Proposal for Hydro Modernization and Unit Rehabilitation

At the request of the TVA Supply Chain, we reviewed a cost proposal submitted for a planned $30 million contract to provide hydro modernization, unit rehabilitation, and functional support services in support of TVA's hydro facilities. The objective of our review was to determine if the cost proposal was fairly stated. In summary, except for excessive costs included in the proposed markup rates and labor and burden rates, nothing came to our attention that indicated the cost proposal was not fairly stated. We concluded TVA could avoid up to $2.11 million on the planned $30 million contract by negotiating reductions to the labor and burden rates and certain markup rates that correspond to the proposing company's actual 2014 costs and expected future costs. Summary Only