Mar 19, 2008

New LANL Contractor Earns $58 Million Fee

By Raam Wong, Albuquerque Journal Staff Writer

Federal officials have determined that the contractor that now runs Los Alamos National Laboratory should be awarded a $58 million fee for its first year on the job.

The total includes a fixed $22 million management fee as well as a $36 million performance fee for meeting most— but not all— of its objectives for fiscal year 2007.

The lab manager, Los Alamos National Security, was eligible for more than $51 million in performance fees if it met all of the objectives in its contract for the fiscal year that spanned from October 2006 through September 2007.

The payouts were described in a 2007 Performance Evaluation Report. The National Nuclear Security Administration's report is the first such evaluation of the contractor since it took over in 2006.

"LANS has made some inroads to improve laboratory operations during FY07, while maintaining outstanding performance in NNSA's core mission areas," states the report, obtained by the Journal on Tuesday following a Freedom of Information Act request.

The U.S. Department of Energy responded to several embarrassing security and fiscal problems at the lab by announcing in 2003 that LANL's management contract would be up for bid.

LANS, a consortium of industrial and academic partners, won the contract and took over lab management in June 2006.

The contract awards LANS for meeting 170 milestones in 13 different areas, ranging from weapons programs to safety and health.

LANS received the highest marks and the biggest fees in the areas of weapons program execution, weapons quality assurance, threat reduction and support of operations across the nuclear weapons complex.

Among the places where LANS fell short was in the accurate reporting of injury rates. The report states that an NNSA audit found misclassification of injury cases, resulting in the under-reporting of certain injury rates. Overall, though, the report found safety and health improvements at the lab and a drop in injuries.

In another area, LANS' own self-assessment stated that it had successfully reduced the lab's facilities by 400,000 square feet. But NNSA officials had "serious questions about the validity" of that claim after they toured one of those facilities, an administration building, that accounted for about half of the closed square footage.

Additionally, the report found that in vacating some of the facilities the lab had abandoned some valuable equipment, such as telephones and a vertical drill press, and items with "potential security issues," such as diskettes and crypto cards.

Personnel was another concern. The report states that LANS brought in an "impressive set of players," who for the most part "aggressively set about integrating the laboratory and setting in motion culture change in security, safety, and business."

But only six months after the change in management, deputy director John Mitchell retired with only one month's notice, while "one of the key personnel individually led to the degradation of an already fragile relationship with state regulators."

LANS had a rocky start with state regulators. Andy Phelps, the former associate director for environmental programs, butted heads with the state Environment Department, while the agency repeatedly fined the lab for violations of a cleanup agreement.

"Building a solid working relationship with the regulators needs continued focused attention," the report states.

26 comments:

Anonymous said...

So, the "fixed fee" is $24M.
That is three times the maximum
fee that UC could earn.

So, will somebody please explain how LANS is doing a better job?

Anonymous said...

totally obscene... thanks to Bush, Cheney, and the others who were in on the fix to go "for profit." Can anyone spell KICKBACK?

Anonymous said...

St. Pete and friends got some big campaign contributions for this one. That, you can be damn sure of.

Anonymous said...

All I can say is "Wow", hey the lab doesn't need a PR Frim, they do very well selling Bullshit themselves. Oh well, the lab is on it's way out anyway this will only help speed up their demise. And you thank that Domenici for all of this mess.

Anonymous said...

Does the fee come out of the Lab's existing budget?

Anonymous said...

So when is the list of accomplishments released to the public?

I work here and would like to know what "WE" did so I can put it on my performance summary!

Anonymous said...

Anonymous at 3/19/08 1:53 PM asks:
"Does the fee come out of the Lab's existing budget?"

You bet your ass it does. And so does
the $120M of NM Gross Receipts Tax.

Anonymous said...

3/19/08 1:53 PM

Yes it comes out of the LANL base budget, along with all other annual cost associated with moving from UC managment of the Lab.

BTW, UC is putting its share of the fee back into LANL in the form of funded research and salary for the managers UC contributed to LANS (Mike and others)... Want to guess what the other LANS partners (Bechel, et al) are going to do with their share?

Anonymous said...

the list of "accomplishments" consists of lowering the number of reportableincidents. All LANS Did was to juggle and re-class the kinds of incidents so it looked good (in actuality the numbers were up from the previous year) and took a whoop of credit for upping safety.

They also took great credit for lowering security breaches, blithely ignoring the ones that occurred. Remember the classified email incidents with 1663 magazine and the board of governors?

And they blamed the Jessica Quintana mess on UC... Neat, huh?

Anonymous said...

Well I think the pre-LANS employees would give management $0 additional fee. (A few old employees are still here- although we're being replaced with Bechtelites at a rapid pace.) What a bunch of self-serving idiots.

Anonymous said...

Employees who have been around for at least 10+ years see the B.S., but the younger staff have not yet seen the tactics, and it may take a few yaers to see through the smoke and mirriors.

Anonymous said...

Pretty sweet to be caught lying about your accomplishments and still make 50-odd million for it. Wish I could pull this off with my performance appraisal!

Anywhoo - I wonder if the chief cheaters on the Ad Building closure (Seestrom and Neu, who established thier current palatial estates in the old Director's and ADWEM office areas) have had their hands slapped for losing fee.

Nah, stupid question.

Anonymous said...

they are eligible for 51 million but get 58 million? What the fuck?

Anonymous said...

