Summary

In response to a congressional request, GAO provided information on the impact of a fire and explosion that destroyed an ammonium perchlorate (AP) plant in Nevada, focusing on: (1) the event's impact on the space program; (2) whether quality and safety problems caused the accident; and (3) who would be responsible for replacing AP production.

GAO found that an advisory group established to resolve potential problems created by the loss of the plant: (1) believed that there was an adequate supply of AP through May 1989; (2) estimated a 14-million-pound production shortfall if the plant failed to resume operation in 1989; (3) did not expect a production shortfall to adversely affect major AP users; and (4) allocated a sufficient supply of AP for space shuttle flights through 1990 and to the Department of Defense for its expendable launch vehicles. GAO also found that: (1) although several agencies are investigating the causes of the accidnt, the plant was fined $36,455 for various safety violations; (2) another firm which produced AP restarted its operations in June 1988, after it paid a fine and corrected safety violations at its facility; and (3) although plans were under way to rebuild the AP plant and to build a new facility at a remote site in Nevada, it was unable to determine the replacement cost or the government's liability.