Federal Reports

At the request of the Tennessee Valley Authority's (TVA) Supply Chain, we examined the cost proposal submitted by a company for transmission construction services. Our examination objective was to determine if the cost proposal was fairly stated for a planned 5-year, $25 million contract.In our opinion, the company's cost proposal was overstated. We found the proposed labor markup rates, for recovery of indirect costs, were overstated compared to recent actual costs. We estimated TVA could avoid about $783,000 over the planned $25 million contract by negotiating revised labor markup rates to more accurately reflect the company's recent actual costs. (Summary Only)

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This report recaps OIG achievements in 2021, in core mission as well as organizational improvements.

The Office of the Inspector General included an audit of the Tennessee Valley Authority’s (TVA) maintenance of its owned gas pipelines in our annual audit plan due to pipeline issues identified at other utilities and potential risks to TVA. Our audit objective was to determine if TVA’s maintenance of its owned gas pipelines is adequate. We found TVA did not provide sufficient oversight of the two Contract Operations Providers and the Contract Engineering Provider. We found the lack of oversight resulted in inadequate maintenance in some areas and inconsistencies in reporting that hindered TVA’s ability to track and correct the identified deficiencies. In addition, we found TVA’s Gas Transmission Pipelines Policy (TVA Power Operations Standard Programs and Processes 09.120, Natural Gas Transmission Pipeline Operations) in place between July 2016 and October 2020 was limited and outdated on contractor oversight.