AbstractThe estimated Environmental Management cost for the Department of Energy (DOE) complex, “the cold war mortgage”, exceeds the projected DOE budget. DOE awarded the Lockheed Martin Corporation the Idaho National Engineering Laboratory (INEL) Management and Operations (M&O) Contract, and Lockheed Martin emphasizes Systems Engineering (SE) as a method to operate a DOE National Laboratory more cost effectively. Lockheed Martin (SE) methods and experience were mainly developed as an aerospace, space, and defense contractor. This paper describes how Lockheed Martin Idaho Technologies (LMIT) applied SE principles to the INEL Environmental Management program within six months of taking over the INEL contract. LMIT transferred and applied SE methods and experience from an industry driven by laws of physics and hardware, to an industry driven by environmental regulations, risk and shrinking budg