Proposal for Construction Management Services

At the request of the Tennessee Valley Authority (TVA) Supply Chain, the OIG examined the cost proposal submitted by a contractor for construction management services. Our objective was to determine if the contractor's cost proposal was fairly stated for a planned $100 million contract. In our opinion, the proposed general and administrative (G&A) rates were overstated in the proposal, compared to the G&A rates included in a current contract TVA has with this contractor. We estimated TVA could avoid about $4.1million on the planned $100 million contract by reducing the proposed G&A rates to the rates established in the other contract.(Summary Only)