An agreement between the four LANS members established a Board of Governors that were charged with oversight and governance of LANS, LLC. The Board included three individuals appointed by the University of California and three individuals appointed by Bechtel, as well as four independent Governors who were selected for their expertise and experience in fields pertinent to LANL operations. The Board included an Executive Committee that consisted of the six University of California and Bechtel appointees.
The President of LANS LLC, Charles F. McMillan, reported directly and solely to the LANS LLC Board of Governors. McMillan also served as laboratory director.
LANS was formed during a period of doubt about whether the University of California would be awarded the management contract, after it was forced to compete for the contract for the first time since it had first began to manage LANL during the Manhattan Project as a result of numerous scandals and dissatisfaction with its management.[citation needed] LANS eventually was pitted against the University of Texas System partnered with Lockheed Martin, and was awarded the LANL contract in December 2005.
In addition to being reimbursed for the cost of operating LANL ($2.2 billion annually), LANS receives a yearly fee for managing LANL of approximately $79 million from the Department of Energy.[citation needed]
In September 2007, director Michael R. Anastasio announced a possible layoff of 2500 people based on predicted budget shortfalls of $350M for FY08.[2] The operating fee of approximately $79M and the state of New Mexico gross receipts tax (LANL was formerly operated by UC as a non-profit) contributed approximately half of the expected budget shortfall.[citation needed]
A series of blogs[3] monitored and discussed the management of LANL since then-director Pete Nanos shut the laboratory down in response to several alleged safety and security incidents.[citation needed]
Bechtel, one of the LANS partners, is also a partner in the operations of several other National Nuclear Security Administration facilities which collectively comprise the core of the United States' nuclear weapons design and production capability: