Federal Reports

At the request of the Tennessee Valley Authority's (TVA) Supply Chain, we examined the cost proposal submitted by a contractor for non-nuclear modification and supplemental maintenance services and technical support services. Our objective was to determine if the cost proposal was fairly stated for a planned $950 million contract. In our opinion, the cost proposal was overstated. Specifically, the proposal included overstated nonmanual payroll tax rates and fringe benefit rates. We estimated TVA could avoid $1.14 million on the planned $950 million contract by negotiating reduced (1) non-manual payroll tax rates that are fixed for the contract term and (2) fringe benefit rates.(Summary Only)

The Colorado Department of Health Care Policy and Financing (State agency) did not always comply with Federal Medicaid requirements for invoicing manufacturers for rebates for physician-administered drugs. The State agency did not invoice manufacturers for rebates associated with $13 million ($6.5 million Federal share) in physician-administered drugs. Of this amount, $10.5 million ($5.2 million Federal share) was for single-source drugs, and $2.6 million ($1.3 million Federal share) was for top-20 multiple-source drugs. Because the State agency's internal controls did not always ensure that it invoiced manufacturers to secure rebates, the State agency improperly claimed Federal reimbursement for these single-source drugs and top-20 multiple-source drugs.