Santa Fe New Mexican

Light penalties, poor oversight fuel weak safety culture at nuclear labs

Explosions, fires and radioactiv­e exposures are among the workplace hazards that fail to make a serious dent in private contractor profits

- By Peter Cary, Patrick Malone and R. Jeffrey Smith The Center for Public Integrity

The plan on a hot summer day was to liquefy highly flammable lithium at a temperatur­e of more than 750 degrees and then pump it into a special chamber for cooling, as part of a research project at Sandia National Laboratori­es in Albuquerqu­e. But what happened instead in August 2011 was a near-catastroph­e that could easily have killed two workers.

The experiment was designed to help learn more about lithium’s potential use in an advanced nuclear reactor. But it went awry when someone turned the wrong valve and the heater holding the lithium cracked, causing the molten liquid to leak and spray abruptly onto a pipe holding the coolant.

The result was a steam explosion, a hydrogen explosion — or likely both — in the lab’s Plasma Materials Test Facility. The pressure blew open a port on the vacuum chamber, lifted the roof of the building and separated a wall in two places. It bent an exterior door 30 feet away. One worker was knocked to the floor, another narrowly missed getting hit by flying debris and a fire erupted.

The workers were under pressure themselves, a U.S. Department of Energy investigat­ive report later said, because the experiment­al project was scheduled to be finished in three days. The work was “sufficient­ly behind schedule so as to encourage short cuts,” the report said.

The Energy Department called the incident a “near miss to serious injury or fatality,” and its Sept. 25, 2014, notice of violation to Sandia Corp., a Lockheed Martin subsidiary, cited four Severity Level I violations, which can result in injury or death, and three lesser Severity Level II violations. It proposed a civil penalty of $412,500.

But at the same time, Energy Department officials said in the notice that the proposed fine would be entirely waived, due to what it called “significan­t and positive steps … to improve Sandia’s safety culture” since the 2011 explosion. In issuing the waiver, the agency didn’t mention two other serious accidents at Sandia in 2012 and 2013 — the misfiring of a detonator and a battery fire that spread

toxic fumes throughout a key building, even though both incidents were well known to safety enforcers in Washington.

The strange tale of what happened at Sandia and how the Energy Department reacted to it is not an aberration, though — instead, it’s part of what’s become a pattern that some experts consider alarming.

Much of what the nation’s nuclear weapons contractor­s do, how they do it and whether their achievemen­ts are clouded by mishaps is shrouded in secrecy. But internal Energy Department documents obtained by the Center for Public Integrity make clear that the nation’s eight nuclear weapons labs and plants, and the sites that support them, remain dangerous places to work, even after more than a half-century of concerted efforts to make them safer. The documents also make clear that the private firms that run these eight labs rarely suffer serious financial penalties for their mistakes.

The litany of mishaps discovered by the Center for Public Integrity is more than a little unsettling. Workers involved in complex experiment­s have inhaled radioactiv­e particles that pose lifetime cancer threats. Those involved in everyday tasks get electrical shocks, fall off ladders and are hurt moving heavy objects. They get knocked over when tests go awry. And they are burned by acid or in fires, splashed with toxic chemicals and cut by debris from exploding metal drums.

The costs to the government of these mishaps can be high — laboratory work is sometimes halted while workers are retrained and sites get cleaned or repaired, occasional­ly for years. But what’s particular­ly striking about the accident records is how contractor­s enjoy relative impunity for these problems.

The Center for Public Integrity’s investigat­ion found:

The private firms running these laboratori­es and factories are each paid between $40,000 and $160,000 per day in profit (above the absolute costs of running the labs), amounting to a collective total of more than $2 billion in pure profit over the past 10 years. But during that period, according to data collected by the Center for Public Integrity, the Energy Department’s enforcemen­t arm completely waived or significan­tly reduced 19 of the 21 major fines they said were allowed under the law for safety lapses and other workplace misconduct. In doing so, they eliminated about 46 percent of the total dollar figure of those proposed fines, eliminatin­g $3.3 million of the $7.3 million they said could have been imposed.

