Tennessee Valley Authority

GAO was requested to investigate and report its opinion on 13 questions concerning arrangements between the Tennessee Valley Authority (TVA) and retired Admiral Steven White, who is serving as Manager of the TVA Office of Nuclear Power. The questions referred to this matter and payments to Mr. Norman Zigrossi as the Inspector General of TVA. This report, GAO answers six of these 13 questions. GAO found that (1) the retention of Mr. White by TVA under contractual arrangements constitutes the improper use of a personal services contract and represents a circumvention of the statutory ceiling on salary payments to TVA employees; (2) the above contractual relationship also appears to be a circumvention of the Dual Compensation Act; (3) since TVA has decided not to follow the provisions of the Federal Acquisition Regulation (FAR), its provisions would not apply to Mr. White's contract; (4) wholly apart from application of the FAR, TVA has not entered into a proper contract for filling management positions: (5) payments to Mr. Zigrossi cannot reasonably be viewed as anything other than part of his "salary" which is subject to TVA's statutory salary limitations; and (6) the Dual Compensation Act does not affect Mr. Zigrossi's salary from TVA so long as he is not actually receiving payments from the Civil Service Retirement Fund.