Date Issued
Report Number
2015-15322
Report Type
Audit
Description
At the request of the Tennessee Valley Authority's (TVA) Supply Chain, the OIG examined a cost proposal submitted for construction/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 cost proposal (1) overstated the other direct cost (ODC) markup rate in the Gallatin Fossil Plant and Paradise Fossil Plant baseline project prices, (2) overstated the payroll tax rate in the craft labor rate schedule, and (3) included non-manual hourly wage ranges that were not reflective of actual salary costs. We estimated TVA could save about $1.2 million on the planned $100 million contract by negotiating reductions to the proposed ODC markup rate and craft labor payroll tax rate. 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