Oh, The Politics of It All
Throughout this book I have alluded to reasons or motivations that certain individuals and organizations might have for doing things the way they do them. Although I used to think that money did not play a large role in how people in government and in scientific and technical fields made technical decisions, I now think that intense personal and corporate financial motives drive the decisions made by a great many governmental and business people, especially those high up. In this chapter, I point out how this works in the case of some of the corporate and individual actors mentioned previously in this book.
I noted earlier that the way DOE handles whistleblower actions would an interesting subject for a thesis for a graduate student, say in the area of public policy. But all of DOE’s and its contractors’ operations would be a fertile field of study for such a student (or for his professor): DOE’s operations and decision making include virtually all areas of governmental scope, from security and defense issues to technological and engineering issues to financial issues to personnel issues to Federal-State-local interface issues. Thus a study of how all these interactions and issue resolutions take place could be of encyclopedic breadth. Still, I think the most interesting topic would be the politics of the many ways that DOE disperses money and influences the dispersal of money by the contractors and of the many ways that the contractors find to distribute the money in ways advantageous to their corporate interests.
Another Look at UT-Battelle’s Winning the ORNL Contract; the Privately Funded Building Program
Dr. Bill Madia was head of PNNL from August 1994 to near the end of 1999. The Hanford area newspaper The Tri-City Herald reported (19 January 1999) that Madia was leaving PNNL to become a Battelle (Columbus) executive vice president focussing on Battelle’s growing DOE business. It was clear that what he would actually be working on was the bid for the ORNL contract. The Herald said that at PNNL Madia had had to trim 900 jobs from a work force of about 4600 in order to make PNNL, in Madia’s words, “more cost-effective, more focused”. (He was also quoted as declaring that “Focus is a core belief of mine. Unless you focus, you can’t be excellent”.) The Herald said (apparently paraphrasing Madia) that PNNL had bounced back from the cuts and had had three years of steady growth, serving “as a budgeting model for other labs”; Madia expected the now 3500-person PNNL work force to increase by as many as 150 people that year. The new model was said to be based on Madia’s noticing that about 90% of PNNL projects were paid for by DOE (i.e., it was work done for DOE) and that much of its budget relied on cleanup work at Hanford and elsewhere. Viewing this as undue reliance by a DOE national laboratory on DOE funding, Madia diversified PNNL’s “clients” to the point that in early 1999 only 70% of PNNL’s “business” came from DOE; the rest was from “new customers” in the automotive, energy, chemical, and electronics areas and from other government agencies, such as the Department of Defense.
Referring to Battelle’s intent to bid on the ORNL contract, the Tri-City Herald (21 January 1999) quoted Madia as saying that “Oak Ridge is an outstanding science laboratory and we [Battelle] would have access to new technologies and source of talent. This would augment our reputation for scientific excellence”. He added that Battelle’s commercial markets would benefit from Oak Ridge’s strengths in materials, environment, computer science, and life sciences and that ORNL’s location was also attractive to Battelle because Battelle had emerging markets in the medical products and energy fields. The Herald said that ORNL, with 4500 employees and a $500 million budget, was about the same size as PNNL.
Some 30 groups participated in the pre-bid tour of ORNL; they were not 30 potential bidders, since some were potentially partnering with others. But in the end, as I noted earlier, there were only two bidders: Lockheed Martin and partners versus UT-Battelle and partners. UT-B’s bid partners were Oak Ridge Associated Universities (ORAU) and six of its member universities, while its proposed subcontractors included BWX Technologies (which I believe is the principal partner in BWXT, which now holds the Y-12 contract); Duke Engineering and Services; and several other companies. As I noted earlier, DOE said that UT-B had won the contract because Lockheed Martin “took exception to our terms and conditions in certain areas of liabilities and fines and penalties” while UT-B did not (The Oak Ridger, 21 October 1999). There were, however, other considerations. Since Lockheed Martin (first as Martin Marietta) had run ORNL for 15 years, they presumably had good relations with the state and local officials. But prior to DOE’s awarding the ORNL contract to UT-B, the State of Tennessee — in a “bipartisan letter” signed by Governor Don Sundquist, Lt. Governor John Wilder, and House Speaker Jimmy Naifeh — sweetened the UT-B proposal pot for DOE by “pledging $18 million to build user facilities at ORNL” if UT-B was selected (The Oak Ridger, 20 October 1999). This kind of heavy weighing in on one side of a federal bid process, not just with urging but with cash, might seem inappropriate in some states, but nobody questioned it in Tennessee. Even Lockheed Martin, which after all “still had to live here”, in that they still had the Y-12 contract, seemed to have sucked it up and refrained from protesting to DOE, at least publicly. Despite Lockheed Martin’s 15-year presence in the area, East Tennessee US representative Zach Wamp stated (The Oak Ridger, 20 October 1999) that UT-B won because it was “the home team” (because of the University of Tennessee connection); he also quoted DOE Secretary Bill Richardson as saying that “strong grass-roots support” for UT-B helped tip the scales in UT-B’s favor. Wamp also opined that the choice of UT-B gave ORNL the opportunity to become “a regional asset, not DOE’s [asset] per se”.
One difference between Battelle and Lockheed Martin was that Battelle was a nonprofit entity, while Lockheed Martin was a for-profit entity. This meant that although Battelle could be penalized in other ways (e.g., by cutting their annual performance fee) for P-AAA violations, it was not supposed to be subject to the civil fines that for-profit entities were subject to. As the Tri-City Herald reported (15 July 1999), the General Accounting Office had criticized this, stating that nonprofits should lose their exemption from civil fines where nuclear safety problems were involved. The original thought (by Congress) was that nonprofits were universities or foundations that did not have extensive financial resources. However, the GAO’s position was that if the nonprofits were earning performance awards, they could afford to pay fines. A PNNL spokesman told the Herald that Battelle believed that nonprofit corporations such as Battelle could not risk substantial fines that might have to be paid for out of the nonprofit’s endowments and other assets. He opined that lower performance awards, stop-work orders, termination of contracts, and a damaged reputation were punishment enough.
UT-B apparently thought that under the ORNL contract, they would not still be subject to safety fines, despite the promulgation of the various P-AAA-associated rules, because both the parent company, Battelle Memorial Institute, and the main partner entity, the University of Tennessee (UT), were nonprofit entities. However, their subsidiary UT-B was set up as a limited liability company and thus fell outside the nonprofit realm. Although UT-B was apparently taken by surprise by DOE’s saying that it was subject to fines — and although they were still telling the press over a year later that they were a nonprofit company (The Oak Ridger, 17 April 2001) — they explained to the worried Oak Ridge city fathers (as if UT-B had known it all along) that they would still be paying the business and sales taxes that Lockheed Martin had paid (The Oak Ridger, 24 January 2000). When a law was introduced in Congress to remove the nonprofit exemption from fines and penalties associated with nuclear safety violations (The Oak Ridger, 2 March 2001), UT-B stated that UT-B and ORNL had been and would continue to be subject to fines. But the apparent initial belief that they would not be subject to fines and penalties may have accounted for their failure (which Sims told me about) to do a “due diligence” inspection of ORNL before taking it over and thus UT-B’s declaring itself after the takeover to be “surprised” by the rundown condition of ORNL.
After Battelle (as UT-B) had won the ORNL contract, the Tri-City Herald (23 October 1999) quoted Madia as saying that adding a new lab benefitted Battelle promotional opportunities: if there was no job open at Hanford for a promising employee, they could promote him by offering him a job at Brookhaven or ORNL. (Note that at this point Madia apparently was still at PNNL, supposedly running it, although the announcement of his departure had been made the previous January and although obviously much of his time must have been spent in preparing the ORNL bid, not doing PNNL work. This may have been due, however, to DOE Secretary Richardson’s rejecting the proposed appointment of a new PNNL director on the grounds that not enough women and minority candidates had been considered. So much for DOE’s not interfering in management appointment decisions by contractors.) DOE announced that although Battelle’s 1998 management rating for running PNNL had fallen just shy of the number needed for a top rating, DOE had awarded them the top rating anyway because of “Battelle’s strong efforts in key areas” (Tri-City Herald, 25 November 1999). Madia told the Herald that they expected to score a top rating again in 1999 based in part on PNNL’s self-assessment. This was surprising in view of the recent flap (Tri-City Herald, 30 July 1999) in which six employees at PNNL’s Marine Sciences Laboratory had been found to be estimating data rather than measuring it. Eventually two were fired and four others disciplined. A PNNL official said that the data were estimated only for peripheral parameters, not the main one(s) under study; he asserted that the offense was only a technical foul, stating that “Science wasn’t the victim — protocol was”. Battelle was not fined for this (Tri-City Herald, 15 July 1999).
Madia also told the Herald (23 October 1999) that now that UT-B had won the ORNL contract, PNNL and ORNL need not compete with each other for research contracts any more but would form partnerships to win contracts and thus be in a better position to win them. He also pointed out that six southern universities (apparently members of Oak Ridge Associated Universities) were investing $18 million in ORNL, mostly in “faculty salaries and research projects brought into the lab”, according to the Herald. As I noted above, part of the UT-B contract strategy had been to line up support by the State of Tennessee, because the University of Tennessee is a state institution; the Herald reported (as did The Oak Ridger and Knoxville News-Sentinel in Tennessee) that the State would invest $18 million for computational research, biological research, and a joint center for studies. However, the Herald said that the State “offered” to do this after UT-B won the contract and quoted Madia as pointing out that the State of Washington did not offer similar support for PNNL. While PNNL had suffered a brain drain (with some top researchers leaving over the last few years), Madia claimed that PNNL had the depth of talent to overcome any talent deficit and that as a result of the personnel losses “as many as 70 people” got advancements that they might otherwise not have, including women and minorities.
As reported by The Oak Ridger (22 December 1999) based on an interview with Madia, DOE allowed UT-B managers to take up residence at ORNL in mid-January 2000 in order to give them time to transition into their roles. (I believe they displaced some ORNL people from their offices, although the building UT-B got was not a desirable one.) Madia said that the “basic thrust of scientific programs” at ORNL would remain the same, but UT-B planned to make changes to save money, boost morale, and give the “50-year-old campus” a facelift. (ORNL was seldom called a campus before UT-B arrived, but after that, campus was the standard term.) Madia stated that in the UT-B bid proposal, one “theme” was that they would revitalize ORNL’s physical plant. This would include completion of the Spallation Neutron Source facility, which was already far along in design and the several buildings that the State of Tennessee had promised to fund if UT-B won the contract. Madia said that UT-B proposed to replace some aging buildings by means of partnerships with private companies: the companies would pay to erect the buildings, on DOE land, and ORNL would lease these buildings from the companies. He asserted that this type of partnership would involve long-term liability for UT-B, so it would have to be approved by DOE. (The Oak Ridger article did not say anything about the nature of the contracts under which the buildings were erected and leased, but by this statement presumably these contracts would be between UT-B and the other companies, not between DOE and the companies.) Madia said that at PNNL they had four new buildings that “were all built by private funds and were made allowable costs in our contract”.
Another cornerstone of UT-B’s proposal, according to this Oak Ridger article, was taking scientific research to practical application. Madia said that UT-B had promised to invest in local economic development and smooth the transfer of technology in the lab to businesses outside. UT-B would be training ORNL researchers in the legalities of taking their work to the marketplace, “to give them all the tools and resources to do technology transfer”. (Note that this suggests that although ORNL had been already been doing technology transfer for years, it would now be done in some new way.) Already, reported the Oak Ridger, UT-B had formed a partnership with a private group called Technology 2020 to create a “regional center for entrepreneurial growth” — to be a “one-stop shopping” center for small businesses desiring to work with ORNL researchers. UT-B had also already signed agreements with the East Tennessee Economic Council, the Community Reuse Organization of East Tennessee (CROET), and the (State of) Tennessee Department of Economic and Community Development to cooperate in regional economic development. The Oak Ridger reporter had apparently talked with various ORNL researchers, because she remarked at this point in the article that all the emphasis on the practical applications had some of them worried that basic research might be compromised; she quoted a physicist as saying that “a nice CRADA (cooperative research and development agreement) is considered somewhat better than publication and review letters”. She put this question to Madia, who responded that he too had heard these concerns. His response was that with a big institution like ORNL, many different things would be done: some staffers would do nothing but basic research, some nothing but engineering studies.
An early UT-B presentation stated that “Simultaneous excellence [is] not only achievable, but essential for success”. The three areas in which excellence was to be achieved were Laboratory Operations/ES&H, Science & Technology, and Community Service. The aim in the latter area was ORNL’s being “a trusted and valued community/regional asset”. A goal of Laboratory Ops/ES&H was to “reduce overhead/indirect costs by 20% over three years” and another was to “build a new research campus for ORNL”; associated bullets were “SNS [Spallation Neutron Source]”, “State funding”, “3rd party financing”, and “facilities revitalization”. Madia reiterated these points in an address to the Rotary Club of Oak Ridge, as reported by The Oak Ridger (8 February 2000). The pledge by the State of Tennessee was confirmed to be the reported $18 million. But to The Oak Ridger, Madia only hinted that the “third parties” might include the six “partner” universities mentioned by the Tri-City Herald. He stated that a priority would be cost-cutting, especially getting rid of what he termed “self-inflicted management”. The reporter stated that “excessive layers of DOE oversight” (the reporter’s term) had long been blamed by ORNL people for the high costs of operation, especially new construction, but Madia and his new management team professed to have deduced that internal procedures and policies also drove up overhead and they planned to get rid of this “bureaucratic low-value work”. Madia listed four areas of “simultaneous excellence” to strive for in research: neutron science, biotechnology, computational sciences, and energy. He also sounded a favorite theme of UT-B: not only were new buildings needed, but also “a new generation” of the scientific staff, for which UT-B would be looking to its six partner universities as primary sources.
In an interview in the ORNL newsletter (April 2000), Madia stated that the State of Tennessee was contributing $8 million to the planned Joint Institute for Neutron Studies, plus another $26 million for another three buildings. In the ORNL newsletter of October 2000 (a month before our layoff), UT-B management talked about its new building program. Madia said, “In a highly competitive research community, it takes world-class facilities to attract world-class scientists”, adding grandiosely, “This modernization plan represents the largest construction effort on the ORNL site since the Manhattan Project in 1943”. The article stated that “one of the plan’s most innovative features involves the long-term transfer of DOE land on the present ORNL site, making possible construction of seven new facilities funded by the state and Battelle”: four of the new facilities would be funded by the State of Tennessee and three by Battelle itself. In a photo accompanying the modernization article, DOE Secretary Richardson, Tennessee Governor Sundquist, Representative Wamp, and Representative Bob Clement “shared a light moment after unveiling ORNL’s modernization plan”. It was not made clear — apparently the reporter did not ask — who the DOE land was being transferred to, what the conditions of transfer were, etc. Note that besides the state’s direct contributions to the modernization, it had also granted a sales tax exemption for the construction of the Spallation Neutron Source (e.g., The Oak Ridger, 3 July 2003), apparently as a condition imposed by Congressional bigwigs for Tennessee to get the facility.
The Oak Ridger (19 June 2001), reporting on a visit to Oak Ridge by new DOE Secretary Spencer Abraham, stated that Abraham “signed over control of 10 acres of federal property at ORNL that will be used as part of UT-Battelle’s plant to modernize the federal facility”. The Oak Ridger also reported (26 June 2001) that DOE had issued a finding of “no significant impact” regarding the modernization of ORNL and that thus no environmental impact statement was necessary for building new facilities at ORNL on “brownfield” (previously contaminated or used) areas. It was also stated that up to 24 new facilities could be built, including four funded by the state and four funded “through the private sector”. The Oak Ridger reported (5 March 2003) that Madia said that ORNL was planning to hire “1000 new employees” within the next three to four years. Playing the “What’s good for ORNL is good for Oak Ridge” card, he stressed that he “firmly believe[d]” that ORNL was “the community’s laboratory”.
The Tennessee Valley Authority (TVA) got into the act as well. TVA was chartered by the federal government during the Depression to electrify a large area of the South by building and operating dams and power plants. Thus although it is subject to the various limitations placed on governmental agencies, it is not a government agency in the usual sense and it is supposed to be run like a business, i.e., in a quasi-private way. TVA, according to the Knoxville News-Sentinel (19 June 2003), put up “much of” the $9 million needed to install a 50-MW substation and associated transmission lines to the Spallation Neutron Source (SNS) facility being built at ORNL. The News-Sentinel remarked that this “figures to be a good investment” since the electrical costs of operating the facility were expected to be about $10 million annually — the 50 MW was “about enough to run a small city”. TVA built the substation under an agreement with DOE (details unspecified). We Tennessee residents have long been reading article after article about TVA’s significant level of debt. Would DOE really not have put the SNS in Oak Ridge if TVA had not erected the substation almost for free? There are of course no TVA stockholders, but it is questionable that TVA ratepayers would really think this was a good deal for TVA, in that it would likely not lower their rates and in the short term might even increase them. One wonders if the rate for SNS will be the same as for large industrial users — or if there will be some special rate for it.
In 2001, Governor Sundquist, never an enemy of commercial interests, put his foot down about one thing (Knoxville News-Sentinel, February 2001): less than a year after UT-B took over ORNL, he refused to allow DOE to transfer about 100 drums of transuranic waste from Battelle’s laboratory operations in Columbus, Ohio (waste supposedly created during the Manhattan Project days) to Oak Ridge for storage. A transuranic treatment facility was being designed and built on the Oak Ridge Reservation and Sundquist was, properly, not opposed to allow the Battelle waste to be treated there when the facility was completed. But he would not allow the reservation to become a storage area for every Tom, Dick, and Harry waste that DOE might be getting pressured about by other states.
Several things should be noted here for future reference about Battelle: Battelle’s candid focus on managing ORNL not just for the fee it would earn but because it would allow Battelle to use its control of ORNL to benefit Battelle’s commercial enterprises; the hints of dissatisfaction among PNNL researchers at the direction PNNL was going and the fears of ORNL people that, as at PNNL, work on commercially transferable (and potentially profitable) technology would be emphasized over pure or at least less commercially oriented research; the team-linking of the labs Battelle controlled (with the potential for practices such as steering contracts to the lab it desired to do the work or the research equivalent of price fixing); the apparent enlistment of specific financial support from research universities and the state for work to be done at ORNL (but with the “strings attached” unspecified); and most of all, the involvement of money from private entities to construct new ORNL buildings. It was also significant that Madia “left” PNNL to work on preparing the bid for ORNL, but the announcement of the intent to bid came only after the announcement of his departure and with the reason for his departure being given as his returning to the mother ship (Battelle headquarters in Columbus) as vice-president for DOE business.
Several things should also be noted for future reference about DOE: DOE’s “spotting” Battelle some points on their PNNL rating (making a subjective process even more subjective); using PNNL’s own “self-assessment” of its performance as part of DOE’s basis for evaluating Battelle’s 1999 performance; DOE’s apparently regarding recruitment of women and minorities (or perhaps the show of considering women and minorities) as trumping Battelle’s right to choose its own top management personnel on the basis of qualifications alone; the lack of clarification of the problematic issue of whether a nonprofit corporation should be subject to fines; and DOE’s transferring of land so that private entities could build facilities on the ORNL site.
Influencing the Governmental and Community Movers and Shakers
On 24 June 1999 — four months before Battelle won the ORNL contract — Madia contributed $1000 to the campaign fund of Zach Wamp, who was and is the representative to the US Congress from the Chattanooga-Oak Ridge area. Wamp is also a member of the powerful House Appropriations Committee and a member of the Energy and Water Subcommittee, which approves funding for the Department of Energy. One would not think that Madia, as a resident of Washington State, would have any interest in funding Wamp’s election campaigns. But not only Madia, but also five other people from Washington State (including future UT-B chief counsel Steven Porter, operations honcho Herb Debban, and vice-president Jeff Smith’s wife) contributed to Wamp at this time, as did two people in the Columbus, Ohio area (Battelle headquarters). These people were apparently the only Washington State and Ohio donors to Wamp. Madia’s wife gave Senator Al Gore of Tennessee a contribution in June 1999 and an even larger one in July 1999. One wonders what the burning national issue was that motivated all these people to give to Wamp and Gore before the contract was awarded.
In the year after UT-B won the contract, Madia hosted a dinner for dozens of people at his house as a fundraiser for Wamp. When the head of the local DOE office retired, Wamp lead the clamor for someone to be selected who was “just like Madia” — or better yet, Madia himself. The Oak Ridger reported (3 June 2002) that DOE Secretary Abraham was asking for information from Oak Ridgers as to the type of replacement DOE head they would like to oversee operations on Oak Ridge (apparently this occurred during a visit to Oak Ridge, so that only the public officials and contractor officials he got to meet were asked, not the population in general). Oak Ridge Mayor David Bradshaw said that he told Abraham “that in my opinion the UT-Battelle team is a super example of what a partner to the city ought to be. Bill Madia comes immediately to mind. He comes to our [city] council meetings, he has shouldered the responsibility for the museum [see below], he has chosen to live in Oak Ridge — he’s the kind of manager I think we want to see in our city”. He added that the new DOE manager should be someone who “understands the important role the city plays as a partner with DOE” and its “historic mission”. (The impropriety of having a contractor head move directly into the position of head of a DOE regional office seems to have escaped him.) When the president of the University of Tennessee resigned in disgrace (see below), Wamp lead the clamor for Madia to be selected as the new president, saying that there was a “groundswell” of support for what The Oak Ridger (18 August 2003) called a “local choice” for the post; Wamp opined that Madia was “the only person that I know of” who met every qualification that the governor had set, including being “a business person with a history of sound financial management and innovations to save money and not waste money”; he added that Madia was “a treasure to the State of Tennessee”. The East Tennessee Economic Council (composed mostly of DOE contractors and subcontractors) adopted a resolution recommending that Madia be made president of UT, stating that “Dr. Madia exemplifies the highest standards of personal integrity and community involvement” (The Oak Ridger, 4 November 2003); the principal of Oak Ridge High School said that having Madia back in the area would be good for the schools because “we need someone with the ability to see where we are going”. Gush, gush, gush. It was enough to make a sensible person puke.
The Oak Ridger (6 June 2000) had a picture of J. Wade Gilley (see below), then the president of UT, presenting the wife of State Senator Randy McNally with a basket of gifts for her husband. The occasion was an Oak Ridge Chamber of Commerce coffee honoring McNally and State Representative Gene Caldwell (also in the picture), who were the Oak Ridge area reps to the Tennessee State Legislature. The sponsors of the coffee were UT-B, the chamber itself, and another company that has a lot of DOE work and at whose facility the coffee was held. It was noted that “the sponsors presented the legislators with gifts”, but not what the gifts were or how much they cost; however, the basket in the picture was not small and clearly did not contain fruit. (McNally seems to be a nice enough fellow and a technical person (a pharmacist). I will always respect him because he stood up when it counted: he was a central figure in the “Rocky Top” FBI investigation of bribe-taking by Tennessee public officials in the 1980’s. He brought “fishy bingo operations” to the attention of the feds and even wore a wire for them, as the Knoxville News-Sentinel (17 October 2005) reminded us. It took a lot of courage for him to do that. However, the one time that I asked him, as my state senator, for information, he did not get back to me as he promised.)
The Oak Ridger reported (3 August 2000) that Madia had been appointed to the board of directors of the Tennessee Technology Development Corporation (TTDC) to fill an unexpired term. He had been in East Tennessee for less than a year and had been in charge of ORNL for only four months. Sounding a note that would be echoed again and again in coverage of ORNL and UT-B, The Oak Ridger stated that the TTDC “helps “grow” businesses by creating infrastructures for seed capital, mentoring, and technology transfer” — but it admitted that this wording was from an ORNL press release. Madia “represented the private sector” on the board, which brings up the question as to whether the head of a company (UT-B) that obtains virtually all of its funding from the government and runs a large government facility as its main task really should be representing the private sector.
The Oak Ridger reported (8 January 2004) that more than forty mayors from all over Tennessee visited ORNL “for a tutorial on the federal research facility”. Why all these folks would be interested in visiting ORNL — instead of, say, the nearby Smoky Mountains — was not stated. They were briefed on “legislative issues” by UT-B’s head public relations person, Billy Stair; they were briefed on what ORNL “does and does not do” by the ORNL head of technology transfer, Alex Fischer (“we don’t do nuclear weapons”); and they were briefed on exciting new technologies (such as finding latent fingerprints) during tours of various ORNL facilities. These new technologies are all very cool stuff and obviously every site like ORNL has to devote some time to public relations, but speaking as one who organized a couple of tours of ORNL facilities, I can say that they are very time-consuming for the organizer and the people visited and should not be undertaken except for clearly beneficial purposes. That is, for scientists who are in Knoxville for a conference, a big tour would be important for ORNL prestige and networking, but the mayors might have been just as happy with a traveling show that came to them — or to their whole communities, including the schools.
It is true that elected officials always need to have fundraisers and that these are often given by groups friendly to the officials, for one reason or another. But in the Oak Ridge-Knoxville area, “appreciation” gatherings for elected officials seem to occur awfully frequently. Wamp, for instance, received the “Vision Award” from Technology 2020 (see below for more on this group), as reported by The Oak Ridger (20 December 2004). This award, Technology 2020’s “highest honor”, was given to Wamp for getting various economy-building bills passed, such as one that gave the University of Tennessee Corridor Initiative some $400,000 for “its information-sharing initiative among institutions, businesses, and individuals”. (The Oak Ridger didn’t tell us which institutions, businesses, and individuals.) It is interesting to note that, as The Oak Ridger and the Knoxville News-Sentinel reported (10 August 2004), only a few months earlier it was announced by Wamp at a press conference that Technology 2020 would be receiving $100,000 of federal money for what The Oak Ridger described as “economic initiatives in the Oak Ridge and Knoxville area”. The Oak Ridger and the News-Sentinel quoted the president of Technology 2020 as saying that in the last five years Technology 2020 had “assisted 90 client companies that have created 1100 jobs at an average salary of $64,000 per year — double the regional average”. He added that Technology 2020 would use the money “to continue to build a robust entrepreneurial system, which will enable us to grow many more technology companies and jobs in the future”. The Oak Ridger noted that a major benefit of Technology 2020’s efforts was the number of companies headquartered in the Oak Ridge area. Bradshaw, who as the News-Sentinel noted was not only the mayor of Oak Ridge but also a Technology 2020 executive, told Wamp, “You’re putting fuel in our gas tank, Zach, and that’s exactly what we need”. The Vision Award, by the way, is apparently not a “once a year” thing, but can be given whenever Technology 2020 finds a deserving candidate; the Chattanooga Times Free Press (28 October 2004) reported that two months earlier, Chattanooga Mayor Bob Corker was presented with the Vision Award “for his support of entrepreneurial efforts”, in particular helping to bring Southeast Community Capital, a lending subsidiary of Technology 2020, to Chattanooga. Yes, you read that right: Technology 2020 gave the mayor of Chattanooga an award for leadership for bringing one of their own subsidiaries to his town.
Anyway, the News-Sentinel article quoted Tom Rogers, president and CEO of Technology 2020 as saying that Wamp “gets it” and had always been a supporter of Technology 2020. The director of UT’s Oak Ridge Operations (who was also the “senior vice president emeritus” of UT) said that Wamp had “the highest ethics and standards of any politician I’ve ever known”. (Perhaps that was not saying much, considering politicians.) The head of the East Tennessee Environmental Business Association “expressed her appreciation to Wamp on behalf of the 130 large and small businesses that make up the organization”; she said that “we appreciate you, Zach, because you understand, above all, the value of the taxpayer investment in Oak Ridge. You understand that the money our nation invests in Oak Ridge has helped create one of the most vibrant, diverse, strong, and growing economic sectors in East Tennessee”. Wamp himself noted that “No other place works together across party lines like Anderson County does”. (Oak Ridge is mostly in Anderson County.)
State Representative Caldwell was a prime organizer of a local “appreciation day” for US representative Wamp (Knoxville News-Sentinel, 19 February 2005, Georgiana Vines’ column) — even though Caldwell is a Democrat and Wamp a Republican — because, Caldwell said, “we are interested in him continuing to represent us”. According to the News-Sentinel (19 February 2005) and The Oak Ridger (25 February and 1 March 2005), the sponsors of the day were the City of Oak Ridge, the Oak Ridge Chamber of Commerce, and the East Tennessee Economic Council, with the Oak Ridge school system, the East Tennessee Environmental Business Association, the University of Tennessee, and CROET participating. An “appreciation event” for Wamp was to be held later that day at the Clinton City Hall (Clinton being the county seat of Anderson County) and still later Wamp was to attend a fund-raising event for the modernization program for Oak Ridge high school (see below). Wamp was scheduled to end the day with a fund-raiser for his campaign chest, at the home of now-ORNL Director Jeff Wadsworth. The day went off as planned, according to The Oak Ridger, which quoted remarks by ORNL’s Tim Myrick and Wadsworth and BWXT Y-12’s Dennis Ruddy at the school fundraiser. (The Oak Ridger headed its article “A Great Day”.) The Oak Ridger’s followup article (2 March 2005) noted that Wamp was “praised by numerous city and county officials and business representatives” for facilitating the development of the “$1.4 billion Spallation Neutron Source, the Tennessee Valley Corridor Summits, Oak Ridge High School, UT-Battelle, and countless other industries and government missions in the area”. I thought it very telling that they mentioned how much the SNS cost and very odd that “UT-Battelle” was stuck in there among the other “missions”. Perhaps this was a Freudian slip on The Oak Ridger’s part — or were they trying to tell us something? None of the articles, except for Vines’ column, mentioned the fundraiser at Wadsworth’s house, so it is not clear who attended that.
The movers and shakers in the East Tennessee area are always giving awards to one another. Wamp, Madia, Wadsworth, the heads of various small businesses mentioned in this book, etc., are forever having their pictures in the newspapers, either giving the others awards or getting them. Madia, after having served only about three years as ORNL head, got the Oak Ridge area Muddy Boot award — at the same time as the long-time and respected former ORNL head Alvin Weinberg (18 years as ORNL director). Madia’s award was presented by Zach Wamp, but Weinberg’s was presented by the not-exactly-a-household-word chancellor of UT (The Oak Ridger, 13 February 2004). The Muddy Boot award is given by the East Tennessee Economic Council (see more below) for what is supposed to be a lifetime of working to improve one’s community, state, and nation. Not long ago, Madia got an award from DOE, along with six other present or former national lab directors or subdirectors, for, I guess, being national lab directors. (At the rate of seven a year, the pool of living present or former lab directors, etc., may be exhausted in a few years and the cycle will have to start over again.) Wadsworth, who had been at ORNL only since about August 2003, received in April 2005 (during Small Business Week) an award from President Bush and the US Small Business Administration: the Dwight D. Eisenhower Award for Excellence “as the leader of America’s most dynamic research and development partnership between a federal contractor [UT-B] and a small business subcontractor”. It was Wamp himself who phrased it that way in an op-ed piece in The Oak Ridger (29 April 2005). So Wadsworth got an award not for his personal astuteness in choosing to partner with small subcontractors and likely not for any real leadership he added to the process, but just for being the head of UT-B at the time. One would think that surely it would be the contractor company that received the award, not the head of the company himself, as Wamp suggests; surely Wadsworth was just accepting it on behalf of UT-B. But no, the federal Web site that announces these things appears to show that the three nominal recipients of this award (not just Wadsworth) are all the heads of the companies, not the companies themselves. Thus the head of a firm gets all the glory of this award. So much for teamwork. (We can also wonder who nominates the candidates for the awards, who serves as references, etc.)
Goodie Bags for Oak Ridge and East Tennessee
DOE’s budget is huge and many people and companies want to get a piece of that pie. So there is an incentive for the have-nots to woo and cultivate the haves and for the haves to dole out contributions to the have-nots, in order to gain their support. By winning the ORNL contract, UT-B, already a “have” by virtue of running three other DOE labs, became a big have in East Tennessee. This section deals with UT-B’s and other contractors’ efforts to win friends and influence people — and how DOE in effect requires them to do it.
The Oak Ridger noted (4 October 1996) that when the contract for all the Oak Ridge plants was rebid in the early 1980s, local leaders gave DOE a series of mostly economic development items that they wanted DOE to require from any future contractor. According to The Oak Ridger, most of these requests were written into the subsequent contract as “Volume IV”. These now-requirements appear to have been beefed up in subsequent contracts, but still fall short of what the city fathers think Oak Ridge deserves. The basis for the requests was that DOE takes up a great deal of land bordering the city of Oak Ridge that would otherwise be available for expansion and development (and sales and property taxation) and there are certain tax exemptions that DOE enjoys as a Federal entity. Oak Ridge, like other communities where DOE is a major employer, used to receive regular “in lieu of tax” payments to make up the supposed property tax shortfall. But several years before I came to Oak Ridge in 1989, the city and DOE agreed on a one-time payment of $20 million, instead of the annual payments DOE gave communities in other areas of the country, after which the city would not ask for any more for years. Wise city heads advised investing the money as a sort of endowment and using only the interest; that way, it would last a long time. Within a few years, however, the city had spent all the money. It is hard to say what is more unwise: DOE’s forking over such a large payment at once (thus using money that, in that year, could have gone to other projects or sites), the city fathers’ spending it all so soon, or the city fathers’ apparently vain quest to get DOE to recommit to sending any significant amount of money directly to the city.
The Oak Ridger (30 April 2004) published a table of how much DOE had paid to Oak Ridge in lieu of taxes; they had to have different columns for what the city said was paid and what DOE claimed it paid because their stories differed. However, it is clear from the table that between 1960 and 1985, the amount DOE paid rose from $1.25 million to $3 million; from 1986 to 1995, DOE, having paid $23 million (the lump sum plus that year’s payment, I guess) at the start, paid nothing more; and from 1996 to 2003, the amount DOE paid rose from $743,000 to $1.27 million. You read that right: DOE paid the same in 2003 as it had paid in 1960 in lieu of taxes. The Oak Ridger pointed out that the $1.25 million in 1960 dollars would be $7.75 million in 2003 dollars. As reported by The Oak Ridger (4 November and 10 December 2003), Los Alamos had for some years been receiving significant federal support for its school system, amounting to $8 million a year in about the 2002-2003 school year. However, this support was said to come through a foundation, i.e., DOE gives the grants to a private nonprofit group for the schools, rather to the city or the school system directly. (It is not clear why this is, but it may be because if DOE gives it directly to the local government, it may be considered an entitlement and set a precedent, whereas if DOE gives it to a private foundation, it is merely a contribution that need not be repeated; it may also be that the school system prefers it that way so that it can avoid some of the federal restrictions on how governmental money given directly is spent.)
Over the succeeding years, Oak Ridge officials have put in a lot of effort, continuing to this day, to try to get DOE to cough up more money. As of 2002, they had hired a politically prominent law firm to pursue this with DOE, thus expending city funds beyond the salaries of the city’s own personnel. In early 2004, this firm was saying that the city should apply for in lieu of tax assistance. But in mid-2004 the firm did an about-face and advised against it on the grounds of, as The Oak Ridger put it (4 June 2004), “some unnamed benefit that could be waiting for Oak Ridge”. I conjecture that the reason was that DOE was instead privately urging or perhaps pressuring its contractors to do more for the city with the promise of enhanced brownie points and less hassle in other ways; I think that the “benefit” was the high school renovation/rebuilding (see below), but I can only guess. There was also the new DOE rule of about early 2004 that allowed “cities affected by their nuclear legacies to obtain DOE excess land without charge”, whereas previously they had had to pay the government fair market value for the land (Knoxville News-Sentinel, 31 May 2004). In any case, by the end of 2004 the city decided not to throw away any more money and ended their contract with the law firm, citing its lack of results.
But they then hired not one but two other companies, one a lobbying firm, to advise them on how to get more money from DOE. The lobbying firm apparently advised them to institute a “tipping fee”, which the city would charge DOE for DOE’s waste storage and transportation activities in Oak Ridge. It was claimed that cities elsewhere in the nation had passed such measures successfully. However, DOE was of course completely opposed to the idea and the contractors howled, saying that layoffs would ensue if the tipping fee was applied (because of course it would come out of the funds that DOE allocated to the Oak Ridge sites). The city sought an opinion from the state attorney general, who said that such a fee was unconstitutional: it was not a “fee” (since no service was provided by the city) but rather a tax. The measure could have been reworded so as to avoid the problem, but the City Council withdrew the measure (on Mayor Bradshaw’s recommendation) rather than do that. The city then entered into talks with DOE (The Oak Ridger, 5 May 2005), negotiating, it was said, a potential payment (still called a “fee”) of between $1.5 and $ 2 million from DOE to the city. DOE head Gerald Boyd said that “David [Bradshaw] did the right thing by withdrawing the bill”, as if Bradshaw alone controlled city legislation. Bradshaw himself was not quoted, but other council members expressed the hope that DOE and the city could work together on this. However, one council member (Leonard Abbatiello, my favorite because of his thoughtfulness, intelligence, and industry) opined that “DOE must be concerned about our efforts to increase remuneration….or they wouldn’t be willing to talk….If they would be forthright with a good offer and an active player in the community, I might feel differently, but I don’t trust them. Every indication that I’ve seen looks like they are just throwing a few crumbs”. This guy is no bomb thrower or poseur, so that was real frustration being expressed.
In addition to the property tax shortfall, local communities, but especially Oak Ridge, are impacted by every major layoff and by chronic smaller layoffs. They have protested to DOE that DOE should make up in some way for this, e.g., by providing job training, new work, etc. The Oak Ridge city manager proposed in 1999 (The Oak Ridger, 18 January 1999) to send a letter to DOE stating that with 10,000 DOE jobs projected to be lost over the next decade, DOE should “strongly encourage its employees and contractors — particularly senior management — to reside in Oak Ridge”; he also urged DOE to increase the requirement for community involvement by contractors. In what I conjecture was an effort to avoid committing to paying the community any more money directly or to taking up the slack for layoffs in a serious and permanent way — but still placate the community — DOE shifted the onus for community investment to the contractors. One requirement that DOE now appears to put into major contracts is that the contractor company will “give back” to the community. Now all the contractor and subcontractor companies give to the Oak Ridge Arts Council, or the local school system, or the Boys’ Club — not totally out of the goodness of their hearts or their civic concern, but because it is part of their contractual obligation, or at least counts heavily toward receiving a full award fee and winning future bids. A person heading up a losing bid team for one very large contract told me told me about the contributions of his company and those of each of his company’s four rivals for the contract: they all forked over significant community money before the contract award, to earn points with DOE for their civic involvement.
The most egregious example of mandatory community giveback was that of the Bechtel Jacobs contract. When Bechtel Jacobs won its original contract to manage environmental cleanup all over the Oak Ridge Reservation, DOE included a requirement that Bechtel Jacobs “create” jobs in businesses outside its own. There was apparently a quota, or at least some criteria for fulfillment; The Oak Ridger (5 March 1999) reported that the figure was $400 million worth of new jobs over the five years of the contract. Later, The Oak Ridger (23 July 1999) reported that the figure was $427 million. It is notable that the requirement was given as a dollar figure rather than as a number of jobs figure, another example of DOE’s fixation on money. It was also notable that DOE would require this of Bechtel Jacobs and cleanup when DOE was not requiring it of the upcoming Y-12 rebid, or so DOE said: The Oak Ridger (27 March 2000) reported that in response to a written request by the East Tennessee Economic Council for “economic development incentives” to be included in the Y-12 request for proposal (RFP), a DOE-Washington defense programs official replied that the Y-12 RFP would broadly encourage but not require the new contractor to contribute to the community. In a speech to the council, another high DOE defense programs official said he believed that, as The Oak Ridger put it, contracts should focus not on community initiatives but on the government work that needs to be done. It is not clear what DOE did about this, but subsequent events suggest that some community contribution factor was included in the Y-12 award fee criteria.
Whatever the case, as Frank Munger of the Knoxville News-Sentinel noted (May 2004), DOE wanted to cultivate local goodwill in an area where DOE jobs had been decreasing and would sharply decrease after the cleanup years were over, but DOE didn’t want to have to ask Congress to fund the job creation effort. The idea of having the cleanup contractor be put in charge of this effort, ostensibly funding it out of its profits, must have seemed to DOE a neat solution to its problem. However, there did not seem to be any requirement that the new jobs be equivalent in skill types or pay to those that had been lost due to layoffs (e.g., The Oak Ridger, 16 February 1999), as Bechtel Jacobs had to acknowledge in view of the fact that (as of February 1999) 600 new jobs were said to have been created but only $13 million in payroll. The Oak Ridger reported (4 December 1998) that there had been several safety incidents (e.g., radioactively contaminated metal that was inadvertently sent offsite as clean; contaminated equipment sold at a public auction; radioactive geese that had to be killed — don’t tell PETA). However, the head of DOE-ORO, Jim Hall, and a DOE spokesman waved this away, saying that such incidents had happened in the past also and that Bechtel Jacobs was hired in part for safety reasons; although Bechtel Jacobs hadn’t completed all the “projects” laid out in its contract, the list of projects was just a guideline for Bechtel Jacobs and no penalties would be deducted from the fixed-fee amount for this; and in particular, while DOE hadn’t yet verified that Bechtel Jacobs had added the non-DOE payroll (jobs) that it had contracted to do, Hall declared that “They say they’ve done it [and] my feeling is that they’ve done it”. So the implication was that safety hadn’t been improved much if at all and the projects weren’t done, but the job creation mandate had been met (or DOE professed to believe that it had been met) — and thus DOE was happy.
The Oak Ridger (19 February 1999) reported that DOE was saying that Bechtel Jacobs had “created $11 million in non-DOE payroll” or, again, about 600 jobs. The press and local oversight groups pressed Bechtel Jacobs and DOE for answers about how many jobs were really created, especially since DOE took four months to release the information. Bechtel Jacobs refused to give any figures regarding specific payrolls and number of jobs for each business, on the grounds of “proprietary concerns” (The Oak Ridger, 16 February 1999), saying it would “probe too deeply into the companies’ business and make the job of creating jobs much more difficult — maybe impossible” (The Oak Ridger, 19 February 1999). But clearly, even if it were true that 600 new jobs had been created, the average salary was $21,000, versus more than $40,000 for the jobs that were lost. DOE and Bechtel Jacobs claimed that that comparison was not valid.
Longtime Oak Ridge observers were skeptical about the number of jobs because for one thing, many of those jobs vaporized in time. For example, Bechtel Jacobs invested $1.1 million in a grant to the University of Tennessee to buy computer equipment for a “visualization center” sponsored by a company called Prosolvia, but as The Oak Ridger reported (21 December 1998), a UT official appeared to have directed some of the startup money into payments for work by herself and a coworker and had to resign. The Oak Ridger (16 February 1999) later reported that Prosolvia had gone bankrupt and the center was put on hold. As another example, in order to “create” some of the new jobs, Bechtel Jacobs apparently paid a company to relocate to Oak Ridge from another state — this did move some jobs to East Tennessee, but no net “new” jobs were thereby produced and of course those who refused to move lost their jobs. I believe that this company ceased to do business here after a year or two.
In 1999, two companies that had been helped to expand by Bechtel Jacobs and whose job gains were thus presumably counted in the 600 added jobs wrote letters to the editor of The Oak Ridger in support of Bechtel Jacobs: IPIX said that a “grant” from Bechtel Jacobs had helped it to grow from 30 to 130 employees, while CTI (the PET scan people) said that their $500,000 Bechtel Jacobs grant, while only 2% of what they would need to complete their expansion, was timely and valuable because it primed the pump for the creation of 27 jobs and an annual payroll increase of $859,000. Again, it should be noted from these figures that these 27 jobs paid an average of $32,000. (IPIX closed down its Oak Ridge offices in November 2005, with reportedly a loss of 15 jobs; CTI seems to be successful, however.)
Bechtel Jacobs passed the job creation requirements down to its subcontractors via the subcontracts. The Oak Ridger reported (12 October 1999) that the subs were being required to kick in an “investment” that amount to 5-8% of Bechtel Jacobs’ job creation goal (the $427 million). Bechtel Jacobs was claiming at that point that a total of 1500 new jobs had been created, amounting to about $50 million in payroll (or an average of about $33,000 per job). Bechtel Jacobs seemed to have been hemorrhaging money trying to keep up with the job creation requirements by, as The Oak Ridger put it, “pour[ing] money into local companies over the past few months, hoping that it would pay off in future years when payroll targets” started to climb. They “helped” 13 businesses in 1998 and 60 in 1999; one company they helped was the Forelock Company (which, as we will see later, seems to get “help” from lots of places). Bechtel Jacobs was bailing as fast as it could, but it was not enough, for, as The Oak Ridger reported, the DOE Inspector General (IG) issued an audit that was critical of DOE-ORO for having failed to require Bechtel Jacobs to produce adequate documentation as to the jobs created, such as letters of verification from the various businesses helped. But Bechtel Jacobs and DOE were hanging tough: the head of “Bechtel Jacobs Development Corporation” (the job-money-funneling arm of Bechtel Jacobs) said that DOE had told the IG that it intended to continue its current verification practices and it was up to the IG to “make a choice as to whether they want to arbitrate this at a higher level”.
The subcontractors complained about the kick-in requirement, of course; the Knoxville News-Sentinel (2 March 1999) quoted the president of the East Tennessee Environmental Business Association (ETEBA) as saying that it was Bechtel Jacobs that had committed to job creation, not the subcontractors. A DOE official commented that DOE did not want to “put something [onerous] on small or disadvantaged businesses” (although DOE did not object to doing so for larger ones). Bechtel Jacobs’ solution (The Oak Ridger, 23 July 1999) was that in lieu of job creation, a subcontractor could just pay Bechtel Jacobs a “specific dollar amount”, either directly or in lieu of payment on the subcontract, and Bechtel Jacobs would relieve them of their job creation quota. In some circles, this would be done under the table and be termed a kickback or “extortion”, as the Knoxville News-Sentinel (16 January 2003) later quoted one subcontractor as calling it. But since this plan was announced at a dinner meeting of the East Tennessee Environmental Business Association (ETEBA), it was out in the open and DOE obviously knew all about it. In fact, DOE helped announce it. The Bechtel Jacobs official gave an example of the subcontract terms: for a $10 million subcontract over three years, the provision for new payroll was $1 million; if the subcontractor did not meet that requirement, the “liquidated damages” (presumably payment withheld) would be $250,000. But if the subcontractor chose, the subcontractor could instead fork over $50,000 to Bechtel Jacobs and get out of the requirement. The official said that Bechtel Jacobs was not trying to make any money out of this, because the $50,000 was what it would cost them to fulfill the requirement. I saw no subsequent articles dealing with this, so I assume that the proposal was implemented.
The Oak Ridger reported the next year (12 April 2000) that US Senator Pete Domenici of New Mexico had written to DOE Secretary Richardson, protesting a DOE proposal to drop economic incentives as a requirement for its principal contractors. Domenici served on the Senate Appropriations Committee and chaired the Energy and Water Subcommittee (the primary Senate entity controlling DOE funding). Domenici said that DOE should maintain its economic development requirements in order to offset the economic impact of downsizing and he asserted that since DOE’s “facilities have very limited expertise in economic development”, it was “far more appropriate to demand that the….contractor[s] provide these skills as part of their overall role”. All this is very murky, as is typical of DOE contract information. But the article gave one important piece of information that I had not heard before: that economic development was not a specific requirement of the ORNL contract won by UT-B, although UT-B did promise to “contribute to community causes”.
The Knoxville News-Sentinel reported (16 January 2003) that 4.5 years into Bechtel Jacobs’ five-year contract, Bechtel Jacobs had met its goal, i.e., the payroll target of $427 million; in fact, they exceeded it by $16 million. DOE proclaimed itself to be “very satisfied”, especially since the results were obtained without the use of any federal funding: Bechtel Jacobs’ parent companies, Bechtel International and Jacobs Engineering, provided the backing for the program. But the News-Sentinel also said that a separate company, the aforementioned Bechtel Jacobs Development Company, was set up for the jobs creation work. Why it was necessary to go to the trouble and expense of starting this whole new company was not stated. Via the new company, Bechtel Jacobs “used incentives to lure companies to the area or provided assistance for local companies to expand”. DOE averred that this all “proves private industry investment can pay off in jobs for our community”. It would of course have been more correct to call it “forced investment”, or better yet a “donation” since the “investor” would not be reaping any direct return. Again, local officials expressed skepticism; the executive director of the Local Oversight Committee (a citizens’ group funded by DOE that keeps watch over DOE cleanup) said that 5000 new jobs did not seem to have appeared in the five-county area covered by the contract provisions and that many of these jobs appeared to be ones already taken credit for by various chambers of commerce, etc. Bechtel Jacobs replied that they were not taking sole credit for these jobs, but claimed they had a (financial) hand in all of them.
Battelle had its own modus operandi regarding community involvement: get involved in everything. The Tri-State Herald (19 January 1999) reported that three months after taking over at PNNL, Madia said to his wife, Audrey, “This is my home”. (How the Tri-State Herald found out about this purported private communication was not stated.) Madia told the Herald that he particularly enjoyed his work with civic organizations and the Tri-City Industrial Development Council, of which he was board secretary. He was on the Washington Round Table; he was a member of the Washington Technology Alliance, the honorary Board of Directors of the Mid-Columbia Education Alliance, the Advisory Board for Junior Achievement of the Greater Tri-Cities, the board of directors of the Reading Foundation, and the Executive Committee for the Children’s Center Capital Campaign; he was co-chairman of the Tri-Cities Corporate Council for the Arts. He said that the Tri-Cities was small enough for PNNL to play a substantial role in the community. Soon after Madia arrived in Oak Ridge, he declared that “Oak Ridge feels like home” (I think this was from The Oak Ridger). Actually, Mrs. Madia might have said it even more strongly — reportedly she moved to Oak Ridge in about July 1999, months before it was announced that UT-B had won the ORNL bid. In an early talk to the Oak Ridge Rotarians (The Oak Ridger, 8 February 2000), Madia said that UT-B was committing $6.4 million to “community outreach”, with emphasis on improving math and science education, moving new technology developments from the laboratory into the private sector, and making it easier for small businesses to access ORNL facilities and personnel. He said that “We must be a trusted and valued asset to your community” — which would be his community as well, pointed out The Oak Ridger, since he told the Rotarians that he was building a house in Oak Ridge. He also told the Rotarians that UT-B wanted to help Oak Ridge’s economic development and industrial promotion efforts, but was a bit puzzled as to how to do so — at Hanford there was only one local economic development group, while at Oak Ridge there were multiple groups.
The ORNL newsletter stated (March 2000) that UT-B was emphasizing local “community outreach” and was planning to spend some $6.3 million on it over the next five years. Of this, about half was to go to economic development activities and about one-third to education projects. With this kind of direct and semi-direct financial support from contractors and with the dim prospects for direct financial support from DOE, who in Oak Ridge government would oppose UT-B on anything? Even the loss of a “few” jobs via layoffs would pale in the face of such contractor support. It is no wonder that the city fathers seemed to be very taken with UT-B, especially with Madia, and that Oak Ridge Mayor Bradshaw was among Madia’s chief cheerleaders. In November 2000, UT-B “had” to lay off 92 people (including me) and let go about 200 others through a voluntary reduction-in-force. Yet that year UT-B gave $90,000 to the University of Tennessee’s Academy for Teachers of Science and Mathematics (The Oak Ridger, 19 June 2000). Surely charity should begin at home.
Also in 2000, UT-B contributed $30,000 to the City of Oak Ridge to build a rowing tower on Melton Lake so that the Oak Ridge marina would be a more attractive venue for major rowing events. Since these events brought tax revenue into the city (via hotels, restaurants, gas stations, etc.), this contribution was expected by the city to produce revenue over time far in excess of the $30,000. Also, as The Oak Ridger reported (21 June 2000), the new tower would be “a great boost” to the University of Tennessee rowing teams, according to the UT director of women’s athletics. (I am reminded of UT-B every time I drive to Knoxville because I go past this rowing tower, which has “UT-Battelle” prominently on the side of it.) In 2001 (ORNL Reporter, October 2001), UT-B contributed another $20,000 to build new starting docks. In 2004, UT-B contributed $13,000 to the Oak Ridge Rowing Association, just in time to build a new launching dock for the 2004 Masters National Championship Regatta. As ORNL Director Wadsworth said of this last gift (The Oak Ridger, 23 August 2004), it was “a great example of UT-Battelle’s philosophy of providing legacy investments that make a lasting contribution to the community’s economic development”. Wadsworth also said that by making Oak Ridge the South’s “premier site for competitive rowing”, “we can attract thousands of rowers to the town’s restaurants and hotels”. I believe that UT-B also earned DOE points toward its award fee, thus contributing to its own economic well-being as well.
In 2002, The Oak Ridger reported (Dick Smyser’s column, 12 March 2002) that “even allowing for self-promotion”, Madia described an “exciting scene” at ORNL in his second annual report to the community on ORNL: “hundreds of millions of dollars in new and improved facilities, clearly defined national missions, fine-tuning of staff, and firm commitments to the community of Oak Ridge, most exciting of all to Oak Ridge High School”. I think that Smyser did not allow enough for self-promotion, as witness his use of the phrase “fine-tuning of staff” as a euphemism for layoffs and his lamenting that only 100 people showed up to hear Madia’a talk, not including “some of our town’s most vocal naysayers”. He also glossed over the closing of Bethel Valley Road — a quasi-public DOE-controlled road that many non-ORNL people in the Oak Ridge and Knoxville area used to get to jobs in, e.g., Lenoir City — by the repositioning of guard stations at the ends of the road from their previous positions at the entrances to ORNL. (So much for Madia et al.’s highly touted open campus idea.) After the events of 9/11/2001, DOE concluded that the security of the HFIR reactor was threatened by allowing just any old body on that road, which runs in front of ORNL’s main area but not near HFIR. Of course, a truck loaded with explosives could get to the HFIR gate from Bethel Valley Road, and even crash through it, if there were no guard stations at the turnoff from Bethel Valley Road to HFIR, which there now appear not to be. It seemed to many people as if this were an economic decision on DOE’s part not to staff up the guard force adequately to control the threat — rather, DOE invoked its exclusive control of this road. Thus many people have lengthened commutes and other travel inconveniences in the name of national security.
Not only that, but as the Knoxville News-Sentinel reported (30 April 2005), speeding along Bethel Valley Road (presumably by ORNL people and ORNL subcontractor personnel) had become such a problem that supposedly it was ORNL staff members’ biggest safety concern. (Yeah, right.) Wadsworth assured the staff that “Most speeders, we have found, are not ORNL employees”. (Yeah, right.) The News-Sentinel confirmed that “[DOE] let ORNL close Bethel Valley Road to through traffic”, so presumably ORNL now controls access to and driving on the road. But ORNL (i.e., UT-B) asked the Oak Ridge (City) police department to issue citations to drivers speeding on the seven-mile stretch. ORNL promised to reimburse the city for its costs, so the police agreed to do it. But the legal staff serving the police department opined that the department did not have the authority to patrol the road. The police used to patrol the road (“as manpower allowed”), but when it was closed following September 11, the police were shut out also. The police can now be called in cases of criminal violations such as trespassing, but civil violations such as traffic violations are another matter. The last I heard, ORNL and the police were trying to work it out.
Various Madia statements seemed to paraphrase that old saying “What’s good for General Motors is good for the country”, as “What’s good for UT-B is good for Oak Ridge”. Wadsworth’s spin on this was that ORNL “looks like the future”, according to The ORNL Reporter (August 2003), because of all the modernization. In fact, DOE and the contractors never miss an opportunity to emphasize the financial impact of DOE funding in East Tennessee. The Oak Ridger reported (11 April 2003) on the Spallation Neutron Source with this headline: $NS, $eeing is believing [sic dollar signs]”. The article read like a PR release from UT-B, except for a certain subtle note of skepticism on the part of the reporter (R. Cathey Daniels). Madia was quoted as saying that the SNS was “the golden ring of economic benefits”. (This was a reference to the shape of the ring shape of the SNS accumulator system and the ion path, but the mention of “gold” should not be ignored.) Madia said that more than 600 workers would be employed to build it and $150 million would be spent each year to run it; of the $350 million in procurement funds to date, 75% had gone to Tennessee companies. Breakdowns by worker home county and by money spent per county were also given. The first paragraph and the last few sentences were about the facility and the science, but all of the rest of the article was about the money.
