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Group Led by Bechtel Gets $59.7M To Run LANL

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Federal officials have awarded the Bechtel-University of California group that runs Los Alamos National Laboratory $59.7 million for managing the lab in 2012, but held back another $15 million that lab managers could have earned.

Also, Los Alamos National Security LLC got a one-year contract extension through a “one-time waiver” that was granted by the National Nuclear Security Administration, despite LANS’ failure to meet all the criteria for the extension.

LANS could have earned as much $74.5 million for the 2012 fiscal year and got 80 percent of that.

It was awarded $27.9 million in fixed fees and work for other entities and another $31.6 million as a so-called “at risk” fee based on performance.

The at-risk fee could have been as much as $46.5 million, but LANS got only 68 percent of the maximum – its lowest score since taking over the lab in 2006, according to the Nuclear Weapons and Materials Monitor.

LANS is supposed to earn at least 80 percent of the at-risk fee in order to win an “award term” extending the LANL management contract for an additional year.

But that requirement was waived in this case by Neile Miller, NNSA’s principal deputy administrator, according to reports by both the Nuclear Weapons and Materials Monitor and the Los Alamos Monitor local newspaper.

Both publications cited a Dec. 7 letter from an NNSA official that said Miller “expressed a desire to award LANS the (contract extension) award in recognition of LANS’ acceptance and accountability for problems” with a flawed security system at the lab and for “moving aggressively to correct the issues.”

Lab officials discovered last year that a project designed to improve security for the building where workers sometimes make plutonium nuclear weapons parts didn’t work. The project using sensors, cameras and other technology to protect the sensitive site had a $213 million price tag and more money will be needed to fix it.

LANL director Charles McMillan, in a Dec. 21 memo to lab employees, said LANS “received low marks” in NNSA’s performance evaluation for the security issue; an August incident where employees tracked low-power radioactive material out of the workplace; “certain nuclear formality of operations issues, and our quality program.”

“This translated into a reduced award of fee for LANS,” McMillan wrote.

“As a premier national security laboratory, we are held to very high standards for safety, security and mission performance – and rightly so,” he said in the memo.

“These expectations are reflected in NNSA’s evaluation of our performance for Fiscal Year 2012 … While we fell short in some areas, I can report that NNSA gave us a final score of 80 percent (of the possible total payment) and – I’m very pleased to say – did award us an additional contract year.”

McMillan said the LANS contract now continues through fiscal year 2018. “We continue to have opportunities to earn award terms that could extend the contract to 2026,” he wrote.

“In my view, the stability and consistency afforded by a long contract term is extremely important to the success of the Lab,” his memo adds. “I am pleased that we have added another year to this stability.”

McMillan said LANS got high marks in several areas while executing more than $2.2 billion in work for the nation in fiscal year 2012, in areas including weapons missions and nuclear security, science breakthroughs, the handling of a “voluntary separation” program to reduce the LANL workforce due to budget cuts, completion of seismic safety upgrades, and shipment of transuranic waste for permanent disposal.

“It is a fact of life that negative issues often outweigh positive accomplishments,” McMillan wrote. “The Laboratory successfully completed its missions despite having nearly $400 million less than in 2011. However, I agree with the principles that underlie our contract and our partnership with the government. Just as the NNSA rewards us for excellence in science and mission execution, it must hold us accountable for failures.”

McMillan concluded his memo to lab employees with: “We are not given easy work. We solve the most difficult problems humans have ever known. Each year, you rise to the challenge. I deeply appreciate your efforts. With our predecessors, we have helped keep the world safe for nearly 70 years. Because of your dedication to excellence, we stand ready to continue for decades more.”

Efforts by the Journal to reach NNSA officials for comment Wednesday were not successful.

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