NRC AUTHORIZATION AND LEGISLATIVE 

PROPOSAlS 

HEARING 

BEFORE THE 

·SUBCOMMITTEE ON 

ENERGY AND MINERAL RESOURCES 

OF THE 

COMMITTEE ON 

NATURAL RESOURCES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRD CONGRESS 

FIRST SESSION 

ON 

H.R. 2143 

TO AUTHORIZE APPROPRIATIONS FOR THE NUCLEAR REGULATORY 

COMMISSION FOR FISCAL YEARS 1994 AND 1995 

H.R. 2170 

TO AMEND THE ENERGY REORGANIZATION ACT OF 1974 AND THE 

ATOMIC ENERGY ACT OF 1954 TO ENHANCE THE SAFETY AND SECURITY OF NUCLEAR POWER FACILITIES, AND FOR OTHER PURPOSES 

72-560 

HEARING HELD IN WASHINGTON, DC 

MAY 27, 1993 

Serial No. 103-28 

Printed for the use of the Committee on Natural Resources 

U.S. GOVERNMENT PRINTING OFFICE 

WASffiNGTON : 1993 

For sale by the U.S. Government Printing Office 

Superintendent of Documents, Congressional Sales Office, Washington, DC 20402 

ISBN 0-16-041585-3 
COMMITTEE ON NATURAL RESOURCES 

GEORGE MILLER, California, Chairman 

PHILIP R. SHARP, Indiana DON YOUNG, Alaska, 

EDWARD J. MARKEY, Massachusetts Ranking Republican Member 

AUSTIN J. MURPHY, Pennsylvania JAMES V. HANSEN, Utah 

NICK JOE RAHALL II, West Virginia BARBARA F. VUCANOVICH, Nevada 

BRUCE F. VENTO, Minnesota ELTON GALLEGLY, California 

PAT WILLIAMS, Montana ROBERT F. SMITH, Oregon 

RON DE LUGO, VIrgin Islands CRAIG THOMAS, Wyoming . 

SAM GEJDENSON, Connecticut JOHN J. DUNCAN, JR., Tennessee 

RICHARD H. LEHMAN, California JOEL HEFLEY, Colorado 

BILL RICHARDSON, New Maico JOHN T. DOOLITTLE, California 

PETER A. DEFAZIO, Oregon WAYNE ALLARD, Colorado 

ENI F.H. FALEOMAVAEGA, American RICHARD H. BAKER, Louisiana 

Samoa KEN CALVERT, California 

TIM JOHNSON, South Dakota SCOTT MciNNIS, Colorado 

LARRY LAROCCO, Idaho RICHARD W. POMBO, California 

NEIL ABERCROMBIE, Hawaii JAY DICKEY, Arkansas 

CALVIN M. DOOLEY, Californil\ 

CARLOS A. ROMERO-BARCELO, Puerto 

Rico 

KARAN ENGLISH, Arizona 

KAREN SHEPHERD, Utah 

NATHAN DEAL, Georgia 

MAURICE D. HINCHEY, New York 

ROBERT A. UNDERWOOD, Guam 

HOWARD L. BERMAN, California 

LANE EVANS, Dlinois 

PATSY T. MINK, Hawaii 

THOMAS J. BARLOW Ill, Kentucky 

THOMAS M. BARRETT, Wisconsin 

JOHN LAWRENCE, Staff Director 

RICHARD MELTZER, General Counsel 

DANIEL VAL KlsH, Republican Staff Director 

SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES 

RICHARD H. LEHMAN, California, Chairman 

PHILIP R. SHARP, Indiana BARBARA F. VUCANOVICH, Nevada, 

AUSTIN J. MURPHY, Pennsylvania Ranking Republican Member 

EDWARD J. MARKEY, Massachusetts CRAIG THOMAS, Wyoming 

NICK JOE RAHALL II, West VIrginia JOHN T. DOOLITTLE, California 

LARRY LAROCCO, Idaho WAYNE ALLARD, Colorado 

NATHAN DEAL, Georgia SCOTT MciNNIS, Colorado 

PETER A. DEFAZIO, Oregon RICHARD POMBO, California 

THOMAS J. BARLOW Ill, Kentucky 

DEBORAH VON HOFFMANN LANWNE, Staff Director DEAN TOUSLEY, Counsel 

LAUREN ScHARFMAN, Clerk 

CHRISTOPHER KEARNEY, Republican Consultant on Energy 

(II) 
CONTENTS 

Hearing held: May 27, 1993 ................................................................................... . Text of the bills: 1. H.R. 2143 ..................................................................................................... . 2. H.R. 2170 ..................................................................................................... . Member statements: 

