Construction and Modification Services

We audited $22.2 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 overbillings and overpayments of about $58,000 including (1) overbillings for small tools due primarily to the contractors application of a recovery rate to an incorrect cost base, (2) craft wages and benefits that exceeded amounts provided for by TVA's labor agreements, and (3) miscellaneous overpaid and unsupported costs. The contractor and TVA management agreed with our findings except for the overbilled craft wages and benefits. In response to that issue, management stated TVA labor relations had decided certain variances from the labor agreements would be allowed and most of the variances identified in this review were within the guidelines established by labor relations. Summary Only