For 60 years, since the atomic bomb was first conceived and built at Los Alamos National Laboratory in the high desert of New Mexico, the University of California has had a lock on the federal contract to run the nuclear weapons research center.
The two institutions have been so closely linked, their histories so intertwined, that the contract to manage Los Alamos, with an annual budget of $1.7 billion, has never been put up for bid -- and the university has vowed never to compete for it.
Now, however, with strong evidence of financial fraud and other problems at the lab, UC's management and business practices are under withering attack from the Energy Department, members of Congress and outside critics.
Some say the university's grip on the prestigious contract to run Los Alamos -- along with its sister nuclear weapons facility, Lawrence Livermore National Laboratory, and the Lawrence Berkeley energy research lab -- is no longer assured.
"It may very well be that the only way to solve the problems is to put [the contract] up for bid," said Rep. James Greenwood, a Pennsylvania Republican who heads a congressional subcommittee investigating the lab. Pledging tougher oversight, he said the university will now "be judged not only on the bombs they build, but on their accounting and management of the lab."
An Energy Department report released Jan. 30 provided powerful ammunition to UC's critics. The investigation by the department's Office of Inspector General confirmed allegations of financial problems, including the theft or loss of at least $1.5 million in government property. Perhaps more damaging, the report cited weak internal controls and a culture that valued loyalty to Los Alamos and the university above honesty.
The report also corroborated allegations by two whistle-blowing investigators who were hired to look into the fraud reports, then fired when they spoke out about what they found. After the pair, Glenn Walp and Steven Doran, complained of a cover-up, they were rehired as consultants by UC to help with the expanding investigations.
UC supporters argue that the university has provided effective leadership for decades on one of America's most challenging national security missions. They cite the potential risks of a management shift, including an exodus of top scientists, and say it makes sense for the nation's most highly regarded public university system to manage the labs that are among the country's most critical security assets.
"The University of California has a 60-year history of providing effective stewardship and superior science at Los Alamos and its sister institutions," UC President Richard C. Atkinson said last month. "The university's commitment to serving the nation's security interests is unwavering."
Pulling the contract for all three labs would cost UC up to $25 million in fees -- nearly $9 million from Los Alamos alone. But the more significant blow would be to the university's prestige. Directors of both the Los Alamos and Livermore labs say such a move would also be unwise.
"In some ways, you can argue that we need UC more than ever," said Michael Anastasio, director of Livermore, near Oakland. "We need access to the very best scientists and technologists this country has available."
George Nanos, interim director of Los Alamos, added that although the lab's faulty business practices are under scrutiny, the heart of the lab's mission -- performance of scientific research -- has not been questioned.
Still, some experts question whether any educational institution is suited to run the labs.
Harold Smith, a former assistant secretary of defense for atomic weapons, said university faculties tend to view management as a secondary responsibility.
"A company would be more concerned with doing a good job," said Smith, a distinguished visiting scholar at UC Berkeley.
He pointed to Sandia National Laboratory in Albuquerque, a nuclear weapons engineering facility run by Lockheed Martin Corp. The company has held the publicly bid contract for Sandia since 1993 and is generally considered to have a better performance record than UC, he said.
UC's operation of the weapons laboratories dates to the Manhattan Project, the secret World War II program to develop the first atomic bomb. Although the Army Corps of Engineers essentially directed the program, senior scientists involved insisted that a university system formally control management, reflecting the scientists' uneasy relationship with the military.
With development of the hydrogen bomb and, later, miniature nuclear devices, the need for university research remained crucial. In fact, weapons experts say, top researchers are needed now more than ever to handle the nation's aging nuclear stockpile. But evidence suggests that UC business practices have not kept pace with increased demands for accountability.