The Oak Ridger (14 May 2003) stated that the DOE payroll in this area was $751 million, down from $767 million in 2001. However, in 2001 there were 12,998 employees at Oak Ridge sites, versus 13,101 employees in 2003. DOE explained this by saying that “we had a bunch of retirees, many at a career high
[salary level]
[retiring] and being replaced by college graduates and others at the low end. So payroll dipped”. It would seem unlikely that a recent college graduate could replace somebody with 40 years’ experience, so perhaps the replacement was actually multiple replacements in domino fashion. But in any case, one would think that the retiree-out-new-hire-in cycle was always going on, so that the drop would not be totally explained by retirements. This is especially true with all the voluntary layoffs that had taken place from 2001 through 2003 (many of which were actually early retirements). According to The Oak Ridger, some $567 million of the total was in “obligated funds” for Anderson County (the county including most of Oak Ridge), $131 million for Knox County (whose seat is Knoxville), $36 million for Roane County (the county including the rest of Oak Ridge), and the rest for other counties.
The payroll figures don’t tell the whole story. The Oak Ridger (6 June 2001) reported that UT’s Center for Business and Economic Research (CBER) had issued the results of a study in which it found that DOE spending supported 33,500 full-time jobs in Tennessee in the year 2000 and that for every DOE job, 2.2 additional jobs were supported in other sectors of the economy; all this led to a contribution of $1.8 billion to Tennessee’s gross state product. The Knoxville News-Sentinel (30 June 2004) reported that DOE’s financial impact had increased in 2003: spending by DOE and its contractors accounted for a $3.2 billion increase in Tennessee’s gross state product, “up substantially from a $2.5 billion increase in 2002”, again according to a report by the CBER. CBER also found that DOE and its contractors spent more than $1.7 billion on wages, pensions, and nonpayroll costs in 2003, “a 47.9 percent increase from 2001”, and DOE-related spending supported about 55,000 full-time jobs in Tennessee, “including [11,300] relatively high-paid workers directly employed by DOE and its contractors”. There were figures on taxes paid as well, along with the observation that for each worker directly employed by DOE (presumably including its contractors), 3.8 jobs were supported in other sectors of the economy. The CBER study noted that there was a two-year “growth spurt” after four years of DOE spending cuts in the area. Even so, the gains appeared to be pretty big from 2000 to 2003, leading one to wonder if some aspect of jobs counted or income ascribed was changed. The Oak Ridger’s story (30 June 2004) on this latter study added the detail that in 2003, 956 “DOE-related” employees held doctorates, 1668 held master’s degrees, and 3461 held bachelor’s degrees. Note that DOE commissioned the study and supplied CBER with the data. The 2004 CBER report reads like a advertisement for the DOE sites, especially ORNL, and for CROET and other reindustrialization entities. There are blocked-off sidebars, such as newspapers and magazines have, that highlight, e.g., the R&D 100 awards won by ORNL; the section on reindustrialization is titled “A Bright Past — A Brilliant Future”; and most of all, there are the simple quotations from DOE, ORNL, CROET, etc., that pass for the information found by the CBER’s “research” on this topic. Maybe it was supposed to be just a summary report of what the individual entities reported, not a true study, but then why couldn’t DOE have written the report itself? (There are also more typos, etc., than one would expect from a university-issued report, but oh, well.)
The Oak Ridger (6 January 2003) reported that the City of Oak Ridge could expect about $800,000 annually in property taxes from a new ORNL facility and Roane County could expect about $600,000. This was because this $72 million research facility had been built by and was owned by a South Carolina development company, which was leasing it to UT-B, which was “backing up” (ensuring?) the payment of the property taxes. The Oak Ridger reminded readers that DOE had transferred the 6.6 acres of land to “the UT-Battelle Development Corporation” in June 2001 so that this facility would not have to queue up for DOE line item funding. UT-B spokesman Stair noted that this was “a privately funded facility. The DOE and Congress did not pay the cost for this facility — it’s a very unique initiative not just for ORNL but for the entire DOE complex”. What Stair did not note was that DOE program funds — i.e., taxpayer dollars — would be paying for the lease and that since the developers did not build the building out of the goodness of their hearts but for profit, DOE program funds would pay for that too as part of the lease. Furthermore, Stair did not point out that the property tax payments would not have had to be made if DOE had built the building. Thus the long-term cost of this building for the federal government may well end up being much more than if DOE had funded it directly. Not only that, but if UT-B was allowing any private companies to do any research there and not passing on any of what they charged to the federal government (since UT-B the private company and not UT-B the contractor was running the building), then DOE would essentially have given a gift of land to private interests. Nobody squawked about this at all, although the benefit to the taxpayers seemed to be as phony as a $7 bill. It was no surprise when the Knoxville News-Sentinel (28 July 2004) reported that ORNL’s building program was going apace, with Bank of America underwriting much of the financing. The ostensible reason for private funding was again given as the slow pace of government building (having to get a line item, etc.). (But of course if DOE had started building several years earlier, they would have been done when the private developer was.) Some time later, the News-Sentinel (27 June 2005) reported that the entire modernization program at ORNL was to cost $300 million.
The Knoxville News-Sentinel said (Munger column, July 2005) that UT’s CBER had issued the results of yet another study in which it found that DOE spending contributed mightily to the Tennessee economy — a study yet again paid for by DOE. Munger made an interesting point about the press conference presenting the results of the study: in introductory remarks, the chancellor of UT stated that historically the biggest three employers in the region were the Tennessee Valley Authority, UT itself, and ORNL. This was a startlingly stupid thing to say, because as Munger noted, Y-12 had about 4700 employees at the time to ORNL’s 3800. The reader should note that at one time Y-12 had more than 10,000 employees while ORNL has probably never had more than 5000, if that. Then there is the K-25 site, which, although not operating as a DOE site now, used to be a big site and now has a lot of cleanup workers, although perhaps not as many as 3800. Munger also pointed out that although the report was about the impact of all DOE’s operations, “most of the discussion was about ORNL”; he remarked that he had not heard a single mention of nuclear weapons production during the press conference, which as he noted was hard to understand given the $800 million annual budget of Y-12. So Munger asked the study author if anybody had compared the economic impacts of ORNL to those of Y-12 and of science versus weapons production. The author replied that there had not been, and he then referred the question to DOE head Boyd. Munger observed that this was an awkward question for Boyd, given that the emphasis on ORNL seemed to serve Boyd’s personal and organizational interests since it was NNSA (the National Nuclear Security Administration), not DOE-ORO, that oversaw Y-12 and its budget. Boyd replied he thought that the economic impact of DOE’s operations in Oak Ridge could probably be divided equally among ORNL, Y-12, and the programs that included environmental cleanup. Munger then told us readers that he thought that the three-way split was “about right”. But he offered no figures to back up this judgment, either for the then-current fiscal year (when, e.g., Spallation Neutron Source construction was adding money beyond what went into the salaries, etc., of the 3800 ORNL employees) or for any year past or present. The fact that ORNL is run by UT-B and UT thus has an interest in promoting ORNL may have had no influence on the economic scientists who did the study and who likely did not control the discussion at the press conference. However, one of the authors of the report stated that the economic impact of DOE operations in Oak Ridge went beyond the contributions cited in the report because “we can’t put a very clear value on research and development spending”. If I understand his comment correctly, it is not enough simply to state what that spending is and how it feeds into the economy — to be totally fair, one has to ascribe to it some economic influence down the road, to include the “penumbra” of it, if you will.
The Oak Ridger (30 April 2004) asked DOE how many DOE and contractor employees actually lived in Oak Ridge. For 2003, the DOE spokesman said, there were 2155 Oak Ridge residents employed at DOE’s Oak Ridge sites, with an associated payroll of $157+ million, plus 115 employees of DOE itself, with an associated payroll of almost $9 million. This was about $73,000 per non-DOE Oak Ridge resident and about $78,000 per DOE Oak Ridge worker. Considering that the median household income in Tennessee in 2003 was $38,000 (per the Census Bureau), one can readily understand why the city fathers are desperate to keep those paychecks in the city.
Turning A Gold Medal High School Into a World-Class High School; AMSE
The Oak Ridger reported (8 March 2002) that following the talk by Madia discussed in Smyser’s 12 March 2002 column (see above), the chairwoman of the Oak Ridge Board of Education and the superintendent of the Oak Ridge schools were asked by the reporter if they had heard of a proposal by Madia to build a new high school and they said they had not. In fact, said the superintendent, he thought the existing facility was in “pretty good shape” and had “high-quality science facilities”. These statements should be remembered by the reader as I relate what followed.
The Smyser column of 12 March 2002 appears to be the earliest significant announcement of what you might call the ORNL high school initiative. UT-B, according to Madia, wanted Oak Ridge High School to become “the best science high school in the country” and was prepared to invest money to achieve that goal. He had already conferred with Ken Green, the principal of Oak Ridge High School, regarding building a new high school. In September 2003, it was announced (e.g., The Oak Ridger, 17 September 2003) that UT-B would pay for an engineering study of repairing Oak Ridge High School and that Tim Myrick, then ORNL’s “revitalization” manager, would devote some of his time to this problem, at no charge to the school system. The expressed intent was to create a “world-class” school that would attract new people to Oak Ridge, specifically to ORNL. The Oak Ridger reported (5 September 2003, after Madia’s departure for Battelle corporate headquarters) that the planning phase of the high school study would cost between $50,000 and $100,000 — and that UT-B would pay for it.
Later, it was announced (The Oak Ridger, 24 November 2003) that not only Tim Myrick — now termed a “loaned servant” to the school system — but also ORNL’s Jeff Smith (deputy director of operations), Thom Mason (director of the Spallation Neutron Source project), and Billy Stair (public relations honcho) would be putting in time on this. It was hard to understand why UT-B would devote megahours and a chunk of money to this one school; there were also the questions of whether these people’s time was coming out of their program-funded salaries and thus whether DOE and thus the US taxpayer were actually footing a lot of the bill (which I believe has not been asked by the media). Tellingly, ORNL head Wadsworth explained (The Oak Ridger, 26 November 2003) that “UT-Battelle has a special interest in the high school, not only because such support is appropriate, but also because our ability to attract the nation’s best talent to [ORNL] is frequently contingent upon being able to provide the best possible public education to their children”. He went on to say that potential employees (i.e., those desirable world-class researchers) were more interested in the quality of local schools than any other issue. This emphasis on what was in it for UT-B kind of undercut their alleged motive of “just being a good corporate citizen of Oak Ridge”, I thought, but at least UT-B was true to form in being open about the financial motives.
The Oak Ridger reported (26 February 2004) that an “Education Foundation”, which was “helping gather support from various groups for the high school”, had been set up; an earlier committee that had been a broadly based community organization and had thus included teachers, parents, and some community leaders seemed to have been transmuted into a private entity, the foundation. The foundation was chaired by Mason, who somehow found time to run it in addition to what one think would be his more-than-full-time duties as head of the ORNL’s Spallation Neutron Source project. The Oak Ridger also stated that “to assist local citizens in understanding the issues involving the high school renovation, UT-Battelle designed and published 5000 copies of a 12-page brochure”.
The Oak Ridger (June 2004) and the Knoxville News-Sentinel (16 June 2004) reported that UT-B was contributing $2,000,000 over five years to the Oak Ridge school system for the purpose of building the new $55-58 million “21st-century” high school — in a town whose projected general school budget in FY 2005 was just under $40 million and whose population was about 26,000 people — on condition that the town voters pass a half percent increase in the sales tax rate, from 9.25% to 9.75%, the maximum allowed by the state. It was startling that a contribution by a contractor, most of whose employees do not live in Oak Ridge, would be tied to a local tax increase; it was startling that the high school was estimated to cost so much when the 2004 high school population was about 1500 students. (As reported by The Oak Ridger in the “Ask Inky” column of 10 May 2005, there were 1499 students at the high school in the 2000-2001 school year, 1462 in 2001-2002 , 1493 in 2002-2003, 1506 in 2003-2004, and 1448 in 2004-2005.) ORNL head Wadsworth again sounded the “good for you and us” note, stating that UT-B’s reason for making the donation was that UT-B wanted to “help maintain the quality of a science program at Oak Ridge High School that is among the nation’s best” and because “an outstanding high school is critical to our efforts to recruit the world’s most talented researchers to ORNL”. He noted that this gift would be “coming directly from the fee Battelle and the University of Tennessee receive for managing [ORNL]”, i.e., not from operating funds provided by DOE. Note that the University of Tennessee was thus apparently contributing to the modernization of this one high school also. Mayor Bradshaw stated that this contribution “says that the private sector is committed to this project and has looked at it from a business standpoint and said, “This is a good investment””. (He also grandiosely termed the modernization “a project for the ages” that would “make an impact for the next 50 years”. Yes, he really talks that way.) UT-B’s Mason claimed (The Oak Ridger, 14 May 2004) that Oak Ridge residents’ support of the school system would be shown if the community voted for the tax increase. Some non-UT-B official was said to have stated explicitly that people who voted against the increase were not supportive of the school system, i.e., a “you are selfish people who don’t care about kids” argument, which various longtime residents objected to because it was their willingness to be taxed in the past that had made the current high school the academic powerhouse that it already is.
Subsequently, it was announced in the Oak Ridger (29 June 2004) that Y-12 managing contractor BWXT would donate $1 million over five years and that this could grow to $2.5 million; a school board member observed on this occasion that it was not just a matter of remodeling the high school but of “mak[ing] Oak Ridge a more attractive place to live”. Oak Ridge Associated Universities (ORAU) pledged $1 million (Knoxville News-Sentinel, 25 June 2004); Duratek was said to be donating $50,000 (Knoxville News-Sentinel, 24 January 2005). The Oak Ridger reported in 2004 that Wackenhut, which supplies and manages the guard force on the Oak Ridge Reservation, was kicking in $500,000 over five years even though, Wackenhut said modestly, its contract was not “anywhere near as large as the site operating contractors”. A Wackenhut vice-president said that the contribution was given because “it is extremely important that we give back to the community in which we live and work” (although The Oak Ridger did not state if this person himself resided in Oak Ridge, or how many of the 800 Wackenhut employees actually resided in Oak Ridge) and that it represented “a long-term commitment of Wackenhut to develop leaders for the future” (although why a security company should take this upon itself to do was not stated). Finally, the News-Sentinel (1 July 2005) reported that the East Tennessee Economic Council (ETEC — see below), whose board is heavily weighted with DOE contractors such as UT-B, UT, BWXT, etc., was contributing $10,000 toward the high school project — to be made over five years. The reader should note that several of these individual companies had already made large pledges to the project, so that insofar as they were contributing through ETEC, they were contributing twice.
All of the “over time” contributions prior to the tax vote had the same string attached: that the voters pass the tax increase on themselves. The Oak Ridger (16 June 2004) opposed having “strings attached” (it seemed to the editorial commenter to be “slightly disingenuous”) — but only on the grounds that the students “deserved” to have the gift free and clear. In addition, BWXT made its contribution contingent on the extension of BWXT’s contract to manage Y-12; of course, BWXT wouldn’t continue its contributions if it lost the contract, but was it also saying it would not continue if DOE made it rebid on the contract? In any case, making this statement prominent seemed to be a push for city support (“Look what you’ll lose if you don’t lobby DOE to let us keep that contract”). Again, all of these contractor contributions were to go to the nonprofit Oak Ridge Public Schools Education Foundation that had been set up to receive and solicit such donations and which was spearheading a $12 million fund-raising campaign, “of which $8 million is earmarked for the high school renovation project (The Oak Ridger, 14 May 2004; the Knoxville News-Sentinel, 25 June 2004). The rest — some $4 million — was to be used for “the foundation’s ongoing efforts to support innovative educational programming in the Oak Ridge School District”. Again, it was notable that all the donated money was going to a private group and not, say, directly to the city or the school system or even into an escrow account controlled by the city. Again, the chairman of the foundation in 2004 was Mason, a UT-B employee.
Why would UT-B (and similarly, the other contractors) do this — why would they care about the school system and the tax rate in a town that many and probably most of their employees do not live in? Again, Wadsworth said that the UT-B contribution was “a great business investment, not just the right thing to do”, as The Oak Ridger put it (27 June 2005); he added that modern facilities at the high school would not only make the high school better, but what really “sells” (his word, apparently) was the high school’s having teachers who teach Advanced Placement Classes. But an additional explanation would be that UT-B gets brownie points for community involvement. This was confirmed in 2005 (The Oak Ridger, 15 February), when DOE awarded UT-B an “Outstanding” rating, including the maximum fee for the points earned for the community service category, and specifically cited “UT-Battelle’s leadership role in efforts to rebuild Oak Ridge High School”. UT-B also got the maximum fee for the science and technology performance category and 90% of the maximum fee for the operations category; all together this gave them 96.4% of the total maximum. There appear to be only the three categories, but the points or fractions of the total that each represents are not clear. However, those readers who are so minded can “do the math”: the 90% of the operations points corresponded to a drop of 100% – 96.3% = 3.6% in the total, suggesting that the operations category counted for about 36% of the total points. This is so close to 33% that….I wonder….could the community service category count for one third of the points? This would surely give UT-B an incentive to give generously of money and their employees’ time — as I noted before, there is a definite return on this investment and it isn’t simply the gratitude of the locals.
Beyond the points business, by tying the contribution to the tax increase, UT-B ensured that matching funds from the city for the high school would be forthcoming. It would not seem necessary to attach this condition to the donation — UT-B could just have required the match for the donation and let the city figure out where to get the money. I believe that DOE must have blessed this endeavor of UT-B’s and the other contractors as a way of getting the Oak Ridge city fathers off their back, financially speaking, and that this is why it was so important for the Oak Ridge schools — but not, for example, the Anderson County schools or the Knox County schools or the Roane County schools — to be assisted to world-class status. The reader should be aware that the per-pupil spending in the Oak Ridge school system was $7,872 in the 1999-2000 school year, while it was $5,975 in the Knox County (including Knoxville) school system, $5,919 in Anderson County, and $5,758 in Roane County (The Oak Ridger, 20 November 2000). While these numbers have changed somewhat since then, the huge disparity is still there. Further, the State of Tennessee pays a baseline salary for an authorized number of teachers; local school systems pay the extra they needed to attract good teachers and they pay all the salary of teachers above the authorized number. Oak Ridge already paid anywhere from $6000-$21,000 extra for its authorized teachers and they paid for 60-70 teachers extra — all to have an already top-ranked school. With that kind of support (and average income) in Oak Ridge, you would think that UT-B would be more interested in boosting the school systems that need help more. But as I noted, this would not score the DOE points that making Oak Ridge happy would.
I was not the only one who thought so: one letter to the editor of The Oak Ridger termed the on-condition-you-pass-the-tax-increase ploy “greenmail”. Another (D. Hurtubise, 4 August 2004) noted that the high school project alone would double the city’s debt and restrict for years the ability of the city to borrow for other capital projects, including those for improving other Oak Ridge schools; the writer asserted that if the DOE contractors wanted a world-class school, they should pay for the extra costs to make the facility “outstanding”, including operating costs. But the city fathers apparently went along with the modernization/tax increase idea happily. They also needed the tax increase passed if they were to make up for, e.g., 15-year 50% tax abatements for developers of upscale condominium housing and if they were to be able to attract “young researchers” . As Oak Ridge Chamber of Commerce president Parker Hardy stated (The Oak Ridger 30 June 2004), “Presumably, when [older employees in the present work force] retire, they will stay in the area. That means that as the next generation of work force is hired, if Oak Ridge is going to capitalize on it, then we’ve got to have the housing stock that will attract them. And we’ve got to have the retail and commercial attractors that will enable them to spend their money….Right now, there are close to 4000 homes….that are somewhere in the pipeline in Oak Ridge….We’ve got to accelerate the process of getting those houses out of the ground”. Well, Mr. Hardy is nothing if not blunt about what Oak Ridge has “got to” do. (And in the same article, The Oak Ridger also reminded readers again that “DOE and its major contractors employed 11,287 Tennessee residents and paid an average annual salary of $49,780 in fiscal year 2003”.)
The city fathers and the developers have their interests to be served, but why is it appropriate for DOE to require, in a big financial way, “community investment” and “outreach” of a contractor? I hope that Congress looks into this sort of action by DOE and the potential it creates for contractor influence over community affairs. Along these lines, one should note the comment of Mayor Bradshaw when asked whether he thought that DOE would renew UT-B’s contract to manage ORNL (The Oak Ridger, 8 April 2004): “I can’t imagine any reason — reasonable or not — why that contract would not be extended”, citing UT-B’s record of accomplishment, including UT-B’s “raising the bar on community involvement”. He said that “their involvement in the community is huge” and he particularly noted UT-B’s efforts to help modernize “the aging Oak Ridge High School” (as The Oak Ridger called it), its contributions to science labs at various area high schools, and “its work to get a finish-line tower for the Oak Ridge Rowing Association”. When he looks at UT-B, he seems to see dollar signs. It was no surprise that Bradshaw, when DOE announced that it was giving UT-B a new five-year contract to run ORNL, said that it was “absolutely the right decision. It’s good for Oak Ridge, good for East Tennessee, good for the nation”.
Following a full-court press by school and city officials, The Oak Ridger, the chamber of commerce, etc., the tax increase — sold as being “for education….for the kids” — did pass by an almost 3-to-1 majority (Knoxville News-Sentinel, 6 August 2004). After the vote, an article in the Knoxville News-Sentinel (5 September 2004) explained why the measure passed. The article was authored not by a member of city government or by a professor of public policy, but by Stair, the ORNL “director of communications” (i.e., public relations). Stair said that Oak Ridge had one of the largest communities of retired persons in Tennessee and that while many cities suffered from “a shortage of good jobs”, Oak Ridge was “enjoying a relative employment boom”, which he claimed was “generated by recent growth at [ORNL] and other federally funded enterprises”. Even so, he said, “the majority of new employees in Oak Ridge have chosen to buy homes in the sprawling suburbs of Knox and Loudon counties” and the population of Oak Ridge and its tax base “have stagnated”. (It was no news to anybody in Oak Ridge that most federally funded employees choose to live elsewhere than small and relatively expensive Oak Ridge, especially young families.) According to Stair, the city council then determined that the community’s “greatest asset” was the high school and that “enhancing this asset” was the best long-term opportunity the city had to attract that very desirable demographic, “young families”. He said that “employers like ORNL likewise decided” that if they were to compete with Berkeley or Los Alamos for “world-class talent”, it would require “a modern high school of the very highest academic standards, particularly in math and science”.
One would have thought that all those Merit Scholarship finalists and semifinalists, all those Math Olympiad and Science Olympiad trophies, etc., would count for something, not to mention all the orchestra, band, Spanish, French, chess, etc. awards — this truly is a high-ranking US high school, on some authority’s top 100 list and, in 2003-2005, a “Gold Medal school” as per Expansion Management magazine. But no — only a shiny brand-new school would do. Stair said that everyone involved, “from the principal to the city’s corporate executives”, understood that the referendum was “a political campaign, no different than a campaign for the state Senate”; “anything less would be doomed from the outset”. He then explained how the campaign was carried out: everyone involved was coordinated to be on message from the get-go. A poll of about 400 residents provided information om how citizens felt about the proposal and which groups were most likely to vote. Voting records and lists of PTO organizations and high school alumni were used to identify and target a base of likely supporters, who then received post cards and phone calls. The poll was followed by “a sophisticated communication plan”: those 5000 copies of the “glossy 12-page brochure” were distributed “to illustrate the structural problems at the high school”, speakers carried the message to civic clubs and “assisted living centers”, and open houses and tours of the high school were held (with emphasis on the cracks in the wall of one part of one building). “Operating [in] parallel” with this, the Oak Ridge corporate community organized a major fund-raising effort: “In a series of coordinated announcements leading up to the election, companies made five-year commitments to the high school, all of which were contingent upon passage of the referendum”. He claimed that the “business leadership” of Oak Ridge committed to “raising” (not “donating”) $17 million, or about 30% of the project’s cost. On election day — a Tuesday and a school day — “with high school students working the polls”, the referendum received majority support “in every precinct and among every demographic group in the city”. He concluded that the result would be “a high school that can realistically aspire to be among America’s very best”.
It was obviously no surprise that with an industrial-strength campaign — and significant arm-twisting of businesses — the referendum passed. One is left to wonder who paid for the post cards and phone calls; for the full-color glossy brochures (and what pot of money it came out of — UT-B was said earlier to have designed and paid for the brochures, but was that from operating funds and company time, or from award fee money and volunteer time?); and for the time of the various business representatives (did the DOE-funded ones charge their time to DOE-paid overhead?). I think that if the majority of the people in Oak Ridge had realized at the time how they were being manipulated, they would have voted down the referendum. ‘Cause you can fool all of the people some of the time…..
After the tax increase passed, the high school renovation plan kicked into high gear. When it was complete, the Knoxville News-Sentinel (1 February 2005) reported that while the cost was initially said to be $52 million, the cost would actually be $42 million, with the costs of equipping and furnishing the school adding another $2 million; thus according to the News-Sentinel, the cost was about $44 million. Yet just two days later, The Oak Ridger (3 February 2005) reported that when the draft plan was reviewed by the school board, the cost was given as $55 million; the News-Sentinel (1 July 2005) also reported this figure. According to the News-Sentinel (1 February 2005), the renovation was to expand the high school from 295,000 to 378,000 sq ft and was designed for 1700 students “at an 80% capacity”. (This was striking because the enrollment was not expected to rise significantly over the 1430 students there were in 2005.) The science classrooms and labs were to be moved into modular buildings while the old main building was torn down and new buildings were built, including a “competition gymnasium” (to seat 2000) and a three-story “learning center”; new buildings would be put in in succeeding years. Tim Myrick, now termed a “consultant” to the school system, said that with the project, “we think we’re in good shape for 15 years”. (One naturally wondered how long it would take the taxpayers to pay it all off. A proposed high school in Knoxville was estimated to cost only $40 million at the same time. Also, I read in the Knoxville News-Sentinel in September 2005 that a “full-service” hotel was to be built in Knoxville; it would have 150 guest rooms, including 10 luxury suites — and cost $13 million.)
Regarding Myrick, The Oak Ridger said (28 February 2005) that “Oak Ridge Schools project manager Tim Myrick” would be announcing the final plans for the new Oak Ridge High School during the Tuesday “Lunch with the League [of Women Voters]” meeting. It further stated that “Myrick, an Oak Ridge National Laboratory employee, is on loan from ORNL to the school system”. The article also reminded us that Myrick had “led the UT-Battelle-funded conceptual design, which was completed in January 2004, and [he] is serving as a special consultant to….the superintendent of Oak Ridge Schools”. One wonders, if he was still on ORNL’s payroll all this time, how UT-B billed his time — was he on the overhead that all the ORNL programs paid into? If so, on what basis was this mostly federal money used for this purpose? Apparently The Oak Ridger and the News-Sentinel didn’t ask such questions.
The funding was to be broken down as follows (The Oak Ridger, 24 February 2005): $38 million from the taxpayers of Oak Ridge (raised from the tax increase passed in 2004), $9 million in bonds in the form of state matching funds, and $8 million from the Oak Ridge Public Schools Education Foundation. As of January 2005, the foundation had raised $5 million of its quota, but to meet the goal of $8 million by June 2005, they were soliciting contributions from the public — the same public that had already been paying taxes to support the schools and was paying an additional tax to build the school. The “extra” $4 million of the total $12 million the foundation was to raise was now termed the school system’s “endowment”.
The foundation has continued to raise money. In 2005, one publicity tactic was to feature people in The Oak Ridger, often as whole families, who gave generously to the fund. Not just their names are printed: there is a large article about them with photographs. Flattering things are said about their commitment to the community and the schools and they are quoted frequently in the article. I am sure that these people are not making the donations just to get their pictures in the paper, but it does seem as if The Oak Ridger is giving a lot of free advertising space to the campaign in this way. I haven’t seen a word against the expensive new high school in The Oak Ridger in some time. However, some questions are being to be asked at the end of 2005, as Hurricane Katrina’s effect on the costs of construction has jacked up the estimated cost by about $10 million more.
Readers who are US taxpayers outside of East Tennessee may be interested to note that they may all contribute to the modernization of Oak Ridge High School as well. As Mason commented (The Oak Ridger, 14 May 2004), the private Oak Ridge Public Schools Foundation can take advantage of federal Qualified Zone Academy Bonds (QZABs), which will multiply the foundation’s donation by two. Thus the $8+ million put in by the foundation will garner another $8+ million from the federal government. As the National School Boards Association explained on its Web site (accessed by me 23 March 2005), “QZABs can be used to finance the renovation of eligible schools on an interest-free basis through the allocation of tax credits to financial institutions. The program was created by the Taxpayer Relief Act of 1997….and extended for an additional two years in 1999. To qualify for a QZAB, a school must be located in an Empowerment Zone or an Empowerment [Enterprise?] Community or 35 percent of its students must be eligible for free or reduced-cost school lunches. In addition, the school must be involved in a business partnership aimed at enhancing the academic curriculum, increasing graduation and employment rates, and preparing students for college…and must receive contributions from a private business or other organization equal to 10 percent of the proceeds of the QZAB. This support may be in the form of equipment, computer software, internships, personnel time, technical services, or volunteers”. It may come as a surprise to many Oak Ridgers to find that they are in an “Empowerment Zone/Enterprise Community” — which tends to imply an impoverished area — but apparently that is so.
The Oak Ridger reported (8 September 2004) that the Oak Ridge City Council had approved a resolution “seeking up to $12 million more in Qualified Zone Academy Bonds from the Tennessee State School Bond Authority” (because the state government is in charge of approving and administering the federal QZAB fund quota allotted to that state); the council had received approval earlier for $4 million of those bonds. These are interest-free bonds, so that the city will save millions over the life of the loan (14 years, I believe). I.e., other US taxpayers will help the city upgrade the already high-ranked high school. Interestingly, the US Department of Education Web site for QZAB said that as of December 2004, the amount allotted to Tennessee was $8,758,000, which I took to mean that this was Tennessee’s share of the total federal funds allotted for QZAB; if so, that means that Oak Ridge will be getting about half (the $4 million) of the total for the fiscal year and perhaps more the next. But in the same edition of The Oak Ridger, another article related the concerns of a member of the Oak Ridge City Council (Abbatiello) that property taxes would have to be raised to pay off the main loan because “we simply don’t have the revenue to pay it off”. Vice Mayor Tom Beehan disagreed, asserting that the city council would not raise property taxes to build a new high school. Backing the loans was a “letter of commitment” from UT-B’s Wadsworth for UT-B to provide $400,000 a year for five years (i.e., the $2 million pledge).
Besides the QZAB money, as The Oak Ridger reported (22 November 2004), Wamp managed to include a provision for $200,000 for “technology upgrades” for the high school in the Fiscal Year 2005 omnibus appropriations bill that passed the US House and Senate in November 2004. Wamp said that while the funds were to go to the city of Oak Ridge, the money was earmarked for “integrating math, science, and technology disciplines” at the high school. Well, them that has gets, as the saying goes; Oak Ridge is a fairly well-to-do community that supports its schools strongly, while there are parts of East Tennessee — perhaps even some in Wamp’s district — where there aren’t enough textbooks for the kids to use (forget computers and science labs). As one letter to The Oak Ridger said (H. Hitchcock, 30 June 2004), while Oak Ridge had multiple Advanced Placement science courses, the Anderson County school system had none; in the coming year there would likely be a reduction in “what could be termed “honors” science courses” due to the elimination of teaching positions. This does seem to have come to pass, as several 2005 articles in The Oak Ridger about the Anderson County Schools have discussed.
This may be one reason that State Representative Jim Hackworth helped put through a state law in 2004 that grants a “credit on state franchise and excise taxes to businesses that donate to public school support organizations” (The Knoxville News-Sentinel, 28 March 2005). Hackworth represents Clinton, the county seat of Anderson County; his wife Brenda works in ORNL’s Communications and Community Outreach group. He is proud of what he termed “kind of a shell game, but a good shell game” and he says that people tell him “it’s the greatest thing since sliced bread”. He is trying to get the law expanded to cover donations to other nonprofit organizations — including chambers of commerce. The way it works is that a business will contribute, say, $1000 for (to use the News-Sentinel’s example) band uniforms. The business does this by donating the money for the uniforms to the band support organization and also paying the sales taxes due on the purchase; note that the money is not paid to the school system directly, but to the private support organization and that although the support organization apparently actually makes the purchase, the business, by earmarking the sales tax portion of its contribution, is credited with having paid the sales tax itself. The business then gets to claim a charitable deduction on its federal income tax and is also authorized to deduct 75% of the state franchise and excise taxes (apparently also on the federal income tax) that would otherwise have been due on the $1000, or 75% of $65. So as the News-Sentinel points out, the state is happy because it gets sales tax; it is “not dramatic [savings]” but is “an incentive to encourage businesses to get involved in their community”. It is also a way, obviously, for the local and state economy to benefit at the expense of the federal budget.
With regard to other education and training contributions, one thing that Y-12 proposed to do (The Oak Ridger, 12 August 2004) sounded like the old Distributive Education (DECA) program in my high school days. Y-12 wanted to partner with the Oak Ridge school system to create a “manufacturing academy” to “train students in 21st century job skills” and emphasize hands-on job skills. The skills were in computer-aided design, computer-aided manufacturing, and robotics. This actually sounds like a good idea, as long as both the students and Y-12 benefit. However, we have to wonder who is going to pay for this — and why students would need to learn these skills in high school rather than, say, in community colleges. There are problems with bringing minors into a secure facility like Y-12 (and one with potential radioactive and chemical hazards) or with having mentors travel to and set up at the high school. And again: why only Oak Ridge High School? Why, even more, not the surrounding area school systems?
The Knoxville News-Sentinel reported (30 April 2005) that the academy idea was moving forward, coupled with the idea of a privately built and owned office building at Y-12: the “Manufacturing and Engineering Technology Academy” at Oak Ridge High School was to open in August 2005 at the school’s vocational building. To make room for the new program, auto mechanics was being phased out and eventually the new program would be moved to better quarters in the new high school. A facility to provide “more intense training for top-notch students” is slated to open in 2007 in the office building at Y-12; a Y-12 representative stated that they planned to “cherry-pick high potential students” who would be “job-ready” after the training. Perhaps folks in this NASCAR-loving region won’t deplore the loss of auto mechanic training for young people; perhaps other employers won’t mind Y-12’s getting the cream of the future technician/mechanic crop and also having a major influence on what is taught in vocational training at the high school level. But I would think that many people would be troubled by the close alliance with and dependency on a major DOE contractor, in this case BWXT. If these young people trained at some technical institute, they would likely receive a relatively broad technical education because the institute is training them for many potential employers, at least in theory. But BWXT would be training them with an eye to Y-12 work. It is not clear whether the young people who receive the training at Y-12 will afterward be obliged to work it off at Y-12 or not (as one would do in the Army), but it is clear that the pay would be at entry level (saving having to hire experienced and thus higher paid folks) and that Y-12 managers would be able to observe and screen prospective workers in a way that they would not be able to do with just interviews, letters of reference, and transcripts. It appears that the main purpose of this academy is to siphon the most technically apt directly into Y-12 and to promote the bottom line of Y-12’s management. It is not clear whether DOE is funding this in any way or if BWXT is getting “brownie points” for public involvement for doing this, but I would bet on it on both counts.
To its credit, ORAU awarded to fourteen Anderson County schools a total of $29,000 (Knoxville News-Sentinel, 30 August 2004; The Oak Ridger, 2 September 2004); however, four of these schools were in Oak Ridge. These awards are made on the basis of “grant proposals submitted by the individual schools”. The Oak Ridger said that money went to books, science and computer labs, hands-on science and math experiments, and an articulated skeleton for an anatomy lab, but also to “enhance the Higher Order Thinking Skills for Science program” (whatever that is). But oddly, the Clinton Police Department received $500 to buy materials for forensic science classes — to be taught at an Anderson County middle school — and an Oak Ridge middle school received $500 for a digital camera for a computer applications course. Middle school seems a little young for this stuff (and I speak as one whose two children attended that same Oak Ridge middle school and as one who has volunteered time at that middle school). Then there was the $500 to Oak Ridge High School “to introduce chess to improve skills that promote academic success” (in addition to the sound $1500 for algebra materials).
UT-B did contribute $150,000 to improve science education in the Knoxville metropolitan area (Knoxville News-Sentinel, 11 June 2004). This money was to be used to pay for a UT science education workshop for middle school teachers in July 2004. Unnamed “officials” told the News-Sentinel that this contribution was one by which UT-B could demonstrate its commitment to the “Nine Counties, One Vision” “regional planning initiative”. Also, the “Nine Counties” executive director stated that science education helps students succeed in college, spurs new technologies, and “creates a skilled work force that attracts more businesses”. I was always skeptical of the “Nine Counties” activities because it appeared to me that the leaders started out with a predetermined agenda and then tried to get members of the community (after listening to the leaders talk) to mouth the various “Nine Counties” slogans and planning lines as if the community itself had decided on them by consensus. I thought it was a faux community effort. I am in favor of upgrading the science knowledge of schoolteachers, especially the middle school teachers because they have to handle the kids as they transition into puberty — anything that might make school more interesting and relevant to those kids is a plus in my book. But UT-B contributing to UT? This was like UT contributing to itself, in effect. Besides, ORNL itself had an education program going in past years and thus could potentially have handled this itself. Finally, the pointed reference to attracting more business sounded as if there might be DOE brownie points to be had from this contribution. Positing this as a contribution under the “Nine Counties” umbrella thus enhanced the “Nine Counties” influence and, yet again, put the emphasis on business interests at the forefront.
The Knoxville News-Sentinel reported (11 March 2005) that the Oak Ridge School System “spent $10,000 to buy an institutional monument that will be part of the Secret City Commemorative Walk” being built in a central park next to the civic center and sponsored by the Oak Ridge Rotary Club. This monument was an “institutional” plaque describing “the history of the city’s school system during the 1940s”. Various businesses and civic organizations were buying “monuments”, of course — e.g., the Cooperative Agreement of Labor (union) and Management kicked in $10,000 for a plaque called “Construction Workers” that gives various details of what they built during the war years, while Bechtel Jacobs kicked in $10,000 for a plaque called “K-25 — the Gaseous Diffusion Plant”. There are a reported ten such plaques, for a minimum total contribution of $100,000 if all the plaques are subscribed to; other contributions will likely push the total up further. But it seemed strange that the school system would kick in, given its alleged need for donations to build a new high school. Well, actually, it was probably not the school system that contributed the money, but rather the foundation set up to raise money for the new high school. But that too raises a question: why would they spend money contributed for the purpose of building a new school on a commemorative plaque? And why would the plaque cost so much? Why would it cost so much to put in a walk and ten plaques in a long-established park? (And maybe this says something about my short attention span, but why would anybody feel a burning desire to go to a park and read ten plaques full of historical statistics? Especially when, e.g., the Children’s Museum and the American Museum of Science and Energy, both in Oak Ridge, have exhibits with photographs and artifacts from the early days of Oak Ridge?)
Speaking of the American Museum of Science and Energy (AMSE), it is also a priority with city officials to ensure its survival. This is a museum that was started and funded for years by DOE. DOE decided it should not be funding it any more, at least not to the tune of $1.2 million a year, and gave the responsibility of operating and funding the museum to UT-B as part of its contract to manage ORNL — which appears to mean that UT-B has to carve out the operating costs from the funds allotted to it to run ORNL. The City of Oak Ridge has offered to take over AMSE, but the terms (including, I believe, some guaranteed funding from DOE) are not acceptable to DOE (e.g., as implied in The Oak Ridger, 13 January 2004). In 2005, it was proposed to use some of the AMSE land for development, with the income from a major new retailer earmarked to support AMSE. But oops! A mall development blessed by the city was already underway and the developer felt that his retailers would be threatened by a proposed AMSE-land retailer. The city fathers made conciliatory noises, but it appears that either the AMSE development or the mall development has to roll off the table. By the way, AMSE is headed now by Steve Stow, the ORNL “ombudsman” back in my layoff days; I believe that he is still an employee of UT-B.
A final note: The Oak Ridger (19 December 2005) reported that Mason, head of the Spallation Neutron Source, was awarded the “Postma Young Professional Medal” at “a special meeting of the East Tennessee Economic Council” (see below). At this time, he was still serving as the chairman of the Oak Ridge Public Schools Educational Foundation. He received the award from Pat Postma, whose late husband, Herman Postma, was a former ORNL director and former foundation activist. Mason was “the Oak Ridge community’s finest representative of the community spirit and leadership modeled for us by Dr. Postma”, according to ORNL’s Wadsworth in his letter nominating Mason for the award. The other four nominees included Mayor Bradshaw and ORNL’s Alex Fischer. (Since they are all over 40, this raises the question of how young a “young professional” is.) This article appeared on the first page, with a big picture of Mason and Ms. Postma; meanwhile, the article about DOE’s fining UT-B $110,000 for nuclear safety violations was on an inner page and ran less than 6 column inches.
Influencing the State and East Tennessee: The UT Connection
The biggest employer group in the Knoxville area is DOE and its contractors; together, they had about 13,000 employees in 2002 (Knoxville News-Sentinel, 4 August 2002). The second biggest is the University of Tennessee, with about 9300 employees in 2002. In order to court state and local officials and get their support for Battelle’s bid to win the ORNL contract, Battelle shrewdly aligned itself with the University of Tennessee, a very popular institution in these parts (especially on football game days). But despite UT’s and Battelle’s burblings about how perfect a partnership it was and how much each was going to contribute to the success of the venture, it appeared that in reality UT would be contributing little beyond its popularity; I.e., UT would be a “beard” for UT-B. (I say this with sadness, reminding the reader that I liked working at UT, except for my execrable boss, and I would like for the worthy folks there to enjoy every success; in particular (and speaking also as a taxpayer), I hope that the graduates of UT win praise for the quality of their academic preparation for their careers.) In vain did I scan the various newspaper-quoted pronouncements of J. Wade Gilley, the UT president at the time that the contract was awarded, for any indication as to what UT’s contribution to the management of ORNL would be. Every statement that he made was either gloating over winning, as though it had been a football game, or celebrating all the benefits that were going to accrue to UT, as though UT had won a lottery.
But then Gilley was typical of the sort of “leader” that UT has had in recent years. I had thought, when Gilley was first hired and was making his first statements to the press as head of UT, that he sounded like a nincompoop. Then when I heard what he said about winning the contract, I was convinced of it — nobody who was really intelligent and savvy about dealing with all kinds of people could have been as unaware of the effect of his words as Gilley apparently was. It was not very surprising that he had to resign in the midst of scandal some months later. (He was having an affair with a subordinate who had inflated her resume and had been promoted by him far beyond her qualifications — and these two supposedly highly educated and competent people carried on by E-mail on UT-owned computers using the UT communications system, so that the messages were legally retrievable by UT.)
Some time after Gilley left, as I noted earlier, my boss Dr. X’s own boss and sponsor, a vice president, also resigned as a result of a computer Achilles heel (in his case, viewing pornography). John Shumaker was the president hired after Gilley — after a very fishy search process, which, it was found later, was rigged in his favor (e.g., Knoxville News-Sentinel, 18 December 2003). As UT president, he was the second highest-paid public university president in the nation. However, because Shumaker’s contract with UT amounted to far less money than he had been making, a private UT foundation formed in 2000 under Gilley signed an agreement with Shumaker in order to pay him the additional $250,000 a year that persuaded him to come to UT. He served only 15 months before resigning under pressure, his offense being to spend university money on lavish and often ineligible charges (including visiting his mistress in another state).
As the reader can see, the process of hiring high-ranking administration officials at UT was arguably corrupt for a number of years. After Shumaker resigned, the search was on for another UT president. Wamp and former State Representative Gene Caldwell both suggested Madia as acting president, even though he had gone off to Battelle corporate headquarters (The Oak Ridger, 6 April 2004). Due to public outcry, the governor et al. promised that the next president would be a very upright and respected person, like the person who was in fact appointed as acting UT president after the second resignation (Joe Johnson, an elderly and highly esteemed former UT president — too bad they can’t clone him). A clamor was raised by the many Friends of Bill (Madia) for him to be appointed as permanent president. One of the most vocal Madia proponents was Wamp, who as noted earlier thought Madia was far and away the best candidate; when Madia was passed over as a candidate, he said that he “just hate[d] this for Bill; I just hope that the Madias know how much they have meant to East Tennessee”. Another proponent was Mayor Bradshaw. When it was announced that Madia had not made the short list — apparently the search committee, more faculty-heavy this time around, thought him not academically oriented enough — Bradshaw said that he did not understand the rationale behind the elimination of Madia. He commented that “It was a bad April Fool’s joke. I can’t even begin to connect the dots on how that decision was made” (The Oak Ridger, 8 April 2004). Apparently it was inconceivable to him that the search committee didn’t love Bill as much as he did. Lee Martin, a local business executive (see below), said that the search committee appeared to be looking for “a traditional academic leader” as the Knoxville News-Sentinel put it (7 April 2004), when “the challenges at UT need an out-of-the-box solution” (whatever that means).
Part of Shumaker’s appeal had been his proposal to establish at UT (as had been established at the university he had previously been president of) a “UT Research Foundation” (not the same, apparently, as the UT Foundation that was providing his salary augmentation). This research foundation was supposed to “become a hotbed for finding and commercializing the university’s research”, according to its director, Dr. Fred Tompkins (Knoxville News-Sentinel, 25 August 2003). It superseded the entity that had formerly handled UT’s intellectual property and commercialization interests. At first, it was proposed that the foundation would do much of its work through a for-profit subsidiary (News-Sentinel, 18 November 2002); it would take “equity in companies created from UT technology”, as well as any other good ideas that students or faculty came up with to make money, and would “have heavy outside influence from experienced business leaders and investors”, with money coming not just from the foundation, but from outside private interests. As the News-Sentinel pointed out (25 August 2003), while the entity that used to handle the intellectual property simply handled the transfer and did not have the authority or resources to market technology, obtain capital, or foster the creation of new businesses, the new foundation would. Because any outside money that came into a university, e.g., as part of a research program, had to be factored into State budgeting for the university and be subject to State regulations, the foundation would be structured as a quasi-private entity to avoid that. Not only that (News-Sentinel, 15 September 2002), but the Tennessee constitution prohibited public universities from taking an equity interest in any private venture. Shumaker averred (News-Sentinel, 25 August 2003) that the accountability provisions of State government were appropriate when State money was involved but, he implied, not when private money was involved; it was important to be able to move quickly on cooperative research agreements and to create a “sizzling, crackling entrepreneurial culture”. Shumaker claimed that university bureaucracies were “anathema to creativity and entrepreneurship” (News-Sentinel, 15 September 2002, two articles) and to the sort of “lively, nimble entrepreneurial culture” that would create high-paying jobs in Tennessee However, many in Tennessee, even in the business community, had great reservations about the private, for-profit aspects of the foundation, so that part was dropped.
The Knoxville News-Sentinel (20 June 2003) reported that a member of Wamp’s staff would be taking a job as UT’s “director of government relations at the federal level” — i.e., a Washington lobbyist for UT. UT was not saying how much he would be paid, but did say that he would be working to secure federal funding for UT research projects. A UT official said that UT needed “full-time representation in the nation’s capital as we grow our research base in medical, biological, computational science, nanoscale technologies, areas related to homeland defense, aerospace, transportation, and basic research”. Shumaker, who was president at the time, shied away from calling this new hiree a lobbyist, but, according to the News-Sentinel, said he “would work through the appropriations process to enhance our effectiveness”. That is, it is not sufficient any more for the professors to fill out applications for federal research grants — either UT fears that its applications wouldn’t win on the merits, or the whole process is apparently so politicized that a university needs a lobbyist to goose the grants along. Either way, this bodes ill for science. At least UT, as the News-Sentinel reported, scrapped plans to hire a lobbyist to work full time in Nashville, the state capital — there wasn’t enough money after the State cut the state appropriation for universities by nine percent.
UT was also working on starting a “business incubator” (News-Sentinel, 25 August 2003) and was trying to find $2.5 million to build a new building for it. A Tennessee Industrial Infrastructure grant from the (State of) Tennessee Department of Economic and Community Development had been applied for, but so far the State had not responded. The incubator, it was claimed, “would allow faculty and students to launch new businesses close to home”. The mayor of Knox County (whose county seat is Knoxville) said that the county would contribute to the incubator if the State funds came through because this “would help provide funds needed for a federal grant”, according to the News-Sentinel. Technology 2020 (which I will discuss later), described as “an Oak Ridge-based technology-focussed economic development organization”, had been called upon by UT to help run the incubator. UT’s Tompkins professed not to be worried by the Shumaker scandal’s potential impact on all this: he said it just took time to “transform UT into a more entrepreneurial university” (the News-Sentinel’s words).
Many aspects of this whole setup seem very fishy. First, while one would hope that the fruits of research would eventually be improvements in medicines, consumer products, understanding of human behavior, etc., the constant emphasis on “commercialization” with respect to a university — i.e., an institution of higher learning — is alarming. It may be only a matter of time before UT is transformed into a vehicle for private, commercial research, with many “professors” devoting little or no time at all to teaching and with any noncommercial majors (Medieval Literature, say) being eliminated as unproductive. Instead of “Publish or Perish”, it may be “Profit or Perish”. Second, is it just me or is there a surreal aspect to a State entity applying for an economic development grant from the State, and for “professors and students” at that? Third, while State, county, and federal money may properly be sought to launch a business, it seems very odd to solicit all that to launch a business to launch undefined future businesses, especially when said business is to be run by a private entity like Technology 2020. This does not seem to be at all the same sort of thing as, say, an urban league soliciting grants to help disadvantaged individuals start small businesses. The incubator sounds more like a conduit to route university technology to venture capital firms and other private interests, without the scrutiny that direct transfer might involve. What would UT be teaching the children of Tennessee with such approaches?
(After I wrote “Medieval Literature” off the top of my head, I read in Metropulse (8 December 2005) that at UT there is a successful Medieval and Renaissance studies program called the “Marco center”. The UT chancellor was quoted as saying that if UT could “gain the interest of a donor [to endow a chair?], we could overnight create the preeminent center in this part of the country if not the nation as a whole. And the position that we’d be creating could be in English or history or religious studies of any number of other disciplines that comprise that program”. Why should Medieval and Renaissance studies be of interest nowadays? The chancellor said that “Science is great at impacting the physical world around us. But it tells us next to nothing about ultimate purposes and reasons for existence….things like Marco….provide another way of impacting reality [sic]”. Well, given the heavy emphasis in East Tennessee on investment in technology-based endeavors, lotsa luck with that, UT.)
The Oak Ridger reported (5 December 2003) that the new head of ORNL, Dr. Jeff Wadsworth, would be the commencement speaker at the UT commencement ceremony in December 2003 — although he had been in the area for only a few months. Instead of talking about his experience and his academic qualifications, The Oak Ridger mainly talked about ORNL — how it had 3800 employees, an annual budget of $1 billion, etc. (Always the money angle.) The Oak Ridger later reported (26 December 2003) that in his talk, Wadsworth shared life questions, in particular about “balancing work, family, and community; and personal ethics”, as The Oak Ridger put it. He said that he “chose to build his lifestyle around the job”, but also said one should work at a job that makes one happy.
A very perceptive take on UT’s approach to money was shown by Tracy Brown, who graduated from UT in the 1970s and still lives in East Tennessee. He pointed out in a 7 December 2003 guest column in the Knoxville News-Sentinel that most organizations in our society have “a primary focus or target” that is closely aligned with the kind of work they do and that the organization’s resources are mobilized to reach this target. He mentioned as examples the American Cancer Society (aim: finding a cure for cancer), churches (aim: spreading the gospel), and financial institutions (aim: to earn money). Brown observed that the aim of an educational institution should be to educate students via research and classroom activities. He claimed that UT was no longer an educational institution, administratively and philosophically, because the first concern of the president, board of trustees, and administration was always raising money. He did not think that this was a recent phenomenon: when he started at UT, he heard a lot about how the university needed to attract money, but nothing about academic excellence, and this had not changed for years. With respect to Shumaker, who was forced to resign because of spending and accounting irregularities, Brown noted that this was “inevitable and even predictable” because the principal reason given for hiring him was his fundraising ability. Brown cracked that in the aftermath of this fiasco, everyone professed to be left in “shock and disbelief”, but they should not have been surprised. He concluded that while the university needed to put forth effort to get the money it needed to carry out its mission, the money should be considered a tool, not an end in itself.
I think that Brown nicely captured the problem with the UT mindset — and, although he did not address this himself, he clearly illustrated why UT and Battelle were such compatible partners. Fundraising for research efforts is important, but as some institutions have found, if most of your money comes from private entities, they will want to call the shots and specify what you are to do and how you are to do it. The more tied to ORNL that UT research becomes, the more the weaknesses of the UT-B approach to funding that research will become weaknesses of UT as well. UT may in the future become a custom research provider for private clients — and may gain a reputation for “finding” results that agree with what the client wanted to hear. This would be inimical to UT’s status and reputation, of course. The Oak Ridger (14 September 2000) reported that earlier in 2000, the Tennessee legislature passed a change to the open records law to exempt proprietary research. This eliminated a big objection that corporations had to funding research at UT, but of course it shielded much of this type of research from public scrutiny. Supposedly the change had the full support of the Tennessee Press Association, which usually campaigns for open records and open meetings.
Another observation that a UT-loving observer could make is that while UT might not be in the research big leagues, it was not exactly a slouch either. As a professor interviewed by the Knoxville News-Sentinel pointed out (21 September 2002), the athletic program generated $54 million in the same year that the academic research programs brought in $55 million; the athletic department’s feat was celebrated while the academics’ feat was not. The average pay for an assistant football coach was $128,000, while the average professorial salary was $66,000; the head football coach made $1.45 million a year, far beyond what even Shumaker made under his cushy deal. The athletic coaches’ and director’s salary went up every year, while the professors suffered a decline (after inflation). The interviewee professor oversaw a program that brought in $3 million alone to the university but still had to pay overhead; UT assessed federally funded projects such as his a 45% surcharge that went into the general operating fund. Yet the athletic program was not assessed a “tax” in any similar way. UT’s vice provost for academic affairs claimed that the athletic program paid for itself and that the profit was used to fund scholarships for non-athletic programs commensurate to research surcharges, so that the athletic program was handled fairly. Yet the bottom-line return from the athletic program to the university was less than $6 million a year (and in 2005, the athletic program actually had to borrow money from a university fund to buy out the contract of one of its coaches).
Only time will tell about the most recent UT president, John Petersen. I’ve got my fingers crossed that the students and faculty will finally get a true leader. However, The Oak Ridger (3 June 2004) quoted Petersen as saying, “I want that kind of vision that intertwines academics with the needs of the workforce to become more commonplace throughout the entire University of Tennessee”; “We must align our research expertise with the strengths of local and regional industry”; and “I’m committed to moving technology out of the university and into the private sector”. While these could be taken by naive folks to be innocent, “move forward” kinds of statements, the seasoned observer of Oak Ridge area affairs would be more likely to take this as signaling the business community that the university was “open for business” in ways it had not been before. (Non-academic readers should also understand that there is a longstanding debate in the academic world everywhere, not just in Tennessee, about how far a university should go in adjusting its curriculum to the needs of business, rather than, say, educating students in the traditional sense. I.e., should a university be a training school or an institution of (broad) higher learning?)
