[Federal Register Volume 60, Number 44 (Tuesday, March 7, 1995)]
[Notices]
[Pages 12578-12581]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-5495]
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NUCLEAR REGULATORY COMMISSION
[Docket No. 70-27 and License No. SNM-42 EA 94-169]
Babcock and Wilcox Company, Lynchburg, Virginia; Order Imposing
Civil Monetary Penalty
I
Babcock and Wilcox Company (Licensee) is the holder of Special
Nuclear Material (SNM) License No. SNM-42 issued by the Nuclear
Regulatory Commission (NRC or Commission) on May 31, 1984. The license
authorizes the Licensee to possess and use Special Nuclear Material in
accordance with the conditions specified therein.
II
Inspections of the Licensee's activities were conducted on June 1-
July 1, 1994, July 1-8, 1994, and July 1--August 9, 1994. The results
of these inspections indicated that the Licensee had not conducted its
activities in full compliance with NRC requirements. A written Notice
of Violation and Proposed Imposition of Civil Penalty (Notice) was
served upon the Licensee by letter dated October 21, 1994. The Notice
states the nature of the violations, the provisions of the NRC's
requirements that the Licensee had violated, and the amount of the
civil penalty proposed for Violations I.A and I.B.
The Licensee responded to the Notice in two letters, both dated
November 20, 1994. In its responses, the Licensee protested the
proposed imposition of the civil penalty, disagreed with NRC statements
concluding that the violations represented a Severity Level III
problem, denied Violations I.B.1, I.B.2, and II.C, and disagreed with
the application of the escalation and mitigation factors.
III
After consideration of the Licensee's responses and the statements
of fact, explanation, and argument for mitigation contained therein,
the NRC staff has determined, as set forth in the Appendix to this
Order, that the violations occurred as stated and that the penalty
proposed for the violations designated in the Notice should be imposed.
IV
In view of the foregoing and pursuant to Section 234 of the Atomic
Energy Act of 1954, as amended (Act), 42 U.S.C. 2282, and 10 CFR 2.205,
it is hereby ordered that:
The Licensee pay a civil penalty in the amount of $37,500 within
30 days of the date of this order, by check, draft, money order, or
electronic transfer, payable to the Treasurer of the United States
and mailed to Mr. James Lieberman, Director, Office of Enforcement,
U.S. Nuclear Regulatory Commission, One White Flint North, 11555
Rockville Pike, Rockville, MD 20852-2738.
V
The Licensee may request a hearing within 30 days of the date of
this Order. A request for a hearing should be clearly marked as a
``Request for an Enforcement Hearing'' and shall be addressed to the
Director, Office of Enforcement, U.S. Nuclear Regulatory Commission,
Washington, DC 20555, with a copy to the Commission's Document Control
Desk, Washington, DC 20555. Copies also shall be sent to the Assistant
General Counsel for Hearings and Enforcement at the same address and to
the Regional Administrator, NRC Region II, 101 Marietta Street, NW.,
Suite 2900, Atlanta, GA 30323.
If a hearing is requested, the Commission will issue an Order
designating the time and place of the hearing. If the Licensee fails to
request a hearing within 30 days of the date of the order, the
provisions of this Order shall be effective without further
proceedings. If payment has not been made by that time, the matter may
be referred to the Attorney General for collection. [[Page 12579]]
In the event the Licensee requests a hearing as provided above, the
issues to be considered at such hearing shall be:
(a) Whether the Licensee was in violation of the Commission's
requirements set forth in Violations I.B.1 and I.B.2, as set forth
in the Notice, and
(b) Whether, on the basis of such violations and the additional
violations set forth in Section I of the Notice that the Licensee
admitted, this Order should be sustained.
Dated at Rockville, Maryland this 27th day of February 1995.
For the Nuclear Regulatory Commission.
Hugh L. Thompson, Jr.,
Deputy Executive Director for Nuclear Materials Safety, Safeguards and
Operations Support.
