[Federal Register Volume 72, Number 145 (Monday, July 30, 2007)]
[Notices]
[Pages 41528-41531]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-3702]


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NUCLEAR REGULATORY COMMISSION

[Docket No. 70-143, License No. SNM-124]


Nuclear Fuel Services, Inc.; Notice of Publication of 
Confirmatory Order and Opportunity for Hearing

    The attached Confirmatory Order was issued on February 21, 2007. 
Although, originally, designated as Official Use Only, upon further 
review by NRC Staff, it has been determined that this Confirmatory 
Order can now be released publicly in its entirety, given that it does 
not identify current security issues. Accordingly, it is being 
published in the Federal Register to ensure that adequate notice has 
been given of an opportunity to request a hearing on the Confirmatory 
Order. The effective date of the Confirmatory Order remains February 
21, 2007, and its publication in the Federal Register does not impose 
any new or different requirements on the licensee. Requests for hearing 
from anyone other than the licensee must be filed within 20 days of the 
date of publication of this Notice in accordance

[[Page 41529]]

with Section VI of the Confirmatory Order.

    For the Nuclear Regulatory Commission.

    Dated this 18th day of July 2007.

William D. Travers,
Regional Administrator.

Attachment--In the Matter of Nuclear Fuel Services, Inc., Erwin, 
Tennessee; Confirmatory Order Modifying License (Effective Immediately)

I

    Nuclear Fuel Services, Incorporated (Licensee) is the holder of 
Special Nuclear Materials License No. SNM-124 issued by the Nuclear 
Regulatory Commission (NRC or Commission) pursuant to 10 CFR Part 70 on 
July 2, 1999. The license authorizes the operation of NFS (facility) in 
accordance with the conditions specified therein. The facility is 
located on the Licensee's site in Erwin, Tennessee.
    This Confirmatory Order is the result of an agreement reached 
during alternative dispute resolution (ADR) sessions conducted on 
September 28 and November 30, 2006.

