[Federal Register Volume 60, Number 86 (Thursday, May 4, 1995)]
[Notices]
[Pages 22081-22083]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-11029]



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NUCLEAR REGULATORY COMMISSION
[Docket No. 030-31609 License No. 37-28496-01 (Revoked) EA 94-253]


McCormick, Taylor, And Associates, Inc., Philadelphia, 
Pennsylvania; Order Imposing A Civil Monetary Penalty

I

    McCormick, Taylor and Associates, Inc. (MTA) (Licensee) was the 
holder of Byproduct Materials License No. 37-28496-01 (License) issued 
by the Nuclear Regulatory Commission (NRC or Commission) on October 31, 
1979. The License was revoked by the Commission on August 13, 1992 for 
nonpayment of fees. The License authorized MTA to possess and use 
certain byproduct materials in accordance with the conditions specified 
therein at its facility in Philadelphia, Pennsylvania.

II

    An inspection of MTA's activities was conducted on December 2, 
1994, at MTA's facility located in Philadelphia, Pennsylvania. The 
results of the inspection and review of communication (and associated 
documents) conducted between NRC and MTA between August 13, 1992, and 
November 19, 1994, indicated that MTA had not conducted its activities 
in full compliance with NRC requirements. A written Notice of Violation 
and Proposed Imposition of Civil Penalty (Notice) was served upon MTA 
by letter dated February 13, 1995. The Notice states the nature of the 
violations, the provisions of the NRC requirements that MTA had 
violated, and the amount of the civil penalty proposed for one of the 
violations.
    MTA responded to the Notice in two letters, both dated March 10, 
1995. In its responses, MTA admits the violations as stated in the 
Notice and requests mitigation of the penalty.

III

    After consideration of MTA's responses and the statements of fact, 
explanation, and arguments for [[Page 22082]] mitigation contained 
therein, the NRC staff has determined, as set forth in the Appendix to 
this Order, that the violations occurred as stated in the Notice, and 
that the violation set forth in Section I of the Notice was 
appropriately classified at a Severity Level III. The staff also has 
determined that an adequate basis was provided for partial mitigation 
of the penalty, and that a penalty of $2,000 should be imposed.

IV

    In view of the foregoing and pursuant to Section 234 of the Atomic 
Energy Act of 1954, as amended (Act), 42 U.S.C. 2282, and 10 CFR 2.205, 
it is hereby ordered that: MTA pay a civil penalty in the amount of 
$2,000 within 30 days of the date of this Order, by check, draft, money 
order, or electronic transfer, payable to the Treasurer of the United 
States and mailed to James Lieberman, Director, Office of Enforcement, 
U.S. Nuclear Regulatory Commission, One White Flint North, 11555 
Rockville Pike, Rockville, MD 20852-2738.
    MTA may request a hearing within 30 days of the date of the date of 
this Order. A request for a hearing should be clearly marked as a 
``Request for an Enforcement Hearing'' and shall be addressed to the 
Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, 
Washington, D.C. 20555, with a copy to the Commission's Document 
Control Desk, Washington, D.C. 20555. Copies also shall be sent to the 
Assistant General Counsel for Hearings and Enforcement at the same 
address and to the Regional Administrator, NRC Region I, 475 Allendale 
Road, King of Prussia, PA 19406.
    If a hearing is requested, the Commission will issue an Order 
designating the time and place of the hearing. If MTA fails to request 
a hearing within 30 days of the date of this Order, the provisions of 
this Order shall be effective without further proceedings. If payment 
has not been made by that time, the matter may be referred to the 
Attorney General for collection.
    In the event MTA requests a hearing as provided above, the issue to 
be considered at such hearing shall be whether, on the basis of 
Violation I, which is admitted by MTA, this Order should be sustained.

    Dated at Rockville, Maryland, this 26th day of April 1995.

    For the Nuclear Regulatory Commission.
James Lieberman,
Director, Office of Enforcement.
Appendix--Evaluations and Conclusion
    On February 13, 1995, a Notice of Violation and Proposed 
Imposition of Civil Penalty (Notice) was issued for a violation 
identified during a review of communications (and associated 
documents) conducted between NRC and McCormick, Taylor and 
Associates, Inc. (MTA) between August 13, 1992 and November 9, 1994, 
as well as an NRC inspection conducted at the MTA facility on 
December 2, 1994. MTA responded to the Notice in two letters, both 
dated March 10, 1995. In its responses, MTA admits the violations as 
stated in the Notice, but requests mitigation of the penalty. The 
NRC's evaluation and conclusion regarding MTA's requests are as 
follows:

