The newly awarded management and operations contract for the Sandia National Laboratories will incorporate governance initiatives to boost transparency, improve project management, and increase engagement between the Department of Energy and its contractors, according to the National Nuclear Security Administration (NNSA).
The semiautonomous DOE agency announced on Dec. 16 it had awarded the new contract to National Technology & Engineering Solutions of Sandia (NTESS), a wholly owned subsidiary of Honeywell International. Northrop Grumman and the Universities Research Association consortium will support NTESS under the contract, worth $2.6 billion annually over up to a decade.
The NNSA said in its announcement that the Sandia contract solicitation incorporated governance initiatives based on recommendations from the Augustine-Mies Congressional Advisory Panel on the Governance of the Nuclear Security Enterprise, the Commission to Review the Effectiveness of the National Energy Laboratories (CRENEL), and the Secretary of Energy’s Advisory Board (SEAB).
These advisory bodies identified a deteriorating relationship between the DOE and its contractors due in large part to the bureaucratic burdens placed on the national labs. NNSA spokesman Al Stotts said by email this week the new contract would take steps to address the problem, such as increasing transparency into indirect costs to strengthen strategic planning; enhancing DOE, corporate parent, and M&O leadership and engagement; implementing improved project management policies “allowing the parties to establish special terms and conditions for individual capital construction projects designed to incentivize efficient and effective project management”; and codifying business process reforms, including salary, benefit, and pension approvals.
A Honeywell spokesperson said the NNSA would have to answer questions on how the contractor plans to specifically address the governance initiatives until after the contract award protest period is closed. The NNSA by press time did not offer additional details about implementation of these initiatives at Sandia.
In a 2015 report, CRENEL recommended a series of reforms intended to relieve bureaucratic burdens, calling for labs to be given greater managing autonomy and suggesting DOE oversee programs at the highest level and allow the labs to handle implementation of policy free from the delays and burdens of departmental approvals at each step. This would include greater flexibility in managing budgets and personnel compensation as well, according to CRENEL’s report.
The CRENEL report highlighted, for instance, “duplicative and unnecessarily burdensome requirements that govern DOE laboratories” in the areas of human resources, business services, and other administrative functions that “waste time and resources on unnecessary transactional details.” It also noted that DOE requirements often involve multiple levels of approvals. In another example about duplicative requirements for construction activities, “the Commission found that some industry standards are more up-to-date than the analogous DOE standards.”
The SEAB also identified DOE requirements as burdensome and said efficiency at the labs would improve if responsibilities were more clearly defined across the headquarters, field offices, service centers, operational oversight offices, lab leadership, and M&O contractors. The Augustine-Mies panel identified often adversarial contractor-government relationships, noting that the nuclear enterprise lacks strategic dialogue between NNSA leadership and the labs.
DOE said in response to these sets of recommendations it would promote greater transparency by providing an annual report to Congress on the state of the laboratory system; the NNSA said it will improve governance and oversight of field operations at its sites by clarifying personnel roles at field offices and headquarters. Now it appears that these efforts will play a larger role in the nuclear enterprise through the M&O contracts themselves.
The current contract at Sandia is held by Lockheed Martin subsidiary Sandia Corp. and will expire on April 30, 2017. The new contractor will manage operations at Sandia locations in Albuquerque, N.M., Livermore, Calif., Kauai, Hawaii, and Tonopah, Nev., for work that includes non-nuclear engineering for nuclear weapons, the development of systems that ensure the reliability of the U.S. nuclear arsenal, and other nonproliferation and treaty verification support.
Lockheed Martin bid for the contract as part of a team with the Purdue, New Mexico State, and New Mexico Tech universities. Battelle and Boeing also bid together on a team with the University of New Mexico, the Texas A&M University System, and the University of Texas System.
Asked if it plans to protest the award, a Lockheed spokesperson said by email, “we’ll make that determination once we’ve received a de-brief from the government on the selection process and evaluation.” A Boeing spokesperson said, “We have yet to receive a post-selection debrief, and therefore have not discussed our options. We anticipate a debrief sometime at the beginning of the year.” A Battelle spokesperson declined to comment at the time of the award.
Offerors have 10 days following the debriefing to protest the award to the Government Accountability Office.
Stotts said NNSA considered each bidder’s past performance history and assigned “adjectival ratings” based on strengths and weaknesses. “Accordingly, the proposal submitted by NTESS was determined to provide the best value to the Government with the highest technical ratings and the lowest price,” he said.
Honeywell has earned strong marks in recent years for its work with DOE; Honeywell Federal Manufacturing & Technologies, which manages the NNSA’s National Security Campus at Kansas City, Mo., was awarded in May for its fiscal 2015 work an overall rating of “Excellent” and 94 percent of its award fee, the highest fee percentage awarded among the NNSA’s site contractors for that time period.
Focus on the Workforce
Several New Mexico lawmakers highlighted the need to focus on workforce recruitment and retention efforts at the Sandia National Laboratories, just hours after the contract award was announced.
“We urge NTESS and NNSA to continue — and strengthen — the lab’s workforce recruitment and retention, as well as its relationship with local small business subcontractors, entrepreneurs, business incubators, and labor organizations,” Sen. Tom Udall (D-N.M.), Sen. Martin Heinrich (D-N.M.), and Rep. Michelle Lujan Grisham (D-N.M.) said in a statement.
Recruitment and retention has been an enduring concern for the nuclear weapons complex in recent years, as the retirement of technical experts has sparked concerns over maintaining know-how among the newer generations of hires. The lawmakers noted that over the next five years, Sandia and the other NNSA laboratory in New Mexico, the Los Alamos National Laboratory, will need to hire up to 5,000 employees.
“We want to make sure New Mexicans are prepared to make up as many of those new hires as possible,” they said. “We will be working with NTESS on initiatives to help boost partnerships with New Mexico’s schools and universities to strengthen science, technology, engineering and math education as well as other learning and career opportunities.”