Hon. Richard Lehman ..................................................................................... . Hon. Barbara F. Vucanovich .......................................................................... . 

~~~: ~~: fho~!? .. :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: 

Witness statement: 

Hon. Ivan Selin, Chairman, Nuclear Regulatory Commission .................... . 

APPENDIX 

MAY 27, 1993 

Additional material submitted for the hearing record from: 

Subcommittee on Energy and Natural Resources, Committee on Natural 

Resources: 

1. Letter from Chairman Lehman to Hon. Ivan Selin, Chairman, - Nuclear Regulatory Commission, dated June 2, 1993, enclosing 

Page 

1 

3 

10 

1 

20 

20 

21 

22 

written questions from himself and Mrs. Vucanovich ... ............ ... ...... 65 

2. Response of Nuclear Regulatory Commission dated July 6, 1993, 

enclosing answers to the post-hearing questions submitted in the 

chairman's June 2letter ....................................................................... 71 

U.S. Nuclear Regulatory Commission, Office of the Inspector General: 

1. Prepared statement concerning the fiscal year 1994-95 budgets ..... 100 

2. "Annual Audit Plan, Strategy and fiscal year 1993 Work Planned" 106 

The ~ci~ty of Nuc~ear Medicine and the American Coll~e of Nuclear 

Physicians, Washington, DC: Prepared statement concerrung H.R. 2143 

and attachments ................... ........... .. ......... ........ ............. .... ..... ............ ... ..... 170 

(III) 

H.R. 2143 TO AUTHORIZE APPROPRIATIONS 

FOR THE NUCLEAR REGULATORY COMMISSION FOR FISCAL YEARS 1994 AND 1995 

H.R. 2170 TO AMEND THE ENERGY REORGANIZATION ACT OF 1974 AND THE ATOMIC 

ENERGY ACT OF 1954 TO ENHANCE THE 

SAFETY AND SECUEUTY OF NUCLEAR 

POWER FACILITIES, AND FOR OTHER PURPOSES 

THURSDAY, MAY 27, 1993 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON NATURAL RESOURCES, 

SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES, 

Washington, DC. 

The subcommittee met at 10:40 a.m., in room 1324, Longworth 

House Office Building, Hon. Richard H. Lehman (chairman of the 

subcommittee) presiding. 

OPENING STATEMENT OF CHAIRMAN LEHMAN 

Mr. LEHMAN. Good morning. The Subcommittee on Energy and 

Mineral Resources is meeting today for a hearing on two bills dealing with the Nuclear Re[U:latory Commission, which I have introduced at the Commission s request. At the outset, I would like to welcome the commissioners of the 

NRC to their first appearance before this Committee in the 103rd 

Congress. And I would also like to note that the NRC Inspector General, David Williams, is present and has submitted a separate 

written statement that we will make part of the official record of 

this hearing. 

The first bill before us today is H.R. 2143, which would authorize 

appropriations for the NRC for fiscal years 1994 and 1995. For various reasons, having to do with past policy differences between the 

House and Senate, there has not been an NRC authorization 

passed since 1984. 

We have conferred with Senator Lieberman over in the lower 

chamber [laughter] and have agreed that we want to get into the 

habit of exercising this authority again. 

While this bill probably cannot be enacted in time to govern fiscal 1994 appropriations, as a two-year authorization we hope that 

it will govern fiscal 1995 appropriations. 

(1) 
2 

The bill would authorize appropriations to the NRC of $542.9 

million for fiscal year 1994 and $546.8 million for fiscal year 1995. 

The 1994 figure represents only a one point four percent increase 

over the Commission's 1993 appropriation. The 1995 figure is only 

seven tenths of a percent higher than that for 1994. 

For the NRC Inspector General, this bill authorizes four point eight million for fiscal year 1994 and five million for 1995. These 

are four point seven and four point two percent annual increases, 

respectively. 

Pursuant to the Budget Reconciliation Act of 1990, the Commission is required to recover 100 percent of its fiscal budgets for 1991 

through 1995 from three sources. Fees for services, annual charges 

on licensees, and payments from the Nuclear Waste Fund. Thus, 

the Commi1;1sion's activities are not funded from general revenues. Nonethele88~ the Commission has taken to heart the directive to 

reduce government costs, and has requested increases that are well 

below the rate of inflation. Indeed, the request for fiscal 1994 represents a fifty percent reduction in total-fifty-person-don't 

panic-reduction in total NRC staffing. The Budget Reconciliation Act of 1993, which is before the House 

today, would extend the NRC's one hundred percent user fee requirement to fiscal 1998. This requirement has not been without 

some controversy and I will get into questions regarding that later. 

[Text of the bill, H.R. 2143, follows:] 
3 

I 

103D CONGRESS H R 2143 1ST SESSION • • 

To authorize appropriations f9r the Nuclear Regulatory Commission for fiscal 

years 1994 and 1995. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 18, 1993 

Mr. LEHMAN, (by request) introduced the following bill; which was referred to 

the Committee on Natural Resources 

A BILL 

To authorize appropriations for the Nuclear Regulatory 

Commission for fiscal years 1994 and 1995. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the "Nuclear Regulatory 

5 Commission Authorization Act for Fiscal Years 1994 and 

6 1995". 

7 SEC. 2. AUTHORIZATION OF APPROPRIATIONS FOR FISCAL 

8 YEARS 1994 AND 1995. 

9 (a) IN GENERAL.-There are authorized to be approtO priated to the Nuclear Regulatory Commission, in accord-
4 

2 

1 ance with section 261 of the Atomic Energy Act of 1954 

2 (42 U.S.C. 2017) and section 305 of the Energy Reorga3 nization Act of 1974 (42 U.S.C. 5875), the following 

4 amounts: 

5 (1) FISCAL YEAR 1994.-$542,900,000 for fiscal 

6 year 19.94, to remain available until expended, of 

7 which $22,000,000 is authorized from the Nuclear 

8 Waste Fund. 

9 (2) FISCAL YEAR 1995.-$546,800,000 for fiscal 

10 year 1995, to remain available until expended, of 

11 which $22,000,000 is authorized from the Nuclear 

12 Waste Fund. 

13 (b) OFFICE OF INSPECTOR GENERAL.-There are 

14 authorized to be appropriated to the Nuclear Regulatory 

15 Commission's Office of Inspector General, in accordance 

16 with the provisions of section 1105(a)(25) of title 31, 

17 United States Code, the following amounts: 

18 (1) FISCAL YEAR 1994.--$4,800,000 for fiscal 

19 year 1994, to remain available until expended. 

20 (2) FISCAL YEAR 1995.--$5,000,000 for fiscal 

21 year 1995, to remain available until expended. 

22 SEC. 8. ALLOCATION OF AMOUNTS AUTHORIZED. 

23 (a) IN GENERAL.-The amounts authorized to be ap24 propriated under section 2(a) for fiscal years 1994 and 

25 1995 shall be allocated as follows: 

•llllS141 m 
5 

3 

1 (1) REACTOR SAFETY AND SAFEGUARDS REGU2 LATION.-Not more than $163,807,000 for fiscal 

3 year 1994, and not more than $168,005,000 for fis4 cal year 1995, may be used for "Reactor Safety and 

5 Safeguards Regulation". 

6 (2) REACTOR SAFETY RESEARCH.-Not more 

7 than $99,969,000 for fiscal year 1994, and not more 

8 than $98,339,000 for fiscal year 1995, may be used 

9 for "Reactor Safety Research". 

10 (3) NUCLEAR MATERIAL AND LOW-LEVEL 

11 WASTE SAFETY AND SAFEGUARDS REGULATION.-

12 Not more than $61,880,000 for fiscal year 1994, 

13 and not more than $63,025,000 for fiscal year 1995, 

14 may be used for "Nuclear Material and Low-Level 

15 Waste Safety and Safeguards Regulation". 

16 (4) HIGH-LEVEL NUCLEAR WASTE REGULA17 TION.-Not more than $22,000,000 for fiscal year 

18 1994 from the Nuclear Waste Fund, and not more 

19 than $22,000,000 for fiscal year 1995 from the Nu20 clear Waste Fund, may be used for "High-Level Nu21 clear Waste Regulation". 

22 ( 5) REACTOR SPECIAL AND INDEPENDENT RE23 VIEWS, INVESTIGATIONS, AND ENFORCEMENT.-Not 

24 more than $31,000,000 for fiscal year 1994, and not 

25 more than $31,369,000 for fiscal year 1995, may be 

.aa lll411 m 
6 

4 

1 used for "Reactor Special and Independent Reviews, 

2 · Investigations, and Enforcement". 

3 (6) NUCLEAR SAFETY MANAGEMENT AND SUP4 PORT.-Not more than $164,244,000 for fiscal year 

5 1994, and not more than $164,062,000 for fiscal 

6 year 1995, may be used for "Nuclear Safety Man7 agement and Support". 

8 (b) LIMITATIONS.-The Nuclear Regulatory Commis9 sion may not use more than 1 percent of the amounts allo10 cated under subsection (a) to exercise its authority under 

11 section 31 a. of the Atomic Energy Act of 1954 (42 U.S.C. 

12 2051(a)) to enter into grants and cooperative agreements 

13 with organizations such as universities, State and local 

14 governments, and not-for-profit institutions. Grants made 

15 by the Commission shall be made in accordance with chap16 ter 63 of title 31, United States Code, and other applicable 

17 law. 

18 

19 

20 

(c) REALLOCATION.-

(1) IN GENERAL.-Except as provided in paragraphs (2) and (3), any amount allocated for a fiscal 

21 year pursuant to any paragraph of subsection (a) for 

22 purposes of the program referred to in any such 

23 paragraph may be reallocated by the Nuclear Regu24 latory Commission for use in a program referred to 

•BR 1141 IB 
7 

5 

1 in any other paragraph of such subsection, or for 

2 use in any other activity within a program. 

3 (2) LIMITATION.-The amount available from 

4 appropriations in any fiscal year for use in any pro5 gram or activity specified in subsection (a) may not, 

6 as a result of reallocations made under paragraph 

7 (1), be increased or reduced by more than $500,000, 

8 unless the Nuclear Regulatory Commission submits 

9 advance notification of such reallocation to the Com10 mittee on Energy and Commerce and the Committee 

11 on Natural Resources of the House of Representa12 tives and the Committee on Environment and Public 

13 Works of the Senate. Such notification shall contain 

14 a full and complete statement of the reallocation to 

15 be made and the facts and circumstances relied upon 

16 in support of such reallocation. 

17 (3) NUCLEAR WASTE FUND.-Funds authorized 

18 to be appropriated from the Nuclear Waste Fund 

19 may be used only for the high-level nuclear waste ac20 tivities of the Nuclear Regulatory Commission and 

21 may not be reprogrammed for other Commission ac22 tivities. 

23 SEC. 4. RETENTION OF CERTAIN FUNDS. 

24 Money received by the Nuclear Regulatory Commis25 sion for the cooperative nuclear safety research program, 

•BRita m 
8 

6 

1 services rendered to foreign governments and international 

2 organizations, and the material and infonnation access au3 thorization programs (including criminal history checks 

4 under section 149 of the Atomic Energy Act of 1954 (42 

5 U.S.C. 2169)) may be retained and used, subject to appro6 priations, for salaries and expenses associated with such 

7 activities, notwithstanding the provisions of section 3302 

8 of title 31, United States Code, and shall remain available 

9 until expended. 

10 SEC. 5. TRANSFER OF CERTAIN FUNDS. 

11 From amounts appropriated to the Nuclear Regu12 latory Commission pursuant to section 2(a), except for ap13 propriations from the Nuclear Waste Fund, the Commis14 sion may transfer amounts to its Office of Inspector Gen15 eral, except that the total amount so transferred during 

16 any fiscal year may not exceed 5 percent of the amount 

17 authorized under section 2(b) for such fiscal year. 

18 SEC. 8. LIMITATION ON SPENDING AUTHORITY. 

19 Notwithstanding any other provision of this Act, no 

20 authority to make payments under this Act shall be effec21 tive except to such extent or in such amounts as are pro22 vided in advance in appropriation Acts. 

0 

. •BB 1143 IB 
9 

Mr. LEHMAN. The second bill we're going to consider today, H.R. 

2170, is a package of amendments to the Energy Reorganization Act and Atomic Energy Act that has been proposed for several 

years by the Commission. These amendments generally plug holes 

in various aspects of the Commission's enforcement authority over 

licensees as well as contractors and suppliers to licensees and others whose actions mi~ht pose threats to nuclear safety. The NRC legislative package deals with notification requirements on licensees, civil monetary penalties, elimination of a congressional reporting requirement for the Advisory Committee on 

Reactor Safeguards, carrying of firearms by licensee employees, unauthorized introduction of dangerous weapons at regulated facilities, sabotage during facility construction, and administrative 

search warrants. 

I will leave it to Chairman Selin to describe these amendments 

more fully in the Commission's testimony. 

[Text of the bill, H.R. 2170, follows:] 
10 

103D CONGRESS H R 2170 1ST SESSION • • 

To amend the Energy Reorganization Act of 1974 and the Atomic Energy 

Act of 1954 to enhance the safety and security of nuclear power facilities, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 19, 1993 

Mr. LEHMAN (by request) introduced the following bill; which was referred 

jointly to the Committees on Energy and Commerce, Natural Resources, 

and the Judiciary 

A BILL 

To amend the Energy Reorganization Act of 197 4 and the 

Atomic Energy Act of 1954 to enhance the safety and 

security of nuclear power facilities, and for other purposes. 

1 Be it enacted by tlw Senate and House of Representa2 tives of tlw United States of America in Congress assembled, 

3 SECI'ION 1. SHORT TITLE. 

4 This Act may be cited as the "Omnibus Nuclear 

5 Power Safety and Security Enhancement Act of 1993". 

6 SEC. 2. NOTIFICATION REQUIREMENTS. 

7 Section 206 of the Energy Reorganization Act of 

8 1974 (42 U.S.C. 5846) is amended to read as follows: 
11 

2 

1 "NONCOMPLIANCE 

2 "SEC. 206. (a) Any person constructing, owning, op3 erating, or supplying a component of any facility or activ4 ity which is licensed or otherwise regulated by the Com5 mission pursuant to the Atomic Energy Act of 1954 (in6 eluding any facility leased by the United States Enrich7 ment Corporation), or pursuant to this Act, who obtains 

8 information reasonably indicating that such facility or ac9 tivity or basic component supplied to such facility or 

10 activity11 "(1) contains a defect; or 

12 "(2) fails to comply with the Atomic Energy 

13 Act of 1954 or any applicable rule, regulation, order, 

14 or license of the Commission; 

15 shall immediately notify the Commission of such defect or 

16 failure to comply if such defect or failure to comply could 

17 create a substantial safety hazard as defined by the regu18 lations promulgated by the Commission, unless such per19 son has actual knowledge that the Commission has been 

20 informed in writing of such defect or failure to comply. 

21 "(b) The Commission may issue such regulations and 

22 orders as it deems necessary to ensure compliance with 

23 this section, including regulations and orders requiring 

24 imy person subject to this section to devise and implement 

25 procedures to identify, evaluate, and report defects and 

•HR 2110 m 
12 

3 

1 failures to comply subject to the notification requirements 

2 of subsection (a). 

3 "(c)(l) Except as provided in paragraph (2), any per4 son who fails to provide a notification required by sub5 section (a), or who violates any regulation or order issued 

6 under subsection (b), shall be subject to a civil penalty 

7 in the same manner and amount as provided for violations 

8 subject to a civil penalty under section 234 of the Atomic 

9 Energy Act of 1954 (42 U.S.C. 2282). 

10 "(2) An individual who is subject to the requirements 

11 of this section solely because of employment by a person 

12 subject to those requirements shall only be assessed a civil 

13 penalty for failure to provide notice pursuant to subsection 

14 (a) if such individual has actual knowledge of the reportIS ing requirement imposed by subsection (a) and of a defect 

16 as provided in subsection (a)(l) or of a failure of compli17 ance as provided in subsection (a)(2). 

18 "(d) The requirements of this section shall be pre19 eminently posted on the business premises of any person 

20 who is required to notify the Commission of a defect or 

21 failure to comply under subsection (a). 

22 "(e) The Commission may conduct such reasonable 

23 inspections, investigations, and other enforcement activi24 ties as it deems necessary to ensure compliance with the 

•D S1781B 
13 

4,, 

1 provisions of this section and with any regulations and or2 ders issued thereunder. 

3 "(f) For purposes of this section, the tenn 'person' 

4 has the same meaning as in section 11 s. of the Atomic 

5 Energy Act of 1954 (42 U.S.C. 2014(s)), except that---

6 "(1) it also includes the Department of Energy 

7 with respect to facilities of the Department regu8 lated by the Commission and with respect to any 

9 item provided by the Department as a component to 

10 a licensee; and 

11 "(2) it does not include an individual unless he 

12 or she is13 "(A) a sole proprietor or partner of a busi14 ness that constructs, owns, operates, or supplies 

15 a component covered by subsection (a) of this 

16 section; or 

17 "(B) a director or responsible officer em18 ployed by a person subject to that .subsection. 

19 "(g) This section shall apply to the United States En20 richment Corporation and facilities leased by the Corpora21 tion, and to its directors and officers, to the same extent 

22 as any other person subject to this section.". 

•llll 11'70 m 
14 

5 

1 SEC. 3. CIVIL MONETARY PENALTIES FOR VIOLATIONS OF 

2 RULES, REGULATIONS, ORDERS, OR LICENS3 lNG REQUIREMENTS. 

4 (a) IN GENERAL.-Section 234 a. of the Atomic En5 ergy Act of 1954 (42 U.S.C. 2282(a)) is amended to read 

6 as follows: 

7 "a. Any person who8 "(1) violates9 "(A) any licensing provision of section 53, 

10 57, 62, 63, 81, 82, 101, 103, 104, 107, or 109, 

11 or any rule, regulation, or order issued there12 under; 

13 "(B) the certification provisions of section 

14 1701, or any rule or regulation issued there15 under; 

16 "(C) any term, condition, or limitation of 

17 any license or certification issued under any 

18 section referred to in subparagraph (A) or (B); 

19 or 

20 "(D) any rule, regulation, or order issued 

21 under subsection b., i., or o. of section 161; or 

22 "(2) commits any violation for which a license 

23 may be revoked under section 186; 

24 shall be subject to a civil penalty, to be imposed by the 

25 Commission, of not to exceed $100,000 for each such vio26 lation. If any violation is a continuing one, each day of 

•HR 2110 m 
15 

6 

1 such violation shall constitute a separate violation for the 

2 purpose of computing the applicable civil penalty. The 

3 Commission shall have the power to compromise, mitigate, 

4 or remit such penalties.". 

5 (b) CONFORMING AMENDMENTS.-

6 ( 1) The heading of section 234 of the Atomic 

7 Energy Act of 1954 (42 U.S.C. 2282) is amended 

8 to read as follows: 

9 "SEC. 234. CIVIL MONETARY PENALTIES FOR VIO10 LATIONS OF RULES, REGULATIONS, ORDERS, OR LICENS11 lNG REQUIREMENTS.-". 

12 (2) The table of contents of the Atomic Energy 

13 Act of 1954 (42 U.S.C. 2011 prec.) is amended by 

14 striking the item relating to section 234 and insert15 ing the following: 

"Sec. 234. Civil monetary penalties for violations of rules, regulations, orders, 

or licensing requirements.". 

16 SEC. 4.. ADVISORY COMMITl'EE ON REACl'OR SAFEGUARDS. 

17 Section 29 of the Atomic Energy Act of 1954 (42 

18 U.S.C. 2039) is amended by striking the last 2 sentences. 

19 SEC. 15. CARRYING OF FIREARMS BY LICENSEE EMPLOY20 EES. 

21 Section 161 k. of the Atomic Energy Act of 1954 (42 

22 U.S.C. 2201(k)) is amended-

•BB 1170 m 
16 

7 

1 (1) in the 1st complete sentence, by inserting 

2 "and licensees (including employees of contractors of 

3 licensees)" after "(at any tier)"; 

4 (2) in the 1st complete sentence, by striking 

5 "owned by or contracted to the United States or 

6 being transported to or from such facilities" and in7 serting the following: "owned by or contracted to the 

8 United States or licensed by the Commission, or 

9 being transported to or from such facilities,"; 

10 (3) in the 4th complete sentence, by inserting 

11 "or a licensee of the Commission" after "or a con12 tractor of the Department of Energy or Nuclear 

13 Regulatory Commission"; and 

14 (4) in the last sentence, by inserting "and the 

15 Commission" after "The Secretary". 

16 SEC. 6. UNAUTHORIZED INTRODUCTION OF DANGEROUS 

17 WEAPONS. 

18 Section 229 a. of the Atomic Energy Act of 1954 (42 

19 U.S.C. 2278a(a)) is amended by inserting after "custody 

20 of the Commission" the following: "or subject to its licens21 ing authority under this Act or any other Act". 

•DR 2110 m 
17 

8 

1 SEC. 7. SABOTAGE OF PRODUCI'ION, UTILIZATION, OR 

2 WASTE STORAGE FACJLITIES UNDER CON3 STRUCI'ION. 

4 Section 236 a. ofthe Atomic Energy Act of 1954 (42 

5 U.S.C. 2284(a)) is amended to read as follows: 

6 "a. Any person who intentionally and willfully de7 stroys or causes physical damage to, or who intentionally 

8 and willfully attempts to destroy or cause physical damage 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

to-

"(1) any production facility or utilization facility licensed under this Act; 

"(2) any nuclear waste storage facility licensed 

under this Act; 

"(3) any production, utilization, or waste storage facility subject to licensing under this Act during its construction where the destruction or damage 

caused or attempted to be caused could affect public 

health and safety during the operation of the facility; 

"(4) any nuclear fuel for a utilization facility licensed under this Act, or any spent nuclear fuel 

from such a facility; or 

23 " ( 5) any uranium enrichment facility regulated 

24 by the Nuclear Regulatory Commission; 

25 shall be fined not more than $10,000 or imprisoned for 

26 not more than 10 years, or both.". 

•BR 1110 m 
18 

9 

1 SEC. 8. ADMINISTRATIVE SEARCH WARRANTS. 

2 Section 161 c. of the Atomic Energy Act of 1954 (42 

3 U.S.C. 2201(c)) is amended to read as follows: 

4 "c. (1) Make such studies and investigations, 

5 obtain such information, and hold such meetings or 

6 hearings as the Commission may deem necessary or 

7 proper to assist it in exercising any authority proS vided in this Act, or in the administration or en9 forcement of this Act, or any regulations or orders 

10 issued thereunder. For such purposes the Commis11 sion is authorized12 "(A) to administer oaths and affirmations; 

13 "(B) by subpoena, to require any person to 

14 appear and testify or appear and produce docu15 ments, or both, at any designated place; 

16 "(C) to conduct searches without a war17 rant of the premises of applicants, licensees, 

18 and other persons subject to section 206 of the 

19 Energy Reorganization Act of 1974 (42 U.S.C. 

20 5846); and 

21 "(D) by judicially approved, administrative 

22 search warrant, to enter at reasonable times 

23 premises under the control of any person not 

24 covered by subparagraph (C) who is subject to 

25 the Commission's jurisdiction. 

•DR llt7o m 
19 

10 

1 "(2) Before a warrant is issued pursuant to 

2 paragraph (1HD), the Commission shall establish 

3 that it has a reasonable suspicion that a ,violation of 

4 a Federal statute or a Commission regulatory re5 quirement has been or will be committed. A search 

6 pursuant to such a warrant shall be effected only for 

7 purposes directly related to the basis for the warS rant, and each such search shall be commenced and 

9 completed with reasonable promptness. 

10 "(3) Witnesses subpoenaed pursuant to para11 graph ( 1 )(B) shall be paid the same fees and mile12 age as are paid witnesses in the district courts of the 

13 United States.". 

0 

•BR 11ft m 
20 

Mr. LEHMAN. At this time, I would like to recognize for opening remarks the ranking member of the Subcommittee, the gentlewoman from Nevada, Mrs. Vucanovich. 

STATEMENT OF HON. BARBARA F. VUCANOVICH 

Mrs. VUCANOVICH. Thank you very much, Mr. Chairman. I thank 

you for holding this hearing. 

In general, I have no problem with the legislative package. In 

fact, I am encouraged by the provision which would increase and 

expand the application of civil penalties for violations of the NRC 

requirements. I believe the Commission should remain ever vigilant and aggressive in the prosecution of violations of its rules and 

regulations. 

I am concerned, however, about the provision which would allow 

the NRC to use administrative search warrants in lieu of criminal 

search warrants in some cases. This is language which should be 

examined carefully. 

There are also a number of troubling programmatic issues that 

the NRC is dealing with which I know are of interest to members 

of the Committee, and I look forward to hearing about them, particularly steam generator issues and Thermo-Lag. 

Of particular interest and concern to me this morning, Mr. 

Chairman, is the NRC's reaction to the release yesterday of a GAO 

report which concludes what we in Nevada have known for some 

time that the DOE has been pursuing an unrealistic deadline in 

their activities at Yucca Mountain and compromising scientific 

study in the process. 

Now the GAO says that due to scientific uncertainties, technical 

activities to characterize the site may take as long as thirteen 

years longer than expected. The GAO also concludes that there 

simply is no way that a MRS will be ready by 1998. But perhaps 

most important, Mr. Chairman, the GAO calls for an independent review of the program. Legislation I introduced a few weeks ago 

also calls for an independent review. 

In light of GAO's findings, I look forward to hearing from Chairman Selin about what the pace of NRC activities at Yucca Mountain will be in the future and how that might affect the NRC budget this year and next. 

With that, I would be very happy to listen to the witnesses. 

Thank you, Mr. Chairman. 

Mr. LEHMAN. Thank you very much. 

I would like to recognize at this time the Chairman of the Energy 

and Power Committee of the Energy and Commerce Committee, 

Phil Sharp. 

STATEMENT OF HON. PHILIP R. SHARP 

Mr. SHARP. I appreciate that, Mr. Chairman. I am delighted to 

be here and regret I am not going to be able to stay. 

I don't have any direct comments relative to actual reauthorization of the Commission. I would just express a concern, which we 

will be discussing here and in other forums around the country, I 

am sure, about what is going to happen in terms of plant life extension in two respects. 
21 

One is, what, if anything, the NRC will do on its own in the absence of ap_plications to extend since we have had a change in the 

status, as I understand it, of I believe two utilities that originally 

were going to extend. 

And, secondly, related to that is whether we are runnin~ into 

public utility commissions around the country who are unwilling to 

pass through safety investments that the NRC believes are essential to safe operation. Whether that is becoming a practical inhibition to dealing with electric-the electric utili~ system and nuclear 

power and generation by nuclear. I simply don t know. 

Mr. Chairman, I am just going to kind of leave those questions 

hanging. I compliment you on your work. Today is sort of a higher priority, I think, for most people since this is when we are going to actually vote on the biggest deficit reduction package in the history of 

the country. And if we can get a majority of people to do that, and 

some of us believe it is imperative that we get that job done. 

Thank you. 

Mr. LEHMAN. Thank you very much. 

I recognize the gentleman from Wyoming, Mr. Thomas. 

STATEMENT OF HON. CRAIG THOMAS 

Mr. THOMAS. Thank you. Some of us are not quite that dedicated 

to that_proposition. 

Mr. SHARP. At least one of us here this morning. [Laughter.] 

Mr. THOMAS. At any rate, thank you very much for having the 

hearing and thank all of you for the toum job tt':!!'re doing; I know 

it is a hard one. And it is a little like pontical · gs, whatever you 

do is wrong according to somebody. 

I am a supporter of nuclear power. And I have always hoped that 

we would be able to move forward, particularly in the generation 

of electricity. It seems to me to make sense. 

But we are not. And I suppose one of the general topics that I 

would like you to address a little bit is, if that is the case, if we 

are not having applications for licensing and so on, is there a reason for your actiVIty to be leBB involved and less expensive than it 

has been in the past? I suppose that involves things like consolidation and this and that. But I think those are things that we do 

need to talk about. 

I do have some concerns that I suppose are relati~\t,:inor in 

terms of the finances, but are very major. And I am · g about 

the charges that are levied against highway construction compa- nies and well loggers and others. Last year a Wyoming contractor 

was billed at the rate of $2,400 an hour for an NRC person to inspect soil density gauges, $2,500 in material costs, even though the 

previous year it was $1,400; $380 I'm told to process a change of 

address in NRC records. No~, it is impo~tl the notion of fees. But,. clearly, these !ll"8 

fees m a sort of penpneral area that are particularly expens1ve. 

And I would be interested to hear some comments on that. 

We are pleased that you're here. And I am anxious to hear the 

testimony. 

Thank you, sir. 

Mr. LEHMAN. Thank you very much. 
22 

And once again, I want to welcome each of the commissioners 

here. We certainly appreciate your taking the time to be with us' 

this morning and we understand the Chairman will do the talking. 

So, Chairman Selin, we recognize you. Without objection, we will 

put your full statement and any other materials you have for submission in the record. You may proceed. 

STATEMENT OF BON. IVAN SELIN, CHAIRMAN, NUCLEAR 

REGULATORY COMMISSION 

Mr. SELIN. Thank you, Mr. Chairman. And thank you for your 

warm opening remarks. 

I will try to answer, in my opening remarks, each of the points 

that have been raised, even though they are not in the prepared 

testimony. 

We are very pleased to be with you to discuss the two bills, 2143 

and 2170. We particularly appreciate your interest and support for 

these bills. We look forward to working with you as they progress 

through the Congress. We, too, look forward to the possibility of 

having authorization bills as well as appropriations, since they set 

out so much of our objectives and our goals and the guidance that 

we get from the Congress. 

Before discussing the details of our budget, I would like to provide a light overall perspective on our principal programs and explain how we use our resources to fulfill our statutory mission. 

About fifty-five percent of our budget request is directed toward 

the conduct of our regulatory program for nuclear reactors. We 

have a chart up here, and all you really have to see is that the big 

numbers are bad and small numbers are good. And these three 

general measures of performance have been going down over time. In other words, performance of the overall set of nuclear reactors 

in the United States has been improving steadily at least over the 

last ten years. In fact, we are now to the point where the better 

performers appear to have reached plateaus where current performance levels are close to reasonable expectations. But the poorer 

reactors lag significantly behind the better ones in performance. We've come to the conclusion that perhaps the most fruitful way 

for us to further reduce overall reactor risk is to concentrate our 

efforts on the poorer performers to bring them up to the level already reached by the better performers. This is a very important 

observation. And clearly a judgment on who are the better performers and who are not the better performers is a critical judgment. 

The principal basis for judging licensee performance is what we 

call the Systematic Assessment of Licensee Performance, or SALP, 

program. The principal purpose of this integrated SALP review is 

to direct both NRC resources and licensee resources precisely to 

those areas that could most sharply affect safety and that need improvement. The NRC's reactor oversight includes reactor inspections, particularly with the assignment of at least two resident inspectors to 

each reactor site. In an effort to improve the inspection process, we 

are modifying the SALP program and the reactor inspection program to focus even more on safety-significant performance. We will 

place more emphasis on SALP results in moving NRC inspection 
23 

resources from the better performers to make sure that we focus 

on the poorer performers. 

Safety will be ensured while costs to the better performing plants 

will be reduced, which we think will provide additional incentives 

for plants to improve their performance. 

Before I move to some of the newer topics, I perhaps might address several of the issues that were raised by members of the 

Committee. 

AB far as the Thermo-Lag issue is concerned, we have a thorough 

program in place to make sure that every plant in the country that 

relies on passive barriers rather than separation of the redundant 

safety systems· will do a self-assessment, and this self-assessment 

will be inspected by our people before they go forward. 

Thermo-Lag, quite frankly, is just the shorthand. We are concerned about all safety barriers, whether they are Thermo-Lag or 

some other factors. In fact, there is some information to suggest the 

problem may not be limited to Thermo-Lag. 

AB I went into some detail before Chairman Dingell's committee, 

there are a lot of things to be done. We are quite confident that 

the interim steps to protect the safety in the plants are quite 

strong. And it will take probably two years before every one of the 

plants is up to a satisfactory material condition. 

We are not worried about the health and safety in the interim, 

given the fire watches and other interim measures that are being 

taken. These are expensive, they require constant vigilance, they 

are not very good in the long run, and the sooner the plants get 

away from these interim measures and the sooner they get to a 

satisfactory physical condition, the happier we all will be. 

AB far as steam generators are concerned, there's a very interesting problem here. The original-first of all, fifty percent of the 

pressure vessel boundary, in other words, the boundary that keeps 

the high-pressure steam in the primary system, which comes in 

contact with the radio-active fuel, the boundary which contains this 

high-pressure steam, fifty percent of that boundary occurs within 

the steam generator. 

So leaks from the primary system to the secondary system in 

steam generators in pressurized water reactors are of very serious 

concern to us, to the licensees, to the general public, and, of course, 

to your Committee. · The original concern when the reactors were first put out was 

that there would be overall corrosion to-I should describe what a 

steam generator is. 

What you have is a circuit that passes water over-water under 

very, very high pressure, over the reactor fuel, carries away the 

heat from the fuel, and it goes through a set of tubes. There could 

be fifteen hundred tubes in a steam generator. And that pressure 

is kept so high that the water doesn't boil. And then a second 

water circuit passes in an outside tube. 

So you have inside the tube in which the primary water is flowing and then outside the tube in which the secondary water is flowing that is turned to steam by the transfer of heat over this pressure boundary. And that heated water, the steam, goes and it turns 

the turbine and it does the useful work. 
24 

In a pressurized water reactor, there can be two, three, or four 

steam generators. And the integrity of the inner tube, the tube that 

contains the pressurized water in the primary system, is absolutely 

critical to the safety of the system. 

We have rules that allow a certain number of these tubes to be 

