Contractor at Watts Bar Nuclear Power Plant overcharged TVA nearly $4.4 million

Contractor at Watts Bar Nuclear Power Plant overcharged TVA nearly $4.4 million

May 31st, 2018 by Dave Flessner in Business Around the Region

The TVA Watts Bar Nuclear Plant is photographed on Thursday, Oct. 22, 2015, near Spring City, Tenn., as Unit 2 begins producing electricity for the first time, 43 years after construction began at the site.

Photo by Staff File Photo /Times Free Press.

The Tennessee Valley Authority was overcharged nearly $4.4 million by a contractor at the Watts Bar Nuclear Power Plant for construction of the Unit 2 reactor from 2013 to 2015, according to an audit released Wednesday.

TVA's inspector general said Williams Plant Services (WPS) used labor classifications not provided in its contract for nearly $3.5 million of work at Watts Bar and another $430,322 for excessive markups, ineligible overtime and other unsupported labor costs. The contractor also improperly billed for $435,624 of temporary living allowances and travel costs, according to TVA auditors.

"In addition, we found WPS did not provide labor classifications for $20.5 million in non-manual employee labor costs when it billed TVA," the inspector general said in a summary report of the audit. "Accordingly, TVA could not validate if the labor classifications were eligible for reimbursement or determine if the wage rates that were billed were within the ranges specified in the contract for each labor category."

TVA spokesman Scott Brooks said the federal utility is pursuing action to collect for the overcharges by the contractor.

"We concur with the findings, and will pursue recovery of the full amount as appropriate," Brooks said.

The Unit 2 reactor at Watts Bar was the last commercial nuclear plant built in the United States and was completed in the fall of 2016 after more than 42 years of starts and stops in construction.

TVA suspended construction at Watts Bar in the 1980s amid whistleblower concerns about the way the plant was constructed, forcing TVA to rewire and redesign much of the original facility. Work on Unit 2 was revived in 2007 when TVA estimated the unit could be completed within five years for another $2.5 billion. Ultimately, the plant took nearly a decade more to finish at a cost of over $4.5 billion, in addition to the estimated $6 billion spent before work on the Unit 2 was suspended a generation ago.

Despite the delays and cost overruns, the Unit 2 at Watts Bar still cost far less than the new reactors being built at Plant Vogtle in Georgia by Southern Nuclear Co.

Williams Plant Services provided indirect support services for work at the Watts Bar Unit 2 completion and was paid $104.3 million between January 2013 and August 2015. Company officials did not respond Wednesday to requests for comment about the critical TVA audit.

Contact Dave Flessner at or at 757-6340.