[Federal Register Volume 70, Number 139 (Thursday, July 21, 2005)]
[Notices]
[Pages 42108-42110]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-14358]


-----------------------------------------------------------------------

NUCLEAR REGULATORY COMMISSION

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


In the Matter of J. L. Shepherd & Associates; San Fernando, CA; 
Confirmatory Order Rescinding Order (Effective Immediately)

I

    J. L. Shepherd & Associates (JLS&A) was the holder of Quality 
Assurance (QA) Program Approval for Radioactive Material Packages No. 
0122 (Approval No. 0122), issued by the U.S. Nuclear Regulatory 
Commission (NRC or Commission) pursuant to 10 CFR Part 71, Subpart H. 
The approval was originally issued January 17, 1980, pursuant to the QA 
requirements of 10 CFR 71.101. QA activities included: design, 
procurement, fabrication, assembly, testing, modification, maintenance, 
repair, and use of transportation packages subject to the provisions of 
10 CFR Part 71. In addition to an NRC-approved QA program satisfying 
the provisions of 10 CFR Part 71, Subpart H, JLS&A was required to 
comply with the requirements in 10 CFR Part 71, Subpart C, which grants 
a general license authorizing licensed material for which a Certificate 
of Compliance (CoC) had been issued by the NRC to be transported or 
delivered to a carrier for transport. Based on JLS&A failure to comply 
with these requirements, QA Program Approval No. 0122 was withdrawn, by 
the immediately effective NRC Order, dated July 3, 2001 (July 2001 
Order) (66 FR 36603, July 12, 2001).

II

    The NRC issued the July 2001 Order because the NRC lacked 
confidence that JLS&A was implementing its NRC-approved QA Program (71-
0122, Revision No. 5) in full conformance with the terms and conditions 
of an NRC CoC and with 10 CFR Part 71, Subpart H.
    On several occasions subsequent to imposition of the July 2001 
Order, JLS&A has requested, based on its proposed Near-Term Corrective 
Action Plan (NTCAP), interim relief from the July 2001 Order to allow 
shipments in U.S. Department of Transportation (DOT) specification 
packaging designated as 20WC. On August 17, 2001, in response to the 
July 2001 Order, JLS&A requested interim relief pursuant to its 
proposed NTCAP to allow 68 shipments to 16 customers, subject to 
JLS&A's commitment to take certain actions regarding implementation of 
its 10 CFR Part 71 QA Program. On September 19, 2001, the NRC issued a 
Confirmatory Order Relaxing the July 3, 2001, Order (September 2001 
Order) based on JLS&A commitment to hold all shipments until NRC 
completed an inspection which confirmed JLS&A's satisfactory completion 
of the actions identified in its August request. Subsequent to 
certifications under oath and affirmation from both the Independent 
Auditor and J. L. Shepherd, the President of JLS&A, that the conditions 
for issuance of an Order had been met, the NRC conducted an inspection 
at the JLS&A facility on November 13-15, 2001. As a result of the 
inspection findings, the inspection team authorized JLS&A to commence 
the shipments in accordance with the September 2001 Order.
    By letter dated December 7, 2001, JLS&A requested that provisions 
of the July 2001 Order be relaxed based on a showing of good cause. 
Specifically, JLS&A requested interim relief to ship an irradiator to 
Surry Nuclear Power Station and return the replaced unit to JLS&A's 
facility in California. JLS&A proposed to use the NTCAP specified in 
the September 2001 Order to authorize these two shipments in DOT 
specification packaging designated as 20WC. The NRC Staff reviewed 
JLS&A's relief request to determine whether the requested relief would 
be consistent with assurances that public health and safety are 
maintained. As a result, the NRC issued a Confirmatory Order Relaxing 
Order dated December 13, 2002 (December 2002 Order), which relaxed the 
July 2001 Order to grant interim relief to allow two shipments to one 
customer in 20WC packages in accordance with JLS&A's NTCAP, provided 
certain commitments were met.
    By letters dated February 26, 2002, as supplemented March 13, 18, 
and 25, 2002, JLS&A requested that provisions of the July 2001 Order be 
relaxed based on a showing of good cause. Specifically, JLS&A requested 
an extension of the September 2001 Order expiration date from March 31, 
2002 to June 30, 2002, to authorize JLS&A to