Petersen also said that he foresaw UT’s “working more with businesses through industrial partnerships and internships for students” and that UT personnel should be on future teams formed to recruit new businesses (apparently to “sell” the university’s capabilities). The Oak Ridger (10 November 2004) reported that in his first major policy speech, Petersen asked rhetorically, “Why do we want to grow programs to greatness?…We have to do this for the good of the people of Tennessee… strategically capitalizing on our strengths”. That kind of empty sloganeering bombast does not bode well, I believe. Furthermore, apparently in response to criticisms that UT was slighting undergraduate education in favor of research, Petersen claimed that “we have to give special attention to the academic and research areas where we have strength and competitive potential”, specifically noting the various alliances between UT and ORNL, including, The Oak Ridger said, a pending $10 million commitment from ORNL requiring a state match for joint professorships. This seems to me to demonstrate that UT views ORNL as its vehicle to “greatness” and is willing to adjust even its academic programs in order to attract the gravy — the Federal and private dollars — that ORNL has to share. In a joint Wadsworth-Peterson interview with The Oak Ridger (2 July 2004), Wadsworth said, “Great labs have great universities associated with them. And great universities often have great labs. We consider it a natural synergy”. Petersen said he had visited ORNL twice before his first official day of work, which, he said, “should tell you a little bit about how important I think this relationship is”. Both Petersen and Wadsworth said that success would not be possible without the support from the State of Tennessee and its elected officials.
The Knoxville News-Sentinel (Munger column, 7 July 2004) quoted the head of UT’s Department of Physics and Astronomy as pointing out the advantages of having more adjunct professors due to the UT-ORNL association. An adjunct professor is not a professor on staff at the university in the usual sense, but performs in an ad hoc capacity, teaching the odd course (especially when a regular professor is on sabbatical), serving on graduate student thesis committees, and serving as a major (supervising) professor or thesis advisor for graduate students. It can be a status thing. The lucky university that is close to a research center often enjoys having such relationships, which is symbiotic because the research center then has a source of students as cheap research labor. This can be a big plus for everybody concerned.
However, having a proliferation of adjunct professors can mean that the regular professors don’t need to take as much time with students or have as many students apiece or even, in some cases, supervise their nominal students’ thesis research. Furthermore, the more the university depends on these adjuncts, the fewer regular professors it needs — the university doesn’t have to pay benefits, etc., for the adjuncts since those are paid by their actual employer. But perhaps the most important drawback is that when the university depends on many adjuncts (UT had 25, mostly from ORNL), the research opportunities that the university affords may depend heavily on the interests and priorities of the research center. The best students may be working for the adjuncts from the research center, not the regular professors; on the other hand, the funding may not be from the research center’s grants and contracts, but from the usual sources of student science funding, such as the National Science Foundation or the National Institutes of Health, which, as the Knoxville News-Sentinel noted, “are sponsors not typically available to scientists at the US Department of Energy’s national labs”. The head of the UT physics department claimed that thus the research opportunities for the students had been increased “without any additional costs to the Tennessee taxpayers” (he didn’t mention federal taxpayers, of course). It is hard to see how Tennessee taxpayers would have had to pay for the students’ graduate research in any case; that is, if no funding were available, the students would either not get the degree or would go to some other institution of higher learning. It is true that the students benefit by getting their degrees, but more of them may be siphoned off into doing more commercially oriented research for those degrees than used to be the case.
As Metropulse pointed out (26 August 2004), the Joint Institute for Computational Sciences (JICS) at ORNL cost $10 million and was built by the State of Tennessee. Its nominal owner is the University of Tennessee. According to Metropulse, “Launching JICS alone will represent a major leap forward for UT as a research university”, but “it is only one of three joint institutes” on which UT and ORNL were collaborating; the State committed another $16 million to build two other joint institutes, one for biological sciences and one for neutron sciences (associated with the Spallation Neutron Source). You would think that if ORNL had $10 million for joint professorships (see above), it could have built this building itself, thus ensuring that its operation would be controlled by the Feds, which would make sense since it is built on federal land, etc. (I suppose if DOE transferred title to the land to the UT-Battelle Development Corporation (see above), it would not be federal land any more.) But this was of course a commitment made by the State at the time UT-B got the ORNL contract — as one of the “sweeteners” that helped persuade DOE that UT-B would attract money other than Federal money. You would think that if the State of Tennessee had given the $26 million to the university system instead of investing it in a facility like this, then UT might not have had to cut 287 jobs and 228 class sections (Knoxville News-Sentinel, 3 June 2003). This is not to mention the $22 million shortfall in faculty salaries or the under-addressed physical plant. The university system keeps making cuts because the State claims not to have money to fund it, but somehow the State has money to build flashy new scientific facilities employing relatively few people. No wonder that Tennessee has one of the lowest percentages of adults holding college degrees in the US and has resorted to a lottery to raise money for education.
The UT chancellor at the time was quoted in the Metropulse article as stating that it would take compensation on the order of $200,000 each to attract the 50 or more top academicians envisioned as working at these institutes. In addition, there would be the hordes of graduate students that would come with them or sign on to work with them. As Metropulse noted, much of the work (and thus of the financial support for the personnel) would come from federal grants, but not all of it. The UT chancellor estimated that the institutes together would generate upwards of $100 million a year in federal research expenditures. But he placed the annual cost to the university of running the joint institutes at $10-$20 million per year, because “it’s the rare federal research project that covers its full cost”. Metropulse noted that ORNL’s staffing and research efforts would still dwarf UT’s even with the joint institutes in full operation. But since ORNL “isn’t eligible as a rule to get funding from other federal agencies”, the advantage to ORNL of association with UT would be to be able to dip into those forbidden federal pots.
It is notable that Gilley, although an ex officio member of the UT-B board of directors, didn’t attend many of its meetings and instead tried to create “centers of excellence” within UT as areas to foster and promote research growth within UT. These centers have done well, according to Metropulse: after an investment of more than $30 million in starting them up, two of them brought in more than $30 million dollars in their first three years of existence. The State of Tennessee committed to providing $7.5 million for expansion of the centers, but apparently reneged on that. The next UT president, Shumaker, paid somewhat more attention to the ORNL connection, but even then ORNL officials were said to resent what they regarded as a lack of fulfillment of UT’s commitment to the joint ventures. The challenge, according to an ORNL spokesman quoted by Metropulse, was to “match ORNL’s scientific agenda with UT’s”. The UT vice-chancellor for research allowed as how universities tended to move slowly “because of the need for shared governance and the need for state approvals”, while ORNL had “goals to meet and [couldn’t] afford to sit around and ponder too much”.
In June 2004, the Oak Ridge Chamber of Commerce announced (The Oak Ridger, 7 June 2004) that the University of Tennessee had joined the Chamber’s “Millennium Partner affinity program” as a “Gold Partner”. The Platinum partners were Bechtel Jacobs, UT-B, and Wackenhut; the other Gold partners were BNFL (the American subsidiary of British Nuclear Fuels Limited), Boeing Oak Ridge, BWXT, and SAIC (all of whom had substantial DOE contracts); and the Silver partners were AkinsCrisp Public Strategies, ORAU, and assorted others, including other DOE contractors. (In the February-March 2005 listing of the Chamber of Commerce members (The Oak Ridger, February 2005), ORAU had moved up to Gold and USEC and CH2MHill were also Gold, while SAIC had moved down to Silver and Remotec and the Washington Group had become Silver.) The required contribution for a company to become a Gold partner was not stated. But why would UT join a chamber of commerce, i.e., an organization devoted to business and business only, and in a small town where it has no real physical presence? Why would UT make what the acting UT president called “this additional financial investment in the business community” at a time when UT was hurting for funds itself? Possibly because the benefits accruing from this contribution are, per The Oak Ridger, “tailored to maximize their investment and support their marketing plans”. I think this means that the Chamber lobbies for and markets the members. One would think that that was what UT had a PR and marketing staff for in the first place and that if they joined any chamber of commerce, it would be the presumably much larger one in Knoxville.
Metropulse said that the governor of Tennessee, Phil Bredesen, was firm in his belief that a major investment in research is an engine for driving Tennessee’s growth, à la North Carolina’s Research Triangle or the University of Texas at Austin. This is said to be despite the budgetary constraints that Bredesen has imposed on UT in the last several years. Metropulse noted that ORNL’s track record for commercialization of research (technology transfer) had been checkered in the past, but UT-B claimed “strong capabilities” for this “and is eagerly looking forward to harvesting rich fruit from the seeds sown by the joint institutes”. The ORNL director of technology transfer and economic development (and former state commissioner of economic development), Alex Fischer, claimed that some 43 companies had been spun out of the lab (as of August 2004) and that they were providing 200 “mostly high-paying jobs”.
Battelle — not UT-B, but the parent Battelle — has, according to Metropulse, a $150 million venture capital fund for investing in companies formed out of technology from the labs it manages, “but as yet none of that money has come ORNL’s way”. This venture capital firm appears to be Battelle Ventures, which The Oak Ridger (20 October 2004) said was formed in 2003 “to promote creation of companies from technologies that Battelle owns, manages, or influences” (underlining mine) and which the News-Sentinel (18 October 2005) said was set up by Battelle “to invest in technologies developed by Battelle-run federal laboratories including” ORNL. The Oak Ridger (19 September 2003) reported that newly arrived ORNL head Wadsworth and other ORNL officials hoped that a “nationwide venture capital infusion of $150 million for early stage science and technology will translate to accelerated economic development for Oak Ridge and East Tennessee”. Why much if any of that should come to East Tennessee was explained by the statement that the fund was “aimed at launching into the commercial marketplace ideas from laboratories” that (this time in Battelle’s own words) it “owns, manages, or influences”, with Madia stating that Oak Ridge was a likely “target” of the funding. Well, one would wonder if they were “launching” the ideas or “latching onto” them to get a share of the profits — which is not a farfetched surmise, given that Madia said that Battelle decided to start the fund “to help with our own technology as well as that of the labs we operate for [DOE] in moving ideas through that zone [commercializing]”. The operation of this fund as being specifically targeted at national laboratories that Battelle runs would seem to be a conflict of interest since they manage ORNL and in particular manage the tech transfer activities for ORNL ideas and innovations; the use of the word “influences” is also troubling (influences how?). Further, Battelle officials said that ORNL generates 50-100 patents each year and a Ventures official said that the fund officials would be looking at “ideas that have the potential to create long-term viable companies” because “that’s what this business is all about”.
The Knoxville News-Sentinel (18 August 2005) reported that “a powerhouse group” of Knoxville business leaders had formed a $35 million venture capital fund called Innovation Valley Partners to “invest in early-stage high-tech companies nationwide”. This fund was said to be “affiliated with” Battelle Ventures, which was again described as a fund created “to commercialize technologies from national labs managed or co-managed by the Battelle Memorial Institute, including Oak Ridge National Laboratory”; Battelle Ventures was to manage the Innovation Valley fund. A Battelle Ventures official told the News-Sentinel that Battelle always took an equity position in the firms it invested in and had usually had at least one board seat. An Innovation Valley partner stated that the technology “spinning out” of ORNL would offer “tremendous investment opportunities”; the Battelle Ventures official said that (in the News-Sentinel’s words) “having investment partners in the Knoxville area will ensure that Battelle Ventures gets first crack at investment opportunities coming out of ORNL”. ORNL head Wadsworth, according to the News-Sentinel helped put the Battelle Ventures and Innovation Valley investors together; in fact, he arranged a tour of Battelle headquarters in Columbus, Ohio, for some Knoxville business leaders at some unspecified earlier time, during which they listened to a presentation by Battelle Ventures to Battelle management and spoke with the former at some length. Finally, the News-Sentinel (19 October 2005) reported that one startup funded by an “affiliate fund of Battelle Ventures” (presumably the Innovation Valley fund) provides technology that “supports projects” at ORNL. This raises the question of whether ORNL is merely hiring the startup or whether the startup is participating as a sort of research partner, with rights to some of any future profits from any technology developed by the project.
Metropulse also noted another way that return on research investments can be realized: licensing fees on patented processes and inventions, which are the intellectual property of the institution that conducts the research that produced them. UT’s licensing fees amounted to less than $1 million in 2002, versus more than $10 million for the three Research Triangle universities and about $4 million for the University of Texas. Metropulse quoted Fischer as saying that UT and ORNL will “share equitably” in licensing fees from the joint institutes.
Metropulse (27 January 2005) later reported that Petersen had asked for state funding “in addition to the $412 million that the UT system received this year” ($161 million of it on the main Knoxville campus). The additional requests included $10 million to recruit “at least 15 nationally recognized scientists and their support teams” to the three joint institutes in which UT and ORNL were partnering; $25 million to “strengthen UT’s research capabilities in other selected areas with the promise that each dollar of state funds will produce $3 million [sic] in additional research funding”; a $6 million boost in graduate student stipends “in order to attract more and more highly qualified doctoral-level students who Petersen says are “critical to the growth and execution of UT’s research agenda and future economic development in the state” “; $1 million to “facilitate commercialization of UT research”; and $75 million, contingent on matching funds from donors, to provide $50 million to endow 20-30 new distinguished professorships and $25 million to build a new engineering building. As regards these statements, if you build a joint institute, they won’t necessarily come — a lot of financial inducement appears to be necessary. Even if Metropulse meant $3 for every state dollar, how could UT and ORNL possibly guarantee something like that? Graduate students are a wonderful source of cheap skilled labor because they are willing to work at low wages for a few years in exchange for their degrees; this is not exploitative if the university gets a few papers and some kudos out of it and the student does get out in a reasonable amount of time, but the emphasis on the moneymaking aspects of the research puts the situation in a whole new light. (Kind of gives a new meaning to the term “slave labor”.) The $1 million for commercialization seems like a lot — if the technology or whatever is attractive, why should marketing it cost so much? Finally, 20-30 new distinguished professorships seems like a huge increase even for a big campus; some of these might actually be vanity chairs. Note that UT raised the tuition at its flagship campus in Knoxville by about 13% for the Fall 2005 term, with some of the funds in part destined for its partnership activities with ORNL.
Metropulse (8 June 2005) reported that “powering the economy” was at the head of a list of bullets in a new UT brochure highlighting the university system’s contribution to the state. Metropulse added that a principal justification for increasing UT research funding was the commercialization of the research that would result, with concomitant new businesses and jobs; in an address in the fall of 2004, UT president John Petersen had stated that UT needed to “bring forth more marketable ideas and innovations to grow more businesses and jobs….The university has to and will make a more significant contribution to that endeavor”. Again, Metropulse reported that the UT Research Foundation was the “arm of the university” mainly responsible for this; this implied that the foundation was a governmental or government-controlled agency, an implication that was strengthened by the fact that the president of the foundation, Fred Tompkins, was also the interim vice president of UT at the time of the article. Tompkins was quoted as saying that the foundation’s purpose was “harvesting, managing, and marketing the fruits [of UT research] for the well-being of inventors and the university….[and] supporting and encouraging entrepreneurial ventures”. Tompkins also told Metropulse that the foundation had obtained 25 patents per year on inventions and discoveries arising from UT research spending, which was $193 million in 2003. Metropulse noted that under federal law, most of these patents belong to the university.
Tompkins explained to Metropulse that the foundation tries to assess the commercial potential for each such patent and for those with reasonable potential, to figure out a marketing strategy; his task was then “to see if I can find money or allocate money or otherwise bring resources to bear on that technology so that there can be a very focused developmental effort to see if we can move from Point A to Point B”, i.e., to commercialization. This sounds like the university might actually be investing money in order to get the invention or discovery commercialized. But as Metropulse told us, Tompkins did not respond to requests for examples of enterprises the foundation was nurturing. He did cite one company, but that was formed three years before the foundation was started; after five years, that company was still in the developmental stage. Besides that, Metropulse pointed out, the head of the company — a member of the research team but not the principal investigator — left UT to start the company, contrary to Tompkins’ professed aim of having researchers stay at UT. While the inventor is supposed to reap some of the proceeds, the principal investigator still at UT had yet to see any of the $40,000 per year licensing fee that the company pays UT. UT did not get an additional $1 million from the state for work to take the various basic discoveries to what one might call proof-of-practicability status, for better assessment of commercial potential. But the foundation did get $2.6 million in contributions — mostly from the state, Knox County, the Tennessee Valley Authority (why?), and the Knoxville Utilities Board (again, why?) to build an incubator building to house beginning companies until they can fly on their own. Again, this sounds like UT is investing in businesses and suggests that research that has limited commercial potential although it may advance scientific understanding will be heavily disfavored — or even not funded at all.
The state FY2005-2006 budget (per the Knoxville News-Sentinel) proposed by Tennessee governor Phil Bredesen included $1.2 billion for higher education. Part of this was for UT-Knoxville: the $25 million for a new engineering building and $12.5 million for upgrades to the ancient steam plant to make it compliant with environmental standards. The engineering building, which will occupy some 150,000 square feet, will actually cost more than the $25 million, but an anonymous donor is contributing $12.5 million. However, the budget includes no increase in operating funds for Tennessee’s nine public universities or its 22 community colleges. This was despite the fact that enrollment in Tennessee’s institutions of higher learning was said to be rising sharply — apparently the state lottery is now expected to cover much of the cost increase. But the budget did include $7.6 million to construct a “biomedical research facility” at ORNL. This would be in addition to the $400,000 that that the state had already provided for the Joint Institute for Biological Sciences to be built at ORNL. The joint institute seems to have been built on spec, in that it was to be part of a future ORNL bid to locate a federally funded $280 million “Genomes to Life” facility at ORNL and would be “a compelling part of our case” to persuade the federal government to locate this facility at ORNL, according to ORNL head Wadsworth. The joint institute was also said to be a bipartisan effort of four state representatives and state senators.
Also, as The Oak Ridger (9 February 2005) and the News-Sentinel reported, the budget included some $2.5 million, to be matched with another $2.5 million from ORNL, “for UT to use in recruiting distinguished science faculty for joint appointments at UT and ORNL”. The News-Sentinel also reported (2 February 2005) that the state’s $2.5 million was only “the first installment of what will eventually be $10 million” to recruit “nationally recognized” scientists in biology, neutron sciences, materials sciences, and computers. ORNL would also match this, so that the two entities would eventually have spent $20 million to recruit “roughly 15 top science faculty members” who would teach at UT and do research at both UT and ORNL. Again, the math-minded will see that that comes out to about $1.3 million per researcher, although over what time frame it would be spent is not clear. Anyway, the UT chancellor said that waving the money in front of these top folks was “[UT’s] way of becoming very good, very quick” in those fields. The News-Sentinel noted that it was hoped that the scientists would bring along “big research money, raise UT’s national ranking in the sciences, and spin off their research into local companies”. An ORNL spokesman said that ORNL had committed to the state “much more so than has happened in the past” to take the technology developed “by the group
[of new scientists]
” and commercialize it into new companies. This sounds like those scientists had better expect to produce commercializable “products” in short order — and not think in terms of, say, pure research or even long-term applied research.
The Knoxville News-Sentinel (4 August 2005) reported that funding was being obtained for a fourth joint institute, this one for advanced materials. This was to come not from private industry or the state, but from the federal government: the News-Sentinel said that Tennessee’s senators, Dr. Bill Frist and Lamar Alexander, “made sure that the appropriation was included in the highway reauthorization bill” and Representative John Duncan also supported it. (Duncan is not usually a big pork supporter — he was a winner of the 2004 Taxpayer Hero Award from Citizens Against Government Waste (Knoxville News-Sentinel, 25 September 2005). Maybe he was having an off day.) The News-Sentinel said that this new joint institute was at the top of UT’s wish list and that it was hoped that the scientists working in the various joint institutes would “bring in big research money, raise UT’s rankings in those [institute] fields, and spin off their research into local companies”. UT would still need to come up — somehow — with an additional $15-20 million for the new institute. The focus of the new institute was said to be on developing “smarter and cleaner transportation methods”, including work on sensor technology, the “creation” of lighter and stronger materials for engines and such in automobiles and airplanes, and improvements in fuel cells. In the same appropriations bill, UT received an $8 million grant for “heavy-vehicle research”, etc., “at its facility in West Knox County” (which is probably the National Transportation Research Center, a joint UT-ORNL entity, which I discuss below). UT was also to receive part of a $75 million appropriation (for six universities) for the “Sun Grant Initiative”, said to be a program to develop “bio-based energy technologies”.
With regard to the above-mentioned institute, the interested reader may want to look at a draft report written by the “Technology Partnership Practice” group of Battelle Memorial Institute (the Battelle parent entity) for the State of Ohio (“Positioning Ohio and Its Research Institutions: Core Competency and Technology Platform Roadmap”, September 2005). In this report, Battelle stated that “innovation commercialization is increasingly central to the future sustainability of state economies” (italics theirs) and that “Not only are research centers the key to basic research discoveries that generate product leads for technology companies, they also contribute to an environment in which these companies can flourish”. Battelle says that the traditional model of commercialization “proceeds in a pipeline fashion” from basic research to major scientific breakthrough to applied research to product development to industrial manufacturing and marketing; this has the “shortcomings” of being “too divorced from commercialization and product development needs” and having “uncertain economic value”. The market-driven approach advocated by Battelle “recognizes that commercialization is a highly interactive process involving close ties between research activities and business development activities”. Battelle quotes the Council on Competitiveness (whoever they are) as pointing out that success depends on “a team effort that includes carefully focused research, design for manufacturing, attention to quality, and continuous market feedback”. This would appear to sum up neatly the Battelle approach to how research should be conducted, especially in a joint institute. Battelle also indicates that a strength of the many Ohio universities that do research is….advanced materials. Specifically mentioned in this context are “nano-micro devices used in sensors”, “systems such as a car or airplane”, “fuel cell development for hybrid automobile engine systems, auxiliary power systems on aircraft, and distributed electric power systems”, “coal-fueled fuel cells and micro-fuel cells” within the “Ohio Fuel Cell Initiative”, “automotive research leveraging the capabilities of the Ohio Transportation Center, [Ohio State University’s] Center for Automotive Research, and their partnerships with Battelle and the automobile industry”, niche areas including “new solar PV materials and systems”, “identification of genetic markers and associated targets”, and initiatives focused on biobased materials and biobased energy sources”. All of these and other areas are discussed in the report, along with difficulties (e.g., the dreaded “nanofear”). Prominently mentioned as a university “relationship” partner throughout is, of course, Battelle itself. Sound familiar? Well, maybe UT can put in co-proposals with Ohio State University on subjects of mutual interest.
Note that at least one collaboration between ORNL and UT to build a facility occurred before Battelle came to town. As The Oak Ridger reported (12 December 1999), ORNL, UT, and DOE worked together for six years to build the National Transportation Research Center (NTRC), a “public/private partnership”, “to pool local transportation-related research and attract private investment”. A private company erected the building and UT and ORNL would be leasing the space. But there were some differences between that project and the various ORNL and UT “commercial” building projects. First, in the NTRC project DOE was directly involved; it does not appear to have been something undertaken by ORNL management with DOE’s permission but without any true DOE oversight. Second, transportation studies had been a longtime ORNL activity and had been funded and encouraged by DOE for years. Thus this was not a speculative sort of activity, but one that would be providing a more roomy and better-equipped place for most of the already funded studies and other work to take place (e.g., work on electrically powered vehicles, materials packaging for shipment, and new composite materials for automobile construction). Third, the facility management was negotiating to have the Knox County traffic control center located at this building so that they could use Knox County traffic data to examine ways to monitor traffic and help it flow smoothly. All this suggests a focussed and carefully evaluated project, unlike so many of the pie-in-the-sky projects I discuss in this chapter. (But a friend of my husband’s who worked at NTRC told my husband after the facility opened that many of the ORNL staff were miffed because all the offices at the front had been given to UT professors.) (CROET (the Community Reuse Organization of East Tennessee) was supposed to kick in $3 million over FY1999-2000 for NTRC equipment but reneged on that, after first delaying its FY1999 contribution to FY2000: CROET wanted to use its funds, allotted from DOE, for its Horizon Center industrial development project instead.)
As the reader can conclude from all of this, it seems very much in character for Battelle and UT to have partnered with each other back in 1999. The emphasis on drawing in federal dollars as a way of solving UT and Tennessee’s financial problems may boomerang on them, producing various expensive “white elephants” that UT may have to cede or lease to ORNL or others at some time in the future if it cannot afford to operate them. Further, their requests to the state for seed money for professors, facilities, “commercialization”, etc., may not result in the returns that the state obviously hopes for. Although I don’t claim to understand all the ins and outs of all the various foundations and other entities, I think it does not bode well for academic freedom and the spirit of wide-ranging inquiry.
Influencing the Media: The Knoxville News-Sentinel and The Oak Ridger
Although others at the Knoxville News-Sentinel write the occasional article about DOE or UT-B or ORNL (e.g., for the business section), the DOE beat at the News-Sentinel is mainly Frank Munger’s turf. He has covered DOE affairs for the Knoxville News-Sentinel since before I came to Oak Ridge in 1989. He always seemed somewhat partial to ORNL in a way that he never was to Y-12 or K-25, but he seemed to exhibit a particular affinity for ORNL after the UT-B takeover. ORNL, suddenly, could do no wrong; Bill Madia was a great guy; and DOE’s allowing UT-B to privatize chunks of ORNL real estate was a wonderful decision. As I noted earlier, Munger did not mention a word about my whistleblower case at first, even after I spent an hour and a half talking with him about it, unlike Paul Parson of The Oak Ridger. The News-Sentinel announcement of my winning in May 2002 was a brief article under his byline; he included a comment by UT-B but did not bother to try to obtain any comment from me, much less interview me. The News-Sentinel did not print anything about my winning the Secretarial appeal or about the subsequent settlement as far as I was able to find, while The Oak Ridger published an article following both. Over a period of less than a year, Munger wrote various articles featuring ORNL, many on the Spallation Neutron Source; in each one, what were ostensibly his own statements often sounded as if he were parroting UT-B PR statements. Even when the words sounded like his own, he seemed to be taking the information given to him at face value; he seldom sought quotes from experts outside the area and outside the DOE world. His several opposite numbers who worked at various times on The Oak Ridger — Paul Parson and R. Cathy Daniels come to mind — were much more apt to make their prose sound impartial and even to sound skeptical or questioning, when that was appropriate. It was often hard to see where Munger stood on an issue, even in his opinion column; for example, he claimed in May 2004 that he had always been against the Bechtel Jacobs job creation provision (see above), but he didn’t seem to have said so way back when, or even to have been skeptical about it.
For a period of about two months in mid-2002, there were no articles at all by Munger — the News-Sentinel stated that he was on “special assignment”. Speculation ran rampant as to what he was really up to. Perhaps he had cancer and was undergoing therapy; perhaps he was preparing to go to work for UT-B; perhaps he was in Washington researching some big DOE development. The answer was None of the Above. He was working on a series of articles on…..ORNL! The articles, which ran in sequence on five days (21-25 October 2002), each for whole pages, were highly complimentary of ORNL, its management, and in particular Madia. More significantly, all but perhaps one were about subjects that Munger had already written at least one in-depth article on in the preceding four or five months. Because very little new information was added (despite his two months of extra access) and because some rather technical information was given a big play when most readers would not even try to wade through it, it was clear that this was a giant “puff piece” orchestrated by and for the benefit of UT-B. Also, during the same week that this series ran, there was a series of advertisements by UT-B (the company, not ORNL), each appearing on the second page of the newspaper and each highlighting some favorable aspect of UT-B affairs (e.g., “Being a good company means being a good neighbor. UT-Battelle and ORNL employees contributed more than $750,000 to the 2002 United Way Campaign, the largest amount of any organization in the Knoxville-Oak Ridge region” — the bolded part was in bold and in a larger font than the rest of the message). Obviously, UT-B was trying to win friends and influence people by showing what a hotshot yet caring bunch of people they were.
More recently, Munger noted (Knoxville News-Sentinel, 16 November 2003) that in 2003, the four biggest Oak Ridge contractors had been fined by DOE for safety violations under the Price-Anderson Act and Amendments (P-AAA): BNFL, BWXT, Bechtel Jacobs, and UT-B. These four fines were among ten that DOE levied in 2003. Munger asked, “Shouldn’t DOE share some of the blame for Oak Ridge’s safety problems?” On the face of it, it was good for this question to be asked in the media. However, considering the context in which it was asked, i.e., Munger’s apparently complete support of UT-B and his patty-cake handling of other contractors’ problems, one could view this question as suspiciously helpful to the contractors. That is, asking this question could have two beneficial effects for the contractors. First, it would shift blame and attention off the contractor and refocus public attention on DOE. John Q. Public would then think that if the contractors had safety deficiencies, it must be all DOE’s fault. Second, DOE, stung by unfavorable rather than the expected favorable publicity whenever it disciplined contractors publicly, might be moved to cut its PR losses by avoiding public discipline and even by avoiding discipline altogether, contenting itself with mild remonstrances and admonitions not to do it again. (“The public won’t stand for it”, they could say to excuse themselves from having to act.) Hence Munger’s question could be read as supportive of the contractors. He said that contractors through the years had “suffered more than the federal agency”, “had sullied their reputations”, and had “sometimes [left] the job in disgrace with their tarnished reputations tucked between their legs”, while DOE “seems immune to criticism after two decades of nonstop controversy”.
Munger did try to interview DOE management on this issue. But DOE declined an interview request and only issued a statement from DOE-ORO head Gerald Boyd. According to Munger, Boyd’s statement claimed that in the year since the contractor actions that led to the fines occurred, both DOE and the contractors had taken “extraordinary measures” to address the issues. In DOE’s case, Boyd said, they had updated and developed new “procedures and processes for federal oversight”; had provided new training for DOE people in their oversight role; and had produced new safety issue tracking measures. DOE-ORO was recently recertified (presumably by DOE-Washington) as having “a quality Integrated Safety Management” program that “provides the oversight that is essential to safe operations”. So now the problem was fixed: “We believe that DOE’s improvement in oversight activities, coupled with a sharp focus on safety by the contractors, will help ensure a safe workplace for all employees”. The reader should note that in 2001 (The Oak Ridger, 15 November 2001), DOE-Washington had removed DOE-ORO’s authority to bless safety documents and had restored this authority only in 2004. DOE, or at least DOE-ORO, thus had an incentive to gloss over the contractors’ past deficiencies as well as its own.
As usual, however, Munger didn’t seem to have dug into the matter to connect the “fixes” with the problems or to comment in any way on the substance of the change. If Boyd gave any details of the changes, Munger did not report them — he simply quoted the broad statements by DOE and left it there. The one thing Munger said by way of analysis of the matter was that whether DOE-ORO had properly addressed the safety concerns was “unanswerable at the moment”. He concluded, “We’ll see” (this is a way he frequently ends his columns). His last statement, however, laid the problem back at DOE’s door: “Given its track record, DOE is more likely to take a contractor to the woodshed than take responsibility for a problem”. Thus the whole column seemed like more an exercise in blame-shifting to DOE than an attempt to analyze the situation for the reader’s enlightenment.
As always seemed to happen when a new Battelle person came to town, DOE gushed about Wadsworth: the Knoxville News-Sentinel reported that the head of the DOE-ORO Office of Science called him “a superb choice”. Later, Munger (Knoxville News-Sentinel, 6 August 2003) said that this DOE manager described him as “an absolutely marvelous person” and stated that while it was hard to match Madia in terms of accomplishments, “Jeff will be fabulous and I think you’ll be very pleased with him”. I wondered who “you” was (perhaps the DOE honcho meant Munger, although why Munger should or shouldn’t be “pleased with” a public figure is hard to figure out). Munger did not question or qualify any of these statements. Munger himself stated that Wadsworth was “truly a man of science” and added an incredible statement: that Wadsworth might even continue to publish research while director of ORNL. Munger said that ORNL’s deputy director for science and technology “marveled at Wadsworth’s prodigious list of scientific publications”, remarking, “My goodness, I don’t know how he has managed to publish 270 papers. That’s very impressive — even if you’re a professor with an empire under you at the university”. True, and surely there is a story there, but Munger did not pursue it.
DOE announced in 2004 (Knoxville News-Sentinel, 14 December 2004) that it was giving UT-B a new five-year contract to run ORNL, worth a total of $4.8 billion; the big thing UT-B did to win the new contract was to modernize ORNL. However, one thing that “could” change in the new contract was the fee structure. UT-B earned a fee of $35 million over the five-year term of the old contract, said to be a “relatively paltry” sum compared to some other DOE contractors, “particularly those managing environmental cleanup projects and production facilities”. (The News-Sentinel failed to note that the environmental cleanup projects, at least, involved significantly more risk, so the greater return had to be offered as an inducement to contractors to take on that risk.) New ORNL head Wadsworth said only that UT-B would be “very interested” in discussing a new arrangement, but Madia, who by then was at Battelle headquarters, asserted that it was “hard to reconcile the fee policy” because UT-B’s maximum fee was below Bechtel Jacobs’ minimum fee. (The News-Sentinel failed to provide data for comparison of the two contracts, such as what each was worth in total or how many people were employed by each.) Madia claimed that companies managing national laboratories were typically underpaid compared to other federal contractors. (Again, no data were provided.) The News-Sentinel hit this theme again (23 February 2005): Munger said in his column that it was clear that DOE favored nuclear weapons work over scientific research work, which he claimed was “apparent by the way DOE treats its contractors”. That is, for FY 2004, BWXT was paid $25 million to manage and operate Y-12, while UT-B was paid $6.6 million to manage ORNL. He asserted that Y-12 and ORNL had similar budgets (almost $1 billion annually) and a similar number of employees (4000-5000). I couldn’t find firm figures for the budget (it seems to depend on what you include and where you look), but the figures that I could find for the number of employees were 4510 and 3890 respectively for Y-12 and ORNL in 2003 and 4700 and 3800 ditto in 2004. Whether or not it was “fair” to pay a smaller fee to UT-B or not for running ORNL, it was notable that Munger was, as so often happened, bringing DOE’s favoritism to public attention just at the time it would be advantageous to UT-B. (Of course, that may just have been a function of when UT-B fed him the news item, rather than that he timed it that way.)
Although DOE had announced in 2004 that the new five-year contract would be worth $4.8 billion, the Knoxville News-Sentinel reported (2 December 2005) that following months of negotiation between DOE and UT-B, it would be worth $6.5 million. UT-B would be able to earn a management fee (profit) of up to $10.7 million annually, versus the previous contract’s $6.8 million annually. This increase of over 50% was not explained in the article (by Munger). The contract announcement, by the way, was not made at a press conference, but at the annual meeting of the East Tennessee Economic Council, “a group that supports the federal missions in Oak Ridge”. (The reader should compare this description of the Council to the further information below.) The DOE official making the announcement stated that one reason ORNL was among the nation’s top research labs was the support of the community.
Munger’s columns were symptomatic of the Knoxville News-Sentinel’s approach to DOE contractors and subcontractors. The News-Sentinel’s list of Top Ten Local Stories for 2003 (News-Sentinel, 28 December 2003) included the Shumaker resignation story, but as a combined “Madia and Shumaker leave”, as though the two events were related. The News-Sentinel said that these two people were examples of “the array of energetic leaders in key positions”. I think the two people were related, but not in the way the News-Sentinel implied; to me, they were both emblematic of the pressure to commercialize and to maximize profits — in supposedly nonprofit institutions. Another one of the Top Ten stories was “Venture capital comes and goes”; included was the statement that in September 2003, Battelle (Columbus) had launched “a $150 million fund aimed at taking nascent technology to the marketplace, promising an essential infusion of cash for scientists whose ideas otherwise might languish”. This might imply to the uninformed reader that Battelle’s venture capital fund would be funding some R&D or that funding would be funneled directly to “scientists” in the form of grants. In reality, it appears, as I noted above, that the capital will fund businesses to be started by these scientists or others, which may actually draw scientists away from the university or may allow others to profit hugely from work done by the scientists.
We layoffees of course found it disgusting that our major area newspaper was an indiscriminate booster of ORNL, but even people who had never worked at ORNL found it disturbing. How could the newspaper “Shed light and the people will find their way”, as its motto has it, when the only light given was filtered through UT-B’s promotional filter? The UT-B PR machine had succeeded to a degree undreamed of by Lockheed Martin or Bechtel Jacobs or any of the other previous contractors. I have learned to take with a grain of salt anything the News-Sentinel says about certain local businesses and institutions, especially UT-B, ORNL, and UT. Where these entities are concerned, the News-Sentinel usually sounds more like a squad of cheerleaders than a reporting staff.
But that said, one must add that after Madia departed for Battelle corporate headquarters in 2003, even Munger could not resist retailing a juicy bit of gossip about UT-B, although as usual he also presented their defensive statements without serious analysis or commentary. It was revealed in Munger’s column (Knoxville News-Sentinel, 3 September 2003) that UT-B vice president Jeff Smith had started construction on his Knoxville house in 1999 — well before the contract was awarded to manage ORNL. Smith told Munger that this fact was kept under wraps because they “didn’t want people to get the wrong idea”, which, as Munger did not point out, was that it would look as if the “fix” had been in for UT-B to get the contract. Smith said that he of course had not known whether or not UT-B would get the contract and he claimed that the reason he started building a house in Tennessee while he still lived in Washington State and was uncertain of moving away was that he was providing an incentive plan for his three daughters to get over their sadness at leaving their old home and friends….um, if they had to leave them, of course. But as usual, Munger did not dig any deeper into this story — e.g., he doesn’t seem to have asked if UT-B fronted Smith any money for the house or bought his old one before he started the new one, which would surely have suggested that UT-B knew far in advance that they would win the contract — but this was about the closest Munger ever came to expressing doubt about anything that UT-B said. (I have been told that Madia too started building his house in Oak Ridge before the contract was awarded, but that is only hearsay.)
I have been a subscriber to both the Knoxville News-Sentinel and The Oak Ridger since I came to Oak Ridge in November 1989. I think that they both typically get their facts right (which is why I quote them so extensively in this chapter), but that not all the facts of interest are necessarily uncovered and presented. The Knoxville News-Sentinel is the “big dog” newspaper in East Tennessee, yet it is The Oak Ridger that is more likely to be skeptical about superficial explanations and grand claims by DOE and its contractors. This is partly because of Oak Ridge’s proximity to the DOE sites (and thus to the contamination and other hazards), but partly, I think, because The Oak Ridger’s readership tends to have a higher concentration of people who work at or have worked at the sites — these savvy folks would not accept The Oak Ridger’s simply parroting what DOE or a contractor says . This is not to say that The Oak Ridger does not sometimes do that, or that it does not sometimes have a guest column that reads like an advertisement for a particular contractor, or that it is not one of the chief cheerleaders for the Oak Ridge High School building campaign. But I think that by and large, The Oak Ridger gives its readers the facts as fully as it is able to find them out and I think its reporters stick their necks out much more. Thus I view the little Oak Ridger as generally a more valuable source of information than the News-Sentinel.
Influencing the Business Community and Technology Transfer: Show Them the Money
Dick Smyser, the late founding editor and editor emeritus of The Oak Ridger, said that in the late 1950s, several ORNL scientists recognized the potential commercial market for radiation detectors (The Oak Ridger, 30 September 2004). They asked ORNL officials about having ORNL itself manufacture them. But in those pre-technology-transfer days, the officials turned them down. The scientists proposed that they themselves start a company to make the detectors, that is, on their own time while holding down their jobs at ORNL. This made sense to them since AEC (the predecessor of DOE) “was already touting that Oak Ridgers should develop private industry to produce local tax revenue for the future incorporated city”. But ORNL officials, sensitive to potential conflicts of interest — “research funded by public funds exploited for private gain” — turned them down again. Finally, when ORNL director Alvin Weinberg was away from ORNL, some substitute official approved the proposal. The result was ORTEC, a name well known to many older health physics professionals. Smyser said that Weinberg later remarked that although he would have vetoed the proposal had he been present at ORNL at the time, he “recognized that ORTEC was an idea the time for which had come and he was now pleased that it had been allowed to proceed”. Even so, it is disturbing that the government apparently did not retain any interest in the product at all, even for a limited number of years. Commercialization of this technology was indeed of great benefit to the public, but it might have been of even greater benefit if the government had reaped even a tiny percentage of the profits.
With regard to the approach taken by ORNL with respect to attracting new business, Alvin Trivelpiece, Lockheed Martin’s director of ORNL before Madia, emphasized the need for ORNL to be “competitive” (The Oak Ridger, 13 May 1998) and to be more aggressive in research, marketing, and politics. However, this came in the wake of what he said was DOE’s giving ORNL one day to decide to abandon design of the Advanced Neutron Source and switch to building a spallation neutron source, when ORNL had no expertise in designing and building accelerators capable of producing significant spallations. He stated that ORNL needed to write better proposals and change fossilized business rules that had been imposed on ORNL by Lockheed Martin Energy Systems before the ORNL and Y-12 contracts were split. Thus he was advocating more streamlined operations and better performance, but more or less in the same ethical mode as the Lab had operated in before.
Dr. H. Lee Martin, who writes a monthly Knoxville News-Sentinel column called “Techonomics”, also had something to say about SNS. As the blurb at the end of his column states, Dr. Martin was a co-founder of the troubled IPIX and is now a partner of Clarity Resources, LLC, a company engaged in “regional mentor capital” and “mentor capitalism”, which I take to mean that it is a venture capital firm. Thus he — and the News-Sentinel — are completely upfront about any tendency he may have to favor business development and venture capital investments. His column of December 2003 seems to be another one of those “Hooray for ORNL” vehicles. It is of great interest, though, regarding some details about why Lockheed Martin, UT-B, and DOE have done certain things the way they have. Martin stated that in 1998, Trivelpiece “bet the future of ORNL on one project” — the Spallation Neutron Source — because ORNL’s facilities were in such a state of decline that without the “infusion” of SNS, ORNL’s mission was in jeopardy. He also stated that Madia and Wadsworth “leveraged the SNS win into a way to “change the rules” for funding facilities”. (He may be giving Wadsworth credit for things he had little involvement in, because Wadsworth didn’t come to ORNL from Lawrence Livermore National Laboratory until August 2003.) UT-B wanted to build a new $300 million office-laboratory complex in addition to SNS, but as we can infer, DOE would not fund both. As Martin explained (and as I noted earlier), usually a major upgrade at a DOE site would come through a “line item” in the federal budget voted on by Congress. The lead time on line items is at least several years (Martin said up to 5-7 years). DOE has to fight for every line item and thus picks its line item battles carefully, a few at a time, often spread around the country so as to make them more palatable to Congress. If UT-B had waited for that like all the other contractors, Martin explained, it would have been years before significant new buildings could be erected. So UT-B went to Wall Street. Using “a specially created UT-B organization to guarantee bonds” (undoubtedly the UT-Battelle Development Corporation), UT-B obtained much of the $300 million outside the congressional budget process. Martin remarks that ORNL’s “campus” and SNS are both “rising from a ridge….instead of sinking in the red tape of government bureaucracy” and that ORNL’s transformation is “astounding” to any observer of DOE affairs.
Martin is indeed correct that all of this is astounding, although in ways not limited to the manner that he suggests. First, your average taxpayer would have assumed that the Lab belonged to the US government, with DOE calling the shots. So it is startling to read that Trivelpiece — who was an employee of a private company, even if it was the company managing ORNL — “bet” the future welfare of the Lab on a single big-ticket facility, which Martin likened to “placing your entire stake on “40 red” on a roulette wheel”. The jury is still out on whether this bet will succeed because the SNS is not up and running yet. Second, presumably DOE is making decisions on a nationwide basis as to what operations and research should be performed where. (Or not.) Third, some of the other national laboratories may now feel resentful of DOE for allowing UT-B to do such things when previous such proposals by others were rejected. I do not know this for a fact, but I suspect it because of proposals that appear to have been floated in the past and were rejected, such as in the area of “work for others” (doing work for private entities and for governmental entities other than DOE, with the contracts between the site managing company and the entity and not directly between DOE and the entity). It will be interesting to see if other labs follow ORNL’s example — or if they are allowed to, since this may be a giant DOE pilot project. I believe that PNNL actually preceded ORNL in doing this (under Madia also), although perhaps not so successfully.
In addition to telling us about Trivelpiece’s big gamble and UT-B’s big score, Martin also gushed in the received News-Sentinel manner: ORNL had “new management” by UT-B, “new leadership from Dr. Bill Madia and Dr. Jeff Wadsworth” (although at this point Madia had been gone from ORNL for months); “a solid political coalition led by Rep. Zach Wamp” (an acknowledgment of Wamp’s obvious commitment of political capital to the success of UT-B); and “smart project management headed by Dr. Thom Mason”. Martin claimed that as a result, “Research Ridge has been reborn with a capital investment rivaling the original Manhattan Project” and that with a “new mission, new facilities, and new capabilities, ORNL’s vision for the next 50 years has been renewed”.
An entity that should be considered in any examination of how UT-B operates with respect to the private section is the “public-private” partnership known as Technology 2020. Technology 2020’s Web site says that it was initiated in 1993 “to capitalize on the unique resources of the East Tennessee region: the presence of Oak Ridge National Laboratory, the University of Tennessee-Knoxville, the headquarters of the Tennessee Valley Authority, and a significant number of both large and small information technology companies in the region”. The Web site goes on to explain that Technology 2020 was formed in light of the anticipated decline of DOE funding in the area and the consequent impact on the region’s economy. While the original area covered was 15 counties, the area was extended to include Chattanooga and the Tri-Cities area. They now refer to the area as the “East Tennessee Technology Corridor”.
As the 1993 start date of Technology 2020 suggests, Lockheed Martin was the contractor that Technology 2020 was originally associated with. The Oak Ridger (29 May 2000) reported that Lockheed Martin gave $100,000 to Digital Crossing, a project/program to “wire a downtown Knoxville building as a technology epicenter for Internet-related companies”. (It is not clear whether this was before or after UT-B took over ORNL; Lockheed Martin was still running Y-12 in 2000.) Technology 2020, which was managing Digital Crossing, had announced a month earlier that it was $250,000 over budget on the project and was seeking other sources of funding. Being that far over budget would not seem to say much for Technology 2020’s managerial skills, but Lockheed Martin pitched in. Possibly they wanted to help protect the $750,000 already given by the Tennessee Department of Economic and Community Development and the $50,000 given by the City of Knoxville.
An ORNL news release dated 12 July 2000 (three months after UT-B took over) stated that ORNL and Technology 2020 had formed a partnership “to help create more jobs in Tennessee”. This partnership was called the Center for Entrepreneurial Growth (CEG). It was to “focus on taking technology developed at ORNL and using the technology to form new companies”. Madia said at the announcement ceremony that the partnership “is making it easier to move state-of-the-art technology from the laboratory to the marketplace”. He also said that the partnership was part of a commitment made the previous year by UT-B with the State of Tennessee to help support economic development in the East Tennessee region. The release stated that CEG was “designed to created an environment in which scientists who develop technology have direct access to items such as planning help and access to capital needed to start a new company”. The director of Technology 2020 was quoted as saying that “what we [in the region] have never done well is make it easy for scientists to develop their ideas in the marketplace”. He added that the center “was already identifying ORNL technologies with commercial potential”; furthermore, CEG would also be conducting monthly seminars open to ORNL employees to discuss issues related to forming and maintaining new businesses. Finally, the release said, “in addition to licensing technologies, UT-Battelle will provide financial support to [CEG]”, including more than $1 million from UT-B’s corporate (award) fee and licensing revenues. In fact, it would be providing $100,000 immediately to establish a CEG Commercialization Fund to be used to “commercialize ORNL technologies”.
The ORNL Reporter (December 2003) had a lead article titled “Jeff Wadsworth explains the multiple reward of tech transfer”. The article began, “ORNL — encouraged and aided by the Battelle side of the contracting partnership of UT-Battelle — has major initiatives under way aimed at commercializing the Lab’s technologies”. The article stated that transferring the work of the Lab’s researchers to the marketplace — technology transfer — brings benefits to the community, including boosting economies “both locally and nationally” and “it also improves the financial state of UT-Battelle through royalties, licensing income, and potential equity shares from those licensed technologies”. That is a startling statement: one would think that these benefits would accrue to the federal government and to a degree to the researchers themselves, not to UT-B itself except as UT-B might earn an extra point or two on the award fee for efficient and appropriate technology transfer. One wonders if DOE and UT-B have some little side agreement about this buried in the ORNL contract. The article says that it is “rewarding” when “the technology a lab has introduced into the marketplace comes back to aid the lab in its research” and that Wadsworth regards this “spinback cycle” as a measure of the value of technology transfer. He noted a pitfall from his days at Lawrence Livermore: “If you are successful [in technology transfer], you have teamed with a part of industry that is now winning more market share and so now those industries’ competitors wake up and realize that their tax money has gone to a national lab that is helping their competitor”. (That is, of course, what happens when tech transfer agreements are exclusive — to one company rather than democratically to as many as want to license the technology — and when there may be suspicions as to how that one company won the right to license the technology.) Wadsworth said that his answer to the competitors was that “you had the opportunity to team with us, and you didn’t choose to do so”. That too is revealing: ORNL (and Lawrence Livermore) is supposed to license evenhandedly, rather than having technology transfer be a game of “Who wants to team with UT-B?” on UT-B’s terms. According to the article, Wadsworth said that some would “still” see it as unfair and would “choose to pick a political way to solve their loss of market share”. The “political ways” are not specified, but I certainly hope he didn’t mean that, e.g., taking it to court was “political”. Wadsworth said that an “obvious reason to commercialize is to generate financial wealth, which brings with it job creation”. He said that there was “an argument that goes: We’re not here to make people wealthy or pick an industry and make it successful, but we are here to get our technology into broad US use” — however, he didn’t say that he was making this argument.
Another “Let’s foster commercialization” entity is a think tank, the Center for Advanced Studies (of what, we are not told). The Oak Ridger reported (22 August 2002) that this facility was to be located in the building erected to house the Joint Institute for Computational Sciences — it is not clear whether this was mentioned when the joint institute was being pitched to the State of Tennessee (which paid for the building). The Oak Ridger quoted the UT-B press release as saying that the purpose of the Center was “to bring together scientists and educators from leading institutions across the nation to form the “intellectual core” of a 21st-century think tank” and Madia as saying that the purpose is “to bring together some of the greatest minds in the world to work on scientific challenges that are too big for any single laboratory or university”, with “visionary thinkers” to meet later in 2002 to address “energy infrastructure assurance”. What all this has to do with computational sciences is not clear. The Knoxville News-Sentinel also reported on the Center (7 February 2005), saying that it was established in Oak Ridge. Well, not in Oak Ridge proper, but “in the middle of [ORNL’s] research campus”. Well, it’s not administratively part of ORNL, but “is considered a part of Oak Ridge Associated Universities” (whose headquarters and major facilities are in the city of Oak Ridge). (Got all that, reader?) We are told that UT-B and ORAU will each cough up $150,000 a year toward the proposed $1 million budget for the think tank; that various of the other “Associated Universities” (e.g., Duke and Georgia Tech) will contribute the rest; and that the think tank is considered ORAU’s because that way it can take advantage of ORAU’s not-for-profit status. The News-Sentinel said that the sponsors wanted a director with “scientific credentials, an entrepreneurial background, and familiarity with Washington policymakers”. Apparently they found one: the think tank’s “founding director” is a former EPA, DOE, and Office of Management and Budget employee and genome-decoding company executive who prefers to refer to the think tank as a “do” tank. He stated that its purposes are to “attract attention worldwide” and “play a role in developing policy on important science issues of the day”; the tank will try to “bring policymakers together with top researchers to promote an exchange of information and ideas”. This all sounds traditionally think-tanky at first. But the director explains that it will be different from, e.g., the Brookings Institution, which “look(s) at problems and analyze(s) what went wrong” or from think tanks that are “research houses that study single issues in great depth”. Just how it is different is not stated. It sounds more like a lobbying or marketing forum.
The Oak Ridger (3 June 2004) said that “ORNL is developing a track record for
[turning technology into jobs]
thanks to its partnership with Technology 2020 in what’s known as the Center for Entrepreneurial Growth. Tech 2020 is a public-private partnership leveraging East Tennessee’s information technology resources to provide access to capital and grow new companies — among other things”. Battelle was described as “a global science and technology enterprise that develops and commercializes technology and manages laboratories”. (Note that “does research” was not included.) The Oak Ridger said of CEG that “about 40 businesses have essentially been created from ORNL-related technologies” and that “UT has an agreement with [ORNL] to essentially do the same with university-related technologies”. The Knoxville News-Sentinel (21 June 2004) reported on the progress of ORNL’s “economic development labors” under UT-B: four years earlier, “it hatched 10 lab-related startup companies through its newly launched Center for Entrepreneurial Growth”. Yes, the Center (CEG) is referred to as ORNL’s (“its”). Then the article stated that as of mid-2004 thirty-seven companies had been started and ORNL’s and CEG’s focus had shifted from startups to “ensuring [ORNL’s] offspring will stick around”. This was because while four companies had “graduated” from the program, seven others had gone out of business.
The News-Sentinel article noted that UT-B provided $200,000 per year in funding to CEG, plus a $400,000 fund that loaned CEG companies money “well below the prime interest rate”. (Associated other contract terms were not stated in the article.) The director of CEG, Bob Wilson, noted that CEG had not been very selective early on, but now had tightened up its screening; now CEG asked “Are [ORNL employees] ready to leave the lab [to start a business]?….Can they be funded?” CEG had expanded to operate not only in Chattanooga and UT, but also in the Fairview Technology Center, “an incubator owned and previously operated by The Development Corporation of Knox County”. ORNL’s technology transfer program director, Fischer, said that he was looking to increase CEG’s role, e.g., by using CEG as “a vehicle for UT-B to create companies using lab technologies that don’t have an entrepreneur behind them” by “partnering with the CEG to start up technology companies ourselves”. This sounds as if UT-B were going to start its own companies, does it not? Subsidiaries of UT-B? As the agent of technology transfer for DOE, UT-B would license the technology…..to itself. This seems like a giant conflict of interest, but since it was reported in the News-Sentinel, DOE folks presumably read it and either thought nothing of it or accepted UT-B’s assurances that it was all on the up and up. Somehow I think there are other segments of the federal government who would be a lot more inquisitive about this cozy little arrangement. I especially think so in light of the November 2004 Fiscal Year 2005 omnibus spending bill passed by Congress, in which there was $100,000 for the CEG (The Oak Ridger, 22 November 2004).
On the face of it, a public-private partnership seems like a good idea, especially given that the original emphasis was on “information technology”, i.e., mostly computer applications. However, some changes appear to have been made. First, as Technology 2020’s Web site states, one of Technology 2020’s priorities is to help start new technology businesses and to provide assistance to the newly formed businesses. That is, they are no longer emphasizing information technology but all technology. Second, besides just attracting new businesses and providing advice to newly started ones, they are now — as I understand it — actively involved in helping get funding (venture capital) to start up companies and are even providing such funding, besides providing “incubator space” for some businesses. Third, there is the UT-B involvement and the mention of ORNL and UT as sources of the technology. Granted that UT-B gets some brownie points from DOE for its public involvement, including job creation, the sums mentioned seem high and the involvement of UT-B too great for UT-B to be doing it just for the points. It seems very likely that they — or the corporate parent Battelle — are getting something out of this, and I don’t mean having the cockles of their hearts warmed. Many people besides me are uneasy about the deep involvement of UT-B in technology transfer to private businesses, not just as DOE’s designated agent for tech transfer at ORNL, but in the funding, from the private side, of businesses that will be receiving the technology for commercialization. Again, there is a lot of potential for conflict of interest and for favoritism in all this. Fourth, the notion of “scientists” starting their own businesses to commercialize their ideas is striking in this context. That is, is an ORNL or UT scientist who has done developmental or research work on an idea at ORNL or UT going to leave ORNL or UT to start his own business? If he does, is he taking his idea and data with him as his own, or is he tech-transferring it (licensing it) from ORNL or UT? If the former, is there not a lot of potential for abuse, in that ORNL or UT facilities and funding or grant money he got because of his association were used to research the idea? If the latter, will such scientists (and other Technology 2020 clients) get preference in licensing the idea, or will it be offered equally to all potential licensees? Etc., etc.
