[Federal Register Volume 61, Number 91 (Thursday, May 9, 1996)]
[Notices]
[Pages 21210-21212]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11606]



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NUCLEAR REGULATORY COMMISSION

[Docket No. 70-1201; License No. SNM-1168; EAs 95-236 and 95-215]


B&W Fuel Company d/b/a Framatome Cogema Fuels; Order Imposing 
Civil Monetary Penalty

I

    B&W Fuel Company (Licensee) is the holder of Special Nuclear 
Material License No. SNM-1168 issued by the Nuclear Regulatory 
Commission (NRC or Commission) in September 1969. The license 
authorizes the Licensee to possess and use special nuclear material in 
accordance with the conditions specified therein. The license was last 
renewed on September 24, 1990, and is due to expire on September 30, 
2000.

II

    Inspections of the Licensee's activities were conducted during the 
period of June 12 through October 6, 1995. The results of these 
inspections indicated that the Licensee 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 the Licensee by letter dated January 30, 1996. The Notice 
states the nature of the violations, the provisions of the NRC's 
requirements that the Licensee had violated, and the amount of the 
civil penalty proposed for the violations.
    The Licensee responded to the Notice in a letter dated February 23, 
1996. In its response, the Licensee admitted Violations B, and C, and 
questioned the regulatory basis for Violation A. In addition, the 
Licensee requested the NRC to reconsider both the severity level of the 
violations and the proposed civil penalty based on the stated minimal 
safety significance of the violations and the Licensee's corrective 
action.

III

    After consideration of the Licensee's response and the statements 
of fact, explanation, and argument for mitigation contained therein, 
the NRC staff has determined, as set forth in the Appendix to this 
Order, that the violations occurred as stated and that the penalty 
proposed for the violations designated in the Notice 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:
    The Licensee pay a civil penalty in the amount of $12,500 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 Mr. James Lieberman, Director, Office of Enforcement, U.S. 
Nuclear Regulatory Commission, One White Flint North, 11555 Rockville 
Pike, Rockville, MD 20852-2738.

V

    The Licensee may request a hearing within 30 days of the date of 
this Order. Where good cause is shown, consideration will be given to 
extending the time to request a hearing. A request for extension of 
time must be made in writing to the Director, Office of Enforcement, 
U.S. Nuclear Regulatory Commission Washington, D.C. 20555, and include 
a statement of good cause for the extension. 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 II, 101 Marietta Street, N.W., Suite 2900, Atlanta, Georgia 
30323.
    If a hearing is requested, the Commission will issue an Order 
designating the time and place of the hearing. If the Licensee fails to 
request a hearing within 30 days of the date of this Order (or if 
written approval of an extension of time in which to request a hearing 
has not been granted), 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 the Licensee requests a hearing as provided above, the 
issues to be considered at such hearing shall be:

[[Page 21211]]

    (a) whether the Licensee was in violation of the Commission's 
requirements as set forth in Violation A of the Notice referenced in 
Section II above; and

    (b) whether on the basis of Violation A, and the additional 
violations admitted by the Licensee, this Order should be sustained.

    Dated at Rockville, Maryland this 29th day of April 1996.

    For the Nuclear Regulatory Commission.

James Lieberman,

Director, Office of Enforcement.

Appendix--Evaluations and Conclusion

    On January 30, 1996, the NRC issued to B&W Fuel Company, aka 
Framatome Cogema Fuels, (Licensee or B&W Fuel) a Notice of Violation 
and Proposed Imposition of Civil Penalty (Notice) for three 
violations identified during NRC inspections conducted during the 
period of June 12 through October 6, 1995. In its response dated 
February 23, 1996, the Licensee admitted Violations B and C, and 
questioned the regulatory basis for Violation A. In addition, the 
licensee requested the NRC to reconsider both the severity level of 
the violations and the proposed civil penalty based on the stated 
minimal safety significance of the violations and the Licensee's 
corrective action. The NRC's evaluation and conclusion regarding the 
Licensee's request are as follows:

Restatement of Violation A

    10 CFR 71.12(c)(2) requires, in part, that the licensee comply 
with the terms and conditions of the Certificate of Compliance and 
the applicable requirements of Subparts A, G, and H of 10 CFR Part 
71.1

    \1\ During the period January 1, 1978 through September 6, 1983, 
this requirement was contained in 10 CFR 71.12(b)(1)(ii) and 
required compliance with applicable requirements in 10 CFR Part 71.
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    Effective April 25, 1983, to September 11, 1992, Condition 
5(a)(3) of Certificate of Compliance No. 6294 specifies that the 
packaging is constructed in accordance with Babcock & Wilcox Company 
Drawing Nos. MS-135E and MS-82B.
    Effective September 11, 1992, through August 4, 1995, Condition 
5(a)(3) of Certificate of Compliance No. 9251 specifies that the 
packaging is constructed in accordance with B&W Fuel Company Drawing 
Nos. 1215598B and 1215599E.
    Contrary to the above:

    1. From August 1983 through July 10, 1995, the licensee made 
multiple shipments using UNC-2901 and/or BW-2901 shipping packages 
which were not constructed by B&W Fuel in accordance with, and did 
not conform to, Certificate of Compliance Nos. 6294 and 9251. 
Specifically, the dimensions of the inner cavity exceeded the 
dimensions on drawings Nos. MS-135E, MS-82B, 1215598B, and 1215599E.

