The Office of Nuclear Energy’s Contract Award to American Centrifuge Operating, LLC (Centrus) for the High Assay Low Enriched Uranium Demonstration Project
July 8, 2025
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7/2/2025
The Office of Nuclear Energy’s Contract Award to American Centrifuge Operating, LLC (Centrus) for the High Assay Low Enriched Uranium Demonstration Project
From June 2012 through September 2015, the Department of Energy invested approximately $397 million in the United States Enrichment Corporation (renamed Centrus in September 2014) to financially support a research, development, and demonstration program for the large centrifuge technology at Centrus’ demonstration facility in Ohio. However, in September 2015, more than a year after the company declared Chapter 11 bankruptcy, the Department terminated funding for the project. Centrus was unable to continue operation of the demonstration plant without further support and, in February 2016, announced its intent to demobilize it. In May 2019, the Department awarded a sole source contract with American Centrifuge Operating, LLC, a subsidiary of Centrus, for the High Assay Low Enriched Uranium (HALEU) Demonstration Project.
This audit was initiated to determine whether the Office of Nuclear Energy’s (Nuclear Energy) contract award to American Centrifuge Operations, LLC was in the Government’s best interest.
We found that Nuclear Energy constrained competition throughout the pre-award and award phases for the HALEU Demonstration Project by including highly restrictive requirements. Specifically, Nuclear Energy bypassed contracting rules outlined in the Federal Acquisition Regulation, and the Notice of Intent and the Justification for Other Than Full and Open Competition contained restrictive requirements that limited competition. In addition, Nuclear Energy awarded the sole source contract to a contractor with financial risks and questionable viability at the time the contract was awarded.
Limiting competition for awards is generally not in the Government’s best interest. Acquisition should be fair, transparent, and facilitate competition, which helps ensure the Government receives the best value while satisfying the needs of the agency. However, in this case, the procurement actions included restrictive language that limited competition. As a result, the Department may not have received the best value for taxpayer resources.
Because more than 6 years have passed since this procurement decision, we are not making any recommendations. However, we encourage Nuclear Energy to consider our findings and observations during future procurements, paying particular attention to potential sole source awards.