We performed an audit of costs billed to the Tennessee Valley Authority (TVA) by GE Vernova International, LLC (GEVI) for parts and services for the covered units at the Allen Combined Cycle Plant as part of a long-term service agreement under Contract No. 11930. Our audit objective was to determine if costs were billed in compliance with the contract’s terms. Our audit scope included about $48.5 million in costs billed from January 1, 2021, through March 31, 2024.
In summary, we determined (1) GEVI applied incorrect discounts to noncapital parts, resulting in an overbilling of $4,278 and (2) TVA was not aware GEVI provided noncapital parts from foreign countries, including one country that was not compliant with the Trade Agreements Act as required by the contract. In addition, we noted opportunities to improve contract administration by TVA. Specifically, (1) TVA did not receive detail cost breakouts for fixed price services to determine the reasonableness of the fixed price and if the contract’s time and material rates and negotiated discounts were used to build up the fixed price; (2) TVA and GEVI agreed in a letter to revise some of the terms of the long-term service agreement in accordance with the letter’s appendix; however, the appendix was not included with the contract documentation in TVA’s Maximo system; and (3) the contract contained inconsistent language.
