November 2, 2016 

The Honorable Charles E. Schumer 

United States Senate 

Washington, DC 20510 

Dear Senator Schumer: 

 On behalf of the U.S. Nuclear Regulatory Commission (NRC), I am responding to your 

letter of October 2, 2016, urging the agency to revise the process for issuing Category 3 

radioactive materials licenses, in light of the recent Government Accountability Office (GAO) 

undercover investigation in which GAO obtained a license by posing as a fictitious company. 

Immediately after learning of GAO’s actions, NRC staff notified the Agreement State that had 

wrongly issued the license and ensured that it took prompt action to revoke the license and 

notify manufacturers and distributors of the revocation. We also informed the other 36 

Agreement States of the issue. 

It is important to note that during the same investigation, the NRC and a different 

Agreement State appropriately applied existing pre-licensing guidance and procedures to 

successfully stop two other attempts by GAO to obtain licenses. Rather than identifying a 

systemic problem with the existing regulations or processes, GAO's success in obtaining a 

radioactive materials license from one Agreement State showed that failure by the regulator to 

follow pre-licensing guidance and procedures could result in a license being issued improperly. 

I can assure you that at no point during the course of GAO’s activities was the safety of the 

public jeopardized, nor were any radioactive sources actually obtained by GAO. 

In response to GAO’s report, the NRC took immediate actions to ensure that our 

regulatory processes related to licensing of radioactive materials continue to adequately protect 

public health and safety and are being properly implemented. Specifically, we conducted three 

webinar training sessions for NRC and Agreement State inspectors and license reviewers to 

reinforce the proper implementation of processes and guidance for conducting pre-licensing 

visits. NRC also ensured that the Agreement State involved performed a thorough selfassessment and root cause analysis of its actions. This assessment determined that a license 

reviewer failed to follow procedures and that there was a lack of effective management 

oversight. 

 Two working groups comprised of NRC and Agreement State personnel were also 

formed to address the findings of the GAO audit and to perform a comprehensive assessment 

of Category 3 source accountability, including evaluating whether Category 3 sources should be 

included in the National Source Tracking System (NSTS). Separately, the Commission recently 

directed the NRC staff to evaluate whether it is necessary to revise our regulations or processes 

governing source protection and accountability to continue to ensure adequate protection of 

public health and safety. This evaluation will consider the results from the congressionally 

mandated review of Title 10 of the Code of Federal Regulations Part 37, the findings in the GAO 

report, and the recommendations made by the two working groups noted above. In addition, 
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the evaluation will be informed by an assessment of any changes in the threat environment 

between 2009 (when the NRC last considered adding Category 3 sources to NSTS) and today 

that argue in favor of or against expansion of the NSTS to include Category 3 sources, and a 

regulatory impact analysis of the accrued benefits and costs of the change, including impacts to 

NRC, Agreement States and regulated entities. The results of this comprehensive evaluation 

are due to the Commission by August 2017. 

 The NRC works closely with Agreement States and those states interested in 

establishing programs to assume regulatory authority, under the Atomic Energy Act, to license 

and regulate radioactive materials within their borders. For example, the NRC conducts training 

courses and workshops for the Agreement States, supports their evaluation of technical 

licensing and inspection issues, and regularly conducts evaluations of their performance 

through the NRC’s Integrated Materials Performance Evaluation Program. The NRC recognizes 

the current 37 Agreement States as important partners of the agency in ensuring the safe and 

secure use of radioactive materials. 

 The NRC takes radioactive materials security very seriously. In addition to the activities 

outlined above, the NRC participates with 13 other Federal agencies on a U.S. Government 

task force that has evaluated the security of radiation sources within the United States over the 

past 10 years. This group has not identified any significant gaps in source security, nor has it 

recommended legislative changes related to source security. The task force meets routinely, 

and the NRC will continue to leverage this interagency resource to ensure that the appropriate 

level of protection is applied to radioactive materials. 

 I hope this information addresses your concerns. If you have any questions, please 

contact me or Eugene Dacus, Director of the Office of Congressional Affairs, at (301) 415-1776. 

Sincerely, 

/RA/ 

Stephen G. Burns