plugged in case of leakages. They tend to be ten percent or so of 

the tubes, and no more than that may be set. 

The original conc~rn was that the primary water tube would 

eventually corrode, the wall would become thin, and there would be 

a risk that, in case of an accident where the steam in the secondary 

escaped, and therefore where the back pressure went down, that 

tube would ·burst and there would be a loss of primary water, 

which is very bad, because then there wouldn't be water to cool the 

reactor. And the original tests that were set up were set up to look 

for a thinning of the walls. 

Well, it turns out that, because of a lot of improvements in chemistry and management, that that's not such a serious concern. The 

serious concern these days is that there will not be general 

thinning of the walls but small cracks in the wall which, in the 

case of loss of pressure from the outside tube, could themselves 

leak. 

The techniques that we had for measuring the integrity of the 

steam generator don't apply to small cracks. They really apply to 

general thinning. So we've had to come up with some new techniques. And the whole discussion has been what is a safe surrogate 

for this new kind of concern, rather than the original concern. 

And we think that we have a pretty good story on this. But there 

is some technical-some range of technical opinions as to how to 

measure for very small, very deep cracks, and how dangerous they 

are. 

In short, that's the steam generator issue. 

As far as Congressman Sharp's question about public utility commissions, we don't have any example of a public utility commission 

refusing to put into the base improvements that we've ordered 

plants to do from a safety point of view. But, on a broader question, 

there is a serious concern that many observers of the industry have 

that investments in maintaining and operating nuclear power 

plants are examined on too short a payback period, and that therefore these investments are discouraged. 

A particular example is the San Onofre plant in California, 

where our people required a number of major changes, over $100 

million of capital investment, to be put into that plant that was to 

continue to operate. And the California Public Utility Commission 

and the utility came to an agreement that rather than make these 

investments, they would close the plant. That's a legitimate commercial consideration, but it was driven by safety considerations. 

Now, turning to the next question that was raised, namely the 

renewal of operating licenses, older American nuclear power plants 

in many cases are facing expiration of their original forty-year operating licenses. The operating license of the first plant that might 

seek license renewal expires in 2006, and a ten-. to fifteen-year lead 

time is necessary for licensees to plan for license renewal or for alternative new capacity. So this is a timely question now. 
25 

As Congressman Sharp pointed out, the two-the original idea 

was that two specific plants would come in with applications and 

that these applications would be a good test of the process. But 

that turned out not to be so. 

Both plants have withdrawn their applications· for reasons that, 

in most cases, have little to do with the license renewal and are 

tied very much to plant-specific plllpOses. 

So, instead, the plant, the staff, and industry have been looking 

for a more generic approach to license renewal. And in fact the 

NRC staff has developed a process for implementing the license renewal rule, which focuses on the effective management of those 

ageing effects which impact on safety during the twenty years, 

from forty to sixty years. The specifics of this process represent an approach to implementation not expressly addressed at the time that the rule was pro- mulgated. Th.e Commission has made available to the public several papers detailing the staffs approach and our decision on 

whether and how best to implement the new approach or the variation of the new approach·is imminent. 

As far as the longer term question comes, the question that was 

raised by Mrs. Vucanovich about-and Mr. Thomas both, about 

what is the future of the industry and what should we be doing there. For the longer term the NRC has established a process to 

review future nuclear reactor designs which make it possible to resolve safety and environmental issues before rather than after the 

start of nuclear power plant construction. 

The key to the process is the safety certification of standardized 

designs well before a utility develops a construction plan. We have 

four applications in hand. The first two, which represent pretty 

straightforward extensions of current technology are well along. We 

expect that it is possible that s~ evaluations will be done by the 

summer of 1994 through the s . The next two, which are more 

advanced designed-they involve different approaches to safety sys- tems-will probably take a ;rear longer ~ ~ forward. 

To answer Congressman Thomas' question, we believe that these 

processes are extremelr. important, not only for the future of nuclear power in the Umted States, but really for the future of nuclear power around the world. The safety evaluations are oriented 

toward deployment in the United States. Many other countries, 

and many other utilities depend on them as well. 

As Chairman Lehman pointed out, we have been able to accommodate the work that's going on in this area by making other reductions in our current budpt and having. a small decrease in real 

cost to our budget while taking on this additional work. Switchin~ to nuclear material, about fifteen percent of our budget request 1s devoted to ensuring the safe disposal of nuclear waste 

and the safe use and transport of nuclear materials. We are asking 

for a small increase in this program, entirely to deal with the additional responsibilities that the Energy Policy Act gave us last year, 

namely for the certification of the safety of the two enrichment 

plants that will transfer on July 1 to the United States Enrichment 

Corporation. 

As far as nuclear waste is concerned, there has been a lot of attention paid not only to high-level waste, as Mrs. Vucanovich has 
26 

brought in, but to low-level waste. This is a fairly complicated system, since the main responsibility falls upon the states. We do have 

a responsibility both for encouraging the states to go forward and 

for taking a look at our regulations to make it clear what it will 

take to satisfy us that state compact sites are satisfactory. 

There has been good news and bad news in the last year. Clearly the states are not making the schedules that were called for in the 

Low-Level Waste Policy Act and in the amendments act. On the 

other hand, there are three states, three compacts, that are operat- ing now. The Northwest and Rocky Mountain Compact seems to be 

fairly stable. The trend toward lower waste volume has continued 

to the point where current disposal requirements are only about 

half of what they were ten years ago. 

To summarize a very complicated situation, there are three potential sites and important decision points, and I think this next 

year we will see whether they go forward or whether there are 

really serious problems in the program. 

In my statement, I discuss at some length the discussion of the 

medical use of byproduct material. I won't go into that great depth 

right now except to point out that we do pose an issue, which is 

a prime issue for any kind of an authorization bill, and that is, 

what's the proper authority for the NRC in regulating the medical 

uses? We have a rather extensive program. Some weaknesses have 

been found, but basically it's a sound program. But it only covers 

about twenty-five percent of the therapeutic uses of radiation to 

fight cancer. 

So a fair question in our mind has been whether continuation of 

the existing scheme is the best way to use limited resources to 

achieve the goal of protection of the public. And we have given 

some thought to alternatives. 

Among the options that we are looking at are, first, to maintain 

the current program. The second, to pull back NRC's regulatory involvement to concentrate on approval of the devices, but leaving to 

the states the job to regulate the medical use of the devices. The 

third option is similar to the second, except that we would also continue to write standards and guidelines for the use of the devices, 

but still leave the states the licensing and inspection process. And the fourth would go the other way, which would be to do 

something like what we do today, but not just to limit the byproduct resources to byproduct materials, but to extend our regulation 

to cover all sources of radiation for therapy, which means in rarticular, linear accelerators as well. These new options would al require legislation. 

We plan to provide Con~ess with an interim report on our effort 

to come to grips with this Issue by August 6 of this year. 

Turning to management and support, about . 30 percent of our 

budget request is for day-to-day management of the agency and the 

normal housekee{ling costs associated with keeping the agency doors open. Even m this area, we have assumed significant new responsibilities in the past several years: the establishment of an Inspector General, our increased international activities, collection of 

license fees at a hundred percent reimbursement, implementation 

of the Chief Financial Officer's Act, and our internal project of consolidating our headquarters facilities. 
27 

There are some very interesting things going on in the international area. I won't take the time to go over too much of them, 

except to point out we are playing an active role in the U.S. govemment»s ·attempts to support nuclear safety initiatives in the former 

Soviet Union and in eas~m Europe. And as far as the more grow- ing areas, we have twenty-seven technical exchange agreements. 

We are very deeply involved in setting up or helping the countries 

set up regulatory regimes in east Asia in particular, and these are 

areas that are activelr in the nuclear generating business and expanding their activities. These agreements help foreign nuclear 

regulatory organizations to create a regulatory environment similar 

to what we have here in the United States. 

I might digress a minute to talk to Congressman Thomas' ques- tion about fees. We are, in fact, required to collect a hundred percent of our expenses through fees, e1ther fixed fees or variable fees, 

license fees and service fees, except for that which comes from the 

nuclear-the high-level waste fund. 

We don't really think that this is completely fair. There are activities that we carry out on behalf of the federal government that 

we believe ought to be covered by appropriations without reimbursement. The process was set up in the Energy Policy Act of 

1992 for us to go out for comments to ask specific and general ques- tions to get all this information, and then to come back and propose 

legislation. I would like to point out that, first of all, it's not our decision 

whether we be a hundred percent fee-reimbursed or not. That is 

clearly a question of overall policy. 

But from a management point of view, we see a number of advantages in being in the hundred percent fee-reimbursement area. 

It really does sharpen our attention to what we do and whether we 

do it efficiently. When we see high prices or activities which./ on the 

face of them, don't seem to warrant these prices, we maJte sure 

that we go back and pay attention to reducing not only our costs, 

but our actual efforts m these areas. 

Furthermore, it's hard to say I welcome the increased attention 

that we get from yourselves and all your constituents, but I do 

think it leads to good government. So we are generally quite happy with the fee reimbursement system, and we are going through the 

process calling for it. 

On the s-oecmc questions that you raised, Mr. Thomas, the 

change of acfdress is not correctly described. When somebody moves 

their-where they keep their nuclear materials, the dangerous nuclear materials, from one facility to another facility, we have to go 

out and inspect the second facility to make sure it is an appro- priate place to move these materials. So it is not just changing the 

paper. · If they change from, say, a P.O. box to a street address, we don't 

charge for that. But if they move from one physical facility to another facility, that involves an inspection, etcetera. And I think we 

can handle your other questions m some detail at the appropriate point. 

I would like to stress the openness of our NRC process. I think 

most of you are quite familiar with the changes we made in the 

last several years, so I won't spend too much time with that. And 
28 

then I would like to move to the legislative proposals, Mr. Chairman. 

As I said before, we are most appreciative of your interest in the 

legislation's recommendations. I discuss in detail in the statements 

and you precisely summarized them in your opening statement. 

Rather than going through each of them, perhaps I might talk 

about the one amendment that we've asked for which deals with 

the so-called administrative search warrant. First of all, the search 

warrants would have to be obtained as any other search warrant 

would have to be obtained, with a judge's consent. We are not asking for the authority that the Commission itself could just issue 

search warrants. · We would use these in situations where we have reason to believe that a licensee or nonlicensee might have counterfeit parts or 

records to show that what they said they had done they had not 

done, either records or evidence that might be destroyed by taking 

the time to go to court to get a subpoena, which is an open process 

where they can contest the subpoena, et cetera. 

The staff tells us that two to three times a year, we would have 

used this process if we had it. 

There is no other way to-unless statute permits you specifically 

to a~k for an administrative or civil search warrant, the courts will 

not normally grant a search warrant. They will tell you, go get a 

subpoena; if the Congress wants you to have a search warrant, the 

Congress would have given you that authority. And criminal search 

warrants are really not a substitute for this. 

In many cases we don't suspect or we can't meet the burden of 

proof for a criminal investigation. And, in any event, the process 

for getting a criminal subpoena is too complicated. You have to go 

to the US attorney, he doesn't know the Atomic Energy Act, he's 

got a lot of other things to do that are more pressing. It just doesn't 

really work. 

So I think that this particular piece, in my opinion, is the highest 

priority of the process. It's a very limited authority that we're asking for, and we think it is quite a well justified one. 

AB far as the budget goes, you quite accurately and, I think generously, described our modest financial goals and recognized the responsible resource management that we've taken into steps. In 

fact, well before submitting our request to OMB, we undertook an 

aggressive, thorough review of our programs that led to a streamlined budget request to OMB and a streamlined budget request to 

the Congress. 

We are budgeting increased resources to keep pace with industry 

activities associated with such items as reactor license renewal, 

and the safety reviews associated with certifying new power reactor 

designs. 

In short, we have tried to keep a step ahead of events. By so 

doing, we think we've been able to undertake additional responsibilities and invest in those programs which affect the future 

while slightly reducing our budget in real terms. We will continue 

to do all this in a transparent manner that facilitates public understanding of our regulatory process. 

I might point out that it's not easy to reduce fifty positions a 

year, in other words, a total of one hundred fifty positions over 
29 

three years from an organization of roughly three thousand posi- tions. That creates pain and problems, for instance, for a number 

of your constituents. It creates pain for many parts of what we are 

doing. But it is an across-the-board attempt to be more efficient 

and more frugal, not picking out a couple of activities for unreasonable attention. Mr. Chairman, members of the Subcommittee, this concludes our 

statement. My fellow commissioners and I will be pleased to answer any questions that you and the Subcommittee may have. Thank you, sir. 

[Prepared statement of Mr. Selin and attachments follow:] 

72-560 0 - 93 - 2 
30 

STATEMENT SUBMITTED BY 

UNITED STATES NUCLEAR REGULATORY COMMISSION 

TO THE 

SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES 

COMMITTEE ON NATURAL RESOURCES 

UNITED STATES HOUSE OF REPRESENTATIVES 

CONCERNING 

THE NUCLEAR REGULATORY COMMISSION AUTHORIZATION 

FOR FISCAL YEARS 1994-1995 

AND 

LEGISLATIVE PROPOSALS 

PRESENTED BY 

IVAN SELIN 

CHAIRMAN 

SUBMITTED: May 27, 1993 
31 

PXSCAL YEARS 1994-1995 AUTHORIZATION TESTIMONY 

Mr. Chairman and members of the Subcommittee, we are pleased 

to appear before you to discuss H. R. 2143, the Nuclear 

Regulatory Commission's (NRC) authorization for fiscal years 1994 

and 1995, and H. R. 2170, the Omnibus Nuclear Power Safety and 

Security Enhancement Act of 1993. We appreciate your interest 

and support for these bills, and look forward to working with you as they progress through Congress. Accompanying me today are Commissioners Rogers, Curtiss, Remick, and de Planque, the NRC's 

Executive Director for Operations and Chief Financial Officer, 

the General Counsel, and the Inspector General. 

The NRC is responsible for ensuring that civilian uses of 

nuclear materials in the United States -- in the operations of 

commercial nuclear power plants, and in medical, academic, and 

industrial applications -- are carried out in a way which will 

adequately protect the public health and safety, the environment, 

and the national security. In implementing regulations we work 

to prevent unnecessary road blocks for the industry we regulate 

while ensuring that our responsibility to public health and 

safety is not compromised. 

Before discussing the details of our budget we would like to 

provide an overall perspective on the NRC's principal programs 

and explain how we are using our resources to fulfill our statutory mission. 

NUCLEAR REACTORS 

Approximately 55 percent of the NRC's budget request is 

directed to the conduct of our regulatory program for commercial 

nuclear reactors. The major part of these resources is directed 

to overseeing and improving the overall safety performance of 

operating reactors and conducting the research necessary to 

support such regulatory activities. our reactor program also 

includes resources to extend the license terms for operating 

reactors and to certify new light water reactor designs. 

Maiptaininq Safety at Licensed Facilities 

The 109 reactors that are licensed to operate in the u.s. generate approximately 21 percent of the Nation's electricity. 

Over the past several years the operational safety performance of u.s. nuclear power plants has continued to improve, This is 

demonstrated by the key operational safety indicators monitored 

by the NRC, which include forced outage rates, automatic scrams while critical, and significant events. These performance indicators are depicted in the first three charts in the appendix 

to our testimony. In general, the better performers appear to 

have reached plateaus where current performance levels are ·close 

to reasonable expectations, while the poorer reactors lag behind 

in performance. It now appears that the most fruitful way for us to reduce overall reactor risk is to concentrate our efforts on 
32 

the poorer performers, to bring them up to the level already reached by the better performers. 

Although performance is improving, we must remain vigilant 

to ensure that existing nuclear power reactors and other licensed 

facilities continue to be operated safely. A principal source of 

information by which licensee performance is judged is the 

Systematic Assessment of Licensee Performance, or SALP program. 

Under this program the performance of each nuclear power licensee 

is evaluated through the periodic (usually every 18 months), 

comprehensive examination of available data, including inspection 

reports, special reviews, and licensing information. The purpose 

of the integrated SALP review is to direct both NRC and licensee 

attention precisely toward those areas that most affect safety and that need improvement. 

The NRC's reactor oversight includes reactor inspections, 

particularly with the assignment of at least two resident 

inspectors to each reactor site. In an effort to improve the 

inspection process we are modifying the SALP program and the 

reactor inspection program to focus even more on safety 

significant performance. We will place more emphasis on SALP 

results in shifting a fraction of the NRC inspection resources away from the better performers to focus on the poorer 

performers. Safety will be ensured while costs to the better 

performing plants will be reduced, providing additional 

incentives for plants to improve their performance. 

Another key NRC responsibility is to ensure that each 

nuclear reactor is staffed with trained and qualified reactor 

operators. Toward this end the NRC licenses all personnel authorized to operate reactors and requires requalification 

examinations to verify their continued proficiency. 

The NRC also establishes physical protection requirements at 

commercial nuclear reactors. The objective of our physical protection requirements is to protect the public from sabotageinduced releases of radioactive material off the site. To 

establish a standard for protection requirements the NRC.created a design basis threat against which to protect -- a hypothetical threat coabining intelligence, technical studies on vulnerability, and costs to counter -- in an attempt to set 

prudent but reasonable standards for security at the plants. 

The co .. ission believes that this is an appropriate time to 

reevaluate the design basis threat for radiological·sabotage. 

The present threat statement does not address the use of a vehicle nor the use of a vehicle bomb against a nuclear reactor. 

To support this reevaluation the staff has formulated an action 

plan and has made it available to the public. Phase I of the 

plan consists of a reconnaissance -- a bringing up-to-date of 

earlier work and a review of recent developments. These findings 

- 2 -
will be presented to the Commission on June 4, 1993; we then 

expect to make an initial determination of depth and direction 

for next steps. Depending on the results of the first phase, there may be a second phase entailing a more profound review and 

analysis of the changes in the nuclear industry, the use of a vehicle, and the countermeasures available to individual plants 

against vehicles. Or the Commission might decide to take action 

without further study. 

Additionally with regard to safety at licensed facilities, 

the Commission appreciates the importance played by safety allegers. For instance, the recent NRC Inspector General report on Thermo-Lag fire barriers highlighted the importance of 

allegers in identifying safety-significant issues. The 

Commission is currently awaiting the results of the IG's report assessing NRC's overall program for handling safety allegations. 

After the commission has had a chance to review the IG's report we will consider the appropriate next steps to ensure that 

individuals with safety concerns feel comfortable bringing these concerns to the NRC. 

Research 

The NRC's nuclear safety research program will continue to 

provide the independent expertise and technical information 

needed to support our regulatory activities, and to develop the 

regulations and guidelines necessary to implement Commission 

policy. It is essential to maintain an adequate research base if 

the safe use of nuclear power is to be continued; within the 

Federal government this responsibility falls almost entirely on the NRC. Nevertheless, as reactor issues are resolved and 

reactor design test programs are completed, we are able to 

realize some reductions in the research program. 

M&ipteuauce at Qperatipg racilitie• 

Because the Commission believes that improved maintenance 

programs will result in enhanced plant safety, we require 

licensees to monitor the effectiveness of maintenance activities 

for safety-significant plant equipment. The requirement' is 

expressed in a performance-based rule which allows licensees the 

flexibility to utilize their existing programs to the greatest 

extent postible. We plan to evaluate the effectiveness of 

maintenance programs .by comparing system perforaauce against 

licensee established goals instead of concentrating on the 

maintenance proce11. Most importantly, NRC is taking steps to 

build on these maintenance initiatives to support the license 

renewal process, as described below. 

- 3 -
Btntvinq Qptratipg Licenses 

The older nuclear power plants operating in this country are facing expiration of their original 40-year operating licenses -- the operating license of the first plant expected to seek license 

renewal expires in 2004 -- and a 10- to 15-year lead time is 

necessary for licensees to plan for license renewal or alternative new capacity. One of the key issues for industry is 

knowing the NRC's requirements for license renewal up front in 

order for them to make reasonable determinations regarding the 

pursuit of license renewal versus some other means of replacement 

power. 

The issuance of the NRC's rule on license renewal in 

December 1991 marked the completion of ~ive years of intensive 

work on this very important regulatory 1ssue. The rule 

establishes the procedures that a utility must follow in 

submitting an application, defines the requirements for license 

renewal, and identifies the information that must be submitted as part of an application as well as the requirements for 

implementing license renewal programs. 

The NRC staff has developed a process for implementing the 

license renewal rule which foc•1ses on the effective management of 

aging effects on the performance or condition of important plant 

structures and components during the renewal term. The specifics 

of this process represent an approach to implementation not · expressly addressed at the time of rule promulgation. The 

Commission has made available to the public several papers 

detailing the staff's proposed implementation approach. our decision on whether and how best to implement the new approach is 

imminent. 

Outside the license renewal rule implementation, the NRC is 

continuing on its path to review license renewal applications. The Department of Energy originally funded lead plant applications for two nuclear facilities. Both lead plants have 

either cancelled or deferred their license renewal efforts for 

plant-specific reasons. As a result the industry is ta~ing a different approach to license renewal -- one that is more generic and less dependent on particular plants. We find this approach 

to be pro•ising fro• a regulatory perspective since it may permit 

generic resolution of issues affecting several plants, thereby 

reducing tht number of significant plant-specific issues to be 

resolved early in the process. 

The Babcock and Wilcox (B&W) Owners Group has started 

discussions with NRC on a license renewal program for B&Wdesigned facilities; during the past few months they have 

submitted several technical documents to us for review. 

Submission of a license renewal application from a member plant 

in FY 1997 is one of the objectives of the B&W program. 

- 4 -
35 

Additionally, the other owners' groups have indicated that they are considering a similar program. Baltimore Gas and Electric 

(BG&E) has also submitted their methodology for implementation of 

the license renewal rule to the NRC for review. 

Reforming the Licensing Process 

The NRC established a process to review future nuclear 

reactor designs which makes it possible to resolve safety and 

environmental issues before, rather than after, the start of 

nuclear power plant construction. The Energy Policy Act of 1992 

codified this process, which provides for standard design 

certifications and combines the construction permit and the 

operating license for nuclear power reactors. The NRC's rule 

provides for a degree of predictability in the regulatory 

process; the standardization of facilities should enhance plant 

safety. The rule's primary objectives are: (1) to encourage 

standardization of future nuclear plants by the use of certified 

designs, and (2) to permit early and definitive resolution of 

siting and design safety issues prior to commencement of 

construction by use of combined construction permits and 

operating licenses. A combined license would be issued only 

after pertinent issues, including development of emergency plans, are resolved. 

The rule has been structured to provide for public 

participation in the rulemaking on certified designs and in 

formal adjudicatory hearings on the combined construction permit 

and operating license at an early point in the process, before 

construction begins. A more limited opportunity for postconstruction hearings prior to plant operation is also provided 

if an appropriate showing can be made that the plant has not been 

constructed in conformance with its acceptance criteria and there are specific operational consequences of nonconformance that 

would be contrary to assuring adequate protection of the public 

health and safety. 

certifying standard Designs 

The NRC has received four design certification applications under this new process. The first two applications are for 

evolutionary versions of existing light water reactor designs. The NRC staff has completed draft safety evaluation reports on both of these evolutionary designs. Although these draft reports include a number of open issues which we and the vendors are working to resolve, almost all the open issues deal ' with 

acceptance criteria, not with specific design problems. The 

other two applications are for novel light water reactor designs which employ passive safety features and modular construction; an initial review of each has begun. 

- 5 -
The proposed budget continues to provide adequate resources to develop the independent information and analyses necessary to 

support our safety decisions on these new and unique designs. 

NVCLBAB MATERIALS 

Approximately 15 percent of our budget request is devoted to 

ensuring the safe disposal of nuclear waste and the safe use and 

transport of nuclear materials. The requested increase in this 

program is primarily to implement NRC's new responsibilities for 

certifying the gaseous diffusion uranium enrichment plants to be 

operated by the United States Enrichment Corporation. 

overseeing uranium Enrichment 

The Energy Policy Act of 1992 places significant new responsibilities on the NRC in the area of uranium enrichment. 

The Act establishes the United States Enrichment Corporation 

(USEC) and requires the NRC to certify radiological health and 

safety protection and adequate safeguards for the two gaseous 

diffusion uranium enrichment facilities which the Corporation 

will lease from the Department of Energy (DOE) . The Act requires the NRC to develop standards for governing these facilities, to 

establish a certification process for the Corporation to comply 

with the standards, to consult with the Environmental Protection 

Agency (EPA), and to report at least annually to Congress on the 

status of health, safety, and environmental conditions of the 

facilities. 

We anticipate that DOE will retain regulatory oversight for 

the facilities until our regulatory standards are in place. We 

have provided resources to develop standards and to prepare for 

the transition, but there are no resources to inspect or monitor 

the facilities in our FY 1994 budget request. We have devoted 

substantial resources to this project since enactment of the· Energy Policy Act of 1992. Beginning July 1, 1993 we will begin 

charging the USEC fees to recover costs that we incur. 

Mapaqinq Buclear Waste 

Our responsibilities for the safe transportation, storage, 

and disposal of nuclear waste were expanded significantly in the 

1980's. The NRC became responsible for licensing a high-level 

waste geologic repository and spent fuel storage casks, and for 

providing the complete regulatory framework that w~ll assist the 

states to develop and implement plans for the disposal of lowlevel radioactive waste. 

During the past year the Department of Energy has taken some encouraging new approaches to high-level waste management • . The 

DOE recently announced a strategy to address options for spent fuel receipt beginning in 1998. This new strategy includes the 

- 6 -
use of multiple purpose casks for both transportation and interim 

storage of spent fuel at Federal sites. We have begun consulting 

with the DOE on the design requirements for such a cask and will 

review the design when submitted by the DOE for certification. 

our high-level waste efforts continue to keep pace with 

DOE's program as they proceed with surface-based testi~g and 

initiation of underground exploration at the Yucca Mountain site. 

The number of NRC reviews has increased recently in response to 

DOE activities. 

With regard to low-level waste, one of the nation's 

commercial low-level waste disposal sites ceased disposal operations at the end of 1992, another has restricted access to 

the Northwest and Rocky Mountain compacts, and the third site is 

scheduled to close to out-of-compact disposal by July 1, 1994. 

State legislation, state budget constraints, litigation, and 

public concern have contributed to delays in establishing new low-level waste disposal sites. However, we do not believe these 

problems are insurmountable. Progress has been made by states over the last year both in siting and in issue resolution. At 

the same time, the trend toward lower waste volume has continued 

to the point where current disposal requirements are only about 

half of what they were a few years ago. 

Decommissioning of Sites 

We must be able to ensure that once an operating facility 

completes its useful life, the site is properly cleaned up. 

Thus, decommissioning and decontamination are an integral part of 

the NRC licensing process. We have developed a Site 

Decommissioning Management Program, creating an enforceable 

regulatory framework that includes cleanup standards and 

deadlines to ensure the timely cleanup of NRC regulated sites 

before licenses are terminated and the sites released for 

unrestricted use. The site Decommissioning Management Plan has 

allowed the NRC to increase its oversight of approximately 45 

previously contaminated sites to ensure satisfactory cleanup of 

low-level waste. Remedial action at two additional sites has 

been completed recently, allowing these sites to be removed from 

the Site Decommissioning Management Plan. Substantial cleanup 

progress has been made at five other sites. I believe we have 

been effective in communicating to licensees and the public NRC's 

expectations for timely and effective remediation of these sites. 

We are also conducting an enhanced participatory rulemaking 

to establish standards for residual radioactivity for 

decommissioned sites. This rulemaking includes workshops around 

the country in which industry and grass roots environmental 

groups have come to the same table to discuss the difficult 

issues associated with these standards. EPA is participating in 

this effort. We are hopeful that it ·will result in the generic 

- 7 -
38 

standards needed to plan and implement future cleanup and d~commissioning efforts in a more efficient manner. 

QytrlttiDq the Safe Ust of Hycltar Materials 

The NRC continues to be responsible for ensuring that 

