[Federal Register Volume 62, Number 100 (Friday, May 23, 1997)]
[Notices]
[Pages 28519-28521]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-13599]


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NUCLEAR REGULATORY COMMISSION

[Docket No. 030-33244, License No. 07-30056-01 EA 97-202]


Capital Engineering Services, Inc. Dover, Delaware; Order 
Revoking License

I

    Capital Engineering Services, Inc., (Licensee) is the holder of 
Byproduct Nuclear Material License No. 07-30056-01 (License) issued by 
the Nuclear Regulatory Commission (NRC or Commission) pursuant to 10 
CFR Part 30. The License authorizes possession and use of moisture/
density gauges containing sealed sources. The License was originally 
issued on September 14, 1993, and is due to expire on September 30, 
1998.
    On February 12, 1996, the License was suspended by an NRC Order for 
nonpayment of fees. However, on May 17, 1996, the NRC issued a 
Conditional Order Extending Time that granted the Licensee's request to 
pay the delinquent fees in twelve monthly installment payments and 
extended the effective date of the February 12, 1996 Order to March 15, 
1997. In addition, the Conditional Order stated that, in the event the 
Licensee fails to pay an installment during the 12-month period, each 
and every term and condition set forth in the February 12, 1996 Order 
will become immediately effective without further notice. The Licensee 
failed to make the first installment due June 15, 1996, after the 
Conditional Order was issued. Accordingly, on June 16, 1996, the terms 
of the February 12, 1996 ``Order Suspending License'' again became 
effective.

[[Page 28520]]

II

    On October 30, 1996, November 19, 1996, February 20, 1997, and 
March 5, 1997, the NRC conducted an inspection at the Licensee's 
facility in Dover, Delaware. During the inspection, the inspector 
determined that the Licensee had continued to use licensed radioactive 
material after issuance of the NRC Order Suspending the License on 
February 12, 1996. Specifically, the Licensee used licensed material on 
numerous occasions between February 12, 1996, and May 16, 1996, before 
the Conditional Order Extending Time was granted, a violation of 
Condition A of the February 12, 1996 Order and 10 CFR 30.3.
    Additionally, the Licensee continued to use the gauges on numerous 
occasions after June 16, 1996, the date on which the Order Suspending 
License once again became effective because of the Licensee's failure 
to pay the first fee installment required by the May 17, 1996 Order 
Extending Time, a violation of Condition A of the February 12, 1996 
Order and 10 CFR 30.3.
    On October 2, 1996, the NRC issued to the Licensee a letter 
reiterating that, given the Licensee's failure to abide by the 
installment plan, the License had been suspended as specified in the 
February 12, 1996 Order Suspending License. During an NRC inspection on 
October 30, 1996, the Licensee informed the NRC inspector that it 
continued to use licensed material because it had not received the 
October 2, 1996 letter until October 28, 1996.
    As a result, the NRC issued a Confirmatory Action Letter (CAL) to 
the Licensee on November 1, 1996, which confirmed the Licensee's 
commitments to cease use and/or receipt of licensed material. The CAL 
references a telephone conversation between Mr. David Johns, the 
Licensee's President, and Mr. Frank Costello, NRC Region I, that took 
place on October 31, 1996, in which Mr. Johns agreed to the terms of 
the CAL.
    Concurrently with NRC inspection, the NRC Office of Investigations 
(OI) conducted an investigation of these matters. During the 
investigation, the Licensee's President stated that he recalled the 
October 31, 1996 telephone conversation, but he understood that once he 
fully paid the outstanding debt, he could use the gauges. The Licensee, 
however, did not pay the outstanding debt 1 and, yet, 
continued to use licensed material on numerous occasions from October 
29 to, at least, November 19, 1996, a violation of Condition A of the 
February 12, 1996 Order and 10 CFR 30.3. In addition, based on the OI 
investigation and inspection findings, the NRC determined that the 
Licensee failed to test sealed sources for leakage and/or 
contamination, a violation of License Condition 13.
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    \1\ By Check No. 2054 dated November 20, 1996, the Licensee paid 
$531.16. However, the check did not clear due to insufficient funds.
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    On April 10, 1997, an enforcement conference was scheduled with the 
Licensee. However, the Licensee failed to appear for the enforcement 
conference. In a subsequent telephone conversation between Mr. David 
Johns, the Licensee President/Owner and Mr. R. Blough, Director, 
Division of Nuclear Materials Safety, NRC Region I, Mr. Johns indicated 
that he was not planning to attend the conference. During that 
telephone conversation, Mr. Johns was also informed that the NRC would 
proceed with appropriate enforcement action.