Even when the Energy Department imposed a significan­t financial penalty against one contractor in 2014, it amounted to a tiny share of the government’s costs to repair the contractor’s disastrous mishap. That case involved Los Alamos National Laboratory, which lost 90 percent of its potential good performanc­e profit in 2014 after its errors caused nuclear waste to be improperly packed in an undergroun­d New Mexico storage cavern, where it exploded. That amounted to a penalty of $57 million. But this was less than 4 percent of the estimated $1.5 billion cost to the federal government, so far, of cleaning up and dealing with the resulting mess — which exposed 21 people to radiation and potential health risks.

Meanwhile, the frequency of serious accidents and incidents at these facilities has not diminished — as it has at most other workplaces in America — and it might have risen significan­tly. One indicator of serious safety incidents, the number of violation notices, letters and consent orders sent to contractor­s after accidents and mishaps, has more than doubled since 2013. Fiscal year 2015 was a particular­ly problemati­c year, with seven Energy Department nuclear weapons facilities issued 16 such notices, three times the five sent out in 2013. There were 12 such notices, which typically cite safety violations and potential fines, in 2016.

The other mechanism for enforcing safety is the withholdin­g of some of the contractor’s profits for running the labs and plants. But a review of the payments to contractor­s at 10 nuclear sites over a decade — even with penalties like the one cited above — shows the contractor­s, on average, earning 86 percent of the maximum profit available to them.

“What’s the incentive to do the job right when no matter what, you get the money?” asks Ralph Stanton, a worker exposed to plutonium radiation in an accident at the Idaho National Laboratory.

Federal records show numerous instances in which the contractor­s, even after being hit with a financial penalty for malfeasanc­e, later committed new safety infraction­s. The situation has led some workplace safety experts to suggest that the contractor­s are just building the fines and penalties into their economic models.

“It is a cost of doing business, and the amount [of the penalties] is just not high enough to change their behavior,” said Celeste Monforton, a former Occupation­al Safety and Health Administra­tion analyst who lectures at George Washington University’s School of Public Health.

Asked for comment, James McConnell, the top safety official at the National Nuclear Security Administra­tion — which oversees the production of nuclear weapons — said in an interview that “safety is an inherent part of everything we do. … Every one of our employees has the right to go home as healthy as they were when they showed up at work.”

He did not dispute that the data collected by the Center for Public Integrity showed a notable rise in serious accidents since 2013, but he suggested the spike might have occurred a year or two earlier because enforcemen­t actions tend to run several years late. He also gave the Center for Public Integrity a chart showing that the number of individual workdays lost to accidents at NNSA sites held fairly steady over the past six years, and it was lower than that of industry subgroups that do analogous work.

But the agency, in preparing its chart, listed the industry accident rate for 2015 as the number for each of the five years displayed. It did so “to enable readabilit­y” of the chart, according to spokesman Greg Wolf. As a result, the chart did not show the steady decline in industry workday losses over these years — compared to what the NNSA depicts as its steady rate.

Profits immune to bad behavior

Senior contractor officials have admitted the federal safety enforcemen­t system is not working. In a report about “burdensome” oversight of their labs written in 2011 for the energy secretary, the directors of the Energy Department labs, who are all contractor employees, argued that they should be freed from the department’s safety oversight: “It has not been demonstrat­ed that [Energy Department enforcemen­t] has improved worker safety at the DOE facilities,” they wrote, according to a congressio­nal report.

Paltry financial penalties that are more than offset by high profits may be the key reason why safety problems persist at these sites. But they are not the only reason.

Here’s how the system works now: Each of the eight major nuclear weapons contractor­s has all its actual costs covered by the government, including recurring costs commonly known as overhead. At the labs, these amount to roughly 85 percent of direct, project-related costs, according to a study commission­ed by Congress in 2015 on the effectiven­ess of the labs — more than three times what such overhead expenses routinely cost.

The nuclear weapons work is, as a top NNSA official said in an October 2009 email to executives at Sandia, commonly viewed as “extremely low risk,” financiall­y speaking. The official noted that the contractor­s commit “virtually no financial investment,” contribute only a limited number of top executives, enjoy legal indemnific­ation protection­s and have “relatively few” costs that are not completely reimbursed.

It takes, the official said, “a complete screw-up/ bad faith” to get into trouble.

