Bechtel Power Corporation

As part of our annual audit plan, we performed an interim audit of costs billed to the Tennessee Valley Authority (TVA) by Bechtel Power Corporation for providing engineering, procurement, construction, and related services in support of the completion of TVA's Watts Bar Nuclear Plant Unit 2. Our audit included about$520 million in noncraft costs billed to TVA from January 1, 2010, to September 30, 2013, (craft costs will be audited separately). Our objective was to determine if Bechtel billed TVA in accordance with the contract terms and conditions. In summary, we determined Bechtel overbilled TVA an estimated $2,066,495, including:$923,231 in labor and related costs, which included (1) $696,841 in ineligible labor hours and rates billed, (2) $228,490 in ineligible home office labor costs,(3) $24,044 in excessive payroll additive costs, and (4) a net credit of $26,144 in other labor costs.$938,928 in ineligible or unsupported relocation, permanent and temporary assignment, and travel costs, which included (1) $520,370 in relocation costs,(2) $372,048 in permanent and temporary assignment monthly allowances,(3) $23,932 in other temporary assignment costs, and (4) $22,578 in travel costs.$204,336 in ineligible or unsupported affiliate company and subcontractor costs. Summary Only