Wednesday, March 09, 2005

Rumors of Bechtel-UC lab venture has bidders’ attention

Rumors of Bechtel-UC lab venture has bidders’ attention

By Donna Heil | The New Mexican
March 9, 2005

Neither Bechtel National nor the University of California will confirm reports that they are teaming up to manage Los Alamos National Laboratory.

But Tuesday, as another potential bidder said it would drop out of the competition for the contact, it endorsed UC partnering with Bechtel, a mammoth engineering and construction company based in Frederick, Md.

"I think Bechtel makes UC a strong team," Michael Plett, of the Computer Sciences Corp., in Falls Church, Va., said in a telephone interview.

Although officials at the University of California, which has operated the lab since 1943 for the federal government, won't confirm they definitely plan to bid for the contract -- Bechtel's name has been circulating as one of UC's likely partners.

Andy Kellsey of Bechtel National said his company remains interested but declined to say whether his company is forming a partnership with UC. "We're still following the procurement," he said.

Months ago, Kellsey said Bechtel would consider being a lead bidder but Tuesday he would not define the role Bechtel is seeking.

Gov. Bill Richardson, in an interview Tuesday, offered his support for such a combination.

"If the reports are true, I do believe that Bechtel would be a good partner to the University of California," he said.

Last year, Richardson made a trip to California to encourage university regents to bid for the contract with an industrial partner and the University of New Mexico. The industrial partner would look after security, safety and other matters that have vexed the university, and the university would focus on managing scientific research.

Richardson said Bechtel could enhance the engineering and scientific strength of the lab.

"It would be good to take advantage of their contacts," Richardson said of Bechtel. "They are strong managers. They are in good financial shape. They have worldwide experience."

He said UC might bid with two industrial partners but declined to name the other one.

Years of safety, security and financial problems at the lab prompted then-Energy Secretary Spencer Abraham to open the management contract to others for the first time in history.

Now, as competitors jockey for position -- forming teams and seeking key management personnel behind the scenes -- players are coy and evasive. Firm commitments probably won't be made until the federal government publishes the official version of the bidding criteria -- which sets forth the amount of money the government is willing to pay the lab manager, the risks involved and the expectations. The Energy Department hopes to name the winner by October.

Northrop Grumman's Information Technology sector, based in McLean, Va., remains interested in being a prime bidder but has not made a decision, Juli Ballesteros, a company spokesman, said Tuesday. In a bold move, the company just advertised for the jobs of deputy director and four associate directors to work at the lab. Of course, filling the positions will be contingent on Northrop Grumman winning the contract, Ballesteros said.

"That's the potential," Ballesteros said. "If we do make the decision to bid, we would have to ramp up pretty quickly and get the talent in there."

She imagines other bidders will do the same.

Northrop Grumman, with offices in Los Alamos and Albuquerque, has 445 employees in New Mexico. A branch of the company that deals with space technology currently has a relationship with LANL, she said.

To find out who's in and who's out, The New Mexican called interested parties that attended a conference last December in Albuquerque about the competition.

Of those reached by phone Tuesday, Computer Sciences Corp. was the only company that had lost interest. "Money and a whole bunch of other things came together," Plett said, noting that CSC decided a week ago it probably would not bid.

The following companies did not return calls: CH2M Hill, Fluor Corp. and BWXT. Prior to this report, Lockheed Martin, Bettelle Memorial Institute and the University of Texas withdrew interest in being prime bidders.

CSC has 40 years of experience in assisting the aerospace and defense industry with business and technology management.

Plett said the federal government crafted a good proposal, and he supports the effort to preserve a beefy pension plan for current employees. "I think Los Alamos laboratory is a jewel," he said. "I think the benefits package has helped make it what it is."

Six months ago, CSC might have been the only prime contractor poised for the job, Plett said, but he doesn't feel bad about quitting the race now. "I think they're going to have a fine competition," Plett said.

He mentioned the University of California, Northrop Grumman and Jacobs.

But Dan Pierre, a Jacobs Sverdrup representative who attended the December conference, had little to say on the matter. "We're not ready to announce," he said.

Representatives from Washington Group International -- who attended the December conference -- were upbeat but tightlipped.

Jim Landers of Washington Group International said, "We're interested," but he would not say in what capacity.

Meanwhile, Landers said he has become an avid reader of the LANL: The Real Story, an Internet blog started by lab computer scientist Doug Roberts, where gripes are aired and issues are discussed.

"I think everybody's reading it. It's pretty insightful," Landers said.

Few companies and universities have what it takes to manage a nuclear-weapons laboratory. Here's the rundown so far:

Not interested

  • Lockheed Martin: Operates Sandia National Laboratories in Albuquerque and Livermore, Calif.
  • Bettelle Memorial Institute: Operates five U.S. Department of Energy laboratories.
  • University of Texas: Decided instead to help Sandia Labs improve its research.
  • Texas A & M University
  • Computer Science Corp. (Falls Church, Va.): Manages large aerospace contracts.

    Interested but undecided
  • University of California: Operates Los Alamos, Lawrence Livermore and Lawrence Berkeley labs.
  • Northrop Grumman: A global-defense company headquartered in Los Angeles; more than 125,000 employees; operations in all 50 states and 25 countries.
  • Bechtel National (Frederick, Md.): The government-services arm of Bechtel Group, which has 40,000 employees. Lead partner in managing the Idaho National Engineering and Environmental Laboratory. Led environmental cleanup at the U.S. government's Hanford Site in Washington state. Won $1.8 billion contract to rebuild Iraq's public works.
  • Washington Group International (Boise, Idaho): One of world's largest construction and engineering firms; recovered from bankruptcy in 2002; has operated the 310-square-mile Savannah River Site for the U.S. Department of Energy since 1989.

    Not saying
  • Jacobs Engineering Group (Pasadena, Calif.): Provides technology engineering services to aerospace and defense projects; remediated contamination at three Energy Department sites.
  • CH2M Hill (Denver): Provides engineering, construction, operations and technical services.
  • Fluor Corp. (Aliso Viejo, Calif.): Oversees construction projects.
  • BWXT Technologies Lynchburg, Va.): Manages nuclear production facilities and the closures of such facilities.

    -- Diana Heil

  • Comments:
    WOW!! Wouldn't that be a dream come true. An actual business entity that knows how to operate a business. That could be just what is needed to cure the "culture problem" here at LANL.

    The partner(s) could operate facilities and manage money. The scientist would be removed from any serious decision making and left to do science.

    Everybody wins, UC, DOE, NNSA, the partner(s) and employees.
    To the poster at 7:04, I've noticed you have posted a lot on this blog
    of late. What drugs are you on? They must be good, because you are
    living in a dream world if you think working for a Limited Liability
    Corporation under UC/Bechtel is going to be good for LANL's workers.

    We are about to lose our UC-employee status and be transferred over
    to a DOE-controlled pension with a declining pay-out targeted for a
    reduction from 180% to 105% of market. Bechtel will feel no qualms
    about laying off the work force once they come aboard as managers.
    And Bechtel will be managing the lab to make a healthy profit, not
    to bring about healthy science. UC will be relegated to a type of
    "window-dressing" position, but that's about it. The last round of
    the RFP was very disappointing. Even our two Senators said as much.
    Time is quickly running out. The final version of the RFP will soon be
    cast in concrete, and I don't expect much will change from this point.

    We had it really good as UC employees over the years. Now, we'll
    get to join the rest of the modern US workforce. That means constant
    benefit cut-backs and constant concerns about whether you're going to
    be the next worker axed with each new management restructuring effort.
    I can hardly wait.
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