LOS ALAMOS, N.M. (AP) - Despite a string of security lapses and allegations of fraud and mismanagement, the University of California has been awarded the contract to continue managing the Los Alamos laboratory that built the atomic bomb, the Energy Department said Wednesday.

Because of the scandals at Los Alamos, the government contract to run the nation's pre-eminent nuclear lab had been put out to bid this year for the first time in the lab's 63-year history.

Energy Secretary Samuel Bodman announced that a partnership of UC and the engineering giant Bechtel Corp. had prevailed over a rival team made up of the University of Texas and the defense contractor Lockheed Martin.

The contract is for up to $512 million over seven years, with a provision to extend it to 20 years. It begins on June 1.

"This is a new contract with a new team, marking a new approach to the management of Los Alamos. It is not a continuation of the previous contract," Bodman said at a news conference in Washington.

UC President Robert C. Dynes said in a statement the contract decision signaled the beginning of a new era and expressed his confidence that Los Alamos workers will "continue to chart new frontiers and help solve some of the greatest scientific and technological problems of our time. "

"All of us at the University of California look forward to being a part of the great science yet to come at Los Alamos," Dynes said.

Bodman listed several goals of the new contract, among them to seek out best practices in government, industry and academia "to make laboratory performance better and cost less, thereby freeing up resources for research and development."

"It is a good decision for the American taxpayers. This new contract will put in place concrete measures of accountability, ensuring that the tax dollars spent at Los Alamos are well spent," he said.

But Rep. Joe Barton, R-Texas, a frequent critic of the lab who chairs the House Energy and Commerce Committee, wasn't convinced. He derided UC's "culture of mismanagement" and called for the DOE to provide by Jan. 6 more documents detailing how the selection was made.

"I have minimal hope and no belief that UC can reverse its record of consistent failure," he said.

DOE officials emphasized that accountability on security issues was a major part of the UC bid, and that the federal government wouldn't diminish its "robust oversight" of the lab's nuclear operations, security and high-hazard operations.

The new management team - formally dubbed Los Alamos National Security LLC - also includes several New Mexico universities. Its new director is Michael Anastasio, who has served as head of Lawrence Livermore National Laboratory since 2002.

All current Los Alamos lab employees, except top managers, are guaranteed jobs at the same pay and with mostly equivalent benefits, Bodman said.

The university has run the lab since it was created in the New Mexico desert in 1943 as part of the top-secret Manhattan Project to build the A-bomb. But because of bitter complaints in Congress about security lapses and poor management, the contract was put up for competitive bidding.

This time, the university teamed up with Bechtel to give itself more managerial expertise.

The Los Alamos National Laboratory, with about 8,000 University of California employees and 3,000 contract workers, is one of the nation's three chief installations responsible for maintaining the U.S. nuclear arsenal and manufacturing weapons components.

The lab also conducts research on a host of topics of national interest, including miniaturized technology, genetics, computing, the environment and health.

In 1999, in a case that proved a major embarrassment for the government and the lab, Los Alamos scientist Wen Ho Lee was jailed amid an investigation into possible Chinese espionage. The case proved to be weak, and Lee pleaded guilty to mishandling classified information and was released with an apology from a federal judge.

The lab was rocked by other security lapses, as well as credit card abuses, theft of equipment and other instances of mismanagement.

Former lab investigator Glenn Walp, who was fired in 2002 after alleging mismanagement, fraud and cover-up at the lab, said he was disappointed that UC-Bechtel won.

"It's a blue Christmas for America," he said. Walp said UC deserves praise for the work it has done in the past, "but in the last 10 years, they're just incapable of running the lab that's so important to American security."

Sen. Pete Domenici, R-N.M., said the new team would mark a "new era" at the lab.

"I particularly hope the new management team will clarify lines of authority and minimize bureaucracies so our scientists can focus on science," he said.

The governors of New Mexico and California also applauded the decision. New Mexico Gov. Bill Richardson said it "will allow the laboratory's great work to continue, under strong leadership, well into the future" while California Gov. Arnold Schwarzenegger called the decision "terrific news for UC, for our state, and for research science in this country."

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AP reporter Jennifer Talhelm in Washington contributed to this report.

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