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Vol. 51, No. 21 October 22, 1999
[Sandia National Laboratories]

Albuquerque, New Mexico 87185-0165    ||   Livermore, California 94550-0969
Tonopah, Nevada; Nevada Test Site; Amarillo, Texas

Turbulent times in Washington make for an interesting year at Sandia

By Bill Murphy

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Sandia has always done interesting work, but, as Paul Robinson made clear in his Oct. 13 employee dialogue sessions in New Mexico -- repeated in California the next day -- the Labs these days is certainly living in interesting times, as well.

In a wide-ranging review of events and issues that have affected the Labs over the past several months, Paul described -- with intentional understatement -- the "fairly turbulent period" that has characterized Department of Energy-related issues. He spoke to audiences of several hundred Sandians in the Steve Schiff Auditorium during two sessions on Oct. 13, and then to several hundred Oct. 14 at Sandia/California.

"It's a pleasure not to be in Washington," said Paul, who has spent considerable time in the nation's capital in recent weeks addressing budget issues and testifying before the Senate on the Comprehensive Test Ban Treaty.

In prepared remarks before taking questions, Paul addressed a number of topics suggested from employees via e-mail.

The FY00 budget shows a "slight downturn," Paul said as he projected a view-graph slide of budget trends on the auditorium's large screen. The graph showed a dip in constant dollars for FY00, with a gradual but full recovery to the current status quo over the next few years. For FY99, the total Labs budget was $1.440 billion; the FY00 budget total -- which includes operating costs, capital equipment, and construction funding -- dips to $1.411 billion.

"The overall trend we still believe will keep us level or show a small increase in real buying power over the next Žve years," Paul said.

Paul said the number of FTE (full time equivalent) employees at the Labs will decline in FY00 to 7,117, down from the FY99 FTE count of 7,572.

"We expect to handle anything we need to do with attrition," he said. "We don't expect a VSIP [Voluntary Separation Incentive Program]."

Paul noted that between 1994 and FY00, the Labs FTE count declined from 8,494 to 7,117. Part of the decision to go to fewer FTEs has been to offer larger raises each year to the employees who remain.

"We put a premium on paying our employees what they deserve," Paul said.

Paul said the Labs' cost situation "is one that is manageable, and we do intend to manage it." But he noted that the Senate Energy and Water appropriation bill -- from which Sandia receives a substantial portion of its funding -- "should be sobering to everyone." He said that to some extent Sandia has been "tarred with the same brush" as other DOE laboratories for their budgetary lapses. As a result, Sandia's Laboratory Directed Research and Development (LDRD) funding will decline from 6 percent of the operating budget to 4 percent. Even though this represents a signiŽcant decline, Paul said, it also represents a political victory, given that there was a serious push in some quarters to "zero-out" LDRD altogether. The funding was saved from oblivion, he said, thanks in no small part to "help from key senators. . . our own Pete Domenici and well as a new and very special friend in John Warner [Republican senator from Virginia]." For historical perspective, LDRD funding in FY91 was 2.5 percent of the operating budget.

Paul also noted that the FY00 budget mandates a 30 percent reduction in travel and places strict new limits on the number of staff who can be stationed in Washington, D.C.

Paul updated employees on the ongoing political struggle over the implementation of the legislatively mandated reorganization that would create a new National Nuclear Security Administration as a semiautonomous agency within DOE. The new agency, was created by Congress in legislation in reaction to concerns over alleged lax security at the weapons labs. The political žap, Paul explained, is that President Clinton then appointed Energy Secretary Bill Richardson to serve as head of the new agency, and Richardson in turn appointed existing DOE personnel to simultaneously staff administrative positions in the new agency.

"I have a feeling that's not going to be the Žnal look [of the agency]," Paul said, noting that he has "never seen more anger from senators toward the White House" than over the President's actions on the implementation of the new agency. "I would predict this is an unstable situation," Paul said. He thanked former Vermont Senator Warren Rudman, who led the commission that looked at labs security issues, for trying to bring all the parties together.

How the issue will be resolved? "I'll have to say 'stay tuned,' " Paul said. "I've told you all I know, but you can be sure there are extraordinary maneuverings going on."

Paul predicted that because of the unusually high level of political animosities in the air, a replacement for Vic Reis, the former Assistant Secretary for Defense Programs who resigned will not be approved during this administration.

Paul said the recently announced restructuring of Lockheed Martin, including the elimination of the Energy and Environment Sector, will probably not have a signiŽcant impact on Sandia. However, he said the corporation's problems can offer some lessons for Sandia. He noted that an internal study, headed by former Martin Marietta CEO Tom Young, found several speciŽc causes for the corporation's well-publicized problems. Key points of the Young report: cost cutting was taken too far; oversight was misdirected or absent on many programs; large sector staffs were a bottleneck; and the workforce is demoralized and frustrated by sharply declining stock values. Lockheed Martin management, Paul said in summary, "has its work cut out for it" in rebuilding shareholder value.

Other issues Paul addressed:

As has become customary during dialogue sessions since he became Labs Director, Paul began his presentation with a video (produced for the occasion by Video Services Dept. 12610) of Labs highlights over the past four months. Following the video, Paul singled out for special commendation the Sandians who worked on the Labs' three most recent R&D 100 Award technologies. (Lab News, July 16).

Last modiŽed: October 25, 1999

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