Report of the Advisory Committee for Selection of Argonne National Management Agency

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Summary and Recommendations The present contract with The University of Chicago for operation of the ArgOMe National Laboratory expires on December 31, 1951, or, i f extended as presently contemplated, on June 30, 1952. I n requesting advice on the selection of the best type of man2gen;ent agency f o r operation of the Laboratory upon expiration of t h e presknt contract, the ' Director of Reactor Development gave this committee the fol - 1. To define the present method employed by The University of Chicago inthe operation of the Argonne National Laboratory and to eva lm te its effectiveness. 2. To identify the functions of managenent that need t o be performed t o enable the Argonne National Laboratory t o accomplish effectively its end objectives. 3. To identify the incentives which can be offered toa laboratory operator t o motivate effective management. 4. To indicate alterna.tive methods of operation with an evaluation of each and make specific reconmendations asto the best method for management ofthe Argonne National Laboratory, 5. Develop criteria for the selection of possible contractors; establish a list of contractors whic:h best satisfy these criteria ; and make recommendations as t o one ora few of the best qualified contractors. while the committee has attempted t o cover the five assignments contained in the memorandum establish kg the comit tee (reproduced a s Appendix A of this report) the discussions of somle of the items have been combined. I n dealing with assignments one and two, the committee concluded t h a t it would be desirable t o consider the managenmt requirements that are ' peculiar t o Argonne

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Laboratory organization and management, wticular reference t o an evalr ion o f the existing For these reasons, assignments one and tyo are treated together as Section 11. Since the incentives motivating effective management vary with the type of operator, the committee considered it desirable t o include the incentives i n considering t h e advantages and disadvantages of the several methods of operation discussed. For this reason, assignments three and four have been combined as Section III. The last part of assignment five,calling fora recomendation of one or a few of the best qualified contractors, contemplated the possibility that expiration of the present contract on DeceniSer 31, 1951 might leave the Commission pressed for time i n which to select a new operator. I n subsequent discussions with the Director of Reactor Development, it was agreed that progress inthe negotiation of a six-month extension of t h e present contract would make possible a more careful screening of potential candidates. tion IVY a relatively long list of potential candidates is sabmitted, For tnis reason, as fw the r discussed i n SecThe cod tte e ' s principal conclusions are the folloning: 1, There have been major changes inthe program, location, size, and character of the Laboratory since Contract V1T-31-109-Eng-38 was signed i n 1946, Clear deficiencies exist inthe present contractual operation of the Laboratory. Operation of the Laboratory by a cor,tractor i s preferable to direct operation Because of the exist;ing deficiencies, operation of the Laboratory by the present contractor should be con+,inaed only if,after comparison with other potential operators, the present contractor appears t o be the best qualified candidate o r qualified as wel:L as the best alternative potential operator, Feither universities, non-profit research institutes, nor industrial organizations inherently po:;sess overriding advantages.

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6, Aection of an oper 'r, therefore, should be made 0; he basis of c r i t e r i a which can be applied equally well t o organizations of any of the three types. Basic re lev art crite2ria are stated for use i n evaluation of potential operators with a maximum of objectivity. A contractor selectiton board should be appointed immediately t o evaluate potential contractors i n accordance with the proposed criteria,to secure proposals from all well qualified candidates, and t o recommend for final selection the three most desirable potential operators.

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SECTION I1 - ASSIGDIENTS 1 AND 2 The Argonne National Laboratory i s engaged i n research and developrnent programs covering a major part of: the field of interest of the Atomic Energy Commission. The Laboratory as it exists today is a direct outgravth of research and development on the urar\ium proiject instituted by the Office of Scientific Research and Development a t The University of Chicago i n 19b1. Under the Manhattan Engiqeer District as the Jtetallurgical Laboratory, located largely on The University of Chicago's campus and i n nearby buildings, it reached a peak size of over l,9OO personnel in August, l9b.k. its size declined quite sharply to slightly less than 1,100 i n January, 1946. However, while t h e Congress was considering what the nation's long-range atomic energy program should be and how it should be managed, t h e ?:ED continued t o maintain the Laboratory and took steps to make it permanent. establishment of an organization of participating institutions and a decision t o erect permnent facilities i n the vicinity of Chicago. the Laboratory as a permanent institution,theE4ED hoped t o serve two purposes: to retain an organized nucleus of a research and development organization t o be available around which to build in an orderly fashion inthe event of another major national emergency, and. t o provide a technical center t o serve the Hanford production plants inthe event of serious operational difficulties or the need for extensive process changes. From this peak employment, These steps included the On November 22, 1946, themD and The University of Chicago entered into Contract V-31-109-Eng-38, effective April 8, 1946, for a tern extending t o December 31, 1947.