III

    Based on the above, the NRC has concluded that the Licensee 
deliberately violated NRC requirements by continuing to use licensed 
material, a violation of 10 CFR 30.10(a)(1), Condition A of the 
February 12, 1996 Order, and 10 CFR 30.3. This conclusion is: (1) Based 
on the Licensee's continued use of licensed material in violation of 
NRC requirements despite the Licensee receiving numerous written 
communications that specifically informed the Licensee of the License 
suspension; and (2) supported by the fact that the Licensee requested 
from the NRC that an installment plan be established to remove the 
suspension of the License; the Licensee's President recalled the 
October 31, 1996 telephone conversation in which he was specifically 
informed that the License was suspended and in which he agreed not to 
use licensed material; and the Licensee did not pay the outstanding 
debt and, yet, continued to use licensed material. Furthermore, the NRC 
has concluded that the Licensee failed to perform leak testing of 
sources, a violation of License Condition 13.
    The NRC must be able to rely on its Licensees to comply with NRC 
requirements. It is important that licensed material be used in 
accordance with the applicable NRC requirements. The Licensee's 
continued deliberate violation demonstrates that the Licensee is either 
unwilling or unable to comply with NRC requirements. Given the 
deliberate nature of the violation, as well as the additional 
violations of other NRC requirements, as set forth in this section, the 
NRC no longer has reasonable assurance that public health and safety 
will be protected.
    Consequently, I lack the requisite reasonable assurance that the 
Licensee is willing and able to conduct operations under License No. 
07-30056-01 in compliance with the Commission's requirements, and that 
the health and safety of the public will be protected. Therefore, the 
public health, safety and interest require that License No. 07-30056-01 
be revoked based on violations set forth above.

IV

    Accordingly, pursuant to sections 81, 161b, 161i, 182, and 186 of 
the Atomic Energy Act of 1954, as amended, and the Commission's 
regulations in 10 CFR 2.202 and 10 CFR Part 30, it is hereby ordered 
That license No. 07-30056-01 is revoked.

V

    In accordance with 10 CFR 2.202, the Licensee must, and any other 
person adversely affected by this Order may, submit an answer to this 
Order, and may request a hearing on this Order, within 20 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. The answer may 
consent to this Order. Unless the answer consents to this Order, the 
answer shall, in writing and under oath or affirmation, specifically 
admit or deny each allegation or charge made in this order and set 
forth the matters of fact and law on which the Licensee or other person 
adversely affected relies and the reasons as to why the Order should 
not have been issued. Any answer or request for a hearing shall be 
submitted to the Secretary, U.S. Nuclear Regulatory Commission, ATTN: 
Rulemaking and Adjudications Staff, Washington, D.C. 20555. Copies of 
the hearing request also should be sent to the Director, Office of 
Enforcement, U.S. Nuclear Regulatory Commission, Washington, D.C. 
20555, to the Assistant General Counsel for Hearings and Enforcement at 
the same address, to the Regional Administrator, NRC Region I, 475 
Allendale Road, King of Prussia, Pennsylvania 19406-1415, and to the 
Licensee if the hearing request is by a person other than the Licensee. 
If a person other than the Licensee requests a hearing, that person 
shall set forth with particularity the manner in which his interest is 
adversely affected by this

[[Page 28521]]

Order and shall address the criteria set forth in 10 CFR 2.714(d).
    If a hearing is requested by the Licensee or a person whose 
interest is adversely affected, the Commission will issue an Order 
designating the time and place of any hearing. If a hearing is held, 
the issue to be considered at such hearing shall be whether this Order 
should be sustained.
    In the absence of any request for hearing, or written approval of 
an extension of time in which to request a hearing, the provisions 
specified in Section IV above shall be final 20 days from the date of 
this Order without further order or proceedings. If an extension of 
time for requesting a hearing has been approved, the provisions 
specified in Section IV shall be final when the extension expires if a 
hearing request has not been received.

    Dated at Rockville, Maryland this 15th day of May 1997.

    For the Nuclear Regulatory Commission.
Edward L. Jordan,
Deputy Executive Director for Regulatory Effectiveness, Program 
Oversight, Investigations and Enforcement.
[FR Doc. 97-13599 Filed 5-22-97; 8:45 am]
BILLING CODE 7590-01-P