Nuclear labs. Lapses in security. Mismanagement. Corporate
competitors appearing on the horizon. The University of California
begins to look like the scene of a political melodrama as it
contemplates the very real possibility of losing some of its best
research facilities to corporate competitors. All possible
competitors for the labs, including the UC, have said they will not
determine if they will bid until they see the Request For
Proposals. But several well-known corporations have asserted their
interest in managing the labs.
The situation as it stands When the UC’s
contracts to run the Los Alamos, Lawrence Livermore and Berkeley
National Labs run out in 2005, the UC will have to compete to keep
them for the first time in over half a century. On Nov. 7, a
committee of the House and Senate approved the Energy and Water
Appropriations Bill for the 2004 fiscal year. The bill included a
clause which mandated labs with “noncompetitive management
and operating contract(s)” ““ contracts which have been
held for more than 50 years without competition ““ to be bid
for when their contracts expire. This includes all three national
labs managed by the UC. The Department of Energy, the entity
ultimately responsible for the labs, will issue its Request For
Proposals in fall of 2004. The RFP will detail the criteria for
bidding on the labs as well as the terms of the contract. Energy
Secretary Spencer Abraham decided in April that the Los Alamos lab
should be opened to competition as a result of mismanagement issues
which surfaced in 2002, involving fraud and missing equipment.
“These are longstanding problems,” said Linda
Rothstein, editor of the Atomic Bulletin, a magazine specializing
in nuclear issues. Rothstein recalled that the government’s
general accounting office issued reports about lost items at
Livermore as early as 1988. Rothstein speculated the problems at
Los Alamos and Livermore could have contributed to the decision to
put the longstanding contracts up for bid. The UC dealt with the
problems at the labs by instituting sweeping changes in management
and upgrading security, said Chris Harrington, a UC spokesman for
the labs. The UC is currently preparing as if it will compete for
the labs, said Harrington.
Labs and the UC Managing the labs gives the UC
access to state-of-the-art research equipment, funding for
scientific research and prestige. Lawrence Berkeley is a general
research lab, and Los Alamos and Livermore are primarily nuclear
weapons labs, although they support a variety of research in fields
from nuclear energy to biotechnology. “They are a tremendous
asset for the University of California,” said Roberto Peccei,
vice chancellor for research at UCLA. Peccei said the UC’s
management of the labs is important because if a private company
ran them, the company might focus more closely on the defense
aspects of the research, instead of pursuing the current variety of
research. The UC is also very important to the labs’
employees because, as manager of the labs, the UC is the direct
employer of everyone who works there. Lab employees pay into UC
retirement plans, and can send their children to UCs for in-state
tuition prices. In addition, the UC’s management of the labs
provides an academic environment important to many scientists.
“People want to be part of the UC because they manage the
labs, and people want to work at the labs because they are managed
by the UC,” Harrington said. The UC employs 8,391 people at
Los Alamos alone. There are also 697 students, most of whom are
graduate students. However, Rothstein said the UC and its possible
competitors are not that different. She said the possible
competitors for the labs ““ the UC, the University of Texas,
Lockheed-Martin, Bechtel, and Battelle ““ already manage
national labs for the DOE. “It is always the usual
suspects,” she said.
The University of California Although the UC
will not determine if it will bid for the labs until it sees the
RFP, the UC has made a series of changes in its labs management and
business methods. Harrington, said the UC took “quick and
decisive action” to “ensure that the business practices
(meet) the same high level as the science that comes out of the
labs.” The UC’s “decisive action” included
the appointment of Ret. Admiral S. Robert Foley as vice president
for management of the labs. Foley had direct responsibility for all
of the DOE’s nuclear weapons complex ““ including the
Los Alamos and Livermore labs ““ as an assistant defense
secretary for the DOE under the Reagan administration. In a
statement, UC President Robert Dynes said Foley’s experience
would be “extremely beneficial as (the UC) moves towards a
decision regarding competition in the laboratory management
environment.” Dynes, who took office on Oct. 1, is a
physicist with a strong scientific background, which could be an
asset to the UC if it decides to compete for the labs. Harrington
said it might be better for the labs to be managed by the UC than a
private company because the UC reinvests any extra fees or profits
back into the labs, while a private company might invest profits
back into their business. “We have been (managing the labs)
for over 60 years as a public service,” Harrington said.
“We don’t make our decisions based on a profit
margin.”
A scientist’s perspective George Igo, a
UCLA physics professor who worked at Los Alamos for over 10 years,
said he had a exhilarating experience working there, but he and
many other scientists are anxious about the future of the
UC’s labs. “It was very stimulating to be there with
some of the best people in nuclear physics,” Igo said. Igo
said in addition to attracting highly respected scientists, the
labs provide unique opportunities for research. “We had a
research program (at Los Alamos) which supported our research for
about 10 years … and we had many grad students who got their
Ph.D.’s there,” Igo said. He said the UC’s
management of the labs has given the labs a university-like feel
which might be lost if the labs were run by a private corporation.
