Date Issued
Report Number
2021-17309
Report Type
Audit
Description
At the request of the Tennessee Valley Authority's (TVA) Supply Chain, we examined the cost proposal submitted by a company for transmission construction services. Our examination objective was to determine if the company's cost proposal was fairly stated for a planned 5-year, $25 million contract.In our opinion, the company's cost proposal was overstated. Specifically, the proposed labor markup rates, for recovery of the company's indirect costs, were overstated compared to recent actual costs. We estimated TVA could avoid about $3.5 million over the planned $25 million contract by negotiating reduced markup rates to more accurately reflect the company's recent actual costs. In addition, we found the company's proposed (1) costs for the RFP's fixed price example projects were overstated by $417,189 and (2) equipment rates were not reflective of its actual equipment costs.(Summary Only)
Joint Report
Yes
Participating OIG
Tennessee Valley Authority OIG
Agency Wide
Yes (agency-wide)
Questioned Costs
$0
Funds for Better Use
$0