Appendix--Evaluations and Conclusion
On October 21, 1994, a Notice of Violation and Proposed
Imposition of Civil Penalty (Notice) was issued for violations
identified during NRC inspections conducted on June 1-July 1, 1994,
July 1-8, 1994, and July 1-August 9, 1994. Babcock and Wilcox Naval
Nuclear Fuel Division (Licensee) responded to the Notice with a
reply and an answer, both dated November 20, 1994. The Licensee
admitted Violations I.A.1, I.A.2, II.A, and II.B, denied Violations
I.B.1, I.B.2, and II.C, protested the proposed imposition of the
civil penalty, disagreed with NRC statements concluding that the
violations represented a Severity Level III problem, and disagreed
with the application of the escalation and mitigation factors. The
NRC's evaluations and conclusion regarding the Licensee's requests
are as follows:
I. Evaluation of Violations Assessed a Civil Penalty
Restatement of Violation I.B.1
License Condition No. S-1 of SNM-42 requires that licensed
material be used in accordance with statements, representations, and
conditions contained in Sections I through IV of the application
dated February 22, 1982, and supplements thereto.
Section III, Paragraph 2.0, of the application requires that the
design of equipment and establishment of operating safety limits
consider the pertinent process conditions and known modes of
failure. Certain conditions may be deemed incredible if specifically
excluded by experimental evidence or design considerations.
Section II, Paragraph 3.1, of the application states that the
Change Review Board (CRB) reviews the effect on nuclear criticality
safety, radiation protection, and other regulatory requirements of
new and revised facilities, equipment and processes involving
special nuclear material and ensures appropriate safety controls are
considered.
Contrary to the above, pertinent process conditions and known
modes of failure were not adequately considered in establishing
operating safety controls or limits in that:
1. On June 7, 1990, the CRB reviewed and approved License
Evaluation Request 89-155 based on a nuclear criticality safety
analysis of acceptable material types, but failed to consider
pertinent process conditions related to the operation of the drum
counter system that were not excluded by experimental evidence or
design considerations. This resulted in a failure to accurately
measure quantities of U-235 in 2-liter bottles.
Summary of Licensee's Response to Violation I.B.1
In its reply to the Notice, the Licensee denies that a violation
occurred as stated. The Licensee states that its nuclear criticality
safety (NCS) evaluation did consider pertinent process conditions
and known modes of failure in establishing operating safety limits
for the low-level dissolution process in Uranium Recovery, and that
the Nuclear Licensing Board (NLB), now CRB, did review the effect on
NCS from processing materials measured by the drum counter in low-
level dissolution and did ensure that appropriate safety controls
were considered. The Licensee states that its Licensee Evaluation
Request 89-155 was submitted, evaluated, and approved only because
of the drum counter measurement problem which resulted in the low-
level dissolution NCS limit being exceeded in 1989 and that the
purpose of the NCS evaluation and NLB review and approval was to
consider the pertinent process conditions and known modes of failure
identified by the 1989 problem. The Licensee also states that the
violation statement that pertinent process conditions and known
modes of failure were not considered cannot be true since these were
the only issues that were considered.
The Licensee further suggests that the evaluation was adequate
in that the LER requested approval of processing only certain
material types in low-level dissolution based on drum count
measurements and only those types were approved for processing based
upon the information in the LER. Further, the Licensee states that
none of these material types were inaccurately measured by the drum
counter subsequent to the approval, and the processing of these
material types did not result in NCS limit violations.
The Licensee states that the scope of the LER was the use of
drum counter measurements to comply with NCS limits for low-level
dissolution and that no restraints were placed on the measurement of
materials when the LER was approved; rather, restraints were placed
only on the use of the measurements. The Licensee states that
restraints on measuring materials by drum counting would be
inappropriate. The Licensee adds that the primary purpose of the
drum counter is to measure materials for material control and
accountability and that the accuracy of the drum counter
measurements is not a safety issue unless the measurements are used
to meet safety limits. The Licensee adds that the NLB appropriately
prohibited the use of the measurements of certain material types to
meet safety limits for low-level dissolution, but also appropriately
did not prohibit the measurement of any materials using the drum
counter.