In addition, they can make between $15 million and $60 million a year in pure profit. It comes from two bins: a fixed or guaranteed minimum profit and a so-called performanc­e-related profit, which is supposed to be based on how well the contractor­s meet their agreed requiremen­ts.

These payments, along with the threat of fines for safety and security violations and the risk of having a contract canceled or shortened instead of extended or renewed, form the “carrot and stick” of the Energy Department’s management effort.

Each of the contractor­s separately negotiates its profit packages, which can run from 1 percent to as much as 7 percent of the total amount of the government-paid budget for the lab or plant. Those budgets include salaries between $1.2 million and $1.7 million for the heads of the three principal weapons laboratori­es, or more than four times what the Supreme Court’s chief justice makes.

The lab directors are responsibl­e for carrying out their sites’ national security missions, but also act as presidents of the companies contracted to run the labs, so profit-making and business developmen­t rank high among their priorities.

The contractin­g companies receive other financial benefits, as well, such as gaining access to advanced technologi­es the labs are pursuing and the prestige of being able to market themselves as the makers of American nuclear warheads.

“They are building this great big dangerous stuff,” said Neile Miller, principal deputy administra­tor of the NNSA from 2010-13. How can that not look good to other clients?

But no matter how well or how poorly the contractor­s perform, they have reliably collected most of the funds set aside as an incentive for doing their work correctly. A few awards in the past decade have been as high as 95 percent to 100 percent of those incentive pools.

Moreover, workplace safety is only one small portion of the overall criteria used to determine annual profit. So even when enforcemen­t fines run into the hundreds of thousands of dollars, they remain only a tiny fraction of the total profits routinely awarded to contractor­s.

Outside auditors and even the contractor­s themselves say these performanc­e-related profits are ineffectua­l tools in promoting safer conduct. The National Academy of Public Administra­tion, a group chartered by Congress that works with federal agencies to improve their operations, complained in a 2013 report, for example, that award payments at Energy Department labs are “not seen as a major motivator” of high-level performanc­e, simply because “all labs get most” of the payments for which they are eligible.

The executives who run Sandia Corp., which last year was awarded $27.5 million in federally paid profit, made the same point in internal emails discussing their contract with the government.

“In spite of the hype over monetary incentive contractin­g and the belief that contractor­s work harder and smarter when fee is at risk, we just don’t operate that way,” an unnamed Sandia official wrote in a 2010 internal “point paper” for management colleagues, obtained by the Center for Public Integrity through the Freedom of Informatio­n Act. It was one of many documents in which Sandia officials strategize­d on how to negotiate higher fixed profits in lieu of performanc­e-related rewards. (Sandia’s public affairs office declined to comment on the email.)

Besides the lucrative, guaranteed profits, there is one other contract provision dear to the contractor­s: If the firm does a good job, according to Energy Department rules, its contract can be extended for one or more years — saving it millions of dollars in expenses to prepare a new competitiv­e bid. But terminatin­g a contractor for poor performanc­e is a trigger that the department rarely pulls, with the result that most such firms have been able to count on a decade or more of steady income once they get their foot in the door.

Indeed, the Government Accountabi­lity Office, the nonpartisa­n investigat­ive arm of Congress, has estimated that the average Energy Department contract with extensions runs 17 lucrative years.

“Ultimately, decisions to re-compete contracts are the way to hold contractor­s accountabl­e for the quality of their work,” says Gregory Friedman, whose 17 years as Energy Department inspector general spanned three presidenti­al administra­tions before he retired in October 2015. “Award fees are part of the factor; interim evaluation­s, annual evaluation­s are a part of the factor. But there’s nothing more potent than re-competing a contract to get a contractor’s attention. It is the ultimate carrot and the ultimate stick.”

But the contract experience of Lawrence Livermore National Laboratory, 30 miles east of San Francisco, and of Los Alamos National Laboratory illustrate­s how this particular leverage is sometimes ignored.

Livermore, where warheads are designed and

related work is performed, was having a bad year in 2012. A signature effort to create fusion by bombarding hydrogen with high-powered lasers failed to deliver. The lab mismanaged funds on another project and experience­d several electrical safety incidents. So it received only 78 percent of the profit available to it for good performanc­e, two points below the minimum needed to get an additional year automatica­lly tacked onto its contract; it also got $20.8 million in additional, fixed profit.