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i Concurrently, the MED irLLtiated s%eps toward the acquisition 9f a permanent s i t e for the Laboratory. program and contract, and on March 25, 1947, ratified and confirmed it. 1947, the term was extended t o December 31, 19% The Commission, upon its establish q nt, considered the Argonne I n January, 1948, the Commission changed the character of the Laboratory toa considerable extent by assigning major responsibilities for reactor development creased and the emphasis inthe Laboratory's program was significantly shifted toward applied developmental and engineering work. As a result,the contemplated size of the Laboratory was substantially inI n the Fernanent Laboratory organization est,gblished by the MED i n 1946, the participating institutions, which were made up of midwest universities and research institutes, played a major role. To them was assigned responsibility for advising the Government in the selection of the contractor, for advising the contractor and t h e Government concerning matters of general policy involving Laboratory operation, f o r reviewing and approving programs and budgets before submission to the co ~ i : ; sion, and for concurring i n the appointment of a Laboraquite unrealistic with the assignment t o Argonne of major development responsiThough never fully implemnted, these responsibilities became bil i ties in the Commission's reactor program. It became apparent tothe Commission, the contractor, and the Board of Governors (representing the participating institutions)that the relationships needed clarification and restatement. Lengthy discussions and considerations of the proper role of the participating institutions resulted i n the establishment of an Executive Board of the Council of Representatives of the Participating Institutions to replace the Board of Governors and redefinition of the responsibilities of the Board t o Zimit it t o matters relating to research progyams of interest both t o members of

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.the participating institutions and the Laboratory and to the provision of specia liz ed services by the Laboratory t o members of the participating institutions. The present role of the Farticipating institut ims is stated Rare fully in the Organization and By-Laws which appears in Appendix B. alist of these institutions. Appendix B also contains Atthe preser,t time, the Laboratory has a total staff of about twenty-eight gations i n the productioii, weapons, and reqctor programs. Ofthe balance of $7,300,900, devoted t o plnysical science research and biology and medicine, a significant portion is directed towards the ss$ution of specific problems o r the accumulation of information required for specific end uses. About two-thirds of the work of the Laboratory i s programmatic and directed and, toa considerable extent, stems from programs formulated outside the Laboratory and assigned t o the Laboratory for action. On the other had,a portion of the work i n biology and medicine and physicaL science research is of a basic nature i n which Commission approval i s limited t o the field of investigation and the financial and manpower level of support. work, t'ne sci ct if ic and technical personnel of the Laboratory are engaged i n work which ranges i n character from detailed engineering process improvement on the one hand t o long-range fundamental studies in the biological and phJrsical sciences on tie other, with widely varying degrees of Commission participation Its operatibn during the fiscal year ending June 30, 1951 Will cost Of this total, about $10,400,000 will be devoted t o investiAs a result of these two broad divisions of the Laboratory's in the initiation and supervision of program progress. The Commission, after its appointment, endorsed the desirability of maintaining Argonne as a permanent installation and embarked upon a major construction program t o prolride adequate permanent facilities at a site in DuFage County about tweqty-five

