[Federal Register Volume 74, Number 234 (Tuesday, December 8, 2009)]
[Pages 64749-64752]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-29205]



[Docket No. 70-143; NRC-2009-0529; EA-08-103]

Nuclear Fuel Services, Inc., License No. SNM-124, Erwin, TN; 
Confirmatory Order Modifying License (Effective Immediately)


    Nuclear Fuel Services, Incorporated (NFS or Licensee) is the holder 
of Special Nuclear Materials License No. SNM-124 issued by the Nuclear 
Regulatory Commission (NRC or Commission) pursuant to 10 CFR part 70 on 
July 2, 1999. The license authorizes the operation of the NFS facility 
in accordance with the conditions specified therein. The facility is 
located on the Licensee's site in Erwin, Tennessee.
    This Confirmatory Order is the result of an agreement reached 
during an Alternative Dispute Resolution (ADR) session conducted on 
September 15, 2009.


    On April 20, 2006, an investigation was initiated by the NRC's 
Office of Investigations (OI) to review a March 2006 incident involving 
a senior executive at NFS who consumed alcohol less than five hours 
before a scheduled working tour. Based on the OI investigation and 
subsequent NRC staff review, the NRC advised NFS by letter dated 
January 7, 2009, of the identification of seven apparent violations:
    (1) On March 9, 2006, a senior executive of NFS consumed alcohol 
less than five hours before a scheduled working tour, in apparent 
violation of 10 CFR 26.20.
    (2) In March 2006, NFS failed to relieve the senior executive of 
his duties, failed to perform for-cause testing to determine his 
fitness for duty, and failed to implement management actions in 
apparent violation of 10 CFR 26.24, 10 CFR 26.27, and an NFS procedure.
    (3) On April 5, 2006, NFS granted the senior executive Self-
Referral Rehabilitation Status in the NFS Employee Assistance Program 
after he had been notified of an ongoing Fitness for Duty (FFD) 
investigation, in apparent violation of 10 CFR 26.20 and an NFS 
    (4) Between April 5 and 30, 2006, an NFS senior executive, in 
correspondence addressed to NRC, stated that the NFS senior executive 
had entered a substance abuse rehabilitation program when, in fact, he 
had not done so, in apparent violation of 10 CFR 70.9.
    (5) On April 11, 2006, in apparent violation of 10 CFR 70.9, 
Completeness and accuracy of information, a senior NFS manager placed a 
letter in the senior executive's personnel file, and on June 8, 2006, 
NFS provided this letter, which was not accurate in all material 
respects, to the NRC. Specifically, the letter stated that the senior 
executive had entered a substance abuse rehabilitation program when, in 
fact, the senior executive had not done so.
    (6) In May 2006, in apparent violation of 10 CFR 26.27 and the NFS 
FFD Program, NFS failed to determine the senior executive's fitness to 
safely and competently perform his duties and responsibilities before 
returning him to duty.
    (7) NFS did not provide appropriate training to ensure that 
employees understood their roles and responsibilities in implementing 
its FFD Program and understood 10 CFR part 26 requirements.


    On September 15, 2009, the NRC and NFS met in an ADR session 
mediated by a professional mediator, which was arranged through Cornell 
University's Institute on Conflict Resolution. ADR is a process in 
which a neutral mediator with no decision-making authority

[[Page 64750]]

