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This BLOG is for LLNL present and past employees, friends of LLNL and anyone impacted by the privatization of the Lab to express their opinions and expose the waste, wrongdoing and any kind of injustice against employees and taxpayers by LLNS/DOE/NNSA. The opinions stated are personal opinions. Therefore, The BLOG author may or may not agree with them before making the decision to post them. Comments not conforming to BLOG rules are deleted. Blog author serves as a moderator. For new topics or suggestions, email jlscoob5@gmail.com

Tuesday, December 30, 2014

Feds slash LANL feee by 90%

Feds slash fee for LANL contractor
December 29, 2014 
Albuquerque Journal

SANTA FE – The federal government has cut its annual pay to the private contractor that runs Los Alamos National Laboratory by nearly 90 percent due to the radiation leak from a drum packed at Los Alamos that forced the shutdown of the nation’s only deep geologic repository for nuclear waste.

The fee paid by the federal government to Los Alamos National Security LLC was reduced to $6.25 million, lab Director Charles McMillan told the staff in a memo obtained by the Journal.

That compares with $59 million-plus paid to the LANS consortium, which includes Bechtel Corp. and the University of California, in the previous two years. The contractor would have been allowed to earn as much as $63.4 million under the current contract if it had met all its incentive goals.

“Given the events surrounding our breached drum at WIPP and the severity of the issue, the Laboratory received a rating of ‘unsatisfactory’ in operations and infrastructure and a score of zero in that area which accounted for the significant reduction in fee,” McMillan’s memo said.

Federal officials said the February leak from a LANL drum that shut down the Waste Isolation Pilot Plant near Carlsbad constituted a “first-degree” performance failure.

It’s expected that reopening WIPP will cost at least a half-billion dollars, and when that will happen is uncertain...

He said that “our true value as a Laboratory should be measured by the contributions we make to national security.”

The NNSA has posted LANL fee determination documents on its website. A Dec. 18 memo from NNSA Principal Deputy Administrator Madelyn Creedon says that in addition to a zero score for operations and infrastructure, the lab also failed to meet goals in science, technology and engineering, with a score in this area of 30 percent; and leadership, also with a score of 30 percent.

But Creedon’s memo still called for paying LANS $41.6 million, or 66 percent of its potential total fee.

However, in a memo dated the same day, NNSA contracting officer Robert M. Poole cut the payment to $6.25 million, reducing the payment for NNSA work to zero. He approved only funding for work for other federal government agencies, such as the Department of Defense.

“The NNSA looks forward to working with LANS to improve the accountability for safe, secure, effective, efficient, and economical performance at the laboratory in 2015,” Poole added in his letter to McMillan.

The Los Alamos contractor also wasn’t granted any contract extension, and a one-term extension earned previously is withdrawn, the NNSA documents state.

LANS won the lab contract in 2006 after the University of California had run the Los Alamos facility since the World War II Manhattan project. The contract term is through fiscal 2017.

The huge fee reduction comes on top of fines recently levied by the New Mexico Environment Department for hazardous waste violations related to the WIPP leak. LANL’s state fines totaled $36.6 million, and WIPP was hit with $17.7 million.

Jay Coghlan, of the Nuclear Watch New Mexico watchdog group, said he was stunned by the fee cut and said the lab contract should be rebid now.

“LANL lives in a little bit of a fantasy world and their own echo chamber of how great they are,” he said. “This ought to be a real wake-up call.”

McMillan, whose total compensation including benefits comes to $1.5 million annually, said the latest performance review reinforced the lab’s “stature as one of the pre-eminent scientific institutions of the nation.”

“Although this was a very tough year for the Laboratory, I am optimistic that next year will be better,” he wrote. “I am determined to do all that I can do to make it so.”

http://www.abqjournal.com/518894/news/feds-slash-fees-for-lanl-contractor-by-90.html

25 comments:

Anonymous said...

Ninty percent is generous. Reading the NNSA letters, the only fee left to LANS was the work-for-others fee, which may have been untouchable. The LANS fixed and performance fees were both zeroed out unilaterally by NNSA.

What Charlie's letter failed to mention, and most of the news articles also, was that LANS had a year taken off their contract as well.

While some may rejoice at the prospect of having to live with LANS one fewer year, it increases the likelihood the employees will get screwed by NNSA again at the next contract change. All over the complex, contract changes have hurt the employees more each successive time so the Government could delude itself that it was saving big money. LANL already can't keep mid-career employees. The next screwing by the equally incompetent NNSA and DOE could leave the Lab crippled beyond repair.

So Congress, how are those big savings working out for you and the taxpayer? Domenici is probably too senile to regret the damage he's done. Anyone else in Congress have any conscience?

Anonymous said...

LANSLLNS should not just have their fee cut by 90%, they should cough up the ~$500 million in damages from their OWN pockets for gross negligence.

Where are all those "for profit", "we are just like Google", voices now? No no, LANSLLNS management want the rewards of a "for profit" company, not any of the risks, and will never voluntarily remove their "for profit" without material risk training wheels. "Keep all the bike photos above the waist please. We want to believe we are shoulder to shoulder with real USA corporations".