Despite what UT-B and Technology 2020 say about the grand aims of their program, DOE and the State of Tennessee have an obvious need to keep close tabs on the activities of this program. The process by which technology first researched and developed at ORNL or UT is transferred should be scrutinized exceptionally closely. This is particularly true since Battelle itself runs a venture capital firm (the aforementioned Battelle Ventures) that can be used to buy into these new companies. US and Tennessee taxpayers would not want to discover someday that technology research originally paid for by them ended up enriching private interests with little return to the respective treasuries. There appear to be many “vehicles” in East Tennessee at present by which tech transfer and commercialization are to be facilitated — but there always seem to be the same few entities driving them.
The Knoxville News-Sentinel reported (14 June 2004) that a conference called the Tennessee Valley Corridor Summit had been held in Knoxville. This conference was organized by a private businessman; he told the News-Sentinel that he did so “because his company, a technical consulting firm for the power industry, is seeking federal Small Business Innovation Research and Small Business Technology Transfer grants”. Because of his efforts to “connect with” UT and other scientists doing research, he decided to link businesses and researchers via the conference in an effort to “create new research — and development-driven companies”, as the News-Sentinel put it. The conference was attended by people from ORNL, the University of Tennessee, the State of Tennessee, and various private businesses, to “discuss ways to create new companies through the ideas generated by researchers at ORNL and UT”. Speakers included the state “technology director”, representatives of the ORNL and UT technology transfer organizations, columnist Martin, and even a member of the state legislature.
At this conference, the ORNL tech transfer representative said that “for five years, we’ve been trying to push our technology [out to the private sector]. What we were missing was somebody pushing from the other side”. Following this puzzling image, he said that companies that paired with ORNL researchers to apply for SBIR and other federal grants to prepare technologies for the marketplace had a much better chance of getting approved. He claimed that 47% of ORNL SBIR applications were granted, compared to the average of 12% elsewhere. Martin said that the university and the state appear to be “misguided”, as the News-Sentinel put it, both in focus and in spending. He noted that the entrepreneurship program he had started at UT had had to shut down for lack of support even though, he claimed, it generated 12 companies and $3 million in outside investment. He asked, “Where’s the program today? It doesn’t exist”. The state technology director pointed out that the central Tennessee area had started a program called Cumberland Emerging Technologies. This program linked Nashville’s Vanderbilt University with the private company Cumberland Pharmaceuticals and with what the News-Sentinel termed “the state’s Tennessee Technology Development Corporation”; its purpose was to “raise federal grant money and spin research ideas out into businesses”. Regarding what the News-Sentinel paraphrased as “com[ing] up with creative ways to surmount impediments to local technology business development”, this director asserted that this was “critically important” and that Martin’s entrepreneurship program might be done privately.
The Knoxville News-Sentinel reported (23 September 2004) that Technology 2020 had organized the “Tennessee Valley Venture Forum”, held just a few months after the summit conference described above. As the News-Sentinel pointed out, in previous years this forum covered the Oak Ridge-Knoxville area, then East Tennessee, and finally, in 2004, much of the Southeast. The forum was to draw 25 venture capital investment groups to look at some 15 “technology-oriented” companies. All of the latter were out-of-state companies representing technologies developed at ORNL. So much for starting new local companies to provide tax dollars to substitute for the waning DOE dollars, one would have thought. But Technology 2020’s president and CEO, Tom Rogers, while conceding that these and other outside companies were not contributing to the local economy, asserted that “Knoxville/Oak Ridge really benefits from the relationships we’re establishing with venture firms across the Southeast….venture capital is a relationship business and Tech 2020’s Rolodex is growing steadily”. As the News-Sentinel further paraphrased his remarks, “the local entrepreneurial community benefits from the relationships generated through the venture forum’s increasing level of sophistication in selecting companies and attracting investors”. But, said Rogers, venture capital investment was only one way to “grow companies and to create wealth”. He didn’t say what the others were.
Regarding the Tennessee Department of Economic and Community Development (ECD), the Knoxville News-Sentinel reported (7 May 2005) that an audit by the state comptroller’s office showed that ECD could not monitor its own progress in improving economic conditions in Tennessee because it was not tracking and collecting data on economic indicators in the various counties, such as unemployment rates, poverty level percentages, average per capita income, educational level, and small business development. ECD was found to be collecting data on the number of new job commitments by companies, the number of new contacts it made relating to potential investment prospects, etc., but it could not say, e.g., how many of the contacts actually resulted in investments and what the dollar amounts were. Finally, the audit report stated that until recently ECD had not identified in detail the major economic areas of Tennessee or their needs. ECD, in its response to the report, seemed to blame it all on the previous governor’s administration, which it said had not developed any performance measures along these lines; this seemed specious because the current administration at the time of the audit had been in office for two years. The News-Sentinel also noted that a local television station was reporting that same week that $2 million of the money allotted by the state legislature for economic development — money whose disbursement and use was supposed to be overseen by ECD — was given to companies headed by the treasurer of the political organization of a powerful state senator. ECD claimed that lawmakers were blocking their efforts to find out how the money was being spent. So while ECD was apparently making some sincere efforts to attract new businesses to Tennessee, the taxpayers had no idea where most of the ECD money went or if the ECD salaries were money well spent.
Soon after, the News-Sentinel reported (12 May 2005) that the state Senate had approved a $20 million jobs bill already approved by the state House. A program would be created in ECD to assist businesses that created or retained jobs in Tennessee. ECD could use 5% of the money for “administration, marketing, and evaluation” expenses and the rest was to be used for job training assistance grants and loans and for developing a statewide broadband strategy. An official of the Knoxville Area Chamber Partnership said that the Chamber was all for the bill since it “codified” the training and infrastructure assistance program and an unspecified “FastTrack” program. Moreover, she said, the legislation expanded the definition of “infrastructure” to include emerging industries and technologies important to Knoxville and Oak Ridge. She declared that “these programs are a return on investment to our state” and that by making the programs a permanent feature of the code[sic]”, new and better-paying jobs would be created “as is a main goal in our Jobs Now! campaign” (see below). It seemed odd that she would characterize a jobs creation bill as a “return on investment”, but even more odd that the legislature would redefine “infrastructure” in this way. Infrastructure, according to a dictionary, is, first, “an underlying base or foundation especially for an organization or system”, and second, “the basic facilities, services, and installations needed for the functioning of a community or society, such as transportation and communications systems, water and power lines, and public institutions including schools, post offices, and prisons”. Thus “emerging industries and technologies” would not logically qualify as infrastructure since they are not supporting the community but themselves require support. There must have been some reason for this strange use of the word — I conjecture that it was in aid of getting other (perhaps federal) funds on the basis of the redefinitions or of allowing state funds that were supposed to be devoted to maintaining the (true) infrastructure to be diverted to new business ventures.
(I believe that my conjecture has been borne out by various tax breaks given on the grounds of infrastructure support, e.g., the report in the Knoxville News-Sentinel (10 December 2005) that the state of Tennessee is providing $5 million under the FastTrack program for site preparation for a new Denso Manufacturing facility next to an existing Denso site. This facility will build electronic components for automobiles. In addition, the state will provide up to $2 million for job training for Denso, job tax credits of up to $2000 for each job created (for a projected 500 new jobs), and TVA will provide redundant power lines to the facility (while refusing to disclose the “economic incentives” it is providing to Denso because disclosure would disadvantage TVA in its “industry recruitment” efforts). Finally, the county in which this facility would be located is providing tax and other incentives, but refuses to disclose the details until the deal is final. And no, this is not the only such deal that Tennessee has made recently.)
The entwinement of governmental and private entities was demonstrated again when it was announced that there would be a new marketing campaign focussing on nanotechnology, called “the East Tennessee Nano Initiative” (Knoxville News-Sentinel, 17 May 2005). Officials from ORNL, DOE, the University of Tennessee, Technology 2020, and Jobs Now! gathered at Tech 2020’s offices for the press conference, which the News-Sentinel said was “attended” by Representative Wamp. The purpose of the campaign was said to be to “recruit and create companies around the Spallation Neutron Source” (SNS). Some of these officials, according to the News-Sentinel, said that SNS not only offered “the world’s best research facility in the field of nanotechnology” (an assertion that may be true but that I have never heard backed up with specifics), but “it also represents an opportunity to reap economic benefits with the impact of that research on a variety of industries”. (Here we see that SNS is looking less like a governmental research facility to which scientists from all over the world come to do research and more like a cash cow for private entities to use to make money.) The CEO of Technology 2020 said that the campaign would include technology transfer, recruitment of new companies to the region, entrepreneurial assistance, and tourism and convention development(!); he also said that no new money would go into the campaign, but the “founding partners” of Technology 2020 had committed money, manpower, and services to creating “the Nano Valley” (as ORNL director Wadsworth called it). The CEO said he hoped that the state would put some money into the pot as well. Curiously, although ORNL is the site of SNS, the partners listed by the News-Sentinel as being part of the “Nano-Initiative” did not include ORNL or UT-B; these were the University of Tennessee, “the Y-12 National Security Complex”, Technology 2020, and Jobs Now!. The mention of Y-12 was puzzling: was it DOE (“owner” of Y-12) that was the partner, or BWXT (managing contractor of Y-12)? Furthermore, why was Y-12 interested in SNS at all — unless somehow Y-12 or BWXT expected to make money off SNS research as well? In fact, except for the odd study here and there over the next few decades, what would a defense facility like Y-12 be doing at SNS at all? (The News-Sentinel never seems to wonder about stuff like this at all.) An official of the Knoxville Area Chamber Partnership said that the Nano-Initiative might be the first “economic development campaign” that linked Knoxville economic developers with ORNL and Technology 2020, which the News-Sentinel now called “a technology-focused economic development organization”.
The Oak Ridger (18 May 2005) had a different take on the press conference above: the headline read “Wamp Announces East Tennessee Nano Initiative”. So it was not clear who did announce it, Technology 2020 or Wamp. The Oak Ridger included ORNL and “Innovation Valley” as the partners in the Nano-Initiative along with the Y-12 National Security Complex, the University of Tennessee, and Technology 2020, but not Jobs Now!. Wamp was quoted as saying that “This idea was not born out of the political realm — we’re just here to help”. Two of the aims of the campaign were listed as “creating new intellectual property and patents to stimulate growth of new companies in the region” and “helping local industries adopt new nanotechnology applications to improve their competitive position”. ORNL’s Wadsworth said that it was not good enough to be world class — “we have to be world leaders”. The Technology 2020 CEO said, “We’re in a real race to the moon with the rest of the world” and “We have to…get East Tennessee on the map….and to translate nanoscience research into economic activity”. I.e., it isn’t enough to discover stuff — to have your work regarded as a success, you have to make money at it. Most scientists would tell you they didn’t go into the field for the money, but obviously the incentives are changing.
Martin’s column of 4 April 2005 was similarly revealing. He is fluent in Business-speak, telling us that two area companies “are bootstrapping their operations to create value”, whatever that means. He says that the founder and president of one of these companies used to work at ORNL as an instrumentation engineer and now his company develops custom instrumentation for the commercial marketplace. So far, so good — the founder found a need and filled it, which everybody can agree is generally a good thing. But then Martin segues, in a non sequitur fashion, to the statement that this company “shows the benefit of having the nation’s largest government research facility [i.e., ORNL] in our community. By attracting an abundance of world-class talent, ORNL spreads the seeds of future businesses”. It’s an arresting idea: ORNL is attracting world-class talent so that they can spend a few years at ORNL developing a technology and then leave ORNL to start their own profitable businesses. Apparently, to Martin ORNL is providing a public service akin to that of an employment agency or West Point. Also, although Martin does not say so, any technologies that are investigated at ORNL at public expense and are found not to bear fruit will not be spun off into companies — just the ones that are found to be promising. So the taxpayer bears the costs of investigation, but virtually all of the profits (except for relatively minor licensing fees) may be realized by the entrepreneur and his investors. It will not be lost on the discerning reader that Martin and his venture capital firm stand to benefit hugely by this arrangement.
The second company’s founders also “trace their careers from ORNL through local companies”. Martin says that these two engineers “developed a valuable [but unspecified] skill [sic] related to software solutions for measuring and protecting experimental data”; their software “creates revision histories of documents and backs up the files to another computer”. One would have thought that such software already existed, but these two may have built a better mousetrap. Martin then says that “Seeds don’t fall too far from the tree” and that’s why there is such a concentration of startup companies in Silicon Valley (associated with Stanford University’s presence) and Boston (associated with MIT’s presence). He implies that the idea people started at Stanford or MIT and then started their own companies, which may be true; it is also possible that people with ideas and no previous association with Stanford or MIT went to those areas to start their companies because there were educated or trained people there to do the work or to consult. In any case, Martin concludes that in the association with ORNL “lies the future of our East Tennessee Valley — the Innovation Valley as it was recently dubbed”. He concluded that “with $1 billion-plus in funded research at ORNL, it is imperative that we become proficient at germinating the seeds attracted to this haven in order to invent the economy of the 21st century”. (He obviously is not a gardener, in speaking of “seeds being attracted” as if a seed could pick where to fall and take root.) ORNL is a powerhouse in many ways, but pinning the region’s entire future economic hopes on that one institution seems dicey. As Mr. Munger would say, we’ll see.
On Technology 2020’s Web site (2005), there is a list of “patrons” who have contributed more than $1 million over several years. In addition to UT-B, we find DOE and the State of Tennessee. Although this is a “public-private” partnership, I wonder if they have gotten their money’s worth. Technology 2020 includes two UT-B employees on its “volunteer” board of directors, including the Chair Elect, Alex Fischer, the head of tech transfer at ORNL (see also below). There are two UT people on the board as well. There is an ex officio member of the East Tennessee Technology Council, indicating the close association of this council with Technology 2020; the council is “an interactive association of businesses and entrepreneurs” who have joined because “it’s good for business”. The most prominent (contributing) four members include UT-B, BWXT, SAIC, and UT. Furthermore, as I noted earlier, Oak Ridge Mayor Bradshaw was said at this time to be working for Technology 2020 as the Chief Operating Officer.
Regarding Fischer, note that in the wake of other stories about various sweetheart deals by members of then-governor Don Sundquist’s administration, The Knoxville News-Sentinel (13 September 2002) reported that a former Sundquist staffer, Fischer, had for a long period of time had a stake in a company that got all its income from the state’s health insurance program. The reason that this was news was that it appeared to violate the State’s conflict of interest policy. Fischer, who had been the deputy commissioner of the Tennessee Department of Economic and Community Development for several years before joining Sundquist’s staff in 2000, claimed not to know anything about such a policy but said that he had disclosed all his investments when first hired by the State. Besides the implications for me as a taxpayer, I found this story to be of interest because of coincidences of time: Fischer was in the Department of Economic and Community Development from 1997-2001 (i.e., during the time that Battelle was lobbying the State to pledge money for the various ORNL joint institutes, etc.), he was head of Sundquist’s staff from 2001-2002, and then from August 2002 on he has been the head of technology transfer at ORNL, i.e., a UT-B employee. More recently Fischer was tasked by Madia and Wadsworth “to lead a Battelle-wide initiative to more fully integrate Battelle’s technology commercialization efforts” — not ORNL’s alone, but apparently all such Battelle efforts (ORNL Reporter, October 2005 issue). This culminated in 2006 with Fischer’s being made “vice president for commercialization” for Battelle Memorial Institute in Columbus, Ohio — but he is still director of technology transfer and economic development at ORNL, according to the Knoxville News-Sentinel (11 February 2006). The News-Sentinel said that he had not decided which job to take permanently and that is why the new position, which he assumed in Fall 2005, was not publicly announced until February 2006. His new position is said to consist of being a single point of contact for “companies interested in establishing partnerships with more than one
[national]
lab to do research” and of developing “common strategies among the labs in bringing technologies to market”.
The Knoxville News-Sentinel and The Oak Ridger reported (28 September 2005) that the US Department of Agriculture’s Rural Development agency was lending Southeast Community Capital some $750,000 so that it could re-lend it out as small business capital in six counties, including Anderson County (home of Oak Ridge). The purpose was to “make investment capital available to small businesses which cannot obtain funding from conventional sources”. Southeast Community Capital (SCC) — whose vice president and chief operating officer is Mayor Bradshaw — is a “subsidiary” of Technology 2020, now described as “a small public/private partnership that seeks to grow new technology-based businesses in East Tennessee”. Interesting thought: “technology-based” “rural” small businesses…… Note that it is a bit hard at times to figure out Bradshaw’s employer. He apparently is the vice president and chief operating officer of SCC, but then he is spoken of as being associated with Technology 2020. Furthermore, he was a “loaned servant” from Y-12 to Technology 2020 for two years before he went to Technology 2020 for keeps in 2002. He was also the secretary-treasurer of CROET in 2005.
Even more recently, the Knoxville News-Sentinel (17 October 2005) told us about the emergence of a company called “TechConnect” (not to be confused with the computer-related magazine of the same name). It was five months old as of 17 October 1005 and had 15 employees in three offices (Oak Ridge, San Diego, and Washington, DC). Its product is some sort of uber search engine that TechConnect uses on a subscriber basis to “[help] federal contractors and the agencies they work for find the information they need about the latest technologies — and each other”. You would think that contractors and federal agencies would have appropriately qualified (and probably Q-cleared) staff for that, but who knows? Maybe they do need this kind of help, this “decision-quality knowledge”. Also, the search engine was apparently developed at ORNL — so one would think that the feds would be developing it themselves — but it has apparently been licensed by TechConnect. The CEO used to be the head of ORNL’s Center for Homeland Security and Counterproliferation; the senior vice president used to be senior VP at IPIX. (Such a small world.) Anyway, TechConnect’s Web site tells us that it does “what commercial search engines and traditional information-driven products cannot do: align a set of requirements with technology-based companies’ capabilities, filter data using intelligent search and match agents while forming deep knowledge structures, evaluate and outline solution roadmaps, provide unbiased analyses from leading industry experts, and enable companies to make informed strategic and tactical business decisions”. They do this by using “a hybrid of human and digital intelligence”, putting “a human in the loop”. It also says that they have signed a “Work For Others” agreement with ORNL “that provides access to the extensive scientific talent at ORNL and other U.S. Government laboratories”. So the News-Sentinel seems to have missed part of what TechConnect does, since all they mentioned was the search engine and not the “unbiased expert analyses” and the “evaluation and outlining of solution roadmaps”. One wonders if they are performing these latter services for the customers mentioned by the News-Sentinel: NNSA, Lockheed Martin, and the Army Science Board. Well, the News-Sentinel did just happen to mention that TechConnect is “helping large contractors locate smaller contractors for bidding on large projects, aiding financial firms with research on investments, and helping federal agencies learn more about each other”. Oh, it is that kind of matchmaker.
(An aside about the item above: In 2005 (I think about 2 November 2005) The Oak Ridger reported that three Oak Ridge High School students were working with ORNL on a special search engine — 40 hours a week! Well, presumably they were not working for that licensee but on some other project related to the search engine. Still, if the idea is that the technological product (in this case the search engine) has been taken as far as it can go at ORNL and is then ready for technology transfer, why are the students working so hard with it at ORNL? If they are developing a specific “product”, how are they being compensated for their time, why are they being allowed (by their parents, if not their teacher) to spend so much time during the school semester, and what will happen to the product? If it is marketable, will they share in the proceeds? I think it is of benefit — and pretty cool — for these students to work with scientists and engineers on technological stuff, but questions ought to be asked regarding what each party is getting out of it; it should be guaranteed that the students are not just a source of cheap labor for ORNL to produce what may become a proprietary product that the students may benefit very little from (and may not be allowed to discuss in detail with, e.g., an interviewer down the road).)
“Jobs Now!” is described (Knoxville News-Sentinel, 1 December 2004) as a “five-year regional economic development campaign funded by area businesses, local governments, and business advocacy groups” and its name for the East Tennessee area — for economic development purposes — is “Knoxville-Oak Ridge/Innovation Valley”, which it hopes to use as a “regional brand
[name]
“. The executive director of Jobs Now! claimed that having such a brand was essential to distinguish this area from other areas competing for business and “and to grab some of that mind share of the regional decision makers” — because “successful regional economic development is all about marketing and marketing is all about creating a recognizable image”. Jobs Now! is supposed to highlight the usual: ORNL, UT, and the development of technology-related businesses. Fischer (again, UT-B’s director of technology transfer and economic development) is quoted as saying that technology is the regional asset that sets Knoxville-Oak Ridge apart from the competition. The News-Sentinel quoted an official of the Knoxville Chamber Partnership as saying that Jobs Now! had developed a set of marketing materials that was free to any Jobs Now! member, so that now “everybody in the region will be using the same marketing materials, which sends a powerful message to corporate executives and site consultants”. But not only was Jobs Now! to try to attract new businesses, it was going to expand existing businesses and promote entrepreneurship, according to its chairman, who is also the president of the Forelock Company. Thus Jobs Now! intended to create a “rapid response team” to work with existing businesses on workforce, infrastructure, and other issues and “develop….incentives similar to those used to recruit new businesses”. (This sounds as if the team was to help existing businesses persuade local and state governments to provide them help in expanding or perhaps just in staying in business.) Technology 2020 was one of the entities that would be working with Jobs Now! “to help entrepreneurs find the capital, workers, and management expertise they need to turn an idea into a successful business”, according to the chairman. (But that sounds as if they would be helping to start new businesses rather than attracting businesses from outside the region.)
At a breakfast briefing hosted by “the Oak Ridge Economic Partnership” at the Oak Ridge Chamber of Commerce building as (apparently) part of the Jobs Now! effort, the East Tennessee Environmental Business Association (ETEBA) shared the results of a survey it conducted of its 115 members and their economic impact (The Oak Ridger, 19 May 2005). ETEBA reported that its member firms paid an average annual salary of $60,000, compared to the state annual average “wage” of $36,400. (Sounds unbelievable, but that’s what they said.) Not only that, but ETEBA companies, it was claimed, provided “tremendous economic impact in this area to the tune of $1.1 billion per year”. The Knoxville News-Sentinel (19 May 2005) said the survey report stated that the annual ETEBA firms’ total payroll was $368 million and they bought about $150 million of goods and services from other Tennessee businesses. No further details were given as to how the total “income benefit” added up to $1.1 billion, but the News-Sentinel said that this figure included ETEBA subcontractors, i.e., businesses that were apparently not members of ETEBA themselves. Also, the News-Sentinel said that two-thirds of ETEBA firms were classified as small businesses. Thus one could conjecture that the reason that the average ETEBA salary was so high was that the “brains” and the “minders” were the actual employees of ETEBA companies, while the “grunts” were employed by the subcontractors.
Soon after this, The Oak Ridger reported (25 May 2005) that the “Knoxville-Oak Ridge Innovation Valley” had moved into the top 20 percent of metropolitan areas in the nation for worker quality, according to a poll by a “national trade publication”, Expansion Management magazine, which “is circulated to some 50,000 business decision makers across the country”. Thus the area now has “Five Star Metro Status”. The magazine cited the area’s “concentration of extremely well educated workers”. The chief editor of Expansion Management warned that the competition — countries like China, India, and Mexico — have extremely low wages and an adequate pool of educated workers. Thus, he said, it was important to push education aggressively, “starting in kindergarten and extending all the way through college and beyond”. ORNL’s Fischer, then chairman of Jobs Now!, said that “the trick is to constantly improve our workforce training and educational opportunities”. Although the high education level of the East Tennessee area is touted by boosters, some experts at a conference organized by the nonprofit Tennessee Valley Corridor (organization) stated that the Tennessee Valley as a whole needed to make education and training a strong priority (The Knoxville News-Sentinel, 13 July 2005). They said that the region (including Tennessee, Alabama, Kentucky, and Virginia and presumably other Southern states) was behind other areas of the country in education and skill levels and that since many low-paid and low-skill-level jobs had gone overseas, it was necessary for the region to become “the innovative South, the smart South”. It seems that the education and grooming of workers of the future may soon be starting in their cradles; perhaps it will be argued that babies should be listening to language tapes and even pregnant women should listen to, say, tapes of the times tables, on the grounds that that’s what’s necessary in order to keep the local economy strong.
One has to wonder about all these initiatives in light of various economic events in the area. For example, The Oak Ridger reported (22 September 2004) that the city was “working hard” to come to an agreement with an Oak Ridge company that wanted to relocate and expand. It seemed that the Tennessee Department of Transportation was planning to pave a road extension (at an estimated cost of $225,000) into the industrial park the company wanted to move into, but this could not be done until the next year. So who would pay for the temporary road the company needed to gain access to its proposed space in the park, at a cost of $20,000? The city’s Industrial Development Board called a special meeting to vote on paying for the temporary road, under conditions “agreed upon by the [Board] chairman and [the] city manager”. This company was to purchase the land in the industrial park for $120,000 and invest $1.25 million in building a facility. Although it had only “10 full-time and two part-time employees”, it would be qualifying for a three-year 100% tax abatement on capital investment. The Knoxville News-Sentinel reported (18 March 2005) that this company would be staying in Oak Ridge; Mayor Bradshaw said that it had taken “years to put together the package right for” this company, as the News-Sentinel put it. So the Department of Transportation would be building the access road; the City of Oak Ridge would be granting the three-year tax abatement; and — the cherry on top — the city would extend water and sewer lines to the new facility (and implicitly, the city would bear the cost). But oops, now the investment in the facility was down to $1.1 million. The News-Sentinel pointed out something else: this company had been “a startup firm with office space in an industrial building operated by Technology 2020, a nonprofit partnership that grows technology companies in the area”.
Then there was the Forelock Company’s effort to get the City of Oak Ridge to help fund its move to larger quarters. As The Oak Ridger reported (12 May 2004), the Forelock Company wanted to move from UT’s Outreach Center (located in Oak Ridge) to the “nearly vacant” Flextronics office building, a former community college campus. The Chamber of Commerce (apparently taking up for the Forelock Company) estimated the company’s moving expenses at $200,000 “since security costs for the classified work the company conducts will be high”. The company requested that the City of Oak Ridge pay $100,000 of the cost. It was claimed that the advantages of the move would be an estimated 50 new jobs over two years and an unspecified “opportunity for UT to increase its presence in Oak Ridge through classes”. This move would also allow Flextronics to “absorb office space in Oak Ridge more suited to its needs”, according to the Chamber of Commerce. Finally, the Forelock Company was expected to put “$2 million of capital investment” into the Flextronics Building. The Oak Ridge City Council’s Economic Development Committee decided to fast-track this “incentive plan” for the Forelock Company after the company president told them that any later meeting would be “too late” because a company board meeting to decide where to relocate to would occur before then. After the company’s presentation request, city staff presented to the council a “re-worked economic incentive plan” for businesses to take advantage of either a tax abatement or an infrastructure improvement incentive from the city, a “limited three-year opportunity”. The incentives would be based on job creation, capital investment, and on “whether the development or improvement occurred to a targeted area”. Eleven businesses had already submitted project plans to invest more than $60 million in the city “should the [incentive] plant be passed by Council” — apparently they were told about all this and had time to prepare and submit formal plans before the staff had fully briefed the city fathers. The assistant city manager said he had had no idea that there was that much prospective activity “out there” — he said that “we” were trying to fast-track the Forelock Company’s request “because I feel we’re holding some projects up”.
One would not have thought that the city fathers would be susceptible to that old advertising pitch “Act now — offer expires soon!”, but they were. The Knoxville News-Sentinel reported (26 July 2004) that the Forelock Company had indeed moved — and the City of Oak Ridge had contributed that $100,000 to the move. But The Oak Ridger reported a few months later (25 November 2004) that the Forelock Company was contributing $10,000 to the Oak Ridge High School project. Let’s see: they received $100,000 in moving help from the city, which they absolutely had to have in order to afford to stay in town, but then were able to afford to contribute $10,000 to the school fund? Sounds like the old shell game to me. (They also donated $2500 to The Nature Conservancy two weeks later — that and the school contribution would count for points with DOE and its prime contractors that the Forelock Company had contracts with.) The Oak Ridger reported that the principal speaker at the annual “Industry Appreciation Day” luncheon was the president and founder of the Forelock Company. He was introduced by Mayor Bradshaw, who complimented the company’s “commitment to their community” and noted that the company charter required it to donate “10 percent of their pre-tax net income to community-based organizations”, such as Oak Ridge High School. It may or may not be significant that the donation was being made on a pre-tax basis, but the Forelock president said in his remarks that “[The Forelock Company] is an example of what good things can happen to a business with the help of a supportive community” and (per The Oak Ridger) that he couldn’t say enough about the businesses and individuals that had helped the company succeed. In other words, the mayor praised the president and the company and the president praised the mayor et al. back; this would be typical of an “industry appreciation” fest, of course, but there is still a whiff of commercial love about the whole thing.
After six months on the job, the Oak Ridge city manager, James O’Connor, stated his view of the role of government (The Oak Ridger, 8 September 2004). He said that, as The Oak Ridger put it, “government should act as a vehicle through which others accomplish goals”. He regarded problems such as the need to redevelop the local mall and to build a new high school as needing “corrective action”. He thought that government should be an enabler, with results more important than process (which sounds a lot like “The ends justify the means”). He explained that Oak Ridge was “built on a process orientation through its roots with the Department of Energy”, as The Oak Ridger put it (or maybe misput it?). He asserted that it was important for the city to become more customer-oriented and efficient. One would naturally think that the “customers” were the city residents, but apparently not, since he said that incentives had to be provided to attract investment because “we’re in a competitive market” — i.e., the people the city had to please were investors and developers and other businessmen.
The Oak Ridger reported (17 November 2004) that the Oak Ridge City Council voted 5-2 to have the Industrial Development Board bring forward a resolution allowing for a payment in lieu of tax agreement for an industrial park on the west side of the city, specifically a subsidiary of CROET. The CROET president was pleased at the outcome because it allowed money to be put toward “developing and marketing the park” — rather than, as he didn’t say, toward supporting the city’s other activities. One of the two members opposing the resolution said that he thought it was unfair for city residents to “subsidize” the company in charge of the park; the other said that he preferred “in lieu of” agreements that were not so broad in nature. Shortly thereafter, The Oak Ridger told us (25 November 2004) that two other area companies agreed to move into an “abandoned” building at a business park in the south central part of Oak Ridge — following the Oak Ridge City Council’s voting them each a one-time $250,000 grant to renovate the deteriorating building and reduce the taxes on it, in the form of a seven-year payment in lieu of taxes requiring annual payments of $36,000. The city declared it was worth it because the two companies supposedly would invest $23 million and create at least 80 jobs “with salaries in excess of 160 percent of the average area income”. These two companies were a tool and engineering company, which at the time was doing work for one of the Army’s helicopter programs, and a hazardous waste transportation company that had recently “graduated” from the Center for Entrepreneurial Growth (the one established by UT-B and Technology 2020) and had recently won a $40 million dollar DOE contract. It did not seem likely that either company would produce so many jobs with 1.6 times the average area income or that they couldn’t afford a measly $125,000 each toward renovating the building (past what they were already putting in). But the city, it seemed, could afford to make the gamble: it still had $2.2 million left in its “economic diversification fund” after making this grant. Later, the Knoxville News-Sentinel (13 August 2005) and The Oak Ridger (17 August 2005) reported that the two companies had been in a partnership that had now dissolved; although the first one then leased space in another industrial park, the second one argued that both companies were still entitled to the tax break because both firms would have their headquarters in Oak Ridge, would continue to add new jobs, etc.
The Knoxville News-Sentinel reported (21 January 2005) that the Municipal Technical Advisory Service (MTAS), a UT agency that provides training and advice to the 348 cities in Tennessee, would be moving from the UT Conference Center in Knoxville to Oak Ridge — to the building recently vacated by the Forelock Company. John Petersen, president of UT, explained that “we want to make a statement of UT’s presence in Oak Ridge and moving MTAS here will do just that”. The director of the UT Institute of Public Service, which includes the MTAS and its 33 employees, said that besides providing more space, the move would also make it easier for MTAS employees to work with experts at ORNL and Y-12 “on technical solutions to city problems”. (ORNL has long done work on, e.g., energy conservation, but it is hard to see what a weapons plant has to discuss with city planners.) In addition to the cases mentioned above, various companies have been given (and others may be given) serious tax abatements for locating or staying inside the Oak Ridge city limits. For instance, in about 2004 (as reported by The Oak Ridger) Mayor Bradshaw proposed to the Anderson County Commission a cooperative effort to attract business by offering such abatements and also proposed (as per an apparent agreement with Roane County) that a prospective business not be allowed to shop a deal among the city and the two counties. He also proposed a pilot program with a point system under which a business garnering all 100 possible points would receive a 100% tax abatement on improvements to its property for nine years.
The Oak Ridger reported (18 May 2005) that a company — called them the Gladhand Company — had made a presentation to the Industrial Development Board (IDB), proposing to relocate their corporate offices to a yet-to-be-built building in Oak Ridge. They said they would like to go either to the Horizon Center (a CROET-sponsored industrial park) or Bethel Valley Industrial Park, but they warned that they were also considering Knox County and the Roane County Industrial Park. They wanted to break ground very soon, so that they could “open in November and host a Christmas reception/grand opening in our new building”. This company had been in business for decades, so it was not a startup and did not seem to be proposing a major expansion. Officials of the company emphasized how much money they would be bringing into the area: their gross(?) was $20 million a year, they spent a fuzzily estimated $2-3 million in the local area for goods and services, and the average pay of their 40-45 Oak Ridge employees would be $45,000 per year. The Gladhanders sweetened the pot by saying that they would promote the Oak Ridge area to their customers, would showcase Oak Ridge when other companies visited them, would work with the Chamber of Commerce — would “be part of the tool of industrial development in Oak Ridge”. They emphasized how white-collar their waste and environmental services work was. They had to admit that some of the work was consolidation of actual waste for their customers, but, they asserted, “transfers are done at the loading dock” and there would be no “discharges of radioactive materials”. One IDB member expressed concern about the hasty schedule, saying that the community was concerned about waste handling and especially about companies who were handling radioactivity being located at the Horizon Center. He noted that several community oversight groups were likely to be concerned about this. A Gladhand official said that “CROET has approved us” and that he thought that CROET would be “more restrictive and conservative” than the IDB. (Huh?) He stated that his company was not a waste processor but “a broker of materials” and that “the radioactive part is a small quiet part of what we do”. (One wonders what he meant by “quiet”.) After some discussion, the IDB member subsided. The city manager, taking Gladhand’s part, said that he would not foresee the Environmental Quality Advisory Board (EQAB, one of the community oversight groups) having a problem with Gladhand’s plans since they had “already dealt with the Toxco situation and had an open house there”. (I think he meant that Toxco, which had had an incident that raised public alarm, had hosted the open house, not the Environmental Quality Board.) But in any case, it seemed that this was a done deal — no community groups need weigh in because the city manager just knew they would be okay with it.
The Oak Ridger reported (6 June 2005) that the IDB had indeed approved Gladhand’s move to Oak Ridge, voting to sell a tract of land in Bethel Valley Industrial Park to Gladhand for $82,000 and to approve the relocation of the company to the Horizon Center Industrial Park. They did both because as a Gladhand official put it, Gladhand was trying to “follow a parallel path to determine which property best meets our needs”. An IDB member remarked that he hoped that Gladhand would choose the Horizon Center to “be the first customer in the park to get things rolling” (the Horizon Park officials had been having trouble attracting anyone). This time The Oak Ridger reported that the Gladhand headquarters would initially employ 20-25 employees with a “target” of 40-45 employees by 2008 and that the average salary for employees would be $50,000-55,000 instead of the previous $45,000. Gladhand also stated that most of its business was not related to DOE but involved handling waste from universities and pharmaceutical companies; they said that some “shredding” of materials, such as syringe needles, and some absorption of liquids would have to be done as part of its operations. Gladhand would be providing state bonding on a per-square-foot basis, to provide assurance of cleanup in case the company were to become insolvent. An Oak Ridge City Council member present asked the three Gladhand officials present if any of them lived in Oak Ridge; it turned out that none of them did. She then asked if they would encourage their employees to live in Oak Ridge; one replied that they would, “but it’s a free country” and employees could live wherever they liked. He added that Oak Ridge would “hopefully have the incentives and products in place to encourage employees to want to live there”.
The president of the Oak Ridge Chamber of Commerce expressed his satisfaction with IDB’s approval because, he said, “Biotech and biomedical companies are our future targets. This deal opens the door and lays the groundwork for that target”. (I thought his use of the word “deal” was pretty revealing in the context.) But the chairman of EQAB, who was also present, was more cautious. She noted that EQAB had to ask questions about how the Gladhand facility would affect the willingness of other facilities to want to locate in an Oak Ridge industrial park, whether this would affect the marketing [of the park and the city, presumably], and how what Gladhand was doing would affect the neighborhood. She observed — accurately, in my opinion — that eventually Gladhand would “lose some contamination with the work they were doing, just like restaurants have grease”. She noted, however, that what Gladhand had described was something that EQAB could approve — as long as they were made fully aware of the potential implications.
The Oak Ridger reported (14 July 2005) about an EQAB meeting at which a Gladhand official presented his company’s proposal to relocate to Oak Ridge. The Oak Ridger pointed out that since Gladhand was “a radioactive company”, any site that Gladhand occupied would have to be approved by the Oak Ridge Board of Zoning Appeals; however, since Gladhand had not made a final choice of site, no appeal had yet been submitted. Hence EQAB decided to postpone any formal recommendation to the Board until Gladhand had made a formal proposal for a specific site. The EQAB chairman said that after having heard from Gladhand, EQAB’s general recommendation would be that the proposed operations would probably be compatible with the sites Gladhand was thinking about; that, she noted, was a departure from EQAB’s previous thinking about such operations. But, she continued, the sites were clean now, so it was necessary to give Oak Ridge assurance that the nature of the operations would not be changed or expanded in such a way as to involve additional types of radioactive operations or result in long-term contamination of the site. Thus Gladhand had agreed to accept deed restrictions that would limit the type of radioactive materials with which they would work. A point of interest about this meeting was that a Knoxville real estate attorney attended the meeting (it was not stated why) and told EQAB that when such deed restrictions are applied, the restrictions should also specify a “third party” who has the authority to enforce the restrictions. Hence, said the EQAB chairman, one of EQAB’s future recommendations would be that the City of Oak Ridge (i.e., its public officials) be listed in the deed as the third party. (Given the city officials’ tendency to give away the store, I do not have confidence in city officials as the enforcers.)
The Oak Ridger (17 August 2005) said that Gladhand had picked the Horizon Center as its new headquarters and expected to have a new building built by December of 2006. Eventually the Oak Ridge Board of Zoning Appeals did approve a “special exception” for Gladhand “to collect, treat, and ship out certain types of nuclear waste from a new $2 million facility” at the Horizon Center location (Knoxville News-Sentinel, 13 October 2005). Work was to start in November 2005 (so much for that Christmas 2005 party) and be completed in March 2006. Gladhand was, however, said to have agreed to “stringent” deed restrictions, including no burning of waste or flushing waste into the sewer system and including restrictions as to types of wastes and length of time kept. A Gladhand official said that since their offices would be in the (single) building, “we’re not going to be a disposal facility. We want to get this stuff out quickly”. Since haste makes waste, I personally would prefer that they be more careful than fast.
The Knoxville News-Sentinel reported (1 December 2005) that in 2002, the city of Oak Ridge, Anderson County, CROET, and the State of Tennessee had kicked in $500,000, $200,000, $50,000, and about $500,000 respectively to buy a $1.25 million “high-tech network switch for a new insurance call center coming to Oak Ridge”. But in early 2005, the company operating the call center was bought out by a larger corporation, which then announced that unless it could find a buyer for the call center, the center would be shut down in early 2006. Officials of the various funding entities defended the investment, with a county industrial recruiting organization rep saying that incentives on “infrastructure” are good investments and Mayor Bradshaw contending that having a network switch in a new building “makes it very attractive to companies looking to locate here”. The switch was owned by the funding entities because the purchase deal and call center company deal had been structured so that the switch was “a public utility”, according to the mayor. The article was oddly titled “Protecting Public Funds”.
Cleanup Capers
This section is about how DOE cleanup money gets funneled out and around the community and how, as with other DOE pots, the hugeness of the amounts give those who receive the money great leverage with the community. It is also about how the financial aspects of the work seem to trump all other concerns.
The Oak Ridger (22 July 1998) reported that the late Gene Joyce, a retired lawyer and “civic activist”, reminisced about successful “Bypass DOE” actions — i.e., occasions in which he and other Oak Ridgers went to their congressional delegation to get DOE to do what they wanted it to do. For example, in the mid-1960’s, DOE (then AEC) was going to divide the Oak Ridge contract into three separate ones (for ORNL, Y-12, and K-25, presumably). Joyce and the then-publisher of The Oak Ridger met with a deputy to the head of AEC, who told them that the splitting was a done deal. So they went to their congressmen (including Al Gore Sr.), with the result that AEC reversed its decision. In 1979, said Joyce, he and others prevailed on their congressional delegation to “persuade” DOE to include in the request for proposal for the new Oak Ridge contract a requirement that the winning bidder “indicate and promise” in the contract “what they could and would do for the community in the form of support of the arts, the city, etc.”. This set of requirements, later termed Chapter (or Volume) IV, eventually became standard throughout the DOE complex, a fact of which Joyce appeared to be proud. He noted that DOE tried to make payments in lieu of taxes for only two years after Oak Ridge was incorporated and refused to pay anything to Roane County at first. Pressured by Congressman Howard Baker, DOE caved. Joyce said that for 20 years, DOE claimed that the payment in lieu of taxes came from the federal treasury and they could not raise the payment without congressional approval. Al Gore Jr., in a congressional hearing in about 1978, got DOE to admit that the Japanese, in purchasing enriched uranium from the United States, had been paying for years part of the purchase price into a trust earmarked for increments to the payments in lieu of taxes “to a local entity” (presumably the one producing the enriched uranium). This led to a one-time payment of $10 million. Joyce said that it was due to the congressional delegation’s intercession that the city limits included the DOE plants, that the purchase prices of the government-built homes and the associated taxes were lowered significantly, etc. Joyce alleged that when Oak Ridge made a claim against Japan for taxes on their uranium that was stored behind the K-25 plant, DOE helped Japan to defend itself against Oak Ridge. In effect, he said, DOE tried “to lend their federal Tax Immunity to the Japanese empire”. With Baker’s help, Japan finally agreed to pay Oak Ridge and Roane County some $4 million.
Joyce’s account showed on the one hand the hamhandedness and secretiveness of AEC/DOE with respect to relationships with local communities and on the other hand its exquisite sensitivity to congressional pressure. I wonder what the Tennessee congressional delegation said to AEC to make them change course with respect to the contracts — it seems that there must have been some threat to withhold AEC funding. It is amazing that a federal site could be forced into a city’s boundaries, with the result that another country, having entered into a contract with the federal government (a sovereign state) for a set price, could then find itself having to pay tribute to a local entity.
In 1998, DOE missed a cleanup milestone it had previously negotiated with the EPA and the State of Tennessee: to provide an action memorandum detailing a plan to clean up some holding tanks at ORNL (The Oak Ridger, 12 November 1998). Instead, on the due date DOE submitted a letter asking for an extension, on the grounds that it wanted to include the tank cleanup under another project. It had recently been found that the tanks contained a higher concentration of radionuclides than had previously been thought, so as EPA and the Tennessee environmental protection agency (TDEC) told DOE in a joint letter, the need for action was even more urgent than before. Under the Federal Facilities Agreement Act that governed cleanup of DOE facilities, DOE could be fined heavily for not meeting the milestone, but according to federal law, informal negotiation was to be tried first, with no deadline for how long this could take. I do not know how it all turned out, but it was very typical of DOE to put things off until the last minute and then figure out some lightweight reason to delay the action further.
The Oak Ridger reported (2 December 1998) that due to a $15 million drop in funding, DOE was going to miss several milestones for cleanup. Several more, that is — they had already missed two. Due to missed milestones, TDEC and DOE had “come close to dispute in past years” and the state had “drawn a line in the sand”, i.e., the state was refusing to negotiate deadlines requested for budgetary reasons; the federal government had formally agreed in writing to fund the cleanup projects at the levels necessary for cleanup and the state would not put up with their reneging on that promise. DOE claimed that this was the first year that a lack of funds rather than “technical adjustments” had made it necessary for DOE to request an extension of the milestones. The Oak Ridger reported (9 February 1999) that DOE had moaned at a public briefing on the budget that funding would cause them to miss deadlines — the first line in the article was “Same song, umpteenth verse”, so the reporter signaled skepticism from the start. A DOE spokesperson blamed Congress for not allocating sufficient funds, because Congress “only care[s] about this fiscal year and that fiscal year” and long-term issues simply did not resonate in Washington; besides that, Oak Ridge had a bunch of smaller cleanup projects instead of one big cleanup project like most other DOE areas. She also said that when one program — say science or defense — gets some money, another program has to suffer (as if one region of the country could get only so much funding of any kind, regardless of need). Concluded a DOE cleanup manager, “It’s [all] political”.
The State of Tennessee and EPA were unmoved by DOE’s whining. The Oak Ridger reported (15 September 1999) that TDEC and EPA fined DOE $100,000 for one of the already missed milestones and was preparing to fine DOE for the other. It may surprise some that one federal entity can fine another, still more that a state entity can fine a federal entity, but so it is. DOE disputed the fine. The Oak Ridger then reported (2 November 1999) that after two years of negotiations, DOE and the State of Tennessee had agreed that DOE would build a waste disposal cell to take care of waste to go to a hazardous waste landfill near Y-12. As part of the agreement, DOE would be putting $14 million over 14 years into a state trust fund to cover the maintenance and management cost of the landfill when it was capped after 14 years. A spokesman for the governor said that “this agreement clearly states that [the federal] government cannot walk away from its obligation to protect the citizens of Tennessee….this is a model for the nation”; the TDEC head said that provisions in the agreement held DOE responsible for adverse events occurring at the landfill and for the money not running out. But the TDEC head also said that the state looked forward to a comprehensive plan for long-term stewardship of all DOE’s sites that DOE was (supposedly) developing, so that the state would not have to haggle to get deals on a case-by-case basis. I wanted to tell him, “Dream on”, because DOE’s pattern was clearly minimalist: promise as little as you can get away with and then deliver as little as you can get away with. Entering into agreements with DOE makes Tennessee seem like Charlie Brown of “Peanuts”: every year he believes Lucy when she says she won’t pull the football away as he starts to kick it, and every year he ends up flat on his back.
The Oak Ridger stated (12 November 2000) that DOE was going to remedy “unsafe K-25 conditions” after issuing a two-volume report on the K-25 site. Volume I dealt with conditions over the previous 53 years, while Volume II dealt with recent conditions. Although a lot of progress had been made, declared the report, “significant weaknesses exist with DOE and contractor implementation of site environmental programs and requirements”, including “incomplete characterization of radiological….contamination”. Another concern was that uranium cylinders were not being maintained as per commitments to the Defense Nuclear Facilities Safety Board. A particular area of corrective action was to be the revision of work planning procedures “to require more involvement by health and safety professionals”. (Note that later that month, a significant number of health and safety professionals were laid off from ORNL and that prior to that, involvement of health and safety professionals in ORNL work planning had been actively reduced. To my knowledge, none of these layoffees was hired by any entity at K-25.) Corrective actions also included increasing work oversight of primes and subcontractors by DOE itself.
Just a few months later, The Oak Ridger stated (23 March 2001) that an independent review of BNFL’s work safety practices (“requested” by DOE Secretary Richardson after the 4 April 2000 fire at a BNFL K-25 worksite) declared that BNFL’s “strong emphasis on management presence and involvement at work locations” was “an important element in establishing appropriate safety and quality behaviors” and that lessons learned were being “aggressively implemented by BNFL to enhance the safety and efficiency of project work”. These were The Oak Ridger’s words, but they sounded as if they had been fed to the reporter by BNFL. The independent review was conducted by a company I’ll call Contempo. One has to wonder how good they are at assessing safety factors, considering its trendy name and its various home page statements: Contempo says that it “is committed to assisting industry and government achieve world-class competitiveness”, “provides comprehensive solutions that improve our clients’….cost effectiveness”, and has a professional staff that “has the requisite experience, knowledge and resources to rapidly and effectively meet the diverse needs of our clients by transitioning appropriate science, technology and management applications” (whatever that means). Also, they spend pages talking about their code of ethics before they get down to what the code is, and one of the “shared values” statements in those introductory pages is “We promote our clients’ agendas as we would our own….”. It’s not clear whether DOE or BNFL hired them, and thus it was unclear who the client was whose “agenda” they would be promoting. Elsewhere on their Web site, Contempo says that it “help[s] you make value-driven changes that provide a competitive edge” because they have “extensive experience dealing with government agencies and organizations”; of course, that could be taken two ways. At any rate, I searched their Web site in vain for any details about independent safety audits they had done. The only independent review they appear to claim to have done for DOE was for the River Protection Program, for which they “convened a panel of experts” (none of which were said to come from Contempo itself) and wrote the report (which won Honorable Mention in some DOE competition). They may have done a good job of coordinating that review, but it is not clear how they would then do the review of BNFL — if they just convened “outside experts” but were not really au courant themselves, what does that say about the value of their review?
The Knoxville News-Sentinel reported (25 February 2001) that Bechtel Jacobs claimed to have cut costs significantly and accelerated the cleanup schedule by using competitively bid, fixed-price contracts, getting “more work done for less
[money]
“, as a spokesman put it. Small wonder that DOE professed to be very pleased with Bechtel Jacobs’ performance. A DOE manager said that they believed Bechtel Jacobs’ cost savings figures even though DOE had not gone through the formal process to validate them. He opined that the claimed savings “just shows how effective fixed-price contracting can be”. Dr. Susan Gawarecki, executive director of the Oak Ridge Reservation Local Oversight Committee (which, the News-Sentinel explained, evaluates DOE environmental activities for local governments), noted that Bechtel Jacobs was “of course….painting the rosiest picture possible”. She added that “it is what’s left unsaid that’s always the most interesting”. She pointed out that while Bechtel Jacobs took credit for moving nuclear wastes offsite for disposal, inventories of other types of wastes had increased and that Bechtel Jacobs took credit for, e.g., cleanup of the gunite tanks at ORNL when that work got done largely due to the efforts of DOE managers and other contractors. She and Charles Washington, a member of the Site Specific Advisory Board (which, the News-Sentinel explained, advises DOE on environmental matters; yes, I know it should have a hyphen, but that’s how they spell it), both expressed skepticism about the huge savings claimed by Bechtel Jacobs. Various observers asserted that while some projects were done well because the work was done by companies specializing in the type of work required, other projects suffered from the low-bid syndrome (“Sometimes you get what you pay for”, noted Gawarecki). Washington, a retired Y-12 chemist, thought that Bechtel Jacobs brought in too many people from Bechtel National’s and Jacobs Engineering’s corporate offices, instead of hiring local people, and that Bechtel Jacobs had “spread the wealth too far”, as the News-Sentinel put it, by hiring more than 100 subcontractor companies. Such hypercontracting made the program almost impossible for DOE to manage. This claim was underscored by the News-Sentinel’s quoting a DOE spokesman as saying that about half of all the contracts had gone to small businesses, with about half of that half going to small and disadvantaged firms and woman-owned companies — with these percentages being near the “targets”. Thus did DOE admit that in fact there were targets, i.e., quotas, and that a very large chunk of the work might be getting done by underexperienced and undermanned (pardon the pun) companies.
Gawarecki said in a guest column in The Oak Ridger (7 May 2001) that DOE headquarters had put a gag order on DOE-ORO officials with regard to talking about the environmental management budget. Although the budget for DOE-ORO for Fiscal Year 2002 appeared to be flat overall, the reservation would actually lose some $90 million in cleanup money. That was, she pointed out, because the United States Enrichment Corporation, DOE’s apparently failed experiment in privatization, made a business decision to end uranium enrichment operations at the Portsmouth Gaseous Diffusion Plant (in Ohio, but still in DOE-ORO territory). Up until then, the heat for the huge facility had been provided by the enrichment process, but with the cessation of that process, DOE was forced to build a heating plant just to keep the facility in limbo indefinitely, i.e., performing just enough surveillance and maintenance to keep it from deteriorating to the point of, say, collapse. As Gawarecki noted, the loss of $90 million in cleanup funds would have a serious impact on the Oak Ridge economy. This would include Bechtel Jacobs’ having to end some subcontracts and pay termination penalties for doing so (which DOE would in reality be paying, i.e., which we taxpayers would thus be paying). DOE’s promises to EPA and the State of Tennessee would not be kept, etc. I think that DOE revised the budget somewhat so that the impact was not as great, but as usual, DOE’s failure to plan and manage got everybody into a pickle.
The Oak Ridger pointed out some interesting things about how DOE awarded a contract to BNFL to clean up some K-25 buildings (I failed to note the date, but it was some months after the contract award, in R. Cathey Daniels’ column). The Oak Ridge Environmental Quality Advisory Board (EQAB, a citizen group whose funding came from DOE) had heard a presentation from a company that was challenging the fairness of DOE’s awarding the cleanup contract to BNFL. EQAB, many of whose members are technical people, found the other company’s technology interesting and they managed to obtain DOE’s Engineering Evaluation/Cost Assessment (EE/CA) for the project. This type of assessment is appropriate for short-term, limited-scope projects — what The Oak Ridger termed “quick and dirty” projects — but of course the cleanup of three large old gaseous diffusion plant buildings would not fall in that category, especially with a projected cost of $250 million. What was even more surprising to EQAB was that the EE/CA did not consider technologies other than the one proposed by BNFL, as though there were only one. Not only the challenger company but also various other companies had bid on the project, each with a possibly viable technology. DOE’s reason for choosing BNFL was that DOE would consider only a “proven” technology for cleaning up a gaseous diffusion plant and BNFL had handled the work on the only gaseous diffusion plant that had ever been cleaned up on earth, supposedly. EQAB’s main focus being on environmental issues, they wrote a letter to DOE, emphasizing the lack of consideration of those issues in the EE/CA and in the cleanup project in general. I don’t know what DOE’s reply was, but I’ll bet it was evasive — BNFL had likely already started work.
The Oak Ridger reported (5 June 2001) that the US General Accounting Office (GAP) had recommended that DOE reevaluate waste disposal options before building new low-level waste disposal facilities in Oak Ridge, Ohio, and Idaho. DOE had done cost and risk assessments and had decided that the new facilities (i.e., local treatment) were more cost-effective than sending the waste off to the Nevada Test Site or the Hanford site. Because of this, the latter two sites were being used at only 48% of capacity. But the GAO stated that building new disposal facilities was not consistent with previous DOE determinations of “preferred [waste] disposal alternatives”, especially since storage of the waste locally was only temporary and the waste would eventually have to be shipped off anyway and since cleanup schedules and the volume of waste often changed from what was assumed in DOE’s assessments. DOE said they would study the GAO report as part of a future “top to bottom” environmental management program study.
In June 2001, the Defense Nuclear Facilities Safety Board had urged DOE to make safety improvements at Y-12, particularly in the storage of hazardous materials. The Board had also pointed out to DOE that some ISMS deficiencies that DOE had identified in Bechtel Jacobs’ operations over a year earlier had so far not been remedied. The Oak Ridger also noted that cleanup activities had had to be halted at K-25 because of deficiencies in key safety documents. But a few months later, The Oak Ridger reported (14 November 2001) that the Y-12 safety system — i.e., its implementation of the Integrated Safety Management System (ISMS) — had received a good review from DOE, which had sent a 12-person team from DOE headquarters to check on it. These people spent a week and a half looking at “a broad range of management practices including fire protection, chemical safety, project management, environmental management, and hazard identification”. Obviously, these people don’t all look at all areas, but subdivide into groups of perhaps one to three people to look at each area; still, they seem to have been spread a bit thin in such a broad-scale audit of a site that some and possibly most of them had never been to before.