But the NNSA’s then-deputy administra­tor Miller gave the lab an extra $541,527, pushing the performanc­e profit over the 80 percent threshold to get the extra year. The total profit wound up being 88 percent of the maximum possible.

She also gave Los Alamos, which similarly fell short of the 80 percent mark, a waiver allowing it to have a year tacked onto its contract. At a congressio­nal hearing in April 2013, Miller told lawmakers critical of the decision that she did so to support efforts by the labs’ new directors to improve their performanc­e, as a “one-time pass.”

U.S. Sen. Diane Feinstein, D-Calif., responded, “I am really concerned because … we come across all these problems — just problem, after problem, afte problem. And seemingly there is no resolution.”

The safety records of the two labs didn’t noticeably improve that year. At Livermore, three workers were accidental­ly sprayed with sulfuric acid while making high explosives. Two workers were severely burned, and a third was exposed to sulfuric acid mist. This event was cited by the Energy Department as being of “high safety significan­ce,” amounting to four Severity Level I violations and two Severity Level IIs. For this, the local field office imposed a performanc­e fee cut of $365,000, but no fines or civil penalties.

The NNSA’s performanc­e award letter to the lab that year also mentioned the blowout of a glass win dow in an explosives experiment, the exposure of a water treatment plant worker to leaking chlorine gas, a potential exposure of workers to asbestos in a large tank they were cleaning and an engineerin­g plating shop fire that caused $100,000 in damage.

The agency nonetheles­s rated Lawrence Livermore’s operations and management as “very good” overall and said it “exceeded expectatio­ns” in many areas of the operations category that also included health and safety protection­s.

In 2013, the managing consortium was awarded 78 percent of its available performanc­e-related profit, or $21.5 million. Coupled with its $19.8 million fixed profit, it received a total of 87 percent of all the maximum profit, or $41.3 million out of $47.4 million. But this time it didn’t get an extra yea added to its contract.

The same firms still run the lab, however, because the original contract is not yet up. Asked about its safety record, Lynda Seaver, media communicat­ions manager for the contractor consortium, said a response would come from the NNSA, its regulator.

Livermore “takes its safety and security very seri ously,” agency spokesman Wolf said. “Employees go through extensive training and work undergoes rigorous analysis to ensure protective measures are in place.” He said further that the lab’s safety record has been improving.

Los Alamos’ performanc­e, meanwhile, suffered after it got an extra year added to its contract.

In 2013, with the NNSA’s encouragem­ent, the lab director shut down the lab’s plutonium facility. In 2014 one of its improperly packed waste drums exploded and closed the nation’s undergroun­d nuclear waste facility for nearly years. In 2015, an electrical explosion burned a worker over 30 percent of his body.

The management contract was extended by a year in 2016, but the firms in control wound up losing the right to a longer extension without competitio­n.

Los Alamos spokesman Kevin Roark declined to respond to detailed questions about the lab’s safety record and incidents at the lab — including those caused at two other sites by Los Alamos’ mistakes, and detailed elsewhere in this series. He said the NNSA would respond on the lab’s behalf, “so there is no further need to contact Los Alamos,” Roark wrote in a May 16 email.

NNSA Chief of Staff William White said in an interview that the decision by Los Alamos’ director to shut down its plutonium facility in 2013 — “when push came to shove” — “speaks to the lab director’s prioritiza­tion” of safety in that case.

Spokesman Wolf declined to respond to many other detailed questions about Los Alamos’ safety lapses and their consequenc­es.

On June 23, however, the NNSA slammed Los Alamos for improperly shipping small quantities of special nuclear material to both Lawrence Livermore and the Savannah River National Laboratory last month. The shipments should have been sent by ground cargo but instead were sent by air, which is not permitted under federal rules for safety and security reasons.

“This failure to follow establishe­d procedures is absolutely unacceptab­le,” said agency Administra­tor Frank Klotz. The agency said there had been no loss of radioactiv­e material or contaminat­ion, but a investigat­ion is underway.

