The view from

A number of commenters on the future of LANL and other national labs seem to be myopic. They are mad that the future is not turning out the way that they want it to.

In part these commenters appear to refuse to see that the other players in this game are playing under different rules and for different rewards.

Here is one example.

The consortium that runs LANS gets about $60,000,000,000 in contracts from the U.S. government each year. This makes the consortium, in terms of income more than twice the size of the entire Department of Energy.

On this income, ignoring the University of California which is a more complicated case, the members of the consortium average 20% a year in gross profits and probably about 13% after government fines and other things. Thirteen percent is not a great return nor a bad return for a company.

So, on the sixty billion income, the consortium would be expected to make $7.8 billion in profit in an average year. If they make less profit than this, their investors take the investment money somewhere else.

LANL brings in about $2 billion dollars a year in income. At 13%, the expected profit on this income would be $260,000,000. Two hundred and sixty million dollars is 4.4 times bigger than the $58.8 million that they actually got. The fifty eight million represents a 3% profit not a 13% profit. If your bank only gave you a 3% return on a CD you would pick another bank.

So, the consortium should not have bid on running LANL if they were only going to get a 3% return and they knew that they were only getting a 3% return, which they did.

Hence, the bid was about something other than running LANL, such as building buildings and cleaning up environmental waste. Building and cleaning is what these companies do, not managing scientific research labs.

Does this make sense?