Federal officials are running out of time to make a decision about whether to renew Lockheed Martin’s contract to manage Sandia National Laboratories or to hold a bidding competition to choose a corporate manager.
The current contract for management of the nuclear weapons lab, which dates to 1993, expires at the end of September 2012, less than 15 months from now, and the federal government has run out of options to easily grant the company a one-year extension, federal records suggest.
Headquartered in Albuquerque with a budget of more than $2 billion and more than 10,000 employees, Sandia is one of the nation’s three nuclear weapons design and maintenance laboratories.
One corporate team, a joint venture of Boeing and Fluor, has already gone public with its desire to bid on a Sandia contract, and other possible contenders are believed to be waiting in the wings.
Lockheed Martin would not comment on its plans beyond suggesting it would like to continue to manage Sandia: “Lockheed Martin is proud to support the Department of Energy through its management and operations contract for Sandia National Laboratories,” said company spokesman Tom Greer.
“While it would be premature to confirm our entry into a competition before one exists, we certainly look forward to continuing what has been a productive and mutually beneficial relationship with Sandia.”
The most recent nuclear weapons lab bidding process – from initial request for bidders to run Lawrence Livermore National Laboratory to implementation of the new contract – took nearly 17 months. Before that, it took 18 months between the initial announcement of a bidding competition and implementation of the contract for Los Alamos National Laboratory.
Federal officials have refused to comment on their plans for the Sandia contract, but the timing of past bidding efforts has led to speculation that a decision is needed soon if the National Nuclear Security Administration wants to hold a competition in time to get a new contract in place when the current one expires.
Lockheed Martin has done an “outstanding” job managing Sandia, which has earned it a series of single-year contract extensions, but “the terms of the management contract do not allow any further such extensions,” federal officials wrote in a 2010 memo.
That would appear to set up the possibility of a new bid competition, which is the approach the NNSA took twice in the past decade: at Los Alamos and Lawrence Livermore.
But with the NNSA running short of time to issue a call for bids, there is also recent precedent for the agency granting what it called a “noncompetitive extension” of a major management contract. In 2010, the federal agency gave Honeywell Federal Manufacturing Technologies a five-year, no-bid extension to manage the Kansas City Plant, where nuclear weapon parts are made, under basically the same terms as its existing contract.
One widely discussed possibility is a middle ground between the Kansas City approach and a quick bidding competition – a one-year deal to keep Lockheed Martin as Sandia’s manager to allow more time for a full contract competition.
Critics question the wisdom of a bidding process because of the results of the last two, in which consortia led by industrial giant Bechtel won management contracts for both Lawrence Livermore and Los Alamos.
In both cases, the new contracts have been substantially more expensive for taxpayers than Lockheed Martin’s contract to manage Sandia.
The government paid the Bechtel team $46 million last year to manage Livermore, while the Los Alamos management team received $74 million. Lockheed Martin, by comparison, received just $26 million to manage Sandia, despite receiving higher management performance ratings than the management teams at Los Alamos and Livermore.
“Lockheed Martin is a different beast,” said Scott Kovac of Nuclear Watch New Mexico, a Santa Fe-based watchdog group. “They’re really good at what they do.”
Former Sandia Labs President C. Paul Robinson agreed that taxpayers do not seem to be getting additional benefits from the higher management fees in the new Los Alamos and Livermore contracts.
Stephen Acra, who oversees the Boeing team pursuing the Sandia contract, said he believes management of the labs would be a good fit for his company.
“Sandia as a national laboratory is the pre-eminent energy lab in the Department of Energy,” he said in a recent interview. “Boeing is an engineering company.”
See CLOCK on PAGE A8Clock Ticking On Sandia Contractfrom PAGE A1″Lockheed Martin is a different beast. They’re really good at what they do.”SCOTT KOVAC, OF NUCLEAR WATCH NEW MEXICO, A SANTA FE-BASED WATCHDOG GROUP
— This article appeared on page A1 of the Albuquerque Journal
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