The County of Los Alamos, N.M., is unhappy with the Energy Department’s plans for the follow-on management and operations contract at the Los Alamos National Laboratory.
The comments were included in an email to DOE signed by David Izraelevitz, chair of the Los Alamos County Council, also on behalf of the body’s vice chair and several other members.
In the letter, the county said it had “serious concerns” about DOE’s procurement so far for the contract — the agency’s semiautonomous National Nuclear Security Administration released a draft request for proposals (RFP) on July 12 — and said the new deal should more closely resemble the current contract held by Los Alamos National Security: a consortium that includes senior partners Bechtel National and the University of California.
A final request for proposals from the NNSA is expected in September. By that time, county officials hope DOE will correct what local government perceives as a potential cheaping out on the agency’s part.
“The arbitrary cap on fees included within the Draft RFP contradicts NNSA’s goal of hiring the best contractor” for the lab, county officials wrote in their letter. In the local government’s read of the RFP, DOE’s fee caps would prevent it from hiring the best technical management, despite the agency’s professed preference to avoid an award to the lowest bidder purely for financial reasons.
“The most experienced and qualified bidders will likely elect not to bid on the Final RFP if NNSA retains the current caps on fees that are set for in the draft RFP,” county leader stated.
The draft RFP says the proposed fixed fee for lab management cannot exceed 1 percent of the estimated cost, and the proposed award fee cannot exceed 0.5 percent of the cost, for each contract period. The planned contract consists of a five-year base period with five additional one-year options.
An industry source told NS&D Monitor that the county officials could be right about the potential impact of these fee caps, saying companies such as Northrop Grumman and Lockheed Martin initially backed out of the competition for the current contract in 2005 due to the low fees. The Energy Department then raised the fee maximum to 4.5 percent, at which point Lockheed rejoined the competition in a team with the University of Texas.
Major contractors must decide whether it is worth placing valuable project managers on a contract that offers a maximum 1.5 percent profit, the source said, when they could instead bid for commercial projects that offer a greater award potential and “less reputational risk” in terms of potential inspector general scrutiny or congressional hearings.
The county in its letter also complained that the draft RFP made no mention of a statutory requirement that the Los Alamos prime contractor provide millions of dollars in financial aid to the Los Alamos Public Schools. “The county looks forward to collaborating with NNSA to ensure the goals of both parties are achieved through the procurement process,” Los Alamos officials wrote.
The Los Alamos lab, a multidisciplinary research site, supports the U.S. nuclear arsenal through work that includes production of plutonium pits for nuclear weapons. The 40-square-mile site employs roughly 11,200 personnel, more than 7,000 of whom work for the site contractor.
Los Alamos National Security has run the nuclear weapons lab since 2006 under a contract worth roughly $2 billion a year. Its contract expires on Sept. 30, 2018.
The NNSA said that while it does not disclose the number or identity of respondents to its solicitations, it is currently “reviewing the inputs and questions received.”
LANL Waiting for Word on New Cleanup Contractor
Meanwhile, LANL is still waiting on word regarding a new contract for legacy nuclear cleanup at the site, an official said Tuesday. DOE’s Office of Environmental Management (EM) in September 2016 issued its final request for proposals for the contract, which could be worth up to $1.5 billion over 10 years. At the time, EM said it expected the transition to the new contractor to begin on July 3 of this year, but that date passed without a formal announcement.
“We are currently awaiting additional information on the announcement of a new contractor for those efforts,” Kathy Keith, director of Los Alamos’ Community Partnerships Office, said in an email message to stakeholders. She subsequently confirmed to NS&D Monitor that the laboratory has not been informed about the timing of the contract award or who might take over the work.
Los Alamos National Security (LANS) currently conducts environmental management duties under a two-year, $230 million bridge contract that expires on Sept. 30.
“Los Alamos has a long history—next year will mark our 75th anniversary—and through the contract transition the Laboratory will continue to focus on its mission, including planning for the future, and working with the broader Northern New Mexico community,” Keith wrote in her stakeholder message. “The crucial work the Laboratory undertakes will continue.”
Los Alamos National Security is a partnership of Bechtel National, BWX Technologies, AECOM, and the University of California. Cleanup responsibilities were removed from its management contract following the 2014 radiation release at the Waste Isolation Pilot Plant in southeastern New Mexico, which was linked to a waste container from the laboratory.
