[Federal Register Volume 71, Number 218 (Monday, November 13, 2006)]
[Notices]
[Pages 66201-66203]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-19098]


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NUCLEAR REGULATORY COMMISSION

[Docket No. 030-29319; License No. 42-26838-01; EA-06-021]


In the Matter of H&G Inspection Company, Inc., Houston, TX; 
Confirmatory Order (Effective Immediately)

I

    H&G Inspection Company, Inc. (H&G), is the holder of Materials 
License No.

[[Page 66202]]

42-26838-01 issued by the Nuclear Regulatory Commission (NRC or 
Commission) on July 30, 1986, last amended on June 3, 2003, and is due 
to expire on June 30, 2013. The license authorizes H&G to possess 
sealed radioactive sources for use in conducting industrial radiography 
activities in accordance with the conditions specified therein.

II

    An NRC inspection was conducted at a temporary job site in Rock 
Springs, Wyoming, and at the H&G field office located in Evanston, 
Wyoming, on December 15, 2004. Following that inspection, an 
investigation was initiated on January 31, 2005, by the NRC Office of 
Investigations (OI) in order to determine whether two radiographers 
employed by H&G willfully violated NRC regulations.
    Based on the results of the NRC inspection and OI investigation, 
the NRC determined that three violations of NRC requirements occurred. 
The violations involved failures to: (A) Secure from unauthorized 
removal or access and control and maintain constant surveillance of 
licensed material in an unrestricted area (10 CFR 20.1801 and 10 CFR 
20.1802); (B) have a second qualified individual observe radiographic 
operations (10 CFR 34.41(a)), (C) and block and brace a radiographic 
exposure device during transport (10 CFR 71.5(a) and 49 CFR 
177.842(d)). The NRC also determined that Violation C resulted from 
willful actions on the part of the two radiographers involved.

III

    In a letter dated May 1, 2006, the NRC issued a Notice of Violation 
and proposed Civil Penalty for the three violations identified as a 
result of the December 15, 2004, inspection and subsequent OI 
investigation. In the May 1, 2006, letter, the NRC offered H&G the 
opportunity to request Alternative Dispute Resolution (ADR) with the 
NRC in an attempt to resolve issues associated with these violations. 
In response to the May 1, 2006, letter, H&G requested ADR to resolve 
the matter with the NRC. ADR is a process in which a neutral mediator, 
with no decision-making authority, assists the NRC and H&G to resolve 
any differences regarding the matter.
    An ADR session was held between H&G and the NRC in Arlington, 
Texas, on August 24, 2006. During that ADR session, an agreement was 
reached. The elements of the agreement consisted of the following:
    1. The NRC and H&G agree that a Severity Level-III violation of 10 
CFR 20.1801 and 10 CFR 20.1802 did occur on December 15, 2004, as noted 
in the Notice of Violation dated May 1, 2006, in that the licensee 
stored its radiography camera in the mobile darkroom of its truck 
parked at the licensee's facility in Evanston, Wyoming, and the door to 
the darkroom was left unsecured and the licensee did not otherwise 
control and maintain constant surveillance of the licensed material.
    2. The NRC and H&G agree that a Severity Level-III violation of 10 
CFR 34.41(a) did occur on December 15, 2004, as noted in the Notice of 
Violation dated May 1, 2006, in that, although the licensee had two 
qualified individuals present at a temporary jobsite in Rock Springs, 
Wyoming, where radiographic operations were being performed, the second 
qualified individual (radiographer's assistant) was physically located 
in the licensee's mobile darkroom during radiographic operations, and 
was therefore not able to observe the operations or provide immediate 
assistance to prevent unauthorized entry.
    3. The NRC and H&G agree that a violation of 49 CFR 177.842(d) did 
occur on December 15, 2004, as noted in the Notice of Violation dated 
May 1, 2006, in that the licensee transported a radiographic exposure 
device containing licensed material to and from a temporary job site 
without the required blocking and bracing.
    4. The NRC and H&G agree that the violation of 49 CFR 177.842(d), 
as noted in the Notice of Violation dated May 1, 2006, was a willful 
act on the part of the radiographers involved.
    5. The NRC recognizes that H&G took the following immediate and 
effective corrective actions: (1) Replacing the area supervisor in the 
associated field office; (2) replacing other personnel in that field 
office, including those involved in the willful violation; (3) holding 
company-wide safety meetings about the deficiencies that NRC found; (4) 
completing implementation of a new locking system (using two physical 
systems: a lock box installed in each dark room and utilization of the 
lock on the dark room door); (5) conducting additional field audits; 
(6) conducting retraining for affected individuals; and (7) clarifying 
Operation and Emergency procedures regarding the requirements for the 
2-person rule.
    6. The NRC and H&G agree that the actions in this paragraph are 
sufficient to address the NRC's concerns. H&G agrees to issuance of 
this letter and Confirmatory Order confirming this agreement, and also 
agrees to waive any request for a hearing regarding this Confirmatory 
Order. The NRC and H&G further agree that this Confirmatory Order 
should include the following elements:
    A. H&G will continue to implement the following corrective actions: 
(1) A new locking system (using two physical systems: a lock box 
installed in each dark room and utilization of the lock on the dark 
room door); (2) conducting additional field audits; and (3) annual 
training on Operation and Emergency procedures regarding the 
requirements for the 2-person rule.
    B. Not later than 1-year from the date of this Confirmatory Order, 
H&G will write and submit an article (for publication by both the 
American Society of Non-Destructive Testing (ASNT) and the Non-
Destructive Testing Managers Association (NDTMA)) that is mutually 
agreeable. The article will address the new H&G management oversight 
program (detailed below) and the value it adds to overall safe and 
effective operations. Not later than 11 months from the date of this 
Confirmatory Order, a draft of the proposed article will be submitted 
to the NRC Region IV office for review, comment, and concurrence.
    C. H&G agrees to implement a management review and oversight 
program with the following elements:
    a. Training of the three area supervisors and three office managers 
to the Radiation Safety Officer level.
    b. Requiring each of the six individuals in 6.C.a to conduct 
unannounced audits of one of the other field offices on a rotating 
basis (quarterly for the first 2 years, and annually thereafter).
    c. Requiring one of the three senior corporate managers (Radiation 
Safety Officer, Chief Operations Officer, and President) to conduct 
unannounced performance observations at each of the field offices on a 
rotating basis twice a year. Meaning each field office will receive a 
visit from a senior corporate manager twice each year.
    D. H&G understands that the NRC, as part of its normal process, 
will issue a press release with this Confirmatory Order. The NRC will 
provide H&G a copy of the press release prior to its release.
    E. In recognition of H&G's extensive corrective actions, the NRC 
agrees to reduce the Civil Penalty originally proposed to $500.
    On October 10, 2006, H&G consented to issuing this Confirmatory 
Order with the commitments, as described in Section IV below. H&G 
further agreed in the October 10, 2006, letter that this