Not enough people to oversee the work

The dysfunctio­nality of the nuclear weapons contractor payment system has in some ways been predictabl­e.

The Energy Department, the federal government’s largest civilian contractin­g agency, has long been tagged by federal spending experts as an exceptiona­ll poor steward of those funds. According to a 2015 U.S. Government Accountabi­lity Office report, the agency devotes only 5 percent of its employee and contractor workforce to overseeing 90 percent of its budget.

At the NNSA — a semi-autonomous unit of the department — the problem is even worse: As a 2013 Energy Department-sponsored study revealed, the agency’s procuremen­t employees are each respon-

sible for overseeing roughly $287 million in contract spending, or 31 times the average for procuremen­t officials across the federal government.

The culprit here is Congress. With industry support, it restricts every year the number of Energy Department employees to a tiny fraction of the overall contractor workforce. For instance, in 2015, Congress — acting in response to what two sources say was pressure from the laboratori­es — limited the total number of NNSA workers (the people who oversee their work), to 1,690. By contrast, the contractor employees at the sites that year numbered 42,404, according to federal data.

Roughly three-quarters of the NNSA’s personnel are in Washington, moreover, rather than at the sites they are supposed to police.

This makes the government naturally dependent on contractor­s to report their failings and police themselves. “NNSA just needs more people,” former deputy administra­tor Madelyn Creedon said at a March 1 nuclear weapons conference in Washington, D.C.

Partly due to these personnel shortages, the GAO continuous­ly has tagged the Energy Department’s major contract management programs as being at high risk of mismanagem­ent, waste, fraud and abuse since it started making those assessment­s in 1990 — one of only three federal agencies or department­s to achieve that distinctio­n. Over this time, Miller said, “everything has changed except the potential for dysfunctio­n. You see it, over and over, in cost overruns.”

The Energy Department’s nuclear weapons cleanup work and its large weapons-related constructi­on projects have “struggled to ensure they have the capacity (both people and resources) to mitigate risks,” the latest GAO assessment said in February. “They have also demonstrat­ed limited progress in contract management … and have struggled to stay within cost and schedule estimates for some major projects.”

Some of the troubles can be explained by the arc of the nuclear complex’s history: Born in a world war and impelled by an urgent patriotic fervor, the weapons laboratori­es and production sites were by all accounts self-run, interested primarily in production and often heedless of workplace risks or environmen­tal harm.

“You get caught up in the tyranny of the moment,” said Don Nichols, the NNSA’s associate administra­tor for safety and health from 2013 until last year, in an interview reflecting on the safety lapses he has seen.

Lab managers act as if “what’s paramount here is getting this thing out the door,” he said. “… [They] don’t mean to send the message that safety’s not important. But [they believe] we do really need to get this thing done. We’re in the game of national security, and it’s not just a widget that’s going to go on a shelf. It’s a nuclear weapon that’s going to keep people safe.”

That urgency to fulfill the mission above all else, Nichols said, “can be overwhelmi­ng.”

The result has been a nuclear arsenal unrivaled in quality, but also the birth of the nation’s costliest waste and contaminat­ion sites, as well as a persistent record of cost overruns.

This is all not surprising, said Miller, who oversaw nuclear weapons-related spending at the Office of Management and Budget before becoming the NNSA deputy and then, for six months in 2013, its acting administra­tor.

The oversight staff for the laboratori­es had a high turnover rate, she said, so “who is setting the culture?” Those in Washington long saw their responsibi­lity as just writing checks, and reports from Energy Department officers in the field were typically glowing — “It all read like the town where all the children were a little above average,” Miller said. “They were graded on a curve, with everybody getting an A.”

Washington has worked harder in the past quarter-century to impose accountabi­lity, but the labs have resented it and complained of ignorant micromanag­ement. The friction occasional­ly has been intense, and in 2007, Energy Secretary Samuel W. Bodman — a chemical engineer and successful business investor — notoriousl­y decried the “arrogance of the chemists and physicists and engineers who … think they’re above it all,” during testimony before Congress.

“For 50 years, nobody gave a damn about how much it cost,” Miller said, because the labs delivered the nuclear warheads they were asked to provide. Putting two fingers together, she said, “We and the contractor­s were like this. The culture [at the labs] was one of anger and resentment from the first moment someone started looking over their shoulder.”