assists the parties in reaching an agreement or resolving any 
differences regarding their dispute. This confirmatory order is issued 
pursuant to the agreement reached during the ADR process. The elements 
of the agreement consist of the following:
    (1) NRC Inspection Report 070143/2006-008, dated July 14, 2006, 
documented a violation regarding an inadequate FFD procedure. By letter 
dated August 11, 2006, NFS responded to the violation and documented 
corrective actions. The referenced corrective actions clarified the 
procedural requirement associated with the consumption of alcohol 
within 5 hours of a scheduled working tour. Since the implementation of 
the FFD program in 1993, NFS' training program included the 5 hour 
abstinence period. NFS stated at the ADR meeting that these corrective 
actions are relevant to apparent violations (II.1) and (II.7) above.
    (2) NFS agrees with the underlying circumstances which gave rise to 
the apparent violations discussed in the NRC's letter of January 7, 
2009. However, NFS disagrees with apparent violations (II.3) and 
(II.6), and questions the appropriateness of apparent violation (II.5) 
because it involves a personnel document wholly internal to NFS and not 
intended for transmittal to the NRC.
    (3) The NRC recognizes the ongoing efforts of NFS in implementation 
of the Safety Culture Improvement Plan as prescribed in the NRC's 
Confirmatory Order of February 21, 2007, and acknowledges the 
applicability of corrective actions and enhancements to preclude 
recurrence of the aforementioned apparent violations and to address the 
safety culture contributors to the apparent violations.
    (4) Although the NRC continues to believe that violations occurred 
as stated in its letter of January 7, 2009, the NRC and NFS agree that 
the underlying issues will be adequately addressed by the corrective 
actions and enhancements documented in this Confirmatory Order.
    (5) To preclude recurrence of the violations and to address NRC 
concerns, NFS completed the following corrective actions and 
    a. NFS conducted a prompt investigation and subsequent review of 
the March 2006 FFD issue and identified factors that contributed to the 
FFD program failures.
    b. Based on review of the above and in furtherance of other 
organizational improvements, NFS implemented and completed the 
    i. Disciplinary action and organizational change with respect to 
the senior executive;
    ii. Modification of the FFD procedure and training for all existing 
and new employees to address the 5 hour abstinence period; and the NFS 
requirement to test if alcohol consumption or the smell of alcohol is 
suspected. NFS continues to advise its employees of actions to be taken 
when a supervisor is suspected of an FFD violation.
    iii. Establishment of alternative avenues for reporting FFD related 
concerns and lowering the threshold for reporting. These include the 
creation of the position of Chief Nuclear Safety Officer, the 
implementation of an Employee Concerns Program (ECP), notification to 
employees of a corporate ethics hotline for reporting concerns, and 
introduction of an anonymous reporting feature as a part of the 
Corrective Action Program (CAP). The Chief Nuclear Safety Officer has a 
reporting chain which is independent of facility operations.
    iv. The Medical Review Officer (MRO) attended comprehensive MRO 
training, and successfully completed a re-certification examination.
    v. Implemented measures to assure continued Safety Conscious Work 
Environment (SCWE), to prevent, detect, and mitigate perceptions of 
harassment and intimidation, including an enhanced SCWE policy, a new 
organizational change process (which considers a potential chilling 
effect associated with organizational changes), new employee 
orientation and continuing communication with respect to the importance 
of a SCWE.
    vi. Launched the ECP on April 6, 2009, with widespread 
advertisement of the program, including informational postings, 
newsletters, periodic e-mails from the Vice President of Operations, 
and distribution of informational brochures.
    (6) In addition to the actions completed by NFS as discussed above, 
NFS agreed to additional corrective actions and enhancements, as fully 
delineated below in Section V of the Confirmatory Order.
    (7) The NRC and NFS agree that the elements discussed in Sections 
III and V will be incorporated into a Confirmatory Order. The resulting 
Confirmatory Order will be considered by the NRC for any future 
assessment of NFS, as appropriate.
    (8) NFS agrees to complete the items listed in Section V within 12 
months of issuance of the Confirmatory Order.
    (9) Within three months of completion of the terms of the 
Confirmatory Order, NFS will provide the NRC with a letter discussing 
its basis for concluding that the Confirmatory Order has been 
    (10) In consideration of the commitments delineated in Section III 
and V, the NRC agrees to refrain from proposing a civil penalty or 
issuing a Notice of Violation for all matters discussed in the NRC's 
letter to NFS of January 7, 2009 (EA-08-103).
    (11) This agreement is binding upon successors and assigns of NFS.


    Since NFS has completed the actions as delineated in Section III.5, 
and agreed to take the actions as set forth in Section V, the NRC has 
concluded that its concerns can be resolved through issuance of this 
    I find that NFS' commitments as set forth in Section V are 
acceptable and necessary and conclude that with these commitments the 
public health and safety and common defense and security are reasonably 
assured. In view of the foregoing, I have determined that public health 
and safety require that NFS' commitments be confirmed by this Order. 
Based on the above and NFS' consent, this Order is immediately 
effective upon issuance.


