Interim Report on GAO's Review of the Total Cost Estimate for the Clinch River Breeder Reactor Project

EMD-82-131: Published: Sep 23, 1982. Publicly Released: Sep 23, 1982.

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In response to a congressional request, GAO analyzed the current cost estimate for designing, constructing, and operating the Clinch River Breeder Reactor (CRBR). The analysis included factors such as inflation rates, offsets, contingencies, and plutonium costs.

The Department of Energy develops the CRBR cost estimate by soliciting estimates from the three primary contractors of the project, and the current estimate is set at $3.4 billion. The estimates are calculated to include an 8-percent annual inflation rate, but this figure is speculative and may overstate or understate the actual cost depending on the actual inflation rate. The CRBR relies heavily on plutonium for its operation. However, because of its constantly fluctuating price, future plutonium production may cause current estimates to be significantly understated. Further, GAO believes that projected offsets resulting from electricity sales may be overly optimistic and that construction contingency costs appear to be low. GAO also believes that several items which are not included in the cost estimate but which could result in added costs are the salaries of full-time Government employees assigned to the CRBR project and the interest on Federal funds used for the project.

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