Todd Jacobson
NS&D Monitor
1/23/2015
The Department of Justice is investigating whether officials with Sandia National Laboratories improperly used government funds to lobby for an extension to the Lockheed Martin-run contractor’s management and operating contract. The mention of the investigation was buried in the National Nuclear Security Administration’s Fiscal Year 2014 Performance Evaluation Review, released late last week, which reveals that the lobbying issue created friction between the NNSA and lab officials. Sandia spokesman Jim Danneskiold said the Department of Justice has followed up on some of the issues raised in a November special inquiry by the Department of Energy Inspector General. “Sandia is cooperating with the DOJ and the IG,” Danneskiold said. “Any additional information would have to come from DOJ.” The NNSA declined to comment on the investigation, referring questions to the Department of Justice, which did not respond to a request for comment late this week.
Sandia earned 81.2 percent of its at-risk fee ($7.9 million out of $9.8 million available) and a “very good” rating in its FY 2014 revew, but lab management was downgraded heavily for an incident at an explosives testing facility that left a worker with burns on his hand and the lobbying scandal. Sandia earned 65 percent of the available fee for Operations and Infrastructure and 76 percent of the available fee for Leadership. By contrast, it earned scores of 85 percent and higher for Nuclear Weapons Mission, Broader National Security Mission, and Science, Technology and Engineering work. “Overall, the PER is highly complimentary of Sandia’s excellence in delivering its national security missions, its efforts to tie its world-class science more closely to the national nuclear weapons mission and its progress in engineered safety and improving its overall safety culture,” Danneskiold said.
PER Describes a ‘Strained’ Relationship
The lobbying scandal, however, threatened to derail other work at the lab and across the weapons complex, the NNSA said in the review. “Accomplishment of the mission of the Nuclear Weapons Complex depends upon the mutual commitment of NNSA and Sandia to developing and sustaining highly effective working relationship at all organizational levels,” the NNSA said. “Challenges presented during FY 2014 have strained the relationship and put at risk the efficiency and effectiveness of the endeavor.”
IG Detailed Lobbying Allegations
The lobbying scandal was exposed by the Department of Energy’s Inspector General last year. In a November report, the IG detailed a Sandia plan to push for a contract extension that was hatched in 2009, relying heavily on influencing the Obama Administration and Congress to push for a long-term deal without a contract competition. The IG said the plan was developed by lab officials and consultants paid with funds reimbursed by the government, including former New Mexico Congresswoman Heather Wilson (R), whose agreement with Sandia came under heavy criticism a year ago. Wilson denied helping the lab lobby for a contract extension.
Federal law prohibits the use of government funds for lobbying efforts. “We find that the position and actions taken by SNL to develop and execute the contract extension plan to be highly problematic,” the IG said. “Given the specific prohibitions against such activity, we believe that the use of Federal funds for the development of a plan to influence members of Congress and Federal officials to, in essence, prevent competition was inexplicable and unjustified.”
According to the report, Sandia said it believed it was OK to push for a contract extension “based on ‘the merits of the matter’ ” and it pushed for the costs of the effort to be deemed allowable. Sandia was pushing for a seven-year extension with the possibility of five years of award-term extensions; its contract was extended in 2009 by two-and-a-half years with up to six months in extensions, and DOE extended the contract in April 2014 by another two years with a third-year option.
‘The NNSA Needs a Partner’
In a letter to the lab outlining its fee, NNSA Principal Deputy Administrator Madelyn Creedon also noted that issues with transparency had “strained” the relationship with the NNSA. “Sandia’s commitment to the positive and cooperative relationship has been modest and falls short of what is expected of a FFRDC,” she said. “We look forward to an improved relationship in 2015.” Creedon also said she expected to see positive changes in FY 2015 with new Sandia leadership. Notably, Sandia announced late last year that Stephen Rottler, the head of its California site and the head of its Energy and Climate unit, would be taking over as its deputy director and executive vice president for National Security Programs effective March 6. He succeeds Jerry McDowell, who will retire in July after 35 years at Sandia.
The NNSA said in the PER that Sandia also initially refused to provide an investigation report—the review doesn’t specify the topic of the report, however—to NNSA and only complied with “extreme reluctance,” the agency said. It was “one example that calls into question Sandia leadership’s commitment to transparency and the obligation as an FFRDC [Federally Funded Research and Development Center] to full disclosure of its affairs to the NNSA.” The agency added: “NNSA needs a partner that is fully committed to the requirement ‘to maintain full and open communication at all times, and on all issues affecting contract performance, during the term of this Contract.’ Sandia’s commitment to the positive and cooperative relationship contemplated by the contract has been modest, and falls short of what is expected of a Federally Funded Research and Development Center.”
Danneskiold noted that elsewhere in the PER Sandia was praised for improving transparency in budget and cost accounting, safeguards and security, and promoting a culture of self-assessment. “Sandia recognizes that maintaining open lines of communications with DOE and NNSA is important for continuing to build strong working relationships and Sandia will work with NNSA to continue to improve the level of transparency,” Danneskiold said. “We are committed to a positive and cooperative relationship with DOE/NNSA.”
Explosives Accident Leads to Downgrade
Sandia was also downgraded for the incident at an explosives testing facility that left a worker with burns on his hand. The accident at the lab’s Site 9920 paused operations across the site for months, and a review of the accident found insufficient work planning and control of test operations, insufficient integration and understanding of the project, and a failure to address potential hazards in the prototype device being tested.
At the direction of the NNSA, the lab tracked the impact of the incident on lab operations and found 42 programs were affected. “While the event at Site 9920 revealed underlying issues at Sandia, the response by senior management showed the seriousness with which Sandia approached the accident and a commitment at the highest levels of Sandia leadership to address the performance concerns,” the NNSA said.
