Wednesday, February 23, 2005

LANL contract extension asked by NNSA

Wednesday, February 23, 2005

LANL contract extension asked by NNSA


ROGER SNODGRASS, roger@lamonitor.com, Monitor Assistant Editor

One for the money, two for the show, three to get ready and ... wait ...

The National Nuclear Security Administration, which oversees the nuclear weapons complex for the Department of Energy, will seek to extend the University of California contract by six months.

During a month in which NNSA has financially penalized UC severely for management infractions at Los Alamos National Laboratory, the quasi-independent agency now finds the need to keep them on the job while NNSA struggles to demonstrate a viable procedure for competing the contract.

NNSA's surprising proposal arrived in a batch of e-mail notifications that had been plugged in the NNSA system for at least three weeks.

The recovered information included a number of potentially significant revisions to the current draft request for proposal.

NNSA is already a week behind its own projections of Feb. 15 for distributing a final RFP, and the flurry of suggested changes include an additional review period for comments on the new proposals as well as an extra 30 days, a total of 90, to prepare the proposal.

"The SEB (Source Evaluation Board which has responsibility for the contracting process) will ask NNSA to seek Secretary of Energy approval to negotiate an extension to the current UC contract," states the white paper on pension benefits for current and retired LANL employees.

An overview of the 14 major issues that will be adjusted to reflect bidder concerns provided details on the rationale for the delay, which is needed for the anticipated transition period.

Sixty days are allowed for the successor contractor to develop a "substantially equivalent" pension and benefits plan; 60 days for the Contracting Officer to decide if the plan meets the definition; and a final 60 days for current employees to decide to transfer to a guaranteed job or retire.

If approved, UC may continue to manage the contract for more than another year, until April 2006.

If senior DOE managers go along with the suggested changes, there will be no difference between pension requirements for UC and other offerers.

Both will require setting up a "stand-alone plan" for the LANL site, according to the new information.

Sen. Pete Domenici, R-NM, objected immediately to the stand-alone plan on Tuesday, saying, "Right off the bat, one significant change that raises a red flag is the call for a stand-alone benefits plan at Los Alamos. That needs to be fully reviewed."

Both Domenici and Sen. Jeff Bingaman, D-NM, have expressed concerns about the prospect for destabilizing and demoralizing delays in arriving at a new contract at LANL.

Pension and benefit concerns were raised on the first day that NNSA vowed to recompete the LANL contract at the direction of former Energy Secretary Spencer Abraham in April 2003.

Two years later, NNSA is still looking for an acceptable formula.

At the time, NNSA Administrator Linton Brooks said he didn't know how the change might be accomplished, but was confident that it could be done.

After the draft RFP was released, a mounting clamor of dissatisfaction at LANL, based on vague language and perceived threats to the existing system, caused NNSA to extend the comment period briefly, while an additional public meeting was held with LANL employees at the end of January.

NNSA also failed to meet its own tentative schedule in developing the draft RFP, creating a likelihood that a new contract would not be in place when the current contract expires on Sept. 30.

Al Stotts, a spokesperson for the Albuquerque service center of NNSA, said the new proposals were in response to comments received from LANL employees and potential bidders.

"This is another step in the process, to be timely in response," he said. The second round of suggestions and bidder responses were meant to say, "Here's what we're thinking. You tell us what you're thinking about," he said.

Comments are due back to the NNSA officials by March 4.

Among the other major changes:

  • SEB proposes to double the total available fee from 1.5 percent to 3 percent of the budget, nominally from about $25 million to $50 million as well as doubling the reimbursable work fixed fee from 1 percent to 2 percent.

    The increase is supposed to compensate the contractor for the non-reimbursable risks, including substantial liabilities.

  • SEB wants to increase the base term of the contract from five to seven years to promote workforce stability.

  • Apparently some bidders may want to have the flexibility of hiring some existing senior management, so SEB proposes to give them that flexibility.

    Chris Harrington, UC spokesperson, said he had just received the notices for the month of February on Friday.

    "We were able to start looking at it on Friday," he said. "We'll continue to look at it, as we have the entire RFP."

    The UC Board of Regents has yet to state their intention to compete for the contract UC has held for more than 60 years, although they have a staff working to prepare a proposal, should that decision be made.

    Harrington declined to comment on what effect a potential 180-day delay might have on UC's plans.

    NNSA's webmaster in Albuquerque, Lou Lubitz, said the system had consistently delivered a message saying that recipients had duly received their notifications.

    "I screwed up, in terms of taking the automated response as gospel," he said.

    "Now, we're going to open the hood every Monday," for a weekly check.

  • Comments:
    "the Department of Energy, will seek to extend the University of California contract by six months."

    If this means six more months of the "Direktor," count me out. The only reason I'm still here is to keep from disrupting my family.
     
    Almost 2 years ago when DOE first announced that they were going to put the contract up for bid, my inital thought was that the DOE could not possibly write an RFP for a research lab that would treat the employees and retirees fairly. Unfortunately, I have been proven correct.

    I wonder how UC feels being told that the DOE is going to be generous and extend the contract for 6 more months. This is the way my Division treats our contract sys admins - extend their work for a month or two at time without a contract all the while "building a team of sys admins" from and by people who have no experience in technical computing.

    Now, what will happen if UC tells the DOE thanks but no thanks without a boatload of money? And what would happen in my division if our contractor sys admins did the same thing?

    Both are extremely pleasing to contemplate.
     
    I do hope UC asks for the penalty back and more if they do decide to accept the extension.
     
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