Nov 21, 2007

Editorial: LANL layoffs: Again, pleas for a new mission

[Just so we're all clear on one thing: the "bad budgetary news" referred to below was not news, nor any kind of surprise to LANL management. The need to lay off 500 - 750 staff at this point in time is due solely to the increased cost of doing business that LANS and NNSA have brought to LANL. The additional $80 million in the new annual award fee paid to LANS, and the additional $55 million GRT that LANS pays to the state of New Mexico accounts for most of these RIFS. When you couple this with the fact that under LANS, management bloat (and costs) have increased three-fold, you now have the real reasons that LANL is RIFing staff at the present time.

And, thanks 9:30am (see comment below) for reminding us that LANS', shall we say, preferential treatment of KSL has resulted in an additional $41 million dollars in wasted LANL budget money this year.

The anticipated FY'08 budget shortfall will represent a whole new set of RIF requirements.

-Gus]

By | The New Mexican

11/21/2007


A year ago, while public-relations people said they knew nothing about layoffs, a few hundred workers at Los Alamos National Laboratory got their severance notices. Turns out they were employees of the lab's various subcontractors, not actually on the institution's payroll, so the deniability was of the disingenuous don't-look-at-us kind.

This holiday season, it appears, LANL itself is being hit with bad budgetary news: Officials there are about to release a plan reducing the workforce by 500 to 750 employees.

It's a severe blow to those workers and their families — eased only a little bit to the extent that some of it might happen through "buyouts" by which they leave voluntarily in exchange for severance packages to tide them over awhile.

The other could've-been-worse news is that it affects only 4 to 5 percent of the 12,000 people working on "the Hill" as staffers or contract employees.

Much is being made of Sen. Pete Domenici's unrelenting use of his once-formidable budget-chair powers to pad the lab's payrolls — and his likely successor, Tom Udall, urging more modern, less bellicose, more useful, less wasteful work up there.

Ironic, isn't it? A Republican spending lavishly on an outdated lab mission, and a Democrat seeking financial justification from a long-coddled campus.

Time after time, Rep. Udall has called on LANL to lead a serious effort to get our nation, and the rest of the world, off fossil fuels — to slow the pace of global warming and to reduce the dreaded "dependence on foreign oil." And time after time, lab leaders insist that nuclear weaponry is such a specialized field that its scientists and engineers can't adapt to such a quest.

Adding an exclamation point to that insistence was last week's news that LANL is the most likely candidate for the role of plutonium-pit supplier to our nation's nuclear arsenal — a job it's been doing by default since the Rocky Flats plant closed in 1989, leaving a swath of radioactive spillage in the hills above Denver.

Having learned from that disaster, LANL presumably will be cleaner — but it's set to extend the military mission for which it was created some 65 years ago.

Udall wants the lab to continue carrying out what he recognizes as its "core mission." But at the same time, he's working to help it grow in "new areas," which, he realistically notes, "is the only way we can ensure the future stability and permanence of this great institution."

If he's elected to the Senate, he could complement the work of Jeff Bingaman, who for a couple of decades has sought to make LANL more of a force in New Mexico's civilian economy.

For at least that long, some scientists there have been given enough rein to dabble in medical science and to experiment with geoscientific approaches to alternative energy. Those efforts, however, have amounted more to image-polishing and public relations than real recognition of the lab's civilian potential.

We remain in awe of the brilliance residing on "the Hill." So far, too few members of Congress share Tom Udall's vision for its future. As a member of the House Appropriations Committee, and, perhaps, with greater influence to come in the Senate, the gauntlet is at his feet: He's got to try harder to convince his colleagues that the wealth of knowledge at our national labs must be invested, directed and supported in an urgent effort at new energy.

51 comments:

Anonymous said...

Two things: the writer is an idiot and Udall is an asshole.

LANL must do the science, etc. that the DOE directs. The writer is an idiot for suggesting otherwise and Udall is an asshole for lying about it.

