PNNL operating under 5-year contract extension for Battelle

By Annette Cary, Tri-City HeraldOctober 2, 2012 

Pacific Northwest National Laboratory began operating under a new five-year contract extension for Battelle on Monday.

The Department of Energy an-nounced that it planned to extend Battelle's contract to manage the DOE national lab in Richland just over a year ago, but the contract extension was signed less than two weeks before it took effect.

The extension will extend Battelle's run as contractor from 1965 through September 2017.

"We're pleased to continue to work with them," said Roger Snyder, manager of the DOE Pacific Northwest Site Office. "They are a well-performing contractor."

During the past year, DOE and Battelle have worked out contract changes that stem from issues raised when DOE earlier considered competing the contract rather than extending it with Battelle. That idea was dropped when the Obama administration said routinely opening lab contracts to competition was not saving money and improving efficiency as intended.

But the issues remained.

Unlike most other DOE national laboratories, DOE does not own all of the buildings at PNNL, which employs more than 4,500 people, most on the Richland campus.

DOE owns some of the buildings, like the Environmental Molecular Sciences Laboratory. But others are owned by third parties and leased to the lab and, most significantly, Battelle owns the original buildings on the PNNL campus.

They were built in the late 1960s and early 1970s and include the Research Operations Building at what serves as the entrance to the campus and the Battelle Auditorium.

A formal agreement for DOE use of the Battelle facilities has been worked out to replace a gentleman's agreement.

"During negotiations, the goal of both parties was to ensure that Battelle-owned facilities remain available to support the mission of PNNL," said Mike Kluse, lab director.

Under the contract extension, DOE assumes full use of all facilities, Snyder said.

DOE now will cover the full operating cost for these facilities as well as for the Battelle-owned land making up the core campus, according to Battelle.

Partly in consideration for the continued exclusive use of Battelle property and also based on the research to be conducted at PNNL, Battelle will be eligible for larger award fees.

In fiscal 2011 and 2012, Battelle has been eligible to earn up to $9 million for managing and operating PNNL. The maximum award payment possible for fiscal 2013, which started Monday, will increase to $11.9 million. For the last three years of the contract extension, that will increase to $12.5 million.

The negotiations also had to create and implement a replacement for the 1831 Use Permit, which has allowed work to be done at PNNL for private industry since 1965 alongside research for federal agencies.

For decades, it allowed Battelle to partner with industry and served as a way to push research and technology to the marketplace. However, it expired Sunday.

In December, DOE established a pilot program called Agreements for Commercializing Technology, or ACT, to allow businesses to work in partnership with PNNL or other national labs to bring new technology to the market.

ACT "is a technology transfer mechanism currently being implemented at PNNL that allows us similar latitude for the majority of work that we currently do under the use permit," Kluse said in the memo.

The use permit previously was used by Battelle outside its DOE contract, but now ACT will work as a portal in the contract to bring industry work into PNNL, Snyder said.

The goal of ACT is to get science out the door and commercialized, said Julie Erickson, deputy manager of DOE's Pacific Northwest Site Office.

Work to phase in ACT began in April. It will allow PNNL to continue to perform the majority of the work it has been doing for industry under the use permit. Some of the other use permit work also is being moved to another contract mechanism, called "Work for Others."

-- Annette Cary: 582-1533; acary@tricityherald.com

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