Friday, June 23, 2006

We have decided not to go forward with this arrangement...

Please post, if you see fit, anonymously. Thank you.
And thank you for your blog. I will miss it.
FOR IMMEDIATE RELEASE Contact: Media Relations
June 23, 2006 202-268-2155
Statement by Azeezaly Jaffer, Vice President, Public Affairs and
Communications, U.S. Postal Service

Some recent news reports have overstated the involvement of the U.S. Postal
Service with the Department of Energy┬╣s Los Alamos National Lab. In February
2004, the Postal Service did enter into a non-binding memorandum of
understanding with the Department of Energy to explore the possibility of
the Postal Service assisting the Department of Energy in the development of
a Science Complex in exchange for a parcel of land to build a new postal
annex intended to relieve overcrowding at the existing downtown Los Alamos,
NM mail processing facility.

We have decided not to go forward with this arrangement and we have notified
the Department of Energy to that effect. Media reports about a final
contractual agreement having been reached were incorrect.

I first heard about this Post-Office-funded building last year. While it may have been held close, it was not secret.

However, I did wonder at the time why the PO was so flush with money that they could loan it to NNSA for a non-weapons facility.
It is (or was) the policy of the DOE to not capitalize buildings except for special circumstances. The preferred vehicle was to have a developer build a custom building and then lease it back as an annual operating expense - an artifact of the government's cash-based accounting system.

For example, when the EG&G Energy Measurements building was built at Eastgate Drive, the building was sold before it was built to a real estate consortium out of Massachusets. The building was purpose-built for EG&G's use, include a VTR and laser labs, and then leased back as part of their annual operating expenses to the DOE. Private money capitalized the building.

This is NOT a shady deal - it's dealing with the distortions introduced by government procurment rules. The office space in Central Park Square now occupied by the News Bulletin is probably a similar situation.

As for USPS's involvement, they have experience in this build/leaseback process and need a larger processing facility than they have now. They're landlocked downtown, and the lab has a lot of vacant land, so this could easily have been a win-win, and totally above board.

To bad the Santa Fe nincompoops got involved and screwed the deal out of ignorance - again!
Nice work, Jay. One day you're bidding on the LANL contract so you can redirect all its researchers toward non-weapons work. Now, you're turning your energies toward shutting down the only feasible mechanism for the non-weapons researchers at the lab to get access to modern facilities.

The reason there's no Congressional line item request for the Science Complex is because "small science" agencies aren't interested in paying for facilities at a defense lab like LANL. Leasing back a third-party financed facility is the only feasible route for LANL to acquire non-weapons science infrastructure.
Maybe the reason the Post Office pulled out is because the "trustworthy" DOE reneged on its promise of land for a Post Office site. Similar to how the DOE reneged on the design of a bypass road around West Jemez Road.

It will be interesting to watch the "talking heads" at LANL trying to explain to the troops how the building will still be built even though there is no line item in NNSA's budget for it.
"It will be interesting to watch the "talking heads" at LANL trying to explain to the troops how the building will still be built even though there is no line item in NNSA's budget for it." (TravisMcGee)

That one is easy. Tax project funding for it. That's the way LANL management typically solves most of their money problems. Now, all you S&T folks go out and bring in more funding to help pay for it. But seriously, why even bother to build a new facility for the S&T side of things. Future growth at LANL will likely involve production work and not cutting-edge science. Bechtel and BWXT took on the contract for a reason, and it probably doesn't involve science. It involves building expensive new production facilities and managing the work that goes on in those new factory buildings.
The talking heads speak.

The Laboratory's infrastructure is rapidly aging and there are many multi-purpose, non-directly funded facilities that are reaching the end of their useful life and which will require major upgrades to meet future mission need. These facilities are indirectly funded and during times of budget constraints are considered lower priority as long as mission-critical stockpile stewardship facilities, funded by NNSA, RTBF, or FIRP, remain unfunded. To this end, in late 2000 the lab began to look at ways to revitalize the infrastructure for multi-customer science missions and started to work with DOE/NNSA Headquarters to develop alternative financing (e.g., third-party) methods to support that infrastructure (in addition to traditional construction mechanisms such as congressional line-item or GPP funding).

Beginning in FY03/04, LANL began developing the mission need and acquisition strategy plan to finance the Los Alamos Science Complex (Science Complex). Two buildings, one classified and one unclassified, totaling 402,000 GSF, were proposed to house approximate 1,400 scientific staff members from across the Laboratory. In February 2004, the Los Alamos Site Office, on behalf of the NNSA, executed a Memorandum of Understanding with the United States Postal Service (USPS) and authorized the USPS, as a third-party, to assist in the development of the two buildings and parking to meet the needs of the DOE/NNSA. U.S. Code Title 39 defines the USPS' authority to furnish property and services to Executive agencies (e.g. DOE). Mission Need for the Science Complex was approved by the Office of Program Analysis and Evaluation (PA&E) in January 2004 and the Deputy Administrator for Defense Programs, NA-10, granted LANL approval to proceed to prepare a detailed alternative financing proposal package and operating lease in April 2004. During 2006 NNSA and USPS developed a MOU to move the project into the next phase: the final approvals (DOE, USPS, Congress, OMB) for the proposal package and then ultimately construction.

The Science Complex is being planned for a site in TA-62 that is in the area West of the Los Alamos Research Park and North of W. Jemez Road. The Complex will be designed, constructed, and maintained by a developer, chosen by the USPS, to include both classified and unclassified space. NNSA will rent the space from the 3rd party developer. A key component of the third-party plan is that the amount of the annual rent payments paid by the Laboratory must be less than or equal to the cost of the necessary upgrades, operations and maintenance on the outdated facilities that the Science Complex will replace. This will help the Laboratory provide higher quality, more suitable space at an equal or lower cost.
I want to assure you that the Science Complex is an essential component of the Laboratory leadership's future plans. Despite some serious challenges to the project's future in recent days, Laboratory leadership is committed to finding a prudent path forward that will help create the kind of safe, functional workspaces that the employees of this Laboratory need and deserve. At this point, we have several options for looking at pushing the Science Complex forward and in the next few weeks, we will be more definitive on the plans.

Finally, I would like to acknowledge that since its inception, the 3rd Party efforts have been lead by Christopher Webster. The road to 3rd Party financing at Los Alamos is very complex, and Mr. Webster has been instrumental in getting the Lab of future close to fruition.



Terry C. Wallace, Jr.

Principal Associate Director, Science, Technology and Engineering (Acting)
Los Alamos National Laboratory

Ph: 505-667-8597 (main office)
Fx: 505-667-5450
Well, the building I'm in now doesn't look like much, and doesn't make me feel all proud to show up every morning, but it does have windows that open which from what I've heard is not on the table for the new buildings. As it is, the fact that I have no thermostat for my office is a negative, but I least I can have some control over my environment.

Frankly I'm not disappointed by the setback for the new structures. A flashier environment might be nice, but not if it's not comfortable (not to mention the likelihood of
"sick building syndrome"; is that too pessimistic? Oops, er, Morale is soaring...)

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