The Oak Ridger reported (12 July 2001) that the DOE-ORO assistant manager of the environmental management program, Rod Nelson, had been queried by the Site Specific Advisory Board (SSAB) about what would happen if his program’s budget was cut for the next fiscal year, as had been rumored. He said he didn’t “have a clue” and hemmed and hawed, but eventually he told SSAB that as a worst-case scenario, “the majority of environmental restoration work would not be performed”. He refused to provide specifics, e.g., which work would be deferred. The Oak Ridger remarked that the lack of response was no surprise because DOE officials had been tight-lipped about the FY 2002 budget (presented but not yet enacted), with some even saying (presumably off the record) that DOE headquarters had imposed a gag order on discussing the budget with the public and the media, as Gawarecki had noted earlier. (Sort of a “When we think it’s time for you to know, we’ll tell you” attitude.) The Oak Ridger further stated (with its information source unspecified) that the proposed budget cuts meant that out of 16 ongoing projects and 23 projects with new phases to begin, 30 would be eliminated and 2 would be seriously reduced. Concluded The Oak Ridger, “That means layoffs”. Because of the potential slowdown in cleanup, SSAB and the Local Oversight Committee expressed concern in letters to the DOE Secretary and the governor — the only two local entities that had officially expressed concern over the cuts, The Oak Ridger said.
As I noted earlier, The Oak Ridger reported (15 November 2001, 19 March 2002) that DOE-Washington had revoked DOE-ORO’s authority to approve safety plans — an extraordinary slap in the face, but one which, although it was reported in The Oak Ridger, did not get the attention in the press that one would have thought it merited. The Oak Ridger also reported that DOE-ORO had revoked its validation of part of Bechtel Jacobs’ safety process, “but this [wasn’t] expected to impact the work the company is doing in Oak Ridge”. You have to read a statement like that twice — makes no difference in the work?? Why not? The safety process was again the Integrated Safety Management System (ISMS). A DOE official, addressing the Site Specific Advisory Board, said that the revocation of Bechtel Jacobs’ ISMS implementation arose from a letter that the Defense Nuclear Facilities Safety Board sent to a high DOE-Washington official. The Board stated that various Bechtel Jacobs ISMS deficiencies pointed out by DOE over a year ago had yet to be corrected. One infers that DOE-Washington became concerned and knocked both DOE-ORO and Bechtel Jacobs “upside the head”: DOE-ORO for laziness or inattentiveness or whatever and Bechtel Jacobs for not getting with the program. Even though Bechtel Jacobs took a knock, they didn’t take it gracefully. According to The Oak Ridger, a spokesman for Bechtel Jacobs said that neither DOE nor the Board indicated to Bechtel Jacobs that they thought there was any imminent hazard to workers, the public, or the environment associated with Bechtel Jacobs’ work performance; that “We all recognize that [ISMS] implementation is never finished…[and] is a framework for continuous improvement as we strive to attain our goal of zero accidents”; that Bechtel Jacobs believed that it and its subcontractors had made great strides in implementing ISMS; and that Bechtel Jacobs had already “initiated” several self-assessments of its (safety) authorization basis program and would be using outside experts to review its efforts and prepare for the next DOE assessment of the basis program.
The Bechtel Jacobs spokesman also said that the National Safety Council, “in an independent survey report”, cited ISMS as “a strong characteristic of our safety culture”, probably because Bechtel Jacobs’ recordable injury/illness rate “continues to be lower than the DOE average”. Finally, with no apparent irony, The Oak Ridger said that on the brighter side, the 12-person DOE audit team “representing DOE headquarters” concluded that BWXT Y-12 had successfully implemented its ISMS. Now, the reader should recall that the Board (at least at this time) had representatives stationed more or less full-time on the Oak Ridge Reservation and thus kept a continuing eye on contractor activities, unlike the National Safety Council or the audit team from DOE. I believe that the National Safety Council was making its judgment largely on the basis of statistics and documents supplied to it by Bechtel Jacobs and of course everybody was on his best behavior at Y-12 when the auditors were there. Perhaps the Council’s and the audit team’s judgments about Bechtel Jacobs’ and Y-12’s progress were more correct than The Board’s, but I would put my money on the Board, just on the basis of the increased access and observation time. This is not to denigrate the contributions of the Council or even of DOE audit teams — both of which perform a public service and both of which would, I am sure, concede their limitations as observers. But Bechtel Jacobs’ self-serving remarks should be viewed in light of the fact that they and DOE-ORO took a significant hit over the Board’s letter. Their mention of “imminent hazards” and “recordable injury/illness rate” along with safety “authorization basis” — as if only hazards resulting in imminent danger were consequential in safety analyses and only recordable injuries and illnesses (which, e.g., latent-developing cancers would not be) were significant as indicators — seemed to indicate an attempt at obfuscation.
The Oak Ridger reported (9 December 2001) that DOE was trying to get out of yet another environmental cleanup agreement it had made, but TDEC wasn’t buying DOE’s arguments. This time it was the mixed transuranic wastes (containing curium, americium, and plutonium, plus some toxic chemicals) that were at issue. (This was part of the transuranic (TRU) waste treatment project that I mentioned working on near the end of my time at ORNL.) While the TRU processing facility was indeed being built as agreed on, DOE told the state on 31 October 2001 that it was canceling a section of the Oak Ridge Site Treatment Plan dealing with mixed TRU wastes and it would no longer be bound by the requirements or milestones the plan contained. Beyond that, DOE was claiming an exemption from the Resource Conservation and Recovery Act (RCRA, which deals with hazardous waste), under amendments to the Waste Isolation Pilot Plant Land Withdrawal Act (WIPP is the national waste storage facility in New Mexico). This was the result of DOE’s “top to bottom” study of its environmental management program mentioned above. The Oak Ridger observed that DOE “reportedly took a look at all existing legal agreements and evaluated which ones were enforceable and which were not” — i.e., their review was not so much of their own program operations and management, but of how they could wiggle out of commitments and thus save money. TDEC noted that the WIPP Act applied to WIPP itself, not to other DOE facilities, as DOE was well aware of back in 1996 when they had signed the original mixed TRU agreement with the State of Tennessee. TDEC threatened the regulatory equivalent of war: fines and other penalties. DOE refused to answer questions from The Oak Ridger about this. Months later, The Oak Ridger (4 March 2002) reported that officials from DOE and the State of Tennessee had yet to reach a compromise regarding DOE’s unilateral declaration that it was no longer bound by its former commitments regarding mixed TRU in Oak Ridge. Along these same lines, the Knoxville News-Sentinel (20 October 2003) said that DOE and TDEC were arguing over the delay of a cleanup project at ORNL called Corehole No. 8; DOE wanted to delay the cleanup past the agreed-on 2005-2006, “in order to coordinate it with other activities”, but the state was insisting on timely removal because the soil contamination that might get into groundwater.
The Oak Ridger (1 February 2002) reported on DOE’s proposed “accelerated cleanup” plan (mentioned above). DOE Secretary Abraham, in announcing the plan, said that the motivation was a comprehensive review of the whole DOE cleanup program that had led DOE to conclude that it had entered in agreements with such aggressive milestones that they were not likely to be achievable. So DOE decided to start a new program. Said Abraham, “It’s a new way of doing business. The goal of cleanup is to finish the job….Promises were made [by DOE] and then broken. Milestones were missed, cleanup was slower than expected, and the understandable frustration among states and communities grew”. Now, he said, DOE needed to ensure that agreements it entered into in the future, and their associated milestones, were achievable and realistic. Well, obviously, DOE was looking for a way out of such agreements and they turned to the usual motivator, money. Abraham said that in order to have access to the new cleanup account, DOE and a site (and presumably the state it was in) would have to agree on an expedited cleanup schedule that showed measurable gains in addressing important risks. Sites that agreed to participate would receive more resources in the near term than in previous years. DOE thus combined the carrot and the stick. (What an image: being beaten over the head by a carrot….).
The Knoxville News-Sentinel reported (12 July 2002) that the accelerated cleanup plan would result in funds being diverted to sites and projects where cleanup could be done relatively quickly (letting more seriously hazardous sites and projects languish) and where the state agreed to commit to a quicker cleanup (thus potentially allowing for higher residual levels to remain after cleanup). The states of Washington, New Mexico, and Idaho expressed concerns about this at a Senate hearing, but, curiously, not Tennessee. The Washington State attorney general expressed concern too at the indications that under the accelerated cleanup plan DOE would reclassify some Hanford tank waste down from “high-level”, which would mean that DOE would not have to remove it. A senator from Washington State pressed the DOE undersecretary on this question, but the undersecretary said that DOE had “a commitment to move as much waste as feasible” — which would seem to allow DOE lots of wiggle room on the issue. Tennessee did weigh in later (The Oak Ridger, 1 August 2002), but only indirectly: TDEC asked the Site Specific Advisory Board to look into discrepancies in DOE’s handling of the Oak Ridge site and other sites with respect to environmental and cleanup issues. The TDEC director asked, “How can it be so important to remove and send to the permanent repository [contact-handled transuranic] waste from other DOE sites, while [remote-handled transuranic] waste at the Oak Ridge site has lower priority and in some instances may remain in shallow burial on the reservation?” Although the stability of the containers and the temporary storage facility was also a factor (not just the radioactivity level), the man had a point.
The Oak Ridger (23 August 2002) reported on the increasing concern about accelerated cleanup, with its implication that money might be saved by allowing a higher level of residual contamination to remain, etc. The assistant DOE secretary for environmental management said that accelerated cleanup absolutely did not mean less cleanup; she said that she understood the concern, but “that isn’t our intent”. She stated that accelerated cleanup was “about doing the right thing at the right time in an environmentally regulatory and responsible way”. Various local officials still expressed skepticism about this, however (understandably, after years of hearing DOE promises). Their misgivings were no doubt deepened by the comments of the DOE-ORO head of the environmental management program at the time, Gerald Boyd: “Granted, there will be long-term stewardship costs
[with accelerated cleanup and leaving residual radioactivity]
. But the other side of the coin is [that] the cost of cleaning Melton Valley to green field
[levels]
probably far outweighs the cost of long-term stewardship. We have to find a balance between risk and cost to remediate on the front end or provide stewardship on the back end, and I think we’ve probably got about the right balance”. The Oak Ridger noted that another concern with accelerated cleanup was (as noted above) that efforts might be made to reclassify high-level nuclear waste so as to allow for a lower standard of cleanup, pointing out that on 9 August 2002, a federal judge had denied DOE’s motion to dismiss a lawsuit charging that DOE had given itself the authority to reclassify such waste so that it could leave it in place at Hanford, Idaho, and Savannah River. A final concern was that some of the technology that would be needed to perform the tougher cleanup projects had not yet been developed, so that techniques known not to be quite adequate might be used anyway — so as not to delay the schedule.
The Oak Ridger reported (26 November 2002) that the Citizens’ Advisory Panel of the Local Oversight Committee (LOC) expressed doubts to DOE that DOE would be able to meet its accelerated cleanup schedule, even if it received sufficient annual funding, which was equally doubtful. The chairman of the panel wrote that the schedule appeared to be based on “seemingly arbitrary dates and milestones [that reduce] the credibility of the effort”. He pointed out that DOE planned to remediate groundwater at the same time that it remediated sources that affected the groundwater, which might result in “illogical and unachievable sequencing”. He opined that many stakeholders had not appreciated the “huge growth” of the waste volumes that were projected to be left for disposal (and thus not included in the cleanup), or the relatively paltry amount to be allocated for the total cleanup program, $4 billion. The Oak Ridger noted that the accelerated cleanup was expected to save $2.2 billion in the Oak Ridge area alone, although, it said, “savings could be higher” if reindustrialization agreements worked out. This was said without skepticism by the reporter, so it seemed that The Oak Ridger was accepting DOE’s apparent new line that accelerated cleanup and reindustrialization were completely compatible.
The Oak Ridger (28 November 2002) reported that the LOC voted to send a letter to DOE criticizing the practice of having fixed-price contracts for complex environmental cleanup projects, just as the General Accounting Office had several years earlier (see below). They were especially concerned that BNFL had chosen not to bid on further contracts for this reason (see below). The executive director of LOC noted that inexperienced subcontractors who submitted “unrealistically low bids only get DOE into trouble in the long run”. The president of Bechtel Jacobs replied that Bechtel Jacobs had carefully scoped the work so that bidders would be able to bid in an informed manner. However, LOC’s opposition to “reverse auction” bidding apparently helped persuade Bechtel Jacobs not to use it.
Or maybe it was the rebellion of the subcontractor community. In the reverse auction form of bidding, companies know what all the other companies’ initial bids are and they are allowed to submit a new bid lower than the lowest initial bid or to decline to bid further; this apparently goes on until only one company still has a bid in, which would be the lowest bid. Earlier, The Oak Ridger (29 August 2003) reported that DOE-ORO cleanup head Boyd said of reverse auctioning that “We sort of have to let them [Bechtel Jacobs] try that. We have contracted with them to get the work done. We don’t want to prematurely or unnecessarily get in their way. If we begin to see that it’s stymieing innovation or preventing competition….if it looks like it’s going to create problems we will work with Bechtel Jacobs on that….[Regarding the K-25/K-27 cleanup contract] They have assured me that if they start to use reverse auction on that project and it begins to show that we’re not getting the bidders to the table that we need or we’re not getting the innovation that we need, they can simply stop that and go to a more traditional approach without losing any time”. ETEBA head Jenny Freeman voiced the concern of the environmental cleanup subcontractor companies that reverse auctioning would “shift the focus away from technical merit to strictly low bid”, while a representative of one such company said that it would be difficult for him to persuade his management to bid in a reverse auction given that it was “in what already amounts to a low-bid environment” and given the complexity of most remediation projects. It is notable that DOE, having pressured Bechtel Jacobs to do the cleanup in the faster/cheaper mode, thought that it “had” to let Bechtel Jacobs employ a questionable bidding practice, and that DOE echoed the concerns of the subcontractor companies (unwillingness to bid, lack of “innovation”) and not so much the concerns of the public that LOC represents (incidents arising from the lack of experience or need to hurry). The Oak Ridger (29 August 2002) added that Bechtel Jacobs had conducted one successful such auction — for travel services.
DOE considered the Toxic Substances Control Act waste (TSCA) incinerator at K-25 to be a “linchpin” in the accelerated cleanup program, according to The Oak Ridger (12 March 2003). But an audit by DOE’s inspector general said that it was not being used at the rate it should have been. The IG stated that $45 million could be saved over the next four years if the incinerator and another treatment facility were used more in line with capacity. Further, the IG concluded that DOE was not doing all that it could to minimize the risk of processing the materials. DOE claimed to concur with the findings, but put the blame on TDEC: the DOE assistant secretary for environmental management said, “Although in the past TDEC has delayed receipt of out-of-state waste through delays in their approval of the burn, I believe that the process has improved”. A TDEC manager shot back that it was the state’s position that “at no time did our negotiations for the review and approval of the TSCA burn plan be the only reason the incinerator was not operational”. He noted that a contributing factor in the delays was DOE’s insistence on receiving approval for shipments prior to characterization of the shipment, saying, “They’re actually asking for material to be incinerated that they’re not certain meets waste acceptance criteria”. He explained that waste approved for shipment in December 2002 would not be incinerated until the summer of 2003 (with the delay being taken up by characterization); if the characterization were done before shipment, then the waste could be incinerated as soon as the incinerator schedule allowed. It appeared that DOE was getting the waste shipped prior to characterization so that it could get credit for having moved waste out from points elsewhere. The troubling question also arises as to whether stuff was being shipped and incinerated that was really not qualified under the Act to be incinerated at TSCA; one would hope that the state’s evident vigilance in this matter precluded that.
The Oak Ridger reported (13 March 2003) that the accelerated cleanup budget for FY 2003 was likely to be reduced by 21 percent. This would result in the delay of several projects until FY 2004 “including the much anticipated award” of the cleanup contract for K-25 Buildings K-25 and K-27 and the subsequent cleanup. Strangely, however, DOE did not think there would be any impact on the scheduled completion date of 2008. The startup of the TRU waste treatment facility at the ORNL site was also delayed. I wondered about that, since the contract had been set up by DOE so as to reimburse the contractor, Foster Wheeler, in installments as they met each milestone. If DOE unilaterally deferred the project, then presumably Foster Wheeler was granted some sort of financial adjustment to compensate them for their deferred income. But would that not make the project end up costing a lot more? (See below.)
In an editorial, The Oak Ridger (3 April 2003) first defined the word “dissemble”, meaning to put on a false appearance, to conceal facts under a pretense, etc. — i.e., to lie. The Oak Ridger said that DOE had been “a good corporate neighbor….throughout the whole history of Oak Ridge” (which many of its readers would disagree with, of course), but asked why DOE would not be forthcoming when queried by The Oak Ridger about rumors that depleted uranium hexafluoride was to be transported down the main street of Oak Ridge. The Oak Ridger said that DOE had first stalled and DOE-ORO head Boyd had declared that DOE would work closely with local entities on the transportation plan and would not “pull any surprises on them”. But five days later, noted The Oak Ridger, a DOE spokesman said that he couldn’t give any actual information because “transportation routes of any radioactive material are considered sensitive information”. He denied that the route published earlier by The Oak Ridger was the correct one, although TDEC had told The Oak Ridger that DOE had told them that that was the preferred route. As The Oak Ridger then asked, if the transportation of the cylinders was not dangerous, the route was appropriate, etc., “why all the secrecy and dissembling”? As The Oak Ridger pointed out, it made the community wonder what DOE was not telling them.
The Oak Ridger (3 April 2003) reported that TDEC had given DOE 180 days to find a way to raise the bottom of low-level waste treatment cells near Y-12 to a minimum of five feet above the water table. A TDEC official said that his staff had found water “within inches” of the surface of the waste cells and DOE would have to correct this problem before they could expand the facility. These cells were designed to treat low-level radioactive waste that was also contaminated with nonradioactive hazardous materials, so TDEC was concerned about the meeting of water and waste. DOE said it was “engineering a plan for depressing the water table” — i.e., instead of raising the cells they would try to keep the water lower. Stormwater management had also been an issue, but TDEC had accepted DOE’s plan to fix that problem. The Oak Ridger did not ask the obvious questions: how did the waste cells get to be designed this way in the first place? How was it that the water table in that area, known to have wide variations, was not sufficiently taken into account? Was this a design gamble made in the interests of saving money?
The Oak Ridger (27 May 2003) reported that TDEC and DOE had agreed to a 30-day extension of negotiations over a dispute that began in March 2003 — following a previous 30-day extension. It seemed that TDEC would draw a line in the sand and dare DOE to cross it, and when DOE did, TDEC just drew another line in the sand. The argument was over the DOE announcement in October 2001 of that unilateral decision to delete certain milestones from the Site Treatment Plan that dealt with mixed wastes (as noted above, claiming a RCRA exemption); TDEC had rejected this decision in November 2001. So 18 months had passed and the issue was still being haggled over. The executive director of the Local Oversight Committee noted that if the milestones were removed, there would be no way to ensure that DOE kept its commitment to move those wastes out of the Oak Ridge area — it would then be something DOE could defer indefinitely if it continued to have budget problems. As the LOC director said, “Talk is cheap”. The Oak Ridger then reported (9 July 2003) that the Citizens’ Advisory Panel of the LOC had voted to ask the governor of Tennessee to talk with the governor of New Mexico (former Secretary of Energy Bill Richardson) to try to persuade him to allow the waste to come to DOE’s WIPP storage facility in New Mexico. It seems that DOE had assumed that it could wangle permission to send the remote-handled TRU waste to WIPP even though that apparently was not in the original WIPP permit. The federal government had given New Mexico a lot of financial goodies to be allowed to build WIPP at all and DOE might have assumed that it would just have to wave more money in front of New Mexico and New Mexico would bite. But New Mexico was rejecting DOE’s application to modify the permit. Or maybe DOE just told everybody in Tennessee that the deal was in the bag until, having strung them along as long as it could, it had to admit that there was a problem with sending that type of waste to New Mexico. In addition to this problem, the Site Specific Advisory Board had recommended that DOE-ORO move forward with the cleanup of Corehole 8, the highly contaminated underground spot in the middle of the ORNL main area. Then it was learned that DOE-ORO had notified TDEC of its plan to postpone until 2009 the cleanup of Corehole 8. The reason was, again, that remote-handled TRU waste was not acceptable at WIPP by its permit. Concluded the LOC director, “So one of the highest risk sites is not going to get done because there is no disposal path for the waste”.
The Oak Ridger (23 July 2003) reported that the DOE Inspector General had concluded that DOE had not adequately planned for capacity problems at WIPP; if current practices continued, WIPP would not be able to accommodate the 980 planned shipments of remote-handled TRU waste from ORNL. Meanwhile, The Oak Ridger noted, capacity in Oak Ridge storage bunkers for this type of waste was growing scarce — and Oak Ridge had the largest store of such waste in the entire DOE complex. The IG’s report also noted that the Savannah River site was planning to send its remote-handled TRU waste to the TRU treatment facility on the ORNL site in 2025, but Oak Ridge officials declared themselves to be unaware of those plans and in fact were planning to shut down the treatment facility in 2010. The IG concluded that prompt attention to these problems could make it unnecessary to reconfigure WIPP storage, make it more likely that the accelerated cleanup goals could be reached, and save $8 million. But DOE’s assistant energy secretary for environmental management countered with a full court press: she said that the IG “continues to misrepresent the facts and draw faulty conclusions” and that the IG’s assertion that DOE was not properly managing the remote-handled TRU waste program was “simply false”. Thus, she claimed, “no additional actions are needed to address the recommendations of this IG audit report”. Thus did DOE thumb its nose at its own IG.
Some of the “products” of the transuranic processing facility were also supposed to go to WIPP, but the sequence of work had to be changed because approval to send those processed wastes to WIPP was uncertain (The Oak Ridger, 26 June 2003). Thus the project fell behind schedule by almost a year. As noted above, payment was in stages, contingent on completion of each stage, so the delay made things difficult for the contractor, Foster Wheeler. The poor contractor had to reorganize because of financial difficulties, mostly but not entirely due to the WIPP problem (e.g., it was discovered that there were faulty valves in the supernate processing equipment, necessitating replacement of all 30 valves). But eventually the facility started up the liquid part of the processing and presumably DOE forked over an appropriate chunk of the full payment.
The Oak Ridger reported (17 September 2003) that the Melton Valley cleanup project (on the Oak Ridge Reservation) had for years been called the Melton Valley Closure Project, by DOE and everybody else. But then the DOE-ORO official in charge of cleanup, Samuel McCracken, said, “Let’s just take that word [Closure] off there”. This was because DOE’s official completion date for that project was 2006, but the cleanup would not actually be complete; he explained that only the work specified in the Interim Record of Decision (ROD) would be completed. That is, the water system that drained ORNL (White Oak Creek, etc.) would still be awaiting its remediation in 2006 and the caps to be installed over the various burial grounds would still have to be monitored for integrity. Besides, the final ROD had not even been presented for approval yet. Well, at least the man was frank.
The Knoxville News-Sentinel (22 September 2003) reported that DOE contractors had to finish capping the old radwaste landfill/burial grounds before remediation of White Oak Lake could begin, because the burial areas drained into the lake. The News-Sentinel, presumably quoting DOE, said that the decision on how to deal with White Oak Lake might not be made for 10 years or more. A TDEC official stated that in Tennessee, industry was not allowed to use waterways and other natural resources as a treatment system, which in essence was what DOE through ORNL had been doing for decades. This position was somewhat undercut by the fact that the lake itself, as a lake, was not a “natural” resource. As the News-Sentinel noted, White Oak Creek had been dammed up during the Manhattan Project years in order to create the lake as a jumbo-sized settling basin and to prevent the ORNL discharges from flowing directly into the Clinch River. A DOE official said that it was estimated that 300 curies of (insoluble) Cs-137 was in the lake sediments. Soluble radioactive materials, including some forms of strontium and tritium, eventually spilled over the dam and subsequently entered the Clinch River; some 5000-7000 curies of tritium are estimated to pass over the dam each year. The levels of strontium and tritium in the lake water are above drinking water standards, but no drinking water intakes draw from the lake itself. Meanwhile, by the time the water reaches the Clinch River, from which at least one municipality does draw its water, it is diluted so much that the levels are below the drinking water standards. All this is not necessarily a bad thing: the radioactivity arriving at the lake is “legacy” radioactivity from long-ago operations, not newly produced stuff, and after all, back when most of it was produced, there was a war on, or at least a cold war. The drinking water standards are met where it counts. Still, here is another area where, it is feared, DOE will promise and promise and promise and then break the promises with little notice.
The Oak Ridger reported (20 November 2003) that DOE had given the State of Tennessee a copy of a draft feasibility study that covered remedial actions for areas at the K-25 site, including 22 acres known as the K-1070 C/D burial grounds. One of the options was to excavate the area and one was to cap the waste. The director of TDEC’s oversight division said of the discussion of the capping option, “It’s certainly not what the state expected”. This was, he explained, because it had always been the state’s position that the burial grounds should be excavated. Gawarecki of the Local Oversight Committee pointed out that if it was DOE’s intent to release the K-25 site to the local community for private sector industrial-type use (as had been stated in DOE’s accelerated cleanup plan), then the entire area should be cleaned up. As she explained so well, “DOE can’t cap a burial ground and put a fence around it and still be consistent with an unrestricted industrial end use” because “it would be impossible for DOE to transfer that piece of property [to the city or the state or private entities] with waste left in place”; although a well-capped burial ground would be safe if kept in a secure situation, its integrity might be compromised in an insecure situation and this would become “a stewardship problem for the local communities, especially since DOE has a history of trying to transfer its liabilities for monitoring to lessees or new owners of surrounding land”. For example, she noted, DOE, in return for transferring Parcel ED-1 to CROET, made CROET responsible for conducting onsite inspections of certain areas in the Horizon Center site located near K-25.
Although this book discusses many events that occurred after the last date cited in the paragraph above (November 2003), I will leave DOE’s further machinations involving cleanup projects to the interested reader to research, except to point out that as I noted in the last chapter, Bechtel Jacobs had a rocky safety start in 2006, with eight recordable injuries (five involving broken bones) among its personnel and its subcontractors by the middle of January (The Knoxville News-Sentinel, 23 January 2006). DOE should of course be looking into whether its financial starvation diet for cleanup is contributing to the spate of injuries. By now, I hope, the reader can appreciate too that DOE’s intent with respect to cleanup may be simply to fund work for a while and then declare victory and leave, or perhaps fund a skeleton force of guardians. By the time all of the state-federal wrangling, lawsuits, etc., over the cleanup reach a head, the DOE bureaucrats responsible for the mess will likely have retired — with each one, as he retired, probably having been presented with a certificate and maybe a bonus for all his years of “service”.
Reindustrialization (Or, Making Silk Purses Out of Sows’ Ears)
For some years, DOE has been trying to “reindustrialize” its old unused facilities, i.e., to clean them up enough to turn them over to private businesses for industrial use and thus get these facilities off its hands. In East Tennessee, its vehicle since 1998 has been the Community Reuse Organization of East Tennessee, or CROET, which was formed specifically to “turn K-25 facilities over to industrial use”. The Oak Ridger reported (6 January 2000) that the EPA and DOE had disagreed for over a year on the process used to lease DOE buildings to private companies at K-25. DOE argued that reindustrialization was a means to expedite cleanup of the site and claimed that CROET had “brokered over 50 leases with private businesses”. But EPA objected to many of these leases on the grounds that DOE had provided inadequate information to estimate risk to employees and the public; in particular, DOE had not performed an environmental assessment of reuse of the site. EPA claimed that it had the authority by law to approve the leases. A pilot approval project fizzled when DOE and EPA could not agree.
The Oak Ridger reported (23 August 2002) that in K-25’s former Building K-1401, there were three companies that “were lured to locate there, then nurtured to grow through the DOE reindustrialization program”. But one company had recently terminated its lease and the other two had their continuing presence threatened because of DOE’s new accelerated cleanup program and the proposed demolition of the building much sooner than CROET expected. One of the remaining two companies had planned to relocate “outside the fence” anyway eventually as it grew, citing a need to make customer access easier than it was at the being-cleaned-up K-25. CROET said that there were four more companies interested in the building, but “it would not be a good business decision for them to locate here for [only] two years”. Representative Wamp, who had announced a new $1.4 million DOE grant to CROET only that week, said that he wanted cleanup to be done “sooner rather than later” and that he was “also positive that there are a whole host of assets that do not have to be taken down to green field condition to get them back into use”. (I digress to note for foreign readers that it is very typical of government agencies to allow senators and representatives to announce major grants, projects, etc., that will economically benefit their constituents (or a subset thereof); the agency is then in favor with the legislator and the legislator gets favorable attention from the local press and constituents. Usually, but not always, the legislator worked to get the grant, project, etc.) The Oak Ridge city council passed a resolution urging DOE not to give up the reindustrialization program and to regard it as “the preferred path forward” in cleaning up “unusable” DOE facilities for private sector use; they sent a letter to DOE saying so and they persuaded several other city and county governing entities and the Knoxville Area Chamber Partnership to do the same. But as Gawarecki observed, “It’s symptomatic of DOE’s inconsistency to steer a course according to which administration is in office”.
The Oak Ridger later reported (14 November 2002) that the EPA was still concerned that DOE was not assuring the protection of private citizens in DOE’s leasing of two buildings at K-25: DOE had not produced the required Baseline Environmental Assessment Report and a related assessment on these properties. As The Oak Ridger explained, DOE planned to sign an “arrangement” with USEC (a company producing enriched uranium fuel for commercial nuclear power plants whose facilities had once been owned by DOE and had been privatized) and had issued a “finding of no significant impact” decision for leasing the equipment and facilities to USEC. USEC needed to lease them because it had signed an agreement in September 2002 with ORNL to “develop and demonstrate a uranium technology” at K-25. A DOE spokesman said that DOE did not agree with EPA that “the protocol applies in this particular case” because the lease with USEC was not like the leases DOE had with CROET “to which the protocol does apply”. DOE’s logic was that “USEC in this case is performing activities on behalf of DOE through leases with DOE. We don’t consider the USEC work the same as commercial enterprise”. The EPA’s logic was that “contractors and grantees are private entities and, as such, deserve protection under our regulations”. As noted above, the pilot for the “protocol” fizzled, but EPA understood that there would be a followup period. Not only that, but EPA expected DOE to comply with the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) requirements. The issue was made worse by the fact that a neighboring building of one of the two prospective leased buildings was to be demolished, meaning that there would be dust drifting over, etc. DOE-ORO head Boyd said that all of these issues would be “captured” in the lease provisions. He also said that he was trying to keep the expenses, such as in the disconnection of lines for the building to be demolished but retention of lines running to the building to be leased, out of the environmental management program’s budget, i.e., he was trying to keep any lease expenses from coming out of EM funds.
Boyd, in an interview with The Oak Ridger (24 January 2003), emphasized the connection between cleanup and the economy in the received DOE fashion. According to The Oak Ridger, he stressed that “environmental management” makes future science and national security missions in Oak Ridge possible: “The way cleanup is done and the level to which cleanup gets accomplished is going to have an impact on economic development in this community…. Environmental management removes barriers. It takes away barriers to modernization, it takes away barriers to good land use. I just hope the community will recognize that — it’s important for the community to say they care about cleanup, because we don’t want anybody in Washington to get the idea, “Well, Oak Ridge is really not all that concerned about cleanup efforts, so let’s not spend that much money on it”. That would leave us with legacy waste that stands in the way of future development and stands in the way of a clean environment and the ability to attract new companies here”. On the face of it, Boyd is saying (in his grammatically inimitable way) that Oak Ridge has to raise a big fuss about cleanup, or else the cleanup dollars will be sent elsewhere, jobs will be lost, and the whole reservation and the town will go to hell. However, I think he is also speaking in code: he is saying that if timely transfer of the cleaned-up properties to private entities is held up by — oh, say, by public support of the obstructionist old EPA, the stodgy old Local Oversight Committee, etc. — then Washington will conclude that nothing will satisfy too-fussy Oak Ridge and they might as well put Oak Ridge off and direct the cleanup dollars — and perhaps even some research dollars — to some more grateful community. Perhaps I misread Boyd, but the reader will have to judge that for himself.
In the same The Oak Ridger article, Mayor Bradshaw was quoted as saying that while he believed that the city understood the importance of the DOE cleanup mission in Oak Ridge, it was not clear that DOE-Washington understood the negative impact that its decisions — such as a possible split of the Portsmouth (Ohio) and Paducah (Kentucky) sites from the Oak Ridge cleanup contract — could have on local economic development. He said that Oak Ridge had “developed some of the leading expertise in cleanup technology” and that “having a major DOE field office in Oak Ridge”, with Portsmouth and Paducah in its scope, “draws companies here to be close to the action”. He said, “Obviously we want those companies to come here and to maintain their presence”. He concluded that DOE needed to “quit fixing things that aren’t broken”. The executive director of the East Tennessee Economic Council, Jim Campbell (a former editor of The Oak Ridger), said that “To do critical future missions we have to prepare the way by cleaning up the legacies of the past at Y-12, ORNL, and [K-25]”, with it being important that DOE recognize that remediation projects besides those in the new accelerated cleanup schedule were important to moving modernization and missions forward. Jenny Freeman, executive director of the East Tennessee Environmental Business Association, pointed out that DOE could support the environment-economy link by helping with challenges to small businesses, “such as bonding and safety”, that had a big impact on small businesses “when doing complex cleanup in our area”, challenges she claimed that DOE did not understand. Personally, I thought that DOE understood all too well: they have quotas for contracts to small businesses and give them a boost up in other ways. (Also, while DOE naturally would like it if new companies came into Oak Ridge, having so many new cleanup companies come in — when cleanup is supposed to be pretty much over in five or ten years — is no improvement in the overall situation.) That DOE was heavily favoring small businesses was underscored in 2003 (The Oak Ridger, 4 June 2003) by a DOE announcement that it would indeed rebid the cleanup contracts for Portsmouth and Paducah, with the successful bidder having to commit to doing even more work with small businesses. Freeman commented that it sounded as if DOE was going to contract directly to small businesses at least part of the Portsmouth-Paducah work.
DOE decided to start a new DOE office in Lexington, Kentucky, to oversee the Paducah-Portsmouth cleanup work instead of having DOE-ORO oversee it; this was understandable given DOE-ORO’s track record, but the reason actually given was that “two layers of management” would be eliminated (how?), field accountability would be increased, and there would be “a single source of leadership for these important cleanup activities”. This may have been due to a report by the DOE Inspector General, which audited the reindustrialization program in Oak Ridge and concluded that it was not operating as intended (The Oak Ridger, one article from 1 July 2003 and one from somewhat earlier). For one thing, there was a lack of management controls; it was not possible to confirm the alleged cost savings. The leases that CROET had given to private companies to use the cleaned-up buildings were “inefficient and costly” because they did not ensure that all the funds DOE directed toward repairs and rehabilitation were actually used for that purpose. The IG said that DOE had put about $5 million into the fund, but only about a tenth of it had been spent to improve the buildings and utilities. As of August 2002, CROET had accumulated most of the rest of these funds — over $3 million — in an investment account. CROET had earned $171,000 in interest on this account. There were criticisms of lack of protection of the government’s interests in other ways, e.g., the agreements were written (presumably inadvertently) to “create disincentives for reducing utility cost and improving operating efficiency”. The example was given that if CROET exceeded its budget for the provision of utility services such as electricity, DOE would reimburse CROET the difference, “along with the applicable markup” (apparently some sort of profit or fee). Concluded the IG about this, “the “profits increase as consumption increases”.
The IG’s report said that DOE had obtained commitments for “only a small fraction of available space” and that DOE would have improved its return on investment had it focussed its appropriated funds on efforts to “decontaminate, decommission, and demolish [K-25’s] higher risk facilities”. The IG recommended against further use of cleanup funds to prepare K-25 buildings for reuse, except where CROET had formally agreed to accept responsibility; that is, DOE had been cleaning up on spec, without a business actually being signed up by CROET to take over the building when it was cleaned up. The IG also stated that as of October 2002, DOE had paid BNFL about $219 million for cleaning up three buildings, but the reuse potential of two of them was “highly questionable”. In addition, since 1997 DOE had paid Bechtel Jacobs $51 million for their reindustrialization support activities, but had only $4 million in verifiable cost reductions. Local environmental management officials professed to agree with the spirit of this report, but argued that they had identified in the report “statements of opinion that required correction” and a lack of mention of “important” cleanup work done by the reindustrialization program. DOE-ORO’s eventual comment was that they had “serious concerns about the factual accuracy, the methodology of the financial analysis, and the objectivity of the report” and informed the IG that they would be doing an “independent” analysis of the leasing provisions.
CROET’s tendency to pooh-pooh safety and health concerns has made some people uneasy, but CROET insists that it is only being realistic and it keeps beating the drum for reindustrialization. Its most potent argument — to local and state officials, at least — is that the longer it takes to get the turnover of the buildings to private parties approved, the less likely it is that that will happen. The president of CROET, Lawrence Young, said so explicitly, according to the Knoxville News-Sentinel (4 February 2005). In the case of four buildings at the K-25 site, Bechtel Jacobs had agreed to lease the buildings during the final three years of its cleanup contract and CROET was to save the lease payments and use them to upgrade the buildings. Then the buildings could be leased to other, unspecified clients. But the longer DOE-Washington took to approve the leasing to Bechtel Jacobs, CROET said, the less time there would be for Bechtel Jacobs to make lease payments and the less money for upgrades there would be. CROET estimated that it would take $6 million to bring the buildings up to code standards. It strikes me that you could build four really nice new uncontaminated buildings for $6 million. Some 23 other buildings are being eyed in the same way by CROET, including the 66-acre (yes, you read that right!) K-33 building, decontaminated by a DOE contractor “at a huge cost”, according to the News-Sentinel.
DOE should probably not put any more eggs in the CROET basket: the Knoxville News-Sentinel (12 August 2005) reported that the only company that had located in the Horizon Center (a producer of radioactive seeds, etc., for cancer treatment, in part using technology licensed from DOE) had reported a loss of $4 million on $33 million of revenue, was going out of the radiochemical business, and was giving up its space in the Horizon Center. The head of CROET expressed confidence that a new tenant would be found for the space. Besides this, the News-Sentinel reported that DOE had “given” four buildings at the K-25 site to CROET, which (as I noted above) was leasing them to Bechtel Jacobs; some 500-600 of its people were said to be working there already. CROET’s Young was quoted as saying that by the time Bechtel Jacobs finished its cleanup mission in September 2008, it would have made a total of $5 million in lease payments. Again, CROET was to put the money back into “upgrades” of the building so that they could later be leased to other private companies, which it was said, would save DOE $6.4 million in demolition costs. Six more buildings were to be conveyed to CROET. Note that this in effect got the buildings off DOE’s hands and into “private” hands. Wamp commented of the DOE transfer that “They’re turning these office buildings back into productive use”. Nowhere else in the article did it state that these were “office” buildings and it seems odd that K-25 would have had “nearly 200,000 square feet of space” (the total for the four buildings) dedicated to offices; at 200 square feet per office (a generous figure for most of the offices, I am sure), that would have been 1000 offices. I don’t know what the going rate for office space in Oak Ridge is, but the $5 million over five years works out to $5 per sq ft per year.
In 2004, ETEBA executive director Freeman had a guest column in The Oak Ridger (21 September 2004) titled “Safety: No Room for Blame When All Share Responsibility”. She said she had attended a 31 August 2004 DOE public hearing on two recent events “that inconvenienced citizens, created distractions from the cleanup of the East Tennessee Technology Park [K-25], and caused our community to question whether or not DOE and its contractors know how to work safely”. She was talking about the 8 May contamination of the public road by a leaking tank on a truck and the 14 May sodium hydroxide “release” at K-25 (both of which I described in the last chapter), so her choice of words (“inconvenienced”, “distractions”) seemed curiously insouciant. A reporter interviewed her afterward, asking her if she thought that DOE should be blamed for these incidents. She told her readers that she thought that “blame” was a loaded word and that it implied that if someone was “nailed”, “we are all somehow absolved of responsibility”. She then said this: “Safety should be a shared responsibility for everyone in the community, whether they work for DOE and one of its contractors or not. As a “DOE community”, safety is the most important issue we face. If a worker is injured on the job, it’s not just that person and his or her family who suffers, it’s the community….”. It probably amazed, say, the teachers and policemen and taxi drivers, to read her implication that since the entire community would be sorry if someone were hurt in DOE work, the entire community, including themselves, were included in the responsibility for safe DOE work. Perhaps that is not what she meant in a direct sense — she does not appear to be a deep thinker, so she may just have been speaking loosely — but since she speaks for a business association, perhaps she is much smarter than she sounds and that is exactly the meaning she intended to convey. Consider the rest of the article, as I discuss it below.
Freeman said that she told the reporter she did not think DOE should be blamed for these incidents. At the hearing, she heard DOE accept responsibility; heard about stringent corrective measures; heard about the assignment of key people to make sure the problems didn’t occur again; heard about appropriate penalties being applied; heard that Bechtel Jacobs was making substantive changes in its project oversight; and heard that the subcontractor was “working diligently” to make significant changes to rectify the problems. She implied that because she “heard” (her word) that these things were to be done, ipso facto they were done. She mused as she was driving home about “the bigger picture into which these incidents fit”. She noted that “our community wants its wastes, legacy as well as newly generated, cleaned up. That is exactly what’s happening”. She gave data on how many shipments of how much waste had been made to out-of-state disposal facilities, claiming that except for the sodium hydroxide release, these had been made “without a leak or serious incident”. That no one had been seriously injured or killed, she said, should not be taken lightly by the community. She “also thought about how we, as a contracting community, must be to make sure we stay safe, and the creation of the Oak Ridge Business Safety Partnership came to mind”. Here again, she referred to the “community”, but whether she was speaking of the cleanup business community or the community as a whole was unclear.
The Partnership, she continued, was an ad hoc organization, “the brainchild of leaders in the Oak Ridge contractor community, and supported by [DOE-ORO] manager Gerald Boyd because it is a contractor-initiated activity to improve safety in Oak Ridge. It is unique in the DOE complex and is comprised [sic] of people who work for DOE, the National Nuclear Security Administration, their prime contractors, the subcontracting companies, unions, the University of Tennessee, and many other local organizations, namely everyone who works on the DOE Reservation”. She added that the Partnership met monthly to talk about safety “from different angles”, etc., and “to talk about how we can apply our safety practices at home”. She invited readers to the next forum — to be held at 8:30 am on a Wednesday, i.e., when those who worked normal business hours and could not get time off would not be able to attend. She claimed that the Partnership was “significant” because the meetings were “facilitated by” Mayor Bradshaw and “[his] commitment to it signifies that he believes safety is everyone’s concern in Oak Ridge”. Finally, she said this: “Mayor Bradshaw is right. As a community we must rely on one another. As cleanup of ETTP progresses, modernization of [ORNL] and Y-12 continues, and construction of new facilities to house the science and research of the future moves forward, the community must look out for each other because we are all in this together. Trying to assign blame is counterproductive. It’s our responsibility as a community to investigate our mistakes, make necessary adjustments, inspire our workers, and perform our work with vigilance and dedication to safety. This cannot be just a DOE issue; it must be a community issue”. (Underlining mine)
So the bottom line, as I interpret Freeman, is that because the community wants the wastes to be cleaned up, we all are responsible along with the cleanup companies for any incidents and injuries that occur and we shouldn’t carp about being “inconvenienced” by having roads closed and being evacuated from our homes. To complain or insist on any more stringent controls or investigations than DOE chooses to apply or make would be to cause “distractions from the cleanup of ETTP”. Furthermore, if we want all those new goodies — go-go research facilities, a modern weapons plant we can be proud of, etc. — we need to get with the program, i.e., with respect to incidents we need to get over it and move on. Got the picture?
In about January 2003, UT-B and Bechtel Jacobs planned to sign a pact that would “lend technical expertise to area environmental management decisions”. This was announced not by the principals but by DOE-ORO head Boyd, who declared that when he stood up in front of the community in 2006 to say that the Melton Valley cleanup project was complete, he wanted the community “to believe we’re telling the truth. I want them to know that though a lot of contaminants are still there, we have contained them in a way that they are not going to be in the drinking water, they are not going to be in the air they breathe”. He explained the ORNL tie-in: “The scientists know a lot more about that than anyone else and can either nod their heads in agreement, or tell us the risks so we can take corrective actions”. He added that it was important to “touch the technical community before you make a cleanup decision”. Bechtel Jacobs’ president said that it only stood to reason that they would use “one of the most renowned research facilities in the world” since ORNL was in the neighborhood; he opined that the sharing of information and expertise “is not only beneficial to our two companies, but better serves the needs of our DOE customer and the Oak Ridge stakeholders”. Madia said that any time ORNL expertise could be blended with Bechtel Jacobs’ cleanup experience, it was the best of both worlds. But in all this, it was not stated exactly what ORNL would do: was it to advise as to cleanup methods? Check Bechtel Jacobs’ cleanup efforts and report the results to Bechtel Jacobs? Provide an independent check and report to DOE? These were not bad ideas in theory, as long as the scientists were knowledgeable about what they were supposed to check for and were truly independent. But DOE could have made this work part of its ORNL contract and directed Bechtel Jacobs to allot cleanup money for it — there was no need for UT-B and Bechtel Jacobs to have entered into what appeared to be a contract between the two companies. So why did they?
The Knoxville News-Sentinel reported (13 February 2003) that Bechtel Jacobs had won a “tentative” new contract with DOE. That is, DOE intended to take four months to negotiate a new five-year contract (with the old one expiring on 30 September 2003) and then would first give Bechtel Jacobs a one-year “demonstration” contract to “prove its capabilities”. One would think that after 4.5 years of the old contract, DOE was well aware of Bechtel Jacobs’ capabilities. So on the face of it, this demonstration contract was ludicrous. The reporter (Munger) did not suggest or even imply that there was any reason for this other than that stated by DOE, which was that it was a “strategy” being used at cleanup sites around the country and its purpose was to reduce risks to workers and the environment. Bechtel Jacobs’ president declared that he wasn’t worried about getting the full contract when the one-year period was over. But it seemed that DOE was expressing a lack of confidence in Bechtel Jacobs by this extraordinary action. This was emphasized by DOE’s statement that it had not yet decided whether the Buildings K-25 and K-27 cleanup work would be performed as usual under a subcontract to Bechtel Jacobs or DOE would contract the work directly — which would seem to be another slap in the face to Bechtel Jacobs.
The very next day, The Oak Ridger reported (14 February 2003) that Bechtel Jacobs was cancelling the existing contract on one of the highest-risk remediation projects on the Oak Ridge Reservation: the “Melton Valley hydrologic isolation project” at ORNL, i.e., the cleanup of the Melton Valley burial grounds just over a hill or two from the main ORNL area. Bechtel Jacobs was splitting up the contract into smaller pieces and putting out a new request for proposals for the design of the project. This request was supposed to be out in less than a week (which we can infer raised some eyebrows) and the design was to be complete by 30 September 2003 (more eyebrow-raising). Further, Bechtel Jacobs would be “the construction manager” for the project, i.e., instead of just overseeing the contract they would more directly oversee the work and execute the contract. (The reader who is not familiar with this form of activity management should remember that the principal approach to cleanup work management was to have DOE oversee Bechtel Jacobs, who was managing the contracts and overseeing the main subcontractors, who were executing the contracts and doing some of the work and overseeing their sub-subcontractors, who were doing the rest of the work. If this sounds like an awful lot of layers, with a lot of cracks that things can fall between…..well, that is my point.) Bechtel Jacobs claimed that the new modus operandi was not a departure from its usual practice of farming work out to subcontractors, but was a one-time thing due to a milestone that they said that they had committed to the State of Tennessee to meet (of course it was really DOE that had made the commitment). As The Oak Ridger noted, Bechtel Jacobs had reached the pre-qualification stage on this project in August 2002, then the contract process had been halted for five months with no apparent action. Bechtel Jacobs refused to comment on why this was, but said that it had just gotten behind schedule and was trying to make up time. Companies would have to re-pre-qualify under the new contract(s). One would certainly be suspicious that DOE had been the cause of the delay, but none of the newspapers (or my informants) ever said what the problem was.
The Knoxville News-Sentinel (3 May 2003) and The Oak Ridger (5 May 2003) reported that DOE had awarded Bechtel Jacobs $17.6 million out of a possible $20 million for fiscal year 2002. (Why this announcement came seven months after that fiscal year ended on 30 September 2002 was not explained.) The head of DOE-ORO stated that he had reduced the fee by $500,000 (2.5%) for safety problems, for “slow progress in updating documentation for regulators”, and for “other technical inadequacies”. This fee withholding, however, was offset by “a special $500,000 management fee that was awarded to the company shortly before Christmas” (which was of course after the 2002 fiscal year ended), for which no reason was given. Another $1.8 million in possible fees for FY 2002 had been put “on hold” because of the delay of five projects “due to conditions beyond [Bechtel Jacobs’] control”, as DOE put it; once the projects were completed, DOE would determine how much of that, if any, Bechtel Jacobs would get.
The Knoxville News-Sentinel (14 July 2003) reported that only one company bothered to “pre-qualify” to bid on a project to melt nuclear waste in pits and then vitrify it (turn it into glass form). Thus Bechtel Jacobs would be negotiating a fixed-price contract for this project with that company under DOE sole-sourcing rules. The Bechtel Jacobs spokesman refused to tell the News-Sentinel (Munger) the estimated cost of the project. The News-Sentinel mentioned the aborted ORNL vitrification demonstration project on, I believe, this same waste — an effort that ended in 1996 when a bubble of steam burst, sending “tons” of molten, radioactivity-containing glass into the air. (The reader should note that this project did not have an RPP-128 or an RPP-310 review, although I had asked Mei about it prior to the incident.) Although no one was hurt, it was entirely possible that someone could have been; the damage figure was set at $500,000 and DOE felt it was too risky to proceed further. Yet now in 2003 DOE was telling or at least allowing Bechtel Jacobs to let a contract to vitrify waste. The winning company explained that the technology had greatly improved since 1996 and had been safely demonstrated at Los Alamos National Laboratory. Bechtel Jacobs said that it would require a dry run (nonradioactive) before the work started.
The Oak Ridger (25 September 2003) reported that a total of 40 people (out of 1050, including the Paducah and Portsmouth staff) were being laid off from Bechtel Jacobs (voluntarily and involuntarily). A Bechtel Jacobs spokesman expressed regret, saying that it was a business decision that had to be made “in order to accomplish our goal and our customer’s goal”; they had to “re-align our resources in order to accomplish the accelerated cleanup under the DOE plan and our new contract”.
The News-Sentinel reported (1 October 2003) that while Bechtel Jacobs had just gotten a new five-year contract with DOE, it had not been easy: the negotiations were supposed to have been concluded months earlier, but had gone right up to the close of business on the last day of the old contract, i.e., 30 September 2003. Under a new “cost-sharing” agreement, if Bechtel Jacobs got a project done under the projected cost, then DOE would get 70% of the money saved and Bechtel Jacobs would get 30%. The same “formula” was said to apply if a project ran over budget: Bechtel Jacobs would lose the money from its “target fee” of $150 million (out of a projected total of $1.8 billion spent on various projects over the five years). Thus, DOE told the News-Sentinel, Bechtel Jacobs could receive as little as $49 million or as much as $249 million. The Oak Ridger reported (6 October 2003) that Bechtel Jacobs stood to lose $12 million a month for missing cleanup milestones for the K-25 site work, while it would gain $6 million a month for beating deadlines. Further, the cleanup funding shortfall (between the estimated or baseline cost and DOE’s target or desired cost) was not $300 million, as had been said earlier, but an even more humungous $540 million. DOE and Bechtel Jacobs again assured everybody that, as The Oak Ridger put it, “quality work and safety would remain top priorities and would not be undercut due to the funding gap”. Bechtel Jacobs said they had signed the contract in full knowledge of the potential shortfall.
The Oak Ridger reported (7 October 2003) that Bechtel Jacobs, having received only one bid for the big-ticket cleanup of Buildings K-25 and K-27 at the K-25 site, had decided to manage the project itself and assume all the risk. This was said to be because the sole bid was 50% higher than Bechtel Jacobs wanted to pay (or could afford under the significantly reduced DOE cleanup budget, perhaps); also, the bidding team wanted to change the terms and conditions of the contract from those that Bechtel Jacobs had specified. In managing the project itself, Bechtel Jacobs would divvy up the work into bite-size chunks and use subcontractors (I assume this meant that it could save the management fee). The Oak Ridger also noted that ETEBA had “roundly criticized” Bechtel Jacobs for trying to let fixed-price contracts for complex cleanup work. A DOE environmental manager, asked if DOE was concerned that Bechtel Jacobs was “decreasing competition” by this lack of competitive bidding, said that DOE’s check of this situation showed that Bechtel Jacobs had a number of subcontracts that had had multiple bidders, so DOE was not worried. The president of Bechtel Jacobs said that these were existing subcontracts under which the work could be subsumed; he said that Bechtel Jacobs would be using 15-20 managers for this work because Bechtel Jacobs would directing the subcontractors’ work in detail. But small companies need not worry that they would not get a piece of the DOE pie: Bechtel Jacobs was going to have “small business goals” for the work and would hold a briefing on the work that would be available for small businesses to bid on. But clearly, Bechtel Jacobs was already tightening its belt.
The Oak Ridger reported (7 October 2003) that the accelerated cleanup program would mean a reduced workforce for Bechtel Jacobs. The company president told its employees that “The new skill mixes required to implement the closure plan may result in reductions in force in some areas. However, any such reductions are expected to be minimal”. This was a head-scratcher: how could doing something faster require different skills than doing it slower? Hence how could layoffs be attributed to the layoffees’ not having “new skill mixes”? A company spokesman claimed that layoffs were not going to be “massive”, but declined to define “massive”. The president also explained that management had been “streamlined” and the whole company was “reorganizing to better align itself to perform”. At this point Bechtel Jacobs had dropped from a high of 2000 employees to just under 1000, mostly by transitioning employees to subcontractors. They had hoped to get down to 450 employees performing oversight and contract management, but had eventually decided to do more work themselves; their explanation was that when they “got into the meat of the work”, they found that “some adjustments had to be made in order to get the work done the way DOE wanted it to get done”. (One would have thought that experienced companies like the parents, Bechtel International and Jacobs Engineering, would have realized this from the start, since the original DOE plan was in effect the ultra-balkanization of the work.) Now not only would Bechtel Jacobs have to work faster, but they would have to do it with fewer people. The Oak Ridger again reported that the accelerated cleanup program had been “roundly criticized” for setting too aggressive a schedule for complex cleanup programs and planning to leave the areas not as clean.
The Knoxville News-Sentinel reported (20 October 2003) further on the new five-year, $1.8 billion cleanup contract that DOE had signed with Bechtel Jacobs. The baseline estimate (which DOE and Bechtel Jacobs apparently agreed on) was $2.3 billion. Thus in order to meet the target costs of $1.8 billion over the term of the contract, Bechtel Jacobs would have to cut more than $500 million from the estimated cost of performing the cleanup projects, i.e., almost 20%. As the News-Sentinel put it, this gap was making some people worry that “quality may be sacrificed in order to speed up the work and save money”. A Bechtel Jacobs manager said that “DOE expected us to take on a challenge” and admitted again that Bechtel Jacobs signed the contract in full knowledge that the work would have to be done with significantly less money than any reasonable person would think was necessary. He said that it was believed that there were “some opportunities to save money” and that if some projects cost more than expected, other cleanup activities would be “evaluated for cost savings”. The News-Sentinel reported (20 October 2003) that a TDEC official said that TDEC had reviewed DOE’s cleanup plans and believed the goals were achievable; however, state inspectors would monitor the work closely to make sure that environmental quality was not sacrificed. He insisted that although the state had accepted the accelerated plan because of DOE’s claim that money would be saved in the long run, “we won’t accept less cleanup”.
