Energy boosts contractor share at Los Alamos

Proposals for the management contract are due by July 19 and a decision will be issued by Dec. 1.

Energy Department officials Thursday sharply increased the value of the management contractor's fee for the troubled Los Alamos National Laboratory.

Energy's National Nuclear Security Administration released the final request for proposals and announced that final bids for the management of the lab are due by July 19. The agency will award the contract by Dec. 1.

The contractor's fee will be worth between $59 million and $79 million, according to NNSA officials. The University of California currently makes about $8 million annually operating the facility.

The University of California has managed the Los Alamos facility without competition for more than 60 years. After a string of security lapses and procurement abuses, however, Energy decided to allow other universities, corporations and nonprofit organizations to bid on the management contract.

University of California officials appear to be developing a bid to continue managing the lab. The most prominent challenger to emerge is a partnership between the University of Texas system and defense contractor Lockheed Martin. Northrop Grumman is also pursuing the contract.

NNSA issued a draft request for proposals in December 2004 and asked for input from potential bidders, laboratory workers, federal officials and the public. The final request calls for the winning bidder to establish a separate corporate organization to run the laboratory and seeks a performance guarantee from the parent organizations.

The basic term of the contract will be seven years, although 13 additional years can be awarded by the NNSA.

NNSA officials require that the next operator of the laboratory provide existing employees a compensation package "substantially equivalent to that provided by the predecessor contractor." The agency's contracting officer may determine the definition of substantially equivalent.

If a new contractor takes over the laboratory, it will be required to offer jobs to existing employees who are in "good standing" and have career or term appointments at Los Alamos. The new contractor will not be obligated to offer employment to officials in senior management positions. The contractor also will have flexibility with new hires.

The winning contractor will be required to develop a "market-driven" compensation plan for personnel hired after June 1, 2006.