labor hours billed.
$115,653 in ineligible markups on material costs.
Joint Report
No
Agency Wide
Yes (agency-wide)
Questioned Costs
$0
Funds for Better Use
$0