Construction and Modification Services

We audited $5.6 million of costs billed by a TVA contractor for providing construction and modification services for TVA generating plant switchyards, substations, electrical transmission system, and power control communication facilities. We found TVA had been overbilled an estimated $186,378 for (1) craft labor costs that exceeded amounts provided for by TVA’s labor agreements, (2) misclassified subcontractor labor, (3)ineligible subsistence allowance payments, and (4) unsupported costs. The contractor agreed with most of our issues and provided credits to TVA. However, the contractor stated it planned to perform a 100 percent review of craft labor costs associated with the audit period rather than rely on the audit estimate of the overbilling. TVA management plans to work with the contractor to recover the overbilled craft labor costs. Summary Only