Remember what President Eisenhower said? Click here to hear it for yourself:

http://www.youtube.com/watch?v=n8GFswburko

Anonymous said...

One thing is for sure. If you get hurt on the job at LANL, think long and hard before reporting it to your boss. Given how eager LANS is to achieve a perfect score on injuries, reporting an accident may well end up being a career ending decision.

Anonymous said...

The numbers are:

LANS gets a minimum of $22 million dollars no matter how bad they screw up. UC could earn $8M to run LANL - but only if UC did a perfect job.

This year LANS was eligible for a total of $73M fee if they had earned a 100% score. Next year its $79M.

LANS earned a 71% grade (C-minus)because of security lapses, safety problems, environmental management problems, and generally poor management performance. The C- earned LANS $58M.

LANS distributed $5M dollars from this fee in bonuses to its top 24 LANL managers. An average bonus of over $200,000 - more than most LANL/UC managers made in total for doing the same job. $200,000 for doing a C- job! This bonus is on top of the inflated salaries that these LANS managers already make.

LANS also costs the LANL budget another $60M in New Mexico Gross Receipts taxes, plus additional pension costs. If LANS earns their entire fee, the total that LANS costs the LANL budget is over $175M per year. Anastasio has directly admitted this in an all-hands meeting.

Therefore, if LANS does an A+ job, it costs the taxpayer $1.2 billion dollars over the 7-year LANS contract. For a C- job, only $1.1B.

Over a billion dollars for C- work? This doesn't pass the smell test - something is really fishy here.

Time for a Congressional audit - Anyone listening? Wilson? Pearce? Udall? Domenici? Bingaman?

Anonymous said...

"they are eligible for 51 million but get 58 million? What the fuck?"

Please, please, tell me this person is not one of our best & brightest :)

Inigo Montoya said...

"earns"

You keep using that word. I do not think it means what you think it means.

Anonymous said...

"You bet your ass it does. And so doesthe $120M of NM Gross Receipts Tax.
Said 3/19/08 3:32 PM


And the point being what? That everybody else should pay impact tax but not the LANL? You don't think the Lab's presence has impacted water, congestion, roads, schools and everything else under the sun? You probably see nothing wrong with little old ladies having to pay gross receipts taxes on their prescription drugs while the Lab went 60 years not paying its own fair share. You probably see nothing wrong with Sandia NL paying its fair share from day one, while LANL never was required to do the same until just recently. Of course not you arrogant selfish entitlement mentality SOB. Its people like you that keep thumbing their noses at the rest of the world because we're "Los Alamos.". We're different! By the way, the GRT LANL is now paying is about half of the exaggerated number you stated. Can't even get that right, can you?

Anonymous said...

they are eligible for 51 million but get 58 million? What the fuck?
=============

Go back and READ!!! They were eligible
for $51M in "performance fees" of which
they got $36M. That coupled with the
"fixed fee" of $22M gives the total of
$58M.

If you include the fixed fee - they were
actually eligible for a total fee of
$73M; of which they got $58M.

Anonymous said...

LANS earned a 71% grade (C-minus)because of security lapses, safety problems, environmental management problems, and generally poor management performance. The C- earned LANS $58M.
====================

The performance fee should not have been
"0-based" - that is if LANS scored 71%,
then they get 71% of the performance fee.

The performance fee should be based on
how much BETTER LANS scored than UC.

IF the last UC score was 70% and LANS
scored 71%; then they improved only 1%
out of a possible 30% and would be
entitled to 1/30-th of the maximum
performance fee.

Anonymous said...

From 3/19/08 8:28 PM ..."Anywhoo - I wonder if the chief cheaters on the Ad Building closure (Seestrom and Neu, who established thier current palatial estates in the old Director's and ADWEM office areas) have had their hands slapped for losing fee."

Nope, these two examples of "shit floating to the top" have Wallace and Mikey whipped beyond belief. The way these gals abuse their power and position and would be grounds for immediate termination in another real world organization. And let's not forget their utter imcompetence - can someone please tell me what Neu or Seestrum have done since June 2006 - just strut their butts up and down the 7th floor for the viewing pleasure? I mean wasn't Neu supposed to streamline training with promises of less, not more? All we've seen since June 2006 is loads more training on top of the nonsense we already had to take.

Anonymous said...

To 7:54 - trust me, they are an embarassment to women trying to make it to those ranks the honest way.

Anonymous said...

Seestrom and Neu are why white girls need affirmative action, too. How else would they get through college?

Anonymous said...

"Nope, these two examples of "shit floating to the top" have Wallace and Mikey whipped beyond belief."

Believe this long gone UC/LANL employee who was a direct report to Wallace from his day one at LANL that he has a REAL problem with the feminine persuasion. He surrounds himself with females no matter their qualifications so long as they devote themselves to his agenda. As a new division leader, Wallace hired a deputy division director without conducting any level of "due diligence" and faced tremendous pressure from then Director Nanos for this lapse.

Sour grapes maybe, but Wallace is one mean SOB, and is not to be trusted by ANY underling.

Anonymous said...

3/22/08 10:15 PM wrote "Sour grapes maybe, but Wallace is one mean SOB, and is not to be trusted by ANY underling."

He is also very intimidated by smart women. I was on the hiring committee for his deputy position. We chose a woman scores above the next contender. Wallace took McBranch from the bottom of the heap. McBranch should be in prison from what I hear about what he did in Tech Transfer. Just the kind of guy to make Wallace feel like a real man.