civilian uses of nuclear materials in the United states are carried out in a way which will adequately protect the public 

health and safety, the environment, and the national security. The NRC licensees include existing nuclear power reactor 

operators and others who are primarily users of nuclear materials 

and fuel cycle facilities. 

The NRC regulates a wide variety of nuclear materials 

licensees across the United States. There are about 22,000 

licensed aedical, academic, and industrial users of nuclear 

materials subject to regulation. Of these, approximately 7,000 are licensed directly by the NRC; the other 15,000 are regulated 

by the 29 states that participate in the NRC Agreement States 

Program. Nuclear materials are used in large industrial 

operations such as the manufacture of reactor fuel, in the 

production of radiopharmaceuticals, in fabrication of consumer products such as smoke detectors, and in operations using small 

and large quantities of radioisotopes in over seven million 

medical diagnosis and treatment procedures annually. Given the 

large and varied use of nuclear materials throughout this _ country, the overall safety record has been very good. However, we have found some weaknesses. 

For exaaple, one of the most important uses of byproduct 

material is for aedical diagnosis and therapy. The last several 

years have seen increased Commission attention directed at the 

medical use prograa. Our regulatory program is directed towards 

assuring, in addition to worker and public safety, that the 

patient receives the dose of radiation or radioactive material 

that is prescribed by the physician. Occurrences of 

misadministrations -- primarily cases in which radiotherapy as delivered is different from that which is prescribed -- are not 

common, but are cause for concern about the effectivenes' of the 

program. 

In Septeaber 1992, staff presented to the Commission a manageaent plan for the aedical use prograa. Additionally, we plan to conduct two audits: an internal audit to determine how 

well we are illpl-enting existing programs; and an., independent audit to assess the adequacy and appropriateness of. the current 

regulatory fraaework for aedical use of byproduct material. We are also exaaininq the relationship between the Agreement State 

programs and the NRC-operated prograa. 

Wt would like to note that the NRC's jurisdiction covers only approxiaately 25 percent of the radiation therapy 

- 8 -
39 

treatments. The remainder, which involve identical radiation 

from different types of sources, are covered under a range of 

state regulatory programs. It is fair to ask if continuation of 

the existing scheme is the best way to use limited resources to 

achieve the goal of protection of the public. So we have been 

giving some thought to ways to address these issues. Among the 

options that come. to mind and that appear to warrant evaluation -- although this may not be an exhaustive list -- are (l) 

maintaining the current program, (2) limiting NRC's regulatory 

involvement to approval for use of sealed sources and devices 

containing byproduct material with all the states then regulating 

their medical use, (3) NRC's continuing to write standards and 

guidelines with all of the states assuming responsibility for 

licensing, inspection and enforcement, or (4) extension of NRC 

regulation to all radiation sources used for therapy, not just byproduct material. The last three options would require 

legislation. 

These and other approaches require careful ev~luation, and 

coordination before the commission would be in a position to make a decision on this matter, including any eventual recommendation 

to Congress for possible revision to our statutory authority. We 

plan to provide the Congress with an interim report on our efforts to come to grips with these issues by August 6, 1993. 

The NRC has also undertaken new initiatives in the 

regulation of major materials licensees and fuel cycle 

facilities. Last year, NRC's Materials Regulatory Review Task 

Force reported its findings and recommendations concerning 

deficiencies and needed improvements in the licensing and 

regulation of major materials licensees. The NRC is now responding to those recommendations by developing a better 

regulatory framework for licensing and inspection, and by 

designating project inspectors for major materials licensees. 

The NRC has also conducted a regulatory impact survey for fuel 

cycle and major materials licensees to determine the impact of 

NRC activities on these licensees, in order not to impose 

unnecessary burdens inadvertently. 

JIA!fAGI!MBMT AIID SUPPORT 

Approximately 30 percent of our budget request is for the 

day-to-day management of the agency and the normal "housekeeping" 

costs associated with keeping the agency doors open. However, even in this administrative arena, we have assumed. significant new responsibilities in the past few years which are putting 

greater pressures on our available resources. These include 

establishment of an Inspector General for NRC, increased 

participation in international nuclear activities, collection of 

significant additional license fees, implementation of the Chief 

Financial Officers Act, and consolidation of our headquarters 

employees. 

- 9 -
40 

IDttrpatiogal actiyititl 

Tht NRC participates in a number of international nuclear. safety an4 safequar4s activities both on a bilateral basis and 

through multilateral organizations like the International Atomic 

Energy Agency an4 the OECD Nuclear Energy Agency. We believe 

that our cooperative efforts in sharing safety information and 

operational experience serve to make commercial nuclear power 

safer throughout the world and enables the NRC to benefit from 

the advances in and experience of nuclear programs in other 

countries. 

Most notable this year are the expanded safety activities 

with the Republics of the former Soviet Union (FSU) and the 

countries of Eastern Europe stemming from the diplomatic 

initiatives at the Munich Summit and in Lisbon. The aid package offered at the Vancouver Summit also includes additional funding for safety assistance to Russian reactors. 

In addition to nuclear power plant safety, health and 

environmental challenges are other potential targets for future 

aid of the FSU. The NRC is playing a role in the development of a much needed integrated plan for overall assistance. 

We are now witnessing the growth of commercial nuclear power 

in Asian nations such as Japan, Taiwan, and south Korea, where u.s. vendors are actively competing for reactor sales, and ehe 

beginning of a new program in Indonesia. The NRC has technical 

information exchange agreements with 27 different countries; most 

recently we have concluded an agreement with Indonesia and 

renewed ones with China and Greece. These agreements provide a framework for bilateral cooperation on nuclear safety, 

safeguards, waste management and environmental protection; they 

help to open up communication channels with foreign nuclear 

regulatory organizations so that they have the means to create a regulatory environment similar to what we have here in the United 

States. 

LictDit lees 

Tht NRC is required by the Omnibus Budget Reconciliation Act 

(OBRA) of 1990 to collect approximately 100 percent of its annual 

budget fro. fees. That represents a substantial increase in fees 

from tht previous requirements to collect 45 percent of our annual budget. To be fair and equitable, the NRC,implemented the 

Act by assessing fees to essentially all of its applicants and 

licensees. As you may expect, the NRC has received severe criticism and complaints from licensees because of the increase 

in fees caused by the requirement to recover 100 percent of the 

budget. We believe there is basis for their complaints where 

they are being charged for services that do not directly benefit 

them. For example, the NRC is engaged in a number of 

- 10 -
41 

international activities, such as assistance to international 

organizations or countries which support u.s. interests. 

However, the costs of these activities must be recovered through 

fees assessed to NRC licensees. 

we are addressing these and other concerns in response to 

the Energy Policy Act of 1992 requirement for the NRC to review 

its policy of assessing annual fees under OBRA-90, solicit public 

comments on the need to change such policy, and recommend to the 

congress such changes in existing law as NRC finds are needed to 

prevent the placement of an unfair burden on certain licensees. 

After evaluation of the comments, we will submit a report to 

congress, including recommendations for any statutory changes 

that are needed. I would note, however, that preliminary 

indications are that to eliminate some of the concerns will 

require legislation. 

OPENNESS OF NBC'S PROCESSES 

A primary NRC responsibility is to ensure integrity, candor, 

and openness in all our activities. Ensuring openness and candor 

in our processes cannot be accomplished by public statements 

alone; it must be incorporated in how the NRC does business at 

every level. We feel that the NRC has made great strides in 

keeping the public informed about what we are doing and why, and 

about successes and shortcomings. We have solicited the 

participation of the public and have b~u~fitted from their 

contributions. As indicated earlier, the NRC currently has an enhanced participatory rulemaking effort under way to establish 

radiological criteria for decommissioning materials sites. We are opening some enforcement conferences to the public, we conduct open meetings to discuss each licensee's performance 

assessment, and the Regional Administrators now hold quarterly 

briefings for the public and the media. 

LBGISLATIVI PROPOSALS 

The Commission is most appreciative of the Subcommittee's 

interest in our seven legislative recommendations which.were 

introduced by Congressman Lehman as H.R. 2170. our testlmony will discuss the main aspects of each of the NRC legislative 

proposals. Six of the proposals would amend provisions of the 

Atomic Energy Act; the remaining proposal would amend section 206 

of the Energy Reorganization Act of 1974. 

1. Bphancinq Security at Nuclear Pacilities 

Ensuring the security of nuclear facilities is one of our important regulatory responsibilities. Three of the proposed 

amendments to the Atomic Energy Act seek to enhance our ability 

to deter theft of nuclear materials and sabotage of nuclear · facilities. 

- 11 -
42 

The first proposal would make unauthorized introduction of 

weapons, explosives, or other dangerous instruments at NRClicensed facilities a Federal crime. There have been an increasing number of reported· incidents where persons without 

authorization have brought firearms into protected areas of NRCregulated sites. While the motivations behind these actions 

appear to have been unrelated to the nature of the facility, 

these occurrences have highlighted the fact that there is no Federal law that imposes criminal sanctions against a person 

responsible for bringing a weapon to a nuclear facility. 

Enactment of this provision would promote the national 

policy of maintaining comparable safeguards for similar nuclear 

materials at DOE-owned and NRC-licensed facilities. Unauthorized 

introduction of weapons or other dangerous instruments at nuclear 

facilities owned by the Department of Energy is a crime under the 

Atomic Energy Act. 

The second proposal to enhance nuclear facilities' security 

would make sabotage of a nuclear facility during its construction a Federal crime if the action could jeopardize public health and 

safety during the facility's operation. Sabotage during the 

later stages of construction could go undetected because the 

inspections that would have discovered the sabotage may already 

have occurred. Here, also, there are no applicable criminal 

sanctions under Federal law. 

Finally, .we propose an amendment to the Atomic Energy Act to 

authorize guards at NRC-licensed facilities to carry firearms. 

Most importantly, the effect of this amendment would be to 

substitute Federal standards for state standards in determining the appropriateness of guards at these facility using deadly 

force to prevent theft of nuclear materials capable of being used 

for nuclear explosives. currently, state law governs the use of 

deadly force by guards at NRC-licensed facilities, and it varies 

significantly; in many jurisdictions, the use of firearms in 

these circumstances could result in state criminal prosecution. 

While this amendment was first proposed because of,~he need 

to protect against theft of strategic special nuclear materials, 

it would apply to any circumstance where successful completion of 

the crime would present an immediate and direct threat to the 

health and safety of the public. Recent events have convinced us that there is a broader need for this authority at NRC-licensed 

facilities. In addition, enactment of this provision would 

promote the national policy of maintaining comparable safeguards 

for similar nuclear materials and facilities in the public and 

private sectors. Guards at DOE facilities already possess this 

authority • . 

- 12 -
43 

2. Enhancement of NRC's Investigation and Enforcement Authority 

Three of the proposed amendments would enhance NRC's 

effectiveness in enforcing the statutory provisions that fall 

under our authority. 

We are proposing to amend an Energy Reorganization Act 

provision that requires the NRC to be notified of defects or regulatory violations at nuclear power plants and other NRCregulated activities, where such defects could create a substantial safety hazard. This notification requirement is now applicable only to individual officers or directors of the 

business that is involved. Failure to provide proper notice can result in a civil penalty being imposed on such individuals, but 

it is unclear whether the business entity itself can be 

penalized, or whether a non-licensee is even covered by the rule. 

We believe that the business entity should be held 

responsible, and that it should be accountable whether or not it 

is an NRC licensee. This view is in accord with the general 

approach to regulation under the Atomic Energy Act and, 

experience tells us, would be more effective in deterring future 

violations of the rule. 

In recent years it has become increasingly apparent that 

civil monetary penalties should reach all persons who violate NRC 

requirements, regardless of their status as licensees or no·rilicensees. For that reason we are also proposing to amend the 

Atomic Energy Act to make clear that the Commission has the 

authority to impose civil monetary penalties upon all persons 

subject to its authority who violate a Commission rule, 

regulation, or order issued under section 161 b., 161 i, or 161 o of the Act. Express authority for imposition of criminal 

penalties for most such violations is already provided by the 

Act. 

We also propose an amendment to the Atomic Energy Act to 

permit the NRC to obtain a judicially-approved, administrative 

search warrant to inspect the premises of a non-licensee.that is 

not part of the regulated nuclear industry. The warrant would 

allow the NRC to inspect a firm's premises without prior notice, 

if the NRC reasonably believes that action by that firm may be 

responsible for a violation that could potentially affect the 

public health and safety. Requiring use of the subpoena process, as is now the case, poses a high risk of destructi~n of evidence 

since notice and an opportunity to contest must be given. The 

administrative search warrant authority is needed to ensure that 

suppliers of NRC-licensees will not be able to deny agency 

investigators access to important information. 

- 13 -
3. lliaiQAtioa of ICI8 Report 

NRC's Advisory Committee on Reactor Safeguards is currently 

required to prepare an annual report to Congress on nuclear 

safety research. The preparation of the report has not proved to 

be an effective use of the time of ACRS members and the 

Commission's limited resources, so we are proposing to eliminate 

that requirement. Reports on significant nuclear safety research 

would continue to be provided to our congressional oversight 

committees under our general statutory responsibility to keep them informed. 

PliCAL YJARS 1114-1115 AUTRQRIIATIQI 

Our fiscal year 1994 budget request is $547.7 million, an increase of $7.7 million above fiscal year 1993--less than a 2\ 

increase. our fiscal year 1995 budget estimate is $551.8 

million, less than a 1\ increase above our request for fiscal 

year 1994. 

Well before submitting our request to OMB we undertook an aggressive, thorough review of our programs. This review 

resulted in a streamlined budget request at less than the rate of 

inflation even as we undertake new responsibilities. We are budgeting increased resources to keep pace with industry activities associated with reactor license renewal and the safety 

reviews and inspections associated with issuing new power reactor 

licenses, and within our management and support program we have 

requested funds to strengthen our financial management systems, 

where recent IG reports have indicated the need for improvement. 

In addition there are programmatic increases needed to fund some of our new responsibilities for regulating the United States 

Enrichment Corporation's facilities, as required by the Energy 

Policy Act. However, we found that by following the policy I 

discussed earlier, we could make offsetting reductions in current 

operations and in reactor research without compromising our safety responsibilities. This budget request complies with the 

Administration's Executive Orders and cost-cutting init~atives. 

The NRC continues its efforts to identify better ways to 

accomplish our mission. These efforts will allow us to respond 

to future needs while minimizing the growth in resource requirements. For example, the Commission has determined that 

changes in workload will allow for the closing of, the Uranium 

Recovery Field Office in Denver, Colorado. The work which is 

currently performed in that office is expected to decrease and 

the remainder will be carried out by personnel in our Dallas, 

Texas, regional office as well as staff in headquarters. This 

action will result in savings to the agency while continuing the 

- 14 -
45 

appropriate level of effort in this area. Also, we currently have under review the possible consolidation of our Western and 

South West regions. The review has been undertaken in 

recognition of the changing workload as the number of reactors 

and licensees have declined in the West. These reviews help to ensure the best application of available resources and will help us in our effort to meet the Administration's goals for continued resource reductions. 

COHCLUSIOM 

in conclusion I would like to reiterate that the NRC is 

committed to meeting its responsibilities for the safety of 

today's operating reactors and other NRC licensed activities. We 

have tried to stay a step ahead of events; by so doing we have 

been able to undertake additional responsibilities and invest in 

those programs which affect the future -- streamlining the 

regulatory process, renewing reactor licenses, certifying 

standard reactor designs, and managing waste disposal -- while 

slightly reducing our budget in real terms. We will continue to 

do all of this in a transparent manner that facilitates public 

understanding of our regulatory process. 

The details of our budget request for fiscal year 1994 and 

budget estimate for fiscal year 1995 have been provided to your 

Subcommittee. The request and estimate are included as an appendix to this testimony, and are summarized in two charts: 

Chart 4 summarizes our budget in terms of NRC's principal program 

objectives and illustrates changes to our program requirements; 

and Chart 5 depicts a gross allocation of resources to our two 

principal programs. 

In the Commission's view this program is necessary to ensure effective regulation of an industry which touches virtually every 

facet of American life. 

Mr. Chairman, this concludes our prepared statement. My 

fellow Commissioners and I will be pleased to answer any 

questions that you and the Subcommittee may have. 

- 15 -
46 

A P P E N D I X 
Forced Outage R

Annual Industry Av

1985- 1992 

Average Forced Outage Rate (%) 

12-

11 11 

10- 9.5 9.9 

a- 7.9 

6-

4-

2-

0.------.------~------.------.-

1985 1986 . 1987 1988 1989 

Year 

Note: Excludes plants in extended shutdown. 
Automatic Scrams Wh

Annual Industry Av

1985- 1992 

Average Number of Reactor Scrams 

6-

5.3 

5 - - ~ 4-

'~ 

3-

2- 

1 -

0 

1985 1986 1987 1988 1989 

~ar 

Note: Excludes plants in extended shutdown. 
Significant Eve

Annual Industry Av

1985- 1992 

Average Number of Significant Events 

3-

2.4 

2-

:1.7 

1 - .9 0.9 

0.------.-------.------.------.--

1985 1986 : 1987 1988 1989 

Year 

Note: Excludes plants in extended shutdown. 
U.S. NUCLEAR REGULATORY COMMISSION 

BUDGET SUMMARY 

(Dollars in Millions) 

FY 1994 B

FY 1993 Current 

_!!.ill_ Services R

REACTOR REGULATORY PROGRAMS 

Reactor Safety and Safeguards Regulation $163.0 $5 . 1 

Reactor Safety Research 100.6 2. 7 

Reactor Special and Independent Reviews, 

Investigations, and EnforceMent ~ ~ 

Subtotal $294.6 $8.7 

NUCLEAR MATERIALS REGULATORY PROGRAMS 

Nuclear Material and Low Level Waste 

Safety and Safeguards Regulation $57.6 $1.9 

High-Level Nuclear Waste Regulation 21.1 ~ 

Subtotal $78.7 $2 .4 

IIAHA&EMEHT All) SUPPORT 

Nuclear Safety Management and Support $162 . 1 $9 .7 

Inspector General ____!,_§. _.1 

Subtotal $166 .7 $9.8 

TOTAL $540 .0 $20.9 

94GB/TESTCHT .4-5 
REACTOR IIIII&ET 

Reactor Regulatory Progra.s 

Manage.ent and Support* 

Subtotal 

IIJCLEAit MATERIALS IUHiET 

U.S. NUCLEAR REGULATORY COMMISSION 

BUDGET SUIIWIY 

!Qollars in Millions) 

FY 1994 Budaet 

&n2lm1 .emm 

$294.8 54 

ill..! ...l! 

$426.4 78 

Nuclear Materials Regulatory Progra•s $83.9 15 

Manage.ent and Support* ...11....! _2. 

Subtotal $121.3 22 

TOTAL S547.7 122 

*Assigned portion 

94GB/TESTCHT.4-5 
52 

Mr. LEHMAN. Thank you very much for your statement. Let me 

just say that there is a vote right now and Mr. Thomas and I think 

we will go make that vote. We will be back in ten minutes and 

then we will proceed with the questions at that point. So we will recess for ten minutes. 

Thank you. 

[Whereupon, a brief recess was taken.] 

Mr. LEHMAN. The hearing will resume. 

Mrs. Vucanovich will be back shortly, but I think I will proceed nonetheless with some questions that I have. 

First, just let me express my intention to cooperate as fully as 

possible with you, and I certainly appreciate the cooperation I and 

my staff have received thus far. We certainly have every intention 

of moving forward with the legislation in that spirit. 

I do want to get into a couple things here, some of which were 

brought out in the chairman's opening remarks. And you did dwell 

at length on the issue of the search warrants that are in 2170. And 

I think having the search warrants in this bill, by the way, does 

necessitate a referral to the Judiciary Committee. So it is going to 

come under very careful scrutiny. And any time we do something 

like this, it raises a lot of red flags and draws attention. 

And I wrote down your words, Mr. Chairman. You said this was 

a high priority, but you also felt it would be a very limited process, 

used only in certain circumstances. And you even quantified that, 

the number of circumstances you think it might have been used in 

the last year. 

And I guess what you're saying, you're saying that the reason for 

this is because the existing process takes too long, it has too much 

opportunity in the process to undo it, I guess, or for it not to be 

effective. 

And for the record, I think I'd like for you to elaborate on that 

a little more for us. 

Mr. SELIN. Yes, sir. 

First of all, I would just like to stress a couple of points. We're 

talking about judicially approved search warrants. We need to, in 

each case, appear before a judge to get the search warrant. We 

would have to justify the requested action and look only for material directly related to the basis for the search warrant. 

There are precedents for this case. There are other federal agencies that have statutory search warrant authority. The Department of Transportation and the Food and Drug Administration. The 

FDA, I think, is· a pretty good analogy to this situation. 

We are talking about-there are two alternatives available to us 

today. We can go for a civil subpoena or we can go to a U.S. attorney to ask for a criminal search warrant. 

As a practical matter, you can not get a civil search warrant, 

even going through the Department of Justice, because the courts 

will not grant a civil search warrant unless it is specifically authorized by statute. They say, use a subpoena; do not use a search warrant. 

The problem with a subpoena, to summarize, Mr. Chairman, is 

not only that it is public but that it takes a long time and therefore 

whatever it is we hope to find on the search warrant could easily 

be destroyed or moved to some other place and not be available. 
53 

The problems with the criminal approach are, basically, two. 

First, of course, the burden of proof is much higher in a criminal 

case. We are looking for health and safety violations, not necessarily criminal violations. But the ~practical problem is that we 

have to go to a U.S. attorney. The U.S. attorney has to satisfy himself that this is a reasonable situation. U.S. attorneys don't know 

the Atomic Energy Act, they have many other priorities. Even if we 

pass that burden, then the documents must be served by a U.S. 

marshal, which is a further delay and a further scheduling prob- lem. 

And it is just not worth doing. I mean, we have found that it's 

just not practical to use the Department of Justice criminal process. So we are really hamstrung m these few cases. 

Mr. LEHMAN. That logic in a way could be extended to all uses 

of search warrants. And I just wonder what the specific need is for 

it here. 

In other words, I think the case you're going to have to make is 

the harm being done poses a potential threat to the public such 

that you need this additional strength in the warrant process. Mr. SELIN. I think that's correct. We agree that that's the point 

that is involved. 

In almost every case, we are interested in going to manufacturers of safety-related equipment. We are concerned that they are 

substituting non-safety related equipment or do not do the internal 

quality control that they have told us that they do. These are clearly health and safety issues that we have in mind. 

There may be-in one case, there were gauges for water levels 

in reactors. We had heard rumors-we had heard allegations that 

the test results that we were getting were just the successes and 

that there were failures. And by the time we were able to get access to the manufacturer's records, they were not there. Now, 

maybe there were no failures or maybe the records were destroyed, 

but we just couldn't get at these. 

We have had a major problem with counterfeit parts. The Department of Justice was just successful about a month ago in winning a conviction against a manufacturer of counterfeit parts. These are parts that attest to have a reliability consistent with 

what we require, that the industry requires for power reactors. 

But, in fact, they were just the everyday parts. And I am sure you have a hardware store that sells only things that work, but a lot of us have had experience witli the -kin<i · of 

things you get on a commercial level in terms of just nuts, bolts, 

fasteners, gauges, et cetera, which are not adequate to the nuclear 

power area. 

We think the standard of reliability that we require is called for 

and do not feel that we can completely assure the quality of the 

parts without, in the very odd case, being able to go in and get the 

records or the-or get access to the manufacturing equipment or 

the rejects that have come along the way. 

Mr. LEHMAN. Another controversy that stems from the hundred 

percent recovery requirement concerns the necessity for the Commission to charge its licensees the cost of activities that-activities 

that are not, I guess, directly attributable to the licensees. 

Mr. SELIN. Yes, sir. 
54 

Mr. LEHMAN. Those include international nuclear safety support, 

like the former Soviet Union, support for agreement states that 

have taken over certain NRC material regulation responsibilities, 

such as licensing medical users and low-level waste repositories. 

I realize that you are reassessing your fee structure now. I am 

wondering if you can tell us anything about how you foresee this 

problem being resolved. 

Mr. SELIN. Yes, sir. 

I think the two examples you brought up are actually quite different. In the first category, I would put those international activities that we do which are not part of our research program-in 

other words, we do some international research, because it's just 

cheaper to do the work in Japan than the United States. That 

clearly benefits our licensees. We put that aside. 

We talk about assistance as not reimbursed by AID. We're talking about $8 million a year of international programs, $5 million 

direct, $3 million in overhead that goes with that. That's a 

nontrivial amount of money. It's about one and a half percent of 

our annual budget. 

Other activities that fall in that category are services we provide 

to federal agencies which are not reimbursable. For instance, we 

have been providing quite a bit of preparation to prepare for the 

United States Enrichment Corporation that's been done for the Department of Energy that's not reimbursable. Things like that areyou could question whether that's of general interest to the industry or whether that should be outside the base. We're probably talking about roughly three percent or so of our 

expenditures that could be questioned. 

My own personal view, since that's what I read you last, it's not 

fair that this be put in the base. The federal government has a very 

strong incentive not to make a lot of exceptions for user fees, and 

that has to be weighed by somebody else. But from our point of 

view, we don't think it's fair to ask the licensees to pay this. Also, 

having a hundred percent reimbursable puts us on our best behavior, and that's good. But if we weren't able to provide assistance 

to the executive branch's work with the former Soviet Union because of this, that would not be good. 

As far as the agreement states go, that's clearly arguable, but it's 

a different kind of a situation, because the Congress clearly intended that the agreement-that states have the authority to carry 

out a lot of this activity, the materials activity, at the state level 

to integrate it with their other health programs and their other radiation control programs that we don't regulate. They have the 

benefit of our general advice and our technical assistance. They do 

get-they do not pay for the oversight that we provide for them. 

And that is true. 

On the other hand, that was clearly intended as an inducement 

for the states to do this and to offset the costs that they have which 

we would otherwise have to bear if we had to do the inspections 

ourselves. 

The total amount of money that we're talking about is not a 

share of the materials program. I think the total amount of money 

we're talking about is the actual cost of our state regulatory program, which is less than $2 million, I mean the part that we would 
55 

look into, say, this program would not exist were it not for the 

agreement state program. 

You could argue that that's also something that's done on the 

federal basis. I think that's part of the general health and safety of the materials business. 

Mr. LEHMAN. Well, if we reduced the recovery requirement to, 

say, ninety or ninety-five percent to cover activities that are in the 

national interest but not attributable to the licensees, do you have 

any_ suggestions about how we make up the difference? 

Mr. SELIN. It would have to be done out of appropriated funds. 

Actually, as a matter of fact, you would-the way our budget 

works, of course, is we don't work on a bottom line. The Congress appropriates our money and then we collect reimbursements and 

send them to the Treasury at the end of the year. So as a technical 

matter, you would continue to a:ppropriate money to us but you would change our legislation to e1ther not require a hundred percent reimbursement or to allow us certain accounts that did not 

have to be reimbursed. 

And from an appropriations point of view, technically you would 

see no difference. On the other hand, the 302[b] allocations that are 

given to the Appropriations subcommittees would have to be 

changed to reflect that the reimbursement would be, say, ninetyfive :percent instead of one hundred percent. 

If m fact, at the end of the year, we fail to collect a hundred percent, we don't have to give that money back u!>; we're supposed to 

try to collect a hundred percent, but we don t have a profit and 

loss--

Mr. LEHMAN. We would have to make up the difference in the 

budget. That's the bottom line. 

Mr. SELIN. Yes, sir. It would be a loss of revenue equivalent to, 

say, five percent of $500 million, say a $20 million or $25 million 

loss of revenue. 

Mr. LEHMAN. Also, I would like to hear your response to some 

of the complaints we get from some of the small nuclear materials 

users like the medical community that the fees you assess are too 

high and don't reflect the service being performed for the fee. Mr. SELIN. Well, the problem is the fees do reflect the service 

being performed. But you can argue that the service isn't worth 

that much money, we shouldn't be spending that much money for 

it. 

Our accoun~ let's start with the accounting. The IG has ed about it. He said, our accounting is not set up 

for a fee-billing agency. I was the chairman of a consulting company for eighteen years; I am personally quite aware of what kind 

of accounting you need if you're going to require reimbursement for 

your services. We don't have the pro~r overhead pools. Everything 

1s either overhead or direct, we don t have the more detailed overhead pools of,. say, :people who are in a materials area can't be 

charged to a single licensee but they shouldn't be charged to reactor people or vice versa. 

So we have to fix that and we are in the process of fixing that. 

But all that will do is move some costs from one licensee to another 

licensee. The great value of the fee system is we take a look and 

we see how much we are charging these people. Where we see fees 
56 

that seem out of Kilter, intuitively we go in and we polish the process and say, do we really need to spend that much time in regulating certain of these licensees. And on the materials side, we've 

found a lot of small cases where we don't. 

Just as an example, on the reactor side, we have a provision 

called 50.59. It says a reactor licensee can make changes of a certain kind, provided he's willing to defend those in inspection. He 

makes the changes, he claims there's no safety impact, and we do 

an inspection when we do the inspection. And if he's right, he's 

made the change. 

We don't have that provision on the materials side. We probably 

should. We should allow a licensee to change the name of his radiation safety officer without getting a license amendment. And when 

we . audit that person, if that person is not qualified, he will be 

fined, rather than· have to make an amendment in advance. 

There are a lot of these small changes that we're starting to 

make that without the inducement of license fee, we did not make. 

On the other hand, we do have limitations for small businesses. 

If you're small enough, you can pay a $400 annual fee. The next 

