Morning Briefing - May 17, 2018
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May 17, 2018

UT Needs Extra $7M to Take Over LANL, if It Wins the Contract

By ExchangeMonitor

If the University of Texas wins a $20-billion-plus contract to manage the Los Alamos National Laboratory, the institution will need as much as $7 million more than it initially budgeted to pay for the contract’s transition period.

The university needs the money “to provide bridge financing to support the successful transition of management for the Los Alamos National Laboratory in New Mexico,” according to the agenda for a Board of Regents meeting scheduled for Friday. The funding would come from the UT System Internal Lending Program, the agenda says.

The incumbent lab manager and whoever wins the next Los Alamos management pact will overlap during the transition period: a brief period of time when both contractors are on-site, and during which the departing team essentially turns the keys over to the new contract.

The National Nuclear Security Administration is expected to award the Los Alamos National Laboratory management and operations contract this week. The lab-management portion of the deal will cost the Energy Department agency more than $20 billion over 10 years, including options. The winner would be eligible for up to $50 million in annual lab-management fees.

The University of Texas is one of several known bidders for the work. The University of California is leading another bid with unidentified industry partners. Bechtel National and Purdue University are also bidding. In addition, Jacobs and BWX Technologies are partnering on a bid, a source said.

After 12 years on the job, Los Alamos National Security is losing the contract after a series of nuclear safety lapses. These including the bad subcontractor waste-packaging job that resulted in a barrel of transuranic waste exploding in the deep underground Waste Isolation Pilot Plant near Carlsbad, N.M., and shutting the facility down for almost three years.

Los Alamos National Security is led by the University of California, which managed the lab solo for most of the facility’s 70-plus year existence, and Bechtel National, with industry teammates AECOM and BWX Technologies. AECOM is not bidding on the follow-on contract.