Date Issued
Report Number
2015-15324
Report Type
Audit
Description
At the request of the Tennessee Valley Authority (TVA) Supply Chain, the OIG examined a cost proposal submitted for construction and modification services. Our objective was to determine if the vendor's cost proposal was fairly stated for a planned $100 million contract. In our opinion, the proposal (1) included inconsistent and overstated labor markup rates; (2) did not comply with the request for proposal requirements related to nonmanual wages, resulting in overstated wage rates; and (3) included multiple fees in the Paradise Fossil Plant baseline costs. We estimated TVA could avoid about $3.34 million by (1) negotiating reduced labor markup rates and (2) reimbursing the contractor's actual salaries within established wage ranges instead of paying a single estimated wage rate for each labor classification. In addition, we found the contract's compensation terms and related attachments were inconsistent with the methodology TVA intends to use to compensate the contractor.(Summary Only)
Joint Report
Yes
Participating OIG
Tennessee Valley Authority OIG
Agency Wide
Yes (agency-wide)
Questioned Costs
$0
Funds for Better Use
$0