Can you imagine the howl if it came out that LANL was using weapons funding for non-weapons work?

Anonymous said...

Energy Dept. Audit Finds Overcharges On Contracts

The Los Alamos National Laboratory paid millions of dollars in questionable charges to a contractor affiliated with KBR, according to a recent audit by the Energy Department's inspector general.

http://www.washingtonpost.com/wp-dyn/content/article/2007/10/29/AR2007102902038.html

Anonymous said...

Are you all still glad that "UC won the contract"?

You know, for being the "best and brightest", you LANL 'scientists' are a bit slow on the uptake to be just now noticing that LANS' increased cost of doing business is the reason 750 of you are going to lose your jobs.

No wonder they call you Sheeple. NNSA, LANS, and KSL management are having lamb stew for Thanksgiving.

Anonymous said...

9:53

YOU'RE the one that doesn't get it. The employees of LANL have not had a say or any influence in how this played out since before 2004. This is no longer a university campus governed, at least in some part, by the student body. This is a puppet organization strung by NNSA/DOE and corporate parties bound by contract. No one even cares what the staff think or have to say. Options? Leave if you don't like it, shut up if you stay. When voting time comes, re-elect No One......

Anonymous said...

There it is again, that 'victim' mentality. It goes nicely with your 'entitlement' mentality.

Go ahead, keep telling yourself that is nothing you could have done to prevent this. You can recite it to yourself, kind of like a mantra, as you stand in the unemployment line.

Anonymous said...

you're way off! I don't like it so I'm leaving - after years of trying to make LANL a better place than I'd found it only to be smacked down with resistance and incompetence I'm through - not a victim, taking action.

Anonymous said...

"There it is again, that 'victim' mentality. It goes nicely with your 'entitlement' mentality.

Go ahead, keep telling yourself that is nothing you could have done to prevent this. You can recite it to yourself, kind of like a mantra, as you stand in the unemployment line."


Any place I've ever worked the employer, who employs you and pays you, sets ground rules and conditions of employement. If you don't follow the rules they fire you. If you don't like the rules you leave and work someplace better. What makes you think LANS operates any differently? How do you suggest I control NNSA and LANS policy decisions?

Anonymous said...

"Can you imagine the howl if it came out that LANL was using weapons funding for non-weapons work?"
11/21/07 9:15 AM


Can you imagine the "howel" if the Lab were doing meaningful work for a change?

Anonymous said...

10:33AM said; "Any place I've ever worked the employer, who employs you and pays you, sets ground rules and conditions of employement. If you don't follow the rules they fire you. If you don't like the rules you leave."

Only a robot or a Nazi guard thinks that way. We're not just bystanders (or sheep). We have a vested interest in the workplace so it IS our responsibility to speak up.

Oops! I forgot, we're talking about Los Alamos. Never mind.

--Guilda Radner

Anonymous said...

Guilda

You where great on SNL. You are missed.

Anonymous said...

LANS has been snarky from the outset in firing limited term employees and contractors (but there's no RIF)... now they are called the "flexibile workforce)and will be gone in the next wave after the "voluntary" portion of the RIF.

Now LANS is lying again that the RIF will include managers. HA... And you can bet no Bechtel/Pantex transplants will be gone either.

My guess is that even with a big boost in budget, the RIF will take place anyway...

Anonymous said...

Regarding the endless posts of our so-called "victim mentality."

Paraphrasing the Serenity Prayer, my team and I had the courage to speak up and found no one was listening, from upper management through our congressmen. We called our senators, sent emails, personally sat down with Nanos and other upper management. Absolutely no good.

We've learned the wisdom that political forces beyond our control are hell-bent on destroying the lab. I myself achieve serenity through moderate drinking.

And now I am carefully designing my exit plan. No victim here, it just takes time to dismantle my programs here and rebuild them in a new, less hostile work environment.

Anonymous said...

