Contract for Geotechnical Services

We performed an audit $3.3 million in payments made by TVA to a contractor for geotechnical services between January 2003 and July 15, 2009. In summary, we determined the contractor overbilled TVA $395,479 as follows:$216,865 in labor costs, including (1) $110,016 due to the use of hourly billing rates instead of actual wages and markup as specified by the contract's compensation section, (2) $98,681 for overtime costs the company did not incur, and (3) $8,168 for miscellaneous duplicate and unsupported charges.$66,071 in estimated travel costs, because the contractor did not bill actual expenses as required by the contract.$55,524 in estimated drilling, sampling, and equipment costs, due to incorrect billing rates and unsupported costs.$51,224 in vehicle charges, because the contractor (1) billed both daily rates and mileage rates for certain vehicles and (2) could not document the accuracy of the billing rates it used for mileage.$5,795 in subcontractor costs, because the contractor billed more than its actual costs for the subcontracts.The contractor agreed it should reimburse TVA at least $173,162 ($98,681 in labor costs, $66,071 in travel costs, $2,615 in vehicle charges, and $5,795 in subcontractor costs). The contractor also provided additional explanations and documentation for certain costs and requested TVA take into consideration certain extenuating circumstances in determining the total amount that should be reimbursed to TVA. Summary Only