Anonymous said...

Lots of talk in DC that the absolute zeroing of the NNSA fee and the removal of the previously earned contract extension year were not for the WIPP accident itself, but rather were a direct consequence of the FUBAR response that came afterward.

Anonymous said...

Lots of talk in DC that the absolute zeroing of the NNSA fee and the removal of the previously earned contract extension year were not for the WIPP accident itself, but rather were a direct consequence of the FUBAR response that came afterward.

December 31, 2014 at 7:09 AM

Terry will be the next director!
By the way Terry will be very happy to know that Kliplinger was made a lab fellow.

Anonymous said...



NNSA may be trying to take a hard line in order to save it's own skin. There was a report that came out recently saying how the NNSA should be done away with.

Anonymous said...

They got a "0%" and "not met" for Operations & Infrastructure... wow

Isn't Operations/Infrastructure at LANL the sole responsibility of Bechtel and the other industrial partners in LANS, and the reason UC brought them into the LLC in the first place.

How the heck does UC continue justifying the value and success of this LLC construct.

Anonymous said...

They got a "0%" and "not met" for Operations & Infrastructure... wow

Isn't Operations/Infrastructure at LANL the sole responsibility of Bechtel and the other industrial partners in LANS, and the reason UC brought them into the LLC in the first place.

How the heck does UC continue justifying the value and success of this LLC construct.

December 31, 2014 at 9:06 AM



The inmates of the UC glass house just love to throw rocks at Bechtel, often with little cause. Read the entire letter before jumping off the cliff here.

30% for S&T. Don't forget that S&T is what UC brought to the table.
30% for leadership. UC selects the Lab Director, and 30% is about what they got.

The failures are much broader than just Bechtel, as demonstrated by "not met" in every single category across the entire operation.

Anonymous said...

The inmates of the UC glass house just love to throw rocks at Bechtel, often with little cause. Read the entire letter before jumping off the cliff here.

30% for S&T. Don't forget that S&T is what UC brought to the table.
30% for leadership. UC selects the Lab Director, and 30% is about what they got.

The failures are much broader than just Bechtel, as demonstrated by "not met" in every single category across the entire operation.

December 31, 2014 at 11:43 AM

Sorry, not buying it. Bechtel rules this roost, UC is just a bit player at this point and everyone knows it. UC does not rotate manager after manager through to transfer them to the pension, UC does take every bit of profit it can.

Anonymous said...

3:58 PM must be experiencing an alternate reality.

There is no pension on which to transfer new managers. All staff that were not in place at time of transition are eligible only for TCP-2. This is an individual, defined contribution plan, no different than what is available to most employees at most employers across the county.

Bechtel has made its share of mistakes, but blame them only for what they have done, not for more.


11:43 AM listed several damning facts, none of which are the fault of any of the industrial partners in the LLC.

Anonymous said...


11:43 AM listed several damning facts, none of which are the fault of any of the industrial partners in the LLC.

December 31, 2014 at 7:23 PM


30/0 = infinitely better. Nuff said.

By the way the original grades wanted to give give something like 40-50% which would have been for the ST andand the other as you say UC run part of the labs, however NNSA overturned. Make no mistake this is in indictment of the industrial partnership i.e Bechtel part of the lab, nothing more and nothing less. By the way the leadership part that got 30% should have been 0% remember the Deputy Director? Take a guess why we all have to take "ethics training" now.

Anonymous said...

LLNL looks like saints in comparison. I have to wonder if LANL employees are intentionally screwing things up just to make some sort of point related to perceived views of their overbloated importance, in order to hurt management.

Anonymous said...

"What Charlie's letter failed to mention, and most of the news articles also, was that LANS had a year taken off their contract as well." (10:38 PM)

Funny how many of the memorandums from LANS upper management fail to mention important points like that one, huh? Oh well, holiday break is almost over. Everyone refreshed and ready to give 110% to help revive the crumbling reputation of LANS?

Anonymous said...

McMillan Memo: “Although this was a very tough year for the Laboratory, I am optimistic that next year will be better,” he wrote. “I am determined to do all that I can do to make it so.”

TRANSLATION: "I refuse to leave and will dump all blame and punishment as low down the ladder as possible. They'll have to take me out of here screaming and fighting every step of the way before I give up any of my sweet $1.5 million in annual compensation!"

Anonymous said...

Fee reduction? Thats it? How about a few arrests for culpability - remember Rocky Flats anyone?

Anonymous said...

It will be very interesting to see how UC approaches the rebidding of the LANL contract in 2 years. If it were not for recently publicized news that Lockheed-Martin engaged in illegal lobbying for renewal of their Sandia contract, I thought UC might seriously consider dropping Bechtel (et al) as partners in running LANL and pairing up with L-M instead.

Anonymous said...

January 2, 2015 at 8:44 AM

Once UC has it fully settle in that they are extremely fortunate that DoE did not seek a debarment from governmental funding as a consequence of the WIPP scandal, their lawyers will throw a massive party and run from LANL as fast as possible.