Paraphrasing from an earlier post:

The layoff has clearly exposed the blatant lie that LANS would absorb the new costs through efficiencies. Instead, 750 employees are now out the door simply to cover the fee alone. From DOE's perspective, the new costs were a bargain compared to the new control they could gain over their lab.

This whole RIF process has also clearly exposed the other blatant lie that LANS would have more autonomy to run the lab like a true business. Clearly, Anastasio cannot make a single, simple decision, nor even speak to us, without thorough review by all levels of LASO/NNSA/DOE. He is not a Director in any sense, he is simply the new messenger for DOE.

DOE now has full authority with very little responsibility. Recall Bill Richardson's frustration in the Summer of 2000, when, as Secretary of DOE, he tried to order LANL employees fired over the missing disk drive. UC and Browne both balked, saying that they would look into the matter and apply "due process." DOE was nationally embarrassed to have to explain that LANL employees were not in their direct control.

The overfunded UC Pension Plan was also a source of frustration to DOE. In 1996, they released a memo estimating that they believed that $600M of the mega billion UC pension plan should be "returned" to DOE as part of the overfunding. Never mind that the overfunding was saving them $100M a year at LANL alone in pension costs. They were administratively frustrated that there was no way to control the UC pension.

Recall also the fight that DOE only partially won in 1993 in trying to control the voluntary early retirement program offered to all UC employees (the rest of UC was offered 3+5, but DOE won the battle that LANL/LLNL could only be offered 3+3). Again, administrative frustration that they did not have control.

Separately, Congressmen are generally small businessmen who fundamentally believe in competition. That UC had never competed for the contract stuck in their craw. UC's threat was that they would never compete any contract.

Hence began the steady banging of the drum that the culture of LANL was bad and must be changed, by both Congress and DOE.

The conversion today is nearly complete. UC's "never compete" bluff was called. DOE has finally achieved several levels of control it has never had:

* The top managers are highly motivated via employment contracts, high salaries, and bonuses to jump to every command, and they simply will not make a single autonomous decision. Total Management Control.

* Every single employee within the lab can be simply and easily fired due to the "at will" status. Total Employee Control.

* The pension plan is now private with unvested rights to the employees, and therefore its future costs are totally controllable. Total Cost Control.

New contract costs: over $200M.
Employment consequences: thousands RIF'd.

Total Control: Priceless.

Anonymous said...

This recent Dilbert made me think of the bright eyed, optimistic postdocs and other recent hires at the lab who get quite defensive when you point out the flaw in their decision making process.

http://www.dilbert.com/comics/dilbert/
archive/images/dilbert2007111111110.gif

(You might have to cut and paste both parts of the URL back together in your browser).

Anonymous said...

I don't know where else to post this. No comments are enabled for the editorial.

Gussie said:

"The need to lay off 500 - 750 staff at this point in time is due solely to the increased cost of doing business that LANS and NNSA have brought to LANL. The additional $80 million in the new annual award fee paid to LANS, and the additional $55 million GRT that LANS pays to the state of New Mexico accounts for most of these RIFS."

Gussie, please explain the math. As I understand it, the award fee and GRT costs owing to the LANS contract (which I resent just like you) were paid for in FY-07 by ~400 contractor layoffs and other cost saving measures. At least that's what Mike claims. Those cost saving measures are still in effect. According to Mike, LANS has reached the end of the rope on that type of flexibility. How is it, then, that a RIF of 750 people is intended to pay for those same costs? Isn't this double accounting?

As I understand it, the reasons for the 750 are (a) even the best possible scenario for LANL is a budget reduction; (b) with inflation, even a constant budget means a reduction in number of people. As I understand it, 750 is a starting point to account for these factors and some fraction, but not all, of the budget uncertainty.

Where am I going wrong? Has the LANS fee and GRT increment already been accounted for or not?

Anonymous said...

Gusssie is constantly harping on the fact that ALL of these layoffs are ONLY due to the increase in costs due to the evil LANS taking over.

This is false.

