Todd Jacobson
NS&D Monitor
5/9/2014
The National Nuclear Security Administration has wrapped up negotiations with the Lockheed Martin-run Sandia Corporation on a two-year extension to its management and operating contract to run Sandia National Laboratories, but it hasn’t released any details of the contract. NNSA spokesman Josh McConaha confirmed late last week that the Sandia contract had been extended through April 30, 2016 (with an option for a third year) as expected but he did not provide any other information. Nearly a week later, the contract had still not been posted to the Internet and the NNSA did not respond to additional requests for information on the extension. Sandia National Laboratories spokesman Jim Danneskiold referred questions to NNSA.
The NNSA said in March that it was planning to briefly extend the contract while it prepares to compete the Sandia contract. Sandia is expected to be the first contract competed under the “public interest” model championed by Energy Secretary Ernest Moniz and former acting NNSA Administrator Bruce Held, but NNSA officials previously said the extension was not expected to vary greatly from Lockheed Martin’s current deal to run Sandia, which includes a fee-earning potential that is much lower than that of Los Alamos and Lawrence Livermore national laboratories.
Future Sandia Contract Plans Unclear
Exactly how the contract will be structured remains undecided, and new NNSA Administrator Frank Klotz has yet to weigh in publicly on his preference. Previously, the NNSA emphasize that it hasn’t been determined whether a future competition will only involve Sandia. The NNSA issued a Request for Information two years ago contemplating combining management of part of the lab with other facilities across the weapons complex, including the Kansas City Plant. “As a result of the RFI process, NNSA decided not to undertake a major realignment of Nuclear Security Enterprise contracts at this time,” a NNSA spokesperson said in March. “The Secretary of Energy thought it was important to extend the contract pending more certainty on the results of the several Congress-directed studies and reviews on NNSA governance and laboratory governance. The next contract competition will be able to capture these results. A detailed plan will be forthcoming likely in the next 18 months.”
However, pushing back the decision also could create complications with other looming NNSA procurements. Over the next three years, the contracts for the Nevada National Security Site (2016) and the Kansas City Plant (September 2015) also expire, creating a potential logjam of procurements. There is expected to be no shortage of companies eager to compete for the Sandia contract, though only two companies have publicly said they will bid: Lockheed Martin and Fluor, which made a splash three years ago when it announced a teaming partnership with Boeing that has since dissolved, though Fluor remains interested in the contract.
Other companies that are believed to be pursuing the opportunity include Bechtel, URS, Babcock & Wilcox, Northrop Grumman, Battelle, Jacobs Engineering, and SAIC. Honeywell, which currently manages the Kansas City Plant for the NNSA, is also likely to have some interest, especially in the non-nuclear production work that takes place at the lab. At least several other universities are also believed to have interest in the opportunity, including Texas A&M and the University of Texas, which teamed with Lockheed Martin on its unsuccessful run for the Los Alamos National Laboratory contract nearly a decade ago, as well as the University of New Mexico.
