Review of Contract for Fire Protection Systems

We audited $37.4 million of costs billed by a TVA contractor for providing specialty fire protection systems and determined the contractor had billed TVA an estimated $408,100 of excessive or unsupported costs. Specifically, the contractor billed TVA (1)an estimated $257,400 of extra labor costs because it paid certain local craft employees wage and benefit rates that exceeded rates included in TVA's labor agreements, (2)$87,700 of labor adjustments that were either not in accordance with the contract or were duplicates of adjustments that had already been made, and (3)$63,000 of miscellaneous overpaid and unsupported labor and travel costs. We recommended TVA (1)revise its contract to include specific criteria for paying wage and benefit rates that exceed rates included in TVA's labor agreements, (2)determine if any of the previously billed costs should be recovered, and (3)recover or avoid paying the remaining overbilled costs. Summary Only