Contract for Engineering and Technical Support Services for the Watts Bar Unit 2 Project

We audited $10.16 million in costs billed to TVA by a contractor for providiing professional engineering and technical support services associated with the detailed, scoping, estimating, and planning study related to the potential completion of Unit 2 at Watts Bar Nuclear Plant. In summary, we found (1) the contractor directly billed TVA $175,094 for home office senior management and administrative personnel that should have been recovered through its overhead rate; (2) the contractor overbilled TVA an estimated $9,393 due to miscellaneous unsupported and ineligible billings for payroll additive costs, relocation expenses, and travel costs; and (3) TVA paid the contractor an additional $33,000 in fees due to conflicting contract language regarding the application of fees for travel costs. We recommended TVA management (1) take action to recover the $184,487 in overbilled costs, and (2) determine the appropriateness of including travel costs in the contractor's fee base. Summary Only