Auditors find Bechtel overbilled TVA for nuclear work

Steam rises from the cooling tower of the Unit 1 reactor at the Watts Bar Nuclear Plant near Spring City, Tenn.
photo Steam rises from the cooling tower of the Unit 1 reactor at the Watts Bar Nuclear Plant near Spring City, Tenn.

One of the biggest nuclear contractors for the Tennessee Valley Authority overbilled the federal utility by more than $2.4 million for work at TVA's unfinished plants, according to audits recently completed by TVA's inspector general.

Bechtel Power Corp., which is helping TVA finish a second reactor at the Watts Bar Nuclear Plant and previously performed engineering work at the unfinished Bellefonte Nuclear Plant, submitted bills to TVA for ineligible labor, travel, and housing expenses as part of more than $580 million of non-craft work conducted by the contractor and its partners, TVA inspectors said.

TVA Inspector General Richard Moore said Bechtel overbilled TVA for $923,231 in labor hours and payroll additions, $938,928 in ineligible or unsupported relocation and travel bills and $204,336 in improper subcontractor costs at the Watts Bar nuclear plant near Spring City, Tenn. The overcharges were part of $520 million in Bechtel bills the Inspector General's office reviewed from 2010 to 2013 when TVA paid the engineering firm to help design, engineer and oversee some of the work on TVA's $4.2 billion project at Watts Bar by the end of 2015.

In a separate audit, TVA auditors found another $204,336 was paid for ineligible labor and living expenses from Bechtel's work with Sargent & Lundy LLC to perform engineering work at the Bellefonte nuclear plant in Hollywood, Ala. TVA paid the two nuclear contractors $60.7 million from 2010 to 2012 to help assess the condition of the Bellefonte plant before TVA decided to cease work and re-evaluate the future of the half-finished plant.

The Inspector General also found that TVA paid $1.9 million to the Bechtel and Sargent and Lundy joint venture at Bellefonte for relocation and temporary living expenses that were not specifically shown to be eligible on forms or contracts made during the two years that were audited.

TVA has not decided when, if ever, it will try to complete the Bellefonte Nuclear Plant.

The overbilling reported by auditors since 2010 represents less than a half of 1 percent of the total amount paid by TVA to the nuclear contractor during the audit period.

But TVA spokesman Jim Hopson said the utility is committed to paying only what it owes those firms that help build TVA's power plants.

"We demand the same high degree of accountability from our contractor personnel as we do with our own employees and fully cooperate with any investigation of alleged issues with fraud, waste or abuse," he said.

In the 1980s as part of an earlier cost-cutting program, TVA replaced its own construction workforce with outside contractors for most of the building and major repair of its power plants. Hopson said using contractors for major projects and time-sensitive technical maintenance activities "helps assure the continuous flow of reliable, low-cost power."

TVA's inspector general released only a summary of the contractor audits, not the complete findings or company responses.

Contact Dave Flessner at or at 757-6340.