Los Alamos contract extended for another year

Despite the failure of the Los Alamos National Laboratory contractor to qualify for an extension of its term, the US Department of Energy’s National Nuclear Security Administration (NNSA) has given it one more year to operate the lab. An NNSA spokesperson confirmed on 10 May that Los Alamos National Security LLC (LANS) will run LANL through fiscal year 2018. The agency had said in January that LANS did not meet the performance standards required to have earned an extension of its contract beyond 30 September 2017 (see Physics Today, March 2016, page 22 ).

The NNSA spokesperson said the agency offered LANS an additional term “in order to ensure the completion of key near-term priorities at the laboratory prior to beginning the follow-on competition for the management and operations contract for LANL.” NNSA has already begun the process to select a contractor to operate Sandia National Laboratories, and the agency would have been hard-pressed to conduct competitions for two major contracts simultaneously. The current Sandia operating contract has been held by Lockheed Martin since 1993 and expires on 30 April 2017. NNSA announced in 2011 its intent to hold a competition for the Sandia contract but has extended the pact multiple times, most recently in 2015. In March, NNSA released a draft request for proposals for Sandia, and the actual solicitation is expected to be issued this month.

The University of California and Bechtel Corp are the major partners in LANS, which has held the Los Alamos contract since 2005. The original award term was seven years, with the possibility of up to 13 annual extensions, subject to NNSA’s performance evaluations. A number of high-profile mishaps—most notably the lab’s faulty packaging of a container of low-level nuclear waste that caused an explosion and shutdown of DOE’s Waste Isolation Pilot Project repository in 2014—caused NNSA to disqualify LANS from further extensions beyond 2017.

The Los Alamos contractor earned only $29 million of an available $39 million in award fees for fiscal year 2015, according to NNSA’s performance assessment released in mid-May. LANS received $22.7 million in fixed fees for the year, for a total of $51.7 million. The bulk of the reduction in the award fee came in the operations and infrastructure category, where LANS earned just 49% of the available award fee. LANS would have needed at least 50% in that area, which includes safety and health, to have qualified for an additional year extension to the contract.

NNSA informed LANS last year of a $7.2 million fee cut due to a May 2015 electrical accident in which an employee received second- and third-degree burns over 30% of his body. He had to be hospitalized for more than 30 days.