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.