    2. From August 1983 through May 22, 1995, the licensee made 
multiple shipments using UNC-2901 and/or BW-2901 shipping packages 
which were not constructed by B&W Fuel in accordance with, and did 
not conform to, Certificate of Compliance Nos. 6294 and 9251. 
Specifically, the hole locations in the closure lids were outside 
the specifications of drawings Nos. MS-135E, MS-82B, 1215598B, and 
1215599E.

The Licensee's Challenge of the Basis of Violation A

    The Licensee maintained that its Quality Assurance Plan (QAP) 
for shipping containers allows and requires B&W Fuel to disposition 
all deviations concerning container design. The Licensee stated that 
``A full reading of 71.12(c)(2) (emphasis added for clarity) is as 
follows: `The general license applies only to a licensee who: (2) 
Complies with the terms and conditions of the license, certificate, 
or other approval, as applicable and the applicable requirements of 
Subparts A, G, and H of this part; and'.''
    The Licensee added that the NRC's approval of the B&W Fuel's QAP 
submitted under Subpart H indicates that B&W Fuel is authorized and 
is expected to act as specified in the ``B&W Fuel Company 
Radioactive Material Shipping Container Quality Assurance Plan'' 
which, the Licensee believes, constitutes the ``other approval as 
applicable'' discussed in 10 CFR 71.12(c)(2). The Licensee noted 
that B&W Fuel acted entirely in accordance with its approved QAP 
which allows and requires B&W Fuel to disposition all deviations to 
the container design basis. Therefore, the Licensee stated, the 
Notice does not appear to recognize that there is another document, 
submitted and approved by the NRC under Subpart H, which guided B&W 
Fuel's actions in dispositioning BW-2901 shipping container defects. 
B&W Fuel added that it has ``acted in good faith with the 
understanding that the differences in interpretation of Part 71 
between the NRC and the licensees would be addressed and resolved in 
an industry forum.''
    In addition, the Licensee argued that when ``the current Part 71 
was invoked, most fissile material container users adopted quality 
programs which mirror 10 CFR 50 requirements.'' The Licensee stated 
that 10 CFR 71.131 clearly anticipates that deviations to the COC 
[Certificate of Compliance] may be found during use, and it does not 
require that the licensee cease to use the packaging. It does 
require, under subpart H, that the safety significance be determined 
prior to further use and that the conditions be reported to the NRC. 
The Licensee stated that ``NRC's approval of our Quality Plan caused 
FCF [Framatome Cogema Fuels, formerly B&W Fuel] to handle shipping 
containers in the same manner that we handle design deviations under 
our Part 50 Program.''

NRC Evaluation

    10 CFR 71.12(a) states that ``a general license is hereby issued 
to any licensee of the Commission to transport, or to deliver to a 
carrier for transport, licensed material in a package for which a 
license, certificate of compliance, or other approval has been 
issued by the NRC.'' As a condition of satisfying 10 CFR 71.12(a), 
10 CFR 71.12(c)(2) provides that the general license applies only to 
a licensee who ``complies with the terms and conditions of the 
license, certificate, or other approval, as applicable, and the 
applicable requirements of Subparts A, G, and H of this part.''
    The ``other approval'' cited in both 10 CFR 71.12(a) and 10 CFR 
71.12(c)(2) does not refer to Quality Assurance Program approval; 
rather, the words ``other approval'' refer to forms of package 
approvals other than Certificates of Compliance. Examples of ``other 
approval'' would be letter amendments, amendments to facility 
licenses, and specific licenses for transportation. Furthermore, the 
regulations pertaining to quality control, set forth in Subpart H of 
Part 71, do not permit Licensees to use packages which do not comply 
with the conditions of the Certificate of Compliance. Section 71.105 
specifically provides that Licensees must implement quality control 
which ``assures conformance to the approved design of each 
individual package used for the shipment of radioactive material.'' 
The regulations in Subpart H of Part 71 do not sanction the use of 
containers which do not comply with the regulatory requirements. 
Therefore, B&W Fuel, aka Framatome Cogema Fuels, has incorrectly 
interpreted the meaning of ``other approval'' as used in 10 CFR 
71.12.
    With regard to the Licensee's argument regarding 10 CFR Part 50 
requirements, the NRC notes that such argument is irrelevant because 
the requirements in 10 CFR Part 50 differ from those in 10 CFR Part 
71. The Licensee's handling of shipping containers in the same 
manner that it handles design deviations under Part 50 is not 
authorized under 10 CFR 71.
    The NRC concludes that Violation A occurred as stated.

