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Upper Management

UT may have the edge in its bid to manage ORNL, but is it ready?

by Mike Gibson

The kegs are tapped, the bids are out, and hazing is now in full swing over at the Delta House and Kappa Alpha and Sig Ep and any number of other venerable frat-rat hovels on the University of Tennessee campus. But while its peach-faced freshman students endure shaving-cream showers and other beery trials, the school itself is still going through a Rush of sorts, bidding for membership in a highly regarded fraternity that includes such distinguished research institutions as the University of Chicago and California-Berkeley.

On Aug. 16, the university and its ally, Battelle Institute, delivered a 240-minute oral dissertation on why the partnership would be best suited to take over the management contract of the Department of Energy's Oak Ridge National Laboratory, currently operated by Lockheed Martin Energy Systems, Inc. Lockheed Martin, along with new comrade-at-arms Universities Research Association, made its pitch to continue as the ORNL contractor later that same week.

Winning the bid would present UT-Battelle with both the unique privileges and abundant responsibilities attendant to operating ORNL, a facility with an annual budget of some $500 million, employing nearly 4,000 personnel across a broad spectrum of cutting-edge scientific programs. Only a tiny handful of schools, including the aforementioned Chicago and Cal-Berkeley, can lay claim to national laboratory oversight.

While the six-member DOE evaluation board charged with evaluating the proposals isn't scheduled to render a decision until early December, university officials are already trumpeting the significance of the school's possible ascendance. "This would represent the most important single event in the history of the University of Tennessee," UT senior vice-president Homer Fisher announces unabashedly, "both in terms of the opportunities and the challenges it presents."

"Winning would instantly enhance our visibility and our reputation," says Billy Stair, executive assistant to UT president J. Wade Gilley. "It would provide us with an invaluable tool in recruiting outstanding faculty and students."

But is the university truly prepared to assume the vast responsibility of overseeing this multi-faceted research facility? At one time, the answer was almost certainly "no." In 1984, when Lockheed Martin—nee Martin Marietta—first assumed the reigns at all three Oak Ridge DOE facilities (ORNL, the weapons manufacturing facility Y-12, and the now-defunct K-25), university officials considered making a bid, but apparently found the prospect of operating the laboratory too daunting at that juncture. "Realistically, it was over their head at the time," observes one former DOE administrator, speaking anonymously.

What UT did instead was inaugurate a series of ongoing lab-university joint ventures, programs that availed students and educators alike of the laboratory's far-reaching scientific endeavors. Today, the institutions share some $20 million in joint research, as well as dozens of "split-timing" pupils and profs.

Fast forward to the spring of '98, when rumors abounded that Lockheed Martin's ORNL contract would not be renewed. At Lockheed's request, then-UT president Joe Johnson wrote a letter of recommendation on behalf of the corporation to the secretary of DOE.

Why the Washington bureau chose to deny Lockheed's renewal is still a matter of speculation. A partial explanation is that former Clinton administration Secretary of Energy Hazel O'Leary announced in the early '90s that, as a matter of policy, all DOE contracts should be re-competed at the point of their expiration. Lockheed Martin may have seen its chances for renewal further damaged in the ensuing years, however, when its effort to clean up a DOE facility in Idaho Falls, Idaho, turned into an over-budget debacle. Lawsuits concerning the aborted contract are still pending.

"Initially, there was nothing particularly adverse about Lockheed, other than O'Leary's declaration that re-competing should be a matter of course," says the same ex-DOE official. "Since then, Lockheed has suffered some warts and black eyes. In Idaho, they got in way too deep."

Despite Johnson's efforts on behalf of Lockheed, UT officials recognized DOE's "evident dissatisfaction" with the status quo, and the very real possibility that the laboratory contract would be put up for grabs. In August '98, a committee of a dozen or so senior administrators and science faculty members began meeting to discuss how the college might best go about bidding for ORNL.

Preparations were exhaustive; one administrator claims the committee held more than 50 sessions to discuss the impending bid. This time, observers say, the school drew on the experience of nearly 15 years of collaboration with DOE, its leadership having gained a better understanding of the ramifications of taking the reigns at ORNL.

"We knew UT did not have the experience and wherewithal to handle the entire spectrum of industrial management issues," says Stair, speaking carefully since details of the UT plan are still mostly proprietary. "So we interviewed dozens of potential corporate partners. Virtually all of the corporate players wanted to team with UT, which I felt was a strong statement on their confidence in our scientific reputation."

