Nov 14, 2007

Lab's fiscal 'surprises'

Contra Costa Times Editorial
Article Launched: 11/14/2007 03:02:44 AM PST

IT DIDN'T TAKE LONG for the other shoe to drop at Lawrence Livermore National Laboratory, where new corporate management has been in control for slightly more than a month.

The announcement this week that as many as 500 employees will be laid off at the nuclear weapons lab leaves us wondering how the facility's new leaders so badly miscalculated the effects of the transition -- and what the future holds.

A consortium led by the University of California and San Francisco-based Bechtel Corp. took over management of the lab and its 8,500 workers on Oct. 1.

Security lapses and financial blunders at Livermore and at the Los Alamos Laboratory in New Mexico had prompted the federal government to seek bids for management of the facilities, which had previously been run solely by UC.

The UC-Bechtel team beat out defense giant Northrop Grumman to win the Livermore contract. As part of the deal, the consortium could make about $300 million during the next seven years. Department of Energy officials said the fees were incentives to find new efficiencies and cut waste.

In May, after the new contract was announced, lab director George Miller said those efficiencies, attrition and other changes would bring enough savings to avoid layoffs, like those seen at Los Alamos last year.

"We have anticipated this and put programs in place to allow a very smooth transition," Miller said then.

How quickly the tune changes. The lab's budget has not been increased to account for the management fees nor taxes the lab must now pay from which it was exempt when UC was in charge.

Health care costs are more than anticipated. Attrition has been lower. And retirement benefit costs have been greater than forecast.

Much of this was foreseeable. The cuts have come so quickly that we wonder whether the new management team knew all along that they were inevitable.

Those who will be laid off in this first round of cuts are temporary workers with fixed-term contracts who are hired through contractors.

The problem could get worse because Congress has yet to approve a budget for 2008. The lab could lose as much as $150 million in federal funding, potentially leading to the loss of 300 permanent employees.

Lab officials say they want to protect scientific research positions, but they offer no assurances that scientists will be spared.

This sort of uncertainty will make it hard to keep and attract top-notch talent the lab needs to conduct work critical to our national security.

Although the security lapses that led to this new management were troubling, these sorts of financial surprises are equally disturbing. Lab leaders must be more forthcoming about what the future holds for its workers.

13 comments:

Anonymous said...

"Much of this was foreseeable. The cuts have come so quickly that we wonder whether the new management team knew all along that they were inevitable......"

Inevitable only because downsizing is the Bechtel way to build profits... They pulled the same crap at LANL... Gross receipts tax? What's that?

Anonymous said...

Right. Anastasio actually maintained a straight face when he told LANL staff that "There are no plans for a RIF."

Lying sack of shit.

Anonymous said...

Anastasio even said "we have no PLANS to plan for a RIF."

total bullshit

Anonymous said...

"...leaves us wondering how the facility's new leaders so badly miscalculated the effects of the transition..."

They obviously knew what the extra cost were going to be based on watching Los Alamos. Cashing large checks can lead to "miscalculations" it appears.

Anonymous said...

Yes so far the corporatization of the labs has been a huge success... other than Bechtel, who has gained anything? Is ONE thing better at LANL? Safer? Securer? NOPE. Not a gaddamned thing. And to think the management fee is only TEN times what it was for UC. Another jewel in the fool's crown of the Bush administration, which also has not had ONE success.

Anonymous said...

One thing that LLNS couldn't plan for when projecting their budget was the number of people who would take TCP2 (and thus immediately hit the operating budget). They probably assumed that the breakdown between TCP1 and TCP2 would be similar to what happened at LANL.

Bad assumption! Over half of the LLNL staff decided to go with TCP2 and that is part of the reason their operating budget is now in such dismal shape.

Anonymous said...

tcp1 or tcp2 niether on comes out of the operating buget doe funds the retirement budget for both. doe did petition congress to stop funding tcp 1 for 08 budget but congress told them no!! check out the congressional buget for 08. the reason lans and llns wanted employees to go tcp1 was so that doe would reap the benfits of the pension fund when the employee died or when the last payment is made out to last employee anything left over goes back to doe. you should have read the final rfp white papers.

Anonymous said...

Someone over at the LLNL blog posted an interesting news story. I'm not sure what newspaper it appeared in, but here is an excerpt:

www.blogger.com/
comment.g?blogID=
7664769810739843802&postID=6
874141371033068054

---------------------------------

Observing that the high cost of doing business has put the Lab at a “major tipping point,” Director George Miller outlined a number of steps the Lab must undertake, including workforce reductions, in order to reduce the “challenges” it faces in fiscal year 2008 and beyond.

In an all-hands talk Monday to address the future of the Laboratory, Miller announced the Lab will reduce its supplemental and flexible term workforce by as many as 500 people in January 2008.


...Despite these costs savings, the Lab still cannot make up the $300 million shortfall without workforce reductions. “The Lab has a weak spot ­ we cost too much,” Miller stated. “This problem has been evolving for more than 15 years. If we were bidding on our own work, we would not accept it.”

Therefore, Miller said, the Lab has a duty to become “more capable, more cost effective and more competitive” in order to execute its missions and grow new missions for the future.

---------------------------------

Can anyone imagine the fuzzy Ewok ever making a statement like this? I can't.

Anonymous said...

Poster 11:38 PM, your English is very poor and you have no idea what you are talking about.

Anonymous said...

Actually I'm not sure Mikey was lying when he said "no plans for a plan..."

LANS senior management has done nothing but REACT since June 1, 2006. They have no plans for a plan for anything.

Anonymous said...

11:38

You may be right about TCP1 and 2 funding. All I know is George Miller put up a view graph which showed anticipated costs and actual costs (to the lab) and TCP2 turned out to be 20 million more than expected. Why? You tell me...

Anonymous said...

All this from the "best and brightest" management team on the race of the earth...no in the whole universe. Heck...not just our universe, but any parallel universes yet to be discovered. What a team!

--R Marquez, aka Richard of LANS

Anonymous said...

Inevitable only because downsizing is the Bechtel way to build profits... They pulled the same crap at LANL... Gross receipts tax? What's that?

11/14/07 4:36 PM

For anyone still interested, sales tax on a purchase is called gross receipts tax in New Mexico.