At the request of Congress, the GAO reviewed the Tennessee Valley Authority`s (TVA) decision to allocate all construction and construction work, focusing on the following basis: (1) basis of its decision; (2) justification for certain procedures followed by TVA to comply with the government in the Sunshine Act; (3) the impact of the decision on VAT staff; and (4) the impact of the decision on the operation of VAT. The GAO noted that (1) VAT decided to award the contract for the construction of facilities and major modifications, primarily to alleviate construction and modification problems and improve productivity and efficiency; (2) This decision reflects its new management approach, which focuses ON VAT`s internal staff on operations and maintenance. (3) In August 1991, TVA projected that contracting would result in annual savings of approximately $106 million, but 75 per cent of the projected savings depended largely on the ability of contractors to increase productivity and efficiency; (4) In January 1992, VAT revised its previous estimate and predicted that the decision would result in potential annual savings of approximately $191 million; (5) The events leading up to and culminating in the conclusion of the contract raised questions about the government`s compliance with the Government in the Sunshine Act, as directors and members of the executive committee participated in the deliberations on the contracting decision before the committee referred the final decision to the Board of Directors. (6) Until March 1992, THE VAT estimates that almost all temporary occupations and salaried workers, more than 300 annual and working jobs and some 500 permanent jobs have been cut; and (7) TVA has set up a staff transfer programme to provide paid workers with continuity of pay, training and employment assistance. Recommendation: In order to avoid procedural violations or the appearance of a possible conflict with the government in the provisions of the Sunshine Act, the chairman, the board of directors of TVA, should restructure the EXECUTIVE committee of VAT so that the three members of the board of directors do not sit on the committee. Subject: Due to the interest and concerns raised by the VAT award decision and because it is too early to determine the full effect of the decision, Congress may consider requiring VAT to submit semi-annual reports on the implementation of the VAT closing decision for the next three years. If Congress finds that such information is appropriate, it could receive the first semi-annual report by June 30, 1992. The report could provide information on the number of temporary work agencies and workers recruited by contractors; (2) the number of permanent salaries and annual employees and workers affected by the decision, as well as whether these workers resigned or obtained new jobs under the staff transfer program; and (3) productivity, efficiency and savings actually achieved through the VAT allocation decision. Notes: VAT will present its first report on 4 August 1992. Agency concerned: Tennessee Valley Authority: Board of Directors.