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 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> $150 million contract. In our opinion, the company's cost proposal was overstated. Specifically, we found: The company's proposals for a Cumberland Fossil Plant (CUF) project and a Bull Run Fossil Plant (BRF) project included overstated (1) equipment costs, (2) material costs, <br> (3) general and administrative (G&A) and small tool rates, and (4) labor costs. In addition, we found the company's proposed unit rate for BRF monthly maintenance was understated due to omissions in the company's unit rate cost buildup.The company's proposed labor rate attachments included (1) incorrect craft labor rates and (2) noncraft wage ranges that were not reflective of the company's actual wage ranges. In addition, the company's proposal omitted labor rate attachments for employees who receive limited or no benefits. We estimated TVA could avoid about $6.6 million on the planned $150 million contract by negotiating appropriate reductions to (1) equipment, labor, and material costs and G&A and small tools rates in the CUF proposal and (2) unit rates in the BRF proposal. In addition, we suggest TVA negotiate revisions to the company's contract rate attachments to correct errors and more accurately reflect the company's actual wage ranges.(Summary Only)

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OIG received a complaint from a veteran alleging that Peterson Regional Medical Center (PRMC) in Kerrville, TX, canceled his sleep study appointment because VA owed PRMC more than $2 million, and PRMC was no longer accepting VA referrals for non-VA Care (NVC) as a result. There was insufficient evidence to substantiate the allegation that PRMC canceled the veteran’s scheduled sleep study because of non-payment by VA or that PRMC limited other veterans’ access to care. While PRMC continued to accept patients through the NVC program, OIG discovered that PRMC improperly informed the veteran that he might be responsible for payment if VA did not pay. OIG recommended the Director of the South Texas Veterans Health Care System (STVHCS) should instruct PRMC to stop advising veterans that they could be liable for pre-authorized NVC. The Director of the STVHCS concurred with our findings and recommendation and stated that STVHCS would implement the recommendation. We will monitor STVHCS’ progress and follow up on the implementation of our recommendation until the proposed action is completed.