Williams Specialty Services - Subcontractor Services to Bechtel Power Corporation

We audited $9.58 million of costs billed to Bechtel Power Corporation (Bechtel) and subsequently to TVA by Williams Specialty Services, LLC (WSS) for asbestos abatement and valve refurbishment services at Watts Bar Nuclear Plant Unit 2 (WBN U2) under a subcontract agreement. We found the costs billed to Bechtel were inflated by at least $624,800 because the hourly rates WSS billed for craft and non-manual labor included overstated cost allowances. The inflated costs included:(1) $274,800 of craft labor billings that resulted because WSS' craft billing rates included overstated allowances for payroll tax costs, and(2) $350,000 for non-manual labor because the non-manual billing rates included excessive wage and burden rates.Additionally, since Bechtel added a 2.5 percent markup when it billed TVA, the actual costs paid by TVA were inflated by $640,420. Accordingly, we recommended TVA management take action to recover $640,420 in inflated craft and non-manual labor costs. Summary Only