LANL managers awarded $58 million fee

By ROGER SNODGRASS, Monitor Assistant Editor

A strong performance in handling its core nuclear missions overcame weaknesses in the areas of cybersecurity, health, safety and management to enable the partnership that runs Los Alamos National Laboratory to collect nearly 80 percent of its fee last year.

The details contained in a performance report by the federal supervisors have been withheld from public view.

Early last week, as LANL Director Michael Anastasio announced the end of the current round of workforce reductions, he referred to a performance evaluation report by the National Nuclear Security Administration (NNSA) in Washington, D.C., that was due after September 2007.

NNSA had determined that the lab had met 71 percent of the objectives against which they were evaluated, Anastasio said.

The number is a key determinant in calculating the performance fee, or profit, that was awarded to Los Alamos National Security (LANS), LLC, the partnership that manages the laboratory, for its first year of responsibilities.

John Broehm, a spokesperson for NNSA in Washington, said Thursday that the FY 2007 performance evaluation report for LANL would not be made available, other than a few numbers related to the award fee.

He said it was classified, “Official Use Only,” because it contained “proprietary information.”

He did provide a partial explanation for the discrepancy between Anastasio’s claim that the laboratory had met 71 percent of its objectives and the award to LANS of 80 percent of the available fee.

Of the 200-page evaluation report for the first 18 months since LANS took over the management contract, NNSA provided a total of five numbers. Two more numbers were provided as a factor of the first set.

“The total possible fee available for Los Alamos was $73,279,996,” Broehm wrote in an e-mail in response to the call. “They received $58,208,986 or 79.4 percent of the total.”

This figure includes $21,984,404, which is the fixed portion of the contract performance fee, and not at risk.

To clarify the difference, Broehm added, “Of the remaining $51,295,996, they earned 71 percent, or $36,224,982.”

In a memo to LANL employees, Anastasio said the lab’s self-assessment “drew very similar conclusions” to the NNSA evaluation.

Anastasio concluded from the NNSA evaluation that “our strategies are sound; we have good plans in place; they remain confident that the management at the lab, including the leadership team is progressing in the right direction; we have made important progress, especially in the second half of the year; and in some areas, our progress has not met their expectations.”

Problem areas needing “significant improvement” included cyber security, safety and health, facilities and project management,” Anastasio wrote to laboratory employees at the time.

The cyber-security problem was exemplified by the breach that occurred in Oct. 2006, involving contract employee and archivist Jessica Quintana, who was sentenced to two years probation last month for having removed classified documents and electronic media from the laboratory.

During the six months of transition to leadership of the laboratory and upon assuming direct responsibility, laboratory officials repeatedly emphasized the importance of “integration” of capabilities and resources within LANL and across the weapons complex.

“It’s the toughest nut to crack at this place,” said LANL spokesman Kevin Roark Thursday. “Trying to figure out how one move affects all the other moves is difficult in any environment, but particularly difficult here.”

An article by Todd Jacobson that appeared earlier in the week in the on-line publication Weapons Complex Monitor also used the 79.4 percent figure, which was compared to a 86.7 percent average among the eight NNSA nuclear weapons sites.
The article said Savannah River Co. scored highest, garnering 99 percent of available fee.

Sandia National Laboratories, graded at 96.9 percent of fee, was awarded $23.21 million out of an available $23.96 million. Lawrence Livermore Laboratory, still under the old University of California contract, received 95.1 percent, or $6.75 million out of a possible $7 million fee, according to the article.

The Monitor has submitted an official Freedom of Information Act request to the Department of Energy service center in Albuquerque for the complete performance report.