NNSA Complex Transformation Contract Consolidation

1
NNSA Complex TransformationContract Consolidation

• Spring 2008 DOECAA Meeting
• Steven L. Porter
• General Counsel
• Los Alamos National Laboratory

2
Complex Transformation

• Smaller, more modern complex
• Better defined scope, capabilities for each of
  the three Labs
• Hard sell politically, but probably the right
  thing to do
• Significant capital budgets to replace outdated
  facilities with new ones excellent idea
• Need for all of the NNSA sites to work together
  in a cooperative manner
• Current fee structure addresses this, in part
• Inherent parochial approach by each lab
  (contractor?) can sometimes be sub-optimal for
  NNSA

3
More Bang for The Billion Bucks

• How can NNSA minimize the sub-optimal behavior?
• With a long-term shrinking budget, how can NNSA
  maintain core capabilities and programs through
  more efficient operations?
• Would the consolidation of all three Weapons Labs
  into one contract address both of these concerns?
• Are there other alternatives that would yield the
  same, or better results?

4
Multi-Lab Contractor

• No guarantee at all that this will solve
  parochial issues
• Science Labs operate pretty independently despite
  common contractors
• Local Congressional delegations have their own
  views about their lab
• BUT there can clearly be cost savings if
  contractors work together NNSA/DOE should
  encourage this!
• LANS LLNS (LANL and (LLNL) joint benefits
  administration will save 3M/year)
• Just beginning to exploit savings opportunities

5
DOE/NNSA Move To Standardize pensions make
Contractor Consolidation Easier, But .

• Every site has its own set of employment rules
  and benefits, and changing those has not proven
  to be easy
• Significant morale issue, particularly for
  pension issues
• The new slimmed-down benefits may reduce costs,
  but at what other cost?
• Recruiting next generation work force is a huge
  challenge
• New pension and retiree medical structure removes
  key recruitment and retention tools
• Enforced uniformity at the three labs may well
  reduce employee morale further, thus damaging
  future recruitment/retention

6
Suggestions

• In business operations at the various NNSA sites,
  drive economies through collaboration, maybe
  consolidation of selected activities (payroll?)
  through use of incentive fee structure
• Dont assume that you can control research and
  scientists, and maintain an atmosphere conducive
  to research, through contract controls control
  may come at a significant cost in staff
  productivity, recruiting and retention
• Be careful what you ask for if all three
  weapons labs were consolidated under one
  contract, a single entity controlling 5B/year
  could create an entire new set of issues for NNSA
  to worry about