700'ish contractors were laid off during FY07, and GRT taxes were planned for and the burden reduced through use of tax attorneys. That, in addition to other reductions in overhead were the reason we AVOIDED layoffs DURING FY07.

The current situation is due to the uncertainties in the budget and projections into the future. FY08 budget is not known, but we have a reasonable idea of what it might be. FY09 will not be any better. The layoffs are due to the budget picture for the laboratory. I suppose increased costs of ops are a factor, but were largely dealt with during FY07.

Gussie Fink-Nottle said...

First things first: comments are enabled (as evidenced by the fact that there are 15 of them already).

Second: The FY'08 budget is not yet known, so it cannot possibly be a factor in the decision to RIF up to 750 staff at the present time. The need to RIF now is because there are more staff then there is budget to pay them.

Finally, the answer to your question is "No."

The 400 or so contractors that have been fired to date have not been sufficient to make up the approximately $176M in direct additional costs that have resulted from the LANS takeover of LANL.

This $176 million figure does not, of course, count the $41 million that LANS "gifted" to KSL this past year, nor does it reflect the additional costs ($21 million, by some estimates) of having tripled the number of AD level and above managers since LANS took over. It also does not reflect intangible costs, such as increased overhead and lowered productivity that have resulted from LANS having made the LANL work environment even more dysfunctional than it already was.

All of which have driven FTE rates through the roof.

Add it all up (go ahead, add it all up), and you have staff (and KSL, and management) burning up money at a much higher rate then the budget can support.

Of course, there is also the anticipated budget reduction for FY'08: $300 million less than the current funding level, in the worst-case scenario. Recall that LANL is operating under a Continuing Resolution at FY'07 levels. Nobody believes LANL will be funded in '08 at '07 levels.

-Gus

Gussie Fink-Nottle said...

"I suppose increased costs of ops are a factor, but were largely dealt with during FY07"


You had me going until this part, 4:51. Largely dealt with? On which planet?

-Gus

Anonymous said...

4:51

The reason we avoided LANS employee layoffs in FY 07 is that LANS used up all the planned carry-over, money allocated in FY 07 that was planned to be spent in FY 08, and they deferred critical maintenance that cannot be deferred any longer. Add it up, if laying off 500-750 LANS employees saves $100M, how in the world did laying off 700 (this number is wrong anyway)contractors save $175M?

Your poor arithmetic skills qualify you to be a LANS manager, that is if you aren't one already.

Anonymous said...

Uh, on the the current planet. I don't know where you get your "facts" Gussie, but you are off the mark here. We had no layoffs in FY07. That is a fact.

Your attribution of the current situation to "increased operational costs" is fiction. It happens to fit the nail you want to constantly hammer, but it is also not true.

Anonymous said...

Yes, carry over was part of the picture. But it was not the entire story. If you think it was the entire story, then you are mistaken.

This has nothing to do with math skills. It has everything to do with making false assumptions because it fits your view of what is happening.

Anonymous said...

Oh and, by the way, ~700 contractor layoffs is not incorrect.

Gussie Fink-Nottle said...

Well, I have an urgent appointment elsewhere tonight, so I'll just let you guys duke it out.

Mr. LANS contends that everything is under control cost-of-ops-wise, as well as every-otherwise, presumably. I suggest that you all question him about the $41 million (plus change) "accidental" KSL overcharges that were paid out by LANS in FY'07, and while you're at it, ask him about LANS' decision to renew KSL's contract.

You might want to get his opinions about the cost burden which the 60 or so additional AD+ level managers that LANS has added in FY'07 to LANL's infrastructure.

Have him tell you about the funding mechanism for the $79 million annual award fee, and from where the GRT payments must come from.

Have him break down the (average) $450K annual FTE cost for a TSM, and to compare and contrast that to the FTE rates of FY'05.

While you're at it, you might want to ask him to compare and contrast the average contractor FTE rate vs. the average LANL staffer rate.

Don't try to engage him on the subject of upper manager bonuses, he might get defensive.

Ask him about LANL's FY'08 RIF plans.

