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The U.S. Department of Energy (DOE) published a notice on the Industry Interactive Procurement (IIPS) website on January 23, 2008, announcing that DOE was cancelling the competition for a new contract for the management and operation of DOE’s Pacific Northwest National Laboratory (PNNL), located in Richland, Washington.  This decision was made in light of the complexities created by a provision in the Consolidated Appropriations Act for Fiscal Year 2008 (language quoted below).

DOE initiated a competitive procurement in October 2007 with the issuance of a draft request for proposals (RFP) for public comment for the award of a new performance-based management and operating (M&O) contract.  The current contract is with Battelle Memorial Institute (BMI) of Columbus, Ohio, and it may be extended until September 30, 2009.  The PNNL M&O contract, with expenditures of about $750 million per year and a staff of about 4,200 members, has not been recompeted for nearly 45 years, since 1964 when the laboratory was created.

PNNL is currently operated under a M&O contract under which the contractor conducts R&D activities and manages a vast array of government facilities to solve complex problems in energy, national security, life sciences and the environment for many DOE organizations, including the Office of Science and the National Nuclear Security Administration, and for other government agencies and non-federal entities, such as universities and private sector businesses. 


Under an agreement known as a “use permit” first executed in 1964 when the laboratory was in its infancy, DOE also has allowed BMI to conduct limited R&D services for its own account in competition with the private sector using in part Government resources and laboratory employees.  Determining that the use permit had outlived its purpose now that PNNL is a well-established world class national laboratory, DOE announced this past fall in connection with the issuance of the draft RFP that DOE would not include the use permit in its replacement M&O contract.  


DOE has not yet made a decision on a path forward regarding the PNNL M&O contract.


Section 311 of the Consolidated Appropriations Act, 2008, Public Law 110-161, Division C, Title III:

“SEC. 311. USE PERMIT.  The Use Permit granted to the contractor for activities conducted at the Pacific Northwest National Laboratory by Agreement DE-GM05-00RL01831 between the Department of Energy and the contractor shall continue in effect during the term of the existing Operating Contract and the extensions or renewals thereof and shall be incorporated into any future management and operating contract for the Pacific Northwest National Laboratory and such Use Permit may not be waived, modified or terminated unless agreed to by both contractor and the Department of Energy.”


The Explanatory Statement referenced in Section 4 of the Consolidated Appropriations Act, 2008, Pub. L. No. 110-161:


“Language is included in section 311 relating to the Use Permit at Pacific Northwest National Laboratory (PNNL).  The Government Accountability Office is directed to conduct an evaluation of the effectiveness of technology transfer across all DOE laboratories and to report to the Committees on Appropriations on the effectiveness of technology transfer and the role the Use Permit at PNNL plays in this issue.”