Siemens Energy, Inc. - Contract No. 10092

As part of our annual audit plan, we performed an audit of costs billed to the Tennessee Valley Authority (TVA) by Siemens Energy, Inc. (Siemens) under Contract No. 10092. This contract was a long-term service agreement for the Ackerman Combined Cycle Plant located in Ackerman, Mississippi. Under the contract, Siemens was to provide program management services; scheduled outage services; and supply any program parts, nonprogram parts, miscellaneous hardware, or services as requested by TVA. Our audit objective was to determine if the costs were billed to TVA in accordance with the contract's terms. The audit scope included $68,055,969 in costs TVA paid to Siemens from April 14, 2015, through February 29, 2020. In summary, we determined Siemens overbilled TVA $201,829 due to ineligible and unsupported time and material costs. Specifically, we found Siemens billed TVA, (1) $124,501 for ineligible per diem costs, (2) $30,523 in unsupported tool costs, (3) $18,342 for ineligible noncraft labor costs, (4) an estimated $17,425 for ineligible craft labor costs, and (5) $11,038 in other ineligible costs. In addition, we identified $500,580 in costs billed to and paid by TVA under Contract No. 10092 that should have been billed under another contract TVA has with Siemens. We also identified opportunities to improve contract administration by TVA. Specifically, we found (1) the contract limits TVA's ability to control cost, and (2) TVA did not maintain adequate documentation to support credits taken by TVA. (Summary Only)