Federal Reports

Congress enacted the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in March 2020. The CARES Act, “Federal Contract Authority,” Section 3610, clarifies that reimbursement requests must be reduced by any credits received from other COVID-19 relief programs, including Paycheck Protection Program (PPP) loans. There were 149 subcontractors that collectively received forgiveness for more than $196 million of PPP loans at the Portsmouth Paducah Project Office (PPPO) sites. In addition, the Department of Energy paid subcontractors about $13 million in Section 3610 safety pay from 2020 through 2022.

Given the risk, we initiated this audit to determine if the Department paid PPPO subcontractors for the same costs that were covered by forgiven PPP loans.

We identified approximately $5.2 million in duplicate payments, unsupported costs, and unallowable profit paid to the Department’s subcontractors at the PPPO that received CARES Act funds. Specifically, we identified 19 subcontractors that received approximately $2.6 million in either duplicate payments and/or unallowable profit under Section 3610. Additionally, we identified seven subcontractors that certified the need for PPP loan forgiveness after already billing and receiving $2.6 million in payments from the PPPO for work performed. These subcontractors also received loan forgiveness paid by the Small Business Administration for costs the Department already paid.

These issues were caused by incomplete policy guidance, inadequate oversight, and inappropriate behavior by subcontractors. For example, the PPPO did not enforce internal controls and labor monitoring during COVID-19 to prevent duplicate payments and erroneous reimbursements. In addition, the PPPO subcontractors did not always uphold ethical standards and comply with contract requirements.

To address the issues identified in this report, we have made seven recommendations that, if fully implemented, should help ensure that the Department’s safeguards reduce future risks associated with similar programs and protect taxpayer funds.

The Tennessee Valley Authority (TVA) plans to invest approximately $7 billion to extend and preserve the life of its seven nuclear units over the next 20 years. Selection of suppliers responsible for maintenance or system upgrades within TVA’s nuclear fleet can affect TVA’s ability to maintain generation reliability.  Because of the importance of supplier selections, we evaluated the solicitation and bid evaluation processes for Watts Bar Nuclear Plant (WBN). The objective of our evaluation was to determine if solicitation and bid evaluation processes were performed in accordance with TVA's policies and procedures for electrical, maintenance, and modifications services contracts at WBN. 

We determined that solicitation and bid evaluation processes for two projects implemented between April 11, 2024, and November 30, 2024, were not performed in accordance with TVA policies and procedures.  Specifically, Supply Chain was not involved in the solicitation and bid evaluation processes as required.  During our evaluation, we also identified gaps in the independent estimation process.  We determined that independent estimates were not always developed as required and checklists to support independent estimate development were not always completed in accordance with guidance.