A Process To Determine Whether To Construct Projects In-House or by Private Contractor Is Needed by TVA

EMD-82-50: Published: Mar 15, 1982. Publicly Released: Mar 15, 1982.

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In response to a congressional request, GAO reviewed Tennessee Valley Authority (TVA) determinations concerning whether to construct projects in-house or by private contractor based on the more economical of the two approaches.

TVA does not have a procedure to compare the cost of construction using TVA employees to the cost of using a private contractor. Although TVA does not routinely compare costs, GAO found that evaluation of some of the comparisons made did not disclose that construction by private contractor was more economical than in-house construction. A task force recommended that TVA adopt a process that would result in a well-documented decision, considering all appropriate factors. GAO concluded that more specific supplementary actions need to be taken and instructions developed to ensure that valid cost comparisons are made and that all criteria are considered.

Recommendation for Executive Action

  1. Status: Closed - Not Implemented

    Comments: While there is still some relevancy to this recommendation, current actions will be followed up through report RCED-83-123.

    Recommendation: The Board of Directors, TVA, should develop procedures and criteria to implement the task force recommendation.

    Agency Affected: Tennessee Valley Authority


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