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Saturday, January 20, 2018
Why did LANS fail?
Both LLNL and LANL are for profit. Profit is money that one gets in return beyond what is invested. In the case of LANL and LLNL, certain members members of the LLC make a profit, other members of the LLC reinvest the money back in the lab and do not make a profit. People paying the extra money that got used for profit expect something in return. I cannot go into all the details on this blog but one of the expectations was that by paying this extra money that certain industrial partners promised that they would improve business practices, introduce industrial effectiveness and so on which would actually save lots money in the long run. At least that was the claim, however this not only did not happen but things become much more expensive and less efficient. Of course one could argue what certain industrial partners wanted to really "maximize" their profit by doing absolutely nothing and not investing anything at all. Let us go through a simple exercise, suppose you come across a lemonade stand that claims it sells lemonade. You say " that sounds good I would like to have some lemonade!". The person at the stand says that will be 1 dollar for lemonade. You give them 1 dollar and the person does not give you any lemonade and you say hey I want my lemonade. The person at the stand says it would cost them 40 cents to make the lemonade so they would get a profit of only 60 cents if they did that but if they did nothing they would get a profit of 1 dollar. Did you know that 1 dollar is more than 60 cents? Now you may think this is short sighted and such a lemonade stand would go out of business in a day which is true in most cases, however for something like an LLC at LANL and LLNL this is not true and for 10 years you can make a metaphorical 40% more "profit" by not investing a single cent to fulfill the promises you said would happen when you got the contract in the first place. Now I will not fill in all the gaps as that is for you to figure out but this is why the contract is changing, why DOE is rather shall we say unhappy with certain members of the LLC. Not only will this explain LLNS/LANS for you but it may also help you understand how banks, supermarkets, the stock-market, and other business work and in some cases fail.
By scooby at January 20, 2018
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