updated 12/21/2005 5:35:58 PM ET 2005-12-21T22:35:58

Despite a string of security lapses and allegations of fraud and mismanagement, the University of California was awarded the government contract Wednesday to continue managing the Los Alamos laboratory that built the atom bomb.

Because of the scandals at Los Alamos, the government contract to run the nation’s pre-eminent nuclear lab had been put out to bid this year for the first time in the lab’s 63-year history.

Energy Secretary Samuel Bodman announced that a partnership of UC and the engineering giant Bechtel Corp. had prevailed over a rival team made up of the University of Texas and the defense contractor Lockheed Martin.

The contract is for up to $512 million over seven years, with a provision to extend it to 20 years.

“This is a new contract with a new team, marking a new approach to the management of Los Alamos. It is not a continuation of the previous contract,” Bodman said at a news conference in Washington.

He said the goals under the new contract include seeking out the best practices in government, industry and academia to make the laboratory operate more efficiently.

“It is a good decision for the American taxpayers. This new contract will put in place concrete measures of accountability, ensuring that the tax dollars spent at Los Alamos are well spent,” Bodman said.

The university has run the lab since it was created in the New Mexico desert in 1943 as part of the top-secret Manhattan Project to build the A-bomb. To win the new contract, the university teamed up with Bechtel to add more managerial expertise.

The Los Alamos National Laboratory, with about 8,000 University of California employees and 3,000 contract workers, is one of the nation’s three chief installations responsible for maintaining the U.S. nuclear arsenal and manufacturing weapons components.

The lab also conducts research on a host of topics of national interest, including miniaturized technology, genetics, computing, the environment and health.

The new management team includes several New Mexico universities and will be directed by Michael Anastasio, head of Lawrence Livermore National Laboratory since 2002. All current Los Alamos lab employees, except top managers, are guaranteed jobs, Bodman said.

“All of us at the University of California look forward to being a part of the great science yet to come at Los Alamos,” UC President Robert C. Dynes said.

The lab has drawn criticism in recent years for security lapses, credit card abuses, theft of equipment, and mismanagement.

In 1999, in a case that proved a major embarrassment for the government and the lab, Los Alamos scientist Wen Ho Lee was jailed amid an investigation into possible Chinese espionage.

The case proved to be weak, and Lee pleaded guilty to mishandling classified information and was released with an apology from a federal judge.

Former lab investigator Glenn Walp, who was fired in 2002 after alleging mismanagement, fraud and cover-up at the lab, said he was disappointed that UC-Bechtel won.

“It’s a blue Christmas for America,” he said. Walp said UC deserves praise for the work it has done in the past, “but in the last 10 years, they’re just incapable of running the lab that’s so important to American security.”

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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