TVA’s Fixed Wing Aircraft

The Tennessee Valley Authority (TVA) purchased two new fixed-wing aircraft (FWA) through sole source contracts in May 2015 for $17.7 million. We audited TVA’s FWA to determine (1) whether TVA’s decision to purchase these aircraft was reasonable compared to aircraft used by other utilities, (2) how the cost and use of the aircraft compared to that of other utilities and industry standards, and (3) whether the use of the aircraft is consistent with applicable federal laws and regulations. We determined the number of FWA in TVA’s fleet is generally comparable to the number of FWA maintained by eight of its peers. However, we determined (1) TVA’s stated justifications for sole sourcing the purchase of the aircraft were not supported and did not include any analyses of historical usage to determine TVA’s FWA needs, and (2) the purchase of a jet instead of a second turboprop has not been cost effective. Additionally, (1) TVA may not have complied with Title 31, United States Code, Section 1344(a)(1), Passenger Carrier Use, and (2) TVA did not comply with various federal regulations and TVA policies and procedures regarding use of the aircraft. Failure to follow the federal laws and regulations (1) prevents TVA from being able to accurately determine the need for owning aircraft, (2) prevents TVA from ensuring travel costs are managed effectively, and (3) may cause reputational risks for TVA with regard to misuse (or perceived misuse) of the aircraft. We made ten recommendations to TVA management to improve (1) controls around the purchase of any future aircraft, (2) use of the FWA, and (3) compliance with all applicable laws and regulations.