[Federal Register Volume 75, Number 229 (Tuesday, November 30, 2010)]
[Notices]
[Pages 74099-74102]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-30116]


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NUCLEAR REGULATORY COMMISSION

[Docket No. 70-143; License No. SNM-124; EA-10-076; NRC-2010-0365]


In the Matter of Nuclear Fuel Services, Inc., Erwin, TN; 
Confirmatory Order Modifying License (Effective Immediately)

I

    Nuclear Fuel Services, Inc. (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 Title 10 of the 
Code of Federal Regulations (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 
October 4, 2010.

II

    On October 7, 2009, the NRC Office of Investigations (OI) began an 
investigation (OI Case No. 2-2010-001) at NFS. Based on the evidence 
developed during its investigation, OI substantiated that a former 
Industrial Safety Specialist at NFS willfully provided the NRC 
incomplete and inaccurate information concerning fire damper 
inspections at NFS on two separate occasions. The results of the 
investigation, completed on February 26, 2010, were sent to NFS in a 
letter

[[Page 74100]]

dated July 20, 2010. The NRC's July 20, 2010, letter offered NFS the 
opportunity to resolve the enforcement aspects of this matter through 
the NRC's normal enforcement process, or through ADR. In response to 
the NRC's offer, NFS requested use of the NRC ADR process to resolve 
the matter.
    On October 4, 2010, the NRC and NFS met in an ADR session mediated 
by a professional mediator, arranged through Cornell University's 
Institute on Conflict Resolution. ADR is a process in which a neutral 
mediator with no decision-making authority assists the parties in 
reaching an agreement on resolving any differences regarding the 
dispute. This confirmatory order is issued pursuant to the agreement 
reached during the ADR process.

