For Immediate Release December 21, 2005 

Bechtel, UC, BWXT, Washington Group Win Contract to Manage Los Alamos Lab: Reaction

Manufacturing mission likely to grow under new manager

Contact: Greg Mello or Damon Hill, 505-265-1200 

Albuquerque and Los Alamos, NM – A consortium including Bechtel, UC, BWXT, and Washington Group International, called “Los Alamos National Security, LLC” (LANS), has been awarded the operating contract for Los Alamos National Laboratory (LANL). 

Skipping most of the particulars, we have the following reaction. 

First, we are pleased that the huge Lockheed-Martin Corporation (LockMart), which makes nuclear delivery systems as well as designs warheads, manages the British nuclear enterprise, and prepares the command and control systems for launching nuclear attacks, did not get the contract – for a variety of reasons. 

One reason we are pleased in this regard is that the combination of LockMart and the relatively weak University of Texas (UT) might well have been less objective than LANS in the annual certification of the US nuclear arsenal – that is, in determining whether to ask the President to conduct nuclear tests. 

This is a difficult speculation to make, but it has to be noted in this regard that Paul Robinson, until recently Sandia’s President and Lockheed’s preferred manager for LANL, was in 1999, out of all three nuclear laboratory directors, the strongest advocate in Congress against ratification of the Comprehensive Test Ban Treaty (CTBT).  Dr. Robinson was also an advocate for a special nuclear arsenal tailored for use against new adversaries (what he called the “To Whom It May Concern” arsenal), and he has worked for years in nuclear strategy at USSTRATCOM, where he has been a member and chair of the Strategic Advisory Group (SAG). 

These involvements, together with Lockheed’s vertical integration and multi-national contracts in the nuclear weapons field, raised uncomfortable questions about the concentration of power and ideology which Lockheed and Dr. Robinson would have brought.  It is unlikely, in our view, that UT would have been able to properly balance these financial interests and ideological beliefs.

We remain concerned, however, that LANL is to be run by a consortium – period.  “One hates to see a huge nuclear lab run by committee, further complicating the accountability and management problems inherent in any government-owned, contractor-operated (GOCO) facility,” said Study Group director Greg Mello.  “The fact that it has not yet been made clear who will do what is disconcerting, and this lack of clarity should remind everyone that this contract “competition” will in no way “fix” any of the basic problems at LANL, which stem from the nature and scale of the work itself and the secrecy which goes along with it.” 

The Study Group has long recommended federalizing LANL as part of a significant downsizing of the lab, independent of changes in nuclear weapons policy – which we would also like to see.  At present some 96.3% of the U.S. nuclear warhead business is privatized, a situation which we and many others regard as highly undesirable. 

It is possible that the role of BWXT in this contract, a nuclear materials manufacturing firm, will help LANL draw closer to the other nuclear weapons manufacturing facilities, and may be related to proposals in the House of Representatives and the Secretary of Energy Advisory Board to consolidate the sprawling and antiquated nuclear weapons complex. 

“What is most important is the mission, not the manager – and the mission is changing,” warned Mello.  “Congress has tentatively directed LANL to make plutonium pits for both existing and new types of weapons.  This, as well as design of new weapons and certification of old ones, are LANL’s three biggest missions.  The new contractors, unless the public and the Congress succeed in changing the situation, are expected to succeed at all three missions, two of which – designing and produce new weapons for the stockpile – are new.  If they do succeed, they will be rewarded with up to 20 years of no-bid, multi-billion-dollar government contracts, and the political influence that goes with them.” 

“This, then, is the bottom line: we are in for a world of hurt.  These companies are some of the biggest feeders off the war and occupation in Iraq and Afghanistan, and now they are coming to New Mexico.  Bechtel, which used to build chemical plants for Saddam Hussein in the “good old days,” is now coming here.  NNSA hasn’t gotten what it wants at LANL, and now it has given the management to a ‘consortium’ of crony capitalists.  Nobody should be under any illusion as to what this means.”

A table of current (12/15/05) prime weapons complex contractors can be found at http://www.lasg.org/technical/NuclearWeaponsComplexTable.htm.

Some background on the LANS partners, prepared by Damon Hill and Greg Mello

Bechtel Group, Inc. (Bechtel)

• $17.4 B in revenue (2004). [1]
• Headquarters in San Francisco, 40 offices around the world, 40,000 employees. [2]
• Ranked 6^th in Iraq and Afghanistan contracts: $2.8 B (Jan 2002 – July 1, 2004). [3]
• Ranked 8^th in overall federal contracts: $4.6 B (FY2003). [4]
• Ranked 15^th in DoD contracts: $1.7 B (FY2004). [5]
• Bechtel, in partnership with Lockheed Martin and Johnson Controls, is a managing contractor of the Nevada Test Site (NNSA budget of $419.0 M in FY2005) and a managing contractor at Savannah River Site (NNSA budget of $319.5 M in FY 2005) in partnership with Westinghouse, BWXT, and BNFL. [6]
• Subsidiary Bechtel National, Inc. is part of Los Alamos National Security, the new management consortium at Los Alamos National Laboratory.
• “No. 1 ranked U.S. contractor seven years running” according to their web site. [7]
• $240,000 in total lobbying expenditures in 2000, $160,000 of which for subsidiary Bechtel National. [8]
• Former Secretary of State George Shultz, once Bechtel’s president, serves on the company’s board of directors. [9]   (Reference under: “Iran-Contra,” etc.) 

University of California (UC)

• 3^nd largest university recipient of DoD spending, $120.9 M (2002). [10]
• Largest recipient of NNSA nuclear weapons spending ($2.8 B, will now drop towards perhaps $1.6 B, assuming a 4-way even split at LANL).  It is possible that BWXT could now surpass UC as the largest NNSA contractor. [11]  
• Ranks an estimated 8^th in overall defense contracting ($2.9 B, DoD + NNSA).  UC’s ranking will fall as the income from LANL is shared. [12]  

Washington Group International (WGI)

• $2.9 B in revenue (2004). [13]
• Ranked fourths in Iraq and Afghanistan contracts, $3.1 B (Jan. 2002 – July 1, 2004). [14]
• Headquarters in Boise, Idaho; approximately 25,000 working in over 40 states and more than 30 countries. [15]
• Ranked 62^nd in overall federal contracts: $566.6 M (FY2003). [16]
• $1,300,000 in total lobbying expenditures in 2000. [17]

BWX Technologies, Inc. (BWXT)

• About $1.53 B in total NNSA contracts (FY2005), a significant increase over FY2004. [18]
• 94% of sales from DOE/NNSA, 6% from civil government (2003). [19]
• 11,180 employees (2003). [20]
• Headquarters in Lynchburg, VA, a subsidiary of McDermott International, Inc. [21]
• For NNSA, BWXT manages Pantex (NNSA budget of $529.6 M in FY2005), Y-12 (NNSA budget of $918.4 M in FY 2005), and is one of four partners at Savannah River Site (NNSA budget of $319.5 M in FY 2005).  With this announcement, BWXT will now be the second-largest NNSA contractor. [22]
• Has been in the nuclear weapons business since the Manhattan project. [23]
• Has paired up with University of Chicago to re-bid for a contract to manage the Argonne National Laboratory. [24]