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Washington, DC - Secretary of Energy Samuel W. Bodman today announced his decision to authorize a four-year contract extension for the management and operation of the U.S. Department of Energy's (DOE) Pacific Northwest National Laboratory (PNNL), located in Richland, Washington, to Battelle Memorial Institute, a non-profit organization based in Columbus, Ohio.  The Battelle management and operating (M&O) contract will be extended through September 30, 2012.

DOE's decision would also extend a companion contract, the Battelle "Use Permit" that allows use of laboratory resources for Battelle's commercial business, to remain in effect through September 30, 2012, at which time Battelle and DOE have agreed that all Use Permit activities will be concluded or transitioned over to the M&O contract (see background attachment for more information).

"This extension paves the way for the U.S. Department of Energy and Battelle to work together to build a stronger, more vibrant and relevant PNNL to meet the important science challenges facing this Nation in a way that holds the promise of a bright future for the Laboratory, its employees and the Tri-Cities region," said DOE Under Secretary for Science Dr. Raymond L. Orbach.  "The Department remains committed to continuing its efforts to develop new or improved mechanisms that would be appropriate for use at all laboratories to make it as easy as possible for industry to partner with our national labs to leverage their scientific and technological innovations."
"Battelle is confident that this extension of the PNNL contract and the Use Permit, combined with the steps the U.S. Department of Energy will take to facilitate technology transfer by industry partnering mechanisms at PNNL and other national labs, will enable us to phase out the Use Permit with little or no impact on the laboratory and local community," said Battelle Memorial Institute President and Chief Executive Officer Carl F. Kohrt.

DOE's current contract with Battelle will expire on December 31, 2008.  This contract extension will allow sufficient time for the contractor to transition its Use Permit activities and for the Department to plan and conduct a competitive procurement process to select a contractor to manage and operate PNNL.

PNNL is one of DOE's 17 world class national laboratories, and performs research for several DOE program offices - including the National Nuclear Security Administration and the Office of Science - as well as other government agencies, universities and industry, to deliver breakthrough science and technology.  PNNL solves complex problems in energy, national security, life sciences and the environment by advancing the understanding of physics, chemistry, biology and computation.  PNNL currently has approximately 4,000 staff members and a business volume of $760 million.

Learn more about DOE's PNNL.

Background Attachment

The Battelle management and operating (M&O) contract for the U.S. Department of Energy's (DOE) PNNL has not been re-competed for nearly 45 years, since 1964 when the laboratory was created.  Under an agreement known as a "Use Permit" first executed in 1964 when the laboratory was in its infancy, DOE also has allowed Battelle to conduct limited work for its own account by using Government resources and laboratory employees.  In October 2007, DOE initiated a competitive procurement for a new PNNL M&O contract with the issuance of a draft request for proposals (RFP) for public comment for the award of a new performance-based M&O contract that did not include the Use Permit.  DOE's decision was based generally on the need to foster competition through a "level playing field" and to better align the new PNNL contract with other DOE M&O contracts.  However, on January 23, 2008, DOE published a notice cancelling the competition for a new PNNL M&O contract in light of the complexities created by the following provision in the Consolidated Appropriations Act for Fiscal Year, 2008, Public Law 110-161, Division C, Title III, 2008: 

"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."

Battelle and DOE have now agreed that all Use Permit activities will conclude September 30, 2012.  The extension of the Use Permit and the PNNL M&O contract provides Battelle time to restructure its relationships with its customers and to put business models in place that will transition work currently performed under the Use Permit.

DOE, through the activities of the Secretary's Technology Transfer Coordinator and Technology Transfer Policy Board, is working within the Department and through its national laboratories to improve existing mechanisms and create new mechanisms appropriate for use by all laboratories for the transfer of technologies.  The PNNL extension gives DOE additional time to make further progress in improving the process for transferring technology advances from its national laboratories to the marketplace.

Media contact(s):

Jeff Sherwood, (202) 586-5806