At the request of the Tennessee Valley Authority’s (TVA) Supply Chain, we examined the cost proposal submitted by a contractor for (1) outage and supplemental maintenance and modification services and (2) support services at TVA’s nuclear plants. Our examination objective was to determine if the cost proposal was fairly stated for a planned $975 million contract.
In our opinion, the cost proposal was fairly stated. Specifically, the proposed total noncraft labor burden rates for the recovery of indirect costs were supported by recent actual costs. However, we determined the proposed noncraft wage ranges were not reflective of the actual salary costs for the contractor’s employees. In addition, (1) the proposed rate schedule included a payroll tax rate even though the contractor indicated it could bill payroll taxes at actual costs and (2) the contractor did not propose a rate for long-term temporary assignments, as requested in the request for proposal.