level is $1,800. In some of the examples that Congressman Thomas 

set forward-we don't audit your books. This is a self-assessment. 

You have to attest to us that you have-you're a small business. 

And then once in five years or once in ten years we take a look 

at the books to see if it's true. But if the licensee does not come 

forward, he does not get the small fee. 

And in a couple of cases that Congressman Thomas sent over, we 

sent people notice saying that they were eligible for the small fee 

and they never applied for it. They get a lot of mail and I'm sure 

they missed it, but there's not much more we can do except drop 

the fees, reduce our actual efforts, and then continue to communicate to make sure that people take advantage of the breaks that 

are available to them. 

Mr. LEHMAN. Thank you. Let me move to another issue. 

A good deal of 2170 is dedicated to physical safety at the plants 

and responding to the potential for terrorist activity. There has 

been a lot of concern recently. As you know, Chairman Markey, 

Chairman Sharp, and I signed a letter expressing some of our con- cern in the need to take some action for physical protection of the 

facilities following the incident at Three Mile Island and the bombing of the New York Trade Center. 

And I guess I'll pose the question this way. Why hasn't the Commission moved more aggressively to secure the perimeters of our 

facilities, and why haven't we gone forward with the construction, 

for instance, of antitruck barriers to prevent a bombing incident 

from devastating a facility? 

Mr. SELIN. I happen to think we are moving very aggressively. 

Now, the last time I appeared before Congressman Markey, he 

pointed out that you can either have reenactment or reconciliation, 

those are the only two choices in human relationships. And I would 

prefer reconciliation to reenactment. I would hope not to have to 

ask the question about why we didn't do something two or three 

years ago. I could defend it, but I don't think that's particularly 

useful. 
57 

But since the truck bombing and the entrance at TMI, we are 

moving as quickly as our regulations permit us to move. We do not 

believe, and I do not believe, that there is an imminent threat to 

health and safety. There is no intelligence, there is no reason to believe that you absolutely have to do this tomorrow, etcetera. 

We believe that an improvement in health and safety is justifiable according to our so-called "backfit" rule, which is where you 

have to do a cost/benefit analysis and come forward and say we 

think that this is called for. Now the staff hasn't reported to the 

Commission. We're moving as fast as we can to do the work, to do 

the analysis, to get the data together, and to justify it. 

But it would not ~ surprising if.· the conclusion is tha. t something should be done to strengthen tlie perimeters. But not as a question 

of urgent health and safety, more as a question of good management based on a cost/benefit analysis. 

Our regulations, and I believe common sense, require that, like 

anything else, to be put in a notice, to be published for comment, 

analysis has to be reviewed by people who are effected, et cetera. 

We are well on the way to a very fast-moving step. Now, staff may 

decide to do that, they may say further study is required, but we 

are on a schedule that will allow resolution of this issue according 

to our rules of openness and public comment and justification of 

steps that require increased spending on the part of the licensees 

that's quite consistent. 

If I might just say one other thing? One of the arguments that's 

been raised 18 if you can put a barrier around a plant for a half 

a million dollars or a million dollars, why don't you do it? I think 

that's a very good argument. If the answer were, it's going to cost 

fifty or a hundred million dollars, I would feel differently, and 

that's prima facie F.OOf that the price matters. 

In other words, 1t's not a question of imminent health and safety. 

It is a cost/benefit analysis. And so we have to do the cost/benefit 

analrsis. We can't just arbitrarily order people to do things because 

our Judgment is that a little money is worthwhile and a lot is not. 

So we are following the rules and we are doing it as aggressively 

as I believe we are permitted to do so. 

Mr. LEHMAN. Thank you. 

Mr. Allard? 

Mr. A.l.LARD. Thank you, Mr. Chairman. 

I am sorry I missed some of the earlier part of your testimony. 

I guess I share some of the Chairman's concerns about your ability to go in and do a search and whether you should have those 

extended powers or not. Can you share with this Committee an example, maybe a hypothetical example, of where you would feel it 

would be necessary to use those powers? 

Mr. SELIN. I could do a little more than that, sir. First of all, I 

would like to stress that the power we are asking for is the authority to ask a judge for a search warrant. It is not to issue one ourselves or to go in ourselves. And I can give you a couple of examples in the past. 

In one case, we wanted to inspect the premises of a company 

making cement and vout used in nuclear power plants, because we 

had received allegations-and, as you all know, allegations are a 

terribly important source of safety information. We had received al-
58 

legations that the product was substandard and the company falsely certified it as meeting industry standards. 

When our inspectors arrived, the company challenged our authority to inspect. They wouldn't let us on the grounds. So we had 

to go back and get a criminal search warrant. But it took so long 

and they had so much notice, by the time we got in there we found 

nothing. 

Now, maybe there was nothing to be found, but it took so many 

months that there was plenty of time to destroy any records that 

were available. 

A second example is a company that was suspected of falsifying 

material test reports on such things as stainless steel bar stock and 

plates supplied to licensee vendors. We were denied access to inspect. Our inspectors show up. They're not licensees, the people are 

not licensees, they're vendors to licensees. They wouldn't let us look 

at their records. 

So our office of general counsel discussed things with their attorneys, an agreement was reached, and we got access, but it took us 

over a week to get this access. And when we got there, we found 

nothing. Maybe there was nothing there, but a week was plenty of 

time to destroy the records. 

We have about two or three cases a year in which we have reason to suspect there is something there that we don't get to. In 

other words, we have reason to suspect, we're denied access on a 

friendly basis, we eventually get in, but it takes weeks or months 

to get in, and we find nothing. 

Mr. ALLARD. I have a couple of questions, since Congressman 

Vucanovich isn't here, that I would like to ask on her behalf. 

One of them is, what steps if any does the NRC plan to take regarding the GAO's conclusion that characterization activities at 

Yucca could take up to 13 years longer to complete than expected. 

Mr. SELIN. You have to understand-or I have to put on the 

record, to be more precise-what our responsibilities are. Our responsibilities are to respond to the Department of Energy program, 

not to independently set schedules or any other items. We've done 

two things. One is we've done a high-level review in 1989 in which 

we came up with two major concerns and I forget the exact number, but about two hundred minor concerns. 

The Department of Energy has answered the two major concerns 

that we have and they've fully resolved a third of the minor concerns, and they continue with the other pieces. 

Now, as far as scheduling goes, we could look around as well as 

anybody else and see that they're not going to make the schedules 

that were originally set up. We haven't seen the GAO report, but 

we have taken this into account. 

We considerably cut back on our program to develop a so-called 

licensing support system, which is an extremely ambitious system 

to put onto computer records all documents that will eventually 

have to be used in a licensing agreement. We have cut way back 

on the pace of that. We have cut way back on the pace of some 

other activities. 

Our objective is not to be on the critical path, and we will not 

be on the critical path on any of these points. We try not to be too 
59 

far ahead,. really from the point of view of economy rather than 

anything else. 

But if your question or Mrs. Vucanovich's question suggests what 

actions are we taking to rectify the situation in the GAO r:~~· that's not our job, it's not our responsibility~ and we're not t · g 

any such actions. 

Mr. ALLARD. Have you looked at-so you have not seen the GAO 

report? 

Mr. SELIN. We have not seen it, no, sir. . Mr. ALLARD. Why haven't you seen it? 

Mr. SELIN. I think they probably send it to the Department of 

Energy before they send it to us. 

Mr. ALLARD. But you're aware that it exists? 

Mr. SELIN. We've seen pieces of it. There were early findings. We .have had interviews with the GAO people. We're generally aware 

of what's in the report. 

I've forgotten the precise title, but the Department of Energy has 

its own review group that looks at the high-level waste program, who have made many of the same findings. They have briefed us 

at an official Commission meeting. We're generally apprised of the 

pr()gress. 

We have a C01.1J>le of people who are resident inspectors who are 

on the site at Yucca Mountain, so we are generally apprised of 

their progress. It's just that specific document we have not seen. 

Mr. ALLARD. Would you, for this Committee, review that GAO report and submit some written comments in regard to that report? 

Mr. SELIN. We will be glad to do so, but we will do so within our 

charter, and I hope you won't be disappointed, because our charter 

is very limited on-- . Mr. ALLARD. W~1 if you will explain that to Congressman Vucanovich, I think mat would help. 

But if you would look at the GAO report and then put some written comments in your response, I'd appreciate that. 

Mr. SELIN. Yes, sir. 

Mr. ALLARD. The other question is, given that DOE has admitted 

in budget briefings that they will not be able to meet the 2001 date 

for filing a high-level waste repository license with the NRC, what 

type of delay would this represent for the NRC in processing the 

application? And then, the second part of the question, would a 

delay in the submittal affect staffing and those type of administrative procedures? 

Mr. SELIN. To answer both your questions, we've already taken 

into account what we think is the most reasonable estimates of 

DOE's schedule. We have very good day-to-day working relationships with the staff. We know what they're doing and our budget already takes into account-it's not so much-1 can't say it's built 

on 2005 instead of 2001. We look at their short term activities, we 

see what they're doing, and we make sure we have adequate staff 

to support in the proper regulatory sense their activities. So our 

budget is already built on their day-to-day schedules. 

There is another area I should go into. It's not a budget area, but 

it's a question of confidence. The Commission made a finding called 

a High Level Waste Confidence Finding renewed two years ago that said that the complex of activities that deal with spent fuel 
60 

in the United States are adequate to give us confidence that nuclear power plants can continue to operate and can continue to generate additional spent fuel. 

So from that point of view, we also very closely monitor the activities at Yucca Mountain, progress or lack of it toward monitored 

retrievable storage facility, and the short term storage on the 

power plants themselves. We are very comfortable that technologies are available to give very high confidence in storage of 

spent nuclear fuel for a very long time. The dry fuel storage seems 

to be good for as long as we can see, fifty years to one hundred 

years. We've used the phrase "a hundred years." 

So at the same time as we work with the Department of Energy 

on what they're doing on Yucca Mountain, we continuously and 

continually upgrade our estimates of the overall safety of the handling of the fuel in the storage area and whether progress is being made in better storage techniques to accommodate the apparent 

slip in the availability of Yucca Mountain. We are comfortable that 

such progress is, in fact, being made. 

Mr. ALLARD. To change directions completely, and this is my own 

question now, in hearing your response to the first question that 

I asked, the thought crossed me that probably OSHA inspects these 

facilities too, do they not? 

[Pause.] 

Mr. SELIN. Oh, I'm sorry, you're back to the business with search 

warrants? 

Mr. ALLARD. Yes. 

Mr. SELIN. Oh, okay. Let's start over again. Yes, sir. I was completely prepared to answer the wrong question, and it won't be the 

first time, either. 

Mr. ALLARD. In regard to the search warrants, the first question that I talked about, OSHA also inspects these facilities, don't they? 

Mr. SELIN. Sometimes. 

Mr. ALLARD. Have you looked at what they are inspecting and 

what you are inspecting? There could be a duplication. You could 

be asking one thing and they could be asking another--

Mr. SELIN. No, sir, first of all I'm talking about people who are 

not our licensees in general. We're talking about suppliers to the 

nuclear industry, not licensees. 

Mr. ALLARD. Okay. 

Mr. SELIN. As. a practical matter--

Mr. ALLARD. But you want permission to go in? 

Mr. SELIN. Yes, sir. 

Mr. ALLARD. Have you ever worked with the OSHA? 

Mr. SELIN. It's not-we're not looking at the health and safety 

practices of these manufacturers for their own employees; we're 

looking to see if the equipment, the goods that they produce, have 

been certified for use primarily in nuclear reactors under the extreme conditions of heat and temperature in nuclear reactors, and 

that these will be safe. There's no overlap at these facilities. 

There is overlap in our inspections of our own licensed facilities. 

When we do an inspection, say, of a fuel fabrication plant, we look 

at all federal rules. We look at environmental questions, we look 

at occupational health and safety questions, we look at radioactive 

safety questions. 
61 

So in those areas, there is need to coordinate, which we do. There 

is need to reduce overlap. But those aren't the places that we need a search warrant. 

I couldn't flat out say that we would never use or administer a 

search warrant at a licensee, but that's not the place we care 

about. We care about people who are supP.lying goods to the licensees; not the licensees themselves. And if there were concerns in 

this area, we would be-in fact, I will now make a commitment 

that we would not even ask for such a search warrant until we had 

issued regulations subject to public comment on how they would be 

used andnow they would not be used. 

Mr. ALLARD. Well, I just think that generally we have a problem 

with anybody in business, just generally speaking, with duplication. You have one agency that comes in-particularly if you get a 

highly regulated industry-where one agency comes in and makes 

one stanaard and another agency comes in and they don't talk to 

one another, they don't know what each other's doing, and the 

guy's in a situation he can't comply with. 

Mr. SELIN. Yes, sir. 

Let me just assure you that there is zero possibility of overlap 

in this situation. There is only one place, and that's not where we 

propose to use these search warrants, and that would be for somebody who is producing material for, say, a medical licensee who 

would have to worry about us and the Food and Drug Administration. And that's maybe one tenth of one percent of what we do. And 

we could set in our regulations situations such that that just 

wouldn't happen. The FDA has sufficient authority to do these 

things themselves. · · We care about providers to the nuclear power reactor industry of 

safety-related eqllipment and supplies. Mr. ALLARD. Thank you, Mr. Chairman. I don't have any other 

questions, and I yield back the balance of my time. 

Mr. LEHMAN. Thank you. Mrs. Vucanovich, do you have any additional questions? · Mrs. VucANOVICH. Thank you, Mr. Chairman. I apologize to the 

Chairman for not being here for all of your testimony. I'd like to 

simply submit some questions for the record, and appreciate all of 

you being here. 

Thank you, Mr. Chairman. 

Mr. LEHMAN. Thank you. And, without objection, we will allow 

any members to submit questions and ask you to respond to those 

promptly. 

[EDITOR'S NOTE.-See appendix.] 

Mr. LEHMAN. Let me just briefly touch on one other item, and 

I will submit more questions to you on this. 

But I just wanted to touch on the contract management issue 

that was brought up in your IG's report that criticized your contracts with the Department of Energy. And I guess my question is, 

is there something inherent in the way these things operate that 

makes them cost so much money? 

And then, also, I note that the GAO attributed a lot of the problems at the labs to cost plus overhead contracts. And I wanted to 

know if that's typical of the way the NRC contracts deal with the 

labs. 

72-560 0 - 93 - 3 
62 

Mr. SELIN. Yes, sir. · First, let me deal with the IG finding, which is much more lim'-

ited. Then I will try to go to what . I believe is your real concern, 

which is in fact our real concern. 

The IG criticizes us not for spending too much or too little money 

on our DOE contracts, but they criticize us for not properly making 

sure that the bills that were paid were for the amounts that were 

authorized along the way. There was no question that they did the 

work that we're paying them for. 

But what happens is we have a technical person who approves 

at the end of each month, looks at the DOE financial ledgers, looks 

at their time cards, says, yes, we did ask for and we did get thirtyeight hours of work at $96 an hour. Then at the end when the bill 

comes in we were not going back and looking at these justifications 

to see if the amount of work that was justified added up to the 

amount of work that was done. 

We did monitor the contracts, but we didn't close the loop at the 

end. As the IG himself said, and I quote from page four of his report-you'll have to trust me it's the right paragraph, because it's 

a good quote, "NRC management took prompt and decisive actions 

to correct these deficiencies." And, in fact, we have. 

But this doesn't really go back to what I think is troubling you, 

and which is troubling us, which is the overall costs of these services. 

About a year ago, Commissioner Remick and I went down to 

OMB-I guess it was about a year and a half ago. And we expressed to OMB, to the parts of OMB that dealt with the Department of Energy laboratories, our concerns that as their weapon business went down that their overhead would go up and that we 

would end up swallowing more of the overhead for the s~e 

amount of work, because we would be a larger proportion of the 

total work done in these laboratories. 

After, we found out that OMB had no idea of what was happen- ing on this situation and if we wanted to worry about this, we had 

to worry about it ourselves. So we set up an internal procedure between our Office of Research and our comptroller to compare the 

costs that were being charged over time from the laboratories and 

from laboratory to laboratory. 

We didn't find much bothersome over time. ln. fact, the rates 

were not going up very fast. But we did find enormous differences 

from laboratory to laboratory for what looked to us like comparable 

work. And what we have tried to do-we're not as good at this as 

we should be, but we've tried to put work where we have some 

choices to the laboratories that seem to be giving us fairer prices. 

But to us, even when we accounted for the way that one laboratory will include secretarial support or material support and another one will not in the hourly rate, we saw then and we still see 

large differences without, in our opinion, justification for the quality of work or anything else from one laboratory to another. And 

we have tried to adjust our work to get more economical prices. 

But we are a very small part of their business and we don't think 

if we're their only market that they're going to fix that problem at 

the laboratories. 
63 

Beyond that, you get into the internal management of laboratories, and I can't answer that, what goes on inside. Mr. LEHMAN. Thank you very much. 

I would certainly allow any other members of the Commission, 

if they want to add anything at this point, to feel free to do so. We 

don't want you to just feel like potted plants there. 

Mr. SELIN. If you ever have to chair a Commission meeting, sir, 

you would know you don't have to worry about the reticence of the 

Commission members. [Laughter.] 

Mr. LEHMAN. Very good. Well, thank you very much. We appreciate your testimony, your 

extensive response to questions, and we look forward to working together in the near future here. Thank you. 

Mr. SELIN. Thank you for your support, Mr. Chainnan. 

Mr. LEHMAN. The hearing's adjourned. 

[Whereupon, at 12:05 p.m., the hearing was adjourned.] 

APPENDIX 

MAY 2'7, 1993 

ADDITIONAL MATERIAL SUBMITTED FOR THE HEARING RECORD 

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11.~. ~1ousr of l\rpresrntatibrs 

~ommitttt on 

31atural ~•oum• 

Wasbin~~ton, Jl( 205\~20\ 

June2, 1993 

Hon. Ivan Selin_ Chairman 

U.S. Nuclear Regulatory Commission 

Washington_ D.C. 20555 

Dear Chairman Selin: 

~~ ..... ~~~ ..,... ..... --.vrAM ............ 'IUCMIOYIOf..IIIIVAOA ILTON -.&Hl.T.~ 

IIICIMIIITF. SIIIfM._._ 

--- ..ll!WIJ..IMIICAN.A.f'I*IS&U 

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--W I'OMMI.~III 

JAYDICI:IY,IoiiUoNU!I 

--.. ---

___ 

.. __ 

CVIMkVALIUIM 

NP\IIIUCM n-..no. 

Thank you for your very helpful testimony before the Subcommittee last week 

on H.R. 2143 and H.R. 2170. I am optimistic that we will be able to move these 

bills this year. 

To help us compile a more complete record on the issues in the hearing, I would 

appreciate receiving your responses to~ enclosed written questions from Rep. 

Vucanovich and me no later than June 28. 

enclosures: Questions from Rep. Vucanovich 

Questions from Chairman Lehman 

(65) 

Sincerely, 

E~L£__ Chairman 

Subcommittee on Energy and 

Mineral Resources 
66 

Post-Hearing Questions for NRC from Chairman Lehman 

1. In reaponse to a queation concerning the Commisaion'a reaearch contracts 

with DOE laba, Chairman Selin atated that the NRC had noted that there 

were large difference& in charges for the aame work among the various laba, 

and that the Commisaion was controlling coats in part by favoring the leas 

costly labs. Please provide some detail on theae coat differences among the 

l&ba, iJlcluding a few specific ~plea deacribing the requested work with 

the bid& that were offered by the laba. 

2. The IG reports that cloaing out contracts and performing required 

evaluation& at the concluaion of contracted work ia a big problem for the 

Commisaion. Please explain why that is the case. 

3. The IG notea that NRC management has taken decisive action& to correct 

contracting abuaes with the DOE laba. Please briefly characterize the kinds 

of actions that have been taken. 

4. One of the major preoccupations of the Commiaaion during the past two yean 

has been the iasue of Thermo-Lag fire barrier material, which is used in moat 

nuclear plants to protect aafety-related electrical cable from fires. The 

Commisaion has declared Thermo-Lag to be non-functional. In recent 

testimony before Congressman Dingell's Overaight and Investigation& 

Subcommittee, you admitted that the Thermo-Lag episode baa been a 

aignificant regulatory failure for the agency. Resolution of the Thermo-Lag 

problem was highly dependent on an industry effort to conduct generic 

testing of the material. It bas recently been reported that the collective 

industry effort has been hindered by legal concerns stemming from a grand 

jury criminal investigation concerning Thermo-Lag, and that widespread 

industry requests for exemptions from requirements of the fire protection 

rule could be in the wings. Do you anticipate that wholesale exemption 

requests or generic relaxation of the fire protection rule will be the primary 

means of resolution of this issue? Please explain. 

6. You testified before Chairman Dingell that the Commission would be 

conducting a review to asaeas the generic regulatory implication& of the 

Commisaion's failure to adequately comprehend the dimenaions of the 

1 
67 

Thermo-Lag problem. Do you have any results of that review that you can 

report at this time? Please explain. 

7. There is apparently no statutory precedent for the term "administrative 

search warrant." Is there some reason why the Commission prefers that 

term to "administrative inspection warrant," for which there is statuto.ry 

precedent? 

8. In explaining your need for the administrative search warrant at hearing, 

you described an example involving a cement grout producer in which the 

Commission first tried to inspect the premises of the firm and was denied 

access, then sought and obtained a criminal search warrant. Possibly 

because of the prior notice involved, nothing was found when the warrant 

was executed. Is it not correct that if you had obtained the criminal warrant 

before attempting the search, there would have been no prior notice? 

9. You objected to the amount of time required to convince a U.S. Attorney to 

seek a criminal search warrant from a judge. How much time transpired 

between the Commission's initial request and the issuance of a warrant in 

the previous example? 

10. For any other instances in which the Commission has successfully obtained 

criminal search warrants in the past ten years, please provide the time that 

elapsed between the initial request and the issuance of the warrant. 

11. Please also list any instances in the past ten years in which the Commission 

requested a criminal search warrant and it was denied, either by the U.S. 

Attorney in refusing to seek it, or by a judge. 

12. Delays in the opening of new repositories for low-level radioactive waste, 

together with reduced access to existing facilities, is resulting in a large 

increase in the need for onsite storage, both at reactors and at materials 

licensees. Does extended onsite storage present any safety problems at either 

type offaeility? Please explain. 

2 
68 

13. One of several issues that currently embroils the potential Ward Valley lowlevel waste site in California is the type of hearing to hold. If California were 

not an agreement state and the site were being licensed by the NRC, would 

the Commission hold a formal adjudicatory hearing on the application? 

14. Your testimony states that the NRC staff has developed a process for . 

implementing the license renewal rule that represents an apj>roach not 

addressed at the time the rule was promulgated in 1991. Is this process 

consistent with the rule? Please explain. If not, do you plan to formally 

amend the rule? 

3 
69 

QUESTIONS FOR NRC CHAIRMAN IV AN SELIN 

FROM REP. VUCANOVICH 

-- Given that DOE has admitted in budget briefings that 

they will not be able to meet the 2001 date for filing a high 

level waste repository license with the NRC, what type of 

delay would this represent for the NRC in processing the 

application? Would a delay in the submittal affect staffing, 

etc.? 

-- Last year, Admiral Watkins in a letter to Sen. Johnston 

proposed the possibility of phased licensing at yucca 

mountain. Mrs. O'Leary initially appears open to the idea. 

Does the NRC support the concept of phased licensing ? 

Why or why not ? 

-- What has been the nature of your interaction with DOE 

on t!te issue of phased licensing ? 

-- If an MRS was sited at a federal facility, as was proposed 

by Admiral Watkins last year, what would that entail for 

the NRC. For example, would you have to license 

it ? 

--Would a federal facility that would be the site of an 

MRS be held to federal environmental standards for which 

it is not currently required to meet ? 
70 

The Nuclear Waste Technical Review Board has called 

on DOE to establish a more flexible schedule for activities 

at Yucca Mountain. Have the NRC and DOE had any 

discussion about adjustments in the program in light of that 

recommendation in March of this year ? 

--What do your current activities at the Yucca Mountain 

site consist of ? 
71 

UNITED STATES 

NUCLEAR REGULATORY COMMISSION 

WASHINGTON, D.C. 21a6-0001 .· 

July 6, 1993 

The Honorable Richard H. lehman, Chairman 

Subcommittee on Energy and Mineral Resources 

Committee on Natural Resources 

United States House of Representatives Washington, DC 20515 

. Dear Mr. Chairman: 

I am responding to your letter of June 2, 1993 concerning the May 27, 1993 

hearing on H.R. 2143, the Nuclear Regulatory Commission Authorization Act for 

fiscal year 1994 and 1995 and .H.R. 2170, The Omnibus Nuclear Power Saf~ty and 

Security Enhancement Act of 1993. The responses to the questions forwarded by 

your letter are enclosed. 

If I can be of further assistance, please let •e know. 

Enclosure(s): 

As stated 

cc: Rep. Barbara Vucanovtch 

Sincerely, n ':if~LY~ ./ i ~ 

Dennis K. Rathbun, Director 

Office of Congressional Affairs 
QUESTION 1. 

Afmi.ER. 

72 

In response to a question concerning the Ca..ission's 

research contracts with DOE labs, Chain~~n Selin stated that 

the NRC had noted that there were large differences in 

charges for the s ... work ..ang the various labs, and that 

the Ca..ission was controlling costs in part by fav~ring the 

less costly labs. Please provide sa. detail on these cost 

differences ..ang the labs, including a few specific exa.ples describing the requested work with the bids that 

were offered by the labs. 

To better understand cost variances ..ang the laboratories, the NRC staff 

reviewed a saall sa.ple of projects f~ throughout the Agency for each DOE 

National laboratory. The cost proposal infon~~tion f~ that sa.ple was used 

to detenaine the average FTE cost charged by the laboratories for NRC work for 

the period FY 1988 - 1992. Attact.ent 1 shows the results of this review. 

Our findings revealed that generally costs charged to the Agency for 

laboratory work have risen each fiscal year for all laboratories. The costs 

for FY 1992 ranged f~ $129,000 for Agency work perfonaed by Idaho National 

Engineering laboratory (INEl) to $218,000 for work conducted by lawrence 

livenaore National laboratory (llNl). Cost variances are attributable to a 

nUIIber of factors, e.g., laboratory direct and indirect rates, nature of the 

work placed at the various laboratories, skill •ix of labor required to 

perfona the work, as well as location of work perfon~~nce. 

The c011p1r1son of laboratory costs without respect to the nature of the work 

perfo.-.d does not, however, provide a c011plete story. Accordingly, we 

recently analyzed the relative cost of doing business with the laboratories 

using projects with si•ilar work efforts. Four sets of research projects were 

used for this analysis and the results/conclusions are shown in Attact.ent 2. 

In .ast instances, the decision to place work at a particular laboratory is 

based upon a nUIIber of considerations, such as: expertise in a particular techntcal area; avatlabtltty of staff to COIIplete the work in the requtred -tiM frlM; unique facilities or equipMflt; and quality and tiMlintfss of 

previous related work perfonaed by the laboratory. In addition to these 

factors, the NRC Executive Director for Operations has instructed the staff to 

use the results of the review of cost variances a.ong the laboratories to .. ke 

infonaed judgelents as to the .ast econa.ical alternative in placing work to 

acc011plish Agency require..nts. 

In sa. instances, when .are than one laboratory has c011parable capability to 

perfona Agency work, the NRC has c011peted projects a.ong the various 

laboratories. Attact.ent 3 contains the results of two such projects. 
* 

ANL 

BNL 

INEL 

ORNL 

LANL 

LLNL 

SNL 

PHL 

• 

AGENCY-WIDE LABORATORY COSTS BY FISCAL 

FY88 ** FY89 FY90 

AVG.FTE AVG.PROJ AVG.FTE AVG.PROJ AVG.FTE AVG.PROJ AV

COST COST COST COST 

124 245 136 180 

151 405 161 392 

113 359 125 518 

130 277 141 295 

N/A *** 115 560 

139 306 150 294 

138 456 150 453 

168 560 160 502 

ANL • Argonne Nattonal laboratory BNL • Brookhaven National Laboratory INEL • Idaho National Engineering Laboratory ORNL • Oak Ridge National Laboratory 

COST COST 

142 

173 

126 

153 

140 

164 

144 

148 

243 

171 

497 

272 

332 

382 2

500 

344 

LANL • Los Al amos 

LLNL • Lawrence L

SNL • Sandia Na

PNL • Pacific N

** Average Project FTE and Proje~t Cost in thousands of dollars. 

*** N/A • Not applicable. The projects reviewed were not active in 

l 
DOE LAB/PROJECT"' 

Set 1. Nue!yr Plan! Aging 

fM, FIN; 82911 

• DieHl G-atoq 

• Service Water Syatemt 

• Snubberl 

• Chillers etc. 

J&. FIN; A3270 

• Motort 

. a.rverann--.. 

• Contrvl Rod Drlvu 

• LP·AHR Syatemt etc. 

QBtiL FIN· 110828 • Pum,. 

• V8Ma MOV,CV,SOV,AOV 

MS!V, PORV/BV 

·Aux. FMc! SysMm etc. 

1IW. fiN• AB389 

• Relldu8l Ufa Ev81118tion 

·HPCI 

• E!ec:trlcel Syatemt 

• Aalno.ftlsk Studln etc. 

Cost Compilrlson ldillerencal Among DOE Netlonll labor

Ayeraoe Cost Per Scieo!lfje!Ttchnlcal Perspn 

Direct Salarlea Indirect labor Cost + Other Direct Co

G&A IAveraoed per ac!lntlfielt!!dmk;l

IAI fBI 

$ 74K/ptrl0ft year $124K/person year 

t100K/perl0ft year t104K/person year 

t112K/peraon year t1 OBK/peraon year 

t 53K/peraon year t101K/peraon year 

Cpnclvalgo; The aa1no reaeardl computation clearly shows that !NElla the low coat performer for t

other three laboratorlel IPNL. IINl. 8lld ORNU are 11111Rer 1nd !esa ligniflc:ant. FactOrS such as lew

laborltory llf1llect 1111nagement trorn - task to lllother can affect coat performance and could cha

laboratories for new tasks. 

"' An cost information derived from FY 1993 submiHIIs of NRC Form 189. 

"' The -" ~ at .a the llbs were comparable and the praducta were IR acceptable. 

"' Each lab employed staff for this WOflt e•hibltlng a slightly different mix of e.,..--ence 1nd gqde. 

•• Scientists, Engineers, 1nd Technicians. !Most of this work was analytical ·few technieians utlllz

'" Each lllb hed shown particular knowledge and expertise in the specifie areas under study. 
DOE LAB/PROJECT"' 

Set 2. Thermal Hvdrau!!c Codes 

INEL J·6000 

BNL l·2187 

Set 3. Seym Accjdtnt A!!l!yus 

BNL A-3281 

ORNL J·6014 

SNL A·1339 

: 

Cost Comparison ldilferencesl Among DOE Netlon

Average Cost Per ScQrntific!Technica! 

Direct Salaries 

lA I 

t 53K/person year 

$ 80K/person year 

• 80K/person ye1r 

1131~.,.... 

•155K/pefson ye1r" 

Indirect Labor Cost + Other Di

G&A !Averaged oer scjentificlte

181 

S117K/person year 

$15 7/person year 

t150Ktpenon year 

t111 K/penan ye• 

t 45K/person ye1r 

Set 2. The comparison on thennll hydrMJiic code work shows thlt INEL coat wn algnillcln

Set 3 . The comparslon on ..,_ICCident anllyala shows th1t SNL Wll _...,.I leas f•bo

'" AH cost information dlrived from FY 1993 aubmlltlla of NRC Form 189. 

'"The work done 11 al the labs -re COfllll8fable and' the products were al ecceptable. 

"' Each lab employed staff for this work exhaliting • slightly different mix of experience end 

'" Scientists, Engi,..rs, ond Technicims. !Most of this work wu 11181ydcel • few technlc

., Each lab had shown PMticulor knowledge 1nd expertise in the specific ~reas under study. 001 Includes other indirect costs !fringe, matls, ADP support, travel} 
76 

i .. 

N"' .!!§ 

I' J_ II u c ~~ ! ~ ~ ··t == • - . 

it a; N - --

i j.& 

II 

l _~! 

~! Ill 0 al 

I • ""! --: II IIIII) - - - ! z , .•Ill 

g I I "IL ~~ 

I ~ 1) .. I 

i 1 

ti ... 

0 

N N -

Ill IJ. if· .i g .•1iJ I c -- i1J 