[[Page 42109]]

complete shipment of Type B quantities of radioactive material in DOT 
20WC specification packaging that was authorized by the September 2001 
Order. The extension of the expiration date was necessary since many of 
the JLS&A customers did not obtain the necessary licensing approval or 
building modification in time for the shipments to be completed by 
March 31, 2002. In addition, JLS&A requested authorization to make 
additional shipment to customers not approved by the September 2001 
Order. JLS&A proposed to use the NTCAP specified in the September 2001 
Order. JLS&A committed to: (1) Inspect the 20WC package (both shield 
and overpack); (2) document the inspection in a separate report; (3) 
perform the shipping and inspection function only by trained personnel; 
and (4) have the Independent Auditor verify compliance of each shipment 
with the foregoing commitments and certify such compliance in the 
routine monthly reports to the NRC.
    This Order only granted additional time to complete the shipments 
previously authorized by the September 2001 Order to be completed by 
March 31, 2002. On February 26, 2002, JLS&A consented to issuance of a 
Confirmatory Order (February 2002 Order) granting interim relief from 
the July 2001 Order subject to the commitments, as described, agreed 
that the Confirmatory Order would be effective upon issuance, and 
agreed to waive its right to a hearing on this action. Implementation 
of these commitments, as described, provided assurance that sufficient 
resources were applied to the QA program, and that the program would be 
conducted safely and in accordance with NRC requirements.
    In response to JLS&A's most recent request for interim relief, and 
based on a showing of good cause, the NRC issued a Confirmatory Order 
dated May 30, 2003, Confirmatory Order Relaxing Order (May 2003 Order) 
(68 FR 34010, June 6, 2003), that allowed JLS&A to make shipments 
through June 1, 2005, and expanded JLS&A's shipment authorization to 
transportation packaging as authorized by JLS&A's implementation of 
Revision 7 of the conditionally approved QA Program Approval No. 0122. 
The May 2003 Order contained an expiration date of June 1, 2005.
    By letter dated April 7, 2005, JLS&A requested the NRC to rescind 
the July 2001 Order that withdrew JLS&A's Quality Assurance Program 
Approval No. 0122. Because the Staff's review of JLS&A's request could 
not be completed by June 1, 2005, the Staff issued a Confirmatory Order 
on June 1, 2005, which extended the expiration date of the May 2003 
Order to July 1, 2005 (70 FR 34165, June 13, 2005), to allow JLS&A to 
continue limited operations under Revision 7 of the conditionally 
approved QA Program Approval No. 0122, while the Staff completed its 
review.

III

    The Staff has completed its review and concluded that the July 2001 
Order should be rescinded. JLS&A has completed all of the elements of 
its NTCAP and has demonstrated, on multiple occasions after relaxation 
of the July 2001 Order, that it can safely transport Type B radioactive 
shipments in both DOT Specification 20WC overpacks and NRC-approved CoC 
packages under their new NRC-approved QA program. In addition, the NRC 
Spent Fuel Project Office has inspected JLS&A in 2003 and again in 2004 
and although minor program implementation deficiencies were found, 
these findings were of lower safety significance and none were of a 
severity level comparable to the original findings which precipitated 
the issuance of the July 2001 Order. In addition, in JLS&A's April 7, 
2005 letter, JLS&A committed to the following conditions:
    1. JLS&A shall continue implementing its new QA Procedures such 
that reviews are conducted to ensure that all activities under the 
scope of Part 71 are governed by procedures defining the activity, 
documenting the activity, and providing audit trail of the activity 
performed.
    2. The Independent Auditor shall continue to perform quarterly 
audits verifying the implementation of the conditionally approved JLS&A 
Quality Assurance Program Plan and Implementing Procedures. Reports 
shall be provided quarterly by the 20th day of the month following 
completion of the audit. Any areas of nonconformance, not self 
identified by JLS&A, shall be reported to NRC.
    3. JLS&A shall keep monthly statistics regarding QA Program 
implementation and procedure adherence. Such statistics shall include 
the number of nonconformances, the nature of the nonconformances, and 
indicate those nonconformances that are referred to the corrective 
action processes. Such information shall be provided to the Independent 
Auditor who will report any areas of concern to NRC during scheduled 
reports.
    4. JLS&A shall immediately stop work or cause to be stopped any 
work which would result in a potential hazard to public health and 
safety.
    5. Conditions 1 though 4 shall remain in effect for one year from 
date of rescission of the July 3 Order, or until the Independent 
Auditor shall issue four successive quarterly reports that show no 
violation of NRC regulations and effective implementation of the JLS&A 
Quality Assurance Program.
    On June 23, 2005, JLS&A consented to issuance of this Order with 
the commitments, as described in Section IV below. JLS&A further agreed 
in its June 23, 2005, letter that this Order is to be effective upon 
issuance and that it waived its right to a hearing. Implementation of 
these commitments will provide enhanced assurance that sufficient 
resources will be applied to JLS&A's Quality Assurance Program Plan and 
Implementing Procedures, and that the plan and procedures will be 
conducted safely and in accordance with NRC requirements. I find 
JLS&A's commitments as set forth in Section IV acceptable and necessary 
and conclude that with these commitments, the public health and safety 
are reasonably assured. In view of the foregoing, I have determined 
that the public health and safety require that JLS&A's commitments be 
by this Order. Based on the above and JLS&A's consent, this Order is 
immediately effective upon issuance.

