January 23, 2006

MEMORANDUM TO: Chairman Diaz

Commissioner McGaffigan

Commissioner Merrifield

Commissioner Jaczko

Commissioner Lyons

FROM: Luis A. Reyes /RA/

Executive Director for Operations

SUBJECT: JANUARY 2006 UPDATE: INCREASED CONTROL OF

SOURCES

On August 15, 2005, the Commission directed the staff in a Staff Requirements Memorandum

(SRM) to implement the actions in COMSECY-05-0028, “Staff Response to SRM for

COMSECY-05-0015: Initiatives for Increasing Agreement State Participation in the Control of

Sources.” In order to keep the Commission fully and currently informed during the initial

implementation of the increased controls, the staff has provided updates to the Commission

through EDO Daily Notes, the Office of Nuclear Security and Incident Response Monthly

Significant Security Activities Update, and a Technical Assistants briefing. The staff provided

the first quarterly report to the Commission, consistent with the SRM for COMSECY-05-0028 on

December 22, 2005. This quarterly report provided a timeline of all actions completed to date

on this effort, and this format will be used for subsequent quarterly reports. The staff will also

continue to provide monthly updates on the status of ongoing U.S. Nuclear Regulatory

Commission (NRC) and Agreement State activities relative to the increased controls.

As a result of the staff’s quality assurance review of licensees who were issued the increased

controls Order on November 14, 2005, staff identified an additional 635 NRC licensees that met

the criteria for receiving the Order, but were not included in the November 2005 mailing. Staff

identified these additional licensees through a visual review of approximately 3,000 NRC issued

materials licenses to identify license conditions that would authorize possession of quantities of

concern. This visual review was necessary because many licenses are written with open-ended

material authorizations and without a firm possession limit that would have facilitated the use of

an automated search mechanism to identify the licensees. On December 22, 2005, the staff

issued the increased controls Order to these additional licensees. The additional licensees are 

CONTACTS: Andrew N. Mauer, STP

301-415-3962

Douglas A. Broaddus, NMSS

301-415-8124
The Commissioners - 2 -

also being added to the interim inventory database, and will be requested to provide information

on the sources they possess. Based on the types of licenses identified during the quality

assurance review, and the responses of licensees from the initial mailing, the staff expects that

most of these additional licensees will not actually possess quantities of concern, and will not

need to implement the Order. Future recurrences of this issue with possession limits will be

addressed by additional licensing guidance for newly issued or amended licenses to include a

limit that would restrict possession to below the threshold values when a licensee does not plan

to possess quantities of concern.

The staff continues to follow up with the Agreement States on the status of the quality

assurance checks of licensees in Agreement States who should have been issued increased

controls. As additional licensees are identified with license authorizations for quantities of

concern, these licensees are either being issued increased controls or Agreement States are

taking action to reduce the limits on the affected licenses to below the quantities of concern. 

Any of these additional Agreement States licensees whose possession limits are not reduced

below the threshold values will also be added to the interim inventory database, and will be

requested to provide information on the sources they possess.

Several activities are currently underway which involve implementation of the increased

controls, and the status of these activities will be addressed in future updates. As noted in the

first quarterly report, the staff has drafted a temporary instruction for inspection of the increased

controls and proposed revisions to the Integrated Materials Performance Evaluation Program. 

These documents are currently being finalized, and will be issued in the near future. In early

January 2006, the staff established a working group composed of NRC managers and a

representative of the Organization of Agreement States, Inc., to ensure regulatory consistency

by reviewing and dispositioning implementation issues identified by the NRC staff, the

Agreement State Radiation Control Programs, and licensees. 

The staff has arranged to conduct at least four training courses for NRC and Agreement State

inspectors in FY 2006. The first training course will be conducted at Sandia National

Laboratory in Albuquerque, New Mexico, in February 2006. Subsequent training courses will

be conducted in the Agreement States of Texas (April 2006) and California (May 2006). The

fourth training course will be conducted in June 2006 at Sandia National Laboratory. The staff

is working with the Agreement States to understand training needs in FY 2006 and FY 2007,

and will schedule additional courses, as appropriate.

All licensees who have been issued the increased controls and possess radioactive materials

outlined in the Order (EA-05-090), must be in compliance with the increased controls within six

months from the date of issuance. Inspections could begin as soon as licensees report full

compliance, but in any case will begin no later than six months after the date of issuance of the

increased controls. The NRC staff and the Agreement States are tracking licensee compliance

with the increased controls and currently are continuing to follow up with the affected licensees

to ensure adequate responses to the increased control requirements are received from each of

the affected licensees. In many cases, licensees have requested that the authorized

possession limits on their licenses be reduced below the quantities of concern, or have

identified that they do not possess radioactive materials in quantities of concern in aggregate. 
The Commissioners - 3 -

Once all of the licensees that will actually need to implement the increased controls are

identified, the NRC and Agreement State staff will begin scheduling inspections of the higher

risk licensees within the first year of implementation based on the prioritization methodology. In

future updates, the staff will provide an estimate of the approximately 2,900 NRC and

Agreement State licensees issued the increased controls that will be implementing the

requirements, and thus need to be inspected.

cc: SECY

OGC

OCA

OPA

CFO
The Commissioners - 3 -

Once all of the licensees that will actually need to implement the increased controls are

identified, the NRC and Agreement State staff will begin scheduling inspections of the higher

risk licensees within the first year of implementation based on the prioritization methodology. In

future updates, the staff will provide an estimate of the approximately 2,900 NRC and

Agreement State licensees issued the increased controls that will be implementing the

requirements, and thus need to be inspected.

cc: SECY

OGC

OCA

OPA

CFO

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