Photo courtesy Los Alamos National Laboratory 

The private consortium that runs Los Alamos National Laboratory will not have its contract renewed after it ends Sept. 30, 2017, The New Mexican has learned. The consortium is currently in negotiations with the federal government that could extend the $2.2 billion annual contract beyond 2017, even as the contract is put back up for bid.

The decision not to renew the contract follows a blistering series of federal investigations and performance evaluations involving the lab’s safety record after a drum from the lab burst and leaked radiation at the Waste Isolation Pilot Plant in February 2014 near Carlsbad, shutting down the nation’s only underground nuclear repository indefinitely.

The Department of Energy notified staffers with the New Mexico congressional delegation about the decision to put the contract up for bid on Friday, according to two people familiar with the discussions who spoke on condition of anonymity.  Members of the delegation were not available for comment Friday evening.

Lab officials did not immediately return calls seeking comment Friday evening.

The lab has been run since 2006 by Los Alamos National Security, which took over operations after years of accounting scandals, security lapses and other management issues. The company is made up of a partnership between the University of California, Bechtel Corp., Babcock & Wilcox Co., URS Corp. and AECOM.

But the consortium repeatedly has run into its own problems over the past several years. In 2013, the National Nuclear Safety Administration, the arm of the Department of Energy that oversees the lab’s contract, denied LANS a one-year extension of its contract to operate the lab because it fell short of its goals for repairing and reopening some weapons facilities. Still, the NNSA awarded LANS about $52 million in performance fees, or 87 percent of the full amount possible in 2013.

Then, last December, the NNSA issued a stinging performance evaluation in the wake of the WIPP leak. In that evaluation, the lab received grades of “unsatisfactory” in key areas that cost the consortium a year on its contract and about $57 million in incentives.

The lab has received the results of its latest performance evaluation for 2015, according to an internal memo obtained byThe New Mexican. The results, though better, were not good enough to earn a “unilateral” addition of another year in what is known in the contract as an “award term.”

“While I am deeply disappointed that we did not meet NNSA’s expectations in a manner sufficient to net another year of award term, I am extremely proud of our accomplishments,” lab Director Charles F. McMillan wrote in the Thursday, Dec. 17, memo to lab employees.

In the memo, McMillan focuses on the positives and does not mention that the contract will be up for renewal, but the language underscores the gravity of the situation.

“Understandably, this news is sure to generate questions for each of you,” McMillan wrote. “Nevertheless, I once again express my deeply held belief that the Laboratory’s greatest asset continues to be its people.”

A few paragraphs later, he writes, “I am scheduling an all-employee meeting shortly after the New Year to hear and address your thoughts, concerns, and questions.”

The new evaluation is not expected to be released publicly for a few weeks. But the memo purports to show substantially better results than in 2014. The memo says the lab received high scores in four of six categories, including management of the nuclear weapons mission and its mission of reducing global nuclear security threats. But it received only a “satisfactory” in the category of “operations and infrastructure.”

The lab needed to receive better than “satisfactory” in all six categories to qualify for an additional year in its contract.

“We did not accomplish this,” McMillan wrote. He added, however, that the NNSA has offered the consortium an extension. “I will provide additional details about that at a later date after there has been more discussion between the federal government and LANS,” he wrote.

“Our federal partners,” he added, “made it clear that shortcomings in our work planning and work controls related to safety events, project performance, cybersecurity, the earned value management system (EVMS), and continued weaknesses in criticality safety all weighed heavily in the evaluation of our performance,” McMillan wrote. “These are areas we must — and will — improve going forward.”

Justin Horwath can be reached at 986-3017 or jhorwath@sfnewmexican.com.

(4) comments

Khal Spencer

These chaps had the right idea. For one night.

Chris Mechels

For those interested, the today's coverage, by Mark Oswald, in the ABQ Journal is much more complete and informative.

For those who don't understand the current LANS structure, and the continued dominance by UC, its all there if you look closely.

The LANS Board Chairman is, by definition, from UC. The Vice Chair is Bechtel. The LANL Director is chosen by UC. The Deputy Director by Bechtel. As the Deputy reports to the Director, UC clearly runs the show.

Also, the Director has the power, via the Board, to remove the Deputy Director.

So, even though Bechtel is "blamed" for operational failures, they only have as much power over operations as the UC appointed Director allows them. This leads to LANL Staff Members, from the Technical Staff, ignoring operations directives from the Operations side. This, in fact, is what led to the WIPP fiasco.

UC has some sort of muddled picture, that the Science must always "trump" the operations, LANL management feeds that picture. Therefore, they must be cleaned out, and effective management brought in .

WIPP cost us billions. UC mismanagement has cost us ten of billions. As noted, UC mismanagement was well known in 1970, the rest is politics.

Jay Coghlan

As the trillion dollar “modernization” of U.S. nuclear forces moves forward, note how the Department of Energy infrastructure is hollow because of contractor greed, incompetence and waste. I expect that to limit the scale and timing of “modernizing” the DOE nuclear weapons complex (“modernization” in effect means the indefinite preservation of the nuclear weapons stockpile and its supporting research and production infrastructure, contrary to official U.S. policy that endorses a future world free of nuclear weapons). This includes Life Extension Programs that give existing nuclear weapons new military capabilities despite denials at the highest levels of the U.S. government, and new production facilities such as the Uranium Processing Facility at the Y-12 Plant near Oak Ridge, TN and plutonium facilities at Los Alamos which face constant cost overruns.

There could also possibly be developments in the first quarter of next year related to its illegal lobbying activities that would shake up Lockheed Martin’s grip on the Sandia Labs (the Sandia contract is also scheduled to be put up for bid). In short, 2016 could be a very fluid and unstable year for the DOE nuclear weapons complex, even as it seeks to put the B61-12 smart nuclear bomb into production and move forward aggressively on a nuclear warhead for a new first-strike air-launched cruise missile.

Jay Coghlan
Nuclear Watch New Mexico

Chris Mechels

This whole method of "extending" contracts need to be scrapped. The contract was for 5 years, starting in 2006. The extensions, as incentives, are far too political and far too subjective.

The LANL contract should be put up for bids, immediately, due to LANL performance issues, as shown most clearly in the WIPP failure, which cost us billions. LANL not only failed its obligation, but they tried to cover it up. Disgusting, but typical.

The contract should be put out for bids, ASAP, and the University of California should not be allowed to participate, due to their failure of LANL oversight going back to 1948. Enough is enough....

The last contract bid was "poisoned" by Senator Domenici, who insisted that the RFP, "could not exclude" UC. This essentially allowed UC to dictate the RFP content, to terms favoring UC. In a word, Pete "wired" the RFP for UC.

Even so, the DOE was not going to award the contract to UC/LANS (this from insiders) and Pete intervened again.

Hopefully, the contract will be bid, soon. LANS/UC should be disqualified, due to their past failings. Our Senators should keep their hands off the process, unlike the meddling of Pete Domenici, which simply prolonged the incompetent UC "management" of LANL.

It has been well known, since the "Zinner Report" of 1970, that UC was incompetent to operate LANL. The rest is politics.

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