You know the drill.

Later,

-Gus

Anonymous said...

I am not suggesting "everything is under control," but that your constant harping on the same theme that all of these layoffs are due to LANS costs is just complete nonsense.

Perhaps you could prove me wrong.

Anonymous said...

8:13,

Since you seem to know so much about the RIFS, and LANS, perhaps you should explain to us why Gussie is wrong. The arithmetic involved seems pretty straight forward. Unless you choose to hide behind a corporate veil of secrecy, of course...

Anonymous said...

I know DOZENS (personally) of people who were limited term UC/LANS employees (in that rotten IRM group and elsewhere) and contractors who have been let go so far this year.... I'm sure there have been hundreds, but because they are not regular LANS employees they don't count toward a formal RIF... and another 500-1,000 "flexibile workforce" workers will be gone along with the 500-750 "regular" employees....

Thousands of workers tossed out because of corporate fees and profits whoring.... welcome to NM the newest Third World country...

Anonymous said...

8:52 PM - you are correct. The Lab managers need to get rid of the limited term scientists. They cannot do any programmatic work and are sucking off the teat of LDRD and other programs. Right Klimov? Oh, but the director indicated that he is too good to let go ... Mikey will probably be giving him millions of LDRD $$ to keep him and his hallway of worker-bees happy. I am sure there are many more that fit this bill.

Anonymous said...

"Since you seem to know so much about the RIFS, and LANS, perhaps you should explain to us why Gussie is wrong. The arithmetic involved seems pretty straight forward. Unless you choose to hide behind a corporate veil of secrecy, of course..."

It is simple. Gussie says that the reason we are having RIFs is because of the increased costs due to LANS. I am pointing out that this alone is not the issue. In fact, the larger issue is the decline of the budget not the increase in costs. As I said a few iterations ago, the increase in costs are a factor but not a dominant factor. He believes this because he wants to believe it. He wants to make this be about LANS and not about Congress.

The fact is the picture is much more complex than this. Little children don't want to hear that, though, so naturally I am attacked as Sir LANS or whatever. Keep throwing those sticks and stones, children. Hope it works for you.

Anonymous said...

Gussie wrote:
"Mr. LANS contends that everything is under control cost-of-ops-wise, as well as every-otherwise, presumably"

Nope. Try reading what I wrote for comprehension. Might work for you. I will repeat it here: cost-of-ops is what it is. Could it be less? Sure, and it should be. Is that what is causing 750 people to be RIF'ed? No. That is much more a function of Congressional budget action and the future of the weapons program under any scenario.

"I suggest that you all question him about the $41 million (plus change) "accidental" KSL overcharges that were paid out by LANS in FY'07, and while you're at it, ask him about LANS' decision to renew KSL's contract."

WTF does that have to do with the current RIF plans?

"You might want to get his opinions about the cost burden which the 60 or so additional AD+ level managers that LANS has added in FY'07 to LANL's infrastructure."

Did that significantly change since LANS took over? We've had that going for more than a year now. Do you really think that it suddenly spiked and now we have to RIF 750 people because we have 60 ADs? Please.

"Have him tell you about the funding mechanism for the $79 million annual award fee, and from where the GRT payments must come from."

They come from the same place they came from in FY07. Yes it now costs more to run this place. These costs have been known and planned for now for over a year. The GRT burden is less. Again, this is not driving 750 people being RIF'ed.

"Have him break down the (average) $450K annual FTE cost for a TSM, and to compare and contrast that to the FTE rates of FY'05."

I can't break down a fictional number. Perhaps you could derive this figure for us here so that we can see how you calculated it.

The average FTE cost varies from org to org, but it appears to be hovering around $380k. Still too high, but I cannot defend a figure that came out of your head.

"While you're at it, you might want to ask him to compare and contrast the average contractor FTE rate vs. the average LANL staffer rate."

Contractors are cheaper. There's a news flash. I guess that is why so many places, including LANL, use them.