Many were skeptical. For example, The Oak Ridger (15 October 2003) reported that the Citizens’ Advisory Panel of the Local Oversight Committee was concerned that the new contract would create a culture of “cutting corners”. Dr. Gawarecki, executive director of LOC, said that it was of great concern that DOE was not going to pay the actual (estimated) costs of the cleanup and she observed that “there’s only one way for the contractor to finish a job that doesn’t have enough money, and that is to shortcut something”. And the Knoxville News-Sentinel reported (15 March 2004) that DOE had decided not to use in situ vitrification (ISV) as planned to remediate old nuclear waste pits at ORNL; they had experimented with it for years (and had that 1996 explosion to prove it), but now, when the estimated cost to deal with the pits rose to $55 million, or twice the original estimate, they pulled the plug on it. DOE then decided to use grout (concrete) injections — “it will do just as good a job [as ISV] at a much lower cost”, said a DOE spokesman. The grouting would cost $14 million, thus resulting in a “savings” of $40 million. A happy ending? Well, no. Although DOE hoped that multiple bidders on the grouting project would send the cost down, only one company had bid on the ISV project, making for a lack of competition. And as the News-Sentinel stated, skeptics wondered whether DOE and Bechtel Jacobs were paying more attention to tight budgets than to environmental protection. The News-Sentinel also stated again what everyone knew: Bechtel Jacobs was under “tremendous pressure to cut cleanup costs to meet the terms of its new five-year contract with DOE”. And one problem DOE would have was with the State of Tennessee (represented by TDEC), which had agreed to the ISV plan in a formal record of decision, which was legally binding on DOE. Thus TDEC would have to agree to any change of plan. Yet another problem was that the company that had bid on the ISV job and had worked with Bechtel Jacobs to reduce the estimated cost finally agreed to a bid of $32.4 million; the additional $22.6 million (to make $55 million) would thus apparently be attributable to Bechtel Jacob’s management of the project. The ISV bidder disagreed that grouting would be as effective as ISV; less than half the amount of soil and waste would be encapsulated with grouting and the grouting would be good for 200-300 years (okay for cesium, not okay for plutonium, but of course it depends on how much of each you have). DOE and Bechtel Jacobs did not demur, but they argued, in effect, that grouting was good enough.
The Oak Ridger reported (20 November 2003) that DOE had issued a $192,500 P-AAA civil penalty to Bechtel Jacobs, in consequence of a review done by DOE-Washington’s Office of Price-Anderson Act Enforcement following incidents at Oak Ridge and Paducah. Bechtel Jacobs was cited for various violations. Said the enforcement letter, “Of particular concern is the long-standing and recurrent nature of the deficiencies and the fact that in many instances, it took active DOE intervention before [Bechtel Jacobs] aggressively approached the problems….Although none of these deficiencies resulted in harm to employees or the public, they are considered significant because they had the potential to expose workers to radiological harm and to place [Bechtel Jacobs-]managed facilities outside of the facility safety boundaries established by DOE”. (Again, I would like to draw the reader’s attention to the opposite tack taken by DOE-ORO and UT-B at ORNL, which was that as long as no one was actually hurt, injured, or exposed so far as anybody knew, then there was no problem, i.e., “no harm, no foul”.) The enforcement letter cited the June 2002 incident in which 32 people were tested for possible exposure due to the release of radioactive material from a ventilation system at what The Oak Ridger said was an unspecified building in Oak Ridge. (This appears to be the strontium contamination at ORNL that I discussed earlier.)
The Knoxville News-Sentinel (21 November 2003) said that another 36 Bechtel Jacobs workers were being laid off, all involuntarily, and, again, that Bechtel Jacobs was under “tremendous pressure to cut costs and complete the work on time”. Still more job cuts were said to be in the offing. Some workers claimed that the latest layoffs targeted workers who had transferred from Lockheed Martin years earlier and also older workers, but Bechtel Jacobs denied that. The Oak Ridger (26 November 2003) reported that other companies were criticizing the fixed-price contracting scheme as “getting a “cheap” fix while sacrificing technical skills and capabilities in performance of cleanup”. Bechtel Jacobs claimed that the fixed-price contract was not really all that bad, because in reality Bechtel Jacobs made “progress payments”, i.e., instead of waiting for its money until the work was completely done and approved, a subcontractor could receive money as intermediate milestones were completed. Bechtel Jacobs also claimed that the K-25/K-27 work was on a smaller scale than the previous BNFL three-building cleanup project, was more repetitive and thus allowed for a “gentler” learning curve, and involved no recycling or disassembly — in other words, a walk in the park. (One of these buildings is so large that “back in the day”, the gaseous diffusion workers used bicycles to get from one area of the building to another.) The president of Bechtel Jacobs said they expected to save money by using “local” companies to do the work.
The News-Sentinel (24 April 2004) reported that the cleanup of a nuclear junkyard containing old scrap from K-25 was about to begin. The estimated $11.6 million contract, let by Bechtel Jacobs, would include hauling 5650 truckloads of material to a new, environmentally friendly landfill. The material would have to be monitored for radioactivity and hazardous materials. The successful bidder planned to have an “anomaly detection program” to segregate “unusual” items. (This sounded as if they might be doing random sampling of items, with only “unusual” items checked 100%.) Bechtel Jacobs would be hiring yet another subcontractor to assess the contamination in the soils under the junk. To accelerate the work — because as usual Bechtel Jacobs was under the gun — Bechtel Jacobs “might” sample the soil while the removal project was still underway, instead of waiting until it was all cleared out. As a Bechtel Jacobs spokesman candidly admitted, “Our Achilles heel is funding” and the progress of the project would depend on allocations over time from DOE. The News-Sentinel noted that DOE and Bechtel Jacobs were trying to complete most of the high-risk and high-cost projects in the Oak Ridge area before FY2009.
The Knoxville News-Sentinel reported (23 December 2003) that Safety and Ecology Corporation (SEC) had won a $12 million contract “to help jumpstart the cleanup of old uranium-processing facilities”, specifically Buildings K-25 and K-27. Actually this was a subcontract, since Bechtel Jacobs was of course managing this project itself. The SEC CEO crowed that this award would “boost the visibility” of SEC’s waste-management service offerings. Note that as I related earlier, just a few months later Highway 95 would be contaminated by SEC workers transporting a tank, with a subsequent investigation, a big fine for Bechtel Jacobs, a big outlay by SEC to clean up the road, and the barring of SEC from any future subcontracts in the cleanup program. Note too that Bechtel Jacobs named SEC (as the “Radcon Alliance”) its “Environmental Safety and Health Subcontractor of the Month” for April 2005 (The Oak Ridger, 25 May 2005). Maybe SEC earned it in the course of the one month, but coming only a year after SEC’s major environmental faux pas, this seemed an ill-advised vote of confidence on Bechtel Jacobs’ part. A press release stated that despite the range of hazards encountered by SEC, “between September 2004 and February 2005, [SEC] employees worked 280,000 hours without a recordable injury…..[and] with no environmental compliance violations, environmental releases, or spills”. If you’re good for six months, apparently, all past sins are forgotten — not only by Bechtel Jacobs, but by The Oak Ridger, who did not even mention the major incident of the previous year. The News-Sentinel reported (31 May 2005) that SEC was trying to get back into everybody’s good graces: they were still barred from bidding on new cleanup contracts in Oak Ridge, so they needed to convince everyone of their competence and alertness. SEC and Bechtel Jacobs were talking about what it would take to reinstate SEC, in particular with regard to completion of corrective actions that had been agreed on the previous year. Bechtel Jacobs, having been fined $250,000 by DOE over the incident, did not seem to be in any hurry to welcome SEC back. SEC said that they weren’t trying to pressure Bechtel Jacobs in any way, that they hadn’t been interested in any of the Bechtel Jacobs’ contracts that had opened for bidding in the meantime, that they would bide their time, etc. But as the News-Sentinel pointed out, SEC had won a $240 million contract at Richland shortly after the strontium incident and then had lost it as a result of a protest by losing bidders, although SEC was free to bid on it a second time. But with Bechtel Jacobs naming SEC a subcontractor of the month for ES&H in 2005, it seemed that SEC would soon be back in the race.
But what about the Knoxville News-Sentinel report (16 June 2005) that DOE had proposed a $55,000 fine against SEC for “alleged retaliation against a whistleblower at a work site” in Portsmouth? The case started in 2001, when a former employee filed a complaint saying that her dismissal was because of her reporting of safety concerns. DOE stated that this was “the first enforcement action covered under nuclear safety rules”. (The newspaper was not specific as to what the rule(s) was, but the decision by the DOE Office of Hearings and Appeals said it was 10 CFR 708 and that it had been designated a “nuclear safety regulation” by DOE and thus enforceable under P-AAA.) SEC claimed that they fired the employee because she repeatedly failed an examination for rad control technicians and they denied any retaliation. However, SEC had to rehire the employee and she then passed the examination. The DOE decision stated that SEC had appealed the decision to the US Court of Appeals (i.e., outside DOE) for a new trial, but the new trial request was denied and the decision upheld. SEC could have appealed further, but seemed to have decided not to do so. SEC replaced the Portsmouth site manager as part of its mea culpa.
The whistleblower had an associate’s degree in health physics; she had first put in about two years as a rad tech for another major rad work company, then was hired by SEC and put in three years as a rad tech at Portsmouth, with satisfactory performance reviews. It was only after those three years, when she was taking a requalification exam, that she failed. This was at a time when, testimony showed, SEC was having trouble recruiting and retaining rad techs. Also, there was a great deal of subjectivity in grading the exams: the third requal exam of a rad tech supervisor who also had failed three times was reviewed and reinterpreted so that she then passed, which was not done for the whistleblower. The initial OHA decision said that the whistleblower was repeatedly taken off projects when she reported health and safety issues and that “this pattern of repeated reassignments constitutes an adverse personnel action, since it served to intimidate and harass [her] as well as undermine her authority and stature as an RCT”. (This statement resonated with me because it paralleled my own experience.) The site manager expressed concern in writing to her about her activities — e.g., her meeting with an SEC official with her concerns. He told her to tell him at once about such meetings, saying that if they were not authorized activities, he could not sign off on her time and thus could not get reimbursement from Bechtel Jacobs (as the oversight entity for cleanup operations). This manager said he told the rad tech and her husband that “if I feel strongly enough about an issue and if I feel that I cannot work with….the company I’m employed with or the other companies on-site to resolve those issues, then I would terminate my employment because I don’t believe that going through the whistleblower standard is going to create any more efficiency or cause the company to respond in any better way than if I put forth my best effort with them as an employee or even as a subcontractor”. I.e., if you don’t like the way things are and you can’t persuade people to change them, then quit because the whistleblower process is not going to make the company change their ways. The reader can check all this out on the DOE Office of Hearings and Appeals Web site (case of Sue Rice Gossett). It is sad that SEC, a company founded to be a force in rad protection services, has foundered like this — the reader should carefully consider the ways that this may have come about.
The Knoxville News-Sentinel (28 September 1999) reported that DOE was paying 10 times more for an environmental assessment than the EPA was paying for its environmental assessments — and EPA’s cost was considered high by nongovernment standards. Some contractors expressed the fear that DOE would respond to pressure from the public and Congress by making “unfair demands on contractors”. Later, the News-Sentinel reported (23 June 2000) that the General Accounting Office had looked at DOE’s cleanup work at the request of a congressional subcommittee and had concluded that DOE was doing a poor job of letting and managing these contracts. In the past, DOE had used mostly “cost plus” contracts for this type of work, that is, they reimbursed the contractor for the actual costs of the work as they were incurred and then added a fee milestone by milestone. But in an effort to keep costs down, said the GAO, DOE had gone to the “fixed price” contract mode, which meant that the bidders had to anticipate what the whole cleanup project would cost and then add on their desired return, with the total being their bid. DOE (or its agent, such as Bechtel Jacobs) would let the contract on the basis that this was all the money that it would pay out for the project to be done; even if unexpected adverse conditions were found, as might well occur in the very nonroutine world of cleanup work, DOE could thus refuse to reimburse the contractor for the overruns. Not only that, in the fixed price contracts, the contractor paid to erect any cleanup facilities and to acquire any cleanup equipment needed. That is, the contractor fronted itself the money and DOE paid it back when the cleanup started. Also, DOE paid for results and otherwise let the contractor decide for itself how to do the cleanup. DOE touted this funding method as reducing its (financial) risk, but as the News-Sentinel article quoted the GAO spokesman as saying (and as the GAO report, available on the Web, also points out), fixed-price contracts work best when there is a clearly defined scope of work and a low probability of major changes. This description certainly did not characterize much of the cleanup work. As the GAO also pointed out, it was for this very reason the Army Corps of Engineers — which had been given the FUSRAP cleanup program when an exasperated Congress took it away from DOE — recommended against using fixed-price contracts for most cleanup work.
As the News-Sentinel reported (23 June 2000), such an overrun occurred in the case of BNFL, which had contracted to clean up some large buildings at K-25 for a fixed price of $238 million. As DOE knew, BNFL had expected to recoup some of its costs by being able to sell of some of the nickel recovered during cleanup, as it was allowed to do under the contract. However, due to protests by activists and others, DOE declared a moratorium on the sale of the nickel — without allowing any compensation to BNFL. Also, the cleanup proved more difficult than anticipated. BNFL told DOE that it would need $110 million more to complete the job and wanted $40 million more as an offset for the loss of the nickel. In 2000 also (The Oak Ridger, 9 May 2000), DOE announced that it would terminate a contract with BNFL at Hanford because BNFL now said it would need $15.2 billion to finish the job rather than the $6.9 billion BNFL had estimated originally. DOE declared itself to be surprised, but congressional lawmakers were skeptical; one remarked that if this came as a surprise to the DOE Secretary, “somebody ought to be fired”. Another such disagreement between Lockheed Martin and DOE on an Idaho (INEEL) project had resulted in litigation.
The Oak Ridger (12 November 2002) reported that BNFL “shook the contracting community”: it announced that it would not bid on further cleanup work under the fixed-price scheme, in particular on the upcoming Buildings K-25 and K-27 contract. DOE-ORO head Boyd said that DOE would not ask Bechtel Jacobs to change the scheme (which was really DOE’s scheme) because DOE believed there was “a sufficient technical basis for the approach they were taking”. DOE would be watching a future cleanup project carefully and would “ensure [that] a sound approach is used”. The bone of contention was the scope of work: Bechtel Jacobs apparently wanted to use a comprehensive but vaguely worded scope of work so that everything that arose could be considered to be in fixed-price scope, however much it increased cost. Thus, potential bidders told The Oak Ridger, the scope of work for the gaseous diffusion facility cleanup would be “heavy on the risk end and light on definition”. Although this proved true in spades for poor BNFL and it had to take a “once burned, twice shy” approach to future bids, Boyd still reiterated confidence in the fixed-price approach.
The Knoxville News-Sentinel (27 January 2003) reported that DOE had agreed to pay BNFL some $46 million for claims of work outside the fixed-price project scope, but other claims had yet to be decided. BNFL estimated that it would still be losing $50 million. DOE estimated that the cost had increased from $238 million when the contract was signed in 1997 to only $290 million in early 2003, but as the News-Sentinel pointed out, the figures given by BNFL would mean that the actual total cost of the cleanup work by BNFL would top out at close to half a billion dollars by the project’s end in mid-2004. The News-Sentinel also noted that when the BNFL-DOE contract was negotiated in 1996-1997, “it was hailed as an innovative project that would save taxpayers money and boost the local economy” and it was held to be “the foundation for DOE’s reindustrialization program, turning surplus federal facilities into space for private-sector industry”. The News-Sentinel said that even before the contract was signed, “DOE hustled to issue a press release on the project a couple of days before the presidential election of 1996….[Al Gore] called the project a “reinventing government initiative”….the Clinton-Gore reelection team apparently was anxious to take credit for the budding project”. They wouldn’t have been, if they had known how it would turn out, but this shows how politicized the whole cleanup process is. Not only that, but the principal DOE advocate of the reindustrialization program, former DOE-ORO head Jim Hall, had been part of the negotiations with BNFL; he had then retired and at the time of this News-Sentinel article, he was an executive with the Washington Group International, which as the News-Sentinel pointed out was one of the six “pre-qualified” companies expected to bid on the upcoming Buildings K-25 and K-27 cleanup project (and was part of the sole bidding team). Hall told the News-Sentinel that even with the cost overruns, the fixed-price contract had been a good deal for the government because even then it was cheaper than the government’s original estimate of $850 million. (Your tax dollars at work!)
The News-Sentinel said that in refusing to bid on the K-25/K-27 project, BNFL specifically criticized Bechtel Jacobs’ declared intention to do the K-25/K-27 cleanup under a fixed-price contract even with the uncertainties associated with all those miles of contaminated piping and tons of radioactive equipment to dismantle. Because of this public expression of frustration by BNFL, the request for proposals on the new work was delayed — for months — as DOE-Washington reviewed the situation. Bechtel Jacobs promised that new work sites would be better characterized, waste materials could be disposed of more easily, etc., but apparently few were buying that: as The Oak Ridger reported (1 June 2003), when the request for proposal was finally issued by Bechtel Jacobs, ETEBA’s Freeman summed up the concerns of the potential bidders, saying “The subcontracting community was told many times by both DOE and Bechtel Jacobs to wait on the RFP because it would be different”, but the new contracting rules included the same “high-risk profiles, difficult bonding requirements, and fixed-price contract terms” as before. Freeman noted that risks to the subcontractor could have been lowered, bonding could have been on phases of the project and not the whole thing at once, and early-completion incentives could have been included. The News-Sentinel (Munger column, 23 April 2003) stated that the RFP was issued to “pre-qualified bidders” only and was “deemed not releasable” to the public or the media by Bechtel Jacobs. So in the end, after BNFL fired its shot over DOE’s bow and subcontractors saw the contract rules, only one company ended up bidding on the contract. As I noted above, that bid was rejected because it was deemed to be too high.
The Knoxville News-Sentinel reported (5 December 2003) that after BNFL got a new COO, BNFL withdrew some of its requests for “equitable adjustments”. As the COO put it, “We don’t want to be perceived as being confrontational (or) argumentative. It’s really important that we establish our relationship with [DOE] as a responsible, credible contractor”. In other words (as the News-Sentinel went on to say, citing several upcoming candidate contracts), they would swallow some of the loss in order not to tick off DOE further and be barred from future DOE contracts. In what may have been a consolation prize, Bechtel Jacobs awarded BNFL and two other companies each a subcontract (The Oak Ridger, 19 December 2003) for “removing all legacy low-level radioactive waste from the Oak Ridge Reservation by the end of fiscal year 2005”. If the “all” part is true, that seems like a tall order. The total volume of waste to be shipped was said to be 22,000 cubic meters and it was to be sorted, segregated, and volume-reduced prior to shipment to a disposal facility. Bechtel Jacobs told The Oak Ridger that they chose three companies instead of one “to prevent a backup in the cleanup work”, although it was claimed that no decision had yet been made as to who was to do what. One of the other two companies, according to its Web site, is developing a commercial waste treatment facility in its future home, Building K-1200, and “is performing the building cleanup in exchange for reduced lease rates”; it is “one of the few companies in the United States licensed to process mixed wastes….for disposal”.
Subsequently, the News-Sentinel reported (4 April 2004) that BNFL might bid on the K-25/K-27 project after all, because DOE was going to reimburse BNFL a total of $500 million for its cost overruns at Oak Ridge and Idaho. BNFL said they were talking to Bechtel Jacobs about the K-25/K-27 project (Bechtel Jacobs denied it). BNFL said that although they lost money on their earlier K-25 site cleanup project, they had gained a lot of experience in dismantling this type of plant and had assembled, trained, and security-cleared a large cadre of workers. Bechtel Jacobs, the News-Sentinel said, was “under pressure to cut costs and accelerate this particular [K-25/K-27] cleanup project”, “the centerpiece of DOE’s cleanup strategy in Oak Ridge”. Eventually DOE agreed to pay BNFL an additional $37 million for cost overruns on the first K-25 cleanup (Knoxville News-Sentinel, 10 February 2005). The originally anticipated $238 million cost had ballooned to a final $310 million, according to a report two years earlier, but now DOE refused to tell the News-Sentinel (Munger) the final cost to the government. A day or two earlier, DOE announced a government-to-government settlement with the UK (whose government owns BNFL) by which DOE bought the treatment facilities constructed at Idaho by BNFL, agreed to modify BNFL’s Idaho contract in unspecified ways, and agreed to pay a further $10 million toward cost overruns at Idaho. BNFL claimed that it would still be losing $150 million on the K-25 project, but again said philosophically that the experience would be useful in future bidding. So much for “fixed-price” contracts.
The Knoxville News-Sentinel (20 October 2005) reported that DOE and BNG America (the former BNFL) had officially closed out the ill-fated original BNFL K-25 cleanup project, which DOE-ORO “chief operating officer” Robert Brown termed a shining success overall and “an extremely good bargain for the taxpayer”. This was despite the fact that DOE ended up paying BNFL a total of $333 million, when the original contract called for $238 million. Brown called this 40% overrun not bad considering the size of the project, saying that when adjusted for inflation, the contract grew from $272 million to $333 million. (But inflation, etc., were already supposed to have been considered in the selection of the $238 million figure, so this argument seems specious.) On top of the $333 million, DOE spent another $22 million on having other contractors “verify and evaluate” BNFL’s cleanup work, the News-Sentinel said. (Why DOE couldn’t do this itself was not inquired into by the News-Sentinel.) Again, BNFL/BNG officials refused to discuss what they had actually spent on the project. The DOE official said that BNFL had evidently written off some of its costs, “but you have to tip your hat to them for sticking with it”. The News-Sentinel noted that no tenants had been found for any of the cleaned-up buildings and so one of them was now scheduled for demolition — the cost of which was not included in the $355 million. The portion of the $355 million that was spent on cleanup and checking thus seems to have been wasted.
As I noted above, a $2.5 billion, five-year cleanup contract had been awarded to Bechtel Jacobs in 1997, predicated on Bechtel Jacobs’ only managing the work and not doing the work itself; it was supposed to subdivide and contract out the work on a fixed-price basis, with the subcontract money coming out of the cleanup contract. The Oak Ridger reported (28 March 2001) that an audit of the Bechtel Jacobs contract by the DOE Inspector General concluded that DOE could have saved $44 million in FY 2000 if Bechtel Jacobs had subcontracted more work and “reduced staffing levels as proposed”. The IG said that Bechtel Jacobs was supposed to subcontract 93% of the work and reduce staffing by 82%; the “staffing” was the existing cleanup workers that it had taken on as part of the contract and was to “transition” to working for subcontractors. But, the IG said, Bechtel Jacobs had subcontracted less than 60% of the work and reduced staffing by transition to subcontractors by only 58%. DOE’s explanation was that the IG had failed to consider that the contract was a first-of-a-kind contract and that DOE’s “policy decisions impacted the contractor’s ability to meet its subcontracting goals”. In other words, DOE was — uncharacteristically — saying “Blame us” and was also in effect conceding the IG’s point. Bechtel Jacobs contended that in dollar terms, they were currently subcontracting out 86% of the work and they were in compliance with the actual contract, not with “statements made during the selection process”. So there appeared to be a discrepancy between the IG’s and Bechtel Jacobs’ interpretations of the contract. It is thus hard to know if the IG was right or if Bechtel Jacobs was, but Bechtel Jacobs made one statement that I thought very telling in light of DOE’s contention that subdividing the work and giving it to (usually) the low bidder was best: “Some continuity in certain areas was necessary for what DOE and we believe are sound business reasons….[including the gunite tank work at ORNL by] Lockheed Martin and others. It made sense to utilize that existing talent and experience….Also….it made sense for a number of other reasons to perform more work ourselves than originally anticipated, such as fire protection and security”.
The Oak Ridger reported soon after (16 May 2001) that the IG had also concluded that $15 million of the fees (over and above the costs) paid to Bechtel Jacobs between FY1998 and FY 2000 was for work “that either had no performance objectives or for which expectations had been reduced”. This was attributed to Oak Ridge DOE office’s not following procedure related to incentive fees. That is, there were no incentive performance objectives in one year, the performance objectives were not set before the start of the fiscal year in the next two years, and once the objectives were set, DOE modified them “to reduce expectations” in each of the three years. This time, local DOE officials concurred with the IG’s finding and were revising the evaluation plan.
The Knoxville News-Sentinel reported (11 March 2005) that DOE judged that Bechtel Jacobs was doing generally outstanding work, even though Bechtel Jacobs was behind schedule on two out of three cleanup milestones. DOE also decided to “set aside” $1.4 million of Bechtel Jacobs’ potential 2005 fee as a “challenge”, despite the multiple safety problems found in 2004 (which I related earlier and which presumably were to be considered in the 2005 fee evaluation). So instead of penalizing Bechtel Jacobs outright for these occurrences, DOE was in effect giving them a do-over: if they reduced their accident and injury rates and “achieve[d] other safety related results”, they would still get the money.
As I noted earlier, for reasons I have never quite found out for sure, DOE-ORO’s authority to approve safety analyses and assessments was revoked by DOE-Washington in 2001 (specifically, by the assistant DOE secretary in charge of cleanup and environmental issues). The Oak Ridger reported (9 January 2003) that local DOE officials were “poised to earn back their safety approval credentials” by having DOE-Washington check their revised methods of approval and apparently their retraining of personnel. Bechtel Jacobs also lost its authority to verify safety implementation (although this revocation was by the DOE-ORO manager at the time, Leah Dever) and was similarly poised to regain it. It seems that the infractions, whatever they were, must have been exceedingly serious for DOE-Washington to have taken this step. The Oak Ridger mentioned that the DNFSB had written a letter of concern in October 2001 about Bechtel Jacobs’ safety procedures. Also, I heard secondhand that Bechtel Jacobs had allowed (or failed to detect) that a subcontractor was improperly preparing safety documentation, so it could have been the discovery of Bechtel Jacobs’ and local DOE’s supervisory and management failures by DNFSB or others that led to the revocations.
A Bechtel Jacobs spokesman told The Oak Ridger that “There’s nothing more important to Bechtel Jacobs Co. and to DOE than safety. Whatever we need to do to protect our workers and the environment we’ll do — that’s not negotiable”. I attended a meeting of the Site Specific Advisory Board in, I think, early 2003 at which this spokesman and a colleague talked at length about what Bechtel Jacobs had done to improve. I did not know then about the revocation of safety document approval, so I did not understand the almost desperate intensity he brought to his presentation. Obviously, it was very important to Bechtel Jacobs to convince all parties that it had changed its ways. The effort was apparently successful: as I noted above, DOE signed a new five-year contract with Bechtel Jacobs in about mid-2003. The Oak Ridger (11 July 2003) reported that Bechtel Jacobs had recovered its authority to produce safety assessments, etc. (and apparently had its ISMS program re-approved by DOE) in June 2003. However, DOE-ORO, after a year and a half, still had not had its own ISMS program approved by DOE-Washington.
Poor old DOE got egg on its face again when a former DOE employee, who left DOE in 2000 to form a small business, got a contract from DOE contractor Fluor Fernald to haul radioactive waste out of Fernald (Knoxville News-Sentinel, 19 October 2005). It seems that his firm’s per-load bid was just over half those of the next nearest two bidders and that after his firm won the contract, DOE changed various bid specifications, such as the requirement for a minimum 21-foot distance between the cab of the truck and the waste containers. This allowed the winning firm to use cheaper trailers and to tie down the containers in a different manner. Further, the firm did not own any suitable trailers at the time it won the bid and so it subcontracted out much of the work after it won the bid. The losing bidders, of course, cried foul because their bids would have been lower had they known that the bid specs would be changed and because by subcontracting out so much after the bid award, the winning firm thus became a de facto broker for the shipments. In fact, said the News-Sentinel, it became the only DOE-approved transportation broker for these shipments. The former DOE person claimed that his firm had “as much transportation knowledge as anyone out there” and had had other shipment contracts. The losing bidders, however, pointed out that his subcontractors were independent contractors with, typically, less experience than the well-established losing shipping companies. DOE does not seem to realize that while people hope that the drivers who move, say, cheese or shoes drive safely, they absolutely expect that the drivers who move radwaste will drive safely. So although the former DOE person does seem like an energetic go-getter, stuff like this does not inspire confidence. (Note that this was one of the two companies that asked the city of Oak Ridge for a tax break when the two were in partnership to lease space in an industrial park; this was the one that had “graduated” from the Center for Entrepreneurial Growth.)
An interesting series of events in the history of DOE-ORO occurred between December 1998 and mid-2002. First, it was announced (The Oak Ridger, 3 December 1998) that Jim Hall, DOE-ORO head since 1995, was going to Hanford to serve as interim DOE-Hanford head due to the retirement of the current DOE-Hanford head. The explanation he gave for DOE-Washington’s taking DOE-ORO’s permanent manager off to be a temporary Hanford manager, while his deputy served as temporary DOE-ORO manager, was that DOE-Washington “felt they needed an experienced manager out there while they went through the process of a nationwide search for a manager”. Hall said that he hadn’t volunteered and was happy with his Oak Ridge position, but obviously orders were orders. Hall had been a champion of the push to reindustrialize, and the rebids of the ORNL, Y-12, and ORAU/ORISE contracts were coming up, so The Oak Ridger naturally wondered whether the fact that Hall himself had recently become eligible for retirement had anything to do with it. The Oak Ridger also stated that “a number of people believe Hall has been the key to what is happening in the region — for good or bad”, but gave no details. A few months later it was announced (The Oak Ridger, 23 April 1999) that Hall himself was “resigning” (the word “retirement” was not used). The Oak Ridger reminded us that in 1998, Hall had been given a “Presidential Meritorious Rank Award” for his work in “using private companies to help clean up and reuse local DOE sites”, i.e., reindustrialization; DOE Secretary Richardson was quoted as saying that Hall had “served with distinction as the Oak Ridge manager at a critical juncture in the history of this important organization. He has made tremendous achievements in transforming these vital facilities from their former Cold War missions”. It was announced that Leah Dever would be his replacement.
In an interview (The Oak Ridger, 6 May 1999), Dever said she had not applied for the DOE-ORO manager position. Originally an environmental scientist, she had worked from 1986 to 1991 at DOE-Washington, held several deputy/assistant positions at DOE’s Nevada operations office from 1991 to November 1997, and finally had been in charge of DOE’s Ohio field office until her appointment to Oak Ridge in April 1999. There were many DOE people who had far more managerial experience to bring to this big multi-programmatic DOE field office than she did. But they were men and Secretary Richardson had declared that he wanted a woman for the job; I believe that he actually said he would consider only women. Dever seemed like a friendly, open sort of person, but somewhat naive, at least to judge from her public statements — i.e., exactly the kind of person the big contractors in Oak Ridge could eat alive.
In June 1999, it was announced (The Oak Ridger, 25 June 1999) that Hall, at that point still nominally head of DOE-ORO, was now “retiring” and had accepted a position with Westinghouse’s Oak Ridge office “as a manager of business development projects”. The Oak Ridger noted that as a former employee of a government agency, by law he was not allowed to serve as a Westinghouse “representative” to DOE for one year. So, Hall said, his work would “have to be without direct contact with DOE employees concerning DOE issues”. The Oak Ridger also noted that Westinghouse “would likely be a top contender” for the contract to run the Y-12 weapons plant when that contract expired in June 2001. But The Oak Ridger soon reported (Ron Bridgeman’s column, 16 August 1999) that Hall, like his predecessor Joe LaGrone, had gone to work for BNFL.
In another interview with Dever, The Oak Ridger (6 October 1999) noted that local environmental and citizen groups had complained that DOE and CROET excluded the public from their activities and took a narrow view of what businesses to attract to Oak Ridge. Dever agreed, saying that she felt that “a lot of our work to reindustrialize the site still seems somewhat disjointed to me, that we haven’t really looked at it in the bigger picture of the reservation. So….one of the things that I wanted to tackle too was kind of our long-term use, long-range vision of the future of the Oak Ridge Reservation”. She thought DOE needed to create a comprehensive plan for using DOE land and plant buildings for industrial efforts, a plan whose formulation should include the city and the public. Emboldened by this kind of statement on Dever’s part, the Local Oversight Committee wrote to Dever to express concern about DOE’s failure to inform or involve the public in various building and development projects, including the Spallation Neutron Source, a chemical and biological agent testing laboratory at ORNL, and property deals. LOC said that they believed that DOE had not followed the National Environmental Protection Act (NEPA, which includes provisions regarding federal agencies’ involvement of the public in decisions having a potential impact on health and the environment). Most serious were the failure of DOE to do an environmental assessment of the testing laboratory (which seems to have been hushed up rather well) and the transfer of more than 1000 acres of land across the river from the K-25 site (where the DOE deed restriction allowed only industrial development but the development company proposed both industrial and residential uses).
A year later, it was announced (The Oak Ridger, 8 June 2000) that Dever was to have two deputies, one for operations and one for administration. But confusingly, there seemed to be a third main deputy, the “deputy manager”. Her former main deputy (who had been the interim DOE-ORO manager while Hall was at Hanford) had retired in March 2000. The new main deputy was Ed Cumesty, who had a long and impressive DOE resume and who, the one time I saw him in person, had impressed me as a serious person. The deputy manager for “business affairs” (apparently contracts) was previously at in charge of the DOE-Ohio planning and management program; he had set up “a series of performance-based contracts in environmental management” and had worked for contractors at Hanford and Idaho before coming to DOE. The deputy manager for operations was to be hired later; included in his purview would be the ES&H and emergency management portfolios. One wondered at the reasons for all this — Dever had recently pointed out that DOE’s own downsizing was complete and here she (or DOE) was adding at least one more highly paid person.
The next year, The Oak Ridger (10 January 2001) reported that LOC was dissatisfied with Dever’s response to their request to review a plan to restructure CROET; they were not given a copy until after it was approved by DOE. Shortly thereafter The Oak Ridger said (23 January 2001) that an activist group and a conservation group had decided to begin seeking legal remedies with regard to DOE-ORO’s several land deals, including a fishy 1000-acre one and an associated conveyance of a nearby 180-acre flood plain — the latter was even fishier, as came out later, because DOE had sold this primo area to the developer for only $54 an acre. Specifically, the two groups sought under NEPA to make DOE write an environmental impact statement for these transfers and they intended to take DOE-ORO to court if DOE did not. As The Oak Ridger said (R. Cathey Daniels column, 10 January 2001), “It’s no surprise that [the activist organization] might finally get fed up with [DOE-ORO]. The real puzzle is that ORO continues to get itself corkscrewed into these holes in its relationship with the public it is supposed to serve. Unless Leah Dever talks a game she doesn’t intend to play, it seems as if her Realty Office staff and other land gurus are not performing their jobs according to Dever’s druthers. Is Dever copied on important correspondence, and kept abreast of, say, public comment periods that have been effectively shortened due to sloppy work on the front end of an environmental assessment?” The head of the activist organization commented to The Oak Ridger that about seven environmental organizations had met with Dever and discussed all this; he said that Dever had listened and made the appropriate noises. He thought that she intended to do the right thing, but she had “all these other pressures from City Council, the Chamber of Commerce, CROET,….to run these land transfers through quickly”. As The Oak Ridger’s Daniels concluded, too often land-use planning came down to development versus conservation — an either-or proposition — instead of being an integrated process.
A letter to the editor of The Oak Ridger (K. Warren letter, 26 February 2001) pointed out that DOE held a stakeholders’ meeting on 30 January 2001 regarding land that included the primo area; about 300 people attended. At the meeting, Oak Ridge city officials, speaking first, stated that the city had to have the land for development. When individuals were allowed to speak, however, most of them stated that the block of land was a native forest tract and was notably high in biodiversity and that the 180-acre parcel was a wetlands. Yet no environmental impact statement had been prepared. As the letter concluded, it appeared that “powerful development forces were pulling strings behind the scenes” and the development would benefit only a few people. It also noted that CROET was urging haste, yet there were many industrial sites ready at a parcel that CROET had previously acquired from DOE, ED-1, with only one tenant so far.
Just days later, Dever approved the plan to transfer the 180-acre flood plain tract (The Oak Ridger, 31 January 2001), i.e., she would sign the environmental document for it. Support for this transfer and for the development of the 1000-acre plot as a combined industrial and residential area had been voiced at a public meeting several nights earlier by the then-mayor of Oak Ridge, the chairman of the board of directors of the Chamber of Commerce, a representative of the East Tennessee Economic Council, and the chairman of the Oak Ridge Housing Task Force. The latter was quoted as saying that “Oak Ridge needs families, and families need homes”. (That statement is a reference to the graying of Oak Ridge, in that more and more of the residents are retiring; they are not giving up their houses but are living on fixed incomes and so represent a limitation on the tax base. The city fathers are concerned about attracting “young” families with children.) Support for the project was also voiced by the Anderson County Executive, the Roane County Executive, Wamp, and Fischer (who was then still the Tennessee State Commissioner of Economic and Community Development). Who would dare speak up against an array like that? Well, a member of the Citizens’ Advisory Panel of the LOC, the director of the Tennessee chapter of The Nature Conservancy, the Environmental Quality Advisory Board, and even an ORNL biological scientist who lived in Oak Ridge, among others. But it was all in vain. Dever announced at the meeting that she would approve the flood plain transfer.
One heard rumors that Dever actually had wanted to do the environmental assessments and include the public (the true public) in the decision making, so she must have been either dreadfully stressed about brushing aside the environmental assessments (as I think was true) or else dreadfully hypocritical. One heard that land use had become a bone of contention among the managers in DOE-ORO — that older-line managers were in favor of aggressive promotion or permitting of development by private entities of unused DOE land and that Dever and only a few allies were in favor of a more environmentally (and legally) measured approach. Whatever the case, on 8 February 2001, it was announced that Dever was leaving Oak Ridge to take a “temporary” post in Washington, DC (The Oak Ridger, 9 February 2001). The Knoxville News-Sentinel (8 February 2001) reported that DOE had scheduled and then cancelled a press conference for 7 February 2001 at which it had been expected that Dever would announce that DOE was requiring an environmental impact statement (EIS) for land use on the Oak Ridge Reservation, as the suit-threatening activist group had wanted. The News-Sentinel said that the announcement was postponed after Wamp met with the head of the DOE-Washington Office of Science. Wamp was quoted as saying, “I ask that before DOE moves forward with a lengthy EIS process on any part of the Oak Ridge reservation that the duly elected leaders of our area be given a briefing and have an opportunity to be heard”. (I.e., he was insisting that environmental impact statement decisions be made a political process.) He said that he was assured that he would be given a full update on any land-use study before a decision was final. The president of the Chamber of Commerce said that the chamber favored land-use planning but did not think an EIS was necessary; a representative of the East Tennessee Economic Council said that DOE was sending a bad signal to the business community if it required an EIS — he said that he had “no idea why, all of a sudden, we need to stop something that was well along and almost done”. The Oak Ridge City Manager claimed that slowing down the transfer of “surplus” property would have a negative impact on Oak Ridge’s efforts to enhance its tax base and he pointed a finger at DOE by asserting that “the government chooses already not to pay its fair share of the costs”. A retired DOE official claimed that an EIS would be a “disaster” and could stall projects for five years.
A DOE spokesman claimed that although the EIS would be on hold until Dever had briefed officials in Washington, it would still be produced. Most people were skeptical of that, especially since it was stated that Dever was on “special assignment”. She was supposedly serving as the chief acting officer of the Office of Science, would be gone 90 days, and had “volunteered” to assume this support role. However, it was unclear why her talents and experience were more needed in that capacity than as the manager of a major DOE field office. A DOE-ORO spokesman denied that it had anything to do with her EIS proposal and Wamp said that he doubted that it had anything to do with land use issues. Incredibly, he said, “She has served us well. I hate to lose her for even 90 days….We need her in Oak Ridge”. The director of LOC opined that it was doubtful that any decisions would be made in Dever’s absence, implying that DOE-ORO affairs would be on hold for three months or more. Dever’s interim replacement was that perennial bridesmaid, Cumesty. In April 2001 it was announced that Dever would be back in June and indeed she did eventually return for some months. But in March 2002 — with the EIS still on hold — DOE announced (Knoxville News-Sentinel and The Oak Ridger, 14 March 2002) that she was going to Washington for good. (When last I checked, she was a relatively low-ranking ES&H and operations manager in the DOE-Washington Office of Science.) Cumesty was also ordered to Washington to “head a DOE team evaluating the effectiveness of systems in the Office of Science” and he stayed there. As the News-Sentinel noted, DOE-ORO and DOE-Washington spokesmen refused to offer any explanation for these transfers. Madia expressed appreciation for Dever’s efforts; Wamp said, “She has implemented a land-use process for the entire Oak Ridge Reservation that when completed will stand for years to come”. (Of course everybody wondered why, if she did such a good job, she was hauled back to Washington….)
In this same time period, The Oak Ridger reported (13 June 2001) that LOC’s board of directors tasked the LOC’s Citizens’ Advisory Panel (CAP) with examining CROET’s activities — which most of LOC felt fell within LOC’s scope. DOE then sent an E-mail message to 18 members of the LOC board of directors “concerning the value of maintaining the oversight program”. LOC is funded by DOE through a grant to the State of Tennessee specifically for oversight of DOE operations and cleanup activities, so DOE’s message could be viewed as a veiled threat to withhold funding. After receiving it, some board members then expressed concern themselves about CAP’s “investigating issues where the group has no apparent interest”. At a CAP meeting, a member asked the DOE official liaison about this; the DOE person replied that CAP’s review of CROET’s strategic plan was an example of such investigations. The member was taken aback, saying that this activity was an appropriate one for CAP (and LOC) and he was bothered that DOE was trying to push CAP off the subject. Other CAP members agreed with him, because CROET’s strategic plan reorganized CROET (and how it used its funds) and CAP was concerned about the lack of public involvement in the plan. Considering that the LOC board itself had asked CAP to look into things, it was significant that the board then allowed DOE to herd them into questioning their own action. The reader should understand that the LOC board is composed mostly of officials (such as the county executives of four counties), while the CAP has more ordinary folks. Both LOC and the Site Specific Advisory Board (SSAB) have had their funding difficulties, as reported in The Oak Ridger (22 August 2003); in fact, the local DOE office had requested that the SSAB become a not-for-profit organization rather than be funded through a DOE “direct contract”, in this case the Bechtel Jacobs contract. It seemed odd that DOE would fund a public oversight committee through a contractor and, as The Oak Ridger quoted a DOE spokesman as saying, there was concern that there was a conflict of interest in doing so since Bechtel Jacobs was the environmental management contractor — i.e., the contractor whose activities were a principal subject of SSAB oversight.
Dever was replaced on an interim basis by Michael Holland, who had been a manager in DOE’s Brookhaven operations. That was interesting because Battelle runs Brookhaven National Laboratory and Madia was quoted (The Oak Ridger, 14 March 2002) as saying that he became familiar with Holland’s work because of the Battelle connection with Brookhaven. Holland stayed six months and then went back to his Brookhaven job (The Oak Ridger, 3 October 2002). (The Oak Ridger noted that during his two years as DOE site manager for Brookhaven National Laboratory, he had spent six months at ORNL and six months at Hanford on temporary assignments, while his family apparently stayed in New York.)
Meanwhile, DOE announced that it was planning to eliminate the top manager position in Oak Ridge (The Knoxville News-Sentinel, 23 July 2002). This manager position had once had responsibility for some 13,000 DOE and contractor employees on the Oak Ridge Reservation, but (as noted earlier) due to Congress’ exasperation with the way DOE was running the weapons plants, the responsibility for the Y-12 plant had passed to NNSA and there was a lot less budget and work for DOE-ORO to oversee. Still, the cleanup work at K-25 and elsewhere and the ORNL work were a big enough piece of the DOE pie that it was astounding that DOE-Washington would even consider downgrading DOE-ORO. DOE-Washington said it was thinking of creating an “executive council” to include the science and cleanup managers, a new operations manager, and possibly an NNSA representative. The new operations manager position appeared to be related to the proposed deputy manager for operations position that was supposed to have been appointed to support Dever way back when, so perhaps Dever’s had been a caretaker managership to prepare the way for an eventual downgrading of the site office. Local reaction was highly negative, however, because local and state officials and representatives (including Wamp and Bradshaw) viewed this as a way to run everything from Washington (The Oak Ridger, 1 November 2002) — and presumably decrease their ability to exert pressure on DOE, as was suggested by a DOE-Washington spokesman’s statement that “”one-stop shopping” for the community” would be preserved by keeping the DOE-ORO office. Others worried about adverse effects on the cleanup schedule. DOE soon shelved the downgrading idea.
The DOE-ORO assistant manager for environmental management, Gerald Boyd, told a group of citizens (The Oak Ridger, 30 September 2002) that he was “optimistic” about the accelerated cleanup program, which was to focus on the highest-risk cleanup spots and thus shave $2 billion off a $6 billion estimated expenditure and years off a many-year cleanup time estimate. He said that DOE would “challenge” the cleanup contractors, i.e., would not pay them unless they met the deadlines. DOE, the EPA, and the State of Tennessee had all agreed on this program. It was easy to see why DOE would agree to it: feckless as DOE was, they would surely assume that they could change the rules down the line , unilaterally if need be. EPA may have thought that they would be able, at long last, to make DOE fulfill its obligations as agreed to. But Tennessee? I believe that the state agreed in order to stop the endless series of cleanup delays and postponements that DOE had engaged in for years; DOE had of course told them that if they did not agree to it, the cleanup funds would be directed toward communities that would accept accelerated cleanup and the cleanup sites in Tennessee would be subject to further delays. Thus Tennessee settled for the best they could get — some cleanup, even though it might prove to be inadequate, and a lot of money spread around the local economy as cleanup dollars. This is not mere speculation on my part: as I noted above, the DOE Secretary had said explicitly that cooperative sites would get more immediately, and as The Oak Ridger further reported, under accelerated cleanup, Oak Ridge was “scheduled to add to its environmental management budget $105 million out of approximately $800 million nationally allotted to those sites which promised to push the accelerator on local cleanup”.
Of course, the unbelievability of saving all that money, the “use it or lose it” ultimatum, etc., raised suspicions among local groups that the cleanup would in fact not be complete and would leave communities with “high-cost legacy wastes to deal with over the longer term”. Boyd conceded that the $4 billion did not include long-term stewardship or cleanup of the lower-risk spots — this was left, he said, as a “concern” that still had to be dealt with at some murky time in the distant future. Questions were raised by the citizens regarding the apparent plan to demolish most or all of the K-25 buildings, which seemed to be contrary to the reindustrialization/re-use plans. Boyd said, in effect, that any building that could be cleaned up and that someone was interested in using would be spared — and that would save cleanup money as well. But he acknowledged that an unanswered question was how such a building cleanup would be completed once the building had been transferred (e.g., via CROET) out of DOE’s hands. Another question he could not answer was why the support buildings (including a cafeteria and a chemical laboratory) were to be demolished early on, when they could be used to support the work.
Boyd met with CAP (of the LOC) and SSAB and asked them to submit a Top 10 list of ways his office could improve communications (The Oak Ridger, 18 November 2002). Both he and these citizen groups told The Oak Ridger that a first step might be to hold a workshop on the “accelerated cleanup” program. Some CAP members expressed concern that budget numbers had removed from DOE documents such as the performance management plan; the chairman of CAP noted that his group thus did not get the same kind (quality and quantity) of information that they had in the past. The Oak Ridger quoted Boyd as saying that he intended to use the SSAB as his primary vehicle for communication with the public. This raised a red flag, as it appeared to designate one citizens’ group as the most important for public input, but a rationale was not given. Clearly, for non-officials to influence DOE, the SSAB might now be the place to be. This is particularly true since DOE appoints the members of the SSAB. Of the 20 or so people listed as SSAB members on the SSAB Web page in early 2005, three worked for Y-12, three were retired from DOE Oak Ridge sites), one worked for BNFL, seven appeared to work for companies having a significant level of DOE work, one ran the local architectural firm working on the high school renovation, two or three were high school students, and three (including the chairman) appeared to work for ordinary companies. It is true that Oak Ridge’s main industry is DOE work, but the SSAB is drawn from several counties, including Knox County, for whom DOE work figures much less prominently. Thus the high percentage of members having DOE-funded employment is very significant.
One of the retired DOE contractor employees was Myrick, who was appointed in October 2004 to the SSAB, which The Oak Ridger (6 October 2004) described as a “federally chartered citizen’s panel” sponsored financially by DOE. As I noted earlier, The Oak Ridger said in October 2004 and in November 2004 that Myrick was retiring, but five months later he was still being mentioned in The Oak Ridger as working for UT-B (8 February 2005). While Myrick is one of the citizens in what you might call the DOE-affected area of East Tennessee, I believe that it is inappropriate for an employee of a company with a financial interest in the activities being evaluated to be on such a board. (But I realize that I must be in the minority on this.) In fairness to Myrick, I must also note that he is a paragon of volunteerism in the area: The Oak Ridger reported (30 August 2002) that he had won the “Service Above Self” award from the Rotary Club; had participated in “every Habitat for Humanity build that the Anderson County chapter has had in its 10 years of existence”, was a “president emeritus” of Aid to Distressed Families of Appalachian Counties, and had contributed $15,000 of his own money to co-sponsor a Habitat build with UT-B. Also, he was a Big Brother for the past two years to an Oak Ridge boy, was active in disaster relief through his church, and was galvanized by the events of September 11th 2001 to lead the effort to purchase an emergency response vehicle for the Red Cross (contributing $20,000 of his own money); etc. (But I have to wonder how much time the man spends at home with his wife and kids….)
The Oak Ridger reported (2 September 2005) that six new members of the SSAB had been named: one is a Bechtel Jacobs employee (i.e., he is advising re the activities of his DOE-funded employer), one works for CDM Federal (another established contractor/subcontractor in the area), one is a longtime ORNL employee (working for UT-B), one is the manager of a company that provides consulting services to the Food and Drug Administration (he is a chemical engineer who has worked at “numerous DOE facilities”), one is retired from the US passport office (“and has been involved in commercial contracting”, whatever that means), and one is the executive director of a nonprofit organization providing services to the developmentally disabled. I.e., of these six, three are clearly employed by DOE contractors and subcontractors that may be the subject of SSAB’s work. DOE-ORO environmental management official Samuel McCracken said that “the experience [that] these individuals bring to our team is substantial”. I thought it significant that he referred to the SSAB as “our team”. The Oak Ridger (10 February 2006) reported that DOE had appointed another three members to the SSAB, two of them UT-B employees and the other the manager of the Business and Industry Center at a local community college. (However, one of the UT-B people was Dr. Gloria Mei, my old supervisor, so maybe things are looking up.)
I will digress here to wonder if the SSAB may be getting a nudge in a certain direction by DOE and others. This was underlined by the establishment of a new exhibit at the American Museum of Science and Energy (now run by UT-B) on “the Oak Ridge Environmental Cleanup Program and the role of the Oak Ridge Site Specific Advisory Board in the cleanup process” (The Oak Ridger, 18 February 2005). It was called “Partnering for the Future: Cleanup of the Manhattan Project at the Oak Ridge Reservation” and it used such tools as “touch-screen kiosks” to “tell the story of the Environmental Management Program and its joint ventures with SSAB”. It may not be accidental that the words “partnering” and “joint ventures” suggest a business relationship. That said, I would like to add that I believe at least several of the SSAB folks to be open-minded and not afraid to ask the hard questions. (Keep it up, folks!)
The Oak Ridger reported (10 December 2002, two articles) that DOE was working on a land deal to preserve 3000 acres in Oak Ridge, at “historic Freels Bend”; DOE, although not giving up ownership of the land, was granting the State of Tennessee the power to manage it as a conservation easement for five years. This was because contamination from DOE activities in the past had settled in the sediments in Lower Watts Bar Reservoir, limiting the recreational use that could be made of the reservoir. This action was cheap for DOE: the estimated cost to clean up the sediments was $30 billion and the lost recreational use damages were estimated to be $5 to $7 million (I assume on an annual basis). The president of a local environmental group said that conservation groups were not included in the negotiations, noting that this did not “exactly give you a warm fuzzy about what’s going to happen when those five years are up”. His was the group that had intended to sue DOE over the lack of an environmental impact statement; they had dropped the suit when a Land Use Focus Group was formed to work on long-term land-use planning for the reservation. The easement was a recommendation of this focus group.
Soon after meeting with CAP and SSAB, Boyd was named the new DOE-ORO manager (January 2003). Shortly, it was announced (Knoxville News-Sentinel, 25 March 2003) that three top management jobs in DOE-ORO had been abolished: one was Cumesty’s old job of deputy manager and one was the position of deputy manager for business operations, held by Robert Folker. Folker, like Cumesty, had been “detailed to other assignments” in DOE, which I think means they were parked in some backwater job until retirement. The previous deputy manager of operations had left DOE to take a job with the Forelock Company (The Oak Ridger, 25 March 2003). (So many DOE retirees don’t actually retire: instead of taking up golf or fly-fishing or macramé, they take reportedly lucrative positions with contractor firms.) George Malosh, previously DOE group manager at Brookhaven and then DOE-ORO assistant manager for laboratories (including ORNL and ORISE/ORAU), became the deputy manager for laboratory operations. Robert Brown, previously the DOE-ORO assistant manager for assets utilization (in which position he was responsible for coordinating and implementing the reindustrialization of K-25 and other “surplus” areas of the Oak Ridge Reservation), became the Chief Operating Officer (duties not described).
The next month, it was announced (The Oak Ridger, 23 April 2003) that the former DOE-ORO “executive director of environmental management”, Samuel McCracken, who had gone off to oversee and close out remediation projects in Weldon Spring, Missouri, and Fernald, Ohio, had returned to head up the DOE-ORO accelerated cleanup program as head of environmental management. The Oak Ridger noted that McCracken was “one of the authors of the reindustrialization program” (originated under Hall). The Oak Ridger (29 May 2003) reported that, as I noted above, the oversight of the Paducah and Portsmouth sites had been taken away from DOE-ORO and transferred to DOE’s new Lexington office. A DOE spokesman told The Oak Ridger that DOE did not foresee “any impact on any federal employee in Oak Ridge”; however, the Kentucky senator who apparently pushed the change through stated that the new office would have 34 new jobs, besides which Boyd had stated the previous January that the Paducah and Portsmouth cleanup funds amounted to 38% of DOE-ORO’s environmental budget. Thus it was hard to see how this was not a major economic hit to DOE-ORO and to the East Tennessee area. It was hard not to interpret it as another type of blow as well: The Oak Ridger stated that according to an Associated Press report, the Kentucky senator had earlier asked congressional investigators to look into how DOE-ORO was managing the Paducah cleanup and although the investigators had not turned in their report yet, one could surmise that DOE did not expect it to be favorable.
It was thus a relief to some to hear (The Oak Ridger, 25 August 2003) that DOE-ORO and DOE’s Chicago office were between the two of them going to have the “support” responsibilities for the ten DOE laboratories under the purview of the Office of Science. The use of the word “support” instead of “oversight” seemed odd and it was hard to see how oversight could be very efficient from two or three time zones away (e.g., Lawrence Berkeley). But Boyd said the new responsibility would stabilize the DOE workforce here. With $2.1 billion as the overall budget for DOE’s Oak Ridge work (i.e., DOE-ORO plus its contractors), Boyd expressed optimism. The Oak Ridger reported (7 January 2004) in a headline that the “community” gave Boyd high marks for his work so far, but the article made clear that it was local officials, not the populace in general, who were saying that. The occasion seemed to be some sort of celebration of Boyd’s first year as DOE-ORO manager. Mayor Bradshaw said that Boyd was “building a strong legacy as a manager who accomplishes [sic] positive outcomes for both [DOE-ORO] and the broader Oak Ridge community” and that “Oak Ridge has the best manager in the DOE system today”; in particular, he liked Boyd’s working to transfer a certain parcel to CROET. Wamp said that Boyd had accomplished the mission of restoring local confidence in DOE-ORO “extremely well” (he didn’t say which DOE person(s) had lost the public’s confidence) and that Boyd was “a leader that people can trust”. He added that he couldn’t think of any weaknesses in Boyd’s management style. In contrast to these officials’ rah-rah effusing for the media, the executive director of LOC, while praising Boyd’s openness and flexibility, nevertheless had some sage and solid comments on things that could be improved by DOE-ORO, such as more long-term planning in land use and stewardship and more communication between NNSA and DOE-ORO on issues of mutual concern, e.g., emergency response planning.