[[Page 66203]]

Confirmatory Order is to be effective upon issuance and that they have 
waived their right to a hearing. Implementation of these commitments 
will resolve the NRC's concerns and will satisfy the response 
requirements listed in the May 1, 2006, Notice of Violation such that 
no additional written response to that letter is necessary.
    I find that H&G's commitments as set forth in Section IV are 
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 H&G's commitments be confirmed by this Order. Based on the above 
and H&G's consent, this Confirmatory Order is immediately effective 
upon issuance.

IV

    Accordingly, pursuant to Sections 161b, 161i, 161o, 182 and 186 of 
the Atomic Energy Act of 1954, as amended, the Commission's regulations 
in 10 CFR 2.202, 2.205, 10 CFR Parts 20, 34, and in Part 71 that 
references 49 CFR 177, it is hereby ordered, effective immediately, 
that:
    1. The NRC reduces the civil penalty proposed by letter dated May 
1, 2006 in the amount of $6,500 to $500.
    2. H&G will continue to implement the following corrective actions: 
(1) A new locking system (using two physical systems: a lock box 
installed in each dark room and utilization of the lock on the dark 
room door); (2) conducting additional field audits; (3) annual training 
on Operation and Emergency procedures regarding the requirements for 
the 2-person rule.
    3. Not later than 1 year from the date of this Confirmatory Order, 
H&G will write and submit an article (for publication by both the 
American Society of Non-Destructive Testing (ASNT) and the Non-
Destructive Testing Managers Association (NDTMA)) that is mutually 
agreeable. The article will address the new H&G management oversight 
program (detailed below) and the value it adds to overall safe and 
effective operations. Not later than 11 months from the date of this 
Confirmatory Order, a draft of the proposed article will be submitted 
to the NRC Region IV office for review, comment, and concurrence.
    4. H&G agrees to implement a management review and oversight 
program with the following elements:
    (a) Training of the three area supervisors and three office 
managers to the Radiation Safety Officer level.
    (b) Requiring each of the six individuals in 4(a) above to conduct 
unannounced audits of one of the other field offices on a rotating 
basis (quarterly for the first 2 years, and annually thereafter).
    (c) Requiring one of the three senior corporate managers (Radiation 
Safety Officer, Chief Operations Officer, and President) to conduct 
unannounced performance observations at each of the field offices on a 
rotating basis twice a year, meaning each field office will receive a 
visit from a senior corporate manager twice each year.
    The Regional Administrator, NRC Region IV, may relax or rescind, in 
writing, any of the above conditions upon a showing by H&G of good 
cause.

V

    Any person adversely affected by this Confirmatory Order, other 
than H&G, 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, Texas 76011, and to H&G Inspection. Because of the possible 
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 
such a person 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 24th day of October, 2006.

    For the Nuclear Regulatory Commission.

Bruce S. Mallett,
Regional Administrator.
 [FR Doc. E6-19098 Filed 11-9-06; 8:45 am]
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