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DOE and micromanagement crippling LANL

The Department of Energy found in 2014 that Los Alamos National Laboratoy had “significant shortcomings that reflect unfavorably on laboratory management.” The problems found at LANL have been around for years and are not confined to LANL.

The national laboratories have been frequently studied over the past 20 years. These studies consistently find these laboratories attract very high quality technical personnel who have the capacity to do innovative work. However, their productivity suffers from poor management by DOE, by the contractors who manage these laboratories and by the laboratories’ senior executives.

The Heritage Foundation found that these labs’ bureaucracies do not reflect the nimble characteristics of today’s innovation-driven economy. Inefficiencies, duplicative regulations and top-down micromanagement stifle innovation.

The U.S. General Accounting Office presented testimony to the House of Representatives in 1999 that agrees. Recent DOE findings regarding LANL have been repeated many times in the past, and the offender is not always LANL or its contractor management team.

We think that it is time to re-evaluate what this elite set of laboratories do, which agency or agencies these labs report to as well as who should be awarded the contract for managing these laboratories.

The government-owned, company-contractor-operated (GOCO) model of operating these laboratories is particularly in need of critical examination. The following is a summary of some of the deficiencies we see in the GOCO model.

1. A portion of the total compensation of today’s laboratory directors and other senior executives is paid by the company contracted to manage the laboratory, not the federal government. This practice invites conflict of interest. One lab contractor acknowledged to the Albuquerque Journal that it paid compensation to a laboratory director’s retirement and another revealed that senior executives’ salaries were proprietary to the contractor. This is all apparently acceptable to DOE, so one can reasonably assume that this practice is widespread.

From 1949 to 1993 Sandia National Laboratories was managed on a no-profit, no-loss, “exceptional service in the national interest” basis by AT&T. AT&T senior executives from Bell Laboratories and Western Electric were assigned to Sandia Corporation on leaves of absence to serve in senior management positions including president or laboratory director. AT&T assignees who retired while at Sandia transferred back to AT&T and received their retirement pensions from AT&T.

2. Technology developed at the DOE laboratories flows more freely to the contractor company than to the contractor’s competitors – a taxpayer-paid advantage to the contractor. This vulnerability is particularly prevalent in cases where the technical capabilities of the laboratory are superior to those of its contract manager.

3. The DOE’s excessive emphasis on pervasive inspections for safety and other compliance issues has resulted in what some term the “world’s largest work-free, safe zone.” This may seem humorous until the taxpayer realizes who is paying for this monumental paper mill. This creates an evaluation system largely based on who caters to DOE the most and best keeps all of its thousands of mandated forms up-to-date.

4. The contractor companies, via their political action committees, can contribute to their respective U.S. senators and representatives. The conflict of interest is all too apparent. It can tempt the laboratories to lobby on behalf of their contractor team as DOE suggested Sandia has done.

For the national laboratories to fulfill critical, long-term needs for the public it is imperative that their management structures be reviewed to assure “exceptional service in the national interest.”

G. T. Cheney, a resident of Macungie, Pa., was at Sandia from 1988 to 1993 as a vice-president on assignment from AT&T. Ed Graham, an Albuquerque resident, was a director at Sandia and retired from the University of New Mexico. Both Cheney and Graham served as presidents of SEMI/SEMATECH. James Gover is a resident of Rio Rancho, an IEEE Life Fellow, a Sandia retiree and professor emeritus at Kettering University.

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