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Audit Report: IG-0616

August 13, 2003

Reconfiguration of the Kansas City Plant

In 1994, the Department of Energy announced its intention to study options for consolidating production operations throughout the complex. In response, the contractor at the Kansas City Plant submitted a plan to significantly reduce the size of its operations. In March 1997, the Department approved Kansas City's Stockpile Management Restructuring Initiative (SMRI), currently estimated to cost $138 million. The Department's approval was based on projected operational savings of $35.4 million per year, generated by consolidating similar production processes and equipment, allowing for a reduction in both the floor space and the workforce needed to achieve required production levels. The Department began restructuring activities in September 1999 and planned to complete the project by the end of September 2005. As long time advocates of reducing the Department's footprint consistent with its evolving mission, we initiated a review to determine if the Kansas City Plant's restructuring initiative would achieve the intended results.