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September 19, 1997

Regents approve national laboratory contracts

By Rick Malaspina
UC Office of the President

The University of California Board of Regents yesterday (Sept. 18) approved five-year contract extensions for UC's management of three U.S. Department of Energy (DOE) national laboratories.

The contracts -- one each for Lawrence Berkeley National Laboratory and Lawrence Livermore National Laboratory, both in California, and Los Alamos National Laboratory in New Mexico -- are the result of more than a year of negotiations between the university and the DOE. The contracts, which run concurrently through September 2002, were signed by UC and DOE officials after yesterday's Regents' meeting in San Francisco.

UC President Richard C. Atkinson, in recommending that the Regents approve the contracts, said:

"The Berkeley, Livermore, and Los Alamos laboratories are uniquely valuable resources. Today, more than ever, the historic partnership we share with the federal government contributes in increasingly important and diverse ways to our society and our future. We are proud of our historic association with the national laboratories and pleased to continue this service to the nation."

The university has been asked by the federal government to manage the three laboratories since their inception. The partnership began in 1943, with the establishment of the Berkeley laboratory as a federal facility -- it was the first laboratory in the DOE complex -- and the founding of the Los Alamos laboratory that same year; the Livermore laboratory was founded 1952.

Today the three laboratories are widely recognized for their research and development in such areas as energy, environment, and health, with the Livermore and Los Alamos laboratories also providing leadership in national security. The three laboratories also contribute to the nation's economic competitiveness through research partnerships with industry, and all engage in math and science education for students and teachers at all levels.

The laboratories employ a combined UC workforce of more than 17,000 people and operate on federally funded budgets totaling about $2.4 billion.

Senior Vice President V. Wayne Kennedy, UC's lead representative in negotiations with the DOE, noted that the contracts will preserve and strengthen the performance-based management system introduced for the laboratories under the current contracts, which took effect in 1992.

"Our goal has been to balance the laboratories' consistently outstanding performance in science and technology with the highest possible degree of business management and accountability," Kennedy said.

"Working with the Department of Energy, we have achieved increasingly strong results in recent years. We intend to build upon this success in the future."

A recent government-wide study sponsored by Vice President Al Gore's National Performance Review identified the DOE/UC relationship -- dubbed the "Partnership for Performance" program -- as an exemplary model of performance-based management.

Objectives of the process, which is consistent with the DOE's contract reform initiative, are to improve the laboratories' support of research, decrease costs of operations, and reduce the need for frequent DOE audits at the laboratories. The process measures performance at each of the laboratories against jointly established metrics in several administrative and operational areas. Also evaluated is the quality of science, engineering and technical work at each of the laboratories.

The contracts continue to reflect principles fundamental to UC's management of the laboratories. Inherent to these principles are the preservation of scientific and intellectual freedom at the laboratories; the administration by UC of benefit and retirement plans for laboratory employees; the continuation of collaborative research opportunities among UC campuses, other academic institutions, and the laboratories in nonclassified areas of benefit to the nation; and the stipulation that UC manages the laboratories as a public service.

Under the contracts UC will receive $14 million a year as a program performance fee. This is used by the university for any operating costs arising from the laboratories not otherwise reimbursed by the government or for discretionary research by or at the laboratories. This fee may be increased or decreased based on results of the laboratories' annual performance appraisals.

The DOE also will provide $11 million annually as a fixed payment for the indirect costs of managing the laboratories and up to $4.5 million a year to fund the UC Laboratory Administration Office, which implements the performance-based management system established for the laboratories.

The contracts include the right for UC to terminate one or more of the agreements upon 18 month's notice.

In addition, the Los Alamos contract includes a provision allowing for a special DOE assessment of the laboratory's performance in programs and activities related to environment, safety and health, environmental restoration and waste management, and community participation on the part of UC and the laboratory. Also included in the Los Alamos contract are provisions addressing needs and circumstances specific to northern New Mexico regarding economic development and regional community and educational outreach by UC and the laboratory.

In acting on the contract extensions for the Berkeley and Livermore laboratories, the Regents also certified addenda to environmental impact reports previously conducted for each of the California laboratories under the state's Environmental Quality Act.

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