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DOE Breaks With Tradition, Puts Los Alamos Up for Bids

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Science  09 May 2003:
Vol. 300, Issue 5621, pp. 876
DOI: 10.1126/science.300.5621.876

Six months after reluctantly agreeing to help the country's World War II effort by managing a new laboratory near Los Alamos, New Mexico, the University of California (UC) was surprised to learn from government officials that their charges were building a revolutionary weapon of unimagined destructiveness. Last week the university got another shocker: It will have to compete for the right to continue its 60-year relationship with Los Alamos National Laboratory.

The news came from Energy Secretary Spencer Abraham, who had asked for a review of the Department of Energy (DOE)-UC partnership in the wake of a string of security and financial scandals at the laboratory. It left the university in the awkward position of trying to decide whether to fight for a job that it didn't originally want and has traditionally said it won't compete for. “It is one thing to manage [Los Alamos] at the request of the federal government … and quite another to actively pursue what could now be interpreted as a business venture,” says UC President Richard Atkinson, who appeared before Congress last week to discuss the 30 April decision.

At stake, he and others say, is the government's ability to find a manager who can attract top technical talent for jobs ranging from maintaining reliable nuclear weapons without testing to developing better global climate models. “This is a big deal … [the lab] is at a crossroads,” says Representative Billy Tauzin (R-LA), head of the House Committee on Energy and Commerce, which held the 1 May hearing.

The laboratory is a $2.2-billion-a-year enterprise with 12,000 employees, of whom 7800 also work for UC. Although celebrated for its world-class science, it has drawn criticism for several management blunders. They include a 1999 firestorm over charges that lab physicist Wen Ho Lee mishandled classified weapons data and a more recent controversy surrounding the firings—and subsequent rehirings—of two investigators who documented lax financial practices. The scandals led to calls from Congress to cancel the contract, and starting in January the university ousted 16 top lab managers in a sweeping overhaul. DOE, meanwhile, began its own 4-month review (Science, 10 January, p. 184).

Warm-up exercise.

University of California officials, including President Richard Atkinson (second from left), prepare to testify on DOE's decision to open the Los Alamos contract to competition.

CREDIT: CHARLES DHARAPAK/AP

In a 29 April report to Abraham, DOE officials recommended against a hasty divorce. In an 11-page analysis,* DOE Deputy Secretary Kyle McSlarrow and Linton Brooks, acting head of the department's National Nuclear Security Administration, lauded the university's reform effort and concluded that immediate termination “would be highly disruptive to the things that are going well at Los Alamos, especially science.” It also predicted a “devastating exodus of the most experienced employees” if the laboratory lost the UC's academic prestige and generous employment benefits, which include tuition breaks for the children of lab employees.

The two officials concluded that an open competition—the practice at most other DOE laboratories—is needed to help fix a “Los Alamos culture [that] exalted science and devalued business practices.” But they went out of their way to encourage UC to compete. “I categorically reject the notion that competition is a repudiation of an incumbent,” Abraham said in a statement.

The report also makes it clear that the lab's recruiting and retention efforts have benefited from the “prestige of association with a world-class university.” A “little-noted benefit of the university,” it adds, has been to “foster a culture of scientific skepticism and peer review” that has proved “absolutely crucial” to the lab's weapons work.

Those conclusions could affect the competition, which DOE is now struggling to organize. A request for proposals could be issued in late 2004, with bids due in early 2005. The first clues to DOE's desires could come in July, when an advisory panel will deliver its thoughts on lab contracting in general. The National Academies is also expected to weigh in.

At UC, Atkinson says his “instinct [is] to compete and compete hard.” But the final decision will be made by the university's 26 governing regents and his successor, as Atkinson is retiring in October after 8 years on the job. Several regents have already said the university should compete, but many faculty members want the university out of the nuclear weapons business.

The list of potential bidders isn't long, DOE veterans say. “This is big science, so you need someone who understands how to run big science,” Brooks told lawmakers. One candidate is the University of Texas, which said in a statement that it is watching developments “with great interest.” Battelle, an Ohio-based nonprofit that already manages four other DOE laboratories, is another possibility, as is defense giant Lockheed Martin, which currently manages Sandia National Laboratories.

Any bidder will have to swallow the cost of putting together a proposal, which some lawmakers peg at $10 million or more. That could be too steep a price for UC, Atkinson predicts. In addition, DOE is requiring the winner to keep Los Alamos's current workforce and maintain UC's benefits package for existing employees. The tuition benefit alone costs the university “a huge amount of money,” Atkinson notes.

DOE says it will wait until next year to decide if it will compete the contract to manage Lawrence Livermore National Laboratory in California, another weapons-related facility UC has managed since 1952. The department is, however, extending the university's contract to manage Lawrence Berkeley National Laboratory.

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