TVA audit reveals Bechtel overcharged by $7M for Watts Bar Unit 2 work

Dive Brief:

An audit by the Tennessee Valley Authority Inspector General revealed Bechtel Power Corp. overcharged the federal utility by almost $7 million for work done between 2010 and 2015 to complete Unit 2 at the Watts Bar nuclear plant.
Tennessee Valley Authority's new 1,150-MW reactor began operation last year as the first new nuclear unit in the United States in two decades.
According to the audit, Bechtel overbilled TVA by $6.8 million, including $3.8 million for "ineligible craft labor and related costs, and almost $3 million in "ineligible and excessive craft labor costs for material handling." According to the contractor, the audit does not accurately reflect its agreements regarding union labor.

Dive Insight:

Bechtel disputes the inspector general's findings, according to reports in the Times Free Press, while a utility spokesman says it is still in negotiations over payment. If the findings are verified, TVA spokesman Jim Hopson said the utility will "pursue the appropriate course of action to make sure this situation is rectified."

According to the audit, Bechtel overcharged for work completed between Jan. 1, 2010 and June 30, 2015.

A summary of the audit shows Bechtel overbilled by $3.8 million for "ineligible craft labor and related costs," which included ineligible overtime and double time costs, ineligible personnel history questionnaire incentive payments, and ineligible and/or unsupported meal allowances.

Another $2.9 million was overbilled for "ineligible and excessive craft labor costs for material handling." A much smaller amount was allegedly overbilled for craft labor "due to using an incorrect rate for the craft labor Helmets to Hardhats contribution," a program for military veterans in construction.

Bechtel spokesman Fred deSousa told the Times Free Press, "we have and will continue to provide the documentation to TVA that support our billing process which is in accordance with the terms and conditions of our contract and in compliance with applicable law."

Unit 2 began operations last year. It cost $4.7 billion to develop, and is part of a long-term plan during which TVA will also add up to 3,800 MW of solar and 1,750 MW of wind by 2033. Unit 2 was the first new commercial nuclear reactor in the United States to begin operation in 20 years.