Rick Perry Hands Texas A&M Lucrative Los Alamos Contract

Rick Perry Los Alamos
U.S. Secretary of Energy Rick Perry speaks at the Energy Policy Summit at the National Press Club, October 16, 2017 in Washington, DC.

Drew Angerer/Getty Images

A group that includes Texas A&M University was awarded a lucrative contract to oversee the Los Alamos National Laboratory in New Mexico on Friday, beating out a competing bid led by the University of Texas system. The group’s bid was chosen by the U.S. Department of Energy, which is headed by A&M alum Rick Perry.

“We are committed to building on the legacy of world-class research, unparalleled innovation, and service to public good that have been the hallmark of the laboratory since it was founded in 1943,” A&M chancellor John Sharp said in a press release. A&M’s bidding group, a limited liability company called Triad National Security, includes the Battelle Memorial Institute and the University of California.

The group will inherit a facility that has long served as one of the nation’s most important nuclear weapons research centers, but has recently been marred by major workplace safety issues. The University of California has been involved in managing Los Alamos for nearly 75 years, most recently partnering with defense contractor Bechtel to run the lab after being awarded a contract in 2006. But the federal government decided in 2015 not to renew the group’s contract after its expiration in September 2017, following a series of federal investigations and performance evaluations that revealed a pattern of serious accidents and worker health and safety violations, which resulted in a total of $110 million in fines and lost performance bonuses, according to ProPublica.

There was much hand-wringing by the University of California over putting together a new bid for the Los Alamos contract. During a September meeting of the Board of Regents, university regents placed much of the blame for Los Alamos’s problems over the past decade on Bechtel, and decided to move forward with a new bid with a different private partner. Bechtel, of course, did not like that. Shortly after the meeting, Bechtel president Barbara Rusinko sent a letter to UC president Janet Napolitano, responding to each point of criticism levied by the regents—and objecting to their harsh criticism of Rick Perry.

According to the letter, which has been obtained by Texas Monthly, UC regent Richard Blum was concerned about the outcome of the looming bidding war being affected by the political leanings of each bidding group, explaining that they decided to bring Bechtel into their 2006 bid because “they were a Republican group.” Blum also had some unflattering comments about Perry. “Now here we go again,” Blum said at the meeting, according to the letter sent by Bechtel. “We have the former governor of Texas who couldn’t remember that there was an Energy Department that he wanted to get rid of when he ran for president, so my guess is that his understanding of anything about this is probably beyond clueless.”

Los Alamos National Laboratory

This undated file aerial photo shows the Los Alamos National laboratory in Los Alamos, N.M.

The Albuquerque Journal via AP

After UC and Bechtel broke up, Bechtel connected with Purdue University to form a competing bid. There were whispers early in the bidding process that A&M and UT were weighing the benefits of teaming up for a Texas-centric bid aimed at pleasing Perry, but the heated rivals couldn’t make it work and instead went forward with separate bids.

A&M helps run a similar but smaller lab, the Lawrence Livermore National Laboratory in California, with UC and Battelle (and Bechtel, too). Given the two university systems’ collaborative history, combined with A&M’s conservativeness to balance out UC’s liberal leanings, their bidding group for Los Alamos made for an obvious alliance.

The A&M Board of Regents voted unanimously last year to pursue a bid. UT, however, was less enthusiastic. The system’s Board of Regents narrowly voted 4-3 in favor of competing for the contract, with opponents citing the facility’s questionable safety record and noting that operating a nuclear weapons facility doesn’t necessarily align with the university system’s mission, the Austin American-Statesman reported in November. It’s unclear whether the board’s reluctance affected the outcome of UT’s bid, but it probably didn’t help. The UT system had also submitted a bid for Los Alamos in 2005, partnering with Lockheed Martin, but they lost out then too. “We offer our best wishes to the NNSA’s chosen contractor and thank our Board of Regents and numerous others who supported this endeavor,” UT deputy chancellor David Daniel said in a statement, according to the Houston Chronicle.

The Los Alamos contract is guaranteed over five years, with one-year renewal options potentially extending the deal for a total of ten years. According to a press release from the DOE’s National Nuclear Security Administration, the “estimated value” of the contract is $2.5 billion per year. The 35-square-mile facility outside Santa Fe employs about 12,000 people.

“Today’s announcement charges the Texas A&M University System with the management of one of the world’s premier laboratories in the areas of defense, nuclear weapons and nuclear nonproliferation,” Governor Abbott said in a press release. “The award links Texas with one of the world’s premier R&D institutions, and I am proud of the expanded contributions our state will make towards our nation’s defense. I commend Chancellor Sharp and the Texas A&M University System for securing this contract that will provide significant opportunities for skilled workers trained in Texas to make lasting contributions to our national security.”

Tags: Business, Energy, Department of Energy, Los Alamos, Rick Perry, Texas A&M, University of Texas system


  • BCinBCS

    Well blow me over with a feather.
    Aggie Rick Perry chose the A&M bid.

  • subtext9

    When Perry’s inevitable Trumpworld “You’re fired!” moment blows up, his buddies at A&M will now have several billion more reasons to put him on their payroll.

    • BCinBCS

      Yea, that’s probably true. I can’t think of anything else that he is qualified to do.

  • John Bernard Books

    A&M beats UT…..who doesn’t?

    • BigDsouthT

      Your Alma doesn’t Mater! Rick is a prick, Trump picks idiots for his cabinet. Rick is a Republican, which explains he’s and idiot.

      • Leanne Long-French

        I think you are the idiot…and can’t type!

        • BigDsouthT

          You understood every word! The feeling is mutual.

  • Robert Kloppenburg

    With what company will A&M partner? Bechtel? The article was not clear on this.

  • Robin Franke

    Anyone who believes this contract is lucrative for the non-profit partners (e.g. TAMU) is sadly mistaken. No one runs a national laboratory to make money — the margins are not there. The reason you run a national laboratory is so that you have an inside track on the research and the R&D synergies and intellectual property that may derive from that. Commercial partners do not make enough off of the contracts to really warrant the bid and proposal effort, their return on effort comes in the way of reputation building.

    • St. Anger

      So to be clear, your argument is that they don’t do the contract to make money, they do it to open up more opportunities for research … funding and revenues?

      Got it.

      • Robin Franke

        Precisely! TAMU, UC, and Batelle are non-profit institutions, as is the LLC they put together to win the contract. This is actually causing consternation here in NM because the state has no mechanism to tax a non-profit entity. For those who bid on the contract that are profit-making organizations (e.g. BWXT, Bechtel, Jacobs, et al). if you look at the ROI for the award fee that they earn, you will find that it is below their average corporate ROI and — in all cases — well below their target ROI for all new business. If their return on investment is less than what they are used to earning, there has to be another reason to bid on the job and I outlined those up above. I’ve been participating on DOE bid and proposal activities for over 20 years now and there are all kinds of reasons to bid on jobs. Cash return is not the only reason. In the 60’s, company’s like GE would run the labs (e.g. Vallecitos) simply for the prestige. They earned $1/year.