Purdue, Bechtel team bids to run LANL

SANTA FE, N.M. — Another major university and a familiar corporate entity are apparently part of the competition for the next contract to run Los Alamos National Laboratory.

According to a respected publication that covers the nation’s nuclear weapons labs, their contractors and related issues, Indiana’s Purdue University has teamed up with Bechtel National to submit a bid for the LANL contract, worth more than $2 billion a year with the possibility of earning millions more in management fees. Nuclear Security and Deterrence Monitor says two sources confirmed the Purdue/Bechtel bid.

Proposals to operate LANL starting in October were due late last year. Three other major public universities – the University of California, the University of Texas and Texas A&M University – have confirmed that they are bidding on the contract.

UCal, which has been part of LANL’s management since the lab was created during World War II, and A&M are reportedly teaming together on a single proposal. The University of Texas is believed to have a corporate partner. The National Nuclear Security Administration, a semi-autonomous agency of the Department of Energy that oversees the national labs, has kept bidders’ identities confidential.

Spokesmen for both Purdue and Bechtel – which is part of a private consortium also including UCal that has run LANL since 2006 under an expiring contract – declined to confirm or deny a bid.

“As is Purdue’s usual practice, we do not comment on proposals that we may or may not have participated in or submitted,” Purdue’s Brian Zink said.

But in 2016, a press release that included a comment from Purdue’s president was issued when Purdue, Lockheed, New Mexico State and New Mexico Tech joined together to bid on the contract to run Sandia National Laboratories in Albuquerque. Honeywell won that contract competition.

Fred deSousa of Bechtel said this week: “We won’t be commenting on the procurement process right now. We’re concentrating on managing the Lab safely and efficiently as part of the LANS team.”

The Department of Energy decided to terminate its contract with Los Alamos National Security LLC, or LANS – which in addition to Bechtel and UCal includes the companies BWXT and AECOM – after the consortium received a series of inadequate performance reviews. LANS’ worst evaluation came after a drum of radioactive waste that was improperly packed with a combustible mix at Los Alamos popped open at the Waste Isolation Pilot Plant in Carlsbad, causing contamination that shut down the nation’s only nuclear waste storage facility.

Jay Coghlan of the watchdog Nuclear Watch New Mexico suggested that things didn’t work out well with the UCal/Bechtel partnership and the California school “wouldn’t touch” Bechtel on a new bid. “So Bechtel went off looking for an engineering school to partner with,” said Coghlan, referring to Purdue.

UCal ran the Los Alamos lab on its own starting with the Manhattan Project to produce an atom bomb in the 1940s until 2006. LANS won the first ever competitive bidding for the lab contract and took over that year.

Taxing the winner

One issue up in the air as the contract award approaches is whether the winner will be subject to state gross receipts taxes. UCal, a nonprofit, didn’t have to pay GRT, but LANS, as a private consortium, is subject to the tax. It paid about $76 million in GRT in 2015 that went to state and local governments.

A bill to tax LANL and Sandia, even if they are run by a nonprofit such as a public university, was overwhelmingly passed with bipartisan support in the Legislature’s session that ended last week – by 48-19 in the House and 31-4 in the Senate. The bill, which has raised legal issues about singling out the labs for taxation among nonprofits, now awaits a signature or veto by Gov. Susana Martinez.

The Regional Coalition of LANL Communities is leading a push to persuade the governor that the bill doesn’t represent a tax increase and will only maintain the status quo as it exists with LANS.

The coalition, which includes cities, counties and tribes in northern New Mexico, sent a letter to the governor this week. It says:

“Each contract acquisition the NNSA processes … sends a shockwave through our regional community with myriad negative and positive possibilities of what comes next. Therefore, we ask that you please sign SB17, so we can ensure our communities can continue to serve its constituents and the State can stabilize future budgets. Thank you for your commitment and we are grateful, in advance, to see your signature on this Bill.”