McMillan: Workforce reduction not viable

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LANL > Director addresses possible sequestration scenarios

Sequestration impact scenarios continue to dominate the news.

Sequestration was enacted in the 2011 debt ceiling negotiations between Democrats and Republicans in Congress.

The debt ceiling was raised in 2011 in exchange for $1.2 trillion in spending cuts, which were to be determined by a bipartisan group of senators and representatives, known as a “super committee.”

If no deal is reached by the committee, automatic, across the board cuts of 10 percent will go into effect.

The next deadline is fast approaching March 1.

Meanwhile, there has been quite a bit of speculation as to how sequestration may impact the Los Alamos National Laboratory.

In a memo to employees Wednesday, Lab Director Charlie McMillan said workforce reduction was not a viable option in dealing with sequestration impacts.

“In the coming days and weeks you will likely see media reports about possible budget reduction scenarios and their impacts to the laboratory, McMillan wrote.

“They are just that — scenarios. Until we know specific numbers, we will not be able to analyze what the granular impacts will be. However, because of the actions we took last year, I am confident in sharing the following with you: For Los Alamos, a reduction to the regular workforce is not a viable option to deal with sequestration impacts.”

McMillan said should sequestration occur, the lab would look at four main levers to reduce costs.

They include:
•Further controlling procurements
• Examining our subcontracted labor force
• Effectively using carryover balances, and
• Furlough of the permanent workforce for a short duration.

“I want to stress that once we see our official funding profile and decisions are made, you will hear it from me first. To date, absolutely no decisions have been made, nor are we taking actions,” McMillan wrote.

According to the Nuclear Weapons and Materials Monitor, the cuts, which may be implemented in March barring action by Congress, are set to reduce the National Nuclear Security Administration’s budget by 7.3 percent. That adds up to about $721 million for NNSA’s weapons and nonproliferation programs, based on enacted funding levels.

McMillan said the actions the lab took in 2012 to control spending has given it some flexibility to deal with budget uncertainties in 2013.

At a community leaders breakfast last October, McMillan outlined the lab budget cuts.

McMillan said the lab finished 2012 with $383 million less in funding than 2011. The 2011 reductions include $183 million for operations and maintenance and $200 million for construction.

In addition, McMillan said the lab finished 2012 with 1,295 fewer employees than in the previous year.

Of the 1,295 employees that left the lab, 557 departed under the voluntary separation program last spring. McMillan said other the other numbers could be attributed to contactor cuts, normal attrition and slightly fewer students.

McMillan said procurements are down by close to $200 million from FY 11. In September of last year, the lab racked up $894 million in procurements compared to $696 million in FY12.

McMillan said in Wednesday’s email that the lab received a request from NNSA, “asking us to describe the impacts given a hypothetical budget reduction. We receive similar requests every year, and we respond. It is prudent for Congress, NNSA and the laboratory to plan for uncertainties.”

McMillan then gave his employees a bit of a pep talk.

“We went through a lot together last year. I realize it is difficult to hear some of these words again. I can assure you that laboratory leadership is working closely with NNSA on this issue, and scenario planning does not equal reality.

“This, however, is reality: Completing our missions for the nation safely and securely, in the face of uncertainty and budget pressure, is the most compelling argument for Los Alamos. Stay focused on the tasks at hand, and take speculation with a grain of salt.”

According to the Albuquerque Journal, meanwhile, officials at Sandia lab said there should be no layoffs at their facility despite a Congressional report suggesting that as many as 100 Sandia jobs may be on the chopping block.

According to a report from the Democratic staff of the House Appropriations Committee, Sandia “will lay off up to 100 positions” and curtail hiring if sequestration takes effect March 1.

“Sandia has analyzed potential impacts of the various budget scenarios currently under consideration and finds no immediate impact on Sandia employees,” Sandia spokesman Jim Danneskiold told the Journal.