~~~ i l::! 

I ~ I J Jll 

r 8 J!l.li u u ~~~ M i l u ~~~ l I ~ 1 .. 1 .. - q t tlj tl 

t; In J!t ~~~ Ill 

~~~ ~ii .... 

0 

f ··lo Ill IH t f < iii .... . ~ .:.. Ul 

0 

0 ci I ! .: .. " 
0 

77 

Attachllent 3 

Besults of Two Proiects COIPeted Along QOE National Laboratories 

Project title: Fuel Cycle Licensing Review Assistance 

Project objective: 

Conduct safety and environ~ental reviews of applications for 

licenses for the construction, operation and deco..issioning of 

fuel cycle fac111t1es. 

Technical review results: 

Award: 

Laboratory proposals were evaluated against the following technical evaluation factors: laboratory experience in performing related work, qua11ficat1ons of personnel 1dent1f1ed to perfona this work and the .. nage.ent syste. e.ployed to oversee the 

effort. 

Project 

fiE Cost 

Laboratory Average 

Argonne National Laboratory (ANL) $142,000 

Idaho National Engineering Laboratory (INEL) 

$193,000 

Los Ala.os National Laboratory (LANL) 

$196,000 

Lawrence Liver.ore National Laboratory (LLNL) $215,000 

Pacific Northwest laboratory (PNL) $170,000 

Technical 

69 

60 

58 

66 

-88 

Work was placed with PNL which received the highest technical 

score that reflected a high caliber of technical personnel, and 

extensive experience to fuel cycle related projects. 

The low cost laboratory (ANL) was not reca.ended for award since 

it did not delonstrate adequate experience in the fuel cycle area 

and did not offer personnel with adequate experience to 

successfully co.plete the effort. 
0 Project title: 

78 

Survey and Evaluation of Aging Risk 

Assessment Methods and Applications 

Attacllllent 3 

Page 2 

Project objective: Incorporate aging risk into a PRA. 

Technical review results: 

Los Alamos National Laboratory (LANL), Lawrence Liven.ore National 

Laboratory (LLNL) and Idaho National Engineering Laboratory (lNEl) submitted proposals for the project. The technical review panel evaluated the proposals in terms of understanding project requirements, technical competence of proposed personnel and 

experience of laboratory in the technical area required to 

ca.plete the project. 

Project 

FIE Cost 

Laboratory Average 

Technical 

$228,000 

$240,000 

$204,000 

LANL 

lNEL 

LLNL 

2 

3 

Award: 

The technical review panel awarded the project to LANL ~ince it 

proposed an outstanding project tea• and de.onstrated an experience level necessary to successfully co.plete the effort. 

While LANL's cost was higher than LLNL, the technical evaluators 

concluded that LANL's technical superiority was worth the extra 

cost. 
QUESTION 2. 

Aftill&. 

79 

The IG ,..rts that closing out contracts and perfon~ing 

required evaluations at the conclusiCHi of contracted work ts 

a btg probl81 for the Ca..ission. Please explain Why that 

ts the case. 

There are two issues rafsed in this question. The first pertains to closeout 

of con~ercial contracts and the second to preparing final evaluations of DOE 

laboratory perfon~~nce upon CQ~Pletion of projects. 

With respect to ca..ercial contracts, the NRC has aade considerable progress in reducing the backlog of close-out actions. Prior to the issuance of the 

IG's June 1992 report, the contracting staff focused its efforts on 

negotiating new awards and adllin1stering active contracts. Since that ti•, however, NRC has placed greater e.phasis on its close-out activity. A new 

contract for close-out assistance was awarded and includes rigorous perfor.ance standards and incentives. A senior level contracting staff Ieiber 

was assigned to .onitor close-out progress. Revised close-out procedures were 

issued, incorporating appropriate stre .. lining .•asures which have helped expedite the close-out process. These actions have resulted in a reduction of 

approximately 400 contracts fro. the backlog of 829 discussed in the IG's 

report. Ve expect to close another 400 contracts by July 31, 1994. 

Regarding the evaluation of DOE laboratory perfon~~nce, the IG correctly noted 

that final written evaluations of laboratory perfon~~nce were not prepared when projects were co.pleted. To assure that final perfon~ance evaluations 

are now being prepared, the NRC aanage~ent directive dealing with plac ... nt 

and 110nitoring work at the DOE laboratories has been IIOdified to provide 110re 

definitive guidance on this require.ent and NRC .. nage~ent and individual 

project aanagers have been aade fully aware of the need for these evaluations. 

Finally, before projects can be closed out the final written evaluation .ust 

be prepared. It .ust be noted, however, that the NRC has been continually evaluating laboratory perfon~~nce during the course of the project through the 

review of 110nthly progress reports fro. the laboratories, telephone contact, 

•et1ngs and site visits with DOE laboratory personnel. The lack o{ final 

written evaluations in no way t.,acted NRC's oversight and •anagement during the course of the work. 
QUESTION 3. 

AfimR. 

80 

The IG notes that NRC •anag ... nt h~s t1ken decisive actions 

to correct contracting probl .. with the DOE labs. Ple1se briefly ch1racterize the kinds of 1ctions th1t h1ve been 

hken. 

Actions to 1ddress the we1knesses found in the IG reports began with the NRC's 

Chief Fin1nci1l Officer .. eting with the •anage .. nt 1nd key support st1ff 

members in e1ch NRC office. At these .eetings, the significance and the i~ort1nce of sound fin1nci1l 1nd progr1• .. nageaent WIS stressed. Since 

then, the following specific 1cttons h1ve been taken: 

o To strengthen contract •anagement over its DOE l1bor1tory 1greements, the NRC h1s dr1fted Man1ge.ent Directive 11.7 entitled, "NRC Procedures 

1nd M1n1gement Controls for Pl1cement 1nd Monitoring of Work With the 

Dep1rt..nt of Energy, • now under review and scheduled for issutnce by the end of.this fisc1l ye1r. The Directive will ensure that laboratory 1greements 1re negotiated and managed consistent with sound business 

practices 1nd contr1cting principles and will ensure unifona application of an agency-wide st1ndard of contr1ct management for projects placed with DOE. 

The agency initiated a 6-month pilot program in the Office of Nuclear 

Regulatory Research to implement the draft directive . Results of the 

pilot progra• will be used to strengthen the Directive prior to 

issuance. 

o . To retlledy weaknesses found by the NRC IG in the agency's management of 

DOE acquired property under laboratory 1greements, the NRC is reviewing its property management procedures and will strengthen existing policy as necessary. Correspondence will be sent to the staff and DOE 

underscoring the need to follow existing policy to ensure proper 

management oversight for property acquired with 1gency funds under 

laboratory agreements. 

o Action to close out all DOE laboratory research projects that have been 

completed is in progress. First priority was given to deobligating funds for projects with unpaid balances. In pursuing the closeout of 

projects completed ye1rs ago, we 1re using an abbreviated closeout 

procedure appropri1te to the age of the project. We plan to close these 

projects by early next ye1r. 

o An 1utomated system for the tracking and updating of the status of all 

projects is under development. This system is also intended to provide an autoaated capability for procur ... nt planning, budget execution, and 

financial management. Our target schedule is to have the high-priority 

components of the system in place by the end of FY 1993. 

o The Office of Research has developed and presented a one-day, hands-on 

project management course to virtually all of its project managers. These project aanagers have also attended the NRC project •anagement course entitled "Acquisition for Project Managers.• Also, by the end of 

FY 1993, all Research managers who have not already done so, will attend one or .ore project •anage.ent training courses. Additionally, the 
81 

Office of Research is taking action to ensure.that all project aanagers attend both project 11111agaent courses. 

o To iiiProve the DOE voucher review process, new procedures were 

established in the Office of Research to track, review and approve vouchers within a 20-dll period. Also. a follow-up syste~ was 

established in the Office of the Controller which alerts aanage.ent when 

required reviews are not COIIPleted in a ti•ly aanner. 

o A verification review of over 9.500 DOE billings representing $210 

•t111on in p.,..nts to DOE laboratories was perfor.ed to deterwine the 

reuonlbleness of the a.unts btlled. This review revealed that less 

than 0.081 of the $210 •illion involved were questionable pay8ents. Of 

the $210 •illion of vouchers reviewed, we found no instance of illegal 

p.,..nts or any evidence of waste, fraud, or abuse. 

o To ensure that project files are properly .. intained, the Office of 

Research has issUed a directive which requires project •anagers and 

aanage.ent to certify annually that project files are coaplete. A 

rand• SIIIPle of the active project ftles ts then selected for a 

confiraatton review by an independent party. 
QUESTION 4. 

82 

One of the major preoccupations of the Commission during the 

past two years has been the issue ~f Thenao-Lag fire barrier 

material, which is used in most nuclear plants to protect safety-related electrical cable. from fires. The Comission 

has declared Thermo-Lag to be . non-functional. In recent 

testimony before the Subcommittee, you admitted that the 

Thermo-lag episode has been a significant regulatory failure 

for the agency. Resolution of the Thermo-Lag probla. was highly dependent on an Industry effort to conduct generic testing of the material. It has recently been reported that 

the collective Industry effort has been hindered by legal concerns steming from a grand jury criminal Investigation concerning Thermo-Lag, and that widespread industry requests for exemptions from requirements of the fire protection rule 

could be in the wings. Do you anticipate that wholesale 

exemption requests or generic relaxation of the fire 

protection rule will be the primary means of resolution of 

this Issue? Please explain. 

The NRC does not anticipate wholesale fire barrier exemption requests from the 

industry and has expressed Its intention to deny these requests should they be 

submitted. In addition, the staff has planned no generic relaxation or modification of the fire protection rule In order to resolve current fire 

barrier issues. 

Members of the NRC staff met with NUMARC representatives on June 3, 1993, to 

discuss the scope and schedule of the industry test program. NUMARC 

representatives assured the NRC staff that the industry was moving forward 

with the testing program and that it did not advocate wholesale exemption 

requests as a means of addressing the technical issues. NUHARC 

representatives acknowledged that the grand jury investigation had caused 

individual utilities to withdraw their direct participation in the fire 

barrier test program, but alternatives, such as the use of independent contract personnel, had been developed to allow the timely continuatjon of the 

test program. Following completion of the NUMARC test program, each licensee 

will be required to assess its plant-specific Thermo-Lag barrier installations 

against the NUMARC test results. The staff expects that the licensees will 

need to upgrade certain fire barrier configurations to meet the NRC's fire 

protection requirements and may need to make repairs to correct fire endurance 

and ampactty derating deficiencies. The staff also expects that some licensees will need to conduct additional tests to qualify plant-specific fire 

barrier designs and configurations that were not modeled by the NUMARC 

program. The NRC staff expects each licensee to comply with the NRC fire 

protection requira.ents and the cosmttments In their licensing bases. The 

staff Is currently In the process of Issuing a supplement to Generic Letter 

(GL) 86-10, "Implementation of Fire Protection Requirements,• of April 24, 

1986. The Gl supplement is a continuation of the clarification and guidance 

process and builds on the fire barrier testing acceptance criteria established 

in GL 86-10. The Gl supplement will Include additional guidance on the 

specific application of raceway fire barrier enclosures. The NRC's 

fundamental regulatory requirement to provide 1- or 3-hour fire barriers to 

separate redundant safe shutdown functions within the same fire area will not 

be modified by this GL suppla.ent. 
Independent of the present fire barrier issue, howev~r. the NRC is reviewing the portions of all NRC regulations believed to be aarginal to safety and 

cu.bersoae to i~la.ent and fulfill. Appendix R of 10 CFR Part 50 is a.ong the rules which have been proposed for .edification. The staff is considering replacing the currently prescriptive Appendix R with perfor.ance-based requirements which will allow the use of PRA technology and risk s.1gnificance of fire sequences to deten~ine fire protection features. 
QUESTION 6. 

~. 

84 

You testified before Chairman Dingfi!ll that the Com1ssion 

would be conducting a review to assess the generic implications of the Comission's failure to adequately comprehend the di.ensions of the Thermo-Lag problem. Do you have any results of that review that you can report at this 

time? Please explain. 

No. A reassessment of the NRR reactor fire protection program was performed in response to the programmatic concerns raised during the review of ThermoLag fire barriers. The results of the reassessment were provided in the 

Report on the Reassessment of the NRC Fire Protection Program (February 27, 

1993). The staff incorporated the recommendations of this report in two 

action plans which are currently undergoing management review. The Fire 

Protection Task Action Plan includes the application of lessons learned to 

other NRC programs. This comprehensive review will be conducted over the next 

2 years, and preliminary results are not yet available. 
85 

QUESTION 7: There 1s apparently no statutory precedent for the tena 

•adlinistrative search warrant.• Is there so.e reason why the 

Ca..ission prefers that tena to •a~inistrative inspection warrant, • for which there 1s statutory precedent? 

~: 

While there -., be no statutory precedent for use of the tena •adlinistrative 

search warrant,• the courts have used the tena and the .. aning appears to be 

well understood. See, for exa.ple, Martin y. International Mltex Tank 

Terminals--Bayonne, 928 F.2d 614 (3rd Cir. 1991). We prefer this ten. to the 

ten. •a~inistrative inspection warrant• because it is unclear whether the 

courts will find an inspection warrant to have the s ... reach as a search 

warrant, particularly in the area of seizure of defective c01p0nents. A court 

challenge to a search conducted under an inspection warrant could result in an 

interpretation that li•its the efficacy of the warrant. 
86 

QUESTION 8: In expla1n1ng your need for the ada1n1strat1ve search warrant at 

hearing, you described an ex~~~ple involving a c.ent grout producer in .tl1ch the C..bsion first tried to inspect tile 

pre.ises of the f1n~ and was dented access, then sought and 

obtained a criainal search warrant. Possibl7 because of the prior notice involved, nothi'1 was found tlhen the warrant was executed. 

Is it not correct tllat f JOU had obtained the criainal warrant 

before att111pttng the search, there would have been no prior notice? · 

!IWI£8: 

Prior notice b not required in use of a criainal search warrant. lblever, 

use of a criainal search warrant Mans having to .. t the rigorous standards 

of probable cause associated with criainal warrants. Me are pri .. ri11 

interested in use of search warrants for ctvtl purposes, are there b non~all1 a lower threshold. Criainal search warrants also subject us to other 

constraints. Not onl1 aust we go to a U.S. Attorne1 for assistance in 

obtaining such a warrant, but a criainal search warrant aust be served b7 a 

U.S. Marshal. This Mans additional coordination with a part1 outside of the 

NRC, and ... ting scheduling and other requisites that a11 not be appropriate 

to NRC requireaents. 
87 

QUESTION 9: You Objected to the uount of ti• requfrecl to convince a U.S. 

AlmtfR: 

Attorney to seek a cri•fnal search warrant f~ a judge. How .uch 

tt• transpired between the Co.tssion's initial request and the 

issuance of a warrant in the previous exa.ple? 

Our records do not indicate the exact date of the first contact with the U.S. 

Attorney's office, but the best recollection is that telephone contact was 

first ude on August 24, 1992. Our records show that on August 26, 1992, NRC 

staff flew to Bridgeport, Connecticut, where the cognizant U.S. Attorney's 

office is located, to explain the safety significance of the issue involved 

and the possible NRC violations, and to assist in. preparing the search warrant 

affidavit. The Judge signed the warrant on August 28, 1992. The warrant was 

served by the U.S. Marshal on Septllllber 1, 1992. 
QUESTION 10: 

MrutfR: 

88 

For any other instances in which tbe C01mission has 

successfully obtained criainal search warrants in the past 

ten years, please provide the tiae that elapsed between the 

initial request and the issuance of the warrant. 

Our search of cases in which the Coaaission has successfully obtained criainal 

search warrants in the past ten years has identified 13 cases, in addition to 

the one discussed in our answer to question 9. In these 13 cases, elapsed ti.e between NRC staff's initial contact with an Assistant U.S. Attorney (AUSA) and issuance of the search warrant was as follows: 

- In a case opened in 1985, elapsed tiae between NRC staff's initial 

contact with an AUSA and issuance of the warrant was 6 days. The 

warrant was executed one day after issuance. 

- In four cases opened in 1988 in which the search warrants were applied for and executed simultaneously, elapsed time between NRC staff's 

initial contact with an AUSA and issuance of the warrants was 10 days. The search warrants were executed four days later. 

- In a case opened in 1988, elapsed time between NRC staff's initial 

contact with an AUSA and issuance of the warrant was 5 days. The search 

warrant was executed on the day the warrant was issued. 

- In six cases opened between 1988 and 1991 in which the search warrants were applied for and executed simultaneously, elapsed time between NRC 

staff's initial contact with an AUSA and issuance of the warrants was 21 

days. The search warrants were executed one day after issuance. 

- In a case opened in 1991, elapsed time between NRC staff's initial 

contact with an AUSA and issuance of the warrant was 23 days. The · search warrant was executed the day the warrant was issued. 

Note that the data provided above do not reflect time consumed by preliminary, informal contacts with the Department of Justice (DOJ) to discuss the need for 

the warrant, having the NRC Office of the General Counsel put together a criminal search warrant package, and delivering the package to DOJ. The time 

required for these activities is often substantially longer than the time it 

takes to get the warrant once the AUSA contact is formally initiated. 

The historical data shed some light on the Commission's decision to submit the 

administrative search warrant proposal to the Congress, but the information 

provided does not tell the whole story behind the Comnission's decision. Not 

all violations of the laws that fall under the Commission's responsibility are subject to criminal penalties. Even when they are, the Commission aay not be 

able to meet the high standards of probable cause associated with issuance of a criminal warrant. Further, the Commission believes that in many instances 

civil proceedings are a more appropriate and effective way of handling violations, particularly with respect to routine citations. 
QUESTION 11: 

AftS!fER: 

89 

Please also 11st any instances tn the past ten years tn 

which the c.-1ss1on requested a crt•t·nal search warrant and 

tt was dented, either by the U.S. Attorney tn refusing to 

seek tt, or by a Judge. 

We have no record of any instances tn the past ten years tn which a U.S. 

Attorney refused to seek a cr1•1nal search warrant requested by the 

c.-1sston, or tn which a Judge refused to 1ssue the warrant. Th1s does not ~ean, however, that a pre11•1nary, tnfor.al discussion between NRC staff and 

the U.S. Attorney's office -.y not have resulted in an NRC staff dectston not 

to pursue the request. 
QUESTION 12: 

AHM.R. 

90 

Delays in the opening of new repositories for low-level 

radioactive waste, together with reduced access to existing facilities, is resulting in a large increase in the need for 

onsite storage, both at reactors and at materials licensees. 

Does extended onsite storage present any safety problems at 

either type of facility? Please explain. 

While public health and safety can be adequately protected if LLW is stored at 

either reactor or material licensees' sites, the Co.aission remains concerned 

about potential health and· safety concerns associated with the increased 

reliance upon on-site storage of low-level waste. However, the public health 

and safety will be enhanced by disposal, as opposed to long-term, indefinite 

storage. There are several concerns relating to storage at both reactor and 

materials licensees' sites that make disposal the preferable waste management option. 

The first concern with storage is waste container degradation and the 

consequences of this degradation. Stored waste packages need to maintain 

sufficient integrity to prevent dispersal of the waste during storage, 

transport, and handling, up to and including emplacement for disposal. Because of the variability of certain storage environments, waste packages may suffer degradation over an extended storage period. 

A second concern regarding storage of LLW is increased radiation exposure. Onsite storage of LLW is not expected to result in any radiation e~posure to 

the general public. However, storage could increase radiation doses to 

workers performing radiation surveys and inspections of LLW in storage and 

from the additional handling required for repackaging and unloading the waste 

from storage for disposal. 

Another concern is the risk of releases in the event of an accident. Although NRC has not conducted a quantitative analysis of accident and release 

scenarios for a failed storage facility, NRC believes that the risk of 

releases as a result of an event or accident at numerous LLW storage_sites around the country is higher than the risk of release from a limited number of 

disposal sites designed to meet the siting and design requirements in 10 CFR 

Part 61 or compatible Agreement State regulations. 

Finally, some materials licensees may need to request amendments to their 

license to possess greater quantities of licensed material to accommodate 

increased onsite storage of LLW. Further changes to the license may be 

required depending on other restrictions in the license. For those cases where a license determines a license ~Gendlent is necessary, NRC issued 

guidance in February 1990 to identify information needed to support the 

licensee's amendment request for extended storage of LLW. 
QUESTION 13: 

WME.B: 

91 

One of several issues that currently embroils the potential Ward Valley low-level waste site in California is the type of hearing -to hold. If California were not an agreement state and the site were being licensed by the NRC, would the 

Commission hold a formal adjudicatory hearing on the 

application? 

Under current NRC regulations, in those eircu.stances in which the NRC would 

be responsible for licensing a low-level waste disposal facility in a nonAgreement State, the Conaission would be obliged, under its current 

regulations, to provide an opportunity to request an fonaal adjudicatory hearing in accordance with the provisions of 10 CFR Part 2, Subpart G. The 

regulations of the NRC in 10 CFR 2.105 require that a Notice of Proposed Action be issued for any license to be issued pursuant to 10 CFR Part 61. The 

Notice of Proposed Action provides that a hearing •ay be requested by the 

applicant for the license or by a person whose interest .. Y be affected. The 

criteria for ad•ission of a person as a party are those in 10 CFR Part-2, Subpart G. Thus, a hearing would be held only if a person were able to 

demonstrate standing as a part and had presented at least one good contention 

for resolution. ~ CFR 2.714. Absent a hearing request would be held; there is no require~ent for a •andatory hearing on a Part 61 license. 
QUESTION 14. 

~. 

92 

Your testimony states that the NRC staff has developed a process for impleaenting the license ·renewal rule that 

represents an approach not addressed at the time the rule was promulgated in 1991. Is this process consistent with 

the rule? Please explain. If not, do you plan to formally amend the rule? 

The\ staff has developed an approach for implementing the license renewal rule 

which can be adopted within the framework of the current rule, but for which 

rule changes may be appropriate to address potential inconsistencies with 

certain rule language and with language in the statement of consideration for 

the current rule. The staff's recommended approach was addressed in SECY-93-

049. In SECY-93-113, the staff clarified this approach and included 

additional proposals that stipulate less stringent age-related degradation 

management program requirements for structures and components which are not of 

fundamental safety importance. Although the staff initially concluded that 

such structures and components need not be subject to the program change and 

reporting requirements contained in Section 54.33(d) and 53.37(c) of the 

current rule, the NRC Office of the General Counsel has indicated that this 1s 

not correct. 

The Commission has directed the staff to convene a public workshop to discuss 

recommendations provided by the staff. This will include proposals resulting from experience, by practical application, with the staff approach and 

proposals for possible amendment to Part 54. The staff has been directed to 

submit to the Commission for its consideration, a sunmary of the results from 

the workshop and a draft proposed rulemaking. 

The Commission is currently considering the staff's proposals for implementing the rule. Rulemaking could be initiated to modify the license renewal rule. 
QUESTION 15. 

Aftm&. 

93 

Given that DOE has adlitted in budget briefings that they will not be able to ~et the 2001 date for.filing a high level waste repository license application with the NRC, what. type of delay would this represent for the NRC in 

processing the application? Would a ·delay in the sublittal 

affect staffing, etc.? 

NRC does not believe a delay in DOE's sublittal of an application would 

significantly affect the ti~ that NRC will need ·to review it. Therefore, if 

DOE were to delay its license application, the only slip would be a corresponding delay in the co.pletion of the NRC review. 

It is unclear what effect a delay in the DOE sublittal would have on NRC 

staffing. In order to assess the i1111act on NRC staffing of a delay in the DOE 

sublittal, NRC would need to know the length of the delay and understand how 

the delay would affect the current ongoing DOE progra.. 

72-560 0 - 93 - 4 
OUESUON 16. 

94 

Last year, Admiral Watkins in a letter to Senator Johnston 

proposed the possibility of phased. licensing at Yucca 

8Quntain. _Mrs. O'Leary initially appears open to the idea. 

Does the NRC support the concept of phased licensing? Why or why not? 

Until the eleaents of the Depart~nt of Energy's (DOE's) phased licensing approach are .are clearly defined, NRC is unable to evaluate the concept fully. However, under 10 CFR Part 60, one for. of phased licensing for a high-level waste repository is per.itted. Once construction of the surface 

facilities and those subsurface facilities necessary for initial operation have been substantially co.pleted, DOE could obtain a license to commence emplacement of saall quantities of waste. From a regulatory perspective, phased licensing of the repository •ight be beneficial. The experience gained during the period When a relatively s.all quantity of waste was in place could 

enhance the effectiveness of the perfor.ance confirmation program and allow, 

if necessary, for less complex retrieval operations should it be determined 

that such operations were needed. 

It should be noted, however, that in order to obtain construction 

authorization, DOE .ust first demonstrate that there is reasonable assurance that the types and amounts of radioactive materials intended to be disposed of 

in the entire facility could be disposed of safely. 
QUESTION 17. 

AfWl£B. 

95 

What has been the nature of your interaction with DOE on the 

issue of phased licensing? 

The Depart.ent of Energy has .est recently discussed the issue of phased licensing at a .eeting with the CommissiQn in June 1992. There have been no other interactions on phased licensing. DOE indicated generally that so.e for. of phased licensing was under consideration. Detailed infonaation on the 

technical or regulatory aspects of this approach were not provided to the NRC. 
OUESTICII 18. 

MS~f£8. 

96 

If an MRS was stted at a federal factltty, as was proposed by ~iral Watkins last year, what would that entatl for the 

NRC. For exa.ple, would you have to ltcense tt? 

Yes, the Energy Reorgantzatton Act of 1974 (42 U.S.C. 5842(3)) gtves the NRC 

ltcenstng and related regulatory authority for DOE "[f]actl ittes used 

pri .. rily for the receipt and storage of high-level radioactive wastes · resulting fro. activities ltcensed under such [At~tc Energy) Act.• 
OUESTICII 11. 

Mma. 

9'1 

Would a federal facility that would be the site of an MRS be 

held to federal nviro.ental standards for. which it 1s not 

currently required to ... t? 

NRC review of a license application for construction and operation of an MRS 

would be conducted against pertinent NRC regulations which include the 

requir...nt to prepare an environ.ental i.pact stat...nt (EIS). An EIS lUst. give due consideration to co.,liance with environ.ntal quality standards and 

requinMnts which have been i.posed by federal, . State, regional, and local 

agencies having ·responsibility for environ.ntal protection. DOE has not yet identified any Federal facility as a potential site of an MRS; therefore, NRC 

1s not in a position to idnttfy whether a particular Federal facility or the 

activities of DOE otherwise qualify for ext~~~pt1ons fro. federal environ.ntal 

standards. 
QUESTION 20. 

AftmB. 

98 

The, Nuclear Waste Technical Review Board has called on 110£ 

to· establish a .are flexible schedule· for activities at 

Yucca Mountain. Have the IRC and DOE hid any discussion 

about adjustlents in the progr .. in light of that 

rec-ndation tn March of this year? 

The Nuclear Regulatory CO..ission has not had any discussions ·wttb the 

Departlent ·of Energy about adjustients in the progr .. in light of· the Nuclea 

Waste Technical Review Board's rec .. ndation. 
OUESTION 21. 

MMR. 

99 

What do your current activities at the Yucca Mountain site 

consist of? 

Current Nuclear Regulatory C01111ission activities at the Yucca Mountain site 

involve the presence of an office in Las Vegas which is supported by two OnSite Licensing Representatives and an office at the U.S. Department of Energy (DOE) Field Operations Center located on the Nevada Test Site which is 

available for staff use during site visits. Through this presence, the NRC 

staff .aintains cognizance of work being done at the site, and also has ready access to ongoing DOE field activities. 

As part of its nonaal review practice, the NRC participates in site visits to 

Yucca Mountain to better understand and evaluate ongoing site characterization 

and Exploratory Studies Facility work. In addition, sa.e DOE -quality assurance audits that are observed by the NRC staff cover site activities. 

Representatives fr01 the State of Nevada and affected units of local 

governMent are invited to attend. 

In addition to evaluating ongoing work at the site, NRC conducts reviews 

directly related to DOE site activities. These include DOE docu.ents such as the Site Characterization Plan Stili-annual progress reports, Topical Reports, the Early Site Suitability Evaluation, Study Plans, and other reports prepared by DOE in support of its site characterization. 
100 

fiA~S~BY 

11IE OFFICE OF 11IE INSPECTOR GENERAL 

UNITED fiATES NUCLEAR REGULATORY COMMISSION 

T0111E 

SUBCOMMlTI'EE ON ENERGY AND MINERAL RESOURCES 

COMMlTI'EE ON NATURAL RESOURCES 

UNITED fiATES HOUSE OF REPRESENTA11VES 

CONCERNING 

111E FISCAL YEAR 1994-1995 BUDGETS 

FOR 

11IE OFFICE OF 11IE INSPECTOR GENERAL 

MAY 27, 1993 
101 

Good morning Mr. Chainnan and members of the subcommittee. I am pleased to present 

my fiscal year (FY) 1994 budget request and my FY 1995 budget estimates for the Office of 

the Inspector General (OIG) of the U.S. Nuclear Regulatory Commission (NRC). The NRC 

is a regulatory agency, whose mission is to ensure that civilian uses of nuclear materials in 

the United States are carried out in a way that adequately protects public health and safety, 

the environment, and our national security. 

My office was established in accordance with the Inspector General Act Amendments of 

1988. Our mission is to prevent and detect fraud, waste, and abuse in the NRC's programs 

and operations, and to identify ways to improve their economy and efficiency. We are also 

charged with the responsibility of ensuring that the NRC employs sound financial 

management practices, as required by the Chief Financial Officers Act of 1990. During this 

past year, both the audit and investigative programs have continued to produce results 

consistent with these important legislative mandates. 

Our program findings this year have suggested the pre5e11ce of agency-wide problems in the 

area of financial management and concerns with certain regulatory programs. For example, 

audit findings revealed that the agency paid for substantial contract services without the 

required approvals and verification of invoices. In addition, over $8 million was unnecessarily "tied up" as contract obligations that could have been used for other program · 

initiatives. To its credit, the NRC has performed a substantial body of work in response to 

these findings. In safety-related areas, an investigation revealed that the agency relied on 

unverified nuclear industry test results when it accepted the use of the fire-barrier material 

known as Thermo-Lag. This material is now used in about 8011' of our nation's nuclear 

power plants. In 1992, the NRC informed the industry that Thermo-Lag should be treated as 

inoperable. 

During FY 1994 and FY 1995, we will continue to assist the NRC by reviewing programs 

and operations and will work with them to resolve these and other financial and management 

deficiencies. To accomplish this in FY 1994, I am requesting $4.8 million and 42 FfEs. 

This represents about a $200,000 increase over last year and an increase of one FTE. The 

estimated requirements for FY 1995 are $5.0 million and 43 FI'Es, which repn:sents an 

increase of $200,000 and 1 FTE. 

The additional FTE in FY 1994 will be used to support my office with independent legal 

counsel. The Inspector General Act provides us with the authority to hire the necessary 

employees for carrying out the functions, powers, and duties of my office. The OIG must be 

an objective and independent unit in order to effectively evaluate the agency. This position 

is particularly if!lportant due to the nature and complexity of our existing investigative case 

work. Independent legal counsel js necessary to ensure that no conflict of interest arises 

between the agency and the OIG and to allow the OIG to properly fulfill its statutory duties _ 

and responsibilities. 

Senator Glenn and other members of Congress have made it unquestionably clear that the 

2 
102 

Inspector General Act of 1978, as amended, provides an Inspector General with the authority 

to employ such officers and employees as may be necessary for carrying out the functions, 

powers, and duties of an OIG. I believe that to properly carry out my statutory 

responsibilities, it is necessary for me to employ an independent counsel. I am, then:fore, 

requesting one FTE for an attorney/advisor position. 

Now, I would like to highlight some of our audit and investigative activities perfonned over 

the past year. 

During 1992, several OIG audits and internal NRC studies found serious breakdowns in 

NRC's internal management controls. When these breakdowns occur, senior managers lack 

adequate assurance that activities under their purview an: operating efficiently, effectively, 

and economically as required by directives. Furthermore, because internal controls are 

designed to protect the Government's resources, breakdowns can lead to fraud, waste, and 

abuse. 

To achieve the necessary safeguards, the Federal Managers' Financial Integrity Act (FMFIA) 

and the Chief Financial Officers Act require Federal managers to establish and maintain 

effective systems of internal management and system controls. These requirements an: 

augmented by Office of Management and Budget and agency directives. Simply defined, 

internal management controls an: measures to safeguard resources, ensure compliance with 

applicable laws, and promote efficient and economical operations. These controls apply to 

virtually all agency programs and activities, as well as to NRC's accounting and financial 

management systems. 

In a recently issued summary analysis, we n:ported that breakdowns in management controls 

exist and an: a common problem found in many of our recent audits. In thn:e areas--

computer security, payments made to privately operated national laboratories, and the 

agency's general financial ledger-our audits found deficiencies serious enough to warrant 

n:porting as material weaknesses in the agency's annual FMFIA report to the President and 

Congress. As a result, we concluded that the Chief Financial Officer should consider 

additional actions to ensun: that management controls an: viewed as an important 

responsibility for senior managers rather than as a tertiary, low priority task. 

A March 1993 audit report disclosed problems concerning the placement of work at the 

Department of Energy's (DOE) national laboratories by NRC's Office of Nuclear Regulatory 

Research. Through an interagency memorandum of understanding, the NRC initiates major 

contracts with DOE for resean:h projects. Our audit report included the following findings: 

NRC cootracts with DOE for laboratory services were not clo3ed out upon completion; NRC 

managers could not adequately account for NRC-funded property and equipment at the 

laboratories; funds from prior fiscal years were improperly transferred from project to 

project by NRC managers without the requiled approval of the Office of the Controller; and 

final DOE laboratory performance on projects was not evaluated as requiled. Additionally, 

management tools for tracking project status were lacking. For example, NRC could not 

3 
103 

determine the completion status for 1, 400 projects begun since 1975. 

We made specific recommendations that collectively were designed to strengthen NRC's 

management of work placed at DOE laboratories to ensure that NRC's limited resources 

were adequately protected. 

In August 1992, audit findings disclosed that NRC made payments to DOE laboratories since 

1986 without reviewing or approving the associated invoices and verifying the accuracy of 

the payments. Such review and approval is required by the General Accounting Office, the 

Treasury Department, and NRC guidance. This failure to follow statutory and prescribed 

agency policies and procedures left NRC vulnerable to fr.wd, waste, and abuse. NRC 

management took prompt and decisive actions to correct these deficiencies. 

Furthermore, the backlog of contract closeouts had increased despite earlier reports 

identifying the scope of the problem. In a June 1992 audit, we reported that NRC's 

inventory of completed, but not yet closed, contracts increased from 591 in May 1986 to 829 

as of October 1991. 

My office estimated that more than $8 million was unnecessarily tied up by the contract 

closeout failure and could be made available for other NRC programs. In following our 

