POLICY ISSUE 

INFORMATION 

September 16, 2008 SECY-08-0135

FOR: The Commissioners 

FROM: Charles L. Miller, Director 

Office of Federal and State Materials 

 and Environmental Management Programs 

SUBJECT: REVISION OF THE CRITERIA FOR IDENTIFYING NUCLEAR 

MATERIALS LICENSEES FOR DISCUSSION AT THE AGENCY 

ACTION REVIEW MEETING 

PURPOSE: 

The purpose of this paper is to inform the Commission of the revision to the criteria that are 

used to identify nuclear materials licensees that warrant discussion at the U.S. Nuclear 

Regulatory Commission’s (NRC) Agency Action Review Meeting (AARM) and to provide the 

new process used to revise the criteria. This paper does not address any new commitments or 

resource implications. 

BACKGROUND: 

In 2002, NRC developed a process for providing information on significant nuclear materials 

issues and adverse licensee performance. This process was provided in SECY-02-0216, 

“Proposed Process for Providing Information on Significant Nuclear Materials Issues and 

Adverse Licensee Performance,” dated December 11, 2002. As part of this process, criteria 

were developed to determine nuclear material licensees with significant performance problems 

that will be discussed at the AARM. The AARM is an agency meeting that allows senior NRC 

managers to review:(1) agency actions resulting from the performance of nuclear reactor and 

nuclear material licensees with significant performance problems; (2) results of the staff’s 

assessment of the reactor oversight process effectiveness; and (3) industry performance 

trends. 

CONTACT: Duane E. White, FSME/DMSSA 

 (301) 415-6272
The Commissioners 2 

In January 2008, as part of the AARM preparation process, staff determined that the AARM 

criteria for determining nuclear material licensees with significant performance problems should 

be revised to provide additional clarity and incorporate NRC’s current policies and procedures. 

In addition, a decision was made to develop a formal process for revising the criteria because 

one did not exist. As part of the process for revising the criteria, a Federal Register Notice 

(FRN) was published requesting comment on the proposed revision to the criteria 

(73 FR 14278, March 17, 2008). 

DISCUSSION: 

Revisions to the AARM Criteria 

Table 1 of SECY 02-0216 provides the existing criteria for identifying nuclear material licensees 

with significant performance issues that would warrant discussion at the AARM. The initial 

criteria were divided into two sections. One section described the criteria for identifying 

candidate licensees for AARM consideration and the other section described the criteria NRC 

would use in evaluating whether the candidate licensees would be forwarded for discussion at 

the AARM. A copy of the initial criteria is provided in Enclosure 1 of this paper. 

The proposed revisions to the AARM criteria as published in the FRN did not change the main 

principles of the initial criteria but provided an additional level of clarity to the criteria. The 

proposed revision to the criteria includes the following: 

• combined the two sections of the initial criteria into one and divided the criteria into three 

different categories (i.e., Strategic Plan, Significant Issue, and Performance Trend); 

• added a criterion to include significant events that meet or exceed Level 3 of the 

International Nuclear Event Scale that requires reporting to the International Atomic 

Energy Agency (per NRC Management Directive (MD) 5.12); 

• added references to NRC’s current policies and procedures such as NRC’s Strategic 

Plan, Abnormal Occurrence Report to Congress (per MD 8.1), and the NRC 

Enforcement Policy; and, 

• clarified the meaning of “additional NRC oversight,” as described in the Significant Issue 

and Performance Trend categories, by providing examples such as “a significant event, 

which requires an incident investigation team (IIT) or augmented inspection team (AIT).” 

One public comment was received in response to the FRN on the proposed revision to the 

AARM criteria. The commenter indicated that it supported the proposed criteria and requested 

clarification or modification as to why category 3 “Performance Trend” of the criteria explicitly 

references NRC’s Alternative Dispute Resolution Process (ADR) as an element of the 

enforcement process but category two “Significant Issues” does not reference ADR. In 

response to the comment, the staff revised the criteria by adding a reference to ADR in 

Category 2 of the criteria. The final revised criteria for identifying nuclear material licensees for 

discussion at the AARM may be found in Enclosure 2. 
The Commissioners 3 

Process for Revising the AARM Criteria 

As part of the revision to the AARM criteria, NRC senior management developed a formal 

process that would be used to revise the criteria in the future. Although the staff does not 

expect frequent revisions to the AARM criteria, this process helps to ensure transparency and 

consistency of the process and allows an opportunity for interested stakeholders to comment on 

proposed revisions. An outline of the process used to revise the AARM criteria for identifying 

nuclear materials licensees for discussion at the AARM may be found in Enclosure 3. 

COORDINATION: 

The Office of the General Counsel has reviewed this paper and has no legal objection. 

 /RA/ 

 Charles L. Miller, Director 

Office of Federal and State Materials 

 and Environmental Management Programs 

Enclosures: 

1. Table 1 – Existing AARM Criteria 

 and Process 

2. New Criteria for Identifying Materials 

 Licensees for Discussion at the AARM 

3. Outline of Process to Revise the AARM 

 Criteria for Identifying Nuclear Material 

 Licensees for Discussion at the AARM 
The Commissioners 3 

Process for Revising the AARM Criteria 

As part of the revision to the AARM criteria, NRC senior management developed a formal 

process that would be used to revise the criteria in the future. Although the staff does not 

expect frequent revisions to the AARM criteria, this process helps to ensure transparency and 

consistency of the process and allows an opportunity for interested stakeholders to comment on 

proposed revisions. An outline of the process used to revise the AARM criteria for identifying 

nuclear materials licensees for discussion at the AARM may be found in Enclosure 3. 

COORDINATION: 

The Office of the General Counsel has reviewed this paper and has no legal objection. 