The university settled on Battelle, which currently operates the Pacific Northwest Laboratory in Richland, Wash., which Stair claims is one of the highest-rated facilities in the DOE system. Pacific lab director Dr. Bill Madia is UT-Battelle's choice to replace departing ORNL director Al Trivelpiece.

In the meantime, support for the UT-Battelle initiative solidified on the home front, as Gov. Don Sundquist and speakers for both houses of the state legislature engineered a pledge to put up $18 million in state funds for three new laboratory facilities (for joint studies of computational and biological science as well as a multi-university think tank), a pledge wholly contingent on UT-Battelle winning the contract.

In the face of an evidently well-conceived battle plan, Lockheed appeared to waver on a possible re-bid. Last December, UT-Battelle officially announced plans to bid for ORNL. In February, Lockheed Martin officials said the company would not follow suit.

Barely a month later, Lockheed perplexingly reversed field. "To say the least, everyone was...surprised when Lockheed Martin said they were reentering the bidding," Stair says, again choosing his words carefully.

This time, Lockheed offered its services as the chief subcontractor to proposed prime contractor Universities Research Association (URA). A Washington-based consortium of 89 leading research universities founded in 1965 at the behest of President Lyndon Johnson, URA's inaugural venture (and still its flagship enterprise) was the Fermi National Accelerator Lab.

According to president Fred Bernthal, URA had already chosen to bid for ORNL, enamored of the lab's pending billion dollar spallation neutron source project, and the vacillating Lockheed was simply the best choice for corporate coupling based on their 15 years of ORNL oversight.

"The question was with whom, if anyone, would we best partner with, and Lockheed was the best choice," Bernthal explains. "I think their experience, combined with our experience with accelerator-based facilities makes us collectively the better choice for ORNL. Neutron-based science is something we're already pretty good at."

Some believe, however, that the 11th-hour (DOE had to extend deadlines to allow for the Lockheed-URA bid) move had more to do with machinations within the Department of Energy than anything else, a muddle of bureaucratic jockeying that saw Lockheed-Martin at once encouraged to renew the quest while retaining a measure of DOE disfavor (as evidenced by its new role as sub- rather than primary contractor.)

"For a long time, the UT team was alone in the bidding," says another former DOE official. "There was some concern that a contract with no competition wouldn't yield the best deal. I wouldn't be surprised to learn that (the Lockheed reentry) was pushed by someone in Washington."

On Aug. 1, both teams presented their written proposals for taking the helm at ORNL, documents that took up as much space as several city phone directories (the UT proposal alone filled seven large boxes). Save for the disclosure of a few key administrative positions (URA announced Dr. Michael Knotek, a physicist with 25 years of experience as a DOE senior manager and researcher, as its director designate), most of the details of those proposals have yet to be revealed.

Should UT-Battelle claim victory, the transition to new laboratory leadership would begin on Feb. 1 and last until the beginning of April. According to Dr. Lee Riedinger, physics department chief and the school's choice for deputy director of science and technology, university officials foresee little in the way of major administrative and operational overhauls; most transitional efforts will be focused on broadening the scope of school/laboratory relationships.

"I don't see a lot of big changes," says Riedinger. "It's a multi-purpose lab with programs in several areas, mostly determined by DOE and the talents of the people there. Our major concern would be to stress the involvement of faculty and students, to increase the university's interaction."

That interaction would include the Joint Institute for Biological Sciences, a planned new free-standing ORNL facility for which the state has pledged $8 million (contingent on a UT victory), as well as the state-funded Joint Institute for Computational Sciences and Oak Ridge Center for Advanced Studies think tank (dowered at $6 million and $4 million respectively, again contingent on a UT-Battelle contract.)

Many believe that these new partnerships will indeed come to fruition. "On the streets, so to speak, the bias seems to be toward UT," says Joe Lenhard, a former DOE manager currently involved in the effort to commercially reintegrate the department's old K-25 facility in Oak Ridge. Lenhard says many Oak Ridgers have been taken aback by the university's newfound grasp of DOE policies and politics; word of mouth has it that the UT-Battelle orals were well-received.

"I think URA and the Fermi lab are single-purpose operations, very different from a multi-purpose laboratory," Lenhard says. "ORNL presents issues the folks in Fermi never dreamed of. With UT, I've been literally awed by the degree to which they've figured this thing out. They seem to understand DOE's priorities, the issues in Oak Ridge. They have been a very pleasant surprise."