recommendations, NRC has de-obligated over $6 million to date and has made significant 

progress toward reducing the backlog. 

In our investigative program, we are continuing to experience an increased level of activity. 

During FY 1992, we received 296 allegations of wrongdoing, which resulted in 93 cases 

being opened for investigation. Also in FY 1992, my investigative staff closed 90 cases. 

We project, based on the number of allegations received during the first 3 months of this 

fiscal year, that the FY 1993 case load will be even lazger. These statistics demonstrate an 

increase in program activity for the third consecutive year since the inception of my office in 

1989. 

One of the more significant issues over the past year was an allegation that Thermo-Lag, the 

fire barrier material used in most nuclear plants to protect safety and emergency shutdown 

electrical circuits from fire, is inadequate. This allegation resulted in an inspection to 

address the adequacy of NRC staffs' performance related to the acceptance and review of 

Thermo-Lag. In addition, the investigative staff, in coordination with the NRC's Office of 

Investigations, initiated a related investigation to determine if there was any criminal activity 

by NRC or licensee employees in connection with the testing of this material. 

While the investigation is still ongoing, the inspection has been completed and it was determined that the NRC staff did not conduct an adequate review of fire endurance 

concerning the ability of the fire barrier material. Had the staff conducted a thorough review 

of test reports submitted by industry or verified test procedures and results, a number of 

problems with the test proparn and the material would have been discovered. 

4 
104 

Another imporlant c:ax involved allegalions by a Conner officer of a consulting SCIVices firm, 

which also handles radioactive malerial, that safety conoems brought to NRC attention were 

not propc:dy addrased. The OIG's investigation disclosed that while NRC conducted an 

inspection bued on the issues raised, the allegalions were not fully and adequately examined. 

During the course of this investigation, a second inspection was conducted by NRC staff and 

seven regulatory violations were uncoveml. 

A highly significant aspect of this c:ax is that the licensee employee who brought the safety 

concerns to NRC's attention was filed by the company. The firing was allegedly in 

retaliation for the employee raising his conoems with management prior to advising the 

NRC. This malta' is being eumined, along with other instances involving the firing of 

employees who raised safety conoems to their employers or to NRC management. Our 

purpose is to determine the adequacy of policies and procedures in place to protect the 

identity of whistleblowers and the adequacy of sanctions imposed against companies who 

engage in reprisals. 

The OIG's investigative office continues to review allegalions and initiate investigations 

involving medical uses of nuclear malerials. In addition to the many cases of this nature that 

have already been addrased, we recently opened a number of inspections and investigations 

pursuant to our participation with an NRC Incident Investigation Team (llT). The·IIT was 

formed to investigate whether a misadministration of a radioactive pharmaceutical for 

treatment of a cancer patient contributed to her death. This office is attempting to determine 

if the licensee in this c:ax had been adequately inspected by the NRC. This case also 

addressed a specific allegation involving a personal relationship between the licensee and an 

NRC employee involved in the licensing process. 

In addition to investigations where public health and safety issues were of paramount 

importance, my office investigated a number of allegalions involving personal relationships 

between NRC employees and NRC contractors. Many of these cases contained potential 

criminal aspects in that gratuities were received or administrative aspects in that there was a 

personal relalionship between a penon in a position to affect the contract and the contractor. 

This area will continue to be monitored very closely not only in response to specific 

allegations of wrongdoing, but also from a programmatic viewpoint. These are issues of 

constant conoem on the part of senior management within the agency. We will continue to 

closely examine all allegalions with serious consideration regarding the integrity of 

regulations. 

Finally, from a financial standpoint, in FY 1992 our investigators continued to be alert for 

cases appropriale for application of the Program Fraud Civil Remedies Act. In the near 

future, the largest dollar volume case investigated by my office to date under this statute will 

be adjudicated. 

This concludes my repon to you on the activities of the past year and the current status of 

our operation. My office continues to enjoy a positive relationship with NRC management 

s 
105 

and we appreciace their ongoing support and cooperation. The agency complies fully with 

our investigative and audit inquiries, and NRC management has consistendy accepted and 

implemented our m:ommendations to improve agency operilions. 

The challenge of providing assurance to the NRC on these vital, complex programs is gm~t. 

We look forward to assisting the agency in continuing to improve the economy and efficiency 

of its programs and operations. Thank you for the opportunity to discuss our programs. 

6 
106 

ASSISTANT INSPECfOR GENERAL FOR AUDITS 

ANNUAL AUDIT PIAN 

STRATEGY AND FY 1993 WORK PlANNED 

NRC Headquarters and Regions 

OFFICE OF THE INSPECfOR GENERAL 

U.S. NUCLEAR REGULATORY COMMISSION 
107 

ANNUAL.· AUDIT PLAN 

STRATEGY AND FY 1993 WORK PLANNED 

OFFICE OF THE INSPECTOR GENERAL 

U.S. NUCLEAR REGULATORY COMMISSION 
108 

FOREWORD 

The Office of the IDspector General (OIG) is pleased to present its fisc:al year 

1993 Audit Plan. The plan proYides our overall audit stratqy aDd summaries 

of the specific audits planned for tbis year. 

The U.S. Nuclear Regulatory Commission (NRC) is respoDSI"ble for protecting 

the public bealth aDd safe!J during c:iYilian uses of nudear materials. This 

plan reflects the results of our strategic planillg process aimed at 

COIICelllratiDg our audit efforts in areas key to the primary mission of the 

NRC. As part of tbis process, we obtaiDed input from the nuclear indusuy, 

special interest poups, inclucliu& Public atizen aDd the American College of 

Nuclear Medicine, the Cooaress, the General Aa:ountin& Office, the Office 

of Manaaement aDd Jludaet, aDd seaior-level NRC J:IWUIIerl, including the 

Commissioaers. We alSo considered sucb factors u NRC programs' dollar 

value, wlnerlbili!J to fraud aDd waste. aDd prior audit coverage. This pi'Ocess 

eDibles us to m11imiu the use of our audit resources. 

Rather than set ISidc time to respond to uncxpec:ted bigb priori~J issues that 

inmtmly arise, we have prograllliiiCd all of our direct audit resources and will 

defer lower priori~J audits as necessary. This approach ensures that we only 

use our limited resources on bigb priori~J audits. 

~~<'.\.,~ 

David c. W'llliaml 

lnspec:tor General 
109 

TABLE OF CONTENTS 

.fiB 

BACKGROUND • • . • • • • • • • • • • • • • . • . • • • • • • . • • • • • • • . • . • . • • 1 

niE AUDIT PROCESS ....•.•..•••.. · .•.•••...•.•.••••.... 4 

~TEGIC PlANNING .••••..•••.••.....•....••••.•.•••• S 

ALLOCAnON OF AUDIT RESOURCES .•.........•.....•..• S 

APPENDIX I ·AUDIT S'l1t.\TBGIES 

NRC MANAGEMENT OF INSPECilON PROGRAMS . • • • . • 1 

INFORMAnON RESOURCE MANAGEMENT .•.•••.•.•• 6 

NRC MANAGEMENT OF RESEAROI ••••.•••••••••.••• 9 

NRCS FINANaAL MANAGEMENT ACI1VITIES . • • • • . • • 12 

AUDIT FOU.OWUP . • . • . . • • . . . . • . • • . . . . . • • . . • • • • • • 1S 

APPENDIX D • AUDITS PlANNED FOil n5C\L YJWl Uf3 
110 

BACKGROUND 

The U.S. Nuclear Regulatory Commission's (NRC's) Office of the Inspector 

General (OIG) was established April15, 1989 pursuant to Inspector General 

Act Amendments contained in Public I..aw 95-452. Simply stated, the OIG's 

mission is to prevent and detect fraud, waste, and mismanagement in NRC 

programs. 

Accordingly, the OIG is committed to ensuring the integrity of NRC programs 

and operations. Audit planning is a aitic:al aspect of accomplishing this 

commitment. Without suc:h planning. the OIG cannot bC assured that audit 

resources are used effectively and that Commission programs subject to the 

most risk receive appropriate audit coverage. 

The Annual Audit Plan is the OIG's formal plan of action for managing the 

auditing workload and audit resources for fiscal year (FY) 1993. The plan 

reflects the interest and concerns of the nuclear industry, the Congress, the 

President's Council on Integrity and Efficiency (PCIE), the General 

Accounting Office (GAO), the Office of Management and Budget (OMB), 

and NRC senior managers, including the Commissioners. 

Pursuant to OMB Circular A-73 guidance, we plan our audit coverage using 

factors such as: 

o current and potential dollar impact; 

o adequacy of internal control systems as indicated by risk 

assessments and reviews required by OMB Circular A-123; 

o management needs; 

o prior audit experience; 

o availability of audit resources; and 

o audit risk. 
111 

The OIG performs the following types of audits: 

Perfonlwlce - These audits are conducted on selected NRC 

administrative and program operations to evaluate the effectiveness 

and efficieoc:y with which 11181111Frial respons1bilities are carried out. 

They focus on whether management controls, practices, processes, and 

procedures are adequate and effective: Performance audits also 

include reviews of selected programs and activities to evaluate their 

overall effectiveness in achieving anti~ results. 

f'ilwKUl -These audits include financial statement audits required by 

the Olief Fmancial Officers Act and financial related audits. These 

latter audits include reviews of such items as internal control systems, 

transaction processing. financial systems, and contracts. 

Our audit mission is carried out by three staff groups to facilitate coverage of 

NRC's programs and activities. The organization chart for the OIG's audit 

function is as follows: 
112 

AUDIT STAFF ORGANIZATION 

INSPECTOR GENERAL 

ASSISTANT INSPECTOR GENERAL 

FOJlAUDD'S SPECIAL 

~ ASSISTANT 

fOJlAUDrr . 

DEPUTY ASSISTANT INSPECI'OR FOLLOW-UP 

GENERAL FOJl AUDD'S 

TEAM LEADER TI!AN LEADER TI!AN LEADER 

I'INANaAL OPERA'I10NAL SPECIAL 

AUDD'S AUDD'S AUDD'S 

... , 
113 

TilE AUDIT PROCESS 

The audit process represents the steps taken by OIG to conduct audits. 'Ibis 

process involves several steps, ranging from notification of the office to be 

audited to maldDg audit follow-up. The underlying goal of the audit process 

is to maintain an open cbannel of communication between the auditors and 

management officials to ensure that audit findings are accurate and fairly 

presented in the audit report. The key elements in the audit process are as 

follows: 

Aadit ..aHicatioa - formal notification to the office informing auditee 

of our intent to begin an audit. 

Eldruce COIIfenDce - a meeting to advise agency officials of the 

purpose, objectives and scope of the audit, and the general 

methodology to be followed. 

Suney - exploratory work conducted before the detailed examination 

to g&ther data for identifying audit objectives, documenting internal 

control systems, becoming familiar with the activities to be audited, 

and identifying areas of concern to management. 

Aadit - comprehensive review of selected areas of a program, activity, 

or function using an audit program developed specifically to answer the 

audit objectives. 

E1dt CIOIIIereace - a meeting with the agency's principal officials to 

present and discuss the results of the audit. 'Ibis meeting provides 

agency management the opportunity to confirm information, to ask 

questions, and to provide any necessary clarifying data. 

Draft report - an offic:ial draft report provided to the agency to obtain 

written comments on the audit findings. The agency is normally given 

30 days to respond to the draft. 

Final aadit report - the final report that contains the agency's offic:ial 

written response to the draft. 

..... 
114 

Audit follow-up and closure - the process that assures that 

recommendations made to management are acted upon. 

STRATEGIC PLANNING 

This year's plan re-emphasizes the strategic approach to planning we initiated 

last year. We plan to continue work in the same key programs that we 

identified last year. We believe this approach increases the effectiveness and 

usefulness of our work and also increases our audit coverage in major mission 

and program areas. During FY 1993, we have planned work in all six NRC 

mission areas. We also plan to increase our audit coverage of NRC contracts 

and in the audit follow-up area. 

Descriptions of our audit strategies and a disc:ussion of the areas we plan to 

pursue are provided as Appendix I. Appendix U provides a synopsis of the 

specific audits we plan to undertake. 

ALLOCATION OF AUDIT RESOURCES 

For FY 1993, the Assistant Inspector General for Audits has an authorized 

staff of 19. With this level of resources, we plan to make about 24 

program/financial audits, 5 follow-up audits, and 5 contract audits. However, 

since 5 financial audits are required annually by either statute or agency 

regulations, we are effectively reducing the auditable universe of213 activities, 

by only 19 audits per year. We have designated 83 of the 213 activities as 

critical and believe they should be audited at least once every 5 years, with 

the remaining 130 activities being audited much less frequently. At our 

current staffing levels and a constant audit rate, it would take us about 11 

years to work through the entire audit universe. However, as a practical 

matter it will take considerably longer to cover the audit universe since we 

plan to audit those areas designated as critical more frequently. Our 

allocation of audit resources by NRC mission area is depicted in the following 

chart. 
115 

OIG FY 1993 AUDIT PLAN 

STAFFING BY NRC MISSION AREA 

Legend 

RSSR 

MLWSR 

SIR 

SR 

laW 

MS 

SY 

HLW 

1.5 SYs 

10% 

SR 

1.7 SYs 

11% 

MLWSR 

.8 SYs 

5% 

RSSR 

3.2 SYs 

20% 

MS 

6.3 SYs 

40% 

reactor safety and safeguards regulations 

material and low-level waste safety regulation 

special and independent reviews 

safety research 

high level waste 

management support 

staff years 

N01E: Percentages do not equal 100 percent due to rounding. 
116 

Our planned allocation of resources by audit category is as follows: 

Audit Category 

Performance Audits 

Financial Audits 

Contract Audits 

Audit Follow-up 

Total Direct Time 

Staff Years Allocated 

9.1 

2.9 1 

2.4 

.u 

1 These audits will be supplemented with contract audit support. 
117 

APPENDIX I 

AUDIT STRATEGIES 
118 

Appendix I 

NRC MANAGEMENT OF INSPECTION PROGRAMS 

BACKGROUND 

In carrying out regulatory oversight, reactor inspection and evaluation 

activities are among NRC's most important (and possibly most contentious) 

programs. The Reactor Inspection Program is primarily administered by 

NRC's Office of Nuclear Reactor Regulation (NRR) and is conducted by 

headquarters and regional inspectors. Regional inspections are conducted by 

both region-based and resident plant inspectors. Key reactor inspections 

include: 

Core Inspections - inspections that provide minimal coverage at all 

plants through inspection of a cross-section of plant activities. 

Mandatory Team Inspections • periodic inspections that address a 

specific area, such as licensee maintenance. 

Regional lnitiad.esfReac:t"e Inspections • discretionary inspections 

selected by the Regional Administrator. 

Special Team baspections • 2-4 week long, technically oriented 

inspections of licensee operations. 

Resident Inspections • on site NRC inspections made by resident 

inspectors who perform a variety of inspection activities and who 

regularly observe and verify licensee performance. 

Vendor Inspections - reactive inspections to respond to vendor and 

license reports of defects in vendor-supplied products, materials, etc. 

to nuclear power plants. 

Security and Safeguard Inspections • inspections to determine the 

operational effectiveness of power plant security. 
Appendix I 

119 

NRR also administers the systematic: assessment of licensee perfoi'IDliiice 

program (SALP), wbich provides an iDtegrat.ed assessment of a licensee's 

perfOI'IIUIDCie using d8ta licensee event reports, inspection reports, etc. from 

the previous .12-18 months. 

NRC's Office for~ and Evaluation of Operational Data (AEOD) also 

performsindependeut assessmeuts of reactor operational perfoi1Jiliiice through 

the following programs: 

Di8poldc EftiiUidolll'n9ut. in-depth ewluations that supplement 

the SALP and the Performance I:Ddicator Program. 

r.ddellt IRftltip'*" ........ ·includes region-directed Augmented 

IDspection Teams and ~rs-dirccted Incident Investigation 

T~ 

~ llldkator Protnua ·quarterly reports for each operating 

~r plant showiD& JreDd data and bistoric:al comparisons based on 

varioUs safety iDdicatOrs. 

In addition to reactor ~ the Ofti9c of l'luclear Material Safety and 

.. 

~ 

SafCguards (NMSS) directs NRC ~ associated with licensee 

and handliDg of nuclear ~rials. Currently, NRC administers 

. approximately 7,500 licenses for the ~n and use of nuclear materials 

in medical and ~ applicatioas . and. makes about 2,800 inspections 

iDnually. The inspeCtions are nonnally performed by NRC regional office 

inspectors. 

Not surprisiDgly, ~ lllllpitude of NRC's inspec:tion activities and other 

ass c '7¥1JIS of licemee performauce raise several questiops regarding the 

overall effectiveness and ldlieYement.of aaency objectives.· For example, how 

are resources dete~ and aUoc:atecl? Is the inspection process consistently 

implemented and reponed? Me iD&pec:tors adequately trained? Is the 

Resideut Inspector Program working effectively? In addition, a Regulatory 

Impact Survey produced a IIWIIber of industry coDCemS about NRC's 

JNNVme11l of inspec:tion prosram adivities. For esample, there were 

concems with NRC's scheduling and control of on-site inspection activities, 
120 

Append~~! I 

especia1Jy team iDspectioDs. The swvey also sugested that shortCOIDinp 

existed in the trainina aud qualifications of the professional iaspection staff. 

The b8laDce of this paper Jays out a conceptual framework for OIG 

undel'takiJJi a lo1J8·term effort to assess NRC"s inspection and evalUation 

propams. Although we apect that our follow-on audits will focus on power 

reactors, the results of our swvey also iDdicated a need to cover NRC"s 

inspection proarams COYeriDg material licensees. 

ACDrr OIUECl1VE: Our overall loag-term objective is to evaluate the . 

· effectiveness of NRC"s maJIIICIDCilt of its various safety inspection programs. 

'Ibis will include auasments of both the reactor and material inspectiim 

prosrams. We also inteDd to assess the extent that AEOD's iDdependent 

assessment.~ and trend analyses are used and to cletCrmine whether there is 

acessive duplication between AEOD's assessments and NRR's inspection 

programs. We inteDd to use a three-proD& approach to make this assessment. 

First, we will assess bow inspectioas are plalmed; secoad, we will evaluate 

bow inspections are aecuted; aud tbird, we will determine bow inspection 

data is reported aud used. 

S'l1lA'I'EGY: Last year, we made a swvey audit of NRC• iDspec:tion propam 

to idemify issues that warranted review aud to help liS appropriately assip. 

wort priorities, thereby makiDa the most effective use of our resources. This 

wort proved very "WOrtbwbile aud durin& the Dat two years we will undertake 

a series of reviews tbat will CODCentrate on croucuttilla issues (discussed 

below) but with a central theme, NRC maJIIICIDCilt of inspectioa prOpams. 

By aualyziDa croucuttilla issues, such as resource allocation, trainin& 

ClQIIIisteney, etc., we em identify areas that affect all or most inspection 

propams, tbus ma•ind•hc our audit effort. At the CIOq)letioD of a series of 

iDdiviclual audits of these issues, we will prepare a cODsolidated report 

summariziDa our overall observatioas 011 NRC"s JDaD~t~C!DCDt of its inspection 

propam oversipt. 
121 

Appendix I 

PlANNING ISSUES 

o Resource Allocation. We will assess how NRR and NMSS inspection 

resources are determined and alloc:ated between headquarters and the 

regious. We will also assess how AEOD determines its staffing 

requirements, especially for diapostic evaluations. 

o Tminiur Reqpiremcnts. Our audit objective will be to determine how 

iuspec:tor traiDiDg needs are identified and met. 

o $Gfwb,Uur of Impectiops.. We will determine and assess how NRR 

and NMSS inspections and AEOD evaluations are scheduled. 

EXECU'I10N ISSUES 

o Promm. Consistency. Our audit objective will be to determine 

whether the approach used in performing inspections is consistent 

between inspection teams and between regious. We will also 

determine the degree to which diagnostic and trend data prepared by 

AEOD is used in performing inspectious. In addition, we will assess 

the degree to wbic:h iuspection and diagnostic data and evaluation and 

trend data is used for maldug SALPs. This would include determiniug 

how consistently such data are used in developing SALP ratings for 

licensees. 

o Inspection Eff...W..mm We will assess NRC's efforts to satisfy itself 

tbat NRR and NMSS inspec:tioD and AEOD evaluation programs are 

adlieving stated goals. This would include assessing whether excessive 

duplication emts and the degree to which inspector utilize AEOD 

data. such as diagnostic evaluations and incident report data, during 

their inspections. 

o Prpmm Pl!ilg!qlhy. We will identify the underlying philosophy of 

compliance versus perfo1111811Ce-type inspections. 

... . .,. 
122 

Appendbc I 

REPORTING ISSUES 

o Preparation of Data We will determine how inspection data is 

recorded and reported. In this regard, we will assess the degree to 

which NRR and NMSS use trend analyses and other evaluation data 

prepared by AEOD. 

o Review ProceSS. We will assess the process used to review inspection 

and evaluation report data, with particular emphasis on the safeguards 

to ensure the integrity of the information. We will evaluate how NRC 

management validates and reports inspection results, especially on 

inspections performed by resident inspectors. 
123 

Appendix I 

INFORMATION RESOURCE MANAGEMENT 

BACKGROUND 

NRC management and its technical and administrative staffs depend heavily 

on information obtained from a vast number of automated information 

systems maintained within the agency. Many of these systems provide ready 

access to essential information on safety issues, operator licensing. reactor 

inspections, daily plant status, emergency response, risk assessment, and 

allegation management. The information obtained from these systems is 

integrated into NRC's decision-making process related to its licensing and 

regulatory functions and overall mission of protecting the public health and 

safety. Consequently, the integrity of the data that goes into these systems is 

vitally important. 

The Office of Information Resources Management (IRM) is responsible for 

NRC's information resources management program. The program provides 

for centralized information resources in the areas of computer, 

telecommunications, and information support services. It also provides the 

essential services and technical means for the agency staff to receive, store, 

retrieve, manipulate, process, and transmit information in support of the 

agency's mission. Although the majority of the systems are managed by IRM. 

others are appuently developed, operated, and maintained by user offices. 

NRC currently has about 220 operational systems and at least 10 other 

systems are being developed. These range from the comprehensive, agencywide systems to the smaller, single-user systems. NRC expends over $40 

million a year on its information resources management function and the 

maintenance of the various systems. 

Over the years, Federal agencies have received Congressional and General 

AQ:ounting Office (GAO) criticism for DOt having a meaningful, strategic 

planning process for developing and acquiring computer systems. 

Interestingly, NRC's FJ:Ve-Year Plan points out that "the present agency 

lllliDpOWCr and project tracking systems do not provide the planning. 

scheduling, or resource allocation functions needed to effectively manage the 

agency's staff resources. Since they evolved in a piecemeal fashion over a 
124 

Appendbc I 

number of years, the systems do not work together efficiently and 

seamlessly ... ." 

The balance of this paper establishes OIG's conceptual framework for its 

long-term evaluation of NRCs information resources management, tbe need 

for the various systems maintained witbin the agency, and the integrity of tbe 

information tbat goes into tbe systems. 

AUDIT OBJECI'IVE: Our overall long-term objective is to determine tbe 

effectiveness of NRCs management of its automated information systems. 

Through a series of audits, we will determine (1) wbetber NRC systems are 

effectively and economically meeting users needs and (2) whether tbe 

information in the system databases is reliable and adequate to support 

management decisions tbat flow from it. 

STRATEGY: During FY 1992 we made a survey audit of NRCs Information 

Resource Management Program to identify areas for more detailed review. 

We also hired a contractor to assist us. As spelled out in Appendix ll, during 

FY 1993 we will continue work in tbe IRM area by doing several interrelated 

reviews with each successive review bringing us closer to our overall 

evaluation of this area. We will complete our assessment with a consolidated 

report, in FY 1994, summarizing our findings and conclusions on NRCs 

management of its automated information systems. 

PLANNING ISSUES 

o 5trateiis: PJan. We will determine whether NRC has a strategic plan 

for meeting its information needs and evaluate the adequacy of tbe 

plan. We will assess whether tbe systems under development fall 

witbin NRCs overall strategic plan. 

EXECU'nON ISSUES 

o Need for Systems. We will assess tbe need for and use of tbe systems 

maintained witbin NRC. This will include an assessment of duplicative 

databases and services from tbe systems. 
Appendix I 

125 

o Integrity of Information. We will evaluate the quality controls over the 

data entry process and the databases and assess the accuracy of the 

data in the systems. We will also examine the extent to whicll NRC 

management relies on the information in this decision-making process 

whether and the information used is adequate to support such 

decisions. 

o External Impact. Our objective will be to assess the extent to which 

external data is used to update the systems, how that data is used, and 

the reliability of that data. 

REPORTING ISSUES 

o Pre.paration of Data. We will. determine what reports are prepared 

from the information contained in the systems and the use made of 

these reports. We will assess the appropriateness of the report format, 

contents, and timeliness. 

o Distribution Process. We will review the distribution of information 

obtained from the systems. This will include an assessment of the 

timeliness of the distribution process. 

72-560 0 - 93 - 5 
126 

Appendbcl 

NRC MANAGEMENT OF RESEARCH 

BACKGROUND 

Under Section 205 of the Energy Reorganization Act (Public Law 95-209), the 

Director, Offioe of Nuclear Regulatory Research (RES), performs functions 

delegated by the Commission, indudiug (1) developing recommendations for 

research deemed necessary for performance by the Commission of its 

lioensing and related regulatory functions, and (2) engaging in or contracting 

for research that the Commission deems nec:essary for the performanoe of its 

lioensing and related regulatory functions. 

The Offioe of Nuclear Regulatory Research (1) plans, recommends, and 

implements programs for nuclear regulatory research, standards development, 

and resolution of generic safety issues for Dllclear power plants and other 

facilities regulated by the NRC; (2) develops and promulgates technical 

regulations; and (3) coordinates research activities within and outside the 

agency, includiug appointment of staff to committees and conferences. 

Goals and Objectives 

The research program has three major goals and objec:tives, namely: 

o (1) Provide independent ~rtise and technical information for 

NRCs regulatory judgments, (2) anticipate potential safety 

problems, and (3) develop regulations and guides to implement 

Commission policy or requirements. 

Structute of the Research Program 

The research program is structured into four mission areas, each having multiprogram elements. The four mission areas are (1) readOr lioensing support, 

(2) materials lioensing support, (3) reactor regulation support, and (4) highlevel waste disposal 

... afl6 
Appendix I 

127 

The Nuclear Safety Research Review Committee (NSRRC) was established 

in 1988 on the recommendation of the National Research Council. NSRRC 

provides advice to the Director, RES, regarding the direction of NRC's 

nuclear safety research programs. The NSRRC consists of 13 members 

including a member from RES who acts as the Designated Federal Official. 

The Department of Energy (DOE) national laboratories and private 

institutions. 

NRC Research Budget Breakdown 

The fiscal year 1993 budget estimate of $127 million for nuclear regulatory 

research is estimated to be -

o Fifteen percent or $19 million for NRC salaries and expenses; 

85 percent or $108 million for contractor-related funding. Of 

the $108 million for contract funding. approximately 70 percent 

or $76 million will be spent in the national laboratories. 

AUDIT OBJEC11VE: Our overall long-term objective will be to evaluate the 

effectiveness of NRC's management of its research program and to determine 

whether NRC is doing the research it should be doing. This will include 

assessments of identifying research needs and the application of research 

results. According to NRC's research philosophy, the primary benefits of 

research should be improved regulations through better definition and 

refinement of safety margins, anticipation of operational problems, and tools 

to deal with safety issues as they arise. 

STRATEGY: During the past year, we made a survey audit of NRC's research 

program to determine (1) how the research program is formulated, (2) how 

funds are budgeted for projects, (3) the basis for selecting contractors, and 

(4)the benefits obtained from the work performed. During FY 1993, we plan 

to continue work in the research area by reviewing issues related to plant life 

extension and license renewal. 

PLANNING ISSUES 

We will review how the agency identifies and assigns priorities to research 

needs. We will also assess how research projects are used to: (1) support 

I'IF10rll6 
128 

Appendix I 

regulatory decisions; (2) anticipate future problems haviug a safety 

significance; and (3) support the development of regulations. 

EXECU'l10N ISSUES 

Our objective will be to review how NRC JllaJiaFS projects in terms of c:osts, 

age, and priority. Of coooem will be projects of long duration and large 

dollar costs. In addition, projects in wbicb priorities have cbanged will be 

reviewed. 

REPOR11NG ISSUES 

We will review research projects that have been <lOI1Cluded and determine if 

they are being used to meet ODe or more of the research goals and objectives. 

Of cow:em in this area will be the effectiftness of project IIWlllgement to 

ensure that the project meets the intended purpose. 

..UeiM 
129 

Appendix I 

NRC'S FINANCIAL MANAGEMENT ACTIVITIES 

BACKGROUND 

As a result of the Chief Financial Officers (CFO) Act and the advent of the 

requirement to collect 100 percent of NRCs budget, NRC must exercise 

tighter financial management controls than ever before. RespollSlbility for the 

implementation of the requirements of the Act at NRC rests with the 

Executive Director for Operations, who was appointed NRCs CFO. 

One of the key provisions of the CFO Act is the requirement for the agency 

to produce yearly financial statements, which would be subject to audit. To 

produce financial statements that have accurate information, the CFO must 

ensure that there are proper internal controls in place and the accounting 

systems are operating in accordance with GAO's principles and standards. 

Another area upon which the CFO should focus attention is the controls 

exercised over contracting for goods and services, with the commercial sector 

and with the Department of Energy's (DOE's) national laboratories. The 

main feature of the controls should be to ensure that NRCs procurement 

activities conform to good business practices and comply With applicable rules 

and regulatjons. 

Key areas where we need to focus our work include the following: 

Budget formulation • the agency's process for deciding what resources 

are required and how they will be used. 

Budget exeeution • the agency's ability to determine how it actually 

spends the monies received. 

Financial statements preparation • the agency's process used to 

capture accounting data and ensure its accuracy for the task of 

producing required statements. 

Federal Managers' FinanclaJ lntepity Act • assessment of the 

adequacy of the agency's system of internal (management) controls . 

.... UCJI16 
130 

Appendbc I 

LiceD~e Fee M•••emeat Procna • method aDd timeliness of 

assessing and collecting for services rendered to licensees. 

Mcoutiq ud fbwlce • 8CCOUIIts for the daily spending activities for 

the agency. 

Coatnct admiDlstratioa ·procedures used by the agency to administer 

contracts once they have been awarded. 

Coatnct opentlou • processes used by the Division of Contracts and 

Property Management to award contraas. 

Coatnct audits • ensure that contractors are only charging expenses 

to a contract that are provided for in the contract terms and governing 

regulations. 

Proanua support fuctlou • methods used by the program offices to 

account for funds used to contract with the national laboratories. 

NRC must be able to properly account for the expenditure of monies from its 

FY 1993 budget of over $500 million. In addition, there is a need to ensure 

the timely collection of license fees since NRC is now required to collect 

approximately 100 percent of its budget from its liC:ensees. 

AUDIT OBJECI'IVE: Our overall objeaive over the next few years will be 

to establish a frame of reference regarding how effectively the agency's 

internal control systems are functioning. 1bis will provide us with a basis for 

our attestation of the financial statements produced by the agency. We also 

intend to examine the procedures used by the agency in planning its 

contractual work to ensure that appropriate procedures are followed when 

awarding task orders to the national laboratories. 

STRATEGY: At the culmination of a series of audits in the areas that impact 

on the financial and resource management of the agency, we plan to prepare 

a summary report addressing systemic problems that are common within the 
Appendix I 

131 

areas reviewed. We will also use the results of our audit work as input in our 

annual requirement to report on NRCs implementation of the Federal 

Manager's Financial Integrity Act. 

PLANNING ISSUES 

o Areas of Vulnerability. We will assess the adequacy of the agency's 

internal control procedures, focusing on the implementation of the 

recommendations from the external audit firm's review to ensure that 

the agency will be able to produce accurate accounting information. 

o Accuras:y of Accountine Information. We will perform audit work that 

will provide us with a basis for rendering an opinion on the financial 

statements and providing feedback on performance measurements for 

programs that began in the budget formulation period through the 

execution cycle. 

o Pr2&J'3lll Needs Versus Financial Mana&emenl We plan to assess how 

the agency balances its dual mission of protecting the public health and 

safety with the need for sound fiscal management. 

EXECUI'ION ISSUES 

o Accomplishment of Goals. We will monitor the effort of the agency's 

external audit finn, perform our own audit effort, and work with our 

own external audit contractor. We will assess whether deficiencies 

exist in NRCs internal controls or financial management systems that 

need to be corrected to achieve compliance with CFO Act 

requirements. 

REPORTING ISSUES 

o Reoorting of Results. We will determine whether the NRC has 

developed effective plans to ensure that fiscal results are timely and 

accurately reported. 

...Mdl6 
132 

AppendiK I 

AUDIT FOLLOW-UP 

BACKGROUND 

Audit follow-up is an integral part of good management and is the 

responstbility of both agency lll.llllliCment officials and the auditors. 

Corrective action taken by maMgemeut on resolved findings and 

recommendations is essential to impi'OYing the effectiveness and efficiency 

of Government operations. The Office of Manasement and Budget Orcular 

A-SO, revised, requires each agency to establish systems to assure the prompt 

and proper resolution and implementation of audit recommendations. The 

systems are to provide for a complete record of action taken on both 

monetaJy and non-monetaJy findings and recommendations. 

NRC Bulletin 1201-4 establishes the procedures for follow-up on audit 

recommendations. This bulletin provides that NRC management bas full 

responsibility for implementing corrective action for audit recommendations. 

NRC's Follow-up Official, among other things, monitors the follow-up system 

and ensures that management officials implement corrective action agreed 

to by management and OIG. 

Audit reports may contain recommendations for management action whose 

status at report issuance is either: 

Closed - indicating that corrective action was completed before the 

final report was issued-the ideal outcome of an audit report; 

Resolved - indicating that the auditors and cognizant management 

officials have reached agreement on the corrective actions needed, but 

those actions have not yet been completed; 

Umesolved - indicating that management and the auditors have yet to 

reach agreement on actions needed to correct a deficiency, or whether 

management will sustain a recovery or concur in any savings reported 

by the auditors. 

.. 1Scl16 
Appendix I 

133 

OMB Orcular A-SO also requires that audit recommendations be 

resolved within six .months of issuance. Open audit recommendations 

are tradced by OIG and cognizant management officials through 

NRC's Audit Follow-up Program. It is czpected that the NRC audit 

follow-up official regularly reports the status of OIG recommendations 

and the actions being taken by management to implement them. 

Although all recommendations are tracked, those with monetary 

implications require more rigorous follow-up in ac:cordanc:e with the 

1988 amendments to the lnspec:tor General Act. Auditors are required 

to clearly identify savings resulting from audit recommendations in 

draft reports and to specific:ally request management's conrurrence in 

the savings c:alcu1ations in responding to the draft report. Any 

monetary recommendation for which conaurence bas not been 

obtained upon report issuance must be considered unresolved until the 

auditors and management c:an agree upon a savings figure. 

OBJECI'IVE 

Our objective is to ensure that NRC bas developed and implemented an 

adequate audit follow-up system to ensure timely action on agreed-to 

corrective actions. In addition, we will determine whether implementation 

of the recommendations satisfactorily resolved the condition reported. 

STRA1EGY 

OIG will accomplish its objective by reviewing the agency's follow-up system 

and following up on prior audit recommendations during subsequent audits 

in the same area. During FY 1993, we plan to evaluate the agency audit 

follow-up system and followup on recommendations made in four prior audits. 

The details are spelled out in Appendix n. 
134 

APPENDIX II 

AUDITS PLANNED FOR FISCAL YEAR 1993 
135 

Appendix II 

REUABILI'IY OF DATA IN NRC'S SAFE1Y RElATED SYS'IEMS 

PLANNED LQCATIQNS 

