Triad National Security took over management of the Los Alamos National Laboratory in New Mexico on Thursday, ending a decade-long experiment in running the nation’s oldest nuclear weapons laboratory as a for-profit business.
After a four-month transition, Triad — led by the nonprofit trio of Battelle Memorial Institute, longtime Los Alamos manager the University of California, and Texas A&M University — began work on the five-year base period for a management and operations contract expected to cost the Department of Energy’s semiautonomous National Nuclear Security Administration (NNSA) about $20 billion over 10 years, including five one-year options.
The base period alone is worth about $10 billion. Triad has not quantified its annual fee take, which should become clearer when the NNSA releases the company’s first annual performance evaluation some time next year. However, the solicitation allowed up to $30 million per year, not counting work outside the core DOE weapons mission.
Los Alamos employs more than 10,000 people, the vast majority of whom work for Triad. The lab has an annual budget of roughly $2.5 billion, which among other things it uses to build nuclear-weapon cores called plutonium pits and assess the health of existing nuclear weapons without conducting any nuclear-explosive tests. The latter stockpile-stewardship mission includes chemical and conventional-explosive tests, as well as supercomputer simulations.
Triad relieves Los Alamos National Security (LANS): a for-profit team led by the University of California with senior industry partner Bechtel National and industry teammates AECOM and BWX Technologies. A team comprising essentially the same players still runs the Lawrence Livermore National Laboratory under a contract that was awarded in 2007 and, with options, would run through Sept. 30, 2026.
Besides the nonprofit partners, Triad includes integrated industry subcontractors Fluor and Huntington Ingalls Industries. Also participating are small businesses Longenecker & Associates, the joint venture Merrick SMSI, and TechSource. The NNSA made small business participation mandatory in the contract competition Triad won.
Triad is a nonprofit, but not yet tax-exempt, meaning it will for now pay about $20 million annually in New Mexico gross receipts taxes. The NNSA might press the company to seek tax-exempt status, against the will of Los Alamos County. The county wants the money to pay its bills, while the NNSA argues Triad has a legal obligation to save taxpayers all the money it can, including by becoming tax-exempt.
Throughout the four-month transition period that preceded Thursday’s scheduled takeover, Triad took public the message it privately pressed on the NNSA during a roughly yearlong contract competition: that returning to a nonprofit lab manager would help industry see itself not as a manager of a discrete Los Alamos stovepipe — as incoming lab Director Thomas Mason has said was the case under LANS — but as a partner in a single national security mission.
“The new leadership team at Los Alamos is determined to strike the right balance between mission delivery for the nation and safe, operational excellence across the entire Laboratory,” Mason, also president and chief executive officer of Triad, said Thursday in a prepared statement. “We are committed to partnering with the National Nuclear Security Administration as an integral part of the National Security Enterprise.”
Mason — a Battelle employee and former director of the Oak Ridge National Laboratory in Tennessee — replaces Terry Wallace, the interim Los Alamos director. Wallace took over in January from Charles McMillan, a nuclear veteran who ran Los Alamos for most of the LANS days.
LANS started managing the Los Alamos National Laboratory in 2006 and departs in the wake of safety and performance lapses that prompted the NNSA to pull the plug on the contract almost 10 years before the final option would have expired. The final straw came in 2014, after a badly packaged drum of Cold War radioactive waste from the lab burst underground at DOE’s Waste Isolation Pilot Plant near Carlsbad, N.M. Prior to LANS, the University of California had managed Los Alamos solo for 75 years.
