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Stand-Down of Los Alamos National Laboratory: Total Costs Uncertain; Almost All Mission-Critical Programs Were Affected but Have Recovered

GAO-06-83 Published: Nov 18, 2005. Publicly Released: Dec 19, 2005.
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Highlights

On July 16, 2004, the director of the Los Alamos National Laboratory (LANL) declared a suspension, or stand-down, of laboratory operations to address safety and security concerns. LANL is one of three laboratories that conduct nuclear weapons research for the National Nuclear Security Administration (NNSA) within the Department of Energy (DOE). In deciding to stand down operations, LANL's director consulted with senior officials from NNSA and the University of California, the management and operating contractor for the laboratory. GAO was asked to assess (1) the extent to which LANL's and NNSA's estimates capture the total cost of the stand-down, (2) the effect of the stand-down on LANL's major research programs, and (3) whether there was a reasonable basis for NNSA's decisions regarding the reimbursement of stand-down costs to the University of California.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Energy To improve DOE's oversight of its management and operating contractors, the Secretary of Energy should require that all contractors establish activity codes within their accounting systems so that the costs of any future stand-downs can be tracked on an actual cost basis.
Closed – Implemented
In March 2006, the National Nuclear Security Administration notified Los Alamos National Laboratory and its six other major contractor-operated facilities in writing that it expects, when program operations are stood down, that separate cost codes are established to track and report the actual direct and indirect costs.
Department of Energy To improve DOE's oversight of its management and operating contractors, the Secretary of Energy should require that all contractors include associated support costs when reporting on stand-down costs.
Closed – Implemented
In March 2006, the National Nuclear Security Administration notified Los Alamos National Laboratory and its six other major contractor-operated facilities in writing that it expects, when program operations are stood down, that separate cost codes are established to track and report the actual direct and indirect costs.
Department of Energy To improve management and operating contractors' accountability, the Secretary of Energy should require that contractors achieve an overall performance rating of outstanding to be eligible to earn extra years to their contract terms.
Closed – Implemented
NNSA has implemented a two-step process for making award fee and contract extension determinations. Each year the contractor will be evaluated against predetermined performance evaluation criteria for its award fee. If the contractor receives an award fee score that exceeds the predetermined award term threshold score, the contractor will be evaluated against additional criteria that apply only for award term. After review of the Award Fee documentation and Performance Evaluation Report, as well as the additional evaluation criteria, NNSA's Administrator will determine whether an additional year will be awarded to the contract. Specifically, NNSA graded the performance of the Los Alamos Nuclear Security (LANS) contractor in the 70 percent range for fiscal year 2007. This rating, in and of itself, would have precluded NNSA from considering whether LANS had earned a 1-year award term. However, under the contract, fiscal year 2008 is the first year that LANS is eligible to receive award term.

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Topics

Allowable costsContract administrationCost analysisDepartment of Defense contractorsInternal controlsLaboratoriesNuclear weaponsNuclear weapons plant safetyNuclear weapons plant securityNuclear weapons plantsNuclear weapons testingResearch programsWeapons research and developmentLaboratory safetyCost estimates