NRC Headquarters and Regional Offices 

TYPE OF AUDIT 

Performance (Priority I) 

BACKQRQUND 

NRC management and its technical staff depend heavily on information 

obtained from a number of automated information systems maintained within 

the agency. Many of these systems provide ready access to essential 

information on safety issues, operator licensing, reactor inspections and other 

key topies. The information obtained from these systems is integrated into 

NRC's decision-making process related to its licensing and regulatory 

functions. 

AUDIT QBJECilVES AND SCOPE 

OIG plans to build on information obtained during a survey of the agency 

regarding user satisfaction of safety related systems. This review will target 

selected systems for more detailed examination to determine the extent to 

which the databases are duplicative and whether the data in the systems is 

reliable. 

ESTIMA.lED RESQURCE RE0UIREMENTS 

This review will require 1,600 staff hours of effort. 

... ICif:ll 
136 

Appendix II 

NRC'S REACI'OR VESSEL CAPSULE SURVEilLANCE PROGRAM 

PlANNED LQCATION 

NRC Headquarters 

TYPE OF AUDIT 

Performance (Priority I) 

BACKGROUND 

When the nuclear industry was first launched, NRC required reactor vessel 

manufacturers and utilities to retain extensive samples of the weld and base 

metal material used to construct each reactor vessel. NRC also required that 

a portion of these "capsules" be placed in the reactor to be irradiated 

throughout the life of the vessel, and the remainder retained by the utility as 

a control group. Utilities are required to periodically remove the capsules 

and test them to determine whether the vessel still meets NRCs 

embrittlement criteria. This testing is NRCs control to ensure the vessel is 

able to withstand a pressurized thermal shock accident. NRCs Office of 

Nuclear Regulatory Research (RES) is responsible for monitoring and 

assessing the results of utilities' capsule tests. Also, we recently learned that 

the Electric Power Research Institute, the research arm of the utility industry, 

just initiated an effort to compile a data base of capsule test results. 

These capsules are critical to assessing the condition of the reactor vessel; 

however, questions have been raised regarding how closely RES is monitoring 

these tests. For example, during the Yankee Rowe license renewal process, 

it was learned that several years ago NRC waived the requirement for the 

utility to retain the vessel weld samples; therefore, neither the utility nor NRC 

had a basis for assessing the condition of the vessel. This was one of the key 

factors that led the utility to terminate operation of the plant. In addition, 

preliminary information indicates that (1) NRC may have granted similar 

waivers to other utilities, and/ or (2) some utilities' capsule surveillance 

Pap2aflS 
137 

programs may not be current. Consequently, significant questions exist 

regarding the ~ of RES's reactor wssel capsule monitoring program. 

Auprr OBlECI1VES AND SCOPE 

The objective of this audit is to determine wbether RES's reactor wssel 

capsule surveillaDoce program is current and provides a basis for NRC to 

assess the condition of the reactors it reguJates. We will determine (1) bow 

many, if any, program waivers NRC bas issued, {2) how many utilities 

currently meet NRC monitoring requUemcms, (3) wbether any utilities are 

approaching their pressurized thermal sboc:k sc:reeDiDa criteria, and (4) what 

regulatory action NRC is planning for the utilities wbose capsule suneil1aDce 

programs are not current. We will also determine the extent that the iDdustry 

bas conducted research on reactor vessels and how it was used by NRC and 

whether it duplicated NRCs research efforts. Initially, ~ will rely on 

information available at RES headquarters; if necessuy, ~ may supplement 

this information with test data from national laboratories and/or other 

commercial test facilities. 

EmMATED RESOURCE SlJRymil ANCE 

This audit will require 1,280 staff hours of effort. 

... hU5 
138 

Appendix II 

NRC TECHNICAL TRAINING CENTER OPERATIONS 

Pl.ANNED LOCATIONS 

Technical Training Center, Chattanooga, TN; Region U and NRC 

Headquarters 

TYPE OF AUDIT 

Performance (Priority U) 

BACKGROUND 

The Technical Training Center (TIC) provides for the technical training of 

NRC technical staff including resident inspectors, region- and Headquartersbased inspectors, reactor operator license examiners, operations center duty 

officers, licensing project managers, and technical reviewers. Training is 

provided on a space available basis for other Federal, state, and foreign 

government employees. Courses are offered in reactor technology system 

design and operation and in materials and fuel cycle safety, reactor health 

physics, and inspection and examination techniques. 

The TIC maintains a 2-year integrated schedule of courses that supports longrange planning by agency managers and is flexible enough to respond to 

changing needs and priorities within the agency. Based on projected training 

needs, approximately 155 reactor technology course-weeks and 115 specialized 

technical training course-weeks will be scheduled each year during FY 1992-

1996. 

The TTC has a projected budget of $3.7 million for program support and $.8 

million for administrative support and a staff of 34 employees for FY 1993. 

The resources allocated for administrative support for the TTC provide for 

rental of space; telecommunications service and equipment; and supplies, 

equipment, and materials to support the technical training of NRC personnel; 

spare parts and consumable materials for NRC-controlled simulators; and the 

development and maintenance of training aids. 
139 

Appendix II 

AUDIT OBJECID1ES AND SCOPE 

The overall objective will be to assess the effectiveness of TI'C's operations. 

We would need to perform a limited survey of the TI'C's operatioDS to 

determine the specific objectives and scope of the review. The survey will 

cover such things as the interactions between Region ll and 1TC and AEOD 

and TIC; TI'C's processes and procedures for managing oourse curriculums 

and schedules; the technical staff's evaluation of the comses and the 

curriculums; and other TI'C activities. 

ESUMAlED RESOURCE REOUlREMENIS 

This audit will require 1,600 staff hours of effort. 
140 

Appendix II 

REVIEW OF NRC PREPARATIONS FOR. REVIEWING REACI'OR. 

LICENSE RENEWAL APPLICATIONS 

PI.ANNED l.OCATIONS 

NRC Headquarters and Selected Regional Offices 

TYPE OF AUPIT 

Performance (Priority I) 

BACKQROUNI) 

1bis activity consists of safety and environmental reviews of applications for 

the renewal of existing reactor licenses for a period of up to 20 years beyond 

the 40-year term of their operating licenses. Approximately 75 percent of all 

operating reactors are expected to request license extension. 

NRC efforts will be focused on administrative and regulatory issues which will 

establish the framework for evaluating utility license renewal requests. The 

NRC will develop and implement regulatory review guidance and technical 

acceptance criteria for the treatment and resolution of license renewal 

procedural and technical review issues identified in the license renewal rule 

or during the NRC review of renewal applications. 

AUDIT OBJECilVES AND SCOPE 

1bis audit will assess the extent to which the agency is adequately preparing 

for the renewal of license applications. We are aware of concerns at the 

Commission level about whether the agency will be able to handle the 

electronic transfers of information, including drawings and other graphics. We 

will also assess NRCs efforts to establish a process for reviewing license 

renewal applications. 1bis will include whether all necessary changes have 

been made to the standard review plan and whether regulatory guides and 

technical acceptance criteria have been established. The review will be 

hp6oUS 
141 

Appendbc II 

preceded by a limited survey during which time the specific objectives and 

scope will be established. 

ESTIMATED RESOURCE REOU1REMENTS 

This review will require 1,600 'Staff hours to complete. 

...7af3S 

72-560 0 - 93 - 6 
142 

Appendix II 

JUSTIFICA110N TO OPERA'IE 1liE CENTER FOR 

NUCLE.Ut WAS'IE REGULATORY ANALYSIS 

PLANNED LOCATIONS 

NRC Headquarters and San Antonio, Texas 

TYPE OF AUDIT 

Performance (Priority I) 

BACKGROUNI) 

The Center for Nuclear Waste Regulatory Analysis (CNWRA) was 

established in FY 1988 to "provide sustained high-quality technical assistance 

and research free from conflict of interest" for NRCs portion of the high-level 

nuclear waste (HL W) program. The center is predicated on starting 

construction for the repository exploratory shaft in 1992. According to NRCs 

October 1991 Five-Year Plan, the agency recently renegotiated the new 

contract and plans to expend about $69 million on this effort between FY 

1992 and FY 1996. 

Although the Federally Funded Research and Development Centers 

(FFRDCs) contracts are intended to be long-term in nature, the Office of 

Federal Management Policy requires that agencies conduct analyses prior to 

renewing FFRDCs to determine whether the unique FFRDC relationship is 

still needed. The analyses should address whether the marketplace has 

changed to the point where competition should be sought. They should also 

evaluate pas~ performance and any future changes to the FFRDCs mission. 

AUDIT OBJECilVES AND SCQPE 

The national program to resolve the HL W issue bas been plagued by 

protracted delays. The purpose of this audit is to evaluate NRCs 1992 

requesting sole source renegotiation justifications for CNWRA. The audit will 

..... us 
143 

Appendbc II 

evaluate the nature .and adequacy of the justification. In· addition, we will 

assess (1) whether it may be prematUre for NRC to fUnd ihe CNWRA at this 

level 8Jld/or at this time, (2) how effective and what contributions CNWRA 

has made in resolving HLW issues, 8Jld (3) whether it may be more costeffective to distribute CNWRA funding among other NRC programs. Work 

will be conducted at NRC headquarters and CNWRA in Texas. 

ES1lMATEDRE5QURCEREQUlREMEJ'!IS 

1bis audit will require 1,280 staff hours of effort. 

... , .. us 
144 

AppendiK II 

LICENSING SUPPORT SYS'mM PROGRAM 

PLANNED l.OCA'DON 

NRC Headquarters 

'D'PE OF AUDIT 

PerformaDcc (Priority I) 

BACKGROUND 

The Uceusing Support System (l.SS) Program was established to ensure 

effective and efficient discbarge of NRCs responsibilities under 10 CFR Part 

2, Subpart J, for loading and subsequent use of the LSS prior to and during 

NRCs bigb-level waste (HLW) licensing proceeding The LSS is an 

electronic information management system that will contain the relevant 

liceusing doaunents of DOE, NRC and other parties to the Commission's 

HLW repository licensing proceeding. The Office of the LSS Administrator 

monitors the LSS activities of the NRC, DOE, and other LSS participants to 

assure that their activities fully support the timely and proper functioning of 

the system. The status of the LSS is uncertain due to significant schedule 

delays of DOFs repository license application. 

AUDIT OBIECilVES AND SCQPE 

The Objective of this review will be to assess whether (1) the LSS program 

is lllliDiged effectively and (2) the LSS staff is being efficiently used 

considering the delays in the license application. 

ESDMAJED RESOURCE REQUIREMENTS 

This review will require 1,280 staff hours of effort. · 

.... .,. 
145 

REACI'OR INSPECnON PROGRAM MANAGEMENT 

PLANNED I.OCATIONS 

NRC Headquarters and Regional offkcs. 

1YPE OF AUDIT 

Performance (Priority I) 

BACKGROUND 

NRC's inspection program requires that cadi reactor site receive a specified 

level of inspection effort. Although specific inspection procedures arc 

prescribed in NRC's Inspection Manual, some reactor sites arc to rcc:civc 

more inspection attention than others. The amount of inspection effort is to 

be derived from the Systematic Assessment of Licensee Performance (SAI.P) 

evaluation that NRC prepares for each licensee. As a result, a specific 

inspection plan is tailored for each site. 

AUPIT OBJECIDIES AND SCQPE 

The purpose of this review will be to deteniline how NRR management 

oversees completion of inspection requirements for each site, and how 

regional management assures the site-specific inspection plans are 

accomplished. We intend to visit all regional offices to gain an Agency-wide 

perspective of this matter. This audit would include an examination of the 

utility of the Master Inspection Planning System. 

ESIJMATEP RFSQURGE REOUIREMENJS 

This audit will require approximately 1,400 staff hours of effort. 
146 

Appendix II 

NRC'S E'DUCS PROGRAM 

PLANNE[) l.OCADONS 

NRC Headquarters 

TYPE OF AUDIT 

Performance (Priority I) 

BACKGROUND 

The 1988 Office of Government Ethics (OGE) reauthorization legislation, 

Public Law 100-958, requires that executive agencies submit an annual report 

to OGE conc:emiDg certain aspects of their ethics program. The Office of the 

General Counsel (OGC) is respoiiSl"ble for the Agency's program. William 

Parler, General Counsel, is the Designated Agency Ethics Official (DAEO). 

In response to a recent OGE questionnaire, the DAEO ranked the top four 

elements of NRCs ethics program from the most difficult to administer to the 

least. In order of difficulty they are: (1) Understanding standards of conduct; 

(2) Oversight of financial disclosure process; (3) Advising department 

employees on post-employment issues; and (4) Employee awareness of ethics. 

Since its inception in April 1989, OIG has not conducted an audit of the 

Agency's ethics program to ensure that it is complying with the requirements 

of the Act. 

AUPIT OBJECil\lES AND SCOPE 

The purpose of our audit will be to review the legislative requirements of the 

Act and the Agency's ethics program to identify areas that may warrant a 

detailed audit. 

ESDMATED RESQQRCE REQUIREMENTS 

This survey will require about 1,280 staff hours of effort. 

...Uo/.:15 
147 

INSPECnON REPORT CONCURRENCE PltOCESS 

PLANNED lOCATIONS 

NRC Headquarters and Regional offices. 

IYPE OF AUDIT 

Performance (Priority I) 

BACKQROUNI) 

We will review the process by which regional management approves 

inspection reports. When management disagrees with an inspector's findings, 

the inspector may file a Differing Professional View (DPV) or Differing 

Professional Opinion (DPO), as appropriate. The DPV is the less formal of 

the two processes. 

The subject is a sensitive issue because NRC bas previously received negative 

publicity and Congressional scrutiny because it failed properly consider an 

inspector's dissatisfaction with management's changes to an inspection report. 

AUDIT OBJECTiyES AND SCQPE 

This review will examine the procedures for requesting an inspector's 

concurrence on an inspection report, and the extent to which the regions 

properly use the DPO/DPV processes. 

ESDMATED RESOURCE REQUJREMEN'IS 

This audit will require approximately 960 staff hours of effort. 

... 13~1S 
148 

Appendbc H 

COMMITI'EE TO REVIEW GENERIC REQUIREMENTS (CRGR) 

Pl.ANNED I.OCATIONS 

NRC Headquarters. 

TYPE OF AUPIT 

Performance (Priority I) 

BACKGROUND 

The CRGR is chartered to "eliminate unnecessary demands on licensees by 

ensuring that the need for a new requirement can be demonstrated by those 

proposing it. ... Through its review the CRGR seeks assurance that the 

proposed requirement: (1) is necessary for the public health and safety, (2) 

is likely to result in net safety improvement, and (3) is likely to have an 

impact on the public industry and government, which is consistent with and 

justified by the urgency of the need or safety improvement to be realized." 

Because the CRGR is tasked to evaluate generic requirement and their 

impact outside the NRC, a review of its effectiveness in meeting its mission 

is appropriate. The nuclear industry has complained that NRC does not 

effectively consider the impact of generic requirements on its licensees. 

AUDIT OBJECID'ES AND SCOPE 

·This review will determine (1) how the NRC staff channels generic 

requirements through the CRGR, (2) how the CRGR meets the requirements 

of its charter by making the three determinations stated above and, (3) the 

timeliness of the CRGR's determinations. We will not evaluate the technical 

adequacy of the CRGR's determinations. 

ESTIMATED RESOURCE REOUIREMENTS 

This audit will require approximately 640 staff hours of effort. 

,.MollS 
149 

Appendix u 

VENDOR. INSPEC110N PR.OGR.AM 

Pl.ANNED LQCATIQNS 

NRC Headquarters, Regional offices, nuclear plant sites, vendor offices. 

TYPE OF AUDIT 

Performance (Priority I) 

BACKGROUND 

NRC's Vendor Inspection Branch (VIB), centralized at NRC Headquarters, 

inspects certain vendors that supply approved products, equipments and 

materials that have safety-related applications in nuclear power plants. The 

vendors inspected are those that have an approved quality assurance program 

that conforms to the requirements of 10 CFR Appendix B. VIB also inspects 

utilities procurement programs to assure compliance with NRC's regulations. 

Nuclear utilities can purchase safety-related products or services from 

"Appendix B" vendors or "commercial-grade" suppliers. Commercial grade 

suppliers are those that do not have an approved Appendix B program. 

Utilities may purchase safety-related products and services from these vendors 

if the utilities assure by a "dedication process" that the products or services are 

suitable for safety-related use. 

Because utilities are increasing the level of purchases from commercial-grade 

suppliers, NRC is considering whether inspections of these vendors would be 

appropriate. 

AUDIT OBlECDVES AND SCOPE 

The objective of this review will be to assess how VIB manages and controls 

this inspection program; the impact of VIB's inspections on utilities 

.. 15oL35 
150 

procurement programs aud vendor operatioos, aud; whether NRC 

sbould initiate inspectiom of CIOIDIDercial grade vendors. 

ES'DMAJED RESOURCE REQUIREMENTS 

This aUdit will require approlimately 1.400 staff hours of effort. 

.. MfliJ5 
151 

Appendbc It 

FJNANCW. ASSlJRANCES OF MATERW.S UCENSES 

PI.ANNED LQCATIONS 

NRC Headquarters and Regional Offices · 

TYPE OF AUDIT 

Performance (Priority I) 

BACKGROUND 

In June 1988 NRC published regulations setting technical and financial 

aiteria for decommissioning licensed nuclear facilities. Current licenses were 

to submit a "certification of financial assurance for decommissioning" or a 

"decommissioning funding plan" by Juiy Tl, 1990. For non-government 

materials licenses, NRC requires financial assurance ranging from $75,000 to 

more than $750,000. Financial assurance may be provided by several 

methods, including: 1) prepayment; 2) a surety, insurance, or other guarantee 

method; or 3) an external sinking fund with annual deposits. NMSS officials 

have said this rule has probiwly liad as great an impact on material licensee 

financial and operating status as the recent 100% fee recovery rule. 

AUDIT OBJECTIVES AND SCOPE 

Our objectives are to determine 1) the adequacy of NRC's aiteria for 

evaluating a licensee's decommissioning plan acceptability, 2) how NRC 

verifies a licensee meets its initial and continuing commitments detailed in the 

plan, 3) the number of licenses late in compliance with the rule and how NRC 

plans to bring them into compliance, and 4) licensees have purposefully 

violated the intent of rule and put the public at risk. 

ESTIMATED RESOURCE REQUIREMENTS 

This audit will require approximately 1,280 staff hours of effort. 

I'IF17<1131S 
152 

Appendix II 

TECHNICAL SPECIFICA110N IMPROVEMENT PROGRAM 

PJ.ANNED I.OCATIONS 

NRC Headquarters and selected Regions 

TYPE OF AUDIT 

PerfOI'IIlaDCe (Priority I) 

BACKGROUND 

1be Teclmical Specifications Improvement Program was initiated by a 1987 

proposed policy statement which was, in tum, based on a 1983 task group 

study which identified several broad weaknesses in technical specifications 

(NUREG-1024 ). The staff recently completed the resolution of public 

comments on the draft improved standard technical specifications (STS). 

Volunteering lead plants will begin conversions to the improved STS in early 

FY 1993. 

AUDIT OB.JECil\1ES AND SCQPE 

1be objectives of this audit are to determine whether (1) the improved STS 

bas adequately addressed the original weaknesses and (2) voluntary 

implementation will effectively resolve those weaknesses. 

ESDMATEP RESOURCE REOUIREMENTS 

This audit will require 960 hours. 

...Uufl'l 
153 

Appendbc II 

CONTRAcr AUDI'I'S 

PLANNED LQCADONS 

NRC Headquarters and Contrador Flicilities 

TYPE Of AUDIT 

Contract (Priority I) 

BACKGROUND 

With the addition of two contract auditors in the audit staff. OIG now has the 

capability to perform contract audits. NRC spends approximately $100 

million contractiugwith commercial vendors yearly for such things as technical 

assistance imd research. There is a need for NRC to assure itself that the 

contnu:tors are dlarging what is. allowed by the terms of the contracts. 

AUDIT OBJECllYES AND SCQPE 

We plan to cooduct five incurred cost audits during the coming fiscal year to 

determine if the selected contractors are charging NRC in accordance with 

the terms and conditions of the contract and the Federal Acquisition 

Regulation. 

ESDMA1ED RESOURCE REOUIREMENTS 

1be audits will require a total of about 1,680 staff hours of effort. 

l'lp19ol315 
154 

Appendbc II 

NRC'S IMPREST FUND 

PLANNED l.OCATIQNS 

NRC Headquarters and Regional Offices 

TYPE OF AUDIT 

Fmancial (Priority D) 

BACKGROUND 

This review is performed annually in accordance with NRC Manual Olapter 

Appendix 1101, Part IV, Section A. which requires that "unannounced audits 

of each imprest fund be made by the Office of the Inspector General as 

frequently as deemed necessary, but at least annually." There are six imprest 

funds in NRC, one at Headquarters and one in each of the regional offices. 

There is approximately $350,000 (cumulative) in the imprest funds. Also, 

NRC uses traveler's checks for travel advances and has a third party payment 

system for travel claims between $100 and $1,000. 

AUDIT OBJECID'ES AND SCOPE 

During the review, we will count the funds at all locations to ensure they are 

properly accounted for. We will also examine the disbursement procedures 

used by the cashiers to determine if they are effective in accounting for and 

protecting the funds. In addition, we plan to assess the impact that traveler's 

checlcs and third-party checks have on the level of the imprest fund at each 

location. 

ESJJMATED RESOURCE REOUIREMENTS 

This audit will require about 400 staff bours of effort. 

..... • .,:15 
155 

COMPUANCE W11111UE FEDEilAL MANAGERS' 

FINANCIAL IN'I'EGIUTY ACr {FMFIA) 

PLANNED LQCADON 

NRC Headquutas 

TYPE OF AUDD' 

BACKGROUND 

Appendbcll 

The Office ol Management aDd Budget (OMB) Circular A-123 requires NRC 

to perform aDIIWil reviews aDd evaluations of internal controls in highly 

vulnerable c:omponcnts (tbat is, programs, functions, and organizations). The 

purpose of the reviews is to identify internal control weaknesses that require 

corrective acdoas. 1be results of the reviews are reported to the President 

aDd the Coapess ammally. During the annual reviews, NRC must (1) revise 

component risk ratiup; (2) perform internal control reviews as required, 

several altemalive internal control reviews, aDd functional reviews; (3) report 

all material weatnesses found during reviews; and (4) develop corrective 

action plans aDd implement the corrective actions effectively. 

1be &ealti¥e Director for Operations has overall responsibility for 

implementing FMFIA aDd Circular A-123 within NRC. The Office of the 

Controller is rapoasible for providing oversight and guidance to NRC offices 

c:oacemiug tbe ~. evaluation, and implementation of effective internal 

controls. 1be Oflice of the Controller is also responsible for managing. 

directing, aod evaluating NRC's reporting under FMFIA and Circular A-123 . 

... 2lflll5 
Appendix II 

156 

AUDIT OBJECI1VES AND SCQPE 

The obj~e of our audit will be to de~rmi!le NRC's compliance with 

guidelines for implementing the Federal Managers' Financial Integrity Act. 

Specifically, the Office of the Inspector General (OIG) will evaluate actions 

taken in accordance with Office of Management and Budget and NRC 

instructions and guidelines for (1) correcting internal control weaknesses from 

prior FMFIA reports and General Accounting Office and OIG audit reports, 

(2) assigning risk ratings and conductiDg internal control reviews and 

alternative internal control reviews, and (3) documenting corrective actions 

for identified internal control weaknesses. In addition, the OIG will review 

office assurance statements when issued to ensure that all significant internal 

control weaknesses identified by current year evaluations were reported to 

senior management 

We will review a sample of risk ratings and control reviews to determine 

compliance with established criteria, including the documentation of required 

testing. We will review NRC offices' corrective action plans and 

documentation supporting the plans' implementation for completeness, 

effectiveness, and timeliness. 

ESTIMATED RESOURCE REOUIREMENTS 

This audit will require about 500 staff hours of effort 
157 

Appendix: II 

LIMITA110N ON USE OF APPROPRIATED FUNDS TO INFLUENCE 

FEDERAL CON"l'RACC1NG AND FINANCIAL TRANSAcriONS 

PLANNED I..OCADQN 

NRC Headquarters· 

TYPE OF AUDIT 

Financial (Priority I) 

BACKGROUND 

On October 23, 1989, the President signed into law the Department of the 

Interio£ and Related Agencies Appropriation Act (P .L 101-121) for fiscal year 

1990. The act amcoded Title 31, United States Code, by adding Section 1352, 

entitled "limitation on Use of Appropriated Funds to Influence Certain 

Federal Cootracting and Fmancial Transactions." 

The Inspector General is required to prepare and submit to Congress each 

year an evaluation of the NRC's compliance with and the effectiveness of the 

requirements of the act- This evaluation may include any recommended 

changes that may be uecessary to strengthen or improve the requirements. 

The 8IUIUal n:port is required to be submitted at the same time NRC submits 

its 8IUIUal budget justific:ations to Congress. The annual report shall include 

the following: 

(1) All alleged violations relating to the NRCs covered Federal 

actioDs during the year covered by the report, (2) the actions 

taken by the Chairman in the year covered by the report with 

Japec:t to those alleged violations and alleged violations in 

Jnvious years, and (3) the amounts of civil penalties imposed 

by the NRC in the year covered by the report. 
158 

Any person who makes an expenditure prohibited herein shall 

be subject to a civil penalty of not less than $10,000 and not 

more than $100,000 for each such expenditure. 

AUDIT OBJECIDIE AND SCOPE 

The objective will be to evaluate the NRCs compliance with the requirements 

of the act. The audit will review, on a sample basis, recipient certification and 

disclosure fol'lllli for contracts, grants, cooperative agreements, and Federal 

loans or loan guarantees that were authorized during the current fiscal year. 

ESTIMATED RESQURCE REQUIREMENTS 

This audit will require about 250 staff hours of effort. 

.. :Mofl5 
159 

INFORMA110N ON CONSUL11NG SERVICES 

PLANNED I.OCADON 

NRC Headquarters 

TYPE OF AUDIT 

Performance (Priority I) 

BACI(GRQUND 

1be United States Code (31 U.S.C. 1114) requires that: 

-.(a) The head of each agency shall include in the budget 

justification for the agency submitted each year to the 

Committee on Appropriations of both Houses of Congress: (1) 

amounts requested for consulting services; (2) the appropriation 

accounts from which the amounts are to be paid; and (3) a 

description of the need for the consulting services, including a 

list of the major programs requiring the services. 

(b) The Inspector General or comparable official of each 

agency shall submit to Congress each year, with the budget 

justification for the agency, an evaluation of the progress of the 

agency in establishing effective management controls and 

improving the accuracy and completeness of the information 

provided to the Federal Procurement Data System on contracts 

for consulting services. 

AUDIT OBJECilVE AND SCQPE 

1be objective will be to evaluate the (1) adequacy of NRC's system of 

management controls and (2) progress on improving the accuracy and 

... 2Sof2S 
160 

completeDeSS of the information prorided to the Federal Procurement Data 

System on the NRCs contracts for consulting services. 

We plan to follow up on a January 28, 1992, OIG audit report, "Review of 

ContractiDg for Consultants, • to determine if the recommendations contained 

in that report have been implemented. 

ESTIMATED RFSQURCE REQUIREMENTS 

This audit will require about 300 staff hours of effort. 

... :IIi of :liS 
161 

AUDIT OF NllC FINANCIAL STA'IDIEN'I'S 

PLANNED LQCAllON 

NRC Headquarters 

TYPE OF AUDIT 

Fillaucial (Priority I) 

BACI(GROUNP 

On November 15, 1990, the President sigDed into law the Chief Financial 

Officers (CFO) Act. The Act, in essence, c:alled for agencies to prepare 

auditable financial statements at the end of fiscal year 1991 unless a waiver 

was granted by the Office of Manqement and Budget (OMB). The Office 

of the lmpector GeDera1 (OIG) is required to audit the financial statements 

or seek audit &om an indepeudent atemal audit firm. Further guidance on 

producing statements is to be provided by OMB. 

AUDI[ OBJECilVES AND sroPE 

In 1992 and beyond. OIG plans to ensure that the NRC financial statements 

are audited in aa:ordance with applicable auditing standards, either by the 

OIG performiug the audits, contradiJJg with external audits firms, or a 

combination of both. 

ESllMATED RF.S0IJRCE REOUIREMENTS 

This audit will require about 2,000 staff hours of OIG effort plus the use of 

a CPA firm to assist in the audit of the fiDancial statements. 
162 

Appendix II 

NR.C'S BUDGET FORMUlATION 

PLANNED LOCATIONS 

NRC Headquarters and Regions 

TYPE OF AUDIT 

Financial (Priority I) 

BACKGROUND 

A budget is a statement of future plans. It serves as control against which 

performance can be measured. 

Annually, NRC is required to prepare budget estimates and submit them to 

the Office of Personnel Management and Congress for approval. The 

Division of Budget and Analysis within the Office of Controller is responsible 

for issuing guidelines to NRC program, support, and regional offices, receiving 

input from the offices, and preparing the final budget 

AUDIT OBJECI1VES AND scoPE 

To determine that a sound budgetary system is operating for planing and cost 

control purposes; to determine if estimated costs are developed on a basis 

consistent with management's latest, most probable plans; and to determine 

if significant changes in plans and circumstances are reflected promptly 

thorough controlled and documented revisions. 

Review the accuracy of budget preparation, test budget assumptions, and 

assess the reasonableness of explanations used by NRC budget officers to 

develop the most recent budget. 

ESTIMA1ED RESOURCE REOUIREMENIS 

This audit will require about 1,400 hours of audit effort. 

,.a.us 
163 

AppendiK II 

PROPOSAL EVALUA'l10NS • NON COMPE1111VE PROCUREMENTS 

PI.ANNED I..OCADONS 

TBD 

lYPE OF AUDIT 

Financial (Priority ll) 

BACKQRQUND 

In some procurement actions, the opportunity for competition either does not 

exist or is impractical to generate. In these instances, it is necessary that NRC 

procure non competitive work. Non competitive procurement is defined as 

a procurement action for new work for which only one source is solicited. 

AUDIT OBJECID1ES AND SCOPE 

To determine whether proposed costs are reasonable, allocable, and in 

accordance with Requests fO£ Proposal (RFP) provisions and the Federal 

Acquisition Regulation, giving special attention to pricing methods used since 

comparison is not available as a means of determining the reasonableness of 

proposed costs. 

Scope depends on individual contract types, amounts, DCAA cognizance, and 

procurement schedules. 

ESTIMATED RESOURCE REOUJREMEN'I'S 

This audit will require about 1,000 staff hours of effort (5 proposals x 4 weeks 

per proposal). 
164 

Appendix II 

FOUOW·UP REVIEW OF NRC'S DEBT COUECI'ION PROCESS 

PLANNED I..OCADQNS 

NltC Headquarters 

TYPE OF AUDIT 

Performance (Priority I) 

BACKGROUND 

Under the authority of the Debt Collection Act of 1982, OMB Circular A-129 

prescribes policies for collec:ting Federal loans and other receivables. The 

circular sets standards for extending aedit, collec:ting delinquent receivables, 

and writing off uncollectible accounts. 

The audit was conducted to determine the effectiveness of NltCs compliance 

with the provisions of the Act and OMB Circular. We found that NRC did 

not bill about $7,200 in interest and other late charges based on a sampling 

of delinquent account receivables. The report made two recommendations 

to improve the Agency's debt collection process. 

AUDIT OBJEC'ITVES AND SCOPE 

Our followup audit will review the status of the staffs actions taken to 

implement the recommendations. 

ESTIMATED OBJECID1ES AND SCOPE 

Our followup audit will review the status of the staffs actions taken to 

implement the recommendations. 

ESTIMATED RESOURCE BEQWREMENT 

This audit will require about 500 staff hours of effort. 

... llloi3S 
165 

Appendix II 

FOLLOW-UP REVIEW OF THE PROCUREMENT PRACTICES OF THE 

ADVISORY COMMITI'EE ON REACTOR SAFEGUARDS (ACRS) 

PLANNED LOCATIONS 

NRC Headquarters 

TYPE OF AUDIT 

Performance (Priority II) 

BACKGROUND 

We conducted an audit of the procurement practices of the ACRS at the 

request of the Commission to determine whether ACRS officials were 

complying with federal procurement regulations. ACRS procurement activity 

consists primarily of obtaining consulting services to support its mission. We 

issued a report of our findings in September 1991. Of particular concern, the 

report noted that ACRS had not fully complied with NRC procedures for 

obtaining services from DOE. In addition, the report noted that NRCs 

guidance for compensating DOE for services provided to ACRS was unclear. 

The report made four recommendations. 

AUDIT OBJECTIVES AND SCOPE 

Our followup audit will review the status of the actions taken to implement 

the recommendations. One of the recommendations concerns the need to 

petition the Comptroller General for a decision on the legality of 

compensation payments made to DOE for advisory committee members. 

ESTIMATED RESOURCE REQUIREMENTS 

This audit will require about 400 staff hours of effort. 

!'oF 31 vllS 

72-560 0 - 93 - 7 
166 

Appendix II 

FOLWW-UP REVIEW OF PART 170 LICENSE FEE PROCESSING 

PLt\NNED LOCATIONS 

NRC Headquarters 

TYPE OF AUDIT 

Performance (Priority I) 

BACKQROUND 

NRC collects fees for services provided to its licensees pursuant to Title V of 

the Independent Offices Appropriations Act of 1952. 10 CFR Part 170 covers 

the fees authorized by the Act. Part 170 fees are charged for services such as 

review of applications for new licenses and the inspection of licensee 

operations by NRC. On November 5, 1990, PL 101-508 was enacted 

authorizing NRC to collect approximately 100 percent of its budget through 

fees beginning in FY 1991 through FY 1995. Approximately $80 million will 

be collected in FY 1991 and will increase to about $100 million in FY 1992. 

OIG reviewed NRCs Part 170 license fee processing to determine the 

adequacy of its billing procedures and related internal controls. The July 3, 

1991 report made three recommendations to improve NRC's billing 

procedures and strengthen its internal controls. 

AUDIT OBJECTIVES AND SCOPE 

Our followup audit will review the status of the staffs actions taken to 

implement the recommendations. 

ESTIMATED RESOURCE REQUIREMENTS 

This audit will require about 600 staff hours of effort. 

,...,.lZullS 
167 

Appendix II 

NRC'S AUDIT FOLLOWUP SYSTEM 

PLANNED LQCATION 

NRC Headquarters 

TYPE OF AUDIT 

Performance (Priority I) 

BACKGROUND 

The Office of Management and Budget Circular A-50, ''provides the policies 

and procedures for use by executive agencies when considering reports issued 

by the Inspectors General .... " The circular specified the role of the agency's 

designated audit followup officials and the role of the Inspectors General. 

Each agency is required by Circular A-50 to "establish systems to assure the 

prompt and proper ... implementation of audit recommendations." There is to 

be a complete record of action taken on both monetary and non-monetary 

findings and recommendations. NRC Manual Chapter Bulletin 1201-4, 

"Procedures for Follow-up of Audit Recommendation, • represents NRCs 

internal guidance for implementing Circular A-50. 

AUDIT OBJECTIVES AND SCOPE 

Our overall objective will be to assess the adequacy of NRCs followup system 

in ensuring that corrective action has been completed as agreed to in the 

response to IG and other Federal agency audit reports. We will also follow 

up on selective recommendations from prior audit reports to test whether 

implementation of recommendations has in fact taken place. 

ESTIMATED RESQURCE REQUIREMENTS 

This work will require about 600 staff hours of effort. 
168 

Appendix II 

FOLLOW-UP REVIEW OF 111E ATOMIC SAFE'IY 

AND UCENSING BOARD PANEL 

PIANNEP LOCATIONS 

NRC Headquarters 

1YPE Of AUDIT 

Performance (Priority I) 

BACKGROUND 

The Atomic: Safety and licensing Board Panel (ASLBP) is the office that 

performs the hearing function for the Commission. The ASLBP was created 

by the Commission in 1962 under the authority of Section 191 of the Atomic: 

Energy Ac:t of 1954, as amended. NRCs hearings are generally conducted 

before a three member Board whic:h is drawn from the Panel of members of 

the ASLBP. Hearings conducted by the ASLBP are the Commission's 

principal public: forum in whic:h individuals and organizations c:an voice their 

interests in a licensing, enforcement, or other matter, and have those interests 

adjudicated by an independent Board. 

The OIG audit report found that the ASlBP was going through a transition 

period with a change in the types of c:ases conducted. As a result, it was 

diffic:ult to project the workload and resource requirements necessary to c:arry 

out the mission of the ASLBP. The report made seven recommendations to 

improve and strengthen their management controls. 

AUDIT OB.JECIJYES AND SCQPE 

We plan to review the status of the staffs action regarding the 

implementation of the recommendations and to determine whether the 

actions taken meet the intent of the report findings. Our audit will encompass 

the effectiveness of the Agency's Followup System and the responsiveness of 

theASlBP. 
169 

Appendix II 

ESTIMATED RESOURCE REQUIREMENTS 

This audit will require about 450 staff hours of effon. 

hF3Sol3S 
170 

~ fA\(riD[Til) ___ 1101 Connecticut Avenue, N.W. • Suite 700 ---=----.:._(QJJ]~ • Washington, D.C. 20036 ®1\.Jl!AJ 

American 

College of 

Nuclear 

Physicians 

(202) 429-5120 Fax (202) 223-4579 

STATEMENT OF 

THE SOCIETY OF NUa..EAR MEDICINE 

and 

THE AMERICAN COll.EGE OF NUa..EAR PHYSICIANS 

concerning 

H.R. 2143 

submitted to the 

U.S. HOUSE OF REPRESENTATIVES 

ENERGY AND MINERAL RESOURCES SUBCOMMITI'EE 

of the 

HOUSE NATURAL RESOURCES COMMITTEE 

June 10, 1993 

The Society 

of Nuclear 

Medicine 

For More Information Contact: 

Kristen D.W. Morris 

Director of Government Relations 

(202) 429-5120 

72-560 .. 210 

'·, ____________________ ____ _ _ _ .-" 
171 

On behaH of the American College of Nuclear Physicians (ACNP) and the Society of 

Nuclear Medicine (SNM), this written testimony is presented to the House Natural 

Resources Committee, Energy and Mineral Resources Subcommittee regarding H.R. 2143. 

This bill would authorize appropriations for the Nuclear Regulatory Commission for fiscal 

years 1994 and 1995. 

Together the ACNP and SNM represent approximately 15,000 nuclear medicine physicians, 

scientists, and technologists. Attached is a description of nuclear medicine for your 

reference (attachment A). It is critical that access to nuclear medicine services be protected