III

    During the ADR session, a preliminary settlement agreement was 
reached. The elements of the agreement consisted of the following:
    1. NFS agreed that two examples of a violation of 10 CFR 70.9(a), 
occurred, which requires that information provided to the NRC be 
complete and accurate in all material respects. The violation involved 
the following:
    a. On November 25, 2008, NFS submitted to the NRC a Reply to Notice 
of Violation that was not complete and accurate in all material 
respects. NFS's letter documented that all fire dampers in procedure 
NFS-GH-22 were inspected in September of 2008, and passed the 
inspection, when in fact, 12 of the fire dampers had not been inspected 
(three of which were designated as items relied on for safety). The NRC 
preliminarily concluded that the submittal of inaccurate information 
was due, in part, to the willful actions of a former Industrial Safety 
Specialist at NFS who was tasked with drafting the written reply to the 
Notice of Violation. The inaccurate information was material to the NRC 
because it was used by the NRC to confirm that the required fire damper 
inspections had been completed.
    b. During the NRC's August 2009 inspection, the NRC attempted to 
verify the corrective actions as documented in the November 25, 2008 
Reply to Notice of Violation. In support of the inspection, the 
aforementioned former Industrial Safety Specialist at NFS created and 
provided a document to the NRC inspector, which indicated that all but 
one of the fire dampers had been fully inspected during 2008, when in 
fact, more than one of the dampers had not been fully inspected. The 
NRC preliminarily concluded that this inaccurate information was 
willfully provided to the NRC. This information was material to the NRC 
because it was used during the inspection to confirm that the required 
fire damper inspections had been completed.
    2. The NRC concluded that the actions of the former NFS Industrial 
Safety Specialist were willful. In its investigation, NFS did not reach 
any conclusions regarding willfulness.
    3. In response to the violation described above, NFS implemented 
numerous corrective actions and enhancements, including but not limited 
to a prompt investigation into the incident, a root cause and 
corrective action review, an extent of condition and extent of cause 
review, a Safety Culture Implications Review, organizational and 
process changes in response to the 10 CFR 70.9 violation, training and 
communication initiatives, initiatives to improve employee awareness of 
the incident and lessons learned, and initiatives to gauge employee 
awareness of NFS's corrective actions, enhancements, and lessons 
learned.
    4. In response to the issues as described in Section III.1(a) and 
(b) above, NFS agreed to the following actions:
    a. Within 30 days of issuance of this Confirmatory Order, NFS will 
submit a Reply to a Notice of Violation, which documents its corrective 
actions and enhancements as discussed in Section III.3 above. NFS's 
Reply to a Notice of Violation will be consistent with the requirements 
of 10 CFR 2.201.
    b. Within one year of issuance of this Confirmatory Order, NFS will 
conduct an effectiveness review of each completed corrective action 
identified in its written Reply to a Notice of Violation. In response 
to its effectiveness review, NFS will implement additional corrective 
actions to address any deficiencies or weaknesses, and will continue to 
do so until such deficiencies and weaknesses are resolved.
    c. Within six months of issuance of this Confirmatory Order, NFS 
will conduct an assessment of the effectiveness of its actions to 
assure the adequacy and accuracy of information submitted to the NRC, 
including continuous improvements to its processes and changes to its 
organizational structure. The assessment will be conducted by an 
independent group (i.e., from outside the safety organization). NFS 
will address, through enhancements and corrective actions, the issues 
identified as a result of the assessment.
    d. NFS agrees to develop and implement an appropriate safety 
culture improvement plan to address the findings identified in the 
second Safety Culture Assessment report that was provided to the NRC on 
June 29, 2010. NFS also agrees to assess the effectiveness of its plan 
and implement additional corrective actions for any weaknesses or 
deficiencies identified, by June 2012. Corrective actions will continue 
to be implemented until such time that NFS demonstrates to NRC that the 
actions were fully effective.
    e. NFS will conduct integrated independent safety culture 
assessments using a variety of appropriate assessment tools (which may 
include, but are not limited to, an independent third party review, 
employee surveys, Nuclear Safety Review Board inputs, self-
assessments), no later than June 2013, and at least every 24 months 
thereafter, to an accepted nuclear industry standard. The safety 
culture assessments will include the following provisions and 
attributes:
    i. The integrated assessment results will be shared with NFS staff 
within 30 days of completion of results.
    ii. The integrated assessment results will be provided to the NRC 
within 30 days of completion of results.
    iii. The corrective action plans to address the issues identified 
in these integrated assessments will be provided to the NRC within 60 
days of completion of results.
    iv. Appropriate and timely corrective actions will be implemented 
to address the issues identified in these assessments.
    v. Effectiveness reviews of corrective actions will be implemented 
within one year of completion of the corrective action. Additional 
corrective action will be taken to address those actions which were not 
fully effective.
    vi. NFS will inform the NRC when it has determined that 
improvements in safety culture are sufficient and sustainable.
    vii. The above actions involving independent safety culture 
assessments will continue until NRC has concluded that the actions were 
fully effective.
    f. NFS will complete an assessment of its current corrective action 
program against the requirements of NQA-1-2008, Part III, Subpart 3.1, 
``Non-Mandatory Appendix 16A-1.'' Based on this assessment, NFS will 
submit a license amendment request within nine months of the date of 
issuance of this Confirmatory Order incorporating into the license its 
current corrective action program including the additional enhancements 
made to the program as a result of the assessment.

[[Page 74101]]

    g. NFS shall implement metrics to measure overall safety 
performance at the facility.
    5. The NRC and NFS agree that the above elements will be 
incorporated into a Confirmatory Order, and that the two examples of a 
violation of 10 CFR 70.9 will be cited as a Notice of Violation, and 
included as an attachment to the final Confirmatory Order. In addition, 
NFS agrees to waive its hearing rights for the issues documented in the 
Confirmatory Order.
    6. In consideration of the commitments delineated in Section III.4 
above and in Section V, the NRC agrees to refrain from proposing a 
civil penalty for all matters discussed in the NRC's letter to NFS of 
July 20, 2010 (EA-10-076).
    7. Issuance of this Confirmatory Order for the above actions 
supersedes the NRC's Confirmatory Order to NFS, dated February 21, 
2007, which is now closed.
    8. This agreement is binding upon successors and assigns of NFS.

