Weapons Complex Monitor
March 27, 2014
Held: DOE Pushing For Fee Reductions At Los Alamos, Livermore
The Department of Energy has had discussions with the companies that run Los Alamos and Lawrence Livermore national laboratories about reducing the fee paid to the companies, acting National Nuclear Security Administration chief Bruce Held confirmed yesterday. Speaking on the sidelines of a Senate Armed Services Strategic Forces Subcommittee hearing that was postponed, Held noted that the discussions were in their preliminary stages but he characterized them as “pretty productive.” In February, Held said DOE/NNSA was looking to move toward more of a “public interest” model of management for the nuclear weapons laboratories and away from the high fees paid to Bechtel and University of California-run contractor teams at Los Alamos and Livermore. “Conversations have been very, very good, really good,” Held said. “That’s not getting into the details but starting to frame the issue of what we’re trying to achieve. My strong feeling is these institutions exist to serve the public interest. They do not exist for profit maximization. For the M&Os that run them we have to provide them reasonable compensation … but they are not profit-maximizing organizations.”
The contractors that run Los Alamos and Livermore currently earn about 3 percent of the lab’s budget in fee, while most Office of Science labs—and Sandia National Laboratories contractor Lockheed Martin—make around 1 percent. Held said he expected Energy Secretary Ernest Moniz to ask the Secretary of Energy Advisory Board to take up the lab management issue. “I think people are in good faith thinking, if we’re going to ask for fee reductions they’re probably going to ask for something related to unallowable costs or risks or liability,” Held said. “The question is what is a reasonable package of things we can do.”
19 comments:
UC Regent Pattiz mentioned this right before announcing Goldstein as new LLNL director. Pattiz said he's had meetings with Held and Moniz on this specific issue and it appears at least UC is comfortable with a significant reduction - as long as some questions on liability are addressed. He also noted that UC puts all of its fee back into research.
Dropping the LLNL $46 million fee down from 3% to 1% so its inline with other national labs (Office of Science and SNL) would put it in the $15 million range. With UC getting about half, I wonder if Bechtel and the other industrial partners would still want to be part of LLNS. Since its basically free money to them - I can't think of one positive thing they've contributed to management and operation of LLNL - they'll probably continue pocketing the money.
Really too bad, I firmly believe that UC could run LLNL without these partners. Although Pattiz also noted that the UC Regents like hiding behind Bechtel and not having UC management of the two weapons labs being so visible and really like not having to hear public protest speeches at Regent meeting.
Recall that neither Lab earned the eligible contract extension this past year. This must have gotten someone's attention and the play is to either reduce the fee or recompete the contract. Even though the best situation would be to get out of the current contracts and recompete them, that may be a stretch for NNSA. Just look at how the Y-12 + Pantex compete process was botched and the recent addition of two years to the SNL contract in place of running a competition.
I firmly believe that UC could run LLNL without these partners.
March 30, 2014 at 9:01 AM
Not as long as NNSA keeps the requirement that bidders must be a "separate entity" from any "parent companies," whose sole function will be to run the lab.
This is a red herring.
The real issue is setting a reasonable long term vision, empowering the labs to accomplish the mission and to provide adequate resources.
2% of fees is like 2% of bullshit.
You still have 98% bullshit.
NNSA competence is the only long-term issue.
Any recompete of a lab operation contract under any new paradigm will again result in demands for cost reductions which will be implemented at the expense of employee and contractor total compensation and benefits.
X Loss of 401k match
X reduction of % contribution to TCP2
X Lower % of medical insurance paid
X Larger % of employee contribution to TCP-1.
And whatever new wool the next Tyler Pryzbylek can pull over your eyes.
Remember 2007 and organize now so that you have enforcable employment contracts to protect you when the new rebid comes.
Get nasty... no one will be looking out for your interest, though paid liars like Lynn Soderstrom and Russo will say that they are...
Warm the tar, collect together the rail and feathers and prepare yourself.
March 30, 2014 at 1:20 PM
"Not as long as NNSA keeps the requirement that bidders must be a "separate entity" from any "parent companies," whose sole function will be to run the lab."
Good point, however, UC could do exactly as the Univ of Chicago did on their rebid for the Argonne Lab contract. They created a separate entity by team with Jacob Engineering to form "UChicago Argonne, LLC" which now manages and operates ANL instead of the Univ of Chicago.
