POLICY ISSUE

(INFORMATION) 

September 20, 2011 SECY-11-0132

FOR: The Commissioners 

FROM: Cynthia A. Carpenter, Acting Director 

Office of Federal and State Materials 

 and Environmental Management Programs 

SUBJECT: REVISION OF THE CRITERIA FOR IDENTIFYING NUCLEAR 

MATERIAL LICENSEES FOR DISCUSSION AT THE AGENCY ACTION 

REVIEW MEETING 

PURPOSE: 

To inform the Commission of the revision to the criteria which are used to identify nuclear 

materials licensees with significant performance issues that warrant discussion at a U.S. 

Nuclear Regulatory Commission’s (NRC) Agency Action Review Meeting (AARM). This paper 

does not address any new commitments or resource implications. 

BACKGROUND: 

In 2002, the 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 (1) to review the appropriateness of agency actions that have been taken for those 

nuclear reactor and nuclear material licensees with significant performance problems, (2) to 

ensure that coordinated courses of action have been developed and implemented for licensees 

of concern, (3) to review results of the staff’s assessment of the reactor oversight process 

CONTACT: Duane E. White, FSME/MSSA 

 (301) 415-6272
The Commissioners 2 

effectiveness, and (4) to ensure that trends in industry and licensee performance are 

recognized and appropriately addressed. 

In January 2008, as part of the 2008 AARM preparation process, NRC senior management 

decided that the criteria used to identify a nuclear material licensee with significant 

performance problems that will be discussed at the AARM needed to be revised to provide 

additional clarity, which included incorporating NRC’s current policies and procedures. In 

addition, there was a concern that a formal process for revising the criteria had never been 

established. Therefore, a formal process for revising the criteria was developed and the criteria 

were revised. The revised criteria for identifying nuclear materials licensees for discussion at 

the AARM and the process used to revise the criteria were provided to the Commission under 

SECY-08-0135. 

In June 2009, the Commission issued Staff Requirements Memorandum (SRM) M090514, in 

response to the Commission Briefing on the results of the May 14, 2009, AARM. One item in 

the SRM stated that “The staff should continue to look for ways to improve and clarify the 

evaluation process and criteria that are used to identify nuclear materials licensees that warrant 

discussion at the NRC’s Agency Action Review Meeting as well as the criteria licensees need 

to achieve in order to no longer be considered for discussion.” In response to the SRM and as 

part of the 2010 AARM preparation process, NRC management took a look at the criteria and 

decided that an additional criterion should be added to address licensees who previously were 

discussed at the AARM but their corrective actions were ineffective in correcting the underlying 

issues. At the 2010 AARM, NRC senior management discussed and approved the addition of 

the new criterion. 

DISCUSSION: 

The agency currently identifies material licensees, including fuel cycle and Agreement State 

licensees, for AARM discussion based on operating performance, inspection results, and 

judgment of the severity of the problems related to safety performance. The revised criteria will 

continue to be based upon the same principles of the existing criteria, but the staff is proposing 

to include one additional criterion. This criterion focuses on those licensees previously 

discussed at the AARM who did not address or were ineffective in correcting their underlying 

issues. As part of the process for revising the criteria, as defined in SECY-08-0135, a Federal 

Register (FR) Notice was published requesting comment on the proposed revision to the 

criteria (75 FR 54917, September 9, 2010). No public comments were received in response to 

the FRN on the proposed revision to the criteria. The revised criteria for identifying nuclear 

material licensees for discussion at the AARM may be found in the enclosure to this paper. 

Also, in conjunction with the addition of this criterion, the staff will ensure that through the 

normal enforcement and/or inspection processes, licensees will be informed when the NRC 

has determined that the licensee has corrected the underlying issue(s). 

CONCLUSION:

The staff plans to publish a FRN describing the new criteria for identifying nuclear materials 

licensees for discussion at the AARM. The new criteria will be used as part of the next (e.g., 

2012) AARM process. 
The Commissioners 3 

COORDINATION: 

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

 /RA/ 

Cynthia A. Carpenter, Acting Director 

Office of Federal and State Materials 

 and Environmental Management Programs 

Enclosure: 

Criteria for Identifying Nuclear Materials 

 Licensees for Discussion at the AARM
The Commissioners 3 

COORDINATION: 

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

Cynthia A. Carpenter, Acting Director 

Office of Federal and State Materials 

 and Environmental Management Programs 

Enclosure: 

Criteria for Identifying Nuclear Materials 

 Licensees for Discussion at the AARM 

ML112280111 

OFFICE FSME/MSSA FSME/MSSA FSME/MSSA NMSS OGC (NLO) FSME/MSSA

NAME DWhite CEinberg JLuehman 

CHaney 

(NJordan for) 

(via email) 

CScott JLuehman 

DATE 8/3/11 8/3/11 8/3/11 8/30/11 9/13/11 9/15/11 

OFFICE FSME/TechEd FSME 

NAME CPoland CCarpenter 

DATE 9/16/11 9/20/11 

OFFICIAL RECORD COPY 
Enclosure 

Criteria for Identifying Nuclear Material Licensees for Discussion 

at the Agency Action Review Meeting (AARM) 

I. Strategic Plan

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

Security in the U.S. Nuclear Regulatory Commission (NRC) Strategic Plan (NUREG-1614). 

II. 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 or augmented 

inspection team). 

III. 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). 

IV. Identified for Discussion at Previous AARM

Licensee corrective actions did not address or were ineffective in correcting the underlying 

issues that were previously discussed at the AARM.