Federal Reports

At the request of the Tennessee Valley Authority's (TVA) Supply Chain, we examined the cost proposal submitted by a company for civil projects and coal combustion residual (CCR) program management work at TVA's steam electric power plants. Our examination objective was to determine if the company's cost proposal was fairly stated for a planned <br> $50 million contract.In our opinion, the company's cost proposal was overstated. Specifically, we found the company's proposed costs for a Cumberland Fossil Plant project included (1) misapplication of overhead/general and administrative (G&A) markup rates, (2) a fee rate that exceeded the maximum allowable fee rate in TVA's request for proposal (RFP), and (3) overstated material, equipment, travel, labor and labor burden costs. We also found the company's proposed rate attachments included (1) incorrect craft labor rates, (2) noncraft wage ranges that did not reflect the company's current wage ranges, (3) incorrect noncraft billing rates, (4) a contractor owned equipment rate schedule containing equipment that the company anticipates will be leased or rented from third parties, and (5) fee on cost reimbursable work that exceeded the maximum allowable fee rate in TVA's RFP. We estimated TVA could avoid about $4.7 million on the planned $50 million contract by (1) limiting the company's application of overhead/G&A to total direct costs, (2) limiting the company's fee rate to the RFP's maximum allowable rate, and (3) negotiating appropriate cost reductions to the company's proposed material, equipment, travel, labor, and labor burden costs. In addition, we suggest TVA negotiate (1) revisions to the company's contract rate attachments to correct errors and more accurately reflect the company's actual wage ranges and equipment usage, and (2) a reduction to the company's proposed fee for cost reimbursable work to the maximum allowable fee rate in TVA's RFP.(Summary Only)

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EAC OIG reviewed EAC's Fiscal Year 2017 Annual Financial Report and the results of the Improper Payments Elimination and Recovery Act compliance testing performed by the independent public accountants who audited EAC's fiscal year 2017 financial statements.

The VA Office of Inspector General (OIG) conducted a review to determine whether VA complied with the requirements of the Improper Payments Elimination and Recovery Act (IPERA) for fiscal year (FY) 2017. VA met four of six IPERA requirements for FY 2017 by publishing the Agency Financial Report (AFR), performing risk assessments, reporting improper payment estimates, and providing information on corrective action plans. VA did not fully comply with two of six IPERA reporting requirements as specified by the Office of Management and Budget. Specifically, VA did not: • Report a gross improper payment rate of less than 10 percent for seven of 13 programs and activities that had an improper payment estimate in its FY 2017 AFR. Further, two of the seven programs have exceeded the 10 percent threshold for three consecutive fiscal years. The two programs’ improper payments were primarily due to administrative or process errors, insufficient documentation, or noncompliance with Federal Acquisition Regulation requirements. • Meet annual reduction targets for seven programs and activities. In addition, four of the seven programs have not met reduction targets for three consecutive fiscal years and are repeat findings. These four programs’ improper payments were primarily due to administrative or process errors, insufficient documentation, or noncompliance with FAR requirements. The OIG recommended the Executives in Charge for the Office of the Under Secretary for Health and Veterans Benefits Administration develop a timeline to reduce improper payments under the 10 percent IPERA threshold and implement steps to reduce improper payments for its applicable programs and activities.