WALNUT CREEK, Calif. - The University of California triumphed over rivals Lockheed Martin and the University of Texas by winning a new contract to manage the troubled Los Alamos National Laboratory, which UC has run uncontested for more than six decades.

Secretary of Energy Samuel Bodman announced Wednesday that the seven-year contract would go to a team led by UC and Bechtel National known as Los Alamos National Security, LLC.

"It gives me great pleasure today to kick off the next chapter in the storied history of the Los Alamos National Laboratory," Bodman said. "It is a good decision for our national security."

The UC-Bechtel team, which also includes BWX Technologies and Washington Group International, will take over the New Mexico nuclear weapons lab in July after a six-month transition period. Its new director will be Michael Anastasio, current director of Lawrence Livermore Laboratory.

"This is a big win for the University of California and it recognizes the academic prowess of the nation's premier public research institution," said Sen. Dianne Feinstein, R-Calif.

UC's contracts to manage the Lawrence Berkeley and Lawrence Livermore laboratories were also put up for bid. In April, UC won a new contract for Berkeley lab; Livermore's contract is set to expire in September 2007.

"As we move toward the competition for the Livermore Laboratory, I look forward to a vigorous competition, one that allows the University of California to highlight the tremendous scientific research and technological advances that have come about through our leadership and your efforts," UC President Bob Dynes told Livermore Lab employees in a letter Wednesday. Dynes also said a national search for a new director to replace Anastasio in Livermore would begin soon.

UC leaders have not yet formally decided whether to compete the 2007 Livermore Lab operating contract, but the Regents have authorized preparing for the competition, UC spokesman Chris Harrington said.

The new Los Alamos contract, worth as much as $512 million over the initial seven-year period, can potentially be extended for an additional 13 years pending performance.

"If the new team lives up to our expectations, as I fully expect, we have set Los Alamos on a course for continued excellence for a generation," Bodman said.

UC's only real competition for the contract came from Lockheed Martin, the giant defense corporation that currently manages Sandia National Laboratories. Lockheed teamed up with UT for the bid along with CH2M Hill and Fluor Corp. and a network of 19 other colleges and universities.

The yearlong bidding process involved detailed proposals that included naming key management and making oral presentations to the evaluation board of the National Nuclear Security Administration, a semi-autonomous branch of the DOE that oversees the national nuclear weapons complex. The evaluation board presented its report to the selecting official, NNSA Assistant Deputy Administrator for Defense Programs Tom D'Agostino, on Monday. D'Agostino said he did not make his choice until Wednesday morning, shortly before the announcement. That was three weeks after the NNSA's self- imposed Dec. 1 deadline.

Bodman said D'Agostino had stressed to him that "both proposals were very strong and of exceptionally high caliber."

But UC's selection is somewhat surprising in that the DOE decided in 2003 to put the Los Alamos contract up for bid because of a slew of accounting blunders, security breaches and safety lapses that occurred on UC's watch.

The problems continued and even escalated, reaching a climax in July 2004 when the reported loss of two classified computer disks led to a shutdown of the lab and eventually a DOE-wide stand-down of work involving classified computer disks and other removable media. A wall-to-wall inventory at the lab failed to turn up the disks, and later two separate investigations concluded that the disks never existed.

Despite the history of problems, D'Agostino said UC's new team distinguished itself with a unique approach to bringing the entire nuclear weapons complex together "in a tightly structured way to drive efficiencies."

D'Agostino also said "key personnel" was a factor in his decision. In addition to Anastasio as lab director, Bechtel's John Mitchell will become deputy director.

Bodman emphasized that the lab will be run by a new team with a new approach - and will not be merely a continuation of the previous contract. "There has been quite a bit of turmoil and uncertainty over the last few years," Bodman said, addressing the Los Alamos employees that were listening Wednesday from the lab. "Today's announcement is designed to relegate that tumult to the past, and to usher in a new era of invaluable, cutting-edge science at Los Alamos."

Bechtel's presence may take some of the political heat off the lab, said Brad Holian, a retired Los Alamos physicist who trains younger scientists at the lab. "I think there's going to be a period of quiet at Los Alamos that will allow us to do good science," he said.

But some employees are fed up with UC and reacted angrily to the decision.

"I'm thoroughly disgusted by it," said experimentalist John Horne, a 23-year Los Alamos employee who said he plans to leave the lab. "It just goes to show it doesn't matter how unethical you are as long as you pay the right people."

Danielle Brian of the Project on Government Oversight was also disappointed. "What does it take for UC to suffer the consequences of screwing up?" she said. "It is hard to see how UC could possibly have been given a vote of confidence. We expect a continuation of the era of chaos at Los Alamos."

UC's supporters are more optimistic. Rep. Ellen Tauscher, D-Calif., commended the DOE for recognizing UC's long record of successful management of DOE labs.

Said Gov. Arnold Schwarzenegger: "Today is another great day for California."

---

(Knight Ridder Newspapers correspondent Matt Krupnick contributed to this report.)

---

LOS ALAMOS TIMELINE

1943 - Los Alamos Lab, at first known as "Project Y," opens, its mission to build an atomic bomb. That was known as the "Manhattan Project." University of California operates it from the start.

1999 - Lab security concerns come to the fore when scientist Wen Ho Lee is accused of 59 counts of mishandling classified information, downloading nuclear secrets onto tapes and removing them from the lab. He served 10 months in jail, and eventually pleaded guilty to a single count. He gets an apology from the judge over having to serve jail time.

2000 - Two computer hard drives containing classified data are reported missing. Six senior scientists were suspended over the ensuing flap; disks were later found behind a lab copying machine.

January 2003 - Lab Director John Browne and Deputy Director Joseph Salgado resign following a 2002 internal report showing the lab could not account for an estimated $2.7 million in missing computers and other equipment, much of it presumed stolen. The FBI and the Department of Energy Inspector General investigate this, and allegations of widespread credit card fraud among lab employees.

May 2003 - In a strong rebuke of UC over security and business concerns, Department of Energy officials decide to put the Los Alamos contract, held by UC for six decades, up for competitive bids, along with the contracts for Lawrence Berkeley and Lawrence Livermore national labs.

July 2004 - Two classified computer disks are reported missing at Los Alamos, leading to a shutdown of the lab and a DOE-wide stand-down of activities involving classified computer disks and other removable media. Investigations later concluded the disks never existed.

April 2005 - UC retains operation of Lawrence Berkeley Lab, awarded a five-year contract by the Department of Energy. DOE would not say if there were any other bidders.

Dec. 21, 2005 - Partnership headed by UC and Bechtel awarded seven-year contract to operate Los Alamos, edging out a partnership of the University of Texas and Lockheed Martin.

2007 - Contract will be awarded for operation of Lawrence Livermore Lab, a UC operation for more than 50 years.

-Complied by Sam Richards and Betsy Mason

---

(c) 2005, Contra Costa Times (Walnut Creek, Calif.).

Visit the Contra Costa Times on the Web at http://www.contracostatimes.com.

Distributed by Knight Ridder/Tribune Information Services.