[Federal Register Volume 66, Number 134 (Thursday, July 12, 2001)]
[Notices]
[Pages 36603-36605]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-17450]


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NUCLEAR REGULATORY COMMISSION

[Docket No. 71-0122 Approval No. 0122 EA-01-164]


In the Matter of JL Shepherd & Associates San Fernando, 
California; Order Withdrawing Quality Assurance Program Approval 
(Effective Immediately)

I

    JL Shepherd & Associates (JLS&A or Approval Holder) is the holder 
of Quality Assurance (QA) Program Approval for Radioactive Material 
Packages No. 0122 (Approval No. 0122), issued by the Nuclear Regulatory 
Commission (NRC or Commission) pursuant to 10 CFR part 71, subpart H. 
The approval was issued pursuant to the QA requirements of 10 CFR 
71.101. QA activities authorized by Approval No. 0122 include: design, 
procurement, fabrication, assembly, testing, modification, maintenance, 
repair, and use of transportation packages subject to the provisions of 
10 CFR part 71. Approval No. 0122 was originally issued January 17, 
1980. Revision No. 5 was issued January 24, 1996, with an expiration 
date on January 31, 2001, and is under timely renewal. In addition to 
having a QA program approved by the NRC to satisfy the provisions of 10 
CFR part 71, subpart H, to transport or deliver for transport licensed 
material in a package, JLS&A is required by 10 CFR part 71, subpart C, 
to have and comply with the package's CoC issued by the NRC.

II

    On November 3-4, 1999, NRC staff conducted an inspection of the 
JLS&A QA activities. The extent and nature of problems identified 
during this limited scope inspection raised serious concerns about 
implementation of the JLS&A QA program and missed opportunities, over 
the period of several years, to self-identify and correct package 
deficiencies. The inspection identified multiple examples of violations 
of 10 CFR part 71. These violations concerned shipments of licensed 
material in Type B packages that were not in accordance with two CoCs. 
JLS&A made nineteen shipments using two different package designs that 
did not meet the requirements of the CoCs. The team further identified 
six nonconformances: specifically, these included 10 CFR 71.13(a), 
using a package that was fabricated after August 31, 1986; 10 CFR 
71.87, failure to determine that the package with its contents 
satisfies the applicable requirements of part 71; 10 CFR 71.107(c), 
package design control, where new wood liners were constructed with a 
wood that did not comply with the design specifications approved by 
NRC; and 10 CFR 71.111, failure to prepare formal procedures or 
instructions to establish and maintain model 181361 or model A-0117 
packaging in conformance with the CoC. Both a Notice of Violation and a 
Notice of Nonconformance were issued on March 2, 2000. As a result of 
the extent and nature of the problems identified during the November 3-
4, 1999, inspection, NRC issued a Confirmatory Action Letter on April 
24, 2000. As part of its December 4, 2000, response to the NRC 
Confirmatory Action Letter, JLS&A stated that the packaging used in the 
August 15, 2000, export to be shipped to Ethiopia via the United 
Kingdom, which contained 18,000 curies of cobalt-60, met the terms and 
conditions of the NRC-issued CoC No. 6280.
    As a result of an April 17, 2001, letter from the French Competent 
Authority raising concerns about noncompliance of the August 15, 2000, 
transportation package undergoing multilateral approval, NRC staff 
conducted an inspection of the returned package at JLS&A's facility to 
determine if JLS&A had delivered for export a model A-

[[Page 36604]]