NRC Evaluation of Licensee's Response to Violation I.B.1
The NRC does not agree with the Licensee's statements that the
Licensee considered pertinent process conditions and known modes of
failure in establishing operating safety limits for the low-level
dissolution process in Uranium Recovery and that the NLB reviewed
the effect on NCS of the approval of processing materials measured
by the drum counter in low-level dissolution. The Licensee was
presented with a known mode of failure regarding a system that was
used to demonstrate compliance with NCS limits. The known mode of
failure was that the drum counter measurements could underestimate
the amount of U-235 in a container.
The Licensee failed to consider pertinent process conditions
such as scrap/waste generation, packaging, labeling, and storage
that could affect the drum counter system's U-235 measurement
accuracy and, therefore, did not ensure that pertinent and
appropriate operating safety controls were considered to prevent the
known failure. Thus, the review and approval of LER 89-155 was not
considered adequate in establishing operating NCS controls or
limits.
With respect to the Licensee's statement regarding the adequacy
of its review of LER 89-155, the NRC notes that the review of the
specific items in the single LER as presented may have been adequate
for the very narrow and limited conditions of the LER presented;
however, the license requires the Licensee to consider pertinent
process conditions and known modes of failure in establishing NCS
safety controls and limits and the Licensee failed to consider such
conditions and known modes of failure.
The NRC agrees with the Licensee's statement that the primary
purpose of using the drum counter is to measure materials for
material control and accountability. However, in this case the
Licensee was relying on the drum counter measurements to ensure that
NCS limits were not exceeded. Given the nature of the Licensee's use
of the measurements, the Licensee did fail to consider all failure
modes that were not specifically excluded by experimental evidence
or design considerations because, despite the Licensee's knowledge
that drum counter mesaurements were inaccurate, such measurements
were used for estimating quantities of U-235 in 2-liter bottles.
The NRC concludes that the Licensee did not provide bases to
withdraw the violation; therefore, the violation occurred as stated.
Restatement of Violation I.B.2
License Condition No. S-1 of SNM-42 requires that licensed
material be used in accordance with statements, representations, and
conditions contained in Sections I through IV of the application
dated February 22, 1982, and supplements thereto.
Section III, Paragraph 2.0, of the application requires that the
design of equipment and establishment of operating safety limits
consider the pertinent process conditions and known modes of
failure. Certain conditions may be deemed incredible if specifically
excluded by experimental evidence or design considerations.
Section II, Paragraph 3.1, of the application states that the
Change Review Board (CRB) reviews the effect on nuclear criticality
safety, radiation protection, and other [[Page 12580]] regulatory
requirements of new and revised facilities, equipment and processes
involving special nuclear material and ensures appropriate safety
controls are considered. Contrary to the above, pertinent process
conditions and known modes of failure were not adequately considered
in establishing operating safety controls or limits in that:
2. From March 1989 through November 1990, the CRB reviewed drum
counter evaluations that revealed measurement problems associated
with material type and container fill level, but failed to establish
requirements for remeasurement of materials previously measured by
the drum counter and stored at the facility.
Summary of Licensee's Response to Violation I.B.2
In its reply to the Notice, the Licensee does not agree that
this violation relates to the stated requirements. The Licensee
further states that the need for remeasurement of materials in 1990
was neither a part of equipment design or the establishment of
safety limits nor a part of the consideration of safety controls for
low-level dissolution. The Licensee further states that the NLB is
chartered to review and approve new or modified facilities,
equipment, and processes and that it is not chartered to investigate
safety problems or require actions to resolve safety problems. The
Licensee maintains that the review and approval of changes to the
low-level dissolution process did not impact the safety of material
storage and, therefore, the need for remeasurement of material was
not within the charter of the NLB.
The Licensee states that no information was presented to the NLB
which indicated a need for remeasurement of scrap materials in
storage. The Licensee states that the materials which were in
storage and had not been acceptably measured were never identified
during the evaluation, review, and approval process, and, therefore,
there appeared to be no need for remeasurement.
The Licensee acknowledges that there were deficiencies related
to the problems discussed, including the inaccurate measurements.
