Plutonium shipping errors in June, a potentially deadly worker safety lapse in September and other management issues cost the operators of Los Alamos National Laboratory $5.7 million in performance award fees, National Nuclear Security Administration officials said Monday.
An agency spokeswoman confirmed in an interview Monday that in addition to $2.6 million deducted from the fees in a report released Friday, the lab was also docked $3.1 million for the plutonium shipping incidents. In total, the lab received $44.6 million in bonuses out of a possible $50.3 million from the National Nuclear Security Administration for fiscal year 2017.
The award rate was at least 15 percent lower than the laboratory earned the previous fiscal year and the most significant deduction since 2014, when a transuranic waste drum from the lab ruptured inside the Waste Isolation Pilot Plant in Carlsbad, releasing radiation and causing a three-year shutdown of the storage site. That costly mishap contributed to a more than $18 million loss in award fees for Los Alamos National Security LLC, a private consortium that runs the lab.
Several safety lapses and worker injuries were reported at the lab last year, including a small fire that burned one worker, two radiation releases and the discovery of an excess amount of plutonium in one location, a violation of a safety program meant to prevent a runaway nuclear reaction. A damning report from an independent federal safety board in the fall also said the lab was not prepared to respond to an emergency.
But the performance report released Friday focused on two issues in 2017 that prompted award fee deductions.
In June, a worker shipped plutonium by aircraft to South Carolina and California in containers that are certified only for truck shipment. In a letter accompanying the report, a National Nuclear Security Administration official said the agency was concerned that lab managers viewed the misshipments as “isolated events.”
The agency also cited a Sept. 13 incident in which a worker entered a room with a low level of oxygen, classified as a “near-miss to a fatality.”
In Jan. 4 letter accompanying the report, which was dated Nov. 30, an agency contract officer called the events significant lapses that indicate a “programmatic breakdown” in the lab’s safety management.
Lab Director Terry Wallace responded to the performance report in an statement issued Friday that lauded workers’ efforts.
“Serving the nation is a commitment all of us at the Laboratory take very seriously — and one we’re called upon to do every day,” he said in the statement.
The performance assessment comes as the lab prepares for a major shift in management. Since 2006, the lab has been managed by LANS, a private limited liability company formed by the University of California, Bechtel, BWXT Government Group Inc., and URS, an AECOM company.
In part because of the WIPP incident, the federal government announced that it would not renew the group’s multibillion-dollar contract after 2017. Following a one-year management extension, the lab is expected to be under new management by September.
The lab operators’ annual award fees include both fixed fees and higher-risk, performance-based incentives.
A spokeswoman for the National Nuclear Security Administration said Monday that as a result of negotiations between the administration and the lab to extend the contract an additional year, the fee structure was altered. As a result, fixed-fees were significantly higher than previous years, and at-risk fees, which are dependent on lab performance, much lower.
Award fees overall were reduced for 2017 by about $15 million, to just over $50 million. Good-performance incentives for 2017 were cut to a fifth of the possible award a year earlier, to $8.5 million from $41.3 million, while the fixed fees — which aren’t vulnerable to cuts due to poor management practices — surged to $41 million from $23.8 million in 2016.
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Correction, Jan. 23, 2018
Correction: This story has been amended to reflect the following correction. While the original version of this story reported that the operators of Los Alamos National Laboratory had lost $2.6 million in possible performance award fees for 2017, based on a November report released Friday, the National Nuclear Security Administration confirmed Monday that it had also reduced award fees for the lab by an additional $3.1 million for misshipping plutonium out of state by aircraft. The story has also been updated to reflect questions answered by the National Nuclear Security Administration, which could not respond to questions Friday.