0109 irradiator and the A-0117 overpack design that were not in 
accordance with CoC No. 6280. The inspection conducted on May 29-31, 
2001, identified significant concerns with the implementation of the 
JLS&A QA program regarding the design, use, repair, and maintenance of 
transportation packages approved for use by NRC under CoC No. 6280. The 
inspection determined that JLS&A failed to implement portions of the QA 
program Approval No. 0122. The failure to implement portions of the QA 
program resulted in JLS&A delivering for export radioactive material in 
a transportation package that did not comply with the requirements of 
10 CFR part 71. A description of the significant findings from the 
inspection follows:
    1. The team determined that the package JLS&A delivered for export 
was not in accordance with the drawings listed in CoC No. 6280, 
Condition 5(a)(3). For example, the irradiator contained in the package 
did not conform to the drawings listed in the CoC No. 6280. The 
``stacks'' used to restrict lateral movement of the irradiator were 
made of fir and pine woods and not hardwood as required by the CoC No. 
6280. The ``spacers'' used to center the irradiator did not conform to 
the drawings listed in the CoC No. 6280.
    1. The team determined that JLS&A had not notified NRC of the 
design changes to the A-0109 irradiator and did not provide a detailed 
analysis to support these changes to the conditions of the CoC No. 6280 
for approval by NRC. This is of significant concern because the A-0109 
is described in CoC No. 6280 as part of the packaging. As such, any 
changes to the drawings listed in CoC No. 6280, Condition 5(a)(3), 
required NRC approval. JLS&A made numerous changes to the irradiator 
design features that were not in conformance with the drawings listed 
in CoC No. 6280, Condition 5(a)(3).
    2. The team determined that the JLS&A did not implement QA 
procedures to assure that the bolts used to attach the lid to the cask 
met the performance specifications required by CoC No. 6280. JLS&A also 
could not demonstrate that the balsa wood used to repair the A-0117 
overpack met the density specifications identified in Drawing No. A-
0117-B, listed in CoC No. 6280 Condition 5(a)(3). The team also 
determined that JLS&A had not established measures for the 
identification and control of materials, parts, and components used in 
the repair of the A-0117 overpack as required by 10 CFR 71.117.
    3. The team determined that the A-0109 irradiator included in the 
shipment, an integral part of the packaging, was manufactured after 
August 31, 1986. Fabrication of previously approved packaging must have 
been completed by August 31, 1986 as required by 10 CFR 71.13.
    4. The team determined that JLS&A had not obtained multilateral 
approval required by 10 CFR 71.13 before delivering the package for 
export shipment since the package was not of the design authorized by 
the NRC CoC No. 6280 nor as approved by the Competent Authority for the 
transportation of radioactive materials in the United Kingdom. The 
United Kingdom approval was issued about 3 months after JLS&A delivered 
the package for export to Ethiopia via the United Kingdom. The package 
was subsequently returned to the United States from the United Kingdom.
    5. The team determined that the Vice President of JLS&A, who is 
also the Acting QA/Quality Control Program Plan Administrator, does not 
have sufficient independence from cost and schedule. JLS&A had not 
implemented procedures appropriate to preclude a conflict of interest 
from cost and scheduling as described in the JLS&A QA Program Plan and 
as required by 10 CFR 71.103(d).
    As a result of the findings during the May 29-31, 2001, inspection 
the NRC no longer has confidence that JLS&A will implement the QA 
Program approved by NRC in accordance with 10 CFR part 71, subpart H, 
in a manner that will assure the required preparation and use of 
transportation packages in full conformance with the terms and 
conditions of an NRC CoC and with 10 CFR part 71. This is of 
significant concern because JLS&A, in addition to holding CoC No. 6280, 
also holds CoC No. 5984 for transportation packages which may be used 
by eight licensees, including JLS&A.
    These inspection findings are of particular concern in light of the 
fact that on December 4, 2000, in response to an NRC Confirmatory 
Action Letter, JLS&A stated that the packaging used in the August 15, 
2000, export to Ethiopia via the United Kingdom met the terms and 
conditions of the NRC issued CoC No. 6280. This package contained 
18,000 curies of cobalt-60 in special form sources. The ability of the 
package to meet the performance requirements for transportation 
packages is evaluated for a specific design. The package that was to be 
shipped to Ethiopia via United Kingdom had been modified and did not 
meet the design that was approved by the NRC. Accordingly, the 
unapproved package design had not been demonstrated to meet the 
transportation package approval standards for both normal and accident 
conditions. This could have resulted in significant safety 
consequences.
    Consequently, I lack the requisite reasonable assurance that the 
Approval Holder's current operations can be conducted under Approval 
No. 0122 in compliance with the Commission's requirements and that the 
health and safety of the public, including the Approval Holder's 
employees, will be protected. Therefore, the interests of protecting 
public health and safety, require that Approval No. 0122 be withdrawn. 
Accordingly, JLS&A may no longer certify to any person that its 10 CFR 
part 71 transportation activities are conducted under an NRC approved 
Quality Assurance Program. JLS&A is no longer authorized to design, 
procure, fabricate, assemble, test, modify, maintain, repair, and use 
transportation packages for which a 10 CFR part 71 QA program approval 
is required by 10 CFR part 71, subpart C. Furthermore, pursuant to 10 
CFR section 2.202, I find that the significance of the conduct 
described above is such that the public health, safety, and interest 
require that this Order be immediately effective.

IV

    Accordingly, pursuant to Sections 62, 81, 161b, 161i, 182 and 186 
of the Atomic Energy Act of 1954, as amended, and the Commission's 
regulations in 10 CFR section 2.202 and 10 CFR Parts 71 and 110, it is 
hereby ordered, effective immediately, that approval no. 0122 is 
withdrawn pending further order.
    The Director, Office of Nuclear Material Safety and Safeguards may, 
in writing, relax or rescind this order upon demonstration by the 
Approval Holder of good cause.

V

    In accordance with 10 CFR 2.202, the Approval Holder 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, DC 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

[[Page 36605]]

each charge made in this order and set forth the matters of fact and 
law on which the Approval Holder 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: Rulemakings and 
Adjudications Staff, Washington, DC 20555. Copies of the hearing 
request also should be sent to the Director, Office of Enforcement, 
U.S. Nuclear Regulatory Commission, Washington, DC 20555, to the 
Director, Office of Nuclear Material Safety and Safeguards at the same 
address, to the Assistant General Counsel for Materials Litigation and 
Enforcement at the same address, to the Regional Administrator, NRC 
Region IV, 611 Ryan Plaza Drive, Suite 400, Arlington TX, 76011, and to 
the Approval Holder if the hearing request is by a person other than 
the Approval Holder. If a person other than the Approval Holder 
requests a hearing, that person shall set forth with particularity the 
manner in which his interest is adversely affected by this Order and 
shall address the criteria set forth in 10 CFR section 2.714(d).
    If a hearing is requested by the Approval Holder 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.
    Pursuant to 10 CFR 2.202(c)(2)(i), the Approval Holder, or any 
other person adversely affected by this Order, may, in addition to 
demanding a hearing, at the time the answer is filed or sooner, move 
the presiding officer to set aside the immediate effectiveness of the 
Order on the ground that the Order, including the need for immediate 
effectiveness, is not based on adequate evidence but on mere suspicion, 
unfounded allegations, or error.
    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. An answer or a request for 
hearing shall not stay the immediate effectiveness of this order.

    For the Nuclear Regulatory Commission.

    Dated this 3rd day of July 2001.
Frank J. Congel,
Director, Office of Enforcement.
[FR Doc. 01-17450 Filed 7-11-01; 8:45 am]
BILLING CODE 7590-01-P