Contract for Engineering and Technical Support Work

Our audit of costs billed to TVA by a contractor who provided engineering and technical support found that most of the contract employees had been transferred from staff augmentation contracts where they had been performing the same duties at a substantially lower cost to TVA. In total, we determined TVA's costs increased $689,000 when the staff augmentation contract employees were moved to the "managed task" contract, primarily due to a high overhead markup rate. By moving the contract employees to the "managed task" contract, it appeared TVA was attempting to avoid reporting this headcount as staff augmentation. Since it appeared doubtful TVA had received $689,000 worth of management oversight from the contractor, it is our opinion that TVA wasted $689,000 when it moved staff augmentation contract employees to the "managed task" contract. Summary Only