Triad National Security is set on Thursday to take over management of the Los Alamos National Laboratory in New Mexico, ending a decade-long experiment in running the nation’s oldest nuclear weapons laboratory as a for-profit business.
The transition was still on track for Thursday, Triad and Department of energy spokespersons wrote in emails Wednesday.
The company — led by the nonprofit trio of Battelle Memorial Institute, longtime Los Alamos manager the University of California, and Texas A&M University — assumes a management and operations contract expected to cost the Department of Energy’s semiautonomous National Nuclear Security Administration (NNSA) about $20 billion over 10 years, with options.
The five-year base period is worth about $10 billion. Triad has not quantified its annual fee take — that should become clearer when the NNSA releases the company’s first annual performance evaluation some time next year — but the solicitation allowed up to $30 million per year, not counting work outside the core DoE weapons mission.
Triad relieves Los Alamos National Security (LANS): a for-profit team led by the University of California with senior industry partner Bechtel National and industry teammates AECOM [ACM] and BWX Technologies [BWXT]. A team comprising essentially the same players still runs the Lawrence Livermore National Laboratory under a contract that was awarded in 2007 and, with options, would run through Sept. 30, 2026.
Besides the nonprofit partners, Triad includes integrated industry subcontractors Fluor [FLR] and Huntington Ingalls Industries [HII]. Also participating are small businesses Longenecker & Associates, the joint venture Merrick SMSI, and TechSource.
Triad is a nonprofit, but not yet tax-exempt, meaning it will for now pay about $20 million annually in New Mexico gross receipts taxes. The NNSA might press the company to seek tax-exempt status, against the will of Los Alamos County.
LANS started managing Los Alamos National Laboratory in 2006 and departs in the wake of safety and performance lapses that prompted NNSA to pull the plug out the for-profit experiment almost 10 years before the final option on the company’s contract would have expired. The final straw came in 2014, after a badly packaged drum of Cold War waste from the lab exploded underground at the Department of Energy’s Waste Isolation Pilot Plant near Carlsbad, N.M. Before LANS, University of California had managed Los Alamos solo for 75 years.
Throughout the four-month transition period that preceded today’s scheduled takeover, Triad took public the message it privately pressed on the NNSA during a roughly yearlong contract competition: that returning to a nonprofit lab manager would help industry see itself not as a manager of a discrete Los Alamos stovepipe — as incoming lab Director Thomas Mason has said was the case under LANS — but as a partner in a single national security mission.
Mason — a Battelle employee and former director of the Oak Ridge National Laboratory in Tennessee — replaces Terry Wallace, the interim Los Alamos director. Wallace took over in January from Charles McMillan, a nuclear veteran who ran Los Alamos for most of the LANS days.