NNSA Awards LANS Additional Contract Year


LANS News:

Los Alamos National Laboratory Director Charlie McMillan issued the following memo Friday, Dec. 21 to all employees regarding a recent NNSA evaluation of Lab performance:


As a premier national security laboratory, we are held to very high standards for safety, security and mission performance – and rightly so.

These expectations are reflected in NNSA’s evaluation of our performance for Fiscal Year 2012, which we received last week.

While we fell short in some areas, I can report that NNSA gave us a final score of 80 percent and – I’m very pleased to say – did award us an additional contract year.

To be sure, our performance evaluation is only one measure of our success. I have always maintained that if we do the right thing for our customers and the nation, the award term and fee will take care of themselves. They are, however, a documented evaluation of how the government values our work. This year, we have very plain evidence of how issues in safety or project execution can overshadow a very successful year when measured in other ways.

As I did last year, I’d like to take a moment to explain the award term and fee and what they mean to us.

The Award Term Under the Prime Contract, if the Laboratory meets certain performance standards, the government may choose to award an additional year, called an “award term,” to the LANS contract. It has done so for five consecutive years now.

The award term this year is significant. In its letter, NNSA cited LANS’ “full responsibility and accountability” and “aggressive” actions to correct issues facing the Nuclear Materials Safety and Security Upgrade Project (NMSSUP), as among the reasons for the award term decision.

The LANS contract now continues through FY 2018. We continue to have opportunities to earn award terms that could extend the contract to 2026.

In my view, the stability and consistency afforded by a long contract term is extremely important to the success of the Lab. I am pleased that we have added another year to this stability.

Overall Assessment

We received high marks for accomplishments including:

  • our weapons mission successes with NNSA and the nuclear security enterprise;
  • programmatic accomplishment;
  • breakthroughs in science;
  • the handling of the Voluntary Separation Program;
  • completion of seismic upgrades at PF-4; and,
  • our shipment of Cold War era transuranic wastes for permanent disposal.

We received low marks for the NMSSUP issue, the contamination event at the Lujan Center, certain nuclear formality of operations issues, and our quality program. This translated into a reduced award of fee for LANS. We received 80 percent of the total available fee.

Out of a possible total of $74.5 million, NNSA awarded LANS a combined total of $59.6 million in fee for executing more than $2.2 billion in work for the nation in FY 2012.

It is a fact of life that negative issues often outweigh positive accomplishments. The Laboratory successfully completed its missions despite having nearly $400 million less than in 2011.

However, I agree with the principles that underlie our contract and our partnership with the government. Just as the NNSA rewards us for excellence in science and mission execution, it must hold us accountable for failures.

We have a streamlined Performance Evaluation Plan for 2013 and a clear picture of where we need to improve.

We are not given easy work. We solve the most difficult problems humans have ever known. Each year, you rise to the challenge. I deeply appreciate your efforts. With our predecessors, we have helped keep the world safe for nearly 70 years. Because of your dedication to excellence, we stand ready to continue for decades more.


Los Alamos National Security, LLC (LANS LLC) operates Los Alamos National Laboratory under contract to the Department of Energy’s National Nuclear Security Administration.

LANS LLC is a private limited liability company (LLC) formed by the University of California, Bechtel, Babcock & Wilcox Technical Services, and URS Energy and Construction. It assumed direct management and operation of Los Alamos National Laboratory June 1, 2006.

An agreement between the four LANS, LLC members established a Board of Governors that is charged with oversight and governance of LANS, LLC.

The Board includes three individuals appointed by the University of California and three individuals appointed by Bechtel, as well as four independent Governors who are selected for their expertise and experience in fields pertinent to LANL operations.

The Board includes an Executive Committee that consists of the six University of California and Bechtel appointees, and five Advisory Governors. LANL Director Charlie McMillan is the president of LANS, LLC, and as such reports directly and solely to the LANS LLC Board of Governors.




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