The Oak Ridger (7 January 2004) interviewed Boyd on the subject of his first year. He commented about UT-B that “there’s not a better contractor in the country to run a laboratory” and that “there’s just no question in my mind about that”, because ORNL had “had two of the best lab directors I think you could ever ask for — Bill Madia and now Jeff Wadsworth”. Boyd opined that ORNL and DOE’s local science programs were the “centerpiece” of the Oak Ridge Reservation and that these two were “what the future of Oak Ridge is going to be”. He said that his biggest challenge was the safety management issue (i.e., the revocation in November 2001 of DOE-ORO’s own ISMS program and the authority to validate safety analyses, etc., and the efforts to get the program re-approved — e.g., as noted in The Oak Ridger, 19 March 2002). It’s not clear how the experience of that revocation and revalidation specifically affected his views on the issue of safety management. But as The Oak Ridger (6 August 2004) reported Boyd as saying, over the last year and a half there had been an impetus to improve safety on the Oak Ridge reservation, with the various safety incidents being “clear examples” that more needed to be done. Because of all this, Boyd announced a reorganization of the safety suborganization within DOE-ORO. This was to involve no loss of jobs, position grades, or salary for any DOE-ORO employee, although, Boyd said, he had to reassign some senior managers (whom he would not identify to The Oak Ridger) in order to “get some strong safety and health folks in certain divisions”. These managers were shifted into the DOE-ORO sections managing ORNL, the cleanup program, and safety and health policy. Again, the word “support” was used, as in “supporting the nuclear energy program”, and not “oversight”.
The Oak Ridger (3 December 2004) had a guest column by Boyd in which he said that the work back in the Manhattan Project days “has made Oak Ridge today a “brand name” for science, technology, and solving big problems”. He emphasized yet again how many people were employed in DOE-related work, how much impact this had on the local economy, and how the spinoffs of technologies developed in DOE work “create even more economic opportunity through multiple public-private partnerships attracting new programs and new missions — and new and expanding private sector companies”. Further, he said, “critically important to our success is the leadership of the Tennessee congressional delegation and the strong partnerships we have with the state of Tennessee and the University of Tennessee”, with UT’s “role” (unspecified) having expanded a lot through UT-B’s management of ORNL. He reiterated how essential it was to have the support of the “public and regional leaders”. He said of the Tennessee Valley Corridor that its goal was “to grow a world-class science and technology economy, while providing national leadership through regional cooperation”. He said that in the years to come, “we have great opportunities to sustain this economic growth in Oak Ridge, East Tennessee, and the Tennessee Valley Corridor”. He claimed that K-25 would be transformed into “a fully viable industrial and commercial site” aided by “the good work of our[sic] Community Reuse Organization [CROET]”. He concluded by giving a generic wish list of goals (e.g., “Make DOE-Oak Ridge an economic engine to spur economic growth in….Oak Ridge, the greater Knoxville region, and the entire valley corridor multistate area”).
If this column seems to sound like a series of buzzwords strung together, that is because that is exactly what it was. It ran on for about 15 column inches and I wondered if he really talked this way….or thought this way. His two main ideas seemed to be that what was good for DOE was good for the local economy and that together, DOE and private industry could work economic wonders. I was struck by his continual use of the word “we” — it was not clear from sentence to sentence whether “we” was DOE, people doing DOE-funded work, the Oak Ridge-Knoxville area, or the large multistate area that the phrase “Tennessee Valley Corridor” was now supposed to suggest. Moreover, in its continual ringing of the economy and partnering chimes, this could have been written by UT-B or CROET. He confusingly said that it was the Corridor’s “goal to grow….an economy”, thus making the Corridor a project rather than an area, but not otherwise indicating that it was in fact a DOE-fostered group of people. I think his read-between-the-lines point was to send a public signal that DOE was blessing and even backing such efforts. Incidentally, The Oak Ridger reported (1 December 2005) that Boyd received the “Muddy Boot” award, given to people who “have demonstrated a lifetime of work to improving their community, their state, and their nation. This award, the reader will recall, is given by the East Tennessee Economic Council’s board of directors — of which Boyd was a member at the time of the award. The award was presented by (no surprise) Wamp. The Oak Ridger hit the money note, saying that Boyd formerly managed “an $800 million annual program in environmental cleanup and waste management” and now as DOE-ORO head was “responsible for an annual $2 billion DOE program in science at the Oak Ridge National Laboratory, environmental management, assets utilization and uranium programs at the Oak Ridge Reservation”.
Some Notes about Y-12
DOE has not refereed very well between contractors. In 2003, there were migrations of personnel from Y-12 to ORNL to such an extent that friction was created between BWXT and ORNL. As reported by the Knoxville News-Sentinel (26 February 2004), the head of BWXT, Dennis Ruddy, admitted that BWXT had blocked transfers of employees from Y-12 to ORNL; he said that the Y-12 budget was such that the workforce was stretched rather thin (there were “not enough….to have a very strong bench”), so Y-12 could not lose many people at a time. Also, Ruddy said, some of the ORNL job offers had been tendered at lower levels of management and had not been cleared with upper management. The News-Sentinel did not make this clear, but employees are, I believe, free to quit one reservation managing contractor company and join another, against the wishes of the first company. It may be, however, that if an employee does that, his seniority, pension accrual, etc., may not transfer or may transfer in disadvantageous ways. Or more likely, UT-B has some agreement with BWXT not to hire its employees without BWXT’s permission (BWT was one of UT-B’s bidding partners, if memory serves). In any case, there may have been some rivalry issues as well: ORNL and Y-12 were both working on nuclear nonproliferation topics and some disputes had occurred in that area; also, in 2002, part of Y-12’s nonproliferation program (including 40 employees and $60 million annually) was moved to ORNL. The News-Sentinel did not explain why DOE did this, but did say that relations between UT-B and BWXT managements were “chilly” after that. In fact, a lot of people had a good laugh (reportedly even ORNL director Wadsworth) after a spite fit on BWXT’s part was reported by the Knoxville News-Sentinel (18 May 2005). It seems that when President Bush visited Y-12 in July 2004, he was shown around by a former Y-12 nuclear technology expert who had gone to work at ORNL prior to the visit. The official DOE photographer took pictures of the President and his guide. These pictures somehow got to BWXT, who used one of them for publicity purposes — but with the offending expert air-brushed out.
The News-Sentinel also said that DOE had intended to move another part of a program to ORNL, including more people and more money, but this had been stalled due to “contractor issues”. DOE-ORO’s Boyd said that it was DOE-Washington that had decided on these program moves. Ruddy pointed out that ORNL had had “some issues in nuclear facility control and operations, and that’s well known” and that ORNL had looked at Y-12 as a “handy source” of engineers, especially since the Y-12 people already had security clearances. One would think, however, that this would not be an issue worked out solely between contractors: one would think that DOE would be interested in having the best overall balance of people and would make maintaining the security of the weapons facility a higher priority than the growth of the research facility, while the individual workers involved would be free to go to any new jobs they liked, as long as they had not signed any agreements to stay in their present jobs. Thus why DOE would apparently allow personnel “transfers” to boil down to a business decision between contractors is hard to fathom.
BWXT is conducting a “mentor-protege” program in which it mentors small businesses and universities; the proteges are limited to woman/minority-owned or -associated companies and universities. One of the ten entities is a company that has been touted as “fast-growing”, with several offices around the country and with an apparently healthy bottom line. Why should such a firm need “mentoring”, since its head obviously knows how to get business? BWXT now has ten such mentoring agreements in place and has had others in the past (Knoxville News-Sentinel, 27 September 2005), so the expenditure of time, money, and management resources must be considerable. As usual, it seems doubtful that BWXT is doing this out of the goodness of its heart; as usual, it appears that DOE has twisted their arm in some way, probably a financial way, to do this. It seems likely too that some of the DOE program money is involved. If so, it seems evident that as in the past, DOE regards its sites as agencies for social change in ways that draw resources away from the main mission. And as usual, awards are given (The Oak Ridger, 16 August 2005): BWXT was given one by DOE at the “6th Annual DOE Small Business Conference” in Nashville. At the same conference, BWXT was given an award by NNSA for “[achieving] the highest level of effective utilization of small business within the past year”, or as a BWXT official put it, “These awards are indicative of BWXT Y-12’s and NNSA Y-12’s commitment to the inclusiveness of small business in the local NNSA business enterprise” (sic — you could not make this stuff up).
Like ORNL, Y-12 appears to be getting into the “modernize with private dollars” act. The News-Sentinel reported (25 June 2004) that “a privately financed $100 million project is expected to accelerate modernization of the Y-12 nuclear weapons plant, help secure new missions, and save the government big bucks over the next quarter-century” by building facilities and leasing them back to the government. Even for Oak Ridge post-UT-B, that is an eye-popper: private money going into a weapons plant? “New missions” for a weapons plant? One proposed facility was a “production-support complex with security arrangements to allow classified work” by 1400 employees, including administrators and engineers. The other was a visitor center with “historical exhibits and a 400-seat auditorium”. The managing contractor, BWXT, was said to be pushing the proposal “as a way to save money”. As with ORNL, one of the hurdles was transferring federal property (land) for a private venture. As the News-Sentinel noted, UT-B used a quit-claim deed to acquire property from DOE at ORNL. Clearly that would be more problematic for a highly secure weapons plant, but the News-Sentinel did not appear to be worried: BWXT could simply lease the land from DOE. (Huh? Lease the land to build a building to lease back to DOE?) The News-Sentinel went on to state that the proposed project (“the new face of Y-12”) had not yet been approved by Washington, but “the financing and development team [including Bank of America again] already is in place” — implying that it was pretty much a done deal.
Subsequently the News-Sentinel (18 March 2005) reported that a plan to fund “office facilities” (apparently the production support complex) was questioned as a result of an audit by the DOE Inspector General’s office. The audit report stated that the proposed arrangements could conflict with rules set out by the US Office of Management and Budget (OMB) covering alternative financing methods; it added that DOE-ORO officials had not fully evaluated the risks of the privately owned facility’s being leased to another entity (i.e., when the original lease was up after 20 years, or presumably earlier if DOE decided to cancel the lease). A BWXT spokesman said that BWXT didn’t view this report as “negative” and did not think it would delay the project. The report said that DOE should work with OMB to restructure the financing plan. The Knoxville News-Sentinel (28 September 2005) said that DOE had approved the private financing plan for two major facilities, with groundbreaking to take place before the end of 2005. Although congressional committees still had to approve the plan, BWXT head Ruddy noted that “obviously the entire Tennessee [congressional] delegation is behind it”.
(Meanwhile, according to The Oak Ridger (two articles and photo, 17 October 2003), for financial reasons Y-12 is using drums of low-level radwaste as security barriers at Y-12 traffic entrances, allowing Bear Creek Road to open for authorized use; DOE and the State of Tennessee say there is no hazard to such a use, that the drums “are not susceptible to a high-speed direct impact”, and that the drums are to be properly disposed of eventually. But as shocked members of community oversight organizations ask, is this the image that DOE and Oak Ridge want to project and would they really want a truck to hit the drums, with PR consequences albeit probably with no safety consequences?)
DOE may have viewed the Y-12 modernization scheme as yet another way to appease the local entities: as the Knoxville News-Sentinel (17 August 2004) reported, the City of Oak Ridge and Anderson County “would divvy up about $1.8 million a year in new property taxes under a plan to privatize part of the Y-12 nuclear weapons plant”. In fact, the investors would be….the City of Oak Ridge. Yes, as reported by the News-Sentinel, the Oak Ridge Industrial Development Board “gave their initial blessings to a proposal for the board to issue revenue bonds for the $117 million project and act as its special sponsor”. “Special sponsor”: what does that mean, legally? The president of the firm that was to develop and manage the project, Lawler-Wood LLC, said that there would be no liability to the board or the city. But that seems dubious. Lawler-Wood said that the contractor managing Y-12, presumably BWXT, “would lease the buildings under a long-term contract” (which one would assume would be blessed by DOE) and that this plan would be similar in concept to the ORNL privatization project. Finally, he claimed that razing the energy-inefficient old buildings and replacing them with new ones would, according to estimates in one study (by whom, he did not say), save enough to cover the lease payments plus an additional $100 million (over what period, he did not say). The Oak Ridger also reported on this story (17 August 2004), but stated that one member of the Industrial Development Board — himself a prominent local developer — voted no. It would certainly be interesting to find out why, but The Oak Ridger did not seem to have asked. The Oak Ridger said that it was Lawler-Wood who asked the Board to be the issuer of the bond.
DOE approved the private building plan (The Oak Ridger, 30 September 2005). This was not surprising, as The Oak Ridger (21 September 2004) had already reported that NNSA “views the private development of the property as important to the long-term modernization of Y-12” — i.e., the feds were happy to have someone else pay for it. The Knoxville News-Sentinel (19 October 2005) reported that the Y-12 private building project would indeed “boost Oak Ridge coffers”. In fact, said the News-Sentinel, city officials were “eagerly eying the expected property tax revenue” the city would get: an estimated $800,000-$900,000 a year, the equivalent of 12-15 cents on the property tax rate. This would forestall the earlier projected need for a 19-cent increase on the tax rate in 2008. It was noted that a privately-built facility at ORNL “generates just over $600,000 a year….for Oak Ridge and $478,000…. for Roane County”. It seems clear that this money is coming, eventually, from DOE, i.e., from the federal government, i.e., from the federal taxpayers. This evidently is yet another way that DOE has avoided a transfer of funds directly from DOE to the City of Oak Ridge, but federal funds are still flowing in the back door.
The Oak Ridger reported (2 December 2005) that groundbreaking ceremonies for the two “privately financed” Y-12 buildings had been held the day before. The two buildings — called the “New Hope Building” and the Production Interface Building — had a total of 500,000 square feet, were built with “private sector financing totaling more than $125 million”, and again were to save almost $100 million in operating, maintenance, and renovation costs over the next 25 years. These costs referred to the “more than 20 other” old buildings that now housed some 1500 Y-12 employees who would in the future move to the new buildings. The “Y-12 Site Office [NNSA] manager” Bill Brumley, who was to retire soon, stated that this “represents a new face for Y-12. It’s one of the major things I wanted to accomplish before I left this place”. The Oak Ridger stated that the Industrial Development Board of the City of Oak Ridge would indeed issue bonds to finance the project — which seems to indicate that the buildings are not truly “privately financed”. It was again noted that the “project” would mean increased tax revenue for the city and for Anderson County because the buildings — as “privately” owned buildings — would be included in the property tax base. The photograph accompanying the article showed Wamp and Bradshaw, among others, digging their shovels into the ground. Bradshaw was quoted as saying that “This is a big day for us” (who “us” was was not clear). As mayor, he proclaimed it the “New Hope Building and Production Interface Building Day” in Oak Ridge, saying “The city is extremely proud of this project”. There were no comments by oldtime residents of the area — one of whose communities was, in fact, named “New Hope” and was wiped out when the Manhattan Project started. Entertainment was provided by the Oak Ridge High School Chorus — who were apparently were bused from school to the Y-12 site on a school day during school hours to sing for the dignitaries. All this for a mere groundbreaking!
In an editorial (6 December 2005), Richard Esposito, publisher of The Oak Ridger, stated that the construction of the two new buildings was a “win-win-win” situation — the government wins by letting the private sector make “the initial investment” in the buildings, Y-12 wins by relocating “about 1500 jobs outside the gate into two modern facilities”, and the City of Oak Ridge wins by getting the tax benefits. I thought it significant that he referred to the 1500 people as “jobs” — i.e., the publisher of The Oak Ridger looks at people and sees dollar signs, just as the contractors seem to. Esposito said that the two new buildings would provide 500,000 square feet and replace buildings “comprising over a million square feet”. (Well, maybe the 1500 folks can all sit a little closer than they used to.) Esposito noted that many people at the groundbreaking had just attended the Muddy Boot award presentation to Gerald Boyd and that Esposito heard Wamp speak at the award ceremony, at the groundbreaking, and at an unspecified other function, all in that same day. He said that Wamp’s groundbreaking speech emphasized “renewal, reform, and responsibility”, with the reform portion being “privately financed property on federal land” and the responsibility portion being the opportunity to “save tens of millions of dollars”. Esposito likened the two-building construction scheme to a marriage between the federal government and the private sector. How true — now they will be getting in bed together.
Actually, according to Munger (Knoxville News-Sentinel, 7 December 2005), only the New Hope building will be outside the fence; this is the “public” building that will allow people with no security clearance to attend meetings “at” Y-12. The other building will be located inside the gate because of its engineering functions. Munger also reported that the two buildings would cost $125-150 million to erect and furnish, with the rent to be $11 million per year for the 550,000 square feet. If I did the math right (but check me on this, folks), that comes to $20 per square foot per year. If the estimate above of saving $100 million over 25 years is correct, or $4 million per year, that means that it cost $11 million plus $4 million to maintain the old buildings, or $15 million per year. (This seems like an awful lot just to maintain several buildings that the government already owns, but what do I know?) Munger also quoted a “federal [DOE?] spokesman at Y-12” as stating that security was “just not a concern” right outside the entrance of Y-12, where the New Hope building will be. Um….has he checked with the federal officials in Oklahoma City, whose spiffy headquarters was blown up (with tragic loss of many lives, including children) by a truck parked out front? Has he checked with DOE officials at the Federal Building in Oak Ridge, where you can’t park right out front any more or get too close to the entrance with any type of vehicle? Finally, Munger said that the construction of the buildings by the private developer would be under an “open shop” arrangement — open to both union and nonunion workers. The wages are supposed to be union-scale rates, so the union should have no objection to participating, said the developer. At first, the construction company engaged by the developer advertised that workers on the New Hope building need not be US citizens. As Munger reminded his readers, the DOE inspector general raised a ruckus in 2005 about non-US citizens working on a construction site that was part of Y-12 activities (although I believe not actually inside the fence) and that had some sensitive information that might have been seen or taken by these workers. So now the construction company is hiring only US citizens. All of these zigs and zags of the two-building story and the repeated massagings of the information do not make one confident about security and safety, especially as neither BWXT nor DOE appears to be overseeing the project on a real-time basis.
The Knoxville News-Sentinel reported (2 October 2002) that DOE’s Inspector General’s office had investigated a Y-12 facility that manufactured depleted uranium bomb components and had found that this facility relied on production equipment “that in many cases is outdated, damaged, or beyond repair”. A case in point was a damaged hydraulic press that was vital to production; the investigators found that a replacement press had actually been on site for over a year but had not yet been installed because “Y-12 had not budgeted for its installation”. The IG’s report also said that only one of seven special furnaces used to melt uranium was working. NNSA (which, again, was created sort of as part of DOE and sort of as an independent entity by Congress and which oversees DOE’s defense facilities) opined that the IG’s report oversimplified the vulnerability of the facility and that the Administration had to make tradeoffs “to meet mission priorities within the resources available to us”. NNSA said — in the “Next year in Jerusalem” fashion that seems to typify all NNSA/DOE/contractor responses with respect to Y-12 and indeed all DOE sites in Oak Ridge — that there was a modernization plan under way at Y-12 that would help relieve the vulnerability of the depleted uranium facility. The IG countered that the modernization plan did not address the specific case of failing equipment at this facility. Y-12 management refused official comment.
The Oak Ridger (3 April 2003) reported that BWXT Y-12 had again won awards from the National Safety Council for its “achievements in worker safety”: for an “outstanding effort in occupational safety performance”, for a safety exposition to promote health and safety of employees at home and at work, and for “significant improvement in safety performance”. Two of these awards were based on what appears to be self-reported safety statistics. No doubt Y-12 had reduced its accident rate and certainly BWXT would deserve credit for that, but it seems implausible that the rate had been reduced to “less than 20% of the industry’s average” unless the average was very low or unless the peer industry for Y-12 was very broad.
The Oak Ridger reported (16 October 2003) that Y-12 had been given low grades in a recent scoring by NNSA. There were 35 performance measures, one of the most important of which was “conduct of operations”; Y-12 went from “yellow” to “red” (the lowest rating of four levels). Y-12 head Ruddy said that management was very concerned, was putting together “an aggressive action plan”, etc. But he also spun the news by saying that while conduct of operations carried more overall ranking weight than just 1/35, while performance needed to be “picked up”, and while conduct of operations was a “zero tolerance” area at Y-12, the plant was nevertheless “running safely”. He asked rhetorically, “Do we know what we are doing? The answer is yes”. He said that improving in 13 measures while slipping in only 3 “is a very good record….where the government continues to raise the bar”. This seemed like an implicit contradiction of the NNSA rating process and conclusions. Once upon a time, a contractor would not dare to “dis” DOE or NNSA like that; the most the contractor might do would be to say respectfully that “we beg to differ” or similar. Soon afterward BWXT took out a full-page advertisement in The Oak Ridger (31 October 2003) headed “BWXT Y-12 congratulates its employees”. Under this, there was a list of Y-12 accomplishments, including winning the Safety Council award, restarting wet chemistry operations (without any reference to why they had been stopped in the first place), donating over $350,000 annually to East Tennessee organizations (not including the United Way, so this $350,000 would seem to have come from the company itself, not the employees), etc. Although the ad purported to congratulate the employees, it seemed more to congratulate management.
The Oak Ridger reported (6 and 7 January 2004) that BWXT received its all-time high performance fee of $21.2 million out of a possible $22.9 million for managing Y-12, receiving high marks from NNSA in general management and most other categories (although BWXT was criticized again for conduct of operations, including violations of procedures and safety requirements and an increase in near miss events). Ruddy claimed that “this recognition [by NNSA] is due to the efforts of many people”. Yet as The Oak Ridger reported soon after (27 January 2004), a fire in April 2003 at Y-12 might possibly result in a fine for BWXT under P-AAA — which would be its second fine for 2003. This fire occurred in the course of an explosion in a glovebox during the startup testing period of a new “saltless” uranium processing system. Workers were not using the glovebox when the explosion occurred, but at least two were contaminated. Two fines in 2003 — and BWXT would still get 92% of the award fee? DOE/NNSA obviously loves these boys and girls.
The Oak Ridger reported (27 January 2004) that DOE’s Inspector General’s office stated that the results of a security test were “tainted and unreliable” because shortly before the security test, two members of the Y-12 security force (provided by Wackenhut under contract to DOE) “were permitted to view the computer simulations of the four scenarios”. As the IG’s report implied in further statements, this was akin to showing a student the questions on the test before he took the test. Wackenhut protested that the exercise was not a standard one and that some advance information was necessary in order to perform the exercise, but suspicions were still aroused by the fact that the Y-12 force won all four exercises. Other irregularities were detailed in the report as quoted by The Oak Ridger; some were apparently routine and dated back years before Wackenhut took over and some Wackenhut said it had already corrected.
The Oak Ridger (28 May 2004) quoted Ruddy as saying that while he was not out to reduce the workforce at Y-12, some employees’ jobs could be changing: “Our mission is going to look different five years from now than it does today, which means that some of the people that are doing “Job A” will have to move to “Job B”. There are many transportable skills inside the plant. For example, a person who works in public affairs may be very, very good at writing procedures or other internal communications”. This was alarming news to some people, since Y-12 would seem to have a single main mission, generally speaking, and Ruddy’s comment implied that that might change significantly. Furthermore, while PR people usually do have good communications skills, these skills are not necessarily the same as would be used in writing procedures; Ruddy’s comment seemed to imply that there was a lot of interchangeability among people. This was apparently part of the much-questioned Y-12 retaining of an outside PR and marketing firm with the intent, as suggested by other Ruddy comments, of creating a Y-12 “brand” (making handout materials uniform in look, etc.). Why Y-12 needed to create a brand — i.e., to sell itself — was not explained, but one can infer from all this that BWXT intended to try to get other work beyond what Y-12 was doing already. One could understand this sort of behavior from, say, a national laboratory, but from a defense facility? Ruddy later said (Knoxville New-Sentinel, 6 July 2005) that it was conceivable that “some of the nicer work” could be taken away from Y-12 and given to others (e.g., to Los Alamos) and that “you have to be able to compete
[and]
be responsive to customers”.
The Oak Ridger also reported (31 May 2004) that long after being hired, the outside PR firm had submitted expense reports that apparently included wining and dining Ruddy himself. Questioned about this by The Oak Ridger, Ruddy said, “Anything that we’re spending to them directly from corporate, we’re not gonna talk about. We’re just not”. This was confusing: was BWXT itself hiring the PR firm for BWXT purposes (out of BWXT money), or was it coming from the Y-12 budget? If the latter, then what was the PR firm doing charging “corporate”? A DOE spokesman confirmed earlier in May that over $500,000 had been spent under the PR firm’s Y-12-related contracts from November 2000 to May 2004. The PR firm entertained various movers and shakers (apparently including congressmen and Knoxville civic officials) as part of the contract. Ruddy explained that it was important that Y-12 be identified “in the greater Knoxville context” and not just the Oak Ridge context and that “We recognize that we need the bigger platform of greater Knoxville in order to market some of our things”. Gee, once upon a time an Oak Ridge identification was good enough for all the people who worked at the DOE sites, but now a bigger stage is needed for marketing “our things”. Um — which things? BWXT’s things or DOE’s things? Why would Y-12 need to market itself to this extent (or even at all) if it is a defense facility whose principal client is DOE? Is it really marketing — or influence peddling?
The Oak Ridger reported (28 June 2004) that Ruddy said that he wasn’t sure if one of his contracts with the PR firm was a DOE contract violation or not. This was because the acting manager of Y-12’s public and governmental affairs department was not actually a BWXT employee, but was employed through the PR firm. He had a Y-12 office computer (presumably connected to the Y-12 system) and an office and he spent most of his work time (34-60 hours per week) at Y-12 — yet, according to a purchase order dug up by The Oak Ridger, BWXT was not supposed to provide him any office space or equipment, he was supposed to use any office that might be available at the time, and he was supposed to spend only 4-16 hours a week at Y-12. Time on this contract appeared to have been billed at an effective rate of over $120 per hour (365 hours in May 2004, at a cost of over $45,000). The PR acting manager would not return The Oak Ridger’s calls about his work and the contract and instead delegated a subordinate to find out what The Oak Ridger wanted. Ruddy said he would check on the situation, but got in a dig at The Oak Ridger by saying that that purchase order might have been “superseded by some other document, which wasn’t filched from our files”. Ruddy also said he might not tell The Oak Ridger the outcome, but the situation would be fixed if it was “out of line”. (So much for public accountability.) The acting PR manager position had been vacant for some time, but Ruddy was vague as to when the search for a permanent replacement would begin — they hadn’t even decided on “what kind of credentials we want in the person who permanently fills it”. Ruddy questioned The Oak Ridger’s interest in the PR contract, suggesting that The Oak Ridger was miffed because one local television outlet had been allowed to film areas of Y-12 previously off limits to public cameras. He also asked, “Are you becoming an advocate for the people in the organization who aren’t capable of doing this and therefore haven’t been promoted into these positions?” BWXT management (Ruddy in particular) has a reputation for being hardnosed and even insulting toward its employees; comments like Ruddy’s show how they earned it.
The Oak Ridger reported (27 June 2004) that DOE was moving forward with plans to build a $250 million above-ground storage complex for bomb-grade uranium and that Wamp had announced the inclusion of funds for the complex in the energy and water appropriations bill for FY 2005. DOE’s decision was made despite concerns raised by the DOE Inspector General. Lockheed Martin had recommended, back when it ran the site and the future facility was being discussed, that an earthen berm be used to cover the uranium vaults in part. The IG’s office agreed that the berm design would be cheaper to build and operate and would be more secure; they questioned the cost-benefit analysis advanced by BWXT. DOE, however, declared that it had “addressed concerns raised by the IG regarding this design”. This issue could not be publicly discussed except in a superficial manner because most of the details were classified. Thus John Q. Public Engineer, for example, could not judge for himself whether DOE’s and BWXT’s apparent claim that the vaults would be able to withstand the impact of, e.g., a plane crash made sense. But perhaps John Q. Security Professional could: Ruddy was quoted as saying that although a berm would enhance the safety of Y-12 employees in the event of a tornado or earthquake, “you’ve got to have sensors in the building that would tell you if somebody is burrowing in under the ground. If the facility is sitting out there and you’ve got a guard tower on every corner, you just have to look out the window to see if anybody’s monkeying around”. But maybe the clue to the decision was in another Ruddy statement: that the important thing was to get the facility built as soon as possible so that Y-12 could consolidate its uranium stockpile in one location, which he claimed would “boost security and make it easier and less expensive to manage the nuclear assets”, as The Oak Ridger put it.
The next year, the Knoxville News-Sentinel reported (19 March 2005) that a US House subcommittee was questioning DOE’s decision to build this facility above ground, although construction had already started the previous December. One member, from Tennessee, asked DOE’s undersecretary for nuclear security to justify the design. Again, the DOE representative said he could not give details for security reasons, but he claimed that DOE’s assessment was that the design was “adequate” and was “superior” to the other design submitted. He claimed that modifying the design to put 22 feet of earth above most of the facility would have added $35 million to the design costs and would delay construction two years. (I found this claim incredible, but perhaps I am forgetting how construction is conducted in the DOE world.) The undersecretary said that “It was important to get on with building it”. He apparently added something about the water table making underground construction difficult in that area, but that begged the question of why it was built in that area at all. In any case, the real story on why the facility “had” to be built ASAP is apparently still to be told.
I think this is the same facility as the $350 million bomb-grade uranium storehouse whose construction had to be halted in February 2006 (The Knoxville News-Sentinel, 24 February 2006). According to a report by the Defense Nuclear Facilities Safety Board, it was found that the steel U-bars in one wall were missing, other rebar was not the right size, etc. The missing steel in a floor slab had been discovered in January, but had not been reported to Y-12 management for almost a month. The Board and presumably NSSA were talking things over with the construction contractor and Y-12 management to see if a backfit repair could be made — or if the building could safely be constructed without any corrections.
Ruddy antagonized Y-12 workers early in his tenure by declaring that the popular “4×10” (“four by ten”) option — to work one’s 40 weekly hours as 10 hours for four days, with three days off per week — was to be discontinued. It was, he asserted, disruptive of operations, disliked by Y-12’s business contacts who couldn’t get hold of people on a Friday, etc. The 4×10 workers were mostly or perhaps all non-union, salaried people, because the union contract spelled out very strictly what the hours were and when overtime provisions kicked in. Ruddy “got his irish up” and said in effect that those who didn’t like it could just leave. So it was a stunning surprise later when he announced that all of Y-12 was going to a 4×10 system. The reason given was that it provided for more efficient operations: e.g., only two iterations of an operational cycle that took several hours could be done in an 8-hour day, what with breaks and restarts, etc., but three could be done in a 10-hour day, thus increasing the number of completed cycles per week from 10 to 12.
However, BWXT management had not even discussed this with the union. The union demonstrated outside Y-12 (e.g., The Oak Ridger, 26 May 2005), demanding that BWXT honor the union contract. The union had other issues with BWXT (such as the pension plan), BWXT’s plans to use private financing to build new office buildings (and thus perhaps exclude the union from, e.g., the maintenance jobs at the privately owned buildings), etc., but the union thought that the 4×10 thing topped them all for chutzpah. The union leader had previously remarked on BWXT’s odd willingness (for a major company) to insult and antagonize workers, saying, “That’s a strange bunch of boys we’re dealing with”. Now he shook his head and said, “There ain’t nothing like them”. (Yes, reader, his nickname actually is “Bubba”.) Ruddy said he had apologized to the union for not talking to their leader before the announcement — he “wanted to make sure everybody heard about the plans….before the message got filtered through the rumor mill”, as the News Sentinel put it — but this did not mollify the union because he still was making the 4×10 change by fiat and not by negotiation. Ruddy said that he did not think that workforce morale was bad at Y-12 and that complaints were coming from a few malcontents; he said he knew this because of his interactions with staff as he walked around the plant. (The term “clueless” comes to mind.)
The union leader subsequently resigned for reasons I won’t go into, but his successor and the other union leaders held firm. BWXT instituted the 4×10 schedule for non-union workers but the union workers were still in 5×8 mode. The Knoxville News-Sentinel (17 August 2005) reported that BWXT said that early feedback from the 4×10 schedule was mostly positive — from the perhaps 2000 salaried workers (of a total of 4700 workers). Complaints were mostly from people with children in day care or school. As of this writing, it is not clear what the union will eventually do. They may have to trade in their 5×8 schedule on some type of job preservation provision: as the News-Sentinel reported (21 September 2005), BWXT was “getting out of the construction business” by outsourcing all construction activities, not just major new projects. The News-Sentinel quoted BWXT as saying that the move would, in the News-Sentinel’s paraphrase, “eliminate overlapping functions, undo layers in the management organization, and allow it to focus more on the national security missions”. Instead of hiring people directly from the union hall, BWXT would have perhaps two contractors handle all the work — and the workers. Confusingly, BWXT said that it did not plan to lay off workers, but would issue “notices of transition” to its construction workers so they would be able to work for the general contractor(s) or any subcontractors. BWXT said that in the contracts, they would require the contractors to hire union labor, but the union was more concerned about the workers’ ability to keep Q clearances, maintain training, etc., all of which made them more employable when they were shifted from project to project. Besides that, a union spokeman noted, Y-12 had always maintained an in-house construction force for jobs that were “too dirty, too secretive, or too difficult for many contractors to handle”, as the News-Sentinel put it.
In June 2005 it was announced that BWXT’s contract to manage Y-12 was being extended for another five years (The Oak Ridger, 2 June 2005). The top local NNSA official, Brumley, declared, “We are very pleased with the performance of BWXT Y-12 over the past five years. Together, we have made dramatic improvements in safety and security and in the cost effectiveness of all operations at Y-12 while continuing to meet our national security mission”. His use of the word “we” was very significant in the context; by saying “we” had done this, NNSA was in effect patting itself on the back for its own performance. In addition, this seemed like over-identification of NNSA with BWXT. The union, among others, was not happy with this NNSA “vote of confidence”, as BWXT head Ruddy put it. The Knoxville News-Sentinel (21 August 2005) had an op-ed piece, supposedly co-written by Brumley and Ruddy, on Y-12’s nonproliferation support activities, such as sending some of its people to be on a team that went on a secret mission to Kazakhstan to recover several tons of nuclear material. Thus, they said, since 1994, “Y-12 has been a leader in the fight to prevent the spread of weapons of mass destruction”; Y-12’s expertise in handling nuclear materials was such that “nobody does it better, period”; Y-12 was building a new storage facility “whose security even the real Fort Knox will envy”. Finally, they said, “every day more than 6000 people come to work at Y-12 thinking about how to do their work safety and securely to protect their families and their fellow Americans from the threat posed by the proliferation of nuclear weapons”. One wonders why News-Sentinel readers are being told all this: shouldn’t Y-12 try to keep a low profile with respect to its activities in this area? Isn’t publicly boasting about one’s capabilities just throwing a gauntlet down in front of the wrong element? It seems as if they are selling Y-12 for some reason — or, in light of the comment about the serious, high-minded, patriotic workers who dismiss all trivial thoughts from their heads the minute they pass through the gates, maybe they are selling Y-12 and NNSA management by self-promotion. Brumley, by the way, is given to making such statements as “Safety and security are like bacon and eggs. They go together” (Munger column, Knoxville News-Sentinel, 17 August 2005).
A feature of the Y-12 contract extension was that NNSA had raised the “available fee pool”, i.e., the maximum BWXT could earn, by a third (Knoxville News-Sentinel (Munger), 28 September 2005). In the current year, BWXT could earn $30.4 million, so presumably in the next year it would be about $40 million. The reason, said BWXT head Ruddy, was that the fee was “out of line for the mission” and as compared to other NNSA sites. Supposedly more “performance-based incentives” were added, including “bonuses for extraordinary actions” (of which Munger gave no examples). Ruddy said that BWXT had saved the government about $50 million in the current year (again no examples) but “was unable to gain an additional fee for it”, although BWXT tried to convince NNSA to grant it. He also said that BWXT would like to start a program that takes some of the money saved and share it with Y-12 employees, so that “maybe next year at Christmas, everybody will get a check”.
In the end, Ruddy himself was terminated. No, it was not the revenge of the union, but a mysterious offense involving security. As The Oak Ridger (12 October 2005) stated, Ruddy was reassigned to BWXT’s corporate headquarters in Virginia because he “failed to meet contract requirements set by” DOE. The Knoxville News-Sentinel (12 October 2005) said that there had been reports that Ruddy had been cited with a security infraction for disclosing classified information about Libyan nuclear equipment that had been stored at Y-12 for over a year. This information had been reported in a 26 September 2005 story in the News-Sentinel, parts of which were then picked up by the Associated Press. The News-Sentinel requoted the meat of it, but it is hard to see just what it is that Ruddy said that was so revealing, especially since it was no secret that the equipment had been brought to the US, much of it specifically to Y-12. NNSA’s Bill Brumley said that Ruddy’s removal was “a corporate matter” on which NNSA “simply cannot comment”, but he added that Ruddy would be missed. (Of course, that is also said when somebody dies.) It seems ridiculous for Brumley to claim that this was a “corporate matter” if Ruddy really was removed for a security violation; surely it is important to acknowledge the reason, even if no details are given, so as to discourage others by showing that such violations really are punished.
Some Further Thoughts about Political Correctness, the Balkanization of Work, and the Impact on Safety
As I noted earlier, when I started at ORNL, there was only one main “prime” contractor on the ORNL site, Martin Marietta, and it ran all three Oak Ridge sites plus the Paducah and Portsmouth sites. Martin Marietta seems to have done most of the work using its own people except for some specialty-type contracts and some construction work done by Rust Engineering, but DOE pressured Martin Marietta to let subcontracts for various reasons. Then at some point DOE decided that more companies should get to bid on and get contracts for work at its sites, instead of having single large contractors control all the work under their site contracts. This may originally have been done for reasons of political correctness — as I noted earlier, DOE for a long time has had a quota system of hiring and of contract allotment and reportedly even has had goals for this written into the big contractors’ contracts for their hiring of subcontractors. I have seen DOE quoted in the newspapers as denying this, but this is so openly known and acknowledged that of course any DOE denial would be pro forma. Hence anybody who hopes to win a large-ish contract typically seeks a minority- or female-owned company to partner with; in fact, such companies have been formed specifically to be a partner on such contracts.
A let-the-chips-fall-where-they-may person like me absolutely favors having a level playing field so that everybody has an opportunity to compete. I say this on principle, but also as a woman and as a person with a Hispanic grandmother. I can understand how the Feds would want to give minority and woman-owned companies a leg up, but I think the better way to do that is to provide low-cost loans and management help, say through the Small Business Administration, not to displace the burden of aid onto the large governmental contractors by requiring them to subcontract some of their business to minority/woman businesses or to team with them. I think that DOE has enough on its plate without trying to act as an agent of social change — it should stick to its nuclear knitting.
Besides having multiple companies team on single contracts, as we have seen above with respect to cleanup DOE splits other projects up and contracts the pieces separately among many companies. The reason given for this is to have work done more cheaply. This seems to be a relatively new motivation for DOE, or at least a relatively new explanation. In advocating this, DOE in effect is admitting to past incompetence or at least to past misjudgment. That is, the stated reason for splitting the work up is that putting the work out in piece lots, with bidders on each “piece”, means that DOE gets the work done for the least money — which they by implication were not doing in the past.
I call all this hyperdivision of work the “balkanization” of work. I view it as adverse to good safety discipline because of the inevitable splintering of safety authority and control and the consequent tendency for things to fall through the cracks. One would think that DOE, if they were serious about safety, would prefer arrangements that maximized the clarity of lines of authority and responsibility, that systematized and streamlined review and approval mechanisms, and that maintained coherence and consistency of oversight and work coverage. One would also think that using one main contractor, with subcontracts awarded as needed for specialty work, would in fact be cheaper and produce a more reliable outcome than using many different companies, each adding on its own overhead charge, each having to send people to meetings, each having its own training, etc. Many people I have spoken with around Oak Ridge have expressed the view to me that it is unbelievable that balkanization could be cheaper. I will discuss the two issues of money and safety management below.
As noted above, when Bechtel Jacobs’ contract with DOE was up for renewal in 2003, there were prolonged negotiations and a contract extension before Bechtel Jacobs apparently agreed to DOE’s terms and signed the contract. Local oversight groups expressed concern: how could Bechtel Jacobs possibly do the work safely with such a significant underfunding? Bechtel Jacobs assured everybody that they could do it by savvy contracting. But note that Bechtel Jacobs laid off people (including safety people) just before and after signing this contract. It soon came out also that DOE had made concessions as to the maintenance of buildings at K-25: Bechtel Jacobs was to be allowed to “run them to failure”, i.e., only minimal maintenance was to be done to maintain them until cleanup. This was startling because one would have thought that this was the way they were already being run for the most part (because cleanup was expected within a few years) and because one would have thought that this would not save a sum anywhere close to what was claimed. So what really appeared to have happened was that DOE had given Bechtel Jacobs an ultimatum to get the work done with the money that DOE had decided it had available to spend, or else DOE would give the contract to somebody else. (Talk about cram-down provisions!)
DOE’s push to balkanize the work is not only a way to reduce nominal contracted cost, but also, allegedly, to control cost overruns. A few small failures on individual contracts could be overlooked if the majority of contracts were a cost success. But if Bechtel Jacobs’ success depended on squeezing all its subcontractors, then that is what it would be doing and they, in turn, would find ways to cut corners in order to preserve their expected profit. As I noted earlier, I interviewed with one of the companies, the Forelock Company, that had won multiple contracts around the time that Bechtel Jacobs had signed its new contract and in the course of the interview, I asked the two managers I was speaking with about the safety implications of Bechtel Jacobs’ being short of money. The airy hand-waving of the senior manager told me all I needed to know. The highly flexible employment structure of this subcontractor company was suggestive of a desire (or maybe, in order to survive, a need) to be able to coordinate the money available with the amount of work to be done. If the engineering work took more time than expected, it would surely cut into work perceived as less necessary or less critical. To judge from past experience on the Oak Ridge Reservation, safety work would be so perceived. Shortly after this interview, I spoke with a person who had worked for Bechtel Jacobs for some years before being recently laid off. This person said that safety at Bechtel Jacobs was indeed being cut back significantly, to the point where it was of concern how the coworker who had taken over the laid-off person’s duties could handle the load. My informant also told me that Bechtel Jacobs would indeed be reducing its own safety costs and that there was no reason to believe that they would not push their subcontractors to reduce theirs as well.
In the past, what you might call the “quota” contracts were usually smaller or more limited or specialized contracts, hence it was theoretically possible to provide effective oversight. But with DOE’s “farm it out to do it cheaper” work model, e.g., with Bechtel Jacobs not doing all or even most of the work itself but evaluating what was to be done and subcontracting it out piecemeal to others, the number of contracts and companies involved in DOE work has multiplied exponentially. One effect is that the subcontractors are not “base-loaded”, as big contractors are; they live from contract to contract and thus are at the mercy of the contract awarders (both DOE and the contractors). Balkanization thus often gives rise to cynical gameplaying that goes into winning contracts based on criteria that have nothing to do with experience or technical qualifications. This undermines the principle of “Let the best man win” (or woman) in a very broad way. This is especially true of safety work, which is viewed as something that can conveniently be split off the main pie and allotted to a subcontractor, or a sub-subcontractor, if need be. Splitting up of work into many pieces will thus involve multiple managements, multiple safety organizations, multiple review and approval mechanisms — and multiple opportunities for things to fall through the cracks.
With the proliferation of small and often understaffed companies that team in shifting configurations with one another to get contracts, there is a potential for some of their personnel to be underqualified as well. If these companies have to lay off good people whenever they are short of work, the good people will leave and not come back. It is hard to ensure continuity and consistency of safety coverage when, e.g., Bechtel Jacobs and its subcontractors are working with an ever-changing cast of characters, many of whom are sub-subcontracted as independent consultants — even, as with the consultant hired instead of me in the example in the previous chapter, while ostensibly working full-time for someone else. An old friend and former Chicago coworker of mine, commenting on the RadSafe bulletin board about the supply of health physicists, said the following, which, although it was with respect to the nuclear power industry, shows another aspect of what happens with hyperdividing of contracts and the balkanization of work. “It seems that the nuc industry is crying [for people], but for a steady, flowing stream of ‘cheap’ staffers where they (the industry) can dip in and ‘catch one or two’ on an as needed basis (sort of like a catch and release program). The view from the industry perspective seems to be that there are not enough *immediately* available Techs, HPs and Nuc E[ngineer]s, to satisfy their instant, short term needs, but the industry is still not willing to staff up to a level that would support a larger personnel base. Now since most of us like something fairly permanent, there is a true mismatch in expectations between the nuclear industry and the people who need extensive training to work in it….To summarize, the nuclear industry personnel philosophy seems to have evolved to holding a small permanent staff with access to a large pool of temporary staff”. I couldn’t have said it better myself.
The small and understaffed companies cannot afford to hire a specialist for every type of work. Thus they may hire a person to be their one ES&H person — a position which may require knowledge of rad protection, industrial hygiene, industrial safety, transportation regulations, radwaste handling, etc. This is an appropriate position when the work is of a general or fairly routine nature, or when the work program is mostly set and the ES&H requirements can be administered by a capable and experienced person who has a reasonable knowledge of the applicable areas. But when the work program has to be defined and worked out (as for a bid), when the work is novel or the conditions that may develop in the course of the work are uncertain, or when the work is highly technical in nature or requires a great deal of design or operational review, it would not be appropriate to have a single person do it all, i.e., determining the requirements and having signoff authority on it all. Sometimes companies hire a consultant to do a piece of the planning or authorization document preparation work; there are certainly situations in which this would be appropriate. However, here again there is the problem of having things fall through the cracks, in that the consultant is briefed by the company as to what is to be done and may not be told the whole story; he may also be “coached” as to the desired conclusion or approach. If he wants to get any more work from the company, he may play the game and produce the product that was “ordered”. But even if the consultant acts professionally and produces an honest report, the company is able to disregard his conclusion, if it is not what was wanted or if the company changes its mind about what it wants to do. A friend of mine who works for a major DOE contractor said that some time ago, her group was hired to do a safety analysis for a facility (unspecified), but the facility management fired her group and hired somebody else “when we didn’t come up with the answer they wanted”.
A related trend we have seen over the last few years is to hire a person with only a two-year degree or less as a “safety officer”, “health and safety coordinator”, or a like title. This person then becomes a sort of jack of all safety trades and is made responsible for a wide variety of health and safety-related items. Such a person is a lot cheaper than someone with a degree and, since he is probably paid somewhat more than the technician he most often used to be, he is tied to his job for at least several years because he would not be paid as much anywhere else, at least not until he has enough experience to call himself a “safety officer/coordinator” rather than a technician in his resume. Even then he would not be able to take some jobs that clearly call for a degree. This situation is being remedied: in many job advertisements or solicitations nowadays, the expression “four-year degree or equivalent in experience” is used. This allows the company to hire an person without a four-year degree by simply declaring that his work experience has given him preparation that is equivalent to four years of study (presumably including even practice in writing reports). One is even beginning to see “two-year degree or equivalent” in these ads.
Consider too an article from The Oak Ridger (31 August 2004) about a company that had signed a five-year contract to supply “a variety of” unspecified services to Oak Ridge Associated Universities (ORAU), “establishing a convenient vehicle for [the company] to provide professional services in support of ORAU’s critical missions and programs”. The head of ORAU said that this “strategic partnership” would help ORAU “meet a diverse set of needs from our business clients and customers”. He added that the “remarkable package of services” provided by the company “is an invaluable resource to have at our disposal”. The article was about 15 column inches long. About one-third of the way down, it was stated that the company has “a 10-year history of providing exceptional customer-focused support”; this statement was not attributed to a company spokesman nor was it in quotes, so it sounded as though the newspaper were saying this. (The statement was apparently from a press release that appears on the company’s Web site.) There was also a run-through of ORAU’s background, emphasizing its management of “key programs in the areas of worker health and environmental stewardship, emergency response and counter terrorism [sic] operational readiness, and science education”, but no specifics of how or where the company would be helping ORAU; the only thing that was said was that the company was “an employee owned safety, environmental, engineering, and security services firm” whose “commitment is to protect people, property, and the environment”. After about 12 column inches it was stated that the company was founded as a Native American-owned, small disadvantaged business. Earlier in 2004 (i.e., some ten years after its founding), it had completed the Small Business Administration’s 8(a) program and was “now positioned for growth as an employee-owned small business”.
Of this same company, The Oak Ridger soon after reported (20 September 2004) that it contributed $10,000 (apparently the going rate for small companies) to the Oak Ridge High School fund. This company also has offices in Los Alamos, Albuquerque, Paducah, Huntsville, and Washington, DC — yet it seems that the company decides to contribute to only one high school (i.e., Oak Ridge’s) because “the company focuses much of its energy in Oak Ridge” (whatever that means). This company somehow had $10,000 extra to give away even though it was still in a “two-year DOE mentor-protégé agreement with UT-Battelle at ORNL that began in 2003”. (It was noted that ORAU too was “a major supporter of the Oak Ridge High project”.) For some reason, when the subject company appointed a new operations manager for its Los Alamos operations — with no Oak Ridge connection — this rated an article in The Oak Ridger (2 November 2004) — about 12 column inches, in fact. Must have been a slow news day.
I do not single this company out as exceptional with respect to getting contracts like the one with ORAU; there are many more such companies. And perhaps they do provide exceptional service like nobody else (as per the “No. 2 has to try harder” dictum). However, one is skeptical that ORAU could not provide services for itself in safety, environmental, and engineering areas, given its own areas of specialization, or that they needed such services on the basis of a five-year contract. One can see why the company would want the contract; other than the revenue, the company president noted that it would allow the company “to continue our association with prominent and influential business leaders within the Oak Ridge community”. But why would ORAU want to engage in such a contract? Also, the range of services it is suggested that the company provides seems to be pretty broad — their Web site tells us they are “the premier firm nationally in the field of beryllium safety and health”, that they “support” site characterization projects by conducting (unspecified) “specific real-time monitoring” for cleanup work by Bechtel Jacobs, and that they surveyed 2200 postal facilities in nine states for lead and asbestos problems. Yet it is a small company (apparently well under 100 employees, although it has offices in those six locations). One wonders how they can have expertise in all those areas. Many such small businesses now seem to advertise a very broad range of services, whereas in the past small businesses tended to specialize in one or two narrower areas of expertise. It seems clear that these businesses often have to add subcontractors (or sub-subcontractors) to do the actual work.
Incidentally, the Knoxville News-Sentinel had an article (28 March 2004) about the 8(a) small business program. Included was a list of the top 30 small business 8(a) firms, including some that have “graduated” from the program. More than half of them say they do environmental remediation, environmental engineering, decontamination and decommissioning, and similar; provide waste management services (which is not mere garbage hauling); and/or do safety, risk, or compliance analyses. In other words, they do the type of work that mostly DOE or its contractors would need to have done here. One of these DOE-interested companies had three employees and another had six. It boggles the mind that the three-employee company was soliciting environmental remediation business; it seemed that except for small spills, it would have to associate with larger companies if it won a contract. But that, perhaps, is the point.
I think that we can conclude two things about the balkanization of work: Many Hands Make “Lite” Work and Too Many Cooks Spoil the Broth. I.e., diluting the work decreases the quality of the work as performed. DOE has in effect mandated the balkanization on the grounds of economy and inclusiveness. But in doing so, DOE has not balanced the advantages (which are debatable) against the disadvantages (which I believe are evident and demonstrable). I reiterate that if DOE were truly serious about safety, they would prefer having a stable workforce situated in a few companies rather than the “spaghetti” contract picture we see today.
Incidentally, UT-B itself got to manage a cleanup contract — at two defense storage depots in Maryland and Indiana (The Oak Ridger, 20 January 2004; Knoxville News-Sentinel, 22 January 2004). It seems that 20,000 drums of thorium nitrate had been stockpiled there for 40+ years by the Atomic Energy Commission, just in case. DOE had finally decided that there was no demand for it, so it was to be removed from storage, inspected, and packaged for disposal at the Nevada Test Site. UT-B was allowed to let and manage the contract, said the News-Sentinel, “because of its expertise with nuclear materials”. (Some would question that, considering UT-B’s handling of the Building 3019 U-233 repackaging effort, e.g., as inquired into by the Defense Nuclear Facilities Safety Board.) The team winning the contract was headed by RWE NUKEM Corporation, which certainly has experience in handling nuclear materials and had already done the characterization under a previous contract. But the team also had four other members: The Oak Ridger said that Team Member B had health physics expertise (didn’t UT-B? didn’t Nukem?), Member C was a waste shipment specialist (but couldn’t Member B, UT-B, or Nukem handle that?), Member D was a “Canadian hazardous materials transporter” (that seems straightforward), and Member E was a “secondary waste processor” (what did they do?). I conjecture that formerly what would have happened was that Nukem would have had the contract and that it would then let subcontracts to one or two others as needed. But now there is “teaming” that seems to disperse responsibility along with largesse. This may be better, but I wonder how.
The amount of work directed to small businesses is not small, as measured in dollars. The Oak Ridger reported (17 May 2005) that Bechtel Jacobs had hosted its annual Socioeconomic Programs lunch. Featured speakers were Wamp and DOE-ORO head Boyd. Boyd praised the $160 million worth of business Bechtel Jacobs had done with these companies; he said he also had “to applaud the small business community, which has a tremendous capability that allows DOE to challenge its contractors”. Wamp took the opportunity to slather praise on Bechtel Jacobs and on DOE itself, saying in his over-the-top way, “In my 11 years, there has been no other team like Steve McCracken [assistant DOE manager for environmental management], Gerald Boyd, and Mike Hughes [president of Bechtel Jacobs]. No one else has been more organized or more on top of DOE’s cleanup report”. As usual, awards were given.
Some Miscellaneous Notes
It has been reported that some of the Spallation Neutron Source beam lines are going to be privately funded. Thus a company could buy the rights to priority use of a beam line, although the maintenance and other support operations would still be handled by the SNS administrative and support staff. I understand that there has been some private funding of subunits, such as individual beam lines, in European research facilities. However, in Europe it appears that overall control of the facility is squarely in the hands of the controlling organization (experiments reviewed and approved, etc.) and thus in the hands of the national governments that own or co-own the facility; this would seem to be a necessary condition in order to maintain public confidence in the safety of the site and the public interest aspects of the research. One would thus expect that that would be the case for SNS, but this remains to be seen. This issue is even murkier in the case of other types of facilities being funded by the State of Tennessee and private businesses at ORNL. If a company funds a whole building and commits to occupying and using the lion’s share of the space (thus to contributing most of the upkeep costs also), then it may expect to have a major say in how the building is run, whether any competitors can use the facilities, etc. For example, if there were a committee that controlled the use of the building, would not the major funder expect to have the majority of seats on the committee? People don’t make investments without expecting a return on those investments, so it would be important to find out what concessions DOE has made to those funding the buildings. This is especially true in the area of safety regulation.
It should be recognized that the local DOE organization would suffer if operations on the Oak Ridge Reservation declined significantly; funding would decrease, the status of being posted in Oak Ridge area office would decrease, etc. From this viewpoint, it would clearly be greatly to the advantage of local DOE if UT-B were to attract a lot of outside funding that would increase the level of research activity at ORNL. However, if the outside funding was secured on the condition that DOE would maintain a more or less hands-off policy toward the new operations, or would turn a blind eye to how they were conducted, the attraction of a significant amount of outside funding would result in a loss of DOE involvement and control, rather than the reverse. This might not perturb DOE, as long as everybody outside the situation still had the impression that DOE was in charge. But in the long run, DOE would surely become more and more irrelevant. The recognition of this irrelevancy would, one would think, tend to move Congress toward splitting up DOE and parceling out its parts among other governmental agencies, as I noted earlier. Thus, worker health and safety aside, it would appear to be shortsighted of DOE to encourage the attraction of outside funding at the cost of its own involvement.