    Accordingly, pursuant to Sections 51, 53, 161b, 161i, 161o, 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 70, It is hereby ordered, 
effective immediately, that License No. SNM-124 Is Modified as Follows:
    (1) NFS agrees to develop an Executive Review Board (ERB) oversight 
process to review and consider Behavioral Observation Program (BOP)/FFD 
issues, allegations, positive FFD tests, disciplinary actions, ECP 
concerns, and if appropriate direct further action, such as root cause 
and common cause reviews. The ERB will convene on an as needed basis, 
but not less than quarterly for a period of one year after issuance of 
the Confirmatory Order. Thereafter, the ERB will convene at a frequency 
of no less than once per year. The ERB will also review relevant 
examples of ECP successes and direct communications to NFS staff, as 
    (2) NFS agrees to implement additional ECP enhancements through 
review of its ECP brochure and other communications for clarity 
regarding the ability of staff to bring concerns to the ECP on a 24 
hour/7 day basis. In addition, NFS will perform a one-time third party 
evaluation of its ECP.

[[Page 64751]]

    (3) NFS will develop BOP/FFD case studies for the purpose of 
communicating program changes, reporting thresholds for FFD issues, 
avenues for reporting, and other FFD issues. One such case study will 
be developed from the circumstances arising from the FFD incident of 
March 2006 described in the NRC's letter of January 7, 2009. These case 
studies will be used in FFD training and the presentation will include 
participation by NFS management at the Level III management level and 
    (4) NFS will revise FFD procedures as necessary to clearly define 
when self-referred status is no longer available and communicate these 
revisions to NFS employees.
    (5) NFS will revise its process for handling NRC Requests For 
Information related to allegations to assure the completeness and 
accuracy of information.
    (6) NFS will modify FFD and BOP procedures for referral of issues 
to the MRO to provide a vehicle for transmitting event information. The 
modification will also include a provision for employee consent to 
disclose pertinent personal privacy information.
    (7) NFS will establish appropriate written standards for the MRO 
and other medical specialists, that ensure effective implementation of 
10 CFR part 26 requirements. These standards will reflect the 
requirements of 10 CFR part 26 as well as the development of 
commercial, licensing, and regulatory requirements and expectations, 
continuing education requirements (such as industry peer group 
membership and certification), and an NFS-specific lesson plan. The 
MRO's performance to these standards will be assessed by an independent 
party within one year after issuance of this Confirmatory Order, and 
every other year thereafter. This assessment will include FFD and BOP 
referrals, and a review of annual NFS performance audits.
    (8) NFS agrees to complete the items listed in Section V above 
within 12 months of issuance of the Confirmatory Order.
    (9) Within three months of completion of the terms of the 
Confirmatory Order, NFS will provide the NRC a letter discussing its 
basis for concluding that the Confirmatory Order has been satisfied.
    The Regional Administrator, NRC Region II, may relax or rescind, in 
writing, any of the above conditions upon a showing by NFS of good 


    Any person adversely affected by this Confirmatory Order, other 
than NFS, may request a hearing within 20 days of its publication in 
the Federal Register. 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 directed to the Director, Office of 
Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555-
0001, and include a statement of good cause for the extension.
    If a person other than NFS 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 
    All documents filed in NRC adjudicatory proceedings, including a 
request for hearing, a petition for leave to intervene, any motion or 
other document filed in the proceeding prior to the submission of a 
request for hearing or petition to intervene, and documents filed by 
interested governmental entities participating under 10 CFR 2.315(c), 
must be filed in accordance with the NRC E-Filing rule, (72 FR 49139, 
Aug. 28, 2007). The E-Filing process requires participants to submit 
and serve all adjudicatory documents over the Internet, or in some 
cases to mail copies on electronic storage media. Participants may not 
submit paper copies of their filings unless they seek an exemption in 
accordance with the procedures described below.
    To comply with the procedural requirements of E-Filing, at least 
ten (10) days prior to the filing deadline, the participant should 
contact the Office of the Secretary by e-mail at 
[email protected], or by telephone at (301) 415-1677, to request 
(1) a digital ID certificate, which allows the participant (or its 
counsel or representative) to digitally sign documents and access the 
E-Submittal server for any proceeding in which it is participating; and 
(2) advise the Secretary that the participant will be submitting a 
request or petition for hearing (even in instances in which the 
participant, or its counsel or representative, already holds an NRC-
issued digital ID certificate). Based upon this information, the 
Secretary will establish an electronic docket for the hearing in this 
proceeding if the Secretary has not already established an electronic 
    Information about applying for a digital ID certificate is 
available on NRC's public Web site at http://www.nrc.gov/site-help/e-submittals/apply-certificates.html. System requirements for accessing 
the E-Submittal server are detailed in NRC's ``Guidance for Electronic 
Submission,'' which is available on the agency's public Web site at 
http://www.nrc.gov/site-help/e-submittals.html. Participants may 
attempt to use other software not listed on the Web site, but should 
note that the NRC's E-Filing system does not support unlisted software, 
and the NRC Help Desk will not be able to offer assistance in using 
unlisted software.
    If a participant is electronically submitting a document to the NRC 
in accordance with the E-Filing rule, the participant must file the 
document using the NRC's online, Web-based submission form. In order to 
serve documents through EIE, users will be required to install a Web 
browser plug-in from the NRC Web site. Further information on the Web-
based submission form, including the installation of the Web browser 
plug-in, is available on the NRC's public Web site at http://www.nrc.gov/site-help/e-submittals.html.
    Once a participant has obtained a digital ID certificate and a 
docket has been created, the participant can then submit a request for 
hearing or petition for leave to intervene. Submissions should be in 
Portable Document Format (PDF) in accordance with NRC guidance 
available on the NRC public Web site at http://www.nrc.gov/site-help/e-submittals.html. A filing is considered complete at the time the 
documents are submitted through the NRC's E-Filing system. To be 
timely, an electronic filing must be submitted to the E-Filing system 
no later than 11:59 p.m. Eastern Time on the due date. Upon receipt of 
a transmission, the E-Filing system time-stamps the document and sends 
the submitter an e-mail notice confirming receipt of the document. The 
E-Filing system also distributes an e-mail notice that provides access 
to the document to the NRC Office of the General Counsel and any others 
who have advised the Office of the Secretary that they wish to 
participate in the proceeding, so that the filer need not serve the 
documents on those participants separately. Therefore, applicants and 
other participants (or their counsel or representative) must apply for 
and receive a digital ID