IV

    Since the licensee has agreed to take additional actions to address 
NRC concerns, as set forth in Section V, the NRC has concluded that its 
concerns can be resolved through issuance of this Confirmatory Order.
    I find that NFS's commitments as set forth in Section V 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 public health and safety require that 
NFS's commitments be confirmed by this Order. Based on the above and 
NFS's consent, this Confirmatory Order is immediately effective upon 
issuance.

V

    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. Within 30 days of issuance of this Confirmatory Order, NFS will 
submit a Reply to a Notice of Violation, which documents its corrective 
actions and enhancements as discussed in Section III.3 above. NFS's 
Reply to the Notice of Violation will be consistent with the 
requirements of 10 CFR 2.201.
    2. Within one year of issuance of this Confirmatory Order, NFS will 
conduct an effectiveness review of each completed corrective action 
identified in its written Reply to a Notice of Violation. In response 
to its effectiveness review, NFS will implement additional corrective 
actions to address any deficiencies or weaknesses, and will continue to 
do so until such deficiencies and weaknesses are resolved.
    3. Within six months of issuance of this Confirmatory Order, NFS 
will conduct an assessment of the effectiveness of its actions to 
assure the adequacy and accuracy of information submitted to the NRC, 
including continuous improvements to its processes and changes to its 
organizational structure. The assessment should be conducted by an 
independent group (i.e., from outside the safety organization). NFS 
will then address the issues identified as a result of the assessment.
    4. NFS agrees to develop and implement an appropriate safety 
culture improvement plan to address the findings identified in the 
second Safety Culture Assessment report that was provided to the NRC on 
June 29, 2010. NFS also agrees to assess the effectiveness of its plan, 
and implement additional corrective actions for any weaknesses or 
deficiencies identified, by June 2012. Corrective actions will continue 
to be implemented until such time that NFS has demonstrated that the 
actions were fully effective.
    5. NFS will conduct integrated independent safety culture 
assessments using a variety of appropriate assessment tools (which may 
include, but are not limited to, an independent third party review, 
employee surveys, Nuclear Safety Review Board inputs, self-
assessments), no later than June 2013, and at least every 24 months 
thereafter, to an accepted nuclear industry standard. The safety 
culture assessments will include the following provisions and 
attributes:
    a. The integrated assessment results will be shared with NFS staff 
within 30 days of completion of results.
    b. The integrated assessment results will be provided to the NRC 
within 30 days of completion of results.
    c. The corrective action plans to address the issues identified in 
these integrated assessments will be provided to the NRC within 60 days 
of completion of results.
    d. Appropriate and timely corrective actions will be implemented to 
address the issues identified in these assessments.
    e. Effectiveness reviews of corrective actions will be implemented 
within one year of completion of the corrective action. Additional 
corrective action is taken to address those actions which were not 
fully effective.
    f. NFS will inform the NRC when it has determined that improvements 
in safety culture are sufficient and sustainable.
    g. The above actions involving independent safety culture 
assessments will continue until NRC has concluded that the actions were 
fully effective.
    6. NFS will complete an assessment of its current corrective action 
program against the requirements of NQA-1-2008, Part III, Subpart 3.1, 
``Non-Mandatory Appendix 16A-1.'' Based on this assessment, NFS will 
submit a license amendment request within nine months of the date of 
issuance of this Confirmatory Order, incorporating into the license its 
current corrective action program including the additional enhancements 
made to the program as a result of the assessment.
    7. NFS shall implement metrics to measure overall safety 
performance at the facility.
    The Regional Administrator, NRC Region II, may relax or rescind, in 
writing, any of the above conditions upon a showing by NFS of good 
cause.

VI

    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 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.
    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, 
August 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

[[Page 74102]]

[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 
docket.
    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 Meta System 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 the Electronic Information Exchange (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 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.
    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 Confirmatory 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 V above shall be final 20 days from the date this 
Confirmatory 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 provisions 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 16th day of November 2010.

    For the Nuclear Regulatory Commission.
Victor M. McCree,
Deputy Regional Administrator for Operations.
[FR Doc. 2010-30116 Filed 11-29-10; 8:45 am]
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