It is also of interest that in February 2004, it was announced in The Oak Ridger that the departed Madia and another UT-B-related person had been appointed directors of the Forelock Company. The Forelock Company had some other contracts and I believe they had, or had had, contracts with ORNL (based on information I had received a couple of years earlier). Thus this company had as part of their directorship people who worked for another company (Battelle) that ran a site at which the first company hoped to get contracts — and a site at which most funding was provided by the government. (Can you spell “conflict of interest”?) Not only that, but the Oak Ridger article stated that one of the other four directors was being reappointed for another term. This third person had been a high-ranking official at ORNL for years and then at Y-12 for years until he retired. So it seemed as if the Forelock company was trying to pack its board with people who had influence with companies it was trying to get contracts with. This company, based in Oak Ridge, is one of the fastest-growing companies in America, as was pointed out at my interview and as was reported in The Oak Ridger. Sadly, one does not have to wonder why that is. These folks were all still on the board a year later (The Oak Ridger, 22 February 2005), along with the head of Clarity Resources LLC, “a Knoxville-based mentor capital company”, and a senior vice president emeritus of UT who was now the manager of UT-B’s Oak Ridge Outreach Office; the latter was also on the boards of ETEBA, the Oak Ridge Chamber of Commerce, and Technology 2020. The founder, president, and chairman of the board of the Forelock Company was also said to have built “very successful professional services business units” at Battelle headquarters and at another DOE contractor company. Talk about interlocking directorates!
The Web site of the East Tennessee Economic Council, when I checked it in 2005, listed some 41(!) members of the board of directors: 6 were from ORNL, 5 from BWXT, 2 from Bechtel Jacobs, 2 from UT, and 6 from various smaller DOE contractors, for a total of 21. I.e., a clear majority of the members were DOE contractor entities. Some of the others are probably small contractors as well. Bradshaw was listed as “Mayor of Oak Ridge” and his Tech 2020 affiliation was not mentioned; the head of Tech 2020 was also a member. Of the four current officers listed (including the chair elect), one was from ORAU, one from ORNL, and one from BWXT. So any pronouncement by ETEC is likely to be heavily weighted in favor of the interests of DOE contractors. There are also some ex officio board members, including various members of the state legislature or their staffs, Wamp, the head of ETEBA, the head of the Oak Ridge Chamber of Commerce, the Oak Ridge city manager, the head of CROET, representatives from Jobs Now! and TVA — and curiously, the heads of DOE-ORO and NNSA-Oak Ridge (Boyd and Brumley). The Council’s perpetual conclusion that the future of East Tennessee, economically speaking, was tied intimately to the DOE sites and especially to ORNL, is thus not surprising.
Some Notes on Radiation Safety Regulation and Management
In the 1990’s, there was much discussion of “external regulation” of DOE, i.e., safety regulation of DOE activities by an entity other than DOE. This idea was pushed by some congressmen exasperated at DOE’s safety culture and safety record. The most likely external regulatory entity, at least in radioactive matters, would be the Nuclear Regulatory Commission (NRC), with the second choice being the Occupational Safety and Health Administration (OSHA). There were even pilot studies done by NRC at ORNL’s REDC facility and other DOE sites. However, as The Oak Ridger (6 August 1999) reported, DOE was waffling on external regulation: DOE Secretary Richardson claimed in a letter to Congress that the costs would outweigh the benefits. An activist noted in testimony to Congress that this new DOE position was counter to what DOE had said before, and also contradicted the results of the pilot studies. This question is re-raised on a regular basis, but somehow DOE always manages to handwave it away.
Some time in about 2003, The Oak Ridger reported that DOE had proposed to make the existing government standards (many in place for a long time) merely guidelines, which as The Oak Ridger pointed out, would then be unenforceable (as a matter of law), although DOE was to retain the right to approve that contractor’s (individually chosen) safety requirements. Apparently in the face of criticism of this proposal, UT-B was suggesting an “alternative to a proposed plan to replace safety requirements at federal nuclear facilities with standards written by contractors”: a single set of rules based on Occupational Safety and Health Administration (OSHA) “guidelines”. The Oak Ridger, with a straight face, reported that “Several [unidentified] officials pointed out that neither DOE or the contractors want to weaken safety standards”. In early 2004 (Knoxville News-Sentinel and The Oak Ridger, 24 February 2004), it was announced that Energy Secretary Spencer Abraham had decided not to let contractors make their own safety rules — just yet. That is, a proposal had in fact been seriously considered within DOE to allow contractors to make their own safety rules, to set their own safety standards internally. This proposal was criticized by lawmakers, the Defense Nuclear Facilities Safety Board, and even some contractors. The chairman of the Board said (The Oak Ridger, 27 January 2005) that the Board felt there was “too much leeway given to contractors rather than requiring the government to set the standards”.
That DOE would even consider such a thing probably surprised a lot of people outside the DOE complex. However, it did not surprise people within the DOE complex at all, even if they had not heard about the proposal to “leave it to the contractor — he knows best what the hazards of the work are”. I submit that DOE did allow exactly that to happen to a significant degree when they allowed the contractors years ago to choose their own safety standards set and to specify themselves how their procedures met the requirements of 10 CFR 835 and other regulations. The reader should recall that almost all truly specific rad requirements were made, e.g., “nonmandatory technical standards”, i.e., completely optional. True, back then contractors’ proposals had to be submitted to local and Washington DOE for approval, but such arm’s-length evaluation was not likely to show up any flaws in the selection or, even worse, in the application of the set: as I stated earlier, ORNL’s Research Reactors Division had left most of the conduct of operations Order out of its Work Smart set and DOE-Washington had made them put it back in. One wonders how it was allowed to be left out in the first place — it was not an oversight, since the text describing and justifying the set explicitly stated that it was being left out (on the grounds of being covered by “equivalent” provisions). It seems obvious that somebody in charge in DOE-ORO either was asleep at the switch or had been talked into allowing this. Either way, this should have raised alarm bells among those who are keeping track of DOE’s activities in protecting workers and the public.
In 2005 (Knoxville News-Sentinel, 25 January 2005; The Oak Ridger, 27 January 2005), DOE announced that it was considering a new proposal to adopt a minimum set of safety standards drawn from OSHA regulations and to have contractors then come up with safety plans to address specific hazards at their facilities. These plans would presumably have to be approved by DOE in the same manner as the 10 CFR 835 rad protection plan had been. Clearly, the fact the DOE keeps announcing that it is not going to allow the contractors to adopt their own safety standards, but then proposes having minimalist regulation of its own and allowing contractors to decide on the balance of the safety requirements themselves, means that the “contractor sets his own rules” proposal keeps floating to the top because it is getting put forward by very powerful interests.
What does DOE get out of ceding its authority and allowing itself to be lulled into a false sense of security? It is not always clear to me why DOE does what it does, but the answer seems to boil down to — as usual — money. The contractors keep making the argument to DOE that if DOE would just get rid of those expensive and unnecessary fixed requirements and let the contractors — the experts! — determine what requirements to apply on a case-by-case basis, then a set of sensible and practical requirements would be selected and the work would be done more cheaply. DOE is always alert to a bargain: as a group, they seem to be the type to drive ten miles to save ten cents. They wasted so much money in the past that Congress threatened them with severe budget cuts, loss of regulatory authority (e.g., to the Nuclear Regulatory Commission), and even total dissolution as a agency. As a group, too, DOE people are not ones to stand up to criticism — they want to be liked, like everybody else. So on this issue, they had it both ways: they told Congress that they had made money-saving, “work smart” reforms and they told the contractors that they “understood” their problems and sympathetically made changes to ease the burden. What they didn’t seem to do was to make any extra effort to provide more intensive scrutiny of the contractor projects in exchange for the lightened requirements — DOE safety people didn’t seem to go to any more project meetings, meet with a broader spectrum of their contractor counterparts, or perform any more in-depth inspections.
Regarding sites’ marketing their “services”, a “fact sheet” posted on the Internet by ORNL, dating from about 2004, listed the various operational safety services offered by ORNL — apparently not just internally to ORNL, but as purchasable services (on a Work for Others) basis by the ESH&Q organization. Staff members are available to review safety basis documents, do criticality analyses, give various kinds of training, test fire systems, and “provide one-stop shopping for comprehensive dosimetry services to all employees, contractors, visitors, and customers of ORNL”. One would think that these services were already being provided for work onsite by ORNL — i.e., by the institutional safety organizations.
As The Oak Ridger reported (16 September 2004), the theme of the Oak Ridge Business Safety Partnership’s third forum was “Defining Safety Culture”. This organization was composed of companies and organizations participating in DOE and NNSA programs in Oak Ridge (i.e., ORNL, Y-12, etc.) and its goal was said to be “zero accident performance”. The forum, organized by Freeman and others, was to feature reports from several companies about their safety programs. The forum was open to the public but was to take place from 8:30 – 10:00 am on a weekday — meaning that only those whose companies allowed them to attend could. After the reports, Mayor Bradshaw (chosen for unspecified reasons) was to “facilitate” a discussion about safety in the workplace and at home..
Starting on about 5 January 2005, Jenny Freeman of the ETEBA had a series of guest columns in The Oak Ridger “about how local companies performing work on the Oak Ridge Reservation ensure the safety of their workers”. The title of each one started with the words “Safety Matters…” and finished with the name of some local DOE contractor or group. This all seemed rather propagandistic on the part of ETEBA and its members, especially since the series purported to “examine the web of safety programs used daily to keep employees, who, after all, are our family and community members, safe on the job”. (There was that “we’re all in this together” chime rung again.) The second column (28 January 2005) looked at Safety & Ecology Corporation (SEC), a “small business” having 400 employees, annual sales of more than $71 million, and a branch office in the United Kingdom. How does this “fast-growing” company make sure “its employees go home at the end of the day without having had an accident or an injury”? Well, its employees are “challenged daily to participate in safe work practices” (one thus wonders if “participation” is optional). They are asked for ideas about dealing with hazards safely, they have safety meetings, their managers and supervisors walk down the worksite. And this is all stated by Freeman as if it were new, i.e., as if it were news.
Further exploring “the complex world of safety” in her third column, she zeroed in on Bechtel Jacobs and its subcontractors. DOE-ORO manager Boyd made it clear to subcontractor representatives that he holds “one person” accountable for worker safety during the accelerated cleanup efforts, i.e., the president of Bechtel Jacobs, Mike Hughes. It is perhaps a bit eye-opening that everybody else at Bechtel Jacobs and everybody at the subcontractor organizations are off the hook as far as Boyd is concerned, but perhaps Freeman misunderstood him. Anyway, she states that “Mike” (as she refers to him in her article) says that “the road map to zero incident and injury job performance begins and ends with leadership”. But safety leadership, he continues, is not based on job title or position; it is a responsibility that each of the 3000 workers “needs to exercise daily as a matter of choice”. Bechtel Jacobs has provided some tools for use by the workers — not physical tools, but, e.g., a list of 7 questions to ask oneself at the start of every work day (sample: “Are we familiar with the hazards associated with the work?”). Another “tool” is stop work authority. Freeman then concludes, “Bechtel Jacobs Co., under Mike Hughes’ guidance, has created a plan for success; it is up to all of us to ask the questions, pay attention to changing conditions, look out for one another, and demonstrate leadership to stay safe 24 hours a day, seven days a week”. Note how this makes the previous presidents of Bechtel Jacobs look: poor klutzes, it sounds as if they just didn’t know how to get anything done safely until Big Mike came along. (Similarly, the president of BWXT Y-12, Dennis Ruddy, was described thus by an Oak Ridge reporter (9 February 2005): “While he was at Pantex, he reduced the accident rate by 46 percent and lost-time injury rate by 59 percent” — as if he had done it single-handedly.) Then there is that foggy “us” again.
In the fourth article (15 February 2005), Freeman talks about WESKEM LLC, formed in 1999 by five companies, “including three small businesses”, to compete for waste management contracts in the Oak Ridge area and later Paducah. Weskem, as I’ll call them, employs a total of about 230 people who are “engaged in high-risk activities on a daily basis” but, Freeman tells us, “has an excellent safety record”. The four building blocks of the Weskem safety program were rigorous work control, safety performance trending and sharing of lessons learned, an incentive program that rewarded safe performance, and worker responsibility. I won’t go into the further details of Weskem’s program, which was mostly a statement of their Integrated Safety Management process. They too ask the 7 questions about safety and they too have a “zero incident” goal. But considering that Freeman likely got her information, even the very words, directly from the safety managers at the various companies, I must say that I much preferred Weskem’s own much more substantive and down-to-earth statements about what they did to the more free-floating or grandiose statements of the other safety managers. I especially liked the Weskem statements about how lessons learned were shared and how they were proud of their workers with many years of experience. It may be that in practice, Weskem does not “walk the walk” — I have no experience of their work — but with regard to “talking the talk”, they sure sounded like the genuine article.
The final(?) article in the series (The Oak Ridger, 21 February 2005) did not list Freeman as the author (in fact, there is no byline or implied author). It said that the series was about safety programs used by not just companies working for DOE, but by DOE. Again, it was stated that keeping workers safe required “leadership and responsibility”. DOE’s own safety program was to be the topic of the next safety forum of the Oak Ridge Business Safety Partnership. (The public was invited to attend this forum, but since it was again held during business hours (8:00-10:30 am on a Wednesday), the self-employed and workers who couldn’t get off would not be attending.) DOE’s safety program is called the DOE “Voluntary Protection Program” (VPP) — a pretty eye-opening name, if you think about it. (“Voluntary”???) The program “promotes safety and health excellence through cooperative efforts among labor, management, and government at DOE sites”. There is an award for meeting all the “requirements for outstanding safety and health [sic]”, called the VPP STAR. This program was initiated in January 1994 to “promote improved safety and health through public recognition of outstanding programs”. The article asserted that this program provides “proven benefits”, e.g., improved labor-management relations and reduced workplace injuries and refers to the program as a “safety tool”. But no details are given: no criteria that must be met, how “voluntary” the requirements are, etc. One wonders if the inclusion of this program in the “Safety Matters” series was just pro forma, or if the preceding “we work safely” articles were meant to help showcase DOE’s “pro-active” safety stance as allegedly shown by the VPP. The Oak Ridger (17 February 2005) reported that DOE-ORO’s Boyd had “challenged” all Oak Ridge sites to achieve the Star level within five years.
Periodically there are articles in The Oak Ridger that relate how this or that company has marked a safety milestone. Case in point: ORNL’s announcement that its “four or five thousand folks” had worked 2 million man-hours without a lost-workday injury. That sounds impressive, but 2 million man-hours is equivalent to 4000 people working 500 hours each, i.e., three months each. Or take BWXT Y-12’s announcement that its 4700 employees had marked 6 million man-hours without a lost-workday injury (14 December 2004). BWXT stated that this is “the equivalent of 100 people working a 30-year career without a lost workday injury” (presumably on a 2000-hour-per-year basis). True, but it is also the equivalent of the 4700 people working about 8 months. The 6 million man-hours is not negligible, of course, and elsewhere in the article the head of BWXT notes that the rate of injury is the lowest in 14 years, definitely a positive event. But we so often hear about millions of man-hours safely worked that it is hardly remarkable. (“Billions and billions”, now, that would be something.)
Notes About My Local Health Physics Society Chapter
As I noted earlier, three years in a row I offered to give a talk at the meeting of the local chapter of the Health Physics Society (HPS), with the subject to be my whistleblower experience and my views on safety management. The first time I offered, my proposal was rejected outright by a “unanimous vote” of the chapter board; the second time I was put off with a vague “maybe a special session, later on”; and the third time I received no reply at all. Let us examine this in a political context.
I had spoken to the president of my local chapter, who told me that he thought that the chapter would not be interested in having me speak, but he would discuss it with the entire chapter council. Based on his telling me that he was sure of what the council’s opinion was (because he had already discussed it with some members), I then expressed my distress at their brushing me off by posting a note on the RadSafe (Internet) bulletin board: I said that I thought that my local chapter was deferring to the wishes of contractors and DOE and I described the safety issues involved in my layoff. I received many kind responses from other people, including some who had had similar experiences earlier in their careers (although usually they had not pursued legal remedies as I had). I also received several nasty responses, including one from a rad safety officer of a university hospital, who admitted he hadn’t read my entire posting. He said that it was “unprofessional” and “inappropriate” of me to discuss this in a forum like RadSafe (i.e., a peer forum but one that non-peers could subscribe to); he added that I should seek the “advise” of the professional health physics (CHP) board’s Standards and Ethics Committee “before proceeding further” in an “unusual activity”. He opined that my attorney must have put me up to posting on RadSafe. (Not so, of course.)
Shortly after this, I was told by the then-president of the chapter that the local chapter council had voted unanimously that there was “no professional interest” in a presentation about my experience; in fact, he personally had no interest in hearing me speak on this issue and he personally had never experienced anything like it. (The point was that he did not believe that I was laid off for the reasons I gave.) He segued into saying that “both sides” should be covered. He said that further the council had been put off by my posting on RadSafe; he said it “showed bias” that I expressed the opinion that the council was deferring to the contractors and DOE. He claimed to have had phone calls from unspecified people “rebutting” my RadSafe writeup. I told him that I would post a message on RadSafe (which I subsequently did) stating that the council had not yet made a final decision when I posted my earlier distress message. But I told him that other people had sent me messages in response to my RadSafe posting, saying that they couldn’t believe my chapter was not interested in having me speak and that if I was ever in their area, their chapters would be interested in hearing me. I pointed out to the president that I had a lot of documentary evidence (so that I could back up my statements with written documents).
The president then told me that the council had been told that it could be “sued for slander” if they allowed me to give a presentation and that declining a talk by me was on the advice of “national” HPS officials whom they consulted. It seems incredible that the chapter could be sued for something that a speaker said, as long as the chapter were hosting the speaker in the spirit of airing issues, even controversial ones, and as long as they made it clear that the opinions of the speaker were not necessarily those of the chapter. If it were true that any host group could or would be sued on such a basis, then every club and society and university in the United States would have to be careful to censor everything every speaker said or might say, for fear of a lawsuit. But of course they don’t. People may show up to heckle a controversial speaker and they may pressure the host club or society or university to disinvite the speaker, but they don’t sue the host. I think that any responsible official of the HPS would know this. Thus the fear of a lawsuit was a canard, a specious reason advanced for not allowing me to speak on a subject that might offend local contractors and DOE, even though it would likely be of interest to many members.
Who thought up this reason and suggested it to the board? I have no idea. The president of the chapter at the time, who communicated the decision to me, was and is a thoughtful person with a conscience; I think that he did not originate this and was troubled by it, but decided to err on the side of caution. I think that probably some members of the board were not savvy enough to realize how false this idea was and so believed the member or members who advanced it. However, I think — given the brainpower and sophistication of my fellow radiological protection professionals (and I say that sincerely) — that one or several of them did know that this idea did not hold water. It upset me to think that one or more of them would cynically spout such a reason in order to persuade others not to give me a chance to speak, but this was a conclusion that could not be avoided.
The second time (the next year) that I offered to give a talk to the local chapter, I was told that the topic would not be appropriate for a regular meeting, but that a “special session” could be called, to be attended only by those interested. But despite telling me this on two occasions, the chapter official then in charge of meetings never did organize that special session. I had won my appeal by this time, so if this official needed to defend his decision to allow me to speak, he would have been able to say that my position was validated. Apparently he did not care to stick his neck out to that extent. The third time (another year, with yet another meeting organizer), I asked by E-mail, i.e., in writing. This would have made it easy for the new organizer to reply without speaking to me directly, if that is what he wished. Not only that, but an E-mail message is harder to mislay or forget than a paper message or an oral message. But he never replied at all.
I got the message — the real, underlying message — that my chapter officers were too fearful of what I might say to allow me to speak on a topic that one would think would have great professional relevance: how safety people can have their authority and autonomy eroded by the pressure that operational people were able to exert, and what can happen to people who dare to raise this issue with the regulatory authority. I believe that the officers also feared to have direct criticism of a major contractor and DOE, which would be inevitable given the circumstances of my experience (although the focus of my talk would have been on safety management philosophy, not on sniping at individuals or entities). Finally, they just did not want to hear that such things could happen to competent people. I believe that their obvious fear and evasiveness demonstrated for all to see how completely the operational people had taken over safety decision making in the Oak Ridge area and how cowed the safety people consequently were.
I attended a meeting of my local HP Society chapter on 9 August 2005 at which the speaker was the ORNL director of economic development, Dr. Terry Payne. His topic was “Regional Health Physics Expertise and Its Effect on Economic Development”. I almost didn’t go, because this was the second or third chapter talk that year on tech transfer or the like by ORNL people. But I needed the points for my health physics certification, so I went. In the introduction of Payne by a chapter officer, we were told much more about Payne than is usual for these meetings. For example, we learned that his PhD thesis topic had been “Strategic Management of Technology” and that he and his wife of 12(?) years lived with their two daughters: Rachel, 12, and Hanna, ?. (I couldn’t write fast enough to catch her age. Well, I was somewhat bemused by the flood of personal information about him and by hearing that ORNL had a director of “economic development” — why would it need one?) Anyway, Payne said that his work at ORNL before Battelle came was linking ORNL technology and research to businesses and that until Battelle came, we in Oak Ridge “didn’t know what economic development was”. He defined economic development as the “creation of jobs and wealth through….[I missed what, although I believe he said a moment later that it was through company recruitment, among other things]” and that the symbol of economic development was the dollar sign. He claimed that a certain company was at the Horizon Center “because of Bill Madia” (this was the company that very soon thereafter fell on hard financial times and gave up its Horizon space). He claimed that UT-B and ORNL were associated with new company startups, more facilities (such as the Spallation Neutron Source), expansion of ORNL (he digressed at some length to rhapsodize about all the new buildings at ORNL), and new government missions. Payne asserted that what “enabled” each of these was technology, because “half of US economic growth was fueled by technology”. He mentioned the various joint institutes, the centers, etc. Regarding the Joint Institute for Advanced Studies, he boasted that he had suggested a topic for them to brainstorm: Alzheimer’s. He asked, “How many families can afford to pay $100,000 a year for that [care for their loved ones]?” (It’s always about the money with these people.) He spoke of UT-B’s financial contribution to Oak Ridge High School. (Ditto.)
He said that two ORNL researchers took a leave of absence to develop a PET scanner for lab animals; that CTI bought their firm; and that “they walked back in to work [at ORNL] on Monday morning with $5 million in their pockets”. He said — for the second time — that the Spallation Neutron Source was on time and on budget in its construction; apparently realizing that he was repeating this fact and that it wasn’t really relevant at this point in his talk, he made a joke of it. Payne harked back to Gordon Battelle, who established Battelle Memorial Institute by endowment in his will, quoting Mr. Battelle as saying that the purpose of the Institute would be to “further the purposes of mankind through technology and development”. Payne claimed that “we” (Battelle) sold the xerography process to Xerox. (The reader should look up the story of Gordon Battelle and the early history of Battelle on the Battelle and other Web sites to see more about this. Gordon Battelle, who was in fact a true believer in the power of science and technology to improve people’s lives but does not appear to have been highly focussed on making money, is probably rolling in his grave at being thus quoted in furtherance of Payne’s points.)
Payne went into an extended discussion of how the Spallation Neutron Source worked; since many of the people in the room undoubtedly understood the physics of the facility far better than he, I thought to myself, “Teach your grandmother to suck eggs”. He related a story of how the doors of the new supercomputer area at ORNL had been signed in invisible ink by Al Gore and later by George Bush (but I didn’t hear him say why — it may have been his little joke and the ink was absorbed into the paint on the door or been washed off). He said that a door was then actually taken to Knoxville for Bush to re-sign. (Wonderful use of our tax dollars.) Payne said that Oak Ridge had world-class teachers, great university, good state support, etc., but what was lacking was entrepreneurs, venture capital, expansion of access to ORNL (by outsiders), and an appropriately trained workforce. He noted that “we” had funded the Center for Entrepreneurial Growth and asked who had heard of it; I was the only one who raised my hand. But then he still mentioned Lee Martin as if we all knew who that was. He said, “We’re open for business” and claimed that every dollar that DOE spent in the area was “spent 3.5 times before it left”, or words to that effect (evidently quoting the UT “economic impact of DOE” report). Bizarrely, at the end of his talk Payne thanked us “for your profession”. He immediately segued back to his main topic, saying that economic development was not one community versus another, but was a regional thing.
I was appalled at how, despite his title, the whole talk was basically a promotion of Battelle and its business interests, with only a few nonspecific mentions of health physics and no discussion at all of “regional health physics expertise” or of its “effect on economic development”. For example, when he spoke of Madia’s being responsible for the company locating at the Horizon Center, he mentioned in passing that the company could take advantage of the health physics expertise in the area — without mentioning what the company did or how (radiologically) they did it. Perhaps he had just brought the wrong Powerpoint file? So in the question-and-answer period, I pointed out as tactfully as I could that he had said very little about health physics, only about business. I said that it appeared that he could just have replaced “health physics” with “chemistry” or “physics” or “computer science” and given the exact same talk. His response was at first jocular, as if he thought that I was joking, and then he became defensive and somewhat indignant as he realized that I was not. It was clear that he was completely clueless about the mismatch between topic and talk, so I let him wind down. Afterward, I pointed out to a fellow health physicist from ORNL whom I had known for a number of years that the talk was just one long advertisement for Battelle and ORNL. He laughed and said that after all, Payne was just a salesman. But, I said, we hadn’t gotten anything technical or even informative out of the talk; my colleague replied that it didn’t matter, we had earned our two certification points for sitting through it.
Somebody else asked Payne how small companies could get to partner with ORNL and he said “Call me”. He was asked about access to the Spallation Neutron Source by researchers from around the world (if memory serves, it was in the context of radiological control); he replied that researchers would be limited to doing their specific approved research and no more. But he then went on to say that all of these facilities were funded by US taxpayers and that it wouldn’t be right to support foreign companies that might put people out of work; “we” didn’t want to be exclusive, but wanted to control access. This was a surprising statement: it was desired to attract a thousand or more researchers per year to this facility and supposedly access was pretty open to everyone for reasonable research, as all such facilities worldwide tend to be. Besides that, researchers would be paying fees for their beam time, I believe. But here Payne was implying that not only the safety and security aspects of the research to be done would have to be approved, but also the business aspects of the research, specifically whether it was to be done by those potentially in competition with the US in the same area.
It’s Hell Getting Old: Layoffs, the Age Discrimination Lawsuit, and the Pension Fund
As noted earlier, when Bechtel Jacobs first took over the Oak Ridge Reservation cleanup contract, the approximately 1800 Lockheed Martin workers who had been employed in the cleanup program were transferred to having Bechtel Jacobs as their employer (e.g., The Oak Ridger, 7 October 2002). Although Bechtel Jacobs managed and conducted all the work at first, most of the cleanup employees were eventually supposed to be “transitioned” (some said “outsourced”) to various subcontractors. Thus Bechtel Jacobs would over time become more and more simply a managing contractor. (Why DOE is not able to function as the “managing contractor” itself as it and its predecessor agencies did for decades is a question I have not seen answered.) The Oak Ridger (22 November 1999) reported that by the end of January 2000, some 1000 Bechtel Jacobs employees would be working for new companies — i.e., they would be transitioned to subcontractors. By the end of October 2000, another 300 Bechtel Jacobs employees might also be laid off, for a total load-shedding of up to 30% and an eventual steady-state level of 600-700 employees. That seems like a lot of employees just to manage the various contracts and do a little audit/oversight work, but apparently it is all very complicated.
The DOE contract required that when Bechtel Jacobs took over the work, the workers transferring from Lockheed Martin to Bechtel Jacobs had to be given “equivalent” pay and benefits by the new contractors or subcontractors to whom the work was contracted. There was a lot of evidence that this had in fact not happened as planned. But also, as The Oak Ridger (14 December 1998) noted, this provision somehow didn’t apply to workers employed by other DOE subcontractors at the time their contracts were shifted to Bechtel Jacobs to be managed. The Oak Ridger noted the case of the DOE-sponsored Information Resource Center, whose work involved allowing the public to look at and make copies of cleanup-related documents. When Bechtel Jacobs outsourced the center work to a new contractor, the employees found that their salaries under the new company had been slashed by about 40%. Four of the five employees quit. Bechtel Jacobs explained that since the center’s jobs were not protected, it simply made good business sense to give the work to the lowest bidder, even if it meant a nearly complete turnover of personnel and loss of experience. The new company taking over the center’s work claimed, incredibly, that they hadn’t been provided information on the salaries of the existing center workers.
In a letter to the editor of The Oak Ridger (4 April 2000), Pamela Gillis Watson noted that when Lockheed Martin employees transitioned to Bechtel Jacobs, they were told specifically that they would receive an “equivalent balance” of pay and benefits; that is, if pay was higher, benefits would be lower, etc. But even though the pay stayed the same, the benefits were markedly decreased. While there was “personal” time (sick time plus personal time) separate from vacation time at Lockheed Martin, Bechtel Jacobs (if I read Watson correctly) put all time off into one pot of “accrued time off”, under which she lost at least one week a year of available time off with pay under this system. The medical coverage was more limited, including fewer drugs in the formulary; the management fees for the 401(k) plan were higher; etc. Watson pointed out that the higher-than-expected attrition rate of transitioned employees was only to be expected under such circumstances, but, she conjectured, Bechtel Jacobs might well not mind since they could fill the jobs with lower-paid but less qualified subcontractors.
Later, Watson pointed out that “transitioned” or “grandfathered” employees were supposed to have the right of first refusal for DOE environmental management (EM) work for which they were qualified (Watson, letter to the editor, The Oak Ridger, 29 November 2000). But Bechtel Jacobs decided that EM records management was not covered under the transition rules, including the right of first refusal. Thus the work of some of the technical writers and editors was given to a Bechtel Jacobs employee and three subcontractor employees. Eventually the records management contract was given to what Watson described as an 8a “mom-and-pop” company and the grandfathered employees were transitioned to this company. At the get acquainted meeting prior to the transition, the company vice president declared that the company was “Biblically based”; a Bible verse was quoted in the company’s basis of operations statement, etc. Two of the grandfathered employees complained to Bechtel Jacobs about the blatantly religious environment, but Bechtel Jacobs told them that the subcontractor could do whatever it wanted about such things “because they’re a private company”. (That their work was being paid for with federal funds apparently was irrelevant.) One of the two complainants filed a formal concern — and was one of two initially grandfathered employees not subsequently offered a position by the subcontractor.
There was also the case of Science Applications International Corporation (SAIC), as related by The Oak Ridger (13 April 1999). When Lockheed Martin awarded the information technology contract for the three Oak Ridge sites to SAIC in January 1999, SAIC agreed to take on the several hundred Lockheed Martin employees who had been doing the work and to use them either to do the IT work or to do other SAIC work. Only three months later, some of these people (The Oak Ridger said 14) were given layoff notices and told their last day would be about two weeks later. They were told that they could seek employment elsewhere in SAIC, but it appeared that they would have to track down these jobs themselves — SAIC did not seem to intend to expend any serious effort in job matching since, SAIC told them, “seeking alternative employment, either inside or outside the company, is primarily your responsibility” and urged them to use the two weeks to do so. It appears significant that, as The Oak Ridger noted, SAIC had promised as part of its contract with Lockheed Martin “to create over 1000 new information technology jobs in the area”. An SAIC official stated (The Oak Ridger, 15 April 1999) that the laying off of these people would not affect SAIC’s job creation “promises” to Lockheed Martin, which he said included a goal of “1,195 job-years”. (That would be 1,195 people working for one year, 120 people working for 10 years, etc.) He said that one problem with the layoffees was that they did not have the skills needed for the work SAIC had: “When times come that you have an employee that the skill mix is just not there [sic], that’s when we have the layoffs. And that’s purely a business decision”. (Compare this statement to the similar Bechtel Jacobs statement earlier in this chapter.)
The Oak Ridger later reported (15 June 1999) that another 11 of these workers had been laid off. A Lockheed Martin official said that there had been work for “about 250”; he said that the work had been outsourced, as The Oak Ridger put it, “to a private firm specifically to avoid laying off large numbers of people and to utilize the workers in both government and commercial work”. SAIC acknowledged that they knew that there would be “reductions of the work scope” from the DOE sites, while more people were laid off over time. The Oak Ridger reported (11 October 2000) that 160 former Lockheed Martin employees laid off by SAIC were suing Lockheed Martin for breach of contract, misrepresentation, age discrimination, etc. These people had from 7 to 30+ years of service at Lockheed Martin. They claimed that although SAIC took all 342, there was work for only 300 (so that Lockheed Martin had shucked off the excess, leaving it to SAIC to do the actual laying off); furthermore, they were given substantially reduced benefits and were not allowed to carry over their pensions or participate in the SAIC 401(k) plan. Their suit included a claim for severance pay. Note that they were suing Lockheed Martin rather than SAIC, apparently because SAIC was acting within the parameters of its contract with Lockheed Martin. This lawsuit, which was still pending as of 2006 (Munger column, The News-Sentinel, 21 December 2005) foreshadowed other such suits by plaintiffs laid off by various Oak Ridge-area contractors, who believed that they were lied to, used, and thrown away. This may have something to do with the fact that, as Munger reported, contract proposals for the renewal/reissuance of this contract were due to DOE in June 2005 but DOE had had many extensions of the contract since then and no new contract had yet been awarded.
As I noted earlier, with the advent of UT-B came a heavy emphasis on the research staff’s pulling in the dollars. As one research/engineering staffer remarked to me near the end of the Lockheed Martin days, formerly section heads and division directors were supposed to be the rainmakers, not the individual scientists and engineers. But at the tail end of the Lockheed Martin days and even more as UT-B came in, everybody was, in effect, supposed to pull his own weight financially. The Oak Ridger reported (23 May 2003) that even top scientists could be laid off from ORNL. An example was that one ORNL division laid off six people in February 2003, one of them a “senior scientist named by the Institute for Scientific Information as a “most highly cited researcher [thus among only 0.5% of all publishing researchers]” and a recipient of DOE’s Exceptional Service Award who was ORNL’s top author in the mid-1990s. But alas, “in 2003 he was less than 50 percent covered in funding” and so, as with other “top-notch scientists who can’t pull in the dollars”, he was laid off. Jeff Smith of UT-B said that “we try to support these people. to bring them into other programs when possible, allow them to continue in other ways, and occasionally we will utilize a limited amount of overhead funding for carrying them. But our practice is not to carry someone indefinitely on overhead”.
It is certainly true that when somebody can’t cut it any more or his research is no longer bearing fruit, his organization may not be able to carry him for long and he has to go; this is true in business, in academia, and in national laboratories. However, the reader was not told how long this high-contributing scientist had been underfunded and why (e.g., if this was a recent dry patch or if he seemed to have hit a dead end in his research area) and what efforts had been made to get him other funded work, etc. Because of UT-B’s many statements about hiring young people, funding work that could be commercialized, etc., one would want to be reassured that this scientist was not being put out to pasture because he was nearing retirement age or because his research, although important, was not of high or immediate commercial value. Smith stated that there was no hard and fast rule for the funding coverage that a researcher had to maintain to keep his or her job. But, he continued, it was a risk for division heads to hire staff who did not have 80-85% coverage. ORNL was focussing on programs where “we have the best chance of succeeding”. Madia stated that “as a scientist you have to constantly refresh yourself — you have to move into areas that are fresh and strong and growing. And as lab director I have to make investments to reposition the lab to meet those new challenges. That’s just the reality of the business”. Where DOE fit into all this was not stated; in fact there was no reference to DOE at all, as if all decisions about what the lab was going to do were being made by UT-B alone and more to the point, in UT-B’s interests. An accompanying table showed that from April 2002 through March 2003, there were 192 new hires and 116 terminations (the terminations included both voluntary and involuntary reductions).
I wondered about this because Dr. David Kocher and Dr. George Kerr were laid off from their division in the same layoff as mine. (Kocher! Kerr! Well-known names in my field! I was stunned.) As Dr. Kocher told me later, he and Dr. Kerr and others had been warned that there was no funding for them and if they could not get it themselves, they would be laid off. Both soon got other work in the Oak Ridge area, but I believe that I am correct in saying that most of it was not exactly the areas that they had been working in and where, arguably, they could contribute the most.
Within a year after my layoff, perhaps 20 or more people in all (not including me), through several law firms, began lawsuits against UT-B for age discrimination. Twenty people out of 92 people laid off is 22% — that is a pretty high figure for suits following one layoff and I think it shows the egregiousness of the discrimination. The largest of these suits, involving about 17 people, was settled in about March 2004. The terms were of course confidential so I do not know what they are. But even if each person was allotted, say, $20,000, that means that UT-B forked over at least $340,000 dollars, plus its own attorneys’ costs. It would be interesting to find out if DOE paid any of it.
In February 2004, a fellow layoffee related the feedback he got from friends who still worked at ORNL. They said that it had turned into a job shop, that management in effect leached off the work of others. (I heard this from other informants as well.) In the most recent round of raises, management got the 20% raises and the peons got a few percent. He said that some 1900 people were being supported on overhead, which was then close to 50%. In March 2004, another fellow layoffee related the gist of a conversation with an ORNL subcontractor, who was from another state and had previously worked for Battelle for years. The subcontractor said that Battelle was a “different kind” of company, that in their minds they never “lay off” anyone, they just “restructure and make your job go away”. He added that that was just how it was done in that corporate setup.
The Oak Ridger (30 April 2004 and 5 May 2004) asked various high-ranking local DOE and contractor officials what they made and what contractor severance package costs had been in recent years. DOE at first refused to talk about salaries, but the newspaper filed a Freedom of Information request for the information. DOE-ORO head Boyd then reported that in 2003 he earned $142,500, plus a $6500 performance bonus. He refused to release the salaries of his top ten underlings, however, saying that he felt that it “was not his place to do so”. But he noted that they all earned between $104,000 and $142,000 and none received a higher bonus than he. The Oak Ridger was still waiting for responses from the contractors about salaries. Regarding severance package costs, UT-B officials said that for the 2000, 2001, and 2001 layoffs, the costs were $10.8 million, $4.2 million, and $10.5 million respectively. A DOE spokesman admitted that the severance package costs for 165 ORNL employees who left voluntarily as part of a reduction in force in 2003 were not included, although the employees were not counted in the number of active DOE-related employees in 2003. Of course, as The Oak Ridger suggested, this meant that the previous layoff figure of 13,100 for 2003 was off by that 165. A BNFL spokeswoman told The Oak Ridger that she was not allowed to give out dollar figures associated with severance packages “because it’s company confidential” — this despite that fact that the severance packages were approved by DOE and paid for (albeit indirectly) with federal dollars.
No story of how the money flows around the Oak Ridge Reservation would be complete without a mention of the convoluted history of the pension fund. (I warn the reader that dates quoted below may be somewhat inconsistent but they are given as they were in the newspaper articles.) As was noted in the December 1999 ORNL newsletter and in various The Oak Ridger articles in 1999, a year or two earlier Lockheed Martin had tried to take out the surplus in the Oak Ridge Reservation pension fund, as the law allowed it to do; DOE apparently concurred in this. However, there was a huge outcry. The substantial surplus in the pension fund was due partly due to the strong market but partly to the fact that there had been little or no cost-of-living increases to the pensioners over the years. As a result, pension payouts were notably small compared to other national labs and Lockheed Martin and DOE had not had to kick anything into the pension fund since 1984. So people thought that Lockheed Martin and especially DOE had a good deal already, without getting to dip into the surplus. Although Lockheed Martin was going to use the money for infrastructure improvements to Y-12 (thus saving DOE that money), as one retiree noted (R. C. Gwaltney letter to The Oak Ridger, 10 November 1999), Congress was supposed to appropriate money for capital improvements to DOE plants, so if Congress did not do that, it was not Congress’ will that it be done. He also pointed out that having a surplus in the pension fund was to allow protection of the pensions in the future due to an increase in inflation or a decline in the market, but this was being ignored. DOE and Lockheed Martin backed down and a small increase was made in the pension payouts, although it was far below what had been lost to inflation over the years. The ORNL finance officer remarked pointedly that being able to take out the surplus would have reduced ORNL’s overhead rate by 3 percentage points. (This was odd, of course, if the money was to be directed to Y-12 improvements, but maybe that wasn’t the whole story…)
A retiree (W. R. Osborn letter to The Oak Ridger, 7 August 2000) met with the supervisor of the Lockheed Martin benefit plan, who told him that the committee that oversaw the pension plan had a formula for calculating pension increases: an increase would be made when the cost of living had increased 30% since the last increase. (Yes, you read that right.) The supervisor stated that the last increase had been in January 1992 and the cost of living had increased “only” 20% from January 1992 to the date of the retiree’s visit. Thus, as the retiree noted, if the cost of living was increasing 3.5% per year, it would take another three years for the “30%” adjustment to kick in. Medicare premiums had increased over 100% (12.5% per year, on the average) since January 1992, but the costs of these premiums were not considered in any way in calculating the cost of living. But, the retiree pointed out, people retiring from DOE itself did get annual cost of living increases. This and many other retirees commenting on the pension situation remarked on DOE’s “let them eat cake” attitude about contractor retiree pensions.
In October 2000, contractor retirees were urged (The Oak Ridger, 25 October 2000) to join in a pension increase rally organized by the Atomic Trades and Labor Council, a confederation of unions. They said that there had not been a pension increase since 1989, so it was proposed that an adjustment be made in all pensions of 3% per year back to 1989, with a minimum increase based on years of service. It was pointed out the even these relatively large increases would use only half of the surplus in the fund and that no congressional action would be necessary. DOE stated (The Oak Ridger, 27 October 2000) that they would have no comment on the brouhaha since it was “inappropriate”: “these are matters between the contractor employees and their respective company. Pension plans are part of an overall compensation plan provided by each company to their employees [and each contractor] reviews these plans annually to ensure that they remain fair, equitable, and competitive as compared to other major industries in the region”. DOE thus washed its hands in the matter of increasing the benefit, even though DOE would benefit if the surplus were to be taken out (e.g., for Y-12 improvements) and even though DOE apparently was the one to veto using the surplus when the retiree public objected so strongly.
The rally was a success. Wamp and other local officials declared themselves to be in favor of a pension increase (e.g., The Oak Ridger, 1 December 2000). BWXT, who now managed the pension plan for the whole reservation, announced that “discussion sessions” would be held. But as a retiree pointed out (The Oak Ridger, 1 December 2000), people who retired after May 1998 were to be excluded. The Oak Ridger (6 December 2000) reported that at one of the two discussion sessions (both of which had overflow attendance), BWXT Y-12 head John Mitchell stated that the last contractor contribution to the fund had occurred in 1985, i.e., that indeed for some 15 years the contractors had not had to contribute to the fund. He stated that the fund did not belong to the employees, that employees were guaranteed specific benefits but not a share of the fund, and that once contributions were made, they became “anonymous” (i.e., contributions from each contributing contractor went into a general pot and were not attributed to the people who worked for that particular contractor or to particular years). He opposed the idea that the pension fund was overfunded (had a large surplus), saying that that could not be determined until the last benefit was paid (i.e., in the very distant future, if ever).
The Y-12 Retirement News (newsletter) (8 February 2001) stated that the pension plan returned 19.5%, 18.5%, and 19.2% on investment in 1997, 1998, and 1999 respectively, but 2000 returns were not expected to be as high due to the decline in the market. It was now stated that there had been some sort of “ad hoc” pension increase in 1969, 1973, 1975, 1977, 1980, 1987, and 1992 — approved by DOE. Thus it was clear that DOE had an interest, even a controlling interest, in how the pension fund was disbursed. In a sidebar, the surplus in the pension fund was estimated to be some $800 million to $1 billion. The Y-12 Retirement News reiterated (1 March 2001) that any recommendation for a change in pension benefits had to go to both DOE-ORO and DOE-Washington for approval. Apparently this was because, as the News observed (8 February 2001), the fund was established with DOE funds (i.e., given to the companies to pay for their work and put aside by the companies in the pension plan); if the plan were ever terminated, “any remaining funds would revert to DOE”, not the companies or the retirees. As the Retirement News (1 March 2001) suggested, DOE’s approval of a change could take months. It was also noted that the contractor company committee that controlled the pension fund and approved or disapproved any increase consisted entirely of company representatives, with no retiree representation whatsoever. The Retirement News estimated the surplus at $300 million.
In March 2001 (taking effect in about July 2001), a significant increase was made in the pension benefits “to replace 50 percent of the rise in the Consumer Price Index since the last increase”, as a letter from BWXT to retirees put it (27 March 2001). This was not all that the retirees had asked for, but it was an important victory. However, as one of my fellow layoffees noted, those who had retired from May 1998 on received no increase. He was told by the ORNL Human Resources director that that was because the salaries of people who retired in those years had kept up with inflation and their pensions reflected that. My fellow layoffee asked why, in that case, those still working had received an adjustment in the “pension factor” (see below). The director replied that they had had to do that to remain “more competitive”, i.e., people would not hire in or would not stay if the pension conditions were unfavorable.
One might wonder why the contractor managements would care if the surplus was used to pay retirees, since the contractors and DOE were not able to use that surplus. Community advocate (and my respected late friend) Susan Kaplan addressed that issue in a letter to The Oak Ridger (12 July 2001). She said that some people had remarked to her that the “premature retirees” and displaced workers who were jettisoned by their companies a short while before a major benefits milestone (such as a pension factor jump upon completion of so many years of service) were “whiners”. But she asserted that some information from The Wall Street Journal (probably 6 June 2000) backed them up. She said that according to The Journal, executives formerly were part of the same pension plan as everybody else, so there was an incentive to make the plans generous. But then many executives began to have supplemental executive retirement plans that were to provide the bulk of their retirement money. Thus there was a disincentive to have generous retirement funds, especially with the executives’ pay and bonuses tied to corporate earnings that would be increased if the contributions to the pension fund could be limited. The executive pensions usually had annual cost of living increases, while many companies were removing the regular cost of living increases from their worker pension plans.
The Oak Ridger reported (31 May 2002) that the US Equal Employment Opportunity Commission (EEOC) ruled that the changes made in the Oak Ridge Reservation pension plan as of July 2001 constituted “an unlawful discrimination against older workers”. The EEOC agreed with the contention of some retirees that under the new pension formula, the more years of company service, the smaller the pension increase was after 30 years. BWXT disagreed, saying that they had done their homework; they made a formal request to EEOC to reconsider. The Oak Ridger (23 September 2003) reported that the Coalition of Oak Ridge Retired Employees (CORRE), a grassroots retiree organization formed in about 2000 to agitate over pension issues, was organizing another rally. CORRE had met with DOE-ORO head Boyd, who refused to comment to The Oak Ridger. Two CORRE issues were the lack of representation on the pension fund advisory board(s) and bringing local pension funds in line with national DOE norms. Then The Oak Ridger (22 October 2003) reported that the contractors had submitted a pension fund proposal to DOE. Neither DOE nor the contractor officials would discuss the details of the proposal, but BWXT president Dennis Ruddy did say that the solution “is not as simple as it might seem”. He claimed that care had to be taken not to “disadvantage the people who have future commitments [in order] to take care of people….whose commitments kicked in long ago”. (Huh?) He also said that “the prosperity of the ’80s and early ’90s has created some expectations on the part of people that aren’t realistic” and that a recent downturn in the stock market could make the extra $500 million in the fund “evaporate”. He said again that BWXT was “mindful of the fact that other pension plans do have periodic adjustments to them, but the solution is not just as easy as some people would have you believe. If you could just make a one-time payment, that would be okay. But it’s not just a one-time payment, it’s something that represents a continual drain on these pension plans as you go forward”. He elaborated, saying that BWXT was “still operating under the possibility that that overfunding will evaporate in the next — pick a number — one to three years, and we would get to the point where we would hit the legal limits that we would have to start making contributions again. And those contributions could be fairly large in terms of the operating budgets of the sites. The government is not currently prepared to make those types of contributions.”
So there you have it: it was DOE all along that was resisting using the pension fund to provide realistic pension payouts. First, the surplus was to be used as capital funds, then (if memory serves) it was to be used for operating funds. Second, the surplus was to be used as a buffer — not a small buffer, but a huge buffer — against not just the vagaries of the market, but against the contractors expending their funds — and thus the government expending its funds. Thus it was not possible for DOE to allow cost of living increases at Oak Ridge, while they were doing so for DOE’s own employees and apparently were doing so for contractor employees at other sites. Oak Ridge retirees had known all along that it was DOE that was using them in this way, but here it was stated in pretty explicit terms. (By the way, this shining moment in pinning down an official and finding out for certain an unsavory but important truth was brought to us by The Oak Ridger’s R. Cathey Daniels.)
The Oak Ridger (22 October 2003) said that nine Tennessee Congressmen wrote the Secretary of DOE to point out inequities in pensions at Oak Ridge as compared to other sites. Ruddy commented that BWXT was now gathering information (which BWXT had previously said was difficult to do because the information was “proprietary”). The subsequent January 2004 success in getting a minimum benefit for long-retired folks (The Oak Ridger, 8 January 2004; Knoxville News-Sentinel, 9 January 2004) was apparently midwifed by Wamp, although the full-court press by the entire congressional delegation undoubtedly helped to move DOE off the dime. The Oak Ridger noted (3 September 2004) that CORRE was still working to get the last pieces of the pension fairness puzzle into place: representation on the pension board and an increase to restore 75% of the loss in pensions due to cost of living increases since retirement. Again, this would require no appropriation from Congress since the money was in the pension fund surplus, although BWXT and UT-B would have to get DOE approval. At this point, there was $2.7 billion in the pension fund, with $2.1 billion being obligated and $581 million as surplus. A letter to the editor of The Oak Ridger (J. Shacter, 23 September 2004) pointed out that the proposed increases would take $194 million of the surplus (as obligated funds over many years, not as an annual payout), so there would still be a comfortable surplus left in the pension fund. The letter reiterated that Oak Ridge appeared to be the only DOE site where the government (through its contractors) had not contributed to the pension fund every year and that pensions at those other sites were “vastly superior” to those of Oak Ridge.
UT-B claimed that there would be a problem if pensions were increased as was being proposed by CORRE (The Oak Ridger, 21 October 2004). UT-B said that the “$500 million” surplus was a total for all sites and contractors and that the ORNL share was only $174 million; if the increase were put in place, UT-B would be faced with a liability of $33-40 million. Besides that, the recent contract with the unions created a further liability of $43 million. Both of these liabilities would be chargeable against the $174 million. Finally, new mortality rates to be incorporated into pension calculations in 2005 would have an impact of a further $46 million on the fund (i.e., more money would be needed to cover the increased life expectancy). So according to UT-B’s calculations, which included the actual “0% growth” of assets in the market in 2004, ORNL’s portion of the pension fund would be short about $17 million by 2006. An ORNL spokesman, while acknowledging that “time had eaten away the earning power of the benefits for longtime retirees”, said that the proposed increase would “force ORNL to make some very difficult choices”. UT-B’s priority was “to grow the Lab’s research program”, but “if the pension system becomes underfunded, we will have no choice but to lay off a large number of current staff”. But as CORRE pointed out, if UT-B’s figures were correct, it was just more evidence that contributions should be made to the pension fund. They reiterated that DOE had not contributed to the pension fund since 1984 and that the contractors had not requested a contribution either. It is notable that UT-B appeared to assume (from talks with DOE?) that DOE would not be advancing any extra funds to cover any shortfall and thus that any shortfall would have to be made up from ORNL operating funds.
A followup letter from CORRE president David Reichle (The Oak Ridger, 24 October 2004) stated that it was foolish to think that market performance could keep the pension fund going indefinitely, “especially when the growing salary base of DOE contractors continues to increase the liabilities with no new contributions to compensate”. Also, as he so aptly stated, “retirees’ welfare continues to be sacrificed to subsidize contractor overhead”. (Reichle was a retired associate director of ORNL, so he knew well of which he spoke.) The solution, he argued, was not to deprive retirees by prolonging the inevitable, but to reinstate pension fund contributions at the present time, when the investment requirements would be minimal. He called the UT-B claim of potential layoffs a “phony fear factor” that UT-B was raising among current employees and the business community and he noted pointedly that UT-B had just added new overhead positions in its recent reorganization of ORNL. Despite all this, CORRE was still having to remind everyone in 2005 that the various Oak Ridge Reservation contractors had not paid anything into the pension plan since 1984 or 1985 (Letter to The Oak Ridger, M. H. Rose, 22 June 2005); in fact, as one retiree pointed out (Letter to The Oak Ridger, S. Hopwood, 29 June 2005), UT-B and BWXT themselves had never had to kick in any money to the pension fund.
In addition to the pension fund payout issues, there was the issue of the pension “multiplication factors”. The reader should understand that in the old days, it was thought to be of value to keep employees a long time, even for all of their careers. Thus the pension to which an employee was eligible was made to depend on how many years he had spent at the company — not in a linear fashion but in more like an exponential fashion, as an incentive to get experienced employees to stay. For example, suppose that in a linear system, an employee was entitled to a maximum of $1000/month after 30 years of service. After he was “vested” (i.e., completed the minimum number of years to qualify for a pension) at 10 years, he would receive (10/30) x $1000, or $333/month, when he reached retirement age. Similarly, after 20 years of service he would receive $667/month. However, under the “multiplication factors” system, an employee who had worked 24 years would not receive 80% of the $1000/month, or $800/month, but instead $570/month. (Note that this is a simplified example to illustrate the point and does not take account of age at retirement, etc. Also, I have seen different listings of what the multiplication factors are, so these may be somewhat in error. However, it is not disputed by the pension plan people that such factors exist and are applied to everyone.) This increases the incentive for contractors to lay off older workers, because the eventual pension payout increases so much more in the last ten or so years of work.
A final extra hurdle for the older retirees is that, according to a CORRE representative who spoke to The Oak Ridger (6 December 2005), they pay up to a 10% fee to pass their pension benefits to their spouses it they die; I think this means that their pension benefit is 90% of what it would be if they did not reserve the right to have the pension continue for their spouses. However, employees who have not yet retired from ORNL, Y-12, etc., will pay a smaller fee. The CORRE person added that retirees have not received a pension adjustment (for the cost of living) in four years — this at a time when the pension surplus was up to $800 million. Thus in this and the other ways I discussed, current employees, current contractors, and DOE are benefiting from the restrictions and limitation placed on older retirees’ pensions.
It would seem to be in the interest of the city of Oak Ridge, with its average age going up because of the many retiree residents, for the pensions to be increased and thus for more spending to occur in Oak Ridge. But the city fathers have been mostly silent on the issue. They prefer to talk about attracting “younger people”, “people with young families” to Oak Ridge — exactly the sort of people that UT-B is trying to attract to ORNL, in fact. The News-Sentinel reported (27 June 2005) that ORNL was conducting a major recruiting campaign “trying to shore up its research and operations staff for the future”. The reason given was that up to 40% of ORNL’s work force — or about 1500 of the 3800 employees — would be “eligible” for retirement in the next 5-7 years. I believe that what this actually meant was not that this 40% would qualify for Social Security (they wouldn’t all be, say, 62-67 years old), but that they would be over, say, 50 or 55 and thus be more likely to take early retirement or, if they had to, a voluntary reduction in force. One of the ORNL efforts was in new co-op and internship programs; this would mean that older workers, probably with degrees, would be replaced by younger ones without degrees or with new degrees. The stated aim was to “build a base for future hires” for research and operations programs; this is not a bad idea, but should not be the main reason for DOE to allow such programs on a controlled site. Also, a relatively large number of people might be “milked” at low wages for some period of time before a few of them were permanently hired. The non-hirees would of course have good experience for their resumes — or would they? It would surely depend on what work they were to do. The News-Sentinel (25 January 2006) reported, however, that the turnover at ORNL not been as bad as expected (which was now said to have been up to 30%) — because, ORNL Director Wadsworth said, people were working longer than traditional retirement ages. Still, ORNL was engaged in a “major” recruiting campaign with emphasis on 20 particular universities.
