Features

The University of California, which had seemed in danger of being ousted from its historic role as manager of the nation’s nuclear labs, signed an agreement Thursday extending its contract to 2005. 

The renegotiated contract leaves UC in control of implementing security at the facilities but gives the federal government significant new powers in deciding who works there. 

The agreement extends UC’s current contract by three years and was signed by UC regents and the Energy Department in the waning hours of the Democratic administration. It follows months of turmoil at the two facilities, the Los Alamos National Laboratory in New Mexico and Lawrence Livermore National Laboratory near San Francisco. 

UC had come under withering criticism from some in Congress after a string of scandals that included the alleged, but never proved, leak of secrets to China, problems with Livermore’s superlaser project and the disappearance of hard drives containing classified information. 

At one point, Energy Secretary Bill Richardson announced he was making major changes in security procedures and said he had not ruled out putting the management contract out to competitive bid.  

That is an option UC, which has managed Los Alamos and Livermore for the federal government since they were created a half-century ago, made clear it wouldn’t pursue. 

However, the Energy Department announced last October it was extending UC’s contracts providing there were changes. 

UC regents unanimously approved those changes Thursday less than 48 hours before Richardson’s term expired. 

The timing was close, but UC President Richard C. Atkinson said he believes there is bipartisan support for UC’s role. 

“I believe it’s always been in the nation’s best interests to have these labs managed by the University of California. We truly do it as a service to the country,” Atkinson said. 

Key changes in the modified contracts are provisions allowing the government to dock UC’s performance fee for safety and security violations and allowing the Energy Secretary to order the removal – although not the firing – of any lab employee. UC negotiators won a provision giving them 60 days to review a removal request, but the Energy Secretary has final say. 

On the issue of security, UC must bring in experts as consultants but remains in control. 

The contracts retains much of the old language, including a commitment to preserving an academic atmosphere. 

However, the government now has the power to reduce UC’s performance fee for environmental, safety or security problems or for failure to meet management objectives.  

The maximum performance fee remains $14.4 million for both labs through 2002 and increases to $15.8 million after that.  

The maximum penalty would be the entire fee, which is a fraction of the labs’ overall budget of $2.6 billion but would be a significant embarrassment for UC. 

UC also gets a base management fee, which brings the fee total to about $25 million a year. UC manages the labs on a nonprofit basis and any surplus goes back into the budget. 

The modified contracts do not include the third lab UC manages for DOE, Lawrence Berkeley National Laboratory, which does not conduct classified research and remains on its five-year contract signed in 1997. 

Regents approved the modified contracts with almost no discussion, a stark contrast to the noisy public debate that has swirled about the labs. 

Among the problems was the two-month disappearance of the Los Alamos hard drives, still a mystery, and the repercussions that followed Richardson’s discovery that Livermore’s $1 billion laser project, which he had been assured was on track, was hundreds of millions over budget and faced substantial delays.  

Lab troubles began in early 1999 when Los Alamos scientist Wen Ho Lee was fired amid an espionage investigation.  

Lee was charged with mishandling classified information and jailed, but was freed last September after the government dropped all but one of 59 charges. Lee was never charged with espionage and denied passing secrets to anyone. 

In his statement Thursday, Richardson called the modified contracts a “tremendous achievement.” 

“I think we’ve turned a corner in our management challenges, and I’m very comfortable turning this over to a new administration,” he said.