However, the Licensee indicates that these deficiencies did not
constitute the violation as stated.
NRC Evaluation of Licensee's Response to Violation I.B.2
The Licensee appears to take the wording of the violation out of
context in that the Licensee has argued that the NLB is only
responsible for considering information contained in LERs. The NLB,
or another body of the Licensee's organization, should have
established requirements for remeasurement of materials previously
measured by the drum counter and stored at the facility. The
Licensee's argument further heightens the NRC's concern as to
whether the Licensee has an oversight organization that is charged
with this responsibility. In addition, the argument points out that
such narrow views are, in part, the reason for the Licensee's
continued NCS problems (i.e., exceeding NCS limits). The license
requires the Licensee to review the effect on NCS of new and revised
processes involving special nuclear material (SNM) and to ensure
that appropriate safety controls are considered.
During a review of revised drum counting processes, the NLB was
presented with evidence that demonstrated problems existed which
were associated with drum counter measurement accuracy. The NLB was,
therefore, required to review the effect on NCS of items or
processes that were using drum counter measurement results to
deomonstrate compliance with NCS limits. Such a review should have
included drum counter measurement results or materials stored in 55-
gallon drums used to demonstrate compliance with the NCS limit of
350 grams of U-235 per drum.
The NRC concludes that the Licensee did not provide bases to
withdraw the violation; therefore, the violation occurred as stated.
II. Evaluation of Violation not assessed a Civil Penalty, Restatement
of Violation II.C
License Condition No. S-1 of SNM-42 requires that licensed
material be used in accordance with statements, representations, and
conditions contained in Sections I through IV of the application
dated February 22, 1982 and supplements thereto.
Section II, Paragraph 10.4 of the application requires the
retention of records of Change Review Board (CRB) actions for the
longer of either two years or six months after termination of the
operation.
Contrary to the above, as of June 29, 1994, records associated
with License Evaluation Request (LER) 89-124, which provided the
basis for a CRB action on LER 89-155, approving the counting of
partially-filled bottles on the drum counter (an operation that was
currently being performed), were not retained and the operation had
not been terminated.
Summary of Licensee's Response to Violation II.C
In its reply, the Licensee denies that the violation occurred as
stated. The Licensee states that the NLB (now CRB) took no action
with regard to LER 89-124 because it was withdrawn and no
information associated with LER 89-124 formed a basis for any NLB
action on LER 89-155.
NRC Evaluation of Licensee's Response to Violation II.C
The Licensee's license requires the retention of records of NLB
actions. The LER 89-155 file contains a document which reads:
``Subject: Low-Level Dissolving of Partial Containers, Reference:
LER 89-124.'' This document states that the subject LER contained a
description of all types of material normally processed in the low-
level dissolvers and the means used to ensure nuclear safety while
processing the various types of material. The document also states:
``After a thorough review of all the material presented in the LER
[89-124] it was concluded [emphasis added] by the Nuclear Licensing
Board that processing of partial containers was not the main area of
concern.'' Therefore, the NLB did consider information from LER 89-
124 in its review of LER 89-155. However, the LER 89-155 file does
not contain any of the material that was thoroughly reviewed and
used as the basis for the NLB to conclude that processing of partial
bottles was not the main area of concern in the approval of LER 89-
155.
The NRC concludes that the Licensee did not provide bases to
withdraw the violation; therefore, the violation occurred as stated.
III. Summary of Licensee's Request for Mitigation
In its answer to the Notice, the Licensee states that a civil
penalty was proposed based on Violations I.A and I.B constituting,
in the aggregate, a Severity Level III problem. The Licensee argues
that since Violation I.B is not a violation, only Violation I.A.
remains and no aggregation can occur; therefore, there is no basis
for a civil penalty. The Licensee maintains that even if Violation
I.B were a violation, sufficient basis does not exist for a civil
penalty and that the statements in Violation I.B, if accurate, would
be causes of Violation I.A and should be written as part of
Violation I.A. In addition, the Licensee believes aggregating a
violation which may have occurred in 1990 with one which occurred in
1994 is inappropriate.