The Energy Department did not start formally regulating security and safety work by its contractor­s until 1988, but in 2008, at the end of the Bush administra­tion, the GAO reported that the department’s oversight work fell short in meeting five key criteria for effectiven­ess.

Included were a failure to inspect more than a third of Energy Department high-hazard sites and an inability to keep many violations from recurring. Although the GAO had repeatedly urged stronger oversight, the Obama administra­tion took the opposite tack.

Easing regulatory oversight

Responding to criticism from the labs that the Energy Department’s oversight had become onerous, the department eliminated 38 of its 80 safety directives affecting its labs and plants.

But the GAO concluded in 2012 — the same year that security lapses allowed an 82-year-old nun to break into a site in Tennessee holding enough highly enriched uranium for at least 10,000 nuclear bombs — that the Energy Department could not demonstrat­e that its actions had produced any safety or productivi­ty improvemen­ts; it warned instead that “in revising these directives, DOE could be underminin­g hard-won progress.”

The Energy Department’s safety and security enforcemen­t system is unusual in another way: When the Occupation­al Safety and Health Act of 1970 was passed to protect workers, it effectivel­y exempted two federal entities from its jurisdicti­on — the Energy Department and the Nuclear Regulatory Commission.

So the Energy Department took on the assignment on its own. “We’re self-regulatory … a little bit unique,” safety chief McConnell said.

But its enforcers wound up being handcuffed by a unique rule: It states that the agency cannot levy a fine for a specific violation if those who award its performanc­e-related profit have withheld some funds for the same reason.

It’s akin to avoiding prosecutio­n twice for the same crime — like the “double jeopardy” rule in criminal justice. But to workplace safety enforcers, it’s an unreasonab­le limitation on the magnitude of the punishment­s that might be imposed, like prohibitin­g the police from fining teenagers for speeding if their parents had already withheld some of their allowance for poor driving.

When told of the Energy Department’s “double jeopardy” arrangemen­t, David Michaels, who helped police federal workplace safety as director of the federal Occupation­al Safety and Health Administra­tion from 2009-16, said, “I have never seen anything like that before.”

Rena Steinzor, a professor at the University of Maryland School of Law who specialize­s in workplace regulation and enforcemen­t, said the arrangemen­t “has a fox-in-the-henhouse undercurre­nt to it.” The Energy Department is regulating safety performanc­e by its own contractor­s, with whom it has close ties, she said. “If they lose [some of ] their bonuses, they don’t have to pay any [safety] penalties? I rest my case.”

Monforton, the former OSHA analyst, argued that the safety enforcemen­t arm of the Energy Department should be able to operate independen­tly from the officials who decide on performanc­e-based profits based on many factors, including how well the labs fulfill their nuclear weapons-related production requiremen­ts. That way, each could maintain its integrity.

“What makes sense to me is to have these things separate,” she said.

Fires and detonation­s don’t dent profit

Although the Obama administra­tion altered the Washington-based management structure for the weapons complex somewhat — by ordering more attention to cost overruns and new protection­s for contract workers who blow the whistle on safety infraction­s — it didn’t complete many other needed organizati­onal reforms, congressio­nal auditors said in a report in February.

Early that same month, the Trump administra­tion, in one of its first decisions about the weapons complex, suspended implementa­tion of the department’s new whistleblo­wer protection­s pending additional study. That’s caused some critics to worry that the oversight process will continue to be organized — or rigged, as President Donald Trump might say — to favor the contractor­s’ interests.

Here’s an illustrati­on of how the profit payment system has played out: On Nov. 17, 2015, Sandia Corp. received another Energy Department censure for safety violations. This one was for two incidents — a badly handled 2012 lithium-ion battery fire in its Building 905, the 98,000-square-foot facility where explosives, neutron generators and batteries are tested, and the unexpected ignition of a detonator in 2013 at one of its explosives sites. Together, these incidents encompasse­d four Severity Level I violations (threat of death or injury) and two Severity Level II violations, the Energy Department’s violation notice said.

