Federal Reports

At the request of TVA Supply Chain, the OIG examined the cost proposal submitted by a contractor, for engineering, design, and construction support for Holistic Industrial Wastewater Treatment Program services at TVA fossil plants. Our objective was to determine if the cost proposal was fairly stated for a planned $45 million contract. In our opinion, the cost proposal was overstated. We estimated TVA could save about $3.68 million on the planned $45 million contract by negotiating reductions to the proposed labor markup rates, including labor markup rates for work performed at TVA sites, and negotiating reductions to the proposed escalation rate and fee rate. In addition, we found the contractor did not propose labor wage ranges for cost reimbursable work, as required by the request for proposal. We also identified compensation terms in the draft contract that needed to be revised to reduce the potential for future billing discrepancies.(Summary Only)

Palmetto Government Benefits Administrator, LLC, a subsidiary of Blue Cross Blue Shield South Carolina, claimed unallowable postretirement benefit costs of $665,000 for Medicare reimbursement for fiscal years 2005 through 2011. We performed this audit in conjunction with two related audits (A-07-16-00484 and A-07-16-00485).

Postretirement benefit costs totaling $4,000 that CGS Administrators, LLC, claimed for Medicare reimbursement for fiscal year 2011 were reasonable and allowable. We performed this audit in conjunction with two related audits (A-07-16-00483 and A-07-16-00485).

Blue Cross Blue Shield of South Carolina overstated its allocable postretirement benefit costs by $7.4 million for calendar years 2006 through 2011. We performed this audit in conjunction with two related audits (A-07-16-00483 and A-07-16-00484).

In March 2016, the Nuclear Regulatory Commission (NRC) issued a Chilled Work Environment Letter for Watts Bar Nuclear Plant. The NRC concluded a chilled work environment existed in the Operations Department because of a perception that operators were not free to raise safety concerns using all available avenues without fear of retaliation. According to the NRC Policy Statement for Nuclear Employees Raising Safety Concerns Without Fear of Retaliation, "A reluctance on the part of employees to raise concerns is detrimental to nuclear safety." Employees interviewed by the OIG in the Operations Department at the Sequoyah Nuclear Plant generally felt free to raise concerns without fear of retaliation. All but one employee reported feeling free to report nuclear safety, quality, or technical concerns without fear of retaliation. Also, most employees were comfortable reporting nuclear safety or quality concerns through multiple avenues. However, 11 percent indicated there could be retaliation when expressing concerns. Even though the potential for retaliation may not currently impact an employee's decision to report concerns, it could in the long term. Our interviews with the operators identified other issues that could impact an employee's willingness to report concerns in the future, including (1) the Outage Control Center and management overriding and pressuring employees, (2) employee distrust of management, and (3) a lack of confidence in the effectiveness of the Corrective Action Program and Employee Concerns Program.