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"Forget the Rest" blog

Plutonium and Profit: A 20-Year, No-Bid Contract to Manage Los Alamos?
by Greg Mello, published (with edits) in the Albuquerque Tribune
December 28, 2005

Since its inception in 1943 as Site Y of the Manhattan Engineering District, the facility now called Los Alamos National Laboratory (LANL) has been owned by the U.S. government and operated by the University of California (UC) and its subcontractors.

This is now about to change. On December 21, the management of LANL was handed over to a newly-created private company called “Los Alamos National Security, LLC” (LANS), which will assume full management powers at LANL after a 6-month transition period.

LANS is a partnership between UC, Bechtel National (a subsidiary of the Bechtel Group), BWX Technologies (BWXT), a nuclear weapons and nuclear materials manufacturer which does some 96% of its business for the
Department of Energy (DOE), and Washington Group International (WGI), a growing government-services firm with large contracts in Iraq and Afghanistan. (As of last summer, WGI ranked fourth among all contractors in sales in those countries. Bechtel ranked sixth).

Most folks don't know that some 96% of DOE nuclear weapons program spending goes to various contractors, mostly for-profit companies. This week's decision continues the privatization trend, moving LANL's $2.2 billion budget into a new for-profit business which stands to make hundreds of millions of dollars in management fees. This situation is quite new at LANL. If LANS succeeds in pleasing its federal paymasters, the organizations which comprise LANS will be rewarded with a continuous, no-bid, government contract of up to 20 years, worth tens of billions of dollars overall and fees in the $1.6 billion range. There is, of course, a great deal of political influence associated with such enormous sums.

Can a huge, secret “national security” laboratory and production site be managed without waste, fraud, and corruption in our present political climate? Not really. History concurs with common sense in this regard: all three nuclear laboratories as well as the nuclear production plants have experienced egregious problems of virtually every kind, and in spades.

LANL's scale itself is a big problem. Since the Reagan era, LANL's budget has not been determined by the mission, but, rather, vice-versa. Senator Domenici gets as much money for LANL as possible; the lab gives him the language with which to do so. Since the language is quite technical and Congress is quite busy, usually only a vague pseudo-scientific fig leaf is all that is necessary to hide what is essentially pork-barrel interest. The chair of the House energy and water appropriations subcommittee, David Hobson (R-OH), calls today’s weapons research program “welfare” for scientists and engineers, and few independent observers would disagree. Thus our senior senator is himself a major cause of problems at LANL. Our junior senator usually keeps a studious silence on the subject; LANL is, after all, his largest campaign contributor.

So LANL has two very difficult management problems from the get-go: its scale, which I believe has exceeded its stated mission in recent years by a factor of about four; and its secrecy, in the service of which LANL boldly goes where no man has gone before. For instance, the “public reading room” at LANL, after being reduced to a single bookshelf of corporate brochures, has now been moved behind a razor wire fence guarded by people with M-16s.

Beneath these problems lies the really big problem: the mission itself, which is the master key in understanding LANL's problems and why this week's management change will solve nothing. In fact, the real situation is likely to deteriorate.

LANL's three core missions are to maintain existing kinds of nuclear weapons, design new warheads, and manufacture the plutonium cores (“pits”) for both. Designing and building new warheads are the new missions at LANL, missions not seen in many years, and they have required a new management structure in order to properly incentivize all concerned in the absence of any genuine national security justification.

On November 7, Congress tentatively assigned to LANL the job of making pits for the nation's stockpile, a role that UC did not relish and did not do well. This past summer the Secretary of Energy's Advisory Board slammed LANL for operating its aging plutonium facility at just “5%” efficiency. The new contractors now have hundreds of millions of dollars in fees riding on the proposition that they can begin manufacturing Trident warhead pits in 2007 and a new kind of pit in 2012.

In the final analysis, "science" can be done at Livermore. LANL's raison d’etre is its relative isolation, which gives LANL the freedom to undertake dirty and risky jobs, as the head of LANL's government relations group patiently explained to me years ago in a private meeting.

Is New Mexico ready for this? I hope not. In the service of its plutonium facility, LANL operates our state's largest nuclear dump – in fact it is the largest in three surrounding states as well. New Mexico's economic development hopes rest substantially on perceived amenity. If we head down the “Rocky Flats” road, it will be hard to turn back.

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