Robert E. Lamb, Inc. - Contract No. 13659

As part of our annual audit plan, we performed an audit of costs billed to the Tennessee Valley Authority (TVA) by Robert E. Lamb, Inc., (Lamb) to provide architectural engineering services to assist with site selection, final programming, and schematic design for a new control center under Contract No. 13659 (formerly Contract No. 11638). Our audit objective was to determine if costs were billed in accordance with the terms of the contract. Our audit scope included about $20.7 million in costs billed to TVA from July 15, 2018, through September 15, 2022.In summary, we determined Lamb billed TVA:$873,147 in costs not provided for in the contract, including (1) $449,311 in equipment costs, (2) $345,503 in insurance costs, and (3) $78,333 in other direct costs. $67,691 in other ineligible costs and incorrect billing rates, including (1) $47,674 in ineligible markups on subcontract costs, (2) $15,784 in ineligible travel costs, and (3) a net $4,233 in labor billing rate errors.We also noted opportunities to improve contract administration by TVA. Specifically, we determined (1) TVA paid Lamb $3,239,091 in construction management fees, although fee was already being paid to Lamb through the contract's time and material labor billing rates; (2) Lamb started and completed work on one purchase order, totaling $484,710, prior to approval by TVA; and (3) TVA could have saved between $40,741 and $113,416 if the contract had included temporary living allowance provisions.(Summary Only)