Sandia LabNews

DOE Secretary announces Lockheed Martin contract extension

It’s Lockheed Martin: DOE Secretary Abraham visits Sandia to announce five-year contract extension

Asserting that DOE should operate on "the very simple premise . . . that outstanding performance will be rewarded," Secretary Spencer Abraham announced on Dec. 13 that DOE intends to extend for five years Lockheed Martin’s contract to manage Sandia.

"Your performance has had an important influence on my decision concerning the future management of this lab," Abraham said.

Speaking to a standing-room-only audience of Sandians in the Steve Schiff Auditorium and flanked by Sens. Pete Domenici, R-N.M., and Jeff Bingaman, D-N.M., Rep. Heather Wilson, R-N.M., NNSA Acting Administrator Linton Brooks, and Labs Director C. Paul Robinson, Abraham praised Sandia’s performance during the nine-plus years under Lockheed Martin’s management.

The new contract — some of the details of which are still being negotiated — will take effect Oct. 1, 2003, and be in place until Sept. 30, 2008. Lockheed Martin’s current management contract began Oct. 1, 1993. The management fee has been approximately $16 million per year for Lockheed Martin.

"I take it by your response that you’re happy" with the contract decision, said Abraham as the several hundred Sandians in the audience burst into applause at his announcement.

"You have been best in class or among the best in managing your national security laboratories during a very challenging period for nuclear weapons labs," Abraham said. "The performance of your senior management, led by Paul Robinson, has been outstanding, [as has been] the technical quality of your work. [Also] your managers have made a series of very solid business decisions to support our national security mission."

(For more comments from Abraham about Sandia’s performance, see "DOE Secretary Abraham praises Labs’ achievements," on page 5.)

Abraham said he has worked closely with Brooks to assess the merits of the various options that might be pursued regarding the Sandia management contract.

"I must tell you that I am in principle a strong proponent of competition in most areas of life," Abraham said. "It weighs heavily in my thinking concerning the management of the Department of Energy complex. Competition can yield management improvements and of course it can help government achieve cost savings for the taxpayer. Where performance has been less than outstanding, it’s important to be willing to make changes. This is true of our contractors as it is of any other part of the Department of Energy and the federal government complex. But I think the reverse is also true. Where performance has been outstanding it is important that it be rewarded."

Paul Robinson was quick to praise Abraham’s decision. Extending Lockheed Martin’s contract provides continuity for Sandia and is good for the nation, he said.

"This is very welcome news," Paul said. "It is good to know that we will not face the distractions of a contract competition at this time of critical national challenge, and the possibility of disruption in the management and culture of the laboratories.

"Lockheed Martin has proved to be a conscientious and wise corporate parent as well as an outstanding corporate citizen. They have created a world-class board of directors here, and have demonstrated a strong commitment to our community."

Lockheed Martin Technology Services Executive Vice President Michael Camardo, speaking for the Corporation, said, "We are extremely proud that DOE has announced their intention to extend Lockheed Martin’s contract to manage Sandia. We are dedicated to supporting DOE’s mission and remain committed to being a good corporate neighbor to the citizens of New Mexico."

Following Abraham’s announcement, Domenici, Bingaman, and Wilson took turns at the podium to congratulate Lockheed Martin and commend the Secretary for his decision.

"In my opinion," Domenici said, "it would have been a terrible mistake [not to renew Lockheed Martin’s contract] and I don’t think my friend [Secretary Abraham] makes serious mistakes. . . there’s no laboratory that comes close in the last eight years to the ratings you all [Sandia] have earned — because of all of you and Paul and everybody else you have earned eight outstanding ratings in the last nine years and that, I must tell you, is truly outstanding . . . .

"You all know that [Lockheed Martin] has done a great job. . . . [T]hey understand that this laboratory must be involved beyond the confines of their mission . . . they understand that to help this state, and help this city, and help business men is [also] their mission."

Bingaman, speaking after Domenici, said, "Clearly, this is the right decision. [Abraham] has made many right decisions since he has been the secretary; this is clearly one of them and one that I strongly support and have supported since the issue first arose.

"I do think it is a vote of confidence for this laboratory and for Lockheed Martin and the management here and for the good work that all of you are doing to meet the needs that the country has. . . . It allows the important work you are doing to continue without interruption; it’s very good for our community here in Albuquerque, it’s very good for our state, and of course it is good for the country as well."

Wilson also offered her congratulations to Lockheed Martin and to Sandia.

"You all have done a wonderful job," she said, "and I think this decision recognizes your outstanding performance and your contribution to the nation. It also recognizes what a wonderful neighbor you have been in Albuquerque. . . . You’ve done wonderful things for this community and you’ve done a wonderful job managing one of the jewels of our national security complex. Congratulations and thank you to all of you."