VECTOR JV - Bechtel Power Corporation

As part of our annual audit plan, we audited costs billed to the Tennessee Valley Authority (TVA) by VECTOR JV. VECTOR is a joint venture between Bechtel Power Corporation and Sargent & Lundy LLC, providing engineering services for Bellefonte Nuclear Plant Unit 1. Our objective was to determine if the $60.7 million in costs paid by TVA for Bechtel's services from October 1, 2010, through December 31, 2012, were billed in accordance with the contract terms and conditions. In summary, we determined VECTOR overbilled TVA an estimated $358,434 in costs for Bechtel's services, including:$246,353 in ineligible other direct costs.An estimated $47,978 in temporary living costs.$64,103 in ineligible labor costs.In addition, we noted several opportunities to improve contract administration by TVA. Specifically, we found TVA paid VECTOR (1) an estimated $1,747,353 in temporary living allowance (TLA) costs for Bechtel employees for time periods not shown on employee TLA certification forms and (2) an estimated $50,486 in excess costs because temporary living monthly allowances were not included in the contract's compensation terms until April 30, 2011. Summary Only