Reducing indirect cost at LANL and LLNL: some questions.
LANL is working on reducing indirect cost. Some of us have been trying to figure just where it goes. On a typical direct code the overhead rate is up to 300 percent or even more. I have no idea if this is accurate but I have heard 1/2 of the LANL staff is on indirect. If that was the case I would think overhead rates would be closer to100% not 300%. I am not sure how the budget actually breaks down. Does the mean (a) 1/2 of the indirect funding people cost three times as much as direct funding people? (b) is the 1/2 of the people on indirect not actually true and it is more like 2/3 or 3/4 of the workers are on indirect? (d) It is 50:50 but the extra money is pays for equipment, supplies, parts, vehicles, benefits and so on? Or is it some combination of these.
Also it would be useful to see a plot of the overhead rates over the last 25 years. Maybe it has always been this way but it would be interesting to see if it was say 200% or 150% 20 years ago. I cannot find that information, but if it was less years ago it would argue that we could lower the rates. Also it would be interesting to do the same for LLNL and Sandia.
Another plot would the ratio of direct to indirect staff over the same time period. Again I do not have that number.
Also in the era of AI, one could argue that more things could be automated and AI replace certain human jobs or make offices staff more efficient so you would need less people. I am not sure if this is actually true, or if this has happened at all at the labs.
5 comments:
NIF construction cost, 15% materials associated labor, 85% highly paid meeting makers complaining about the cost of construction and manufacturing labor cost.
Here are some comments from a Sandian. First, our HR directly publicizes in UUR recruiting materials that the Labs are 30% staff, 10% technologists - 60% of the Labs is management, HR, business operations, safeguards and security, travel and treasury, etc. Right there, you have pretty much 150% overhead (some get paid less than staff, some get paid a bit more). Next you have benefits and operating expenses - I would estimate 50% of take home pay is used for vacation, pension, building heating/cooling/electricity/water/etc. Sandia loading rates run toward 300%, and this accounts for about 200%. Next is Laboratory Directed Research and Development, which also gets taxed off direct projects. LDRD is probably another 10-20%.
The precise overhead rate depends on the source of funding, but it's generally in the neighborhood of 75% of the total labor cost. In other words, if my total hourly labor rate is $100, the fully burdened rate that the government is actually charged is roughly $400/hour.
One reason that's so high compared to SNL is the fact that LANL owns and operates the property and has to provide all services. SNL is a tenant on an Air Force base located in a major city. SNL and LLNL also got rid of almost all of their plutonium, which saves a lot of money.
That said, I would similarly estimate that roughly half of LANL staff are indirect funded. Part of the problem with being indirect funded is that they have no stake in the success or failure of the enterprise. They get paid whether or not any program or effort succeeds, and all of the institutional motivations are to impede work.
The biggest problem is that we are run like the state of California. By that I mean that we have very high taxes yet very poor services. For example, we pay 75% to overhead, yet LANL can't even fix a leaky roof, have working badge readers or repair crumbling stairs. That's a bitter pill to swallow and I always wondered why the NNSA doesn't seem to care that the facility is literally crumbling under their watch.
Ultimately it's ironic that the lab has become a parody of a Soviet run enterprise. People expect empty grocery store shelves and malfunctioning cars in the USSR, but not for a $6B/yr US laboratory that's supposed to be run by the private sector. One can only hope that the government will wake up and force change because I don't see it ever happening otherwise.
8/22/2025 2:09 AM
You have a couple of good points. It is interesting that services are just so poor. A huge amount of the buildings have major issues and there seems to be no way to fix them. Badge readers do not work, some places have major mold, leaky roofs and wild animals yet nothing ever gets fixed.
As for indirect people more and more are not working offsite, if you ask for some form and some paper work done, you can never get hold of the people and they do not respond to emails. Many of these are very simple things. My favorite is sometimes you can get hold of them on the phone and you have to do the work for them. They are clearly at home as you can hear the ice crushing and blender on liquid flowing. Maybe they are making a smoothie while working or maybe a Margarita.
As for the indirect people that do work on site you, many come in at 10am and leave at 3.0pm and never show up on a Friday. The managers cannot really do anything because in reality you have no one to replace them. The place has just become increasingly weird over time.
Someone outside of the labs once asked me how many people actually did real work and the answer at that time was 1/2 of them, a couple decades with corporate management it’s down to about 10 or 20% many of the others spent their time getting in the way of the 10 to 20% trying to do actual work.
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