"Don't try to engage him on the subject of upper manager bonuses, he might get defensive."

Nope. I don't know what "upper manager bonuses" are. Do you? Of course you don't.

"Ask him about LANL's FY'08 RIF plans."

It depends on the budget we get from Congress much more than it does our operating costs.

Anything else I can help you with?

Anonymous said...

Contractors were laid off in FY07. Why is this even a question? Anastasio announced that it would be around 350 or so, but then seemed puzzled by his own math as to what the total number would be (did he mean 350 more, or 350 total).

But both he and LANS were adamant that it was not a true RIF, since what they really did was simply cancel contracts with the subs. The subs were the ones who did the layoffs, hence there was no LANS RIF.

Udall publicly stated that regardless of semantics, he was distressed that hundreds of his constituents were now out of a job.

This all happened in the Fall of 2006. Are our memories so short that we are now arguing whether or not a de facto RIF occurred in FY07?

Anonymous said...

8:52 pm: "welcome to NM the newest Third World country..."

Newest?? You've got to be kidding. Anyone who has lived elsewhere knows NM is the ORIGINAL "third word country" in the US. The NM Legislatures and Governors have seen to that since I've been a resident, over 30 years. Last in absolutely everything. I live in the highest income county in the state (maybe the US), and my property taxes are almost exactly one-tenth of those of my friends on the East Coast. Is this a good thing? Depends on if you care about education or careers. The NM drop-out and unemployment rates are leading the nation. One of these days I'll stop pouring my tax money (little as it is) down the NM rathole and move "back to the States" where you can actually get a 16-year old to finish school, because his/her parents actually care.

Where else can you find no one behind a counter who speaks English without an accent, but whose ancestors have lived in the US for over 20 generations? Not a racist statement, just a factual one. No fluent, unaccented English = no career, and no income. Just a fact.

Anonymous said...

Actually Mississippi is the original 3rd world country in the US.

Something approaching 700 contractors were let go over the past year.

If not enough people volunteer to be RIFed, the next step will be to examine limited term employees and contractors. These are the "flex" employees Mike referred to in his talk. These can be let go with no severance considerations. They will be the next to suffer.

Then it will be involuntary time.

Anonymous said...

11/21/07 10:03 PM

Get Lost

Anonymous said...

"No fluent, unaccented English = no career, and no income. Just a fact."

A lack of education may equal no income, but an accent shouldn't matter. Have you looked at who is enrolled in our top schools lately? A large percentage of them are foreigners...with accents. :)

Anonymous said...

I visited LANL last week, the drivers on the road up the hill were nuts. Speeding, weaving lanes. The cafeteria was almost empty at lunch, lots of folks shuffling around heads down. Not a lot of brisk striding into the bright future of high technology to be seen. The fire-swept hills, and in the back of my mind the CDC analysis of historical plutonium releases there...I could not wait to get out of town, sorry to say. A unique heritage, a lot of smart folks doing important work to be sure...but I could not shake the feeling that the times had changed. Then driving down Pajarito past the new gates and the new security area I understood that was where all the action is going to be, in pit processing. Good luck, folks.

Anonymous said...

Arithmetic 101-

By LANS's own numbers

Total staff (contractors included)is ~12,000. Total salary paid - $911M. Average Salary is ~78,000. Contractor multiplier = 2.5.

If the average contractor makes the average salary (they don't, they make less), the total savings from laying off 700 would be $136M not $175M. So even with the most optimistic math, LANS didn't cover its shortfall last year.

If the number of contractors laid off was 600 FTE, and the average salary 60,000, more reasonable estimates, then the savings was $90M, about 1/2 of the $175M shortfall. That's why Anastasio needs to cut another 500-750 staff to balance the books and regain the ability to fund maintenance activities.

Wait and watch - the involuntary RIFees will predominantly be younger staff members simply because they have the fewest weeks of severence pay accrued. If LANS lays off 20+ year employees in January - February, they don't save a dime this FY, but if they layoff <6 year employees, they can start to save money by April.