 /RA/ 

 Charles L. Miller, Director 

Office of Federal and State Materials 

 and Environmental Management Programs 

Enclosures: 

1. Table 1 – Existing AARM Criteria 

 and Process 

2. New Criteria for Identifying Materials 

 Licensees for Discussion at the AARM 

3. Outline of Process to Revise the AARM 

 Criteria for Identifying Nuclear Material 

 Licensees for Discussion at the AARM 

 ML082480564 WITS200800292/EDATS: EDO-2008-0532

OFFICE FSME/DMSSA FSME/DMSSA FSME/DMSSA OGC NSIR OE 

NAME DWhite CEinberg RLewis BJones 

(NLO) MShaffer CCarpenter 

DATE 8/ 13 /08 8/ 14 /08 9/ 02 /08 8/ 28 /08 09/ 04 /08 9/ 03 /08 

OFFICE NMSS TechEditor FSME 

NAME MWeber CPoland CMiller 

DATE 9/ 03 /08 9/10/08 9/16/08 

OFFICIAL RECORD COPY 
Enclosure 1 

Table 1 

Existing AARM Criteria and Process Description 

 Performance by Individual NRC Licensees and Groups of Licensees and Selected Agreement 

State Licensees-Evaluation Criteria 

Criteria for identifying candidate licensees for 

AARM consideration

Criteria Office of Nuclear Materials Safety 

and Safeguards will be used in evaluating 

whether candidate licensees will be 

forwarded for discussion at the AARM.

Licensee has an event that results in the 

failure to meet a Safety Measure (e.g., a 

death, release with a significant impact on 

the environment, etc.).

These licensees will typically be discussed at 

the AARM unless the matters have already 

been adequately addressed and discussed 

before the AARM.

Licensee has an event that results in an 

Abnormal Occurrence, or an event that 

qualifies for a Severity Level I or II violation, 

or multiple events that meet the criteria of the 

agency Strategic Plan Performance 

Measures (e.g., reportable loss of material, 

breakdown of physical protection, etc.), and

technical staff believes that there are unique 

or unusual aspects of the cases that are not 

adequately or appropriately handled within 

the normal inspection and enforcement 

processes.

These licensees will only be discussed at the 

AARM if Agency actions beyond the normal 

inspection and enforcement processes are 

necessary, and other Offices will be required 

to support these actions, or other Offices 

would benefit from an awareness of the 

issues and circumstances associated with 

licensee performance.

Licensees that have significant breakdowns 

in their licensed programs, where the 

breakdowns involve more than one 

compliance item (e.g., a dose monitoring 

breakdown and also wide-spread failure to 

implement and maintain required 

procedures), and technical staff believe that 

there are unique or unusual aspects of the 

cases that are not adequately or 

appropriately handled within the normal 

inspection and enforcement processes. 

These licensees will only be discussed at the 

AARM if Agency actions beyond the normal 

inspection and enforcement processes are 

necessary, and other Offices will be required 

to support these actions, or other Offices 

would benefit from an awareness of the 

issues and circumstances associated with 

licensee performance.
Enclosure 2 

New Criteria for Identifying Nuclear Material Licensees for Discussion at the AARM 

Strategic Plan

Licensee has an event that results in the failure to meet a Strategic Outcome for Safety or 

Security in the NRC Strategic Plan (NUREG-1614). 

Significant Issue or Event

Licensee has an issue or event that results in: 

1. An Abnormal Occurrence Report to Congress (per Management Directive 8.1), or 

2. A severity level I or II violation, as described in the NRC Enforcement Policy (including 

equivalent violations dispositioned by Alternative Dispute Resolution), or 

3. A Level 3 or higher International Nuclear Event Scale Report to the International Atomic 

Energy Agency (per Management Directive 5.12), 

and 

There are unique or unusual aspects of the licensee’s performance that warrant additional NRC 

oversight (e.g., a significant event, which requires an incident investigation team (IIT) or 

augmented inspection team (AIT)). 

Performance Trend

Licensee has multiple and/or repetitive significant program issues identified over more than one 

inspection or inspection period, and the issues are supported by a severity level I, II, or III 

violation, as described in the NRC Enforcement Policy (including equivalent violations 

dispositioned by Alternative Dispute Resolution). 

and 

There are unique or unusual aspects of the licensee’s performance that warrant additional NRC 

oversight (e.g., oversight panel formed for order implementation). 
Enclosure 3 

Outline of Process for Revising the Criteria for Identifying Nuclear Materials Licensees 

for Discussion at the AARM 

Time Action 

Start of AARM process Determine if there are any proposed changes 

to the criteria. 

At Division level AARM preparation meeting Division Directors discuss and agree on 

changes to the criteria to be given to Office 

Directors/Regional Administrators for their 

approval. 

At Office level AARM preparation meeting Office Directors/Regional Administrators 

discuss and concur on changes to the criteria. 

After Office level AARM preparation meeting Lead Office (e.g., FSME) publishes proposed 

criteria in FR for 45-day public comment 

period. A generic communication (e.g., 

Regulatory Issue Summary) should also be 

provided to States and licensees informing 

them of the proposed criteria and comment 

period. 

Public comment period complete Lead Office reviews public comments and 

prepares draft of criteria (according to 

comments) to be presented at AARM meeting. 

(Note: Public Comments and draft criteria 

provided to Offices/Regions prior to AARM.) 

At AARM EDO, Office Directors, and Regional 

Administrators discuss and comment on 

criteria and decide on final criteria to be 

presented to the Commission. 

After AARM Provide Commission with an information paper 

regarding the criteria and if time permits, 

present criteria to the Commission at AARM 

Results Commission Briefing. 

After informing the Commission of the new 

AARM criteria 

Lead Office publishes new criteria in FR. New 

criteria for identifying materials licensees will 

be used for the next AARM.