Honeywell selected to manage Sandia labs

Copyright © 2016 Albuquerque Journal

WASHINGTON – A subsidiary of Honeywell International will take over management of Sandia National Laboratories early next year after winning the $2.6 billion contract Friday, beating out more than a dozen competitors.

graphic12-17-16The National Nuclear Security Administration took some by surprise when it bypassed defense giant Lockheed Martin, which has managed the nuclear weapons lab for more than two decades.

The state’s three research universities – University of New Mexico, New Mexico State and New Mexico Tech – had sought to play a prominent role in Sandia’s management as part of a separate bid with other companies, but those bids failed.

“Honeywell is excited to be part of the National Technology & Engineering Solutions of Sandia team that will be helping Sandia National Laboratories and their great employees continue the world-leading science and technology research work in support of national security,” Honeywell Aerospace spokesman Shaunda Parks told the Journal in a statement.

Parks said the NTESS team that won the Sandia bid on Friday also includes integrated subcontractor Northrop Grumman Technical Services Inc., another major defense contractor.

Sandia labs mechanical engineer Ryan Schultz adjusts a microphone for an acoustic test. (SOURCE: Sandia National Laboratories)
Sandia labs mechanical engineer Ryan Schultz adjusts a microphone for an acoustic test. (SOURCE: Sandia National Laboratories)

The contract award is valued at $2.6 billion annually over 10 years, if all options are exercised. Honeywell currently manages the Kansas City National Security Campus in Kansas City and in Albuquerque for the NNSA, an arm of the Department of Energy.

As incoming Sandia contractors, Honeywell and Northrop Grumman are expected to replace the entire leadership team that now runs Sandia, according to one analyst who has closely followed the bidding process. That includes lab President and Director Jill Hruby, Deputy Director and Executive Vice President Kim Sawyer and a dozen other vice presidents who head different lab programs and divisions.

The top brass all signed on to Lockheed Martin’s bid to continue running Sandia, which means Honeywell and Northrop Grumman would have named other leaders to run the lab in its bid to the NNSA, the analyst said.

“If they all signed up with Lockheed Martin, they all will be replaced over the four-month transition period,” the analyst said.

The lab’s 10,500 rank-and-file employees will not be affected, just the top brass.

“All other positions are secure,” the analyst said.

The Sandia Z-Machine is part of the Pulsed Power Program at Sandia labs. (SOURCE: Sandia National Laboratories)
The Sandia Z-Machine is part of the Pulsed Power Program at Sandia labs. (SOURCE: Sandia National Laboratories)

It was not yet clear which individuals be will be in charge of managing Sandia under the new contract.

19 applicants

Frank G. Klotz, undersecretary for nuclear security and NNSA administrator, said the Sandia contract generated plenty of interest. The Journal previously reported that almost 20 organizations, including private defense contractors and universities, sought the lucrative contract.

“The Sandia bid generated unprecedented interest from across industry, demonstrating that our improved acquisitions process is attracting high-quality competition and the best talent to serve NNSA’s mission,” Klotz said.

Al Stotts, an NNSA spokesman, told the Journal on Friday that Honeywell’s bid represented the best value “based on the collective mix of strengths and weaknesses identified” among the bids.

“Accordingly, the proposal submitted by NTESS was determined to provide the best value to the government with the highest technical ratings and the lowest price,” Stotts said.

The current management contract for Sandia will expire on April 30, 2017, allowing for a four-month transition period, which will provide stability for the workforce employed under the current contract and efficient continuity of operations for NNSA’s vital missions performed there, the NNSA said Friday.

With headquarters at Kirtland Air Force Base, Sandia is one of the Albuquerque area’s largest employers, with more than 10,500 people on its payroll and an annual budget of $2.9 billion. Sandia’s primary task is research, development and maintenance of nuclear weapons, but in the past decade its workload has broadened to include a range of other missions, including a growing amount of work for the Department of Defense and U.S. intelligence agencies.

Nineteen organizations from around the country had jockeyed for a piece of the action, with some heavy hitters in both the corporate and university arenas expressing interest.

‘Open competition’

The NNSA, which oversees the Albuquerque-based nuclear weapons lab, released its final request for proposals earlier this year and said it would “conduct a full and open competition” for awarding the contract, which consists of a four-month transition phase and a five-year base period with options for up to five additional years.

The Department of Energy first announced in 2011 that it planned to open the contract to new bidders but then granted a series of extensions to Sandia’s current manager, Lockheed Martin. A new Sandia contract must be in place by April 2017 under the current schedule.

Lockheed Martin spokesman Matthew Kramer voiced disappointment in the NNSA decision but said his firm would aim for a smooth management transition.

“Although we’re disappointed that we were not selected for the Sandia Management and Operating contract, we’re proud of our 23 years of service to Sandia and the NNSA, and we thank Sandia’s employees for their dedication and innovation,” Kramer said. “Sandia’s mission is critical to national security, and we’ll work with the incoming contractor to ensure a smooth transition. We’re committed to doing our part to ensure Sandia’s important work doesn’t miss a beat.”

Among the bidders were two groups that partnered with New Mexico universities. Lockheed Martin partnered with New Mexico State University, the New Mexico Institute of Mining and Technology in Socorro, and Indiana’s Purdue University. Battelle and the Boeing Co. partnered with the University of New Mexico, the University Texas System and the Texas A&M University System.

Both bidding groups had hoped to strengthen their competitive standing through those partnerships by proposing more joint research and collaboration with the universities. That, in turn, could create better workforce pipelines with qualified university graduates for potential hire at Sandia, plus more potential for joint efforts to develop and commercialize new technologies.

A 45-page “statement of work” released as part of the NNSA’s request for proposals at Sandia reflects much of the cutting-edge science already taking place at the lab, including “defense, energy efficiency, industrial competitiveness, engineering sciences, atomic physics, computational sciences, biological sciences, nano-science and other areas of national interest.”

Several members of New Mexico’s congressional delegation congratulated Honeywell on the news and said they stand ready to help with the transition. Sens. Tom Udall and Martin Heinrich, and Rep. Michelle Lujan Grisham, who district includes Sandia, issued the following joint statement:

“Throughout the contract award process, we have supported an open and fair competition, and we congratulate NTESS on its selection while also recognizing the important and valuable contributions of the labs’ current leadership team. Sandia National Laboratories plays a critical role in our national security as well as New Mexico’s economy and the greater Albuquerque community. This will be a time of change and adjustment for many in the Albuquerque area, and we’re committed to working to ensure there is continuity and a smooth transition over the next four months and beyond.

“Sandia’s success in all of its missions is dependent on its workforce, as well as the businesses, universities and many others who are an integral part of its overall operation. We urge NTESS and NNSA to continue — and strengthen — the lab’s workforce recruitment and retention, as well as its relationship with local small business subcontractors, entrepreneurs, business incubators, and labor organizations. We’re encouraged that New Mexico’s universities are part of the Universities Research Association, which will support NTESS, and we look forward to seeing the the lab continue to build a strong and mutually beneficial relationship with our state’s top-notch universities.”

Universities expect strong cooperation to continue

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