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DOE AND UNIVERSITY OF CALIFORNIA SIGN CONTRACTS TO MANAGE LABORATORIES

 OAKLAND, Calif., Nov. 20 ~PRNewswire~ -- Secretary of Energy James D. Watkins announced today that negotiations have been completed with the University of California on the terms of new 5-year contracts for management and operation of the Lawrence Livermore National Laboratory and the Lawrence Berkeley Laboratory in California and the Los Alamos National Laboratory in New Mexico.
 Admiral Watkins had authorized beginning negotiation of these new contracts in July of 1991, after extensive consultations between senior department and university officials indicated that the university's management was agreeable to negotiating significant revisions to the long-standing terms of these contracts. These revisions were sought by the department in order to enhance the university's management accountability for the operation of the three laboratories. The university has managed all three laboratories from their inception, beginning with the Berkeley and the Los Alamos Laboratories nearly 50 years ago.
 Unlike previous extensions of these contracts, the negotiations that have now been concluded involved a complete, top-to-bottom reappraisal and approval of all the contract provisions. All deviations from standard contract clauses made necessary by the mission of the laboratories and the status of the university as a state of California institution of higher education required approval by senior department officials.
 "We have had intensive and productive negotiations with the university," Watkins said, "and I feel these new contracts will enable these laboratories to function in a way that is top notch not only in science but in management, too. I know University President Jack Peltason joins me in looking forward to the successful implementation of these contracts, which place a rigorous emphasis on environment, safety and health, and sound business management, as well as continuing the university's tradition of performing world-class scientific and technological research."
 Some of the new features of these contracts are:
 -- A new university central oversight capability to oversee the
 functioning of all three laboratories.
 -- Abandonment of "mutuality" of decision terms in the contract that
 had produced management impasses.
 -- Explicit specification of departmental orders regarding safety of
 operations that are applicable without further negotiations to
 the university's management of the laboratories.
 -- Performance-based management incentives for senior laboratory
 officials.
 -- Inclusion of a standard audit clause.
 -- Inclusion of a standard disputes clause.
 -- Addition of a new mechanism for prompt, informal resolution of
 disputes to avoid impasses.
 -- Explicit recognition of new categories of unallowable costs,
 including costs incurred contrary to a direction of the
 contracting officer and costs made unallowable by the Major Fraud
 Act of 1988.
 From a business management standpoint, the new contracts will result in improved procurement and property management, internal audits, safeguards and security, financial systems and project management.
 Lawrence Livermore and Los Alamos have played a major role in national security research and development, including development and testing of nuclear weapons. Their annual budgets amount to approximately $1 billion each. "These two laboratories," Watkins said, "have demonstrated extraordinary capabilities during their long histories, as they have designed and developed nuclear weapons that, as much as any element of the national security enterprise, have assured that the national had a credible nuclear deterrent -- one of the key elements in bringing the Cold War to a successful and peaceful conclusion.
 "These national laboratories are uniquely equipped to play a continuing role in national security programs," Watkins said, "and the fundamental research performed for defense applications will also contribute significantly to the transfer of technology for civilian applications crucial to American economic competitiveness and an expanding job base."
 Lawrence Berkeley is the oldest DOE laboratory and carries out leading multidisciplinary research in several scientific fields, ranging from astrophysics and materials sciences to the human genome and energy conservation. Its annual budget amounts to over $200 million. The laboratory has a major role in educating and training future generations of scientists and engineers and transferring technology to the private sector. For example, energy-efficient window research done at the laboratory since the mid-1970s and commercialized in 1982 has contributed greatly to U.S. energy conservation. The commercial windows from that research now account for more than 25 percent of residential window sales and have saved more than $300 million in avoided energy costs.
 "Under the university's management, our national laboratories will continue to serve as 'national treasures' and are critical to the nation's future in science, technology and national defense," Watkins said.
 -0- 11~20~92
 ~CONTACT: John Belluardo, 510-273-6398, or Anna Bachicha, 505-845-5653, or Sam Grizzle, 202-586-5806, all of the U.S. Department of Energy~


CO: U.S. Department of Energy; University of California ST: California IN: SU: CON

ML-SG -- SF005 -- 3548 11~20~92 16:48 EST
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Date:Nov 20, 1992
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