Los Alamos contract will go to highest bid

    Ending several months of speculation, Energy Secretary Spencer Abraham announced on April 30 that the contract to manage Los Alamos National Laboratory will be made open to competitive bidding, and that the University of California will have to compete in order to retain the contract.

    Spencer Abraham
    Department of Energy Secretary

    Although he praised the management improvements made by the University of California, Abraham maintained that the university bears responsibility for the laboratory’s management failures.

    “”Given that responsibility and the widespread nature of the problems uncovered at Los Alamos, I intend to open the management of Los Alamos to full competition when the current contract expires,”” Abraham said in a statement. The current contract with the university is set to end in September 2005.

    The University of California has managed the New Mexico laboratory uninterrupted since its inception in 1943. The laboratory employs 7,600 people and has an annual budget of $1.6 billion. The University of California also manages Lawrence Berkeley National Laboratory and Lawrence Livermore National Laboratory.

    Abraham noted that the University of California is still eligible for the contract and said that he “”strongly agreed”” that the university should compete for the laboratory.

    “”I categorically reject the notion that competition is a repudiation of an incumbent contractor or that an incumbent contractor is inherently incapable of prevailing in a competition,”” Abraham said.

    In a written statement dated April 30, UC President Richard C. Atkinson left open the question of whether or not the university would choose to compete, but said that his instincts were “”to compete — and to compete hard.””

    “”We believe, with every fiber of our institutional being, that continued UC management is in the absolute best interests of the nation’s security,”” Atkinson said.

    The final decision of whether or not the university will compete will be decided by the UC Regents, who will be discussing Los Alamos at their next meeting in mid-May in San Francisco.

    Allegations of funding mismanagement arose in November 2002, and since then, Department of Energy investigations and UC-funded audits found that due to lack of strict oversight, laboratory funds were used to purchase questionable items such as jackets, shoes, hand lotion and hunting supplies. One employee attempted to use a laboratory charge card to buy a Ford Mustang.

    Abraham based his decision on an April 26 report and recommendation made by Deputy Energy Secretary Kyle McSlarrow and Acting National Nuclear Security Administrator Linton F. Brooks. Brooks will be in charge of determining the criteria for accepting potential bids.

    The report said that although the university was slow to resolve problems, its subsequent actions to that end were “”broad, forceful, and effective.”” The report also recognized that the alleged mismanagement was not as widespread as once thought and was the result of “”the failures of a few.””

    Of great concern to long-time workers at Los Alamos, Abraham also said the he would work to ensure that should the University of California not continue managing the lab, that the current workforce would be retained and that the pension benefits of current Los Alamos employees be protected by new management.

    Parties that are rumored to be interested in the contract include the University of Texas system and the University of New Mexico as well as corporations such as Lockheed Martin and Battelle — both of which already manage laboratories for the Department of Energy.

    On May 1, Atkinson will testify before the House Committee on Energy and Commerce regarding the alleged mismanagement and the corrective steps taken at Los Alamos. His appearance was scheduled prior to the energy secretary’s announcement. On March 12, UC Senior Vice President Bruce Darling appeared before the same committee.

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