II

    Recent NRC inspections and investigations at NFS have resulted in 
the identification of the following apparent violations for which 
escalated enforcement action is being considered:
    A. On June 22, 2005, an NFS supervisor willfully failed to wear a 
full face respirator while performing maintenance and repairs on a 
Building 302 calciner as required by Safety Condition S-1 of Special 
Nuclear Materials License No. SNM-124, Section 3.1.2 and 3.1.3 of the 
License Application, Procedure NFS-GH-03, ``Radiation Work Permits, 
Revision 11, and Standard Radiation Work Permit (RWP <greek-i> 05-04-
032) (EA-06-129).
    B. On March 8, 2006, NFS failed to meet the performance 
requirements of Section IV of a July 2000 Confirmatory Order Modifying 
License and NFS Safeguards Contingency Response Plan, Revision 0; dated 
October 26, 2004; Section 3.3, Module 3, subparagraph 3.3.1, during a 
force-on-force exercise (EA-06-133).
    C. On May 31, 2005, an NFS acting building manager willfully 
transferred solvent extraction raffinate waste solution to the 
condensate waste storage area, Tank-5A01, without the approval of 
Building Supervision, Industrial Safety or NCS through work 
instructions, as required by Safety Condition S-1 of Special Nuclear 
Materials License No. SNM-124, Section 2.7 of the License Application, 
and Standard Operating Procedure (SOP) 409, Caustic and Condensate 
Discard Tank, Revision 2 (EA-06-141).
    D. On March 4, June 30, and November 9, 2005, and on May 13, 2006, 
NFS failed to secure or properly attend Special Nuclear Material, as 
required by the NFS Physical Protection Plan (PPP), Revision 2, Section 
5.8; Storage of Strategic SNM, Subsection 5.8.3, Process Material 
Access Areas (EA-06-160).
    E. On March 6, 2006, NFS inadvertently transferred high enriched 
uranyl nitrate (HEUN) solution into an enclosure that was not approved 
for operation. The violations involved: (1) The failure to establish 
management measures for the solvent extraction tray dissolver filter 
enclosure drain system as required by 10 CFR 70.62(d), which resulted 
in the failure to ensure that the filter enclosure met performance 
requirements of 10 CFR 70.61(d) for limiting the risk of a nuclear 
criticality accident under the credible abnormal condition; (2) the 
failure to notify the NRC within one hour of discovery of an event that 
constituted a condition whereby the licensee recognized that a spill of 
HEUN solution had occurred into an unapproved and unfavorable geometry 
enclosure and that no safety controls or items relied on for safety 
(IROFS) were available and reliable to prevent a nuclear criticality 
accident, as required by 10 CFR 70, Appendix A, (a)(4)(ii); (3) the 
failure to establish a configuration management system to evaluate, 
implement, and track changes to the filter enclosure M205 as required 
by 10 CFR 70.72(a); (4) the failure to verify proper installation of 
the solvent extraction tray dissolver filter enclosure drains, as 
required by Safety Condition S-1 of the license and license application 
License Application Section 4.1.1.1.3; (5) the failure to assume in NCS 
analysis for the tray dissolver system as required by the license and 
license application Section 4.1.1, that a credible abnormal condition 
could occur, specifically fissile solution being misdirected from the 
solvent extraction feed transfer line to the tray dissolver filter 
enclosure, as required by the license and license application Section 
4.1.1; (6) the failure to conduct SNM operations and safety function 
activities with procedures, as required by Safety Condition S-1 of the 
license and Section 2.7 of the license application; (7) the failure to 
report to plant management, the discovery of previous instances of 
yellow solution in enclosure 2M05, in accordance with Safety Condition 
S-1 of the license, Section 2.7 of the license application, Procedure 
NFS-HS-CL-26, Nuclear Criticality Safety for the BLEU Preparation 
Facility, Revision 3, April 29, 2005, Section 4.1.2, and Procedure NFS-
GH-65, Problem Identification, Revision 3, October 6, 2005, Section 
5.1; and (8) the failure to assure the requirements in 10 CFR 70.61(d) 
were met, in that the solvent extraction room did not meet performance 
requirements for criticality safety with respect to the credible 
abnormal condition of fissile solution accumulation on the solvent 
extraction room floor because there were no controls available to 
prevent a spill of fissile solution from accumulating into an unsafe 
geometry in the elevator pit (EA-06-179).
    F. On August 1, 2005, two security officers willfully failed to 
conduct a vehicle search, as required by NRC Interim Compensatory 
Measure Order, Attachment 1, Section B, dated August 21, 2002, and the 
NFS PPP, Revision 2, Module 6, Access Control Subsystems and 
Procedures, Subsection 6.2, Access Control at the Owner Controlled Area 
(EA-06-182).

III

    On September 28 and November 30, 2006, the NRC and NFS met in ADR 
sessions facilitated by a professional mediator, arranged through 
Cornell University's Institute on Conflict Resolution. ADR is a process 
by which a neutral mediator, with no decision-making authority, assists 
the parties in reaching an agreement to resolve their differences 
regarding a dispute.
    During the ADR sessions, the parties discussed the apparent 
violations and NFS's overall enforcement history. Given the number and 
repetitive nature of some of the apparent violations, the parties 
acknowledged that: (1) Past disposition of violations via the 
enforcement policy had not resulted in NFS's development of corrective 
actions capable of preventing recurrence of violations; (2) a deficient 
safety culture at NFS appeared to be a contributor to the recurrence of 
violations; and (3) a comprehensive, third party review and assessment 
of the safety culture at NFS represented the best approach for the 
identification and development of focused, relevant and lasting 
corrective actions.
    With these considerations in mind, the following agreement was 
reached as documented in this Confirmatory Order:
    A. NFS will conduct, via a third-party, an independent safety 
culture assessment(s) within the parameters described in Section V 
below.
    B. Within 60 days of the date of this Order, NFS will submit, for 
NRC approval, a request to amend the license to revise the 
configuration management (CM) program. The amendment request

