Thursday, December 08, 2005

NNSA bets big contract fee will create change

ROGER SNODGRASS,, Monitor Assistant Editor

The Los Alamos Site Office is taking a break.

Officials at the local office of the National Nuclear Security Administration that oversees Los Alamos National Laboratory said Wednesday that means they are concentrating on getting ready for the changes in store under the new contract.

Herman Le Doux, who is leading a LASO team preparing for the next manager at the lab, said the $79 million in fee that will be available would drive many changes.

"This is the first time in the history of LANL that we will have a Limited Liability Corporation managing the laboratory for NNSA," he said. "The fact that it's an LLC and will have a significant portion of the fee at risk necessitates that we do business differently from the site office standpoint."

The three-month effort, called a "strategic pause" and dedicated to "re-engineering" oversight policies and procedures is expected to continue through February.

Bernie Pleau, LASO's public affairs officer said the basic nature of the supervision would be changing under the next contract.


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Very apropos. Poison Ivy indeed.
"This site, including both LANL and NNSA, has not experienced a for-profit contract with this much money at stake," Le Doux said. "This is going to be a new experience for people up here on the hill."

Indeed. The word is that there could be a ~5% tax on all programs to pay the $80M contractor's fee and the gross receipts tax. That means 5% less work accomplished on DOE programs (and all other programs), and possibly a 5% cut in LANL staff to accomodate the new costs. Thank you very much, Ambassador Brooks. This is a "new experience" I could have skipped just as well.
hummm. if you think they took this contract for $79 are a real novice in this field... for a major corp like these, it's chump change (pays for the drinks)
So, if UC wins the contract, poor performance will mean they'll only get a 500% increase in contract fee from the present level instead of a 1000% increase. This will encourage better Lab management. Being a simpleton, I don't understand how this works.
Lockheed Martin claims corporate sales in excess of 35 BILLION in 2004 with 135,000 employees worldwide. So the management fee for LANL of about 80 million a year comes in at about the price they are paid for a single weapons acquisition contract. ( Go look at their news release page ).

LM is not going to get rich off of managing LANL.
An additional 5% tax to pay the management fee, plus another 2% for the
increase from 6% to 8% on the LDRD means will be looking at an increase
of at least 7% additional tax on every program dollar. Next, add in
the salary cuts that will come from our new contributions to support
a thread-bare pension fund. Yeah, thats the ticket to cheer up the
work force! Greater job anxiety due to increase funding stress along
with a drop in real take-home pay.

All TSMs better start to work on proposals to feed this new money monster.
I'm sure their are plenty of new sponsors out there who don't mind paying
$500 K per year for a LANL scientist. But if not, then a RIF is probably
in LANL's future, regardless of what St. Pete or the DOE have been telling
us of late. At least the jobs out at the new LANL plutonium pit factory
will be secure.
Regarding the new taxes on programs, good2go left out the 10% that will be needed for the Gross Receipts Tax.
Left unexplained is how this is to "incent" UC which is a non-profit. They can't make any money on this deal , by definition. Part of the reason the incentive fee is so large is LANL's history. The Sandia fee is only about $18 million per year.

As for the GRT, Sandia pays it and gets by just fine. If LANL can't "afford" to pay it; why? New Mexico should not be paying this subsidy, of some $70 million per year, to the US Federal government for the "privilege" of having UC run the Lab.
lucky is correct in that Sandia pays the GRT and does survive. What is going to hurt LANL is that the GRT will be a step-function cost of ~$100M.

The GRT, plus the ten-fold increase in the management fee, plus the pension costs, totalling as much as ~$250M, are going to cause good2go's predicted RIF.

Anyway, Fat Bill Richardson will piss it away on another airplane or similar nonsence.
Ah, Lucky Chris, you never give up. SNL was given a line item for GRT by DOE when the contract was awarded to LM. This is funded annually, so SNL is not affected in the program line. DOE did not do this for the LANL competition, and has said that GRT will come out of program. The AMERICAN TAX PAYER is getting screwed by NNSA with the new contract. Of course, you know all this Chris, but it never stops your diarrhea of hate. GRT means less jobs at LANL (and less state income tax paid, which is roughly equivalent to the GRT), less mission for NNSA, and will not serve NM.
And DAHRTman's hate for "King" Bill Richardson shows through again. Fat "King" Bill is a far, far cry from the good ol' days when New Mexico had a REAL governor, whose LAST name was King.
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