Summary of Licensee's Request for Mitigation and Reconsideration of 
Severity Level

    The Licensee offered several arguments in support of its request 
for mitigation of the proposed penalty. Below is a summary listing 
of the Licensee's arguments that are related to its request for 
mitigation, some of which have been consolidated. The NRC's 
evaluation follows each argument.
    1. The Licensee disagreed with the NRC's characterization of the 
violations. Specifically, B&W Fuel stated that it believes that, 
taken by themselves, none of the violations would constitute a 
Severity Level III violation; therefore, taken together B&W Fuel 
cannot tell what part of the civil penalty is applicable to each 
part.

NRC Evaluation

    The purpose of aggregating violations as stated in Section IV.A 
of the Enforcement Policy (NUREG-1600) is to focus the Licensee's 
attention on the fundamental underlying causes and to reflect that 
several violations with a common cause may be more significant 
collectively than individually and may, therefore, warrant a more 
substantial enforcement action. As stated in the Enforcement Manual, 
NUREG/BR-0195 at Section 3.5.2, a group of Severity Level IV 
violations may be evaluated in the aggregate and assigned a single, 
increased severity

[[Page 21212]]

level, thereby representing a Severity Level III problem, if the 
violations reflect the same underlying cause or programmatic 
deficiency, or the violations contributed to or were unavoidable 
consequences of the underlying problem. In this case, the violations 
are related, and the lack of attention and carelessness toward 
licensed activities were the underlying causes of the three 
violations. Therefore, in accordance with the Enforcement Policy, 
the NRC aggregated the violations into a Severity Level III problem 
for which a $12,500 civil penalty was assessed.
    As to the apportionment of the civil penalty, the violations 
individually would be characterized at Severity Level IV and, 
therefore, would not be subject to individual penalties. The 
regulatory significance of this Severity Level III problem is the 
collectiveness of the problem. Therefore, the penalty has not been 
allocated for each violation. Consequently, the civil penalty 
applies to the problem as a whole.
    2. The Licensee argued that none of the violations ``has real 
safety significance.'' B&W Fuel stated that its safety analysis of 
the BW-2901 package, which was performed after deviations were found 
and prior to further use, was more than adequate. B&W Fuel added 
that the NRC does not have a basis in the regulations for requiring 
the use of incredible assumptions, such as an optimized volume 
fraction, in post accident assumptions.
    The Licensee contended that the NRC staff's new assumptions 
imposed during the review of B&W Fuel's submittal under 10 CFR 71.95 
make the analysis appear inadequate and that this is not the case. 
The Licensee stated that it considers some of the required 
assumptions to be not credible and therefore beyond the requirement 
of 10 CFR 71.55(b)(1) and (2), and that the NRC ultimately agreed 
with B&W Fuel's analysis and authorized it to use the containers 
with the deviations present.

