After a highly troubling performance evaluation last year, the manager of the Los Alamos National Laboratory in New Mexico received significantly higher marks for its work in fiscal 2015, according to the National Nuclear Security Administration performance evaluation report released on May 13. Nonetheless, Los Alamos National Security’s (LANS) contract will expire in fiscal 2018, several years before the potential final end date set out in the contractor’s 2006 deal to manage the nuclear weapons research and development site.
In fiscal 2014, LANS received ratings no higher than Very Good in all five performance areas, including an “Unsatisfactory” in operations and infrastructure for improper management of transuranic waste, which was linked to the February 2014 release of radiation from a container that had been shipped to the Waste Isolation Pilot Plant in southeastern New Mexico. It received only 45 percent of its at-risk award fee — $18.2 million out of a possible $40 million.
The lab has also been handicapped by pauses and shutdowns in its Plutonium Facility for safety problems and physical upgrades. “The remaining operations that were not resumed in the Plutonium facility continued to impact programmatic operations,” the latest evaluation notes. “Several additional facilities remained inoperable throughout the year, including the Waste Characterization Reduction and Repackaging facility, the Radioactive Assay and Nondestructive Testing facility, Waste Area G and the Weapons Engineering Tritium facility.”
For the six areas considered in the fiscal 2015 report — covering Oct. 1, 2014, to Sept. 30, 2015 — LANS received marks of Excellent for DOE and Strategic Partnership mission and science, technology, and engineering, along with a Very Good rating for the reducing global security threats mission and Good for leadership. Its operations and infrastructure rating was bumped up to Satisfactory, though with “significant challenges noted.” It received 74 percent of its at-risk fee — just over $29 million out of $39 million. In total for fiscal 2015, LANS received $51.7 million in fixed and at-risk fees, out of a total possible of $61.7 million.
In both reports, LANS received ratings of Very Good in the area given the most weight (35 percent) in determining the award fee: managing the nuclear weapons mission.
In fiscal 2015, “The Laboratory made important progress in support of the stockpile, including work in Advanced Certification readiness efforts for pit reuse, work on dynamic materials properties for the National Boost Initiative, preparatory work on a future neutron-diagnosed subcritical experiment, along with several other areas,” the latest report says.
Other successes cited in the latest report included helping to secure materials of proliferation concern, “quantum information science applications for cyber security,” and operation of a money-saving supply chain management system. Challenges included several facilities that remained offline during the year, an arc flash that severely injured a worker, and a cyberattack that compromised personnel information.
The report is dated Nov. 2, 2015, but was only made public late last week, along the evaluations for the NNSA’s other site managers.
In a letter attached to the NNSA award fee determination memo, DOE contracting officer Robert Poole said he was cutting LANS’ award fee by an aggregate of $7.7 million due to the May 3, 2015, arc flash incident that left the worker with severe burns, along with two separate “losses of contamination control” of highly enriched uranium at a research facility at the Nevada National Security Site.
Los Alamos National Security is a consortium of Bechtel National, BWX Technologies, AECOM, and the University of California. Its decade-old contract featured potential extensions to 2023, but securing another year had been dependent on achieving Good or better ratings in all areas. The National Nuclear Security Administration announced earlier this month that the contractor would receive its last extension, to Sept. 30, 2018, to allow time for the M&O contract bid process and for the transition of legacy nuclear cleanup responsibility at the lab from LANS to another firm.
The management and operations contract for the nearby Sandia National Laboratories is also formally up for bid as of this week, in the wake of a strong review from the NNSA.
With significant improvements in operations and infrastructure for fiscal 2015, contractor Sandia Corp. received an overall strong rating in its latest performance evaluation report, dated Nov. 19, from the NNSA.
That came despite a sharp drop in its rating for leadership, from “Very Good” to “Satisfactory,” which the report attributed to “the results of the Department of Justice investigation settlement based on allegations of improper use of government funds for lobbying activities” aimed at securing a contract extension. To avoid charges under the False Claims Act, the report notes, Sandia in August 2015 paid the federal government over $4.7 million. Longtime Sandia staffer and manager Jull Hruby took over as director last July.
The NNSA said its fiscal 2015 leadership rating for the lab was based on “on the positive work of Sandia leadership in the majority of the performance objective, but largely degraded by the results of the Department of Justice (DOJ) investigation and settlement based on allegations of improper use of government funds for lobbying activities. The allegations and subsequent settlement damaged the reputation of the Laboratory and the parent company.”
In contrast, the performance evaluation report finds, “The new Laboratory Director and other senior managers demonstrated a commitment to improve transparency and partnership. Their actions acknowledging and implementing appropriate corrective measures were positive,” but could not override the negative implications of the investigations.
The issue continues to rankle clean government advocates. Commenting on the latest performance evaluation, Jay Coghlan of Nuclear Watch New Mexico vowed to keep this issue alive. “Lockheed had $34 billion in federal contracts in 2014, but paid only $4.8 million to the Department of Justice to settle its illegal lobbying activities.” he stated. “The National Nuclear Security Administration (NNSA) dinged Sandia only $140,000 from its contract award, which is peanuts.”
Sandia Corp., a wholly owned subsidiary of Lockheed Martin that operates NNSA national security facilities in New Mexico and California, was rated in six areas in the long-awaited report, and earned 85 percent of its at-risk fee for fiscal 2015 – $2.4 million out of a possible $2.8 million.
In the category that weighs most heavily on the award fee – managing the nuclear weapons mission, at 25 percent of the total – the contractor remained at “Very Good” for the second consecutive year. It popped from “Very Good” to “Excellent” for its national security mission; stayed “Excellent” in science, technology, and engineering; and rated the same in the new category of Department of Energy and Strategic Partnership Project mission.
The contractor met expectations and improved from Good to Very Good in the operations and infrastructure category, winning praise for safety and security improvements over the previous year when an accidental detonation at Sandia’s Site 9920 caused an injury and led to a pause in explosive operations.
Including a $25 million fixed fee, Sandia Corp. earned total fees of $27.4 million in fiscal 2015, a marginal increase over the year before. Its contract expires in 2017. The National Nuclear Security Administration on Wednesday released the request for proposals for the M&O contract covering the New Mexico and California campuses, along with a number of smaller operations.