The big difference is that LLC is solely owned by the Univ of Chicago, with Jacobs as a sub-partner. While ANL employees were transferred to the LLC and are no longer university employees, the LLC's policies and benefits are still very similar to what they were when then university ran ANL.
UC looked at this model, but because the industrial partners wanted basic equal rights (ie. more money) the current structure was selected.
As noted in this report from 2007 by UC... "The LLC structure was chosen as the form of legal entity for the two partnerships because it was deemed to offer the most flexibility in the organization and governance of the partnerships, and also because it proved to be particularly conducive to establishing a partnership between the University, as a public institution and an instrumentality of the state of California, and its three commercial partners."
http://senate.universityofcalifornia.edu/reports/ac.labguide.0807.pdf
In other words, instead of a "public" institution (UC) funneling $20 million to private partners (Bechtel, URS, B&W) as their share of the fee, the fee goes to the LLC which in turn passes the appropriate share on to the individual partners.
Get nasty...
March 30, 2014 at 3:33 PM
Guess what? You already are. Hint: it isn't helping you. No one likes nasty people. Just a thought.
No one who has any self-respect, self-confidence, or competence needs a union. Only losers who want more than they deserve and who are afraid to or are too lazy or incompetent to find an employer they don't hate. Or, maybe they just hate all employers.
March 30, 2014 at 8:01 PM
You are undoubtedly right, but March 30, 2014 at 9:01 AM was also correct when he said "Pattiz also noted that the UC Regents like hiding behind Bechtel and not having UC management of the two weapons labs being so visible and really like not having to hear public protest speeches at Regent meeting." In my opinion, the latter point (protests) will keep UC from ever again being "out front."
"No one who has any self-respect, self-confidence, or competence needs a union.."
Where did this strategy get folks in 2007?
1700 fired, pension cancelled, frozen salaries, NNSA domination, increased TCP1 employee payment, less medical insurance copayments to name a few..
Hows that working for you?
Professional organizations such as the academic senates at UC campuses may be a good point of departure for protection of professional benefits and working conditions.
These give employees a voice separate from management which can be helpful in making strong points.
Worked fine for me - I still have a good job and a good salary, and a good pension. See, I am valuable to the organization because of my skills and my dedication, both to the mission and to my career. I didn't need any union "help." I also didn't spend my valuable time bitching about nearly everything.
The unionized people lacked ambition; they were violent, sexually promiscuous people who did not respect human life.
April 1, 2014 at 1:15 PM
You got the first part right. The rest of your statement is just a stupid attempt at sarcasm.
" Worked fine for me - I still have a good job and a good salary, and a good pension. See, I am valuable to the organization because of my skills and my dedication, both to the mission and to my career. I didn't need any union "help." I also didn't spend my valuable time bitching about nearly everything.
March 31, 2014 at 7:26 PM"
Funny, I hear the same thing from the complete parasites that exist at the labs. Over the years the ratio of administration to technical staff just keeps going up. Does this make sense?
I don't want to work in a place where alcoholic high school drop-outs can bully everybody. A person who wants that can go to Detroit. Or did the unions bully the city out of existence? Oh, that's right, they did.
Funny, I hear the same thing from the complete parasites that exist at the labs.
April 2, 2014 at 8:06 PM
I agree completely. The deadwood that the unions continue to support needs to go. If you have a good job, get good raises, get good performance evaluations, and surpass your coworkers in career advancement, you are definitively NOT a "parasite." You are what's called a "good match" for the job. If you are not a "good match" do you think that you should change, or that the job should change? Or maybe you should just change jobs.
I remember the first time I interacted with a union person at LLNL. This guy of average height walks into the meeting but he weighs 350 pounds. He really can't fit in a regular chair. Soon he makes it clear that he and his guys don't want to and don 't have to resolve the issue at hand because they can't be fired. While he is stonewalling, his beer belly is hanging over the table.
Departing from the union side track and returning to the OP, it will be interesting to see if the "public interest" model prevails. Seeing Congress ready to pounce with snail like speed on any action in the next two years, it may not go anywhere in the absence of a forcing event.
"Lab Decline Reflected in Discussion of Lower Fees"
http://m.independentnews.com/mobile/news/article_ca4c02fe-c0f1-11e3-965d-001a4bcf887a.html
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