“The employees at Los Alamos always felt good about being
part of the university family,” Igo said. Igo said there was
a growing concern among the employees at Los Alamos and Livermore
that they could lose the retirement plans they have been paying
into, as well as the privilege of sending their children to UCs for
in-state costs, if the labs are taken over by a private
corporation. Igo said his concern has been augmented by his
experience at the Brookhaven National Laboratory. He said
scientific excitement ebbed at Brookhaven as the new lab managers
““ the State University of New York, Stony Brook and Battelle
““ failed to interact with the scientific community. “I
have friends who say they will leave if (the labs go to a private
company) … the labs could lose some very good scientists,”
he said.
Lockheed-Martin Lockheed-Martin, a defense
contractor that does 80 percent of its business with the federal
government and manages the Sandia national labs, may enter the
competition for the UC labs. Lockheed-Martin has managed the Sandia
national labs since 1993, which could give it the experience to be
strong competitors for the UC labs. The Sandia labs ““ which
are located in Albuquerque, N.M. and Livermore, Calif. ““ are
nuclear weapons labs similar to Los Alamos, said Bruce Fetzer, a
spokesman for the Sandia national labs. Like the UC president,
Lockheed-Martin’s CEO has a strong science background. Before
becoming CEO, Vance Coffman ““ an aerospace engineer by
training ““ was president of Lockheed’s Space Systems
Division when they designed the Hubble telescope. The director of
the Sandia labs, C. Paul Robinson, also has substantial experience
dealing with nuclear weapons. Robinson headed a U.S. delegation to
Geneva from 1988 to 1990, which negotiated nuclear test -ban
treaties with the Soviet Union. However, Lockheed-Martin is a
for-profit company, which means it might distribute profits to its
shareholders, or invest them in the company rather than reinvesting
them in research.
Bechtel Bechtel, one of the key contractors
rebuilding Iraq, is a construction and development firm that has
also worked on the Hoover Dam. It may also compete for the lab
contract. Bechtel has a government branch which manages two
national labs: the Idaho National Engineering and Environmental Lab
and the Nevada Test Site. The Nevada Test Site is responsible for
weapons testing and national security. Like Los Alamos and
Livermore, it is managed on behalf of the National Nuclear Security
Administration. Valerie Kazanjian, a spokeswoman for Bechtel, said
Bechtel is always interested in opportunities for contracts with
the Department of Energy. Unlike the UC, Lockheed-Martin and
Battelle, Riley Bechtel, Bechtel’s CEO, does not have a
background in science. Bechtel has degrees in political science and
psychology from UC Davis, and is a member of the American Bar
Association.
Battelle The Battelle Memorial Institute, which
helped to develop the Xerox copy machine, compact discs and the
“sandwich” system for minting coins, could be another
strong competitor for the labs. Battelle has had a long history of
running national labs. It has managed the Pacific Northwest
National Laboratory for 38 years. Battelle is also a partner in the
management of the Brookhaven, Oakridge and National Renewable
energy labs with the State University of New York, the Midwest
Research Institute and the University of Tennessee, respectively.
None of these labs are weapons labs like Los Alamos or Livermore,
but the Pacific Northwest lab has dealt with nuclear
non-proliferation, which gives Battelle experience in the nuclear
arena, said Katey Delaney, a Battelle spokeswoman. Battelle is a
non-profit company, which could make its management technique
similar to the UC’s. Twenty percent of the net income
Battelle receives goes to the communities where it works, and the
rest of the profits go to expenses, facilities, staff and
equipment, Delaney said. Battelle’s leadership has a strong
scientific background. Carl Kohrt, Battelle’s CEO, has a
doctorate in physical chemistry, and the laboratory director, Bill
Madia, is a nuclear chemist who has managed the Oakridge and
Pacific Northwest national labs.
A point of comparison Although the 2005
competition will be a first for the UC labs, the DOE has revoked
the contracts of other national labs as a result of mismanagement.
For example, in 1997 the DOE fired Associated Universities
Incorporated, the contractor that had run the Brookhaven national
lab for 50 years, said Peter Genzer, a spokesman for Brookhaven.
AUI’s contract to run Brookhaven was revoked after the local
community was outraged by its belated response to a leak in one of
the pools where spent nuclear fuel rods were cooled. Although
Brookhaven is a basic research lab which deals primarily with high
energy nuclear physics rather than nuclear weapons, the criteria in
its RFP may have a similar outline to the forthcoming one for Los
Alamos and Livermore. When the Brookhaven lab went up for bid, the
DOE’s request for proposals detailed the responsibilities the
next lab manager would undertake, limited potential bidders to
non-profit organizations, and introduced terms for the contract.
Terms included retaining a certain level of employment and employee
benefits, and a clause that let the DOE terminate the contract
without termination liability. The criteria for bidding for the
Brookhaven lab included a successful reputation for conducting
world-class research and managing nuclear facilities. The RFP for
Brookhaven also mandated that a new contractor would hire
researchers of national standing in order to promote cutting edge
science, and recommended contractors form teams with other
organizations.
The future When the Los Alamos, Livermore and
Berkeley national labs go up for bid in 2005, the UC could face
competition from private corporations with much experience managing
nuclear labs, and overcome its own management errors if it wants to
win the contracts. “We are looking at all the options for
what would make for a compelling and strong bid,” Harrington
said. In the meantime, UC scientists will hold their breath.