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TVA’s Process for Issuing Purchase Orders Under Blanket Contracts

Report Information

Date Issued
Report Number
2024-17518
Report Type
Audit
Description
The Tennessee Valley Authority’s (TVA) Supply Chain organization enters into blanket contracts with vendors to support TVA goals and lower total costs to TVA.  Blanket contracts are defined as open-scope contracts under which TVA may place multiple orders for designated products or services over a set timeframe.  Defined scopes of work and TVA’s commitment to buy are established through purchase orders (PO) issued against existing blanket contracts. Under appropriate circumstances, TVA may group multiple blanket contracts that have the same general scope of work under a master contract.  TVA’s Supply Chain Buyer Guide, which defines best practices for contracting officers, describes this process as the competitive model.  According to the Buyer Guide, competitions between vendors under a competitive model can often be conducted quickly to better support organizational needs. Due to issues identified in previous audits related to TVA’s lack of competition of fixed price POs, we conducted an audit to assess TVA’s process for evaluating and awarding POs issued under blanket contracts. Our audit scope focused on POs issued under blanket contracts where TVA has multiple blanket contracts for a general scope of work.  In summary, we determined TVA does not have an overall policy and there are limited procedures and guidance for evaluating and awarding POs issued under blanket contracts where TVA has multiple blanket contracts for a general scope of work.  This has resulted in inconsistencies in how Supply Chain and the organizations have evaluated and awarded POs.  Specifically, we determined there were inconsistencies in the level of (1) competition between prequalified vendors when issuing POs and (2) Supply Chain involvement in the evaluation and selection of vendors.  With limited guidance on evaluating and awarding POs issued under blanket contracts, TVA increases its risk of not achieving best value for TVA.
Joint Report
No
Agency Wide
Yes (agency-wide)
Questioned Costs
$0
Funds for Better Use
$0
View report on Oversight.gov

Recommendations

Since the Supply Chain Buyer Guide is only applicable to the Supply Chain organization, we recommend the Vice President, Supply Chain, develop an agency-wide standard program and process defining the process for evaluating and awarding purchase orders under blanket contracts. The standard program and process should define when (1) the product or service should be competed among multiple vendors before issuing a purchase order and (2) deviations from competition guidelines are acceptable.