Summary of MTA's Request for Mitigation

    In its response, MTA maintains that there are a number of 
extenuating circumstances and other mitigating factors which should 
be considered and result in mitigation of the penalty.
    With respect to the NRC application of 50% escalation because 
the violation was identified by the NRC, MTA contends that it, in 
fact, notified the NRC on December 2, 1994, that it could not locate 
the gauge. MTA states that it did not become convinced until 
December 1 or 2, 1994 that the gauge had been stolen or misplaced. 
MTA further contends that a statement made by the Radiation Safety 
Officer during a telephone conversation with the NRC on December 2, 
1994, was, in fact, a notification that MTA was in violation.
    With respect to the NRC application of 50% escalation because of 
the lack of prompt action, MTA states that it was not until December 
2, 1994, that it became fully aware that the gauge was lost or 
stolen. MTA further maintains that it has acted promptly and 
aggressively since December in an attempt to locate the gauge.
    With respect to the NRC application of 100% escalation because 
of prior opportunity to prevent the violation, MTA states that it 
did not believe it ever received the Order issued in 1992 for 
nonpayment of fees. At the enforcement conference, MTA indicated 
that it requested proof of a delivery receipt from the NRC but the 
NRC has not yet provided MTA with a receipt. MTA also states that 
its Chief Financial Officer had a conversation with an NRC 
representative (unnamed) in 1993, and was told that with its payment 
of fees and penalties at that time it was fully paid up through 
September 1994.
    With respect to the NRC application of 100% escalation based on 
duration (because the gauge was unattended for an extended period), 
MTA states that there is no evidence to document how long the gauge 
was outside the locked storage closet before it was lost or stolen. 
MTA also states that its office is not easily accessible and is 
typically a secure location, noting that the fact that the gauge was 
out of its locked storage cabinet was not as risky a location as it 
might seem. Therefore, while admitting the violation, MTA maintains 
that these factors should reduce the escalation.
    MTA also describes other bases which it considers mitigating 
factors and extenuating circumstances to the proposed civil penalty. 
Specifically, MTA contends that there was significant confusion over 
payment of fees from 1991 to 1993, noting that on at least one 
occasion, it was cited for nonpayment of a particular charge that 
had in fact been paid. MTA stated that due to the confusion over 
payment of fees, when it was contacted in August and September of 
1994, there was still confusion over payment. MTA further states 
that this confusion, and the fact that it never received the Order 
in 1992 may help explain why it did not initially respond with 
urgency.
    MTA also states that a significant amount has already been paid 
in penalties for late payment of fees and that the imposition of an 
additional $3,000 seems excessive. MTA maintains that it acted 
aggressively to locate the gauge over the ten weeks prior to its 
response. MTA states that the penalty is excessive to emphasize the 
importance of maintaining a valid license, and is unnecessary since 
MTA does not intend to possess a gauge of this type, or any NRC 
licensed material, in the future. MTA requests that the civil 
penalty be reduced to $500.

NRC Evaluation of Licensee's Request for Mitigation

    The NRC letter, dated February 13, 1995, transmitting the civil 
penalty, notes that the base civil penalty amount of $500 in this 
case was increased by 50% because the violations were identified by 
the NRC; increased by 50% based on the licensee's lack of prompt 
corrective action; increased by 100% based on the prior opportunity 
since the Order provided ample notice of the need to control entry 
to restricted areas; and increased 100% based on the duration 
because the gauge was unattended in the vicinity of a closet for an 
extended period, based on the RSO's recollection. The letter also 
notes that to emphasize the importance of maintaining a valid 
license or properly disposing of NRC-licensed materials, 
particularly after the NRC directed and reminded MTA to do so, and 
the importance of maintaining proper control of licensed material, 
the NRC exercised discretion in accordance with Section VII.A of the 
Enforcement Policy and increased the base civil penalty by an 
additional 200%. As a result, a penalty of $3,000 was proposed.
    With respect to the identification factor, the NRC is not citing 
the licensee for failure to notify the NRC as required. It was 
during the NRC inspection that the specific violation was 
identified, namely, failure to maintain adequate security of 
licensed material (which resulted in the gauge being lost or 
stolen). Further, the loss of the gauge was only identified after 
the NRC repeatedly reminded MTA of the need to transfer the gauge to 
an authorized recipient, as well as to notify the NRC that such a 
transfer had taken place. Therefore, mitigation is not warranted for 
this factor.
    With respect to the corrective actions and prior opportunity to 
identify factors, the NRC also notes that MTA had ample opportunity 
to identify and correct any problems with security of the gauge, via 
the repeated [[Page 22083]] contacts with the NRC reminding MTA of 
the need to transfer the gauge to an authorized recipient. If MTA 
had aggressively responded to the Notice of a Violation issued by 
the NRC on September 7, 1994, or the telephone call from Mr. Walt 
Pasciak on August 29, 1994, the security violation could have either 
been prevented, or corrected, or identified if the gauge was already 
missing.
    MTA's failure to do so is considered particularly egregious. 
Even if MTA had not received a copy of the 1992 Order, it had 
several conversations with NRC staff regarding the status of the 
gauge between August 1992 and November 1994, and had received the 
September 7, 1994 Notice of Violation which provided prior 
opportunities to prevent or correct this violation. If MTA had 
promptly acted to locate and transfer the gauge to an authorized 
recipient at that time, the security violation and subsequent loss 
of the gauge might have been prevented. Therefore, no mitigation is 
warranted for these factors.
    With respect to the duration factor, while MTA contends that its 
office is typically a secure location, and the gauge being out of 
its locked storage cabinet is not as risky a situation as it might 
seem, MTA's action to remove the gauge from its secure location 
without taking appropriate measures for an extended period, as the 
RSO recollects, provided an appropriate basis for excalating the 
penalty on this factor. Therefore, no mitigation of this factor is 
warranted.
    Escalation of the penalty by 200% to emphasize the importance of 
maintaining a valid license is no longer warranted due to MTA's 
assertion that they do not intend to posses any NRC licensed 
material in the future. Therefore, the penalty is reduced to $2,000.
    Furthermore, notwithstanding MTA's contention, the NRC does not 
consider the penalty excessive, particularly given the fact that the 
security violation resulted in a loss or theft of radioactive 
material.

NRC Conclusion

    The NRC has concluded that MTA did not provide an adequate basis 
for mitigation of the civil penalty to $500. Given the significance 
of the failure to maintain security of radioactive materials, and 
the loss of the gauge that occurred in this case, a civil penalty in 
the amount of $2,000 should be imposed.

[FR Doc. 95-11029 Filed 5-3-95; 8:45 am]
BILLING CODE 7590-01-M