Joanna Stancil, Chris Kielich,
Barbara Wetherell, 202-586-5806

May 15, 1996

Department of Energy to Extend University of California Contracts

Secretary of Energy Hazel R. O'Leary announced today that the Department of Energy (DOE) will enter into negotiations with the University of California to seek a five-year extension of the contracts to manage the Lawrence Livermore and Lawrence Berkeley Laboratories in California and the Los Alamos National Laboratory in New Mexico. The present contracts, which account for approximately $2.5 billion annually, expire September 30, 1997. The University has operated the three National Laboratories since their inception.

In recognizing the University's long-standing relationship with the federal government, President Bill Clinton said, "Over the last five decades, the University of California made an enormous contribution to our success in winning the Cold War. We look forward to working with the University of California to promote both our economic and national security."

Secretary O'Leary added, "Together, the Department of Energy, the University of California and our national labs can meet President Clinton's challenge to advance peace and security by providing for effective stewardship of the nuclear weapons stockpile without underground testing. UC has been a leader in path-breaking energy research programs which have increased the efficiency of U.S. energy use and decreased costs to U.S. energy consumers. The University's record of scientific achievement at the three laboratories and its reputation for 'world class' science are unparalleled."

The Secretary noted that, although she is committed to competition for contracts for the management of the DOE's laboratories and facilities, special circumstances warrant the decision to extend the current contracts with the University. The Department's decision to extend the contracts for the management of the Lawrence Livermore National Laboratory (LLNL) and Los Alamos National Laboratories (LANL) comes at a critical juncture in the country's commitment to the development and implementation of a science-based nuclear stockpile stewardship program.

This program is a key element in the President's commitment to maintain a safe and reliable nuclear weapons stockpile without underground nuclear testing. Livermore and Los Alamos are the United States' two primary nuclear weapons laboratories. The University's nuclear weapons experience is critical as the program changes from new warhead design, production, and testing to stewardship of an aging weapons stockpile without nuclear testing.

Regarding the Lawrence Berkeley National Laboratory, the Department based its decision to extend the contract on UC's excellent scientific and technical performance and the detrimental impact on DOE's energy research programs of having to relocate the laboratory -- which is on the UC Berkeley campus -- if the department had to relocate.

Secretary O'Leary, in recognizing the University's scientific and technical excellence, expressed DOE's commitment to bringing management improvements and greater accountability to its contracts and indicated that DOE would be seeking important changes to the Department's current contracts. As a condition of the extension, the new contracts must embody the objectives of the Department's Contract Reform initiative, including greater use of results-oriented performance and results-based payment.

In addition, the contracts must provide for enhanced oversight by DOE in important areas of business and financial management. DOE is especially concerned to see improvements in the Los Alamos National Laboratory's relations with its local neighbors in New Mexico and the management of the environmental, safety and health programs. The Secretary noted that the University is moving to address these issues and expressed confidence that they could be further resolved in the upcoming negotiations with the University.

In recognition of community and regional obligations, the University has agreed to help with the economic diversification of northern New Mexico. The University is also exploring opportunities for collaborative activities and educational outreach with various New Mexico universities.

"We expect the University of California, as a partner with DOE, to recognize its responsibility to the American taxpayer for top-quality leadership in management and financial matters, and our contracts must reflect that commitment," Secretary O'Leary stated. "In building on our past successes, we look forward to the continuation of a very productive relationship at a time of importance to our Nation's nuclear history."