Independent Examination of Labor and Labor Markup Rates

At the request of the Tennessee Valley Authority's (TVA) Supply Chain, we examined the labor and labor markup rates included in a contract TVA has with a contractor. Our examination objective was to determine if the contract's labor and labor markup rates were fairly stated for a planned 5-year contract extension.In our opinion, the contract's labor and labor markup rates were fairly stated. However, we found the contract's current labor rate ranges are not reflective of the actual costs of the contractor's employees. We suggest that TVA request the contractor submit revised labor rate ranges that are more reflective of the actual minimum and maximum salary cost for each labor classification and incorporate these labor rate ranges into the contract.(Summary Only)