IV

    Accordingly, pursuant to Sections 62, 81, 161b, 161i, 161o, 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 the July 3, 2001, Order is 
rescinded, reinstating JLS&A's quality assurance program approval and 
granting relief to J. L. Shepherd and Associates to allow full 
participation in 10 CFR part 71 transportation activities in accordance 
with NRC-approved quality assurance program approval, revision 7, based 
on the following conditions:
    1. JLS&A shall continue implementing its new QA Procedures. Reviews 
shall be conducted to ensure that all activities under the scope of 10 
CFR part 71 are governed by procedures defining the activity, 
documenting the activity, and providing an audit trail of the activity 
performed.
    2. The Independent Auditor shall continue to perform quarterly 
audits verifying the implementation of the conditionally approved JLS&A 
Quality Assurance Program Plan and Implementing Procedures. Reports 
shall be provided quarterly by the 20th day of the month following 
completion of the audit. Any areas of nonconformance

[[Page 42110]]

included in such reports that are not self identified by JLS&A, shall 
also be reported to NRC, in writing, by the 20th day of the month 
following completion of the audit.
    3. JLS&A shall keep monthly statistics regarding QA Program 
implementation and procedure adherence. Such statistics shall include 
the number of nonconformances, the nature of the nonconformances, and 
those nonconformances referred to the corrective action processes. Such 
information shall be provided to the Independent Auditor who will 
report any areas of concern to NRC through scheduled reports.
    4. JLS&A shall immediately stop work or cause to be stopped any 
work which would result in a potential hazard to public health and 
safety.
    5. Conditions 1 though 4 shall remain in effect for one year from 
date of rescission of the July 3 Order, or until the Independent 
Auditor shall issue four successive quarterly reports that show no 
violation of NRC regulations and effective implementation of the JLS&A 
Quality Assurance Program, whichever is later.
    The Director, Office of Enforcement, may in writing, relax or 
rescind any of the above conditions upon demonstration by JLS&A of good 
cause.

V

    Any person adversely affected by this Confirmatory Order, other 
than the Certificate Holder, may request a hearing within 20 days of 
its issuance. 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. Any request for a hearing 
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 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 
JLS&A. Because of continuing disruptions in delivery of mail to United 
States Government offices, it is requested that answers and requests 
for hearing be transmitted to the Secretary of the Commission either by 
means of facsimile transmission to 301-415-1101 or by e-mail to 
[email protected] and also to the Office of the General Counsel 
either by means of facsimile transmission to 301-415-3725 or by e-mail 
to [email protected]. 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 Order and shall 
address the criteria set forth in 10 CFR 2.309(d) and (f).
    If a hearing is requested by 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 Confirmatory 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. An answer or a request for 
hearing shall not stay the immediate effectiveness of this Order.

    Dated this 30th day of June, 2005.

    For the Nuclear Regulatory Commission.
Michael R. Johnson,
Director, Office of Enforcement.
[FR Doc. 05-14358 Filed 7-20-05; 8:45 am]
BILLING CODE 7590-01-P