TVA Needs To Develop a Formal Process for Determining Whether To Construct Projects In-House or by Private Contractor
Highlights
GAO was asked to examine the policies used by the Tennessee Valley Authority (TVA) in determining whether to contract for construction or to perform the construction in-house. GAO was asked to determine: (1) whether TVA has a policy whereby the costs of using its own employees versus the costs of using private contractors for construction projects are compared; (2) if TVA has such a policy, whether it is used on all projects, what criteria are used to determine the least costly approach, and if they are reasonable; (3) how TVA calculates overhead, if administrative costs are included in comparisons, and how this cost allocation compares with private industry or other Government construction projects; and (4) what factors TVA should consider in developing a method for comparing costs.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Tennessee Valley Authority | The Chairman of the Board of Directors, TVA, should develop detailed implementation procedures and criteria for cost comparisons. These procedures should ensure consistent cost comparisons and well-documented decisions. The criteria that are developed should provide for cost comparisons which include the same scope and level of performance, the same cost factors, and all costs, including indirect overhead. |
Closed – Not Implemented
While there is still some relevancy to this recommendation, future monitoring of actions taken will be through RCED-83-123.
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