Before some armchair attorney gets all spun up about the "LLC" and how it shields UC from LANL screw ups, go look at the details. While the consequences of accidents do not generally break the LLC veil, such is not the case for fraud or abuse, as held in government contracting law. In particular, the e-mail trail that was published in the Santa Fe newspaper is awfully damning in this regard.

Debarment may still be on the table, and if it does come to pass then UC stands to loose big time. Just how many faculty members would remain at a university that was banned from receiving federal funding?

Anonymous said...

"January 2, 2015 at 9:05 AM"

Not gonna happen.

In any case the rebid process is not going to be like the last time with huge fees. It may still be UC but my guess it will be much more like how Argonne, or PPNL are run which are for service rather than profit. There has been several reports saying how the "for profit" created the wrong motivations for running the labs and had all sorts of bad unintended consequences.

Another point of view I hear is that WIPP was untimely due to the industrial/Bechtel side of things since they are the ones that did not consult scientists about the change in the materials, however the real cause has not even been determined.

Anonymous said...

WIPP is the biggest screw-up within the DOE Complex since Rocky Flats, probably bigger when you factor in cut fees along with the State of NM fines to DOE contractors.

Can anyone explain to me how LANS will survive and win the rebid contract in 2017? It seems there only chance is to get high evaluations for Operations/Infrastructure on NNSA's annual performance evaluation in FY15 and FY16 - and argue that their leadership of LANS has turned things around.

Also if there's no real competition like what occurred on the LLNL contract - the losing LLC didn't even have an academic research partner, kiss of death for an RFP that placed the bulk of the weighting on science.

I wonder if the Univ of Texas and Univ of New Mexico would team up with a new industrial partner (say... Boeing and/or Northrup-Grumman) for a bid on LANL. Although it seems like the academic partners would really need an industrial partner with DOE/NNSA site experience but less baggage (not easy to find when you look at contracts with history at DOE sites.)

Thoughts?

Anonymous said...

Yes, WIPP is the largest screw-up in the history of the DOE. It easily eclipses Rocky Flats, and is all on LANL. No matter how much Charlie's friends try to spin it that the fault is on Bechtel, this one takes the whole team down with it.

Anonymous said...

Yes, WIPP is the largest screw-up in the history of the DOE. It easily eclipses Rocky Flats, and is all on LANL. No matter how much Charlie's friends try to spin it that the fault is on Bechtel, this one takes the whole team down with it.

January 2, 2015 at 4:27 PM

I say that problems at WIPP and the deputy director are due to as Bodman would say "Arrogance of the chemists and physicists and engineers who work at Los Alamos and think they're above it all."

It just makes sense. Well congress might go for it.

Anonymous said...

I like Boeing, 11:06 AM. They are a great American company with a distinguished history.

However, Boeing is moving away from the defense side of things and toward the commercial side (i.e., the Dreamliner). They see the reductions in defense funding that are coming down the road as the boomers retire and push up Medicare and Social Security spending.

The easy days of living off of bigger and bigger national security spending are coming to an end. Sequestration was only the first step in this process.

I can imagine that the non-profit Battelle Institute, however, might be eager in bidding on the next set of NNSA lab contracts. They are already big players over at ORNL and PNL.

Anonymous said...

So what do you think of this match up for competing LLCs on the 2017 LANL contract...


Battelle/Northrup-Grumman LLC

vs

UC/Lockheed-Martin LLC


Any thoughts on which would win?

Anonymous said...

So what do you think of this match up for competing LLCs on the 2017 LANL contract...


Battelle/Northrup-Grumman LLC

vs

UC/Lockheed-Martin LLC


Any thoughts on which would win?

January 4, 2015 at 1:32 PM


Maybe the best thing to do is to just shut the labs down. As long as we have scientists at the lab that we will have a culture of arrogance. This is unacceptable, so the the only clear path forward is shutting it down.

Anonymous said...

Agreed, 1:51 PM, the first task in the Strategic Transformation Plan (STP) of this National Laboratory is to rid it of scientists. Too much arrogance, opinions, and academic culture. This process, however, is already well under way. And already it is bearing fruit: the electricity bill has been reduced by as much as 18% last year! But we cannot rest on our laurels and must do better in 2015. And we will.

But let's not forget the second, equally important, deliverable of the STP: to continue beefing up the management ranks. We have top management talent to retain. And recruit more, as necessary.

What do you mean, "shut the Lab down"?! Who's going to continue generating mission and vision statements? How about defining and redefining strategic goals and priorities for this Institution on an annual basis? Formulating codes of ethics? Generating rims of compliance paperwork for NNSA and DOE?

Last but not least, when NNSA does send the next installment of the management fee, who'll be there to receive it?

Anonymous said...

Why have hard to manage scientists when you are no longer a true science lab?

It's far easier to pretend and have a "science lab" staffed by nothing but lots of highly compensated managers. PBIs, baby!

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