NRC Evaluation

    Safety significance, from an enforcement prospective, involves 
consideration of: (1) actual safety consequence; (2) potential 
safety consequence; and (3) regulatory significance. Violation A is 
of concern because of the potential criticality consequence of B&W 
Fuel's use of shipping packages that were not constructed as 
required and for which an adequate safety evaluation had not been 
performed. Violation B is of concern because the violation continued 
for over two years which demonstrates a lack of management oversight 
(i.e., B&W Fuel failed to identify the violation, although the 
cylinders were readily visible during that time). Violation C is of 
concern because, in each example of the violation, the NRC relied 
upon inaccurate information submitted by the Licensee to make a 
regulatory decision.
    While the actual safety consequences of the violations 
fortunately turned out to be minimal in this case, the regulatory 
concerns are significant due to B&W Fuel's lack of attention to 
licensed activities. Specifically, the lack of attention to 
regulated activities was not isolated, but spanned several areas 
including licensing, transportation, quality assurance, and material 
control and accountability, and directly resulted in the three 
violations described in the Notice. Therefore, the NRC concludes 
that, taken collectively, the violations represent a significant 
regulatory concern.
    The NRC disagrees with the Licensee's statements regarding the 
adequacy of its safety analysis. When B&W Fuel evaluated the safety 
significance of the larger containment vessel, the Licensee 
incorrectly considered the wooden boards (i.e., box) to be 
structural components that would confine the fissile material under 
accident conditions. This is not consistent with the safety basis of 
the package or previous B&W Fuel analyses. The NRC did not, and does 
not, agree with B&W Fuel's safety assessment dated July 7, 1995. 
Furthermore, the NRC did not authorize the Licensee to use the BW-
2901 shipping packages with the deviations present unless certain 
conditions were met; specifically, installation of borated aluminum 
poison plates, or restricting shipments to large size pellets with a 
stainless steel separator plate. In view of the above, the NRC 
concludes that the Licensee's safety analysis of the BW-2901 
shipping package was inadequate.
    3. The Licensee stated that it does not understand why the NRC 
did not give B&W Fuel credit for its corrective actions or the cost 
of meeting the requirements imposed by the NRC assumptions in the 
analysis for the BW-2901 shipping containers. The Licensee argues 
that it has been very proactive in this case and took action which 
prevented any reduction in the protection of the public's health and 
safety. Specifically, when NRC management indicated that it 
considered that B&W Fuel's action was outside the NRC's 
interpretation of Part 71, B&W Fuel immediately stopped using the 
containers and submitted a request for modification of the COC.
    The Licensee claimed that, despite its belief it acted entirely 
in accordance with its approved QAP, B&W Fuel agreed to comply with 
the NRC position on 10 CFR 71.12(c)(2) and did so voluntarily on 
July 20, 1995. B&W Fuel stated that it has operated in accordance 
with NRC's wishes and is not using the provisions of its QAP, which 
allows the Licensee to use containers with deviations that are shown 
by analysis to have no safety significance. The Licensee asserted 
that corrective action was taken to prevent recurrence in 1990 with 
a re-design of the procedures which govern shipping container 
manufacture and use, and that these procedures were demonstrated to 
be effective during the procurement of new Model 51032 containers in 
1993. The Licensee, therefore, disagreed with the NRC's statement in 
the Notice that ``absent NRC action, FCF would have continued to use 
nonconforming packages without NRC approval and without performing 
an adequate safety analysis.''

NRC Evaluation

    NRC did not give B&W Fuel credit for corrective actions because 
the NRC had to take action to focus the Licensee's evaluative and 
corrective process to obtain comprehensive corrective action. 
Specifically, for Violation A: (1) as noted in Section 2 of this 
Appendix, B&W Fuel's safety analysis of the BW-2901 shipping package 
was inadequate; and (2) the Licensee continued to use nonconforming 
packages after performing its analysis until the NRC staff informed 
B&W Fuel staff that it was not authorized to do so.
    B&W Fuel was initially informed by the NRC staff via telephone 
on May 24, 1995, as a result of identification of the bolt hole 
discrepancies, that it was not authorized to use packaging that does 
not meet the drawings listed in the COC. In the telephone 
conversation, B&W Fuel was requested to submit revised pages to the 
safety analysis report to clarify that packages must conform to the 
drawings specified in the Certificate of Compliance.
    By letter dated May 24, 1995, B&W Fuel submitted revised pages 
for the BW-2901 safety analysis report. The revised acceptance tests 
included the following statements: ``Containers will be fabricated 
only in accordance with the designed drawings referenced in the 
Certificate of Compliance. The approved Quality Assurance Manual 
will be used to ensure compliance. Any changes in the drawings shall 
be submitted to NRC for approval.'' Based on this, NRC staff 
understood that B&W Fuel would not use packaging that deviated from 
the drawings referenced in the Certificate of Compliance, without 
prior NRC approval.
    Contrary to the communications, and based on its erroneous 
interpretation of the use of its QAP, B&W Fuel used the BW-2901 
packaging that did not conform to the drawings following 
identification of the inner dimensional discrepancies until July 20, 
1995, when the NRC staff reiterated the regulatory requirements to 
the Licensee. While the NRC acknowledges that B&W Fuel ultimately 
agreed to stop using the BW-2901 shipping package, the Licensee, 
absent NRC involvement, would have continued to use the 
nonconforming packages. Therefore, the NRC concludes that its 
statement in the Notice was appropriate.
    With regard to Violations B, the Licensee did not provide 
additional corrective actions which were not already considered 
after the November 21, 1995 predecisional enforcement conference. As 
stated in the Notice, although the initial corrective actions for 
Violation B were appropriate, the adequacy of the long term 
corrective action is yet to be demonstrated. The corrective actions 
for violation C were adequate.
    Therefore, the NRC concludes that, in accordance with Section 
VI.B.2 of the Enforcement Policy, credit for the Licensee's 
corrective action is not warranted.

NRC Conclusion

    The NRC has concluded that the violations in the Notice were 
correctly categorized as a Severity Level III problem, and that the 
Licensee did not provide an adequate basis for mitigation of the 
civil penalty. Consequently, the proposed civil penalty in the 
amount of $12,500 should be imposed.

[FR Doc. 96-11606 Filed 5-8-96; 8:45 am]
BILLING CODE 7590-01-P