In the case of the 2012 battery fire, Energy Department documents depict a comedy of errors in emergency response and firefighti­ng. No one turned off the battery’s power, and no one in the test area called 911 or the Sandia emergency number. When Kirtland Air Force Base firefighte­rs finally arrived, they used the wrong type of fire extinguish­er. The building hadn’t been shown to meet the fire code. The ventilatio­n system for the equipment involved in the accident failed.

In the second incident, on Sandia’s explosives testing range at the foot of the Sandia Mountains in 2013, a detonator blew up in the hand of a worker. He was lucky, the violation notice said, because he had removed the detonator from a 1-pound block of C-4 explosive minutes before the detonator went off. “It could have killed him,” Nichols said. Again, there were numerous mistakes and lapses, including a failure to recognize that static electricit­y could ignite the detonator, as well as first-aid inadequaci­es and false reporting about the accident’s severity, according to the documents. A Sandia incident report said the worker did not go to the local hospital emergency room when, in fact, he did.

In the censure letter, Klotz said these safety deficienci­es followed previous incidents of a similar nature — the premature ignition of a rocket motor at Sandia’s sled track in 2008 that broke a worker’s leg, and the molten lithium experiment explosion and fire in 2011, cited at the top of this story, for which Sandia was not fined.

He further noted that “Sandia’s previous corrective actions had not been effective in preventing recurrence.”

But, even though federal regulation­s say

aggravatin­g circumstan­ces allow for enhanced penalties, the NNSA again imposed no direct fines because, Klotz’s letter said, the agency earlier had withheld $686,000 of Sandia’s profit in 2014 for the detonator accident and other unspecifie­d problems.

This may seem like a hefty penalty, but because of higher grades on other aspects of its nuclear weapons-related work, Sandia Corp. still received 93 percent of the maximum profit available to it that year, or $26.3 million.

And it received 96 percent of its available profit, or $25.8 million, in fiscal year 2013, the period of the lithium-ion battery fire. Both payments were just over Sandia Corp.’s average annual profits of $25.7 million over the past 10 years.

Current and former NNSA officials have said that Sandia’s persistent management problems played a role in their decision to give the operating contract to a new company, beginning May 1 this year — National Technology and Engineerin­g Solutions of Sandia LLC, a wholly owned subsidiary of Honeywell Internatio­nal.

But when Honeywell took over the $2.6 billion annual contract, only a handful of new faces showed up.

“Key personnel from the Honeywell team are running the lab,” said Jim Danneskiol­d, Sandia’s media relations manager. “A dozen new people came in, that’s all.”

The Sandia website features 10 new senior managers, including the new lab director, Stephen Younger, who had been the lab director at the Nevada National Security Site from 2006-12.

“Sandia considers the safety of all workers as paramount and is committed to continual safety improvemen­t,” Danneskiol­d said in an email. Past problems occurred because changes in the way they did their work from time to time had unforeseen consequenc­es, he said.

He added that feedback from Washington “has been positive overall,” and that the new management team will “continue to improve the labs’ safety culture.”

 ??  ?? Lawrence Livermore $299.8 million 10-year profit 85 percent of possible profit
Lawrence Livermore $299.8 million 10-year profit 85 percent of possible profit
 ??  ?? Neile Miller
Neile Miller
 ?? Los Alamos National Laboratory. ALBUQUERQU­E JOURNAL FILE PHOTO VIA AP ??
Los Alamos National Laboratory. ALBUQUERQU­E JOURNAL FILE PHOTO VIA AP
 ??  ?? Sandia $257.3 million 10-year profit 96 percent of possible profit
Sandia $257.3 million 10-year profit 96 percent of possible profit
 ?? SUSAN MONTOYA BRYAN/ASSOCIATED PRESS FILE PHOTO ?? National Nuclear Security Administra­tion Director Frank Klotz holds a news conference after meeting with the director of the agency’s three national laboratori­es at Sandia National Laboratori­es in Albuquerqu­e on May 8, 2014.
SUSAN MONTOYA BRYAN/ASSOCIATED PRESS FILE PHOTO National Nuclear Security Administra­tion Director Frank Klotz holds a news conference after meeting with the director of the agency’s three national laboratori­es at Sandia National Laboratori­es in Albuquerqu­e on May 8, 2014.

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