[Federal Register Volume 64, Number 191 (Monday, October 4, 1999)]
[Notices]
[Pages 53755-53757]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-25718]


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NUCLEAR REGULATORY COMMISSION

[Docket No. 030-14016; License No. 21-18668-01; EAs 99-097 & 99-169]


Testing Engineers & Consultants, Inc.; Troy, Michigan; Order 
Imposing Civil Monetary Penalty

I

    Testing Engineers & Consultants, Inc. (Licensee) is the holder of 
Byproduct Materials License No. 21-18668-01 which was last renewed in 
its entirety by the Nuclear Regulatory Commission (NRC or Commission) 
on September 17, 1996. The license authorizes the Licensee to use 
certain byproduct material in accordance with the conditions specified 
therein.

II

    Between July 28, 1998 and March 23, 1999, an inspection and an 
investigation of the Licensee's activities were conducted. The results 
of the inspection and the investigation 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 
Penalties (Notice) was served upon the Licensee by letter dated July 8, 
1999. 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 penalties proposed for the violations.
    The Licensee responded to the Notice in letters dated August 4 and 
13, 1999. In its responses, the Licensee agreed with the information 
presented in the Notice, admitted the violations, but requested 
mitigation or remission of the civil penalties.

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

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the penalties 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 civil penalties in the amount of $5,500 within 30 
days of the date of this Order, in accordance with NUREG/BR-0254. In 
addition, at the time of making the payment, the Licensee shall submit 
a statement indicating when and by what method payment was made, to the 
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, DC 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 submitted to the Secretary, U.S. Nuclear Regulatory 
Commission, ATTN: Rulemakings and Adjudications Staff, Washington, DC 
20555. Copies also shall be sent to the Director, Office of 
Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555, 
to the Assistant General Counsel for Hearings and Enforcement at the 
same address, and to the Regional Administrator, NRC Region III, 801 
Warrenville Road, Lisle, Illinois 60532.
    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 
issue to be considered at such hearing shall be:
    Whether on the basis of the violations admitted by the Licensee, 
this Order should be sustained.

    Dated this 24th day of September, 1999.

    For the Nuclear Regulatory Commission.
R. W. Borchardt,
Director, Office of Enforcement.

Appendix: Evaluations and Conclusion

    On July 8, 1999, a Notice of Violation and Proposed Imposition 
of Civil Penalty (Notice) was issued for violations identified 
during an NRC inspection and an investigation. Testing Engineers & 
Consultants, Inc. (Licensee or TEC) responded to the Notice by two 
letters dated August 4 and 13, 1999. The Licensee admitted the 
violations occurred, but requested mitigation or remission of the 
civil penalties. The NRC's evaluation and conclusion regarding the 
licensee's requests are as follows:

Summary of Licensee's Request for Remission or Mitigation

    The Licensee states that no escalated enforcement has occurred 
since September 1995 and that its overall performance of licensed 
activities has been good. The Licensee contends that compliance with 
license requirements as well as prompt identification and 
comprehensive corrective action of violations has always been 
emphasized and encouraged. The Licensee states that it understands 
the severity of the violations and will make every effort to regain 
the trust and confidence of the NRC by ensuring that it acts with 
integrity and abides by requirements designed to protect public 
health and safety.
    The Licensee maintains that every effort is made to educate its 
employees to implement all of the terms and conditions of its NRC 
license. According to the Licensee, the employee involved had been 
properly trained and instructed and there was little else that could 
have been done to prevent this incident from occurring. The Licensee 
suggested that the NRC should fine the individual as well as the 
company.

NRC Evaluation of Licensee's Request for Remission or Mitigation

    The NRC concurs with the Licensee regarding its enforcement 
history and overall good performance. Enforcement history and 
licensee performance are used in determining which enforcement 
action will be taken. In accordance with Section VI.B.2. of the 
``General Statement of Policy and Procedures for NRC Enforcement 
Actions'' (Enforcement Policy), NUREG 1600, Revision 1, enforcement 
history is considered in two of the four decisional points in the 
civil penalty assessment process. Specifically, when the NRC 
determines that a non-willful Severity Level III violation has 
occurred, and the licensee has not had any previous escalated 
actions during the past 2 years or 2 inspections, whichever is 
longer, the NRC considers whether the licensee's corrective action 
for the violation is reasonably prompt and comprehensive. If a 
willful Severity Level III violation has occurred--or if, during the 
past 2 years or 2 inspections, the licensee has been issued at least 
one other escalated action--the civil penalty assessment normally 
considers the factor of identification in addition to corrective 
action. As to the second decisional point, the NRC may exercise 
discretion by either escalating or mitigating a sanction based, in 
part, on the enforcement history. For example, the NRC may either 
propose a civil penalty where application of the factors would 
otherwise result in zero penalty or escalate the amount of the 
resulting civil penalty in cases involving particularly poor 
licensee performance, or involving willfulness. On the other hand, 
the NRC may exercise discretion and refrain from issuing a civil 
penalty in cases where the overall sustained performance of the 
licensee has been good.
    In this case, the Licensee's enforcement history is irrelevant 
with regard to the first decisional point because the violations 
were willful. As to the second decisional point, the NRC considered 
the Licensee's enforcement history and determined that, on balance, 
neither escalation nor mitigation was warranted because, while the 
Licensee's enforcement history has been good, the violations 
involved willfulness. Willful violations are of particular concern 
because the Commission's regulatory program is based on licensees 
acting with integrity and communicating with candor.
    With regard to the assessment factors, both noncompliances were 
characterized as willful Severity Level III violations and, 
consistent with Section VI.B.2. of the Enforcement Policy, the NRC 
considered both identification and corrective action. In this case, 
the NRC concluded that credit was not warranted for identification 
because NRC staff identified the violations, but credit was 
warranted for corrective action based on the promptness and 
comprehensiveness of the actions taken. Consideration of the 
identification and corrective action factors yielded a base civil 
penalty of $2,750 for each of the violations described in the 
Notice.
    As to the Licensee's argument about its efforts to educate 
employees and to prevent the incident, according to Section VI.B of 
the Enforcement Policy, management involvement, direct or indirect, 
in a violation may lead to an increase in the civil penalty; 
however, the lack of management involvement in a violation may not 
be used to mitigate a civil penalty. The Licensee is responsible for 
violations caused by its employees, whether arising from inadvertent 
error or willful acts. The licensee hires, trains, and supervises 
its employees. All licensed activities are carried out by employees 
of the licensee and, therefore, all violations are caused by 
employees of the licensee. A licensee enjoys the benefits of good 
employee performance and suffers the consequences of poor employee 
performance. To not hold the licensee responsible for the actions of 
its employees, whether such actions result from incompetence, 
negligence, or willfulness, is equivalent to not holding the 
licensee responsible for its use and possession of licensed 
material. If the NRC were to adopt such a premise, there would be no 
incentive for licensees to assure compliance with NRC requirements.
    With respect to the licensee's suggestion about fining the 
individual as well as the company, the NRC notes that while it is 
not the Commission's general policy to monetarily penalize 
individuals, the NRC takes enforcement sanctions against 
individuals. Notices of Violation and Orders

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are examples of enforcement actions that may be appropriate against 
individuals. The Notice of Violation issued to the Licensee's 
employee was deemed the appropriate action in this case.

NRC Conclusion

    The NRC has concluded that the Licensee did not provide an 
adequate basis for remission or mitigation of the civil penalties. 
Consequently, the proposed civil penalty in the amount of $5,500 
should be imposed.

[FR Doc. 99-25718 Filed 10-1-99; 8:45 am]
BILLING CODE 7590-01-P