[[Page 41530]]

will include a plan and schedule for implementation of the revised 
program.
    C. The NRC agrees, based on the terms of the agreement, that 
exercise of Enforcement Discretion is warranted for the EAs listed in 
Section II.A through F above, and the violations will not be cited.
    D. With respect to any potential enforcement action related to 
securing SNM after the process line shutdown, to the extent the NRC 
determines that a violation occurred, it will be included in the group 
of apparent violations for which discretion will be exercised, and the 
violation will not be cited.
    E. The proposed settlement excludes other potential escalated 
enforcement actions, including those that could result from issues 
previously identified in inspection reports and issues under review by 
the NRC's Office of Investigations. However, as part of its 
deliberations, the NRC will consider the extent to which violations 
that occur prior to or during implementation of the safety culture 
assessment, but no longer than 24 months from the date of this Order, 
are the result of safety culture deficiencies, such that NFS's 
implementation of the comprehensive safety culture initiative warrants 
mitigation or other adjustment in any resultant enforcement actions.
    On January 9, 2007, the Licensee consented to issuance of this 
Order with the commitments, as described in Section V below. The 
Licensee further agreed that this Order is to be effective upon 
issuance and the Licensee has waived its right to a hearing.

IV

    Since the licensee has agreed to take additional actions to address 
NRC concerns, as set forth in Section III above, the NRC has concluded 
that its concerns can be resolved through confirmation of the 
Licensee's commitments as outlined in this Order.
    I find that the Licensee's commitments as set forth in Section V 
are acceptable and necessary and conclude that with these commitments, 
the public health and safety are reasonably assured. In view of the 
foregoing, I have determined that public health and safety require that 
the Licensee's commitments be confirmed by this Order. Based on the 
above and the Licensee's consent, this Order is immediately effective 
upon issuance.

V

    Accordingly, pursuant to Sections 51, 53, 161b, 161i, 161o, 182 and 
186 of the Atomic Energy Act of 1954, as amended, and the Commission's 
regulations in 10 CFR 2.202 and 10 CFR Part 70, it is hereby ordered, 
effective immediately, that license no. SNM-124 is modified as follows:
    1. For purposes of this agreement, NFS does not dispute the 
apparent violations listed in Section II above. Within 60 days of the 
date of this Order, NFS will provide NRC written documentation of the 
reasons for the violations, the corrective actions taken and planned to 
prevent recurrence, and the completion dates for each corrective 
action.
    2. The apparent violations associated with EA-06-179 raise concerns 
about configuration management (CM) that should be within the scope of 
the safety culture improvement program. Within 60 days of the date of 
the Order confirming this agreement, NFS will submit, for NRC approval, 
a request to amend the license to revise the CM management program. The 
amendment request will include a plan and schedule for implementation 
of the revised program.
    3. NFS will conduct, via a third-party, an independent safety 
culture assessment(s), which includes nuclear material security, within 
the following parameters:
    a. Within 90 days of the date of the order confirming this 
agreement, NFS will identify contractor(s) for performing the 
independent third party safety culture assessment, will submit to NRC 
the name(s) and qualifications of the contractor(s) specifically, the 
experience of the contractor(s) in conducting a safety culture 
assessment, and will submit a plan and schedule for performing the 
safety culture assessment developed by the independent third party. The 
assessment shall include the 13 safety culture components discussed in 
the NRC's Regulatory Issue Summary 2006-013, dated July 31, 2006, and 
the commitments NFS made at the management meeting with NRC on 
September 18, 2006. The NRC will inform its review of NFS's submittal 
using the relevant guidance contained in NRC Inspection Procedure (IP) 
95003 specifically, Sections 02.07-02.09, 03.07-03.09, and Enclosures 
A-F. NFS will not be bound by any specific provision of the NRC 
guidance document.
    b. Within 270 days of the date of this Confirmatory Order, the 
independent third party will complete its safety culture assessment.
    c. Ninety (90) days following completion (i.e., upon the third 
party's issuance of the report to NFS) of the safety culture 
assessment, NFS shall provide NRC the third party contractor's report 
documenting its findings and assessment of the safety culture at NFS 
and a plan and schedule for implementing assessment recommendations and 
actions to address identified issues. Upon request by NRC, NFS shall 
also make available the supporting documentation and data compiled by 
and/or relied upon by the third party contractor in making its 
assessment.
    d. An acceptable safety culture implementation plan must include 
performance-based metrics that will be used to measure the success of 
the program.
    e. NFS will conduct an additional third-party safety culture 
assessment approximately 24 months following the completion (i.e., upon 
the third party's issuance of the report to NFS) of the initial 
assessment, and provide the report to the NRC.
    The Director, Office of Enforcement, or the Regional Administrator, 
Region II, may, in writing, relax or rescind any of the above 
conditions upon demonstration by the Licensee of good cause.