As to certain statements made in the Notice, the Licensee
disagrees that there have been many examples of inadequate
evaluations relating to known modes of failure, that it has had
continued poor performance in the area of NCS, and that extensive
management attention has not been directed toward identifying and
correcting NCS problems. The Licensee indicates that the issues for
which the civil penalty is being proposed were primarily caused by
problems which predate most of its efforts and that it is applying
significant attention and resources to strengthen its NCS program.
With respect to the application of escalation and mitigation
factors the Licensee states that Violation I.A was not a self-
disclosing event because if the operators had not compared the
output values from the dissolvers to the mass limit and reported the
limit violation, Violation I.A. would not have been known since
there was no requirement to make such comparison. Further, the
Licensee requests full mitigation because it showed enormous
initiative in identifying the root causes, contrary to the NRC's
Notice, which stated that the Licensee did not demonstrate
initiative in identifying the root causes of the Violations I.A. and
I.B, and because it developed long-term corrective actions in a
timely manner. The Licensee also states that it suspended or
severely restricted activities involving scrap and waste to prevent
recurrence. The Licensee states that the September 23, 1994 report
to the NRC addressed in detail why procedures, controls, and
implementation were inadequate and did address corrective actions
for the underlying problems revealed by the event. Additional
information regarding other causes and corrective actions was
provided to the NRC on November 16, 1994. Thus, based on all of its
corrective actions, the Licensee indicates that a civil penalty is
unwarranted. The Licensee also states that escalation of 100 percent
for prior opportunity to identify is not warranted since it
demonstrated that the February 1994 event did not provide
opportunities for identification and that the March 1989 problem
provided limited opportunities for this identification.
[[Page 12581]]
NRC Evaluation of Licensee's Request for Mitigation
With respect to the Licensee's argument that aggregating
Violations I.A and I.B is inappropriate, the NRC concluded, as
described above, that Violation I.B occurred as stated. The NRC
determined that Violations I.A and I.B were related in that they
have the same fundamental underlying cause and similar programmatic
deficiencies, namely, the lack of management attention to NCS
controls. Violation I.A involved exceeding a NCS limit. Violation
I.B was issued for failure to consider process conditions and known
modes of failure in the NCS analysis. These are two different issues
in NCS controls and two different license requirements. Therefore,
the NRC concludes both that aggregating Violations I.A and I.B as a
Severity Level III was appropriate regardless of the time period
between the two violations and that an escalated enforcement action
was warranted.
With regard to the Licensee's disagreement with NRC statements,
the NRC notes that there are 17 documented Licensee violations of
NRC requirements involving NCS controls over the past two years.
Despite these noted numerous weaknesses, the Licensee's NCS
evaluations and analyses have not been adequately strengthened as
evidenced by the failures described in NRC inspection reports 70-27/
94-12, 94-15, and 94-16. These violations and other weaknesses
clearly represent continued poor performance and inadequate
management attention because the Licensee has not sufficiently
improved its performance over the past two years to prevent
recurring problems in the area of NCS. Furthermore, the Licensee's
argument regarding the function of the NLB is narrow and does not
support the Licensee's statements that extensive management
attention has been placed in this area to ensure identification and
correction of NCS problems. While the NRC acknowledges that some
management attention has been directed toward identifying and
correcting NCS problems, Licensee management must ensure that proper
NCS controls and oversight are in place and are adhered to, and that
NCS problems are thoroughly investigated to ensure that effective
corrective actions are in place to prevent such problems from
recurring or leading to other problems.
The NRC neither escalated nor mitigated for the identification
factor because while the NRC recognizes that the Licensee identified
Violation I.A, the Licensee should note that the NRC identified
Violation I.B. In addition, Section VI of the Enforcement Policy
states, in part, that a ``self-disclosing' event as used in this
policy statement means an event that is readily obvious by human
observation * * *'' The Licensee's Chemical Processing operating
procedures required operators to: compare the amount of U-235 added
to the low-level dissolvers with the amount removed, determine if
the difference between the two exceeded 40 percent and, if so,
report such excessive differences to management. Also, the
Licensee's NCS limits required the amount of U-235 in each low-level
dissolver zone be limited to 350 grams. Because the license requires
procedures and postings to be followed and because doing so made the
350 gram limit violation readily obvious to human observation, the
event was correctly categorized as self-disclosing.
