UT System competing against California-A&M alliance to run Los Alamos

December 9, 2017

By Ralph K.M. Haurwitz - Austin American-Statesman Staff

In this May 10 photo, U.S. Energy Secretary Rick Perry, second from left, accompanied by Laboratory Director Charlie McMillan, second from right, learns about capabilities at the Los Alamos National Laboratory’s Plutonium Facility, from Jeff Yarbrough, right, Los Alamos associate director for plutonium science and manufacturing in Los Alamos, N.M. (Los Alamos National Laboratory)

When the University of Texas System and its competitors — including a surprising alliance between the Texas A&M University System and the University of California — submit proposals to run the birthplace of the nation’s nuclear weapons program, they better make sure to use the correct typeface and to format and number the pages properly.

After all, if you can’t get those things right, how can you be trusted to manage and operate Los Alamos National Laboratory, which is responsible for designing nuclear weapons and ensuring that they would work as intended, without actually detonating them?

The federal government’s 200-some pages of instructions and requirements in its request for proposals to run the lab in the mountains of northern New Mexico range from the mundane — text must be in the Times New Roman font and at least size 12 — to the consequential: Bidders must state how much in fixed fees and potential bonuses they want to be paid.

The laboratory is a massive operation, with more than 11,000 workers and 1,000 buildings scattered across 22,000 acres. In addition to its work with nuclear weapons, the lab conducts research involving national security, space exploration, renewable energy, medicine, nanotechnology and supercomputing.

The governing board of the A&M System voted unanimously in October to pursue the Los Alamos contract, and the University of California board followed suit last month. The American-Statesman has learned from sources that the two systems are partners. Bids are due Monday.

“We can neither confirm nor deny whether we are submitting a proposal or if there are partners involved,” A&M spokeswoman Marilyn M. Martell said.

“We’re not going to talk about anything with regard to our bid strategy at this time,” said Gary Falle, with UC’s federal governmental relations office, although he added that the university was working “diligently” to finish its proposal by Monday’s deadline.

Suddenly Texans like Californians?

The A&M-UC alliance was unexpected given the conservative leanings of A&M’s governing board and the dismissive attitude of many elected officials in Texas toward all things California, especially its decidedly blue politics and other liberal leanings. On the other hand, A&M officials might figure that the University of California has a leg up on the competition because it has been involved in running the lab since it was established in 1943, with physicist J. Robert Oppenheimer leading development of the atomic bombs that were dropped on Japan during World War II.

UC officials perhaps reckon that it couldn’t hurt to team up with the alma mater of Rick Perry, the former Texas governor who is now secretary of the Energy Department.

The UT System Board of Regents voted 4-3 last month to bid on the Los Alamos job. The regents on the losing end of that vote cited opposition from UT-Austin as one reason for their stance. That was the first time anyone outside of a relatively small circle of people knew that the flagship of the 14-campus system didn’t want to have a hand in running Los Alamos.

UT Regent Janiece Longoria also cited a string of safety mishaps at the lab involving the handling of plutonium, a radioactive and carcinogenic metal that is a key component for thermonuclear explosions.

In 2011, for example, improper positioning of several plutonium rods by two lab workers nearly provoked a runaway nuclear chain reaction that could have killed those nearby, according to an investigation by the Center for Public Integrity, a nonprofit, nonpartisan news organization. The episode led to the resignations of many nuclear safety engineers who said their warnings about dangerous practices were being ignored by contract managers.

UT-Austin President Gregory L. Fenves declined the Statesman’s request for an interview through a spokesman. John Ekerdt, associate dean for research at the university’s Cockrell School of Engineering, told the newspaper that running a national lab wasn’t considered a core mission for the campus.

“Our mission is discovery and scholarship and education,” said Ekerdt, who serves on a steering committee organized by system officials to pursue the Los Alamos contract. “To that extent, the lab detracts from the attention you can devote to your core mission.”

The campus nevertheless will support the Los Alamos effort, he said, adding: “If we’re going to do this, we should do this to win. And if we win, let’s be the best managers that we can possibly be.”

That can-do attitude echoes what the regents on the winning side of the vote said.

The lab’s safety problems “actually represent an opportunity for UT System to gain very positive recognition and to bring in many millions and likely hundreds of millions of dollars in research funds,” Regent Paul Foster said. “And I also think it represents an opportunity for UT to shine and to perform at the level that a university of the first class is expected to perform.”

The UT System has enlisted at least one corporate partner. The A&M-UC team likely has one or more corporate partners as well, and there could be other bidders that have not surfaced publicly.

UT System Deputy Chancellor David Daniel declined to identify any partners, calling that information “competition-sensitive.” For the same reason, he said, the names of a limited liability company and a corporation established as part of the initiative are not being disclosed now.

The Statesman has filed a request under the Texas Public Information Act with the system for the names of those entities, as well as the names of their directors, officers and managers. Filings to establish companies are considered public records.

“We are determining the applicability of state law and federal confidentiality requirements during the ongoing bidding process and will comply with all TPIA deadlines and requirements associated with your request,” Karen Adler, a UT System spokeswoman, said in an email.

Kelley Shannon, executive director of the Freedom of Information Foundation of Texas, said: “Not even releasing the name of the entities they have created is going way overboard in secrecy, even from their own argument of competitive bidding sensitivity. They should at least reveal the name, but actually more than that since we’re talking about a public entity and public money.”

UT regents have authorized the expenditure of up to $4.5 million to prepare the bid. UT played second fiddle to Lockheed Martin Corp. on a failed joint bid in 2005 for the Los Alamos contract, but it is leading its team this time, officials said.

Building relationships

Andrea Romero, executive director of the Regional Coalition of LANL Communities, a group of cities, counties and Indian pueblos surrounding the lab, was pleased that UT System representatives met with the coalition and toured San Ildefonso Pueblo, whose leaders are concerned about an underground plume of cancer-causing hexavalent chromium from decades of poor waste management at the lab.

“We are looking to build relationships with every potential bidder,” Romero said. “The lab is the lifeline of our communities economically. We are really appreciative that the University of Texas has taken time to understand that dynamic.”

University of California officials have also met with the regional coalition. “We haven’t heard from Texas A&M, and they are not even listed on the (National Nuclear Security Administration’s) website as an interested party,” Romero said.

M. Katherine Banks, A&M’s vice chancellor and dean of engineering, said in a statement: “When Texas A&M participates in the Los Alamos competition, it will be in a leadership role. There will be many opportunities for community engagement after the proposal submission period.”

That seemed to indicate that A&M would be on an equal footing with its partners.

The split vote by UT regents was “very interesting,” Romero said. “It’s not necessarily cause for pause. We know there are significant risks involved. Operating a nuclear facility is extremely delicate. Hopefully, based on their majority, they are committed.”

Bidding on the contract is a sizable undertaking. Bids must state how much the organizations vying for the contract want to be paid in each of 10 years, consisting of a base term of five years and five optional years. The National Nuclear Security Administration, an arm of the U.S. Energy Department, estimates the cost of running the lab for 10 years at more than $23 billion.

Bidders must propose a fixed fee for each year, but not more than 1 percent of the government’s estimated operating cost for that year. They must also suggest an award fee for good performance, but no more than 1.5 percent of the annual estimated cost. The security administration says the government “is more concerned with obtaining a superior technical and management proposal than making an award at the lowest evaluated cost/price.”

The contract for its current operator, Los Alamos National Security LLC, a private company that includes the University of California and the Bechtel Corp., expires Sept. 30, with the new operator taking over Oct. 1. Federal officials signaled in late 2015 that they were unhappy with the consortium’s performance.

Robert Mello, executive director of the Albuquerque-based Los Alamos Study Group and a former environmental inspector at the lab, said any operator will face daunting cultural and management challenges as well as safety ones.

“It’s got to build in a high sense of responsibility and expertise in industrial processes,” he said. “The previous contractor just didn’t do that. The safety challenges tend to surprise top management. You can’t just sit in an administration building and tell people to make things right down a long chain of command that includes subcontractors. At Los Alamos, normal expectations collide with a Cold War-based culture that is to some degree a world unto itself.”