Alissa Tabirian
NS&D Monitor
7/10/2015
Newly revealed emails between Sandia National Laboratories (SNL) and Lockheed Martin Corporation (LMC) highlight officials’ coordinated attempts to secure a noncompetitive extension of the Management and Operating (M&O) contract with the Department of Energy (DOE). Despite those attempts, DOE posted in May a “full and open competition” notice for the management and operation of SNL.
A DOE Office of Inspector General report last November first discovered SNL’s use of federal contract funds to lobby “Federal and Congressional officials” for the contract extension. The full IG report, released to Greenwire recently via the Freedom of Information Act, details SNL’s “inexplicable and unjustified” lobbying activities, in violation of federal regulations. The contract was “then valued at about $2.4 billion per year,” the report says.
A redacted portion of the audit includes emails that warned “that SNL should not be requesting help from LMC Washington Operations team, stating that it would put SNL ‘in serious hot water’ for lobbying.” In other emails, an official noted that “this process is political whether [redacted] accepts it or not – our competitors are not shy about invoking the political process.” A 2010 email discovered by the audit revealed a precedent for SNL’s efforts, noting that “we used operating costs in the same way in securing the extensions in [1998] and 2003." In another instance, an email to SNL noted that from a legal standpoint, funding requests submitted to members of Congress as recommendations “smack squarely into the definition of lobbying.” These communications shed light on SNL’s concerted push to extend the contract “for an additional 7 years with award term potential of an additional 12 years” following several previous extensions.
SNL’s efforts to “campaign aggressively” date back to 2009 with the creation of a Contract Strategy Team that relied on the expertise of three consultants to provide lobbying guidance. The consultants, which included former Rep. Heather Wilson (R-N.M.) and two unnamed officials, developed a Contact Plan to target individuals that would be part of the contract bid decision. One of these individuals was then-Secretary of Energy Steven Chu, the report says. The team’s activities included outreach to federal officials to “convince a new President, freshman NM [New Mexico] delegation, Democratic Congress, new DOE Secretary, new NNSA administration, new E&W [Energy and Water] Appropriations Committee Chair that the value and contribution of the team merits a contract extension," the audit says.
The team sought to “avoid [a Request for Proposal] process,” in part by “informing the Secretary of Energy that the nation would be better served by preserving the SNL/LMC team,” the audit says. It notes that the strategy also included talking points to present a potential competitive bid as “costly and disruptive to the Department/National Nuclear Security Administration.” The audit also highlights cases of written lobbying in the science research reports that SNL gave the New Mexico Congressional Delegation. SNL “sometimes included funding requests” for Congress in these reports and continued to include this portion despite being advised not to do so, the audit says.
In response to the investigation, SNL claimed its activities were meant “to demonstrate to [DOE/NNSA] that SNL was fulfilling the Department’s needs” and that their costs were allowable because the actions “were based on ‘the merits of the matter’,” according to the report. The audit ultimately offered several recommendations for management, including an examination of consultant and SNL employee salaries to “recover any costs determined to be unallowable.”
NNSA spokeswoman Shelley Laver said in a statement that the agency addressed one of the recommendations by publishing policy guidance this February. Laver added that “NNSA is awaiting the results of an on-going investigation before we take any additional actions on the remaining recommendations outlined in the report.” SNL spokeswoman Heather Clark said in a statement that “Sandia National Laboratories has cooperated fully with the government’s review of this matter” and “will continue to work closely with the Inspector General’s office, the [DOE] and the [NNSA] to address all the IG’s recommendations.” Clark also said, “We are hopeful this matter will soon be resolved.”