Furthermore, Section VI of the Enforcement Policy also states,
in part, that ``The base civil penalty may also be mitigated up to
25% when the licensee identifies a violation resulting from a self-
disclosing event where the licensee demonstrates initiative in
identifying the root cause of the violation.'' While the NRC
acknowledged that the Licensee identified inadequacies in
procedures, controls, and implementation systems, the NRC maintains
that the Licensee did not demonstrate initiative in identifying the
root cause of the violations because its analysis did not ask or
answer why these procedures, controls, and systems were inadequate
and what should be done to prevent such recurrence. Specifically,
NRC involvement was needed before acceptable corrective action was
taken in that it was not until NRC requested and conducted a
management meeting with the Licensee on August 3, 1994, that the
Licensee agreed to evaluate the series of incidents that had been
occurring in an attempt to uncover the underlying generic root
cause(s).
With regard to the corrective action factor, the NRC
acknowledged that the Licensee took some immediate corrective
actions to stop operations of the low-level dissolver and formed an
incident review team to review the event in detail and determine
appropriate corrective actions. The NRC did give the Licensee credit
for these corrective actions in that escalation for this factor was
not applied. However, the NRC affirms that full mitigation for this
factor is not warranted because: (1) The Licensee did not
demonstrate initiative in identifying the root cause of the
violations because NRC involvement was needed before adequate
actions were taken; (2) the Licensee's initial long term corrective
actions were not comprehensive; and (3) the Licensee's development
of long term corrective actions was not timely.
As noted earlier, it was not until NRC requested and conducted a
management meeting that the Licensee agreed to evaluate the series
of incidents in an attempt to identify the root cause. The results
of that evaluation were discussed in a management meeting on
November 16, 1994, and were submitted by the Licensee on November
20, 1994, as an attachment to the Licensee's reply to the Notice.
Furthermore, on July 8, 1994, as the NRC's Augmented Inspection Team
discussed its findings with Licensee management, the Licensee was
requested to submit a copy of its investigation team findings,
including corrective actions, to the NRC. The Licensee stated that
the report would be completed and made available to the NRC on or
about August 5, 1994. However, the report was not completed and made
available to the NRC until September 23, 1994, after the enforcement
conference. During the enforcement conference, NRC asked the
Licensee for a time schedule for implementing the corrective actions
discussed by the Licensee at the conference. More than two months
after the low-level dissolver event, the Licensee did not have long-
term corrective action time schedules firmly in place.
Regarding the prior opportunity to identify factor, the NRC
believes that effective corrective action, if taken, for events
occurring in March 1989 and February 1994, which revealed weaknesses
in the drum counter measurement system, could have prevented the
June 1994 event. Specifically, if the Licensee had adequately
reviewed the effect on NCS of items or processes that were using
drum counter measurement results and implemented effective
corrective actions, the June 1994 event could have been prevented.
Following the March 1989 and February 1994 events, a formal incident
review and root cause analysis were not performed and corrective
actions were not taken. The NRC expects licensees to learn from
their mistakes and implement adequate and effective corrective
actions to prevent recurrence. In its answer to the Notice, the
Licensee acknowledges that its corrective actions would have
prevented the low-level dissolution violation had they been
followed.
The NRC concludes that the escalation and mitigation factors
were applied appropriately and in accordance with the Enforcement
Policy.
NRC Conclusion
The NRC concludes that Violations I.B.1, I.B.2, and II.C
occurred as stated, that Violations I.A and I.B were appropriately
categorized as a Severity Level III problem, and that an adequate
basis for mitigation of the proposed civil penalty was not provided
by the Licensee. Consequently, the proposed civil penalty in the
amount of $37,500 should be imposed by Order.
[FR Doc. 95-5495 Filed 3-6-95; 8:45 am]
BILLING CODE 7590-01-M