Independent Examination of the BWRX-300 Technology Collaboration Agreement

At the request of the Tennessee Valley Authority's (TVA) Supply Chain, we examined a company's standard design rates (i.e., indirect cost recovery rates) contained in the BWRX-300 Technology Collaboration Agreement (TCA). Our examination objective was to determine if the company's proposed indirect cost recovery rates were fairly stated. In our opinion, the company's proposed rates for the recovery of its fringe benefits, overhead, and general and administrative costs were fairly stated. However, we determined the total cumulative indirect rate listed in the TCA did not accurately represent the total rate that would be applied to the company's salary costs. Specifically, we found the TCA's total cumulative indirect rate and accompanied calculation represent a salary rate multiplier, instead of the indirect cost recovery rate, as it is labeled in the TCA. We suggest TVA management negotiate appropriate changes to the TCA to more accurately reflect the total indirect cost recovery rate. (Summary Only)