University of California keeps contract to manage Los Alamos

Los Alamos National Security LLC, a corporate entity that includes the University of California, has won a $512 million, seven-year contract for management of the Los Alamos National Laboratory, the Department of Energy announced Wednesday.

The award entrusts management and operations of the New Mexico nuclear laboratory to a corporate entity backed by Bechtel National, the University of California, BWX Technologies and the Washington Group International. The team beat out a competing bid from a University of Texas-Lockheed Martin team.

The new contract far exceeds the $8 million that Energy currently pays the University of California each year to operate the facility. The $512 million total includes costs for a transition, scheduled to start immediately, as well as for key personnel, oversight by the LANS parent companies and performance-sensitive fees. The contract can be extended for an additional 13 years based on successful performance.

For more than 60 years, Los Alamos has been managed without competition by the University of California. A slew of security and procurement scandals over the last several years led the Department of Energy to run a competition for the contract.

The competing bids were reviewed by a source evaluation board chaired by Tyler Przybylek, the former general counsel of the Energy Department's National Nuclear Security Administration. The panel spent five months reviewing the proposals before Tom D'Agostino, NNSA assistant deputy administrator for Defense programs, made a final decision.

D'Agostino said the winning proposal promises to enhance integration within the laboratory, bringing together the academic and business capabilities of the corporations behind LANS. The new team will have full access to the resources of the parent companies, he said. He declined to go into details of how security responsibilities and practices will differ from those in place under the University of California contract, citing restrictions on revealing the contents of a proposal.

The Project on Government Oversight, a watchdog group based in Washington, has closely monitored the laboratory over the last several years as security and other problems have come to light.

"Lockheed wasn't a great alternative, but it is hard to see how UC could possibly have been given a vote of confidence," said Danielle Brian, POGO's executive director, in a statement. "We expect a continuation of the era of chaos at Los Alamos."

But Energy Secretary Samuel Bodman pledged that the contract will represent a fresh start. "This is a new contract, with a new team, marking a new approach to the management of Los Alamos," he said.