[[Page 64752]]

certificate before a hearing request/petition to intervene is filed so 
that they can obtain access to the document via the E-Filing system.
    A person filing electronically using the agency's adjudicatory E-
Filing system may seek assistance by contacting the NRC Meta-System 
Help Desk through the ``Contact Us'' link located on the NRC Web site 
at http://www.nrc.gov/site-help/e-submittals.html, by e-mail at 
[email protected], or by a toll-free call at (866) 672-7640. The 
NRC Meta-System Help Desk is available between 8 a.m. and 8 p.m., 
Eastern Time, Monday through Friday, excluding government holidays.
    Participants who believe that they have a good cause for not 
submitting documents electronically must file an exemption request, in 
accordance with 10 CFR 2.302(g), with their initial paper filing 
requesting authorization to continue to submit documents in paper 
format. Such filings must be submitted by: (1) First class mail 
addressed to the Office of the Secretary of the Commission, U.S. 
Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: 
Rulemaking and Adjudications Staff; or (2) courier, express mail, or 
expedited delivery service to the Office of the Secretary, Sixteenth 
Floor, One White Flint North, 11555 Rockville, Pike, Rockville, 
Maryland 20852, Attention: Rulemaking and Adjudications Staff. 
Participants filing a document in this manner are responsible for 
serving the document on all other participants. Filing is considered 
complete by first-class mail as of the time of deposit in the mail, or 
by courier, express mail, or expedited delivery service upon depositing 
the document with the provider of the service. A presiding officer, 
having granted an exemption request from using E-Filing, may require a 
participant or party to use E-Filing if the presiding officer 
subsequently determines that the reason for granting the exemption from 
use of E-Filing no longer exists.
    Documents submitted in adjudicatory proceedings will appear in 
NRC's electronic hearing docket which is available to the public at 
http://ehd.nrc.gov/EHD_Proceeding/home.asp, unless excluded pursuant 
to an order of the Commission, or the presiding officer. Participants 
are requested not to include personal privacy information, such as 
social security numbers, home addresses, or home phone numbers in their 
filings, unless an NRC regulation or other law requires submission of 
such information. With respect to copyrighted works, except for limited 
excerpts that serve the purpose of the adjudicatory filings and would 
constitute a Fair Use application, participants are requested not to 
include copyrighted materials in their submission.


    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 V above shall be final 20 days from the date this 
Order is published in the Federal Register without further order or 
proceedings. If an extension of time for requesting a hearing has been 
approved, the provision specified in Section V shall be final when the 
extension expires if a hearing request has not been received.
    A Request for Hearing Shall Not Stay the Immediate Effectiveness of 
this Order.

    Dated this 23rd day of November 2009.

    For the Nuclear Regulatory Commission.
Victor M. McCree,
Deputy Regional Administrator for Operations.
[FR Doc. E9-29205 Filed 12-7-09; 8:45 am]