The University of California will remain entrenched at the Los Alamos National Laboratory for up to 10 more years after winning the National Nuclear Security Administration’s (NNSA) next lab-management contract as part of privately held team with Battelle and Texas A&M University.

The NNSA announced the award Friday.

The University of California managed the New Mexico nuclear weapons facility solo for most of the lab’s 75-year history. The institution is the main partner on incumbent Los Alamos National Security: a privately held partnership that includes senior industry partner Bechtel National, along with AECOM and BWX Technologies. 

The incumbent’s contract, awarded in 2006, was canceled by NNSA after a series of safety and management mishaps at the lab and will expire in September. The contract had options that extended the deal into 2026.

Come this fall, Triad National Security LLC, the privately held partnership of Battelle Memorial Institute, the Regents of the University of California, and the Regents of Texas A&M University, will take over the nation’s oldest nuclear weapons lab. Triad also includes industry teammates Fluor Federal Services, Huntington Ingalls Industries/Stoller Newport News, Longenecker & Associates, TechSource, and Strategic Management Solutions/Merrick & Co.

Triad National Security’s contract includes a five-year base and five one-year options. The lab management portion of the pact will cost more than $21 billion over 10 years, including a little over $10 billion in the base period, according to the NNSA. That excludes some $2 billion worth of work funded by agencies other than the Department of Energy over the life of the contract.

An NNSA spokesperson said the agency received four responsive proposals to the solicitation it released in October for the latest lab-management pact.

A source said losing bidders would be briefed on the NNSA’s decision during the week of June 18. After that, the losers would have 10 days to lodge a protest with the Government Accountability Office.

A spokesperson for the University of California said Triad was “honored” by NNSA’s decision, but “[u]ntil Triad receives the notice to proceed from the National Nuclear Security Administration (NNSA) and transition commences, we are unable to provide additional information about our team’s plans beyond the details announced today by the DOE/NNSA.”

In its solicitation for the contract, the NNSA estimated it would take four months after the award to transition Los Alamos to the new prime from the incumbent. Once on the job full-time, Triad will produce fissile warhead cores called plutonium pits and conduct experiments, sans nuclear explosions, to assess the health of the U.S. nuclear arsenal as it ages. Los Alamos employs about 12,000 people, the vast majority of whom work for the current prime contractor.

The other known bidders for the next contract were:

• Bechtel National and Purdue University.
• Jacobs and BWX Technologies.
• University of Texas and an unidentified industry partner or partners.

“We’re disappointed at the government’s decision and believe our team proposed the transformative change the NNSA requested,” a Bechtel National spokesperson said Friday by email. “We will await results of our debrief with the government and evaluate our options. In the meantime, we remain focused on the continued safe and efficient operations of the lab as part of the LANS [Los Alamos National Security] team.”

“While we are disappointed to have not been selected, it was a tremendous privilege to be among the strong group of finalists competing to manage Los Alamos National Laboratory,” Mitch Daniels, president of Purdue University, wrote in a statement emailed to the press Friday. “The management of Los Alamos is a solemn responsibility for U.S. national security and the protection of our citizens, and we wish the very best to those involved in that essential mission.”

“We offer our best wishes to the NNSA’s chosen contractor and thank our Board of Regents and numerous others who supported this endeavor,” a spokesperson for the University of Texas wrote in an email Friday. “We are honored to have been among the finalists for the role.”

The Austin, Texas-based university system approved around $4.5 million just to bid on the Los Alamos contract.

A Jacobs spokesperson did not immediately reply to a request for comment Friday. A BWX Technologies spokesperson declined to comment.

AECOM did not bid.

The NNSA did not disclose the financial terms of Triad’s winning bid. According to the final solicitation for the contract, released in October, bidders could earn up to $50 million a year in lab-management fees: an increase from the $30 million in the draft solicitation the agency floated last summer, which garnered backlash from industry.

The award announced Friday marks the beginning of the end of a bumpy road for Los Alamos National Security. The final nail in the coffin for the incumbent came in 2014, when a company subcontractor did a bad job packaging transuranic waste from the lab. The badly packaged barrel later burst open and leaked radiation into DOE’s Waste Isolation Pilot Plant near Carlsbad, N.M., shutting the facility down for about three years.

After that accident the Department of Energy decided to remove Cold War nuclear-waste cleanup from the scope of Los Alamos’ NNSA-owned management and operations contract. That plan came to fruition in April, when the agency’s Office of Environmental Management on-ramped new full-time cleanup contractor Newport News Nuclear BWXT-Los Alamos. That deal is worth nearly $1.4 billion over 10 years, with options.

The University of California had managed Los Alamos solo since World War II before the Department of Energy decided, around the middle of last decade, that it wanted a for-profit entity to run the lab. That change, like the contract change just announced, was driven by the agency’s desire to improve the safety and management culture at the isolated lab in northern New Mexico.

“We are committed to working [with] the new management team to ensure a seamless transition,” current lab Director Terry Wallace wrote in a statement posted to Twitter Friday.  “While the contract change will bring in a new team of parent companies, the lab’s mission remains the same: to serve the nation with excellence.”

Editor’s note, 08/16/2018, 7:45 a.m. Eastern – The story was corrected to show that Strategic Management Solutions/Merrick & Co. is a joint venture company.