County sends NNSA concerns about lab bid

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By Tris DeRoma

Los Alamos County’s manager raised “serious concerns” last week with the National Nuclear Security Administration’s draft request for proposals regarding the new management and operations contract for the Los Alamos National Laboratory.

County Manager Harry Burgess expressed his concerns in a 13-point letter to the NNSA sent by email on Wednesday.
The NNSA released the RFP July 13.

Burgess told the NNSA the draft RFP does not go far enough in attracting the best contractor for the job.
“In its current form, LANL will be unable to maintain the high standard in which it operates and meet the goals that are stated in the draft RFP,” he said in the letter.

In the RFP, NNSA has cut the contractor’s performance fee from 3 percent to 1 percent, a move some critics said will keep the best and most capable from applying for the job, since they may not think the risk would be equal to the reward.

“The arbitrary cap on fees included within the draft RFP contradicts NNSA’s goal of hiring the best contractor for LANL,” Burgess said. “This arbitrary cap will reduce the number of interested and qualified bidders on the final RFP.”

Los Alamos County Council Chairman David Izraelevitz also encouraged the NNSA to lift the performance cap.

“Doing so will allow NNSA to be certain that it is capturing responses from a range of qualified candidates – and not only those that are willing to perform at the lowest fee,” Izraelevitz said in a similar letter sent to the NNSA from county council. “It is not in NNSA’s interest to arbitrarily limit the fee and discourage the most qualified candidates from supporting NNSA to run LANL.”

LANS is operating under a 3-percent fee of an annual $2.4 billion contract. Since LANS is a for profit company, the county and the state receive a gross receipts tax from that fee and other economic activities conducted by LANL. For that reason, Izraelevitz said it’s vital the NNSA select another for-profit company to manage and operate the lab.

“Some news reports have speculated that DOE (Department of Energy) may seek a non-profit for laboratory contracts in an attempt to avoid paying for general governmental services,” Izraelevitz said. “A for-profit institution must be given priority for managing LANL. A non-profit tax structure for LANL would negatively affect the state and county, result in a substantial reduction in key municipal services, and create and adverse effect on job retention and economic opportunities.”

Another chief concern of county officials is that the RFP made no mention of continuing established working partnerships between LANL and the county.

“The final RFP should identify that the contractor will be required to continue to support all existing contracts, agreements, memorandums of understanding, and other similar instruments between the current contractor and other state or local government entities,” Burgess said.

Those partnerships would include the school district, the Manhattan Project National Historical Park, and certain agreements the county has with LANL.

Izraelevitz wants the NNSA to include language from the current contract that supports those partnerships, as well as those with the county’s and LANL’s fire departments, including the Emergency Operations Center on West Jemez Road.
Izraelevitz said he hopes that his letter and Burgess’s letter will result in a clearer, definitive RFP that is more supportive of the county and the northern New Mexico region.

“This was a draft version, this was not the final version,” Izraelevitz said of the RFP. “I hope that they will take our comments into consideration as well as those of other organizations that would be affected by the contract or support Los Alamos National Laboratory so that the final set of bidders understand more fully their responsibilities and the impact of their management to make the laboratory as successful as it can be.”