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For immediate release March 23, 2012

LANL doth protest too much: need for employment reduction exaggerated, and is a result of choices made by Los Alamos and Sandia

No employee layoffs are necessary under current budget.
Overall, LANL budgets and programs are oversized, overpriced, and oversold.
LANL downsizing is necessary, appropriate, and if embraced would be good for New Mexico. 
LANL funds are squandered by poor management, internal bureaucracy, and excessive salaries, especially in management.

Contact: Greg Mello, 505-265-1200, 505-577-8563 cell (preferred today)
For more, also these recent press releases:

Administration Hints at Smaller Nuclear Force Amid Wider Defense Cutbacks, press release, Jan 5, 2012
Los Alamos Lab Trims Workforce: “Good News,” Says Green Policy Group, press release, Feb 21, 2012
NNSA delays proposed plutonium warhead plant "for at least five years," press release #2 of Feb 13, 2012
Brief remarks re CMRR-NF as an economic development engine, and alternatives (pdf) Dec 5, 2011

Albuquerque – Today the  "Regional Coalition of LANL Communities," a lobbying group composed of local government leaders that was organized by Los Alamos County, is holding a press conference to discuss funding for Los Alamos National Laboratory (LANL) and "jobs."

LANL is maintained and operated by a privately-held company, Los Alamos National Security (LANS), for the Department of Energy (DOE) and its subset the National Nuclear Security Administration (NNSA).  The long-term LANS contract, with a current cash flow of about $2.2 billion (B) per year, is one of the largest in the federal government.

LANS, its subcontractors, and Los Alamos County have been stung by the indefinite deferral of the proposed $6 B Chemistry and Metallurgy Research Replacement Nuclear Facility (CMRR-NF), which has been the highest priority infrastructure project in the NNSA weapons program.  Financially, this project was to be the largest single government construction project in New Mexico history, by about a factor of ten.

In fiscal year (FY) 2010, DOE LANL spending stood at $1.823 B.  In the following year DOE sought and received $2.166 B, an increase of $344 M million (M) (19%) in a single year -- the largest one-year spending increase since the Manhattan Project.  The Obama Administration sought still more funding for LANL for FY2012, but Congress cut back FY2012 DOE LANL spending to $1.951 B, a decrease of $216 M.

None of that decrease was due to Congress holding back $100 M from proposed CMRR spending.  That action kept CMRR spending flat from FY2010 to FY2011 instead of funding the requested $100 M increase.

DOE proposes to trim LANL spending for FY2013 by $57 M, a 3% decrease from today's (FY2012) level, well within historical fluctuations.

Overall New Mexico DOE spending is also expected to decline slightly (1.6%) from today's level of $4.47 B, to $4.40 B.  DOE spending at Sandia National Laboratories (SNL) increased by $16 M from FY2011 to this year, and DOE proposes to increase SNL spending by a whopping $316 M next year.

Thus DOE has requested a large net increase in spending at the two New Mexico laboratories of $259 million for next year. 

Changes in LANL funding since 1993 are shown in the graph below, which illustrates the considerable funding growth experienced at LANL since the end of the Cold War, primarily in nuclear weapons programs.  The proposed cut for FY2013 would return LANL DOE spending to a little more than what it enjoyed two years ago in FY2010.


In addition to DOE spending, LANL is able to attract some so-called "work for others" (WFO), which is largely work for other federal military agencies.  In addition to the congressionally-imposed cuts in DOE spending from FY2011 to FY2012, WFO also declined by about $134 M to $249 M, about 11% of current LANL funding, down from about 15% last year.  WFO spending levels at LANL are a function of funding in other federal agencies, as well as those agencies' perceptions of the value of LANL to their projects. 

The DOE nuclear weapons laboratories are very expensive places to do business.  Sources tell us that in 2009, the average fully-burdened cost of a single scientist at these three laboratories was $490,000 per year, far higher than cost at Department of Defense laboratories and almost twice the cost of scientists at MIT's Lincoln Laboratories.  Other factors being equal, lower LANL costs would result in more WFO. 

Any potential losses in LANS employment caused by the modest proposed $57 M (3%) reduction in LANL spending could be met by attrition and reallocation of funds within LANS. 

Potential losses in LANS subcontracting employment could be ameliorated, if not obliterated, by the proposed $316 M increase in DOE spending at SNL.  Subcontracting opportunities at SNL are under the control of Lockheed-Martin, which runs SNL.

Losses in subcontractor employment because construction projects are completed, e.g. the Radiological Laboratory, Utility, and Office Building (RLUOB) at LANL, are not LANL layoffs.  Temporary work is often subcontracted. 

When the management of LANL was changed from the University of California to LANS, considerable additional costs were incurred, including gross receipts taxes, setting up a new pension fund from scratch, and additional profit ("fee").  Management salaries within LANS also reached new heights under the new for-profit management, putting upward pressure on all higher-tier LANL salaries and thus cutting into potential employment.  Together, these factors added at least $200 million to the cost of running LANL, far more than the cuts DOE is currently contemplating. 

LANL salaries are indeed very high.  Upon information and belief, the average compensation of LANS employees, including maintenance staff and secretaries, exceeds $150,000.  Most of these employees are not working scientists.  A significant fraction of LANS employees are, we believe, compensated at a rate of above $300,000 per year. 

For further comments, please call.

***ENDS***


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