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.piles west of The University of Chicago campus, The total ccst of the facilities, Three majorvhen completed, will be inthe neighborhood of sixty rnj,ll$on dollars. units of the Laboratory still operate i n buildings on The University of Chicago campus--the Divisions of Chemistry, Chernical Engineering, and Biologjr and Fedicine. The Chemical Engineering Division i s i n the process of moving from t h e West Stands of Stagg Field to the DuPage Site; this move will be completed i n the Spring of campus tothe DuPage Site during the late Spring and Sumzier of 1951. The Biology and :fedicine Division will probably not begin t o move until early in 195'2 and the move should be completed by June of 1952. The Chemistry Division vi11 move from the N e w Chemistry Building on the During the Sumer of 1949, as a result of the rapid growth of the Laboratory and t h e development of the Laboratory-AEC relationship, it became desirable t o promulgate a fornal statement of t h e framework within which the Laboratory would operate. This statement was developed jointly by the Laboratory and the Tiashington and Chicapo staffs of the Commission under the direction of the Director o f Reactor It was ap:-~rovedby the Conmission on June 1, 1950 and i s reproduced. On the general mission of the Laboratory, t h e Operating Policy "The purpose of the Argonne Mationd Laboratory isto provide a fornardlooking program of basic research and development i n t h e Ididwest which mill help t o assure the leadership of the United States in the field of ' I...for basic research, the Argonne National Laboratory provides the for the stimulation, encouragement and support of qualified investigators throughout Iiidwestern universities, research institutions aqd industries a t work intie atonlic energy field ; it provides facilities not available elsewhere; and it brings together i n one research organization the many differen& speciali-sts requisite for the comprehensive attack essential in this field where the problems overlap the areas of the variolls scientific disciplines (phjsics, chemistry, biology, etc.) toa Wicpe extent. It is a focal point i n atomic energy research

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"The available talent and facilities of the krgonne National Laboratory play an important r ' ole in the solution of practical problems and i n the development of specific military and non-military uses o f atomic er?ergy. lt,,.the AEC, subject to availability of funds, Assumes responsibility for the long-term support of a cadre of carefully selected senior men who are capable of assuming responsibilities and acting either as project leaders in developmental work o r as experienced in'dividual research workers capable of formulating, planning and carrying out t h e most difficult research assignments. Asumes responsibility for support of an adequate basic research group, free t o choose tothe fullest practicable extent tine problens it will work on and the methods of attack which it v,iU follow in their soluIntends that the development group be larger in size than the research group, that it be engaged i n projects carrying an assigned priority, arrd that it operate under t ne discipline necessary t o ensure that efforts are directed toward goals for which funds are allocated.!1 Inthe fiscal year ending June 30, 1950, the costs charged by the University under Contract 6-31-109-ag-3 19 for the operation of the Argonne National Laboratory amounted. t o $16,76k,278, which 17as 39.5 percent of the University fs consolidated current expenditures of $42,425,735. (See yppendix D f o r other Commission contracts with the University.) amounted t o $3- in the fiscal year ended June 30, 1950. $525,644 represents t h e allocation of general and administrative expenses, share i s 37.5 percent of the total general and administrative expenses allocated; it i s 48.1 percent of the amount identified as "general administrative and general expensell inthe report of the Universityts Comptroller for the fiscal year 19491950. I n addition, $47'2,29b was charged as an 1lallmance for costs which cannot be computed," based on five percent of direct salaries and wages on the contract, The overhead charges tothe Argonne operating contract

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For the operations under t h e contract with t h e Atomic Energy Commission, the Laboratory is virtually ;I self-contained unit separate from The -University of Chicago campus organization. (The contract itself as originally drawn states that the contractor shall "establish within its organization a separate, and as nearly as may be, Self-contained administrative unit f o r the operation and maintenance of the LaSor&orjr, which units hall be under the direction of the conhired for the Laboratory operation rather than having been transferred from recular who are members of t h e faculty of The UniverCjity of Chicago and who spend p a r t of the& time on Argonne work,;' the program relationships with the University are the same as with any other member of the group of thirty-one participating in st it u - tions. During the period from June, 1948, t o February, 1951, the number of persons carried on the assigned employee roll has steadily decreased from 39 t o 22. Almost in their entirety,the personnel of the Laboratory have been It i s reported by the Chicago staff that the Laboratory Director and the personnel of t h e Laboratory regard themselves as "Argonneft employees and do not regard themselves as meinbeys of The University of Chicago staff. meinbers of tie technical and. administrative staffs of the Laboratory reported by the Cnicago Operations Office, it appears that relatively few of the employees are familiar with or are interested in …