Proposal for Non-Nuclear Modification and Supplemental Maintenance

At the request of the Tennessee Valley Authority's (TVA) Supply Chain, we examined the cost proposal submitted by a contractor for non-nuclear modification and supplemental maintenance services and technical support services. Our objective was to determine if the cost proposal was fairly stated for a planned $950 million contract. In our opinion, the cost proposal was overstated. Specifically, the proposal included overstated nonmanual payroll tax rates and fringe benefit rates. We estimated TVA could avoid $1.14 million on the planned $950 million contract by negotiating reduced (1) non-manual payroll tax rates that are fixed for the contract term and (2) fringe benefit rates.(Summary Only)