Feds give LANL contractor one more year

$2B+ contract will still go out for bid

The federal government has granted the Bechtel-led private consortium that runs Los Alamos National Laboratory a one-year contract extension, through September 2018, and, during the interim, the more-than-$2 billion annual contract will be put out for competition.

LANL director Charlie McMillan announced the latest developments at an all-employee meeting at the lab Thursday, following up on his disclosure in December that Los Alamos National Security LLC was losing the contract, but that some kind of interim extension would be worked out.

LANS — which, along with Bechtel, includes the University of California, Babcock and Wilcox, and URS Energy and Construction — has failed to get adequate performance reviews to earn additional contract years.

The worst evaluation was for the 2013-14 fiscal year, or FY 2014, during which a waste drum improperly packed with a combustible mix at LANL breached at the nation’s nuclear waste storage facility near Carlsbad.

The resulting radioactive contamination has kept the Waste Isolation Pilot Plant closed since the February 2014 leak, causing waste backups throughout the nation’s nuclear weapons complex sites.

The FY 2015 review — which still has not been released by the National Nuclear Safety Administration — was much better, but still fell short of what was required in order to keep the LANS contract alive beyond September 2017 and some additional, transitional period, McMillan said in December.

A Thursday memo from McMillan obtained by the

Journal included an “official communication” from NNSA. That statement said that, although LANS didn’t earn more contract years, the extension for another year through fiscal year 2018 “acknowledges the improvements made by LANS in mission performance during FY 2015.”

NNSA also said it is granting the LANS consortium another year “in order to facilitate environmental cleanup programmatic changes,” and to provide for new contract competitions for LANL operations and cleanup.

McMillan said in the memo: “My primary goal and that of the senior management team remains for the Laboratory to be in the strongest possible position through contract transition and into the future.” LANS can compete for the new contract.

An NNSA spokeswoman provided a comment Thursday confirming the contract extension for LANS through September 2018, and adding that NNSA and LANS are committed to the success of the Los Alamos lab, “its essential and enduring mission, and its people. Together, we seek to ensure the long-term health and vitality of LANL as a world-class institution.”

The NNSA communication included in McMillan’s memo also reiterated why LANS is losing the contract.

It noted that LANS had won the contract in December 2005 after the first-ever open competition for management of the Los Alamos lab. The University of California previously had run the lab on its own since the World Wart II Manhattan Project that created the first atomic bomb, but LANL was plagued by security and operation scandals in the years before the feds’ decision to “compete” the contract in 2005.

The LANS contract included a “base period” of seven years, through FY 2013, and the potential to earn up to 13 additional years based on “very good performance across the Laboratory,” Thursday’s NNSA statement said.

Early on, LANS’s evaluations were good enough to extend the contract through 2017. But, since then, evaluations weren’t sufficient over several years to meet extension standards. The evaluation for FY 2014, which included criticism over the WIPP mess, was so bad that LANS even lost one contract extension year that had been previously granted.

It’s unusual that the FY 2015 evaluations for LANL, as well as for the managers of Sandia National Laboratory in Albuquerque and other weapons complex sites, still have not been released by NNSA. The annual ratings are typically posted on the web in January following the close of the fis- cal year on Sept. 30. NNSA has said only that the 2015 evaluations process hasn’t been completed.

Also still not posted or released are the 2015 “fee determination” letters for LANS and the other NNSA weapons complex contractors, setting out how much of a performance-based fee they get on top of their contract amounts. The Los Alamos contract with LANS totals about $2.2 billion a year, but LANS can get many millions of dollars more for meeting performance goals.

After the poor FY 2014 evaluation stemming from the leak that shut down WIPP, the feds cut the fee for LANS by nearly 90 percent, down to $6.25 million. That compared with performance fees of more than $59 million paid to the LANS consortium the previous two years.