Anonymous said...

This is to the first poster (9:15 a.m.). I'm not from LANL but when I worked at a DOE lab LDRD was used to develop new ideas that would lead to proposals in the future. Showing proof-of-principle to make a stronger proposal. Isn't that a perfect mechanism by which a number of TSMs could have been diversifying their research over the years? LANL is not forced to do some things; other parts of DOE have solicitations and LANL has been free to participate in them. For every big block of money from NNSA it is correct to say that you must do the science that NNSA directs, but that seems short sighted. Why haven't people been leveraging LDRD money to increase chances of proposals outside of NNSA? Is LDRD used there in a different way than all of the other DOE labs seem to use it?

Anonymous said...

> Where else can you find no one
> behind a counter who speaks English
> without an accent, but whose
> ancestors have lived in the US for
> over 20 generations?

Umm... Boston. Brooklyn. New Joisey. South Carolina. Maine. Vermont Kentucky. etc. etc. etc.

What exactly do you mean by, "unaccented English?" Something like the British Received Pronunciation?

New Mexico has its accent, just like lots of other places in the USA. Shouldn't stop anyone from getting a job.

It's lack of education that does that, which we have plenty of, here in the Land of Enchantment.

Anonymous said...

Good grief people. Why is it when things get tough, the people resort to attacking LDRD, Fellows & contractors, and blame everything on racism in Los Alamos?

Anonymous said...

812am, you are partially correct, but not entirely. Cutting 750 people and have them off the books by March at the earliest does not have a huge effect on FY08. If LANS had not covered the increased costs in FY07, we would have been RIFing already. As I said, contractors were cut and carry over was used. FY08 is still unknown and the planned RIFs would have some effect on FY08, but this is really a workforce adjustment for FY09 and beyond due to weapons program budget projections. The processes required for RIFing folks just do not allow things to happen fast enough to solve all of FY08 problems, however big or small we seem to think they are. Should FY08 turn out worse than currently projected, contractors and limited terms will suffer the most immediately.

Anonymous said...

"Mr. LANS" (who does not deserve that nickname) has successfully refuted Gussie's statement:

"The need to lay off 500 - 750 staff at this point in time is due solely to the increased cost of doing business that LANS and NNSA have brought to LANL."

Obviously, some of the FY-07 cost saving measures, including laying off a number of contractors (whatever the number), has helped to defray a fraction of the LANS fee and GRT problem. The only question is what fraction. What we need to face in FY-08 is the incremental budget, cost, and uncertainty. The RIFs do not have to pay for the entire LANS burden all over again, although the burden is always present.

Gussie is taking a certain cost element and arbitrarily saying the RIF is needed to cover it, even though certain cost saving measures were already made to cover a fraction of it. He could just as well say that the RIF is needed to pay for building maintenance.

I am not saying that I like the LANS burden. I think it sucks. But I think the financial accounting of it ought to be presented fairly.

So, on the face of it, I believe that Gussie's blanket statement, especially the word "solely" is not true.

Anonymous said...

That's certainly one opinion, 10:34.

Personally, I haven't seen sufficient proof to substantiate either claim. Nor have I seen anybody from the LANS side provide any explanation of the $41 million KSL cost overruns, as reported in the Washington Post. Where does the money come from to cover that "unexpected" line item? $41 million would cover 91 staff members at LANL's current obscene TSM loaded rate. If LANS has been that cavalier with LANL budget regarding KSL, where else are they wasting money?

You can side with LANS on this issue if you like. I would prefer to see all the numbers (and not just take Roark's word for it that Mike is doing all he can to minimize the need to get rid of people) and do the arithmetic myself.

As another poster commented, each funded TSM has to bring in enough money to pay for about 1 1/2 overhead staff. That's just not right! Mike's RIF numbers simply don't explain what the real budgetary situation at LANL is. If you RIF a funded TSM, who is going to do that work? staff are not interchangeable parts. If you RIF a funded TSM, who gets to pay for those 1 1/2 overhead staff that he'd been carrying on his back?

Anonymous said...

In the absence of actual data such as the current loaded (benefits + overhead) rates for LANL staff, current budget, actual GRT payments, etc., there is a relatively simple empirical proof that Gussie is correct.

Which is: we are under a continuing resolution which is funding LANL at the same levels as we were funded last year. We made it through last year without needing to RIF any staff. Contractors, yes, but not staff. So why else are now facing up to 750 staff RIFs unless LANS has increased the cost of doing business by that amount?

Anonymous said...

You are missing my point, 11:01. You said we made it through last year without a RIF. True, but other measures were taken to defray the LANS burden last year, and some of those measures are still in effect. All I am saying is that attributing the entire amount of the RIF to one particular cost element is arbitrary.

This is really just an academic discussion about how costs are allocated. Sorry I brought it up. I agree that the LANL burden is large, and it is bad. Having to pay for it is bad.

Anonymous said...

There is another observation that supports Gussie's claim - LANS knows the staff believes the layoffs to be a direct consequence of the LANS $175M annual cost. If Gussie's claim wasn't true, LANS would have opened its books and provided refuting evidence. They haven't because they can't.

Anonymous said...

No doubt that DOE/NNSA wants to reduce LANL's size and cost, one way they can quickly make that happen is to hire LANS at an obscene cost without funding the cost increase thus making LANS lay off 1300+ staff and contractors. Then DOE fires LANS for cause (multiple causes already exist) and reinstates a not-for-profit contractor saving LANL ~$160M which can be cut from the budget. Net result, LANL is 1300+ employees smaller, $160M cheaper, and the pension liability is reduced dramatically, all in less than three years.

The workers and New Mexico are the victims, LANS plays the part of the villian, but LANS is really just the stooge.

Anonymous said...

Continuing what I said in my last post, there are other possible reasons for projected cost increases (and the RIF) apart from the relatively constant element of LANS burden. These could include, for example:

inflation

budget uncertainty - the post CR predictions are grim.

desire of the NNSA to put more resources into infrastructure and less into labor.

The last is just a guess.

Anonymous said...

I don't really care about the details of which accounting column caused the deficit that is now being used as the excuse for the RIF.

The new contract caused a dramatic upheaval in costs, from $8M to well over $200M. Under UC, the pension costs were destined to rise over the next seven years, but it would have been a gradual increase. This sudden jump plus the fee and the GRT were all predictable new costs back in 2003 when Bodman announced the competition.

Yet absolutely no budget was provided, and we were blatantly lied to that efficiencies would absorb the cost with no RIF. Well, guess what, we laid off hundreds of contractors last year, and we're laying off hundreds more regular employees this year.

Does anyone recall that the unused snow days budget was used to pay the GRT? How is that efficiency?

Anastasio states the RIF is to save $100M. Why in the world would we not connect the dots with the dramatic jump in costs just 18 months ago?

I hate being lied to.

Gussie Fink-Nottle said...

Sorry, guys. Nobody has "refuted" my position. If someone can present proof that the present RIF situation has come about because of anything other than the increased cost of business that LANS and NNSA have brought to LANL, I'll gladly post a big, fat top-of-the-blog apology. It will require proof, not just the vigorous expression of opinion.

Until then, the fact that LANS will be RIFing up to 750 staff during this go-around as we continue under the flat funding of the present '07 CR stands as sufficient proof that LANS is costing quite a bit more to run LANL than in the UC days. Otherwise, staffing levels would be as flat as the budget.

-Gus

Anonymous said...

Isn't it true that UC, just before they lost the contract, converted several hundred contractors into LANL employees? Could that have bloated the staff numbers so much that RIF's were inevitable, despite funding issues?

Anonymous said...

11/21/07 2:06 PM

Whoever you are, you are right on.

This takes it back right to the beginning of a DOE plan/conspiracy to "put LANL in their place".

This post needs to be placed at the top for all to read and absorb.