VI

    Any person adversely affected by this Confirmatory Order, other 
than the Licensee, may request a hearing within 20 days of its 
issuance. Where good cause is shown, consideration will be given to 
extending the time to request a hearing. A request for extension of 
time must be made in writing to the Director, Office of Enforcement, 
U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, and 
include a statement of good cause for the extension. Any request for a 
hearing shall be submitted to the Secretary, U.S. Nuclear Regulatory 
Commission, ATTN: Chief, Rulemaking and Adjudications Staff, 
Washington, DC 20555-0001. Copies of the hearing request shall also be 
sent to the Director, Office of Enforcement, U.S. Nuclear Regulatory 
Commission, Washington, DC 20555-0001, to the Assistant General Counsel 
for Materials Litigation and Enforcement at the same address, to the 
Regional Administrator, NRC Region II, 61 Forsyth Street, SW., Atlanta, 
Georgia 30303, and to the Licensee. Because of potential disruptions in 
delivery of mail to United States Government offices, it is requested 
that answers and requests for hearing be transmitted to the Secretary 
of the Commission either by means of facsimile transmission to 301-415-
1101 or by e-mail to <a href="/cdn-cgi/l/email-protection#d7bfb2b6a5beb9b0b3b8b4bcb2a397b9a5b4f9b0b8a1"><span class="__cf_email__" data-cfemail="c2aaa7a3b0abaca5a6ada1a9a7b682acb0a1eca5adb4">[email protected]</span></a> and also to the Office of 
the General Counsel either by means of facsimile transmission to 301-
415-3725 or by e-mail to <a href="/cdn-cgi/l/email-protection#f1beb6b2bc90989db2949f859483b19f8392df969e87"><span class="__cf_email__" data-cfemail="29666e6a644840456a4c475d4c5b69475b4a074e465f">[email protected]</span></a>. If a person

[[Page 41531]]

other than the licensee requests a hearing, that person shall set forth 
with particularity the manner in which his interest is adversely 
affected by this Order and shall address the criteria set forth in 10 
CFR 2.309(d) and (f).
    If the hearing is requested by a person whose interest is adversely 
affected, the Commission will issue an Order designating the time and 
place of any hearing. If a hearing is held, the issue to be considered 
at such hearing shall be whether this Confirmatory Order should be 
sustained.
    In the absence of any request for hearing, or written approval of 
an extension of time in which to request a hearing, the provisions 
specified in Section V above shall be final 20 days from the date of 
this Order without further order or proceedings. If an extension of 
time for requesting a hearing has been approved, the provisions 
specified in Section V shall be final when the extension expires if a 
hearing request has not been received.
    An answer or a request for hearing shall not stay the immediate 
effectiveness of this order.

    For the Nuclear Regulatory Commission.

    Dated this 21st day of February 2007.

Victor M. McCree for William D. Travers,
Regional Administrator.
[FR Doc. 07-3702 Filed 7-27-07; 8:45 am]
BILLING CODE 7590-01-P


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