A&M System’s charge at Los Alamos includes improving safety culture

June 15, 2018

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

U.S. Energy Secretary Rick Perry (second from left) tours Los Alamos National Laboratory’s plutonium facility in 2017. Perry, a former Texas governor and a graduate of Texas A&M University, played no role in the selection this month of the Texas A&M System and its two partners to manage and operate Los Alamos, officials said. LOS ALAMOS NATIONAL LABORATORY VIA AP

Texas A&M University System officials were thrilled earlier this month when the system and its two partners won the contract to manage and operate Los Alamos National Laboratory, birthplace of the atomic bomb. Now comes the hard part: changing the lab’s culture to improve safety, security and efficiency.

The National Nuclear Security Administration, a semi-autonomous arm of the U.S. Department of Energy that oversees the federally owned lab, declared repeatedly when it requested proposals to run the lab that “organizational culture change” is needed. It even instructed bidders to describe the experience of their key personnel in leading such change.

The government’s desire for cultural change comes amid a backdrop of safety lapses at Los Alamos, such as mishandling plutonium and improperly packaging a drum of radioactive waste that burst after it was shipped to the Waste Isolation Pilot Plant near Carlsbad, N.M., leaking radiation and leading to a three-year shutdown of the plant.

The A&M System and its partners — the University of California System and Battelle Memorial Institute, an Ohio-based research and development organization involved in managing several national labs — formed Triad National Security LLC to beat out competition for the contract that included a team led by the University of Texas System.

The contract includes a five-year base with five one-year options, for up to 10 years; its estimated value is $2.5 billion annually. Energy Secretary Rick Perry, a former governor of Texas and a graduate of A&M, “played no role in the evaluation or selection of the successful offeror,” said Lindsey Geisler, a spokeswoman for the security administration.

Culture change won’t come easily, said Greg Mello, executive director of the nonprofit Los Alamos Study Group. For one thing, the vast majority of the lab’s 11,000-plus employees will remain on the job, as their hands-on expertise is hard to come by. For another, the University of California has had a major role in running the lab since it was established during World War II.

“The time line for culture change is going to be at least as long as the contract period,” Mello said. “Don’t expect anything quick. There have been a lot of promises about reforming Los Alamos over the last three decades, and they have not succeeded. It’s possible things will change, but history suggests it will be difficult.”

The task will be all the more challenging given that the government recently announced plans for Los Alamos to increase production of the softball-size plutonium “pits” at the heart of nuclear warheads. The lab is also charged with ensuring that nuclear weapons would work as intended, without actually detonating them. In addition, it conducts research involving national security, space exploration, renewable energy, medicine, nanotechnology and supercomputing.

Few details about how Triad intends to run the lab and improve its safety culture have emerged pending resolution of any protests of the contract award that losing bidders might file with the security administration. Nonetheless, it’s likely that the A&M System’s long experience in disaster response, industrial safety and nuclear energy could inform improvement efforts.

Michael Young, president of the A&M System’s flagship campus in College Station, said in a statement that the system, Battelle and the UC System would be equal partners.

The security administration said Triad would be supported by Fluor Federal Services Inc., Longenecker & Associates, TechSource Inc., Strategic Management Solutions LLC, Merrick & Co., and Huntington Ingalls Industries Inc. and its Stoller Newport News Nuclear unit.

An open question is whether Triad will pay tens of millions of dollars a year in gross receipts taxes — money that goes to the state and to local and tribal governments in the area, said Andrea Romero, former executive director of a regional coalition of communities.

If Triad operates as a nonprofit, it could avoid paying such taxes or elect to make contributions in lieu of taxes. The current operator of the lab, Los Alamos National Security LLC, whose members include the University of California, is a for-profit enterprise and therefore required under state law to pay the taxes.

“No team ever committed to what their business model was going to be,” Romero said. “They basically all recognized that that was a huge concern for the communities.”

Three other teams competed with Triad for the contract, according to the security administration. The UT System has not disclosed its industrial partner, but a source familiar with the matter confirmed media reports that it was the Boeing Co., a Chicago-based aerospace and defense heavyweight. Boeing did not respond to requests for comment.

Nor has the UT System said whether it intends to protest the award, but Deputy Chancellor David Daniel made a brief statement in which he offered “our best wishes to the NNSA’s chosen contractor.” That hardly sounded like a prelude to a protest.

A protest also seems doubtful in light of the split vote in November by the system’s Board of Regents on pursuing the contract in the first place. What’s more, the system’s flagship campus in Austin was never keen on having a hand in running the lab, regarding it as a distraction from its core missions of education and research.

This was the second time the UT System failed in a bid to operate Los Alamos, having come up short in 2005 when it allied with Lockheed Martin Corp. And it no doubt was doubly painful to lose to the A&M System, its in-state rival.

The UT System spent about $3.9 million of $4.5 million authorized by the regents to bid for the job, most of it on consultants specializing in nuclear weapons and procurement of large-scale contracts, said Karen Adler, a system spokeswoman.

The A&M regents authorized up to $250,000, which suggests that the UC System and Battelle bore most of Triad’s bidding expenses.

M. Katherine Banks, the A&M System’s vice chancellor and dean of engineering, told the American-Statesman in October that the system “reached out to UT several times” regarding a possible collaboration. “We received no response.”

On the other hand, she said in a comment that turned out to be prescient, “This could double the chances that the state of Texas is represented on the winning team.”