Northrop Grumman drops out of Los Alamos competition
Defense contractor’s decision leaves two major bidders for the management contract.
A leading defense contractor announced Thursday that it will not compete for the contract to manage Los Alamos National Laboratory, leaving a field of only two prominent competitors.
Northrop Grumman officials said they decided not to pursue the contract after the Energy Department issued its final request for proposals. That request, issued May 19, significantly raised the value of the management contractor's fee in addition to calling for the winning bidder to establish a separate corporate organization to run the laboratory and to seek a performance guarantee from the parent organizations.
"Based upon its evaluation of the Los Alamos National Laboratory request for proposal, Northrop Grumman corporation has decided not to pursue the contract," the contractor said in a press release. "The company determined that it can best provide that support through other key programs."
A spokeswoman declined to say what aspect of the request deterred the company from making a bid.
The University of California has managed the Los Alamos facility without competition for more than 60 years. The past several years, however, have included repeated security lapses and procurement abuses. The Energy Department decided to allow other universities, corporations and nonprofit organizations to bid on the management contract. According to the RFP issued earlier this month, the basic term of the contract will be seven years, although the National Nuclear Security Administration can award 13 additional years.
The contractor's fee will be worth between $59 million and $79 million, according to NNSA officials.
The decision leaves two major competitors vying for the management contract. The University of California is expected to attempt to retain the contract. The University of Texas and defense contractor Lockheed Martin announced a partnership earlier this month to pursue the contract.
Officials at the Project for Government Oversight, a nonprofit watchdog organization, have actively promoted a vigorous competition for the laboratory contract. Pete Stockton, a Los Alamos observer from POGO, said a competitive bidding process is in the best interest of the facility.