Issues Concerning DOE Justification for Building the Gas Centrifuge Enrichment Plant

GAO provided a supplement containing its analysis of and response to the Department of Energy's (DOE) comments on a prior report concerning the justification for building a gas centrifuge treatment plant. In that report, GAO concluded that building the plant is not justified at current projections of demand for DOE enrichment services.

DOE agreed that expected future demand for its enrichment services has declined from its earlier estimates and acknowledged that its 1980 uranium enrichment strategy study also found that DOE could provide enrichment services at the lowest cost by terminating the gas centrifuge plant and using a more advanced technology. However, DOE said that the GAO economic analysis was incomplete and inaccurate and that the analysis of its competitive market position did not place enough importance on improvements brought about by the current administration. In addition, DOE disagreed with several aspects of the GAO analysis of the budgetary impacts of completing, partially completing, or terminating the gas centrifuge plant. Based on its evaluation of the DOE comments, GAO saw no need to change its basic conclusion that building the plant is not justified. This supplement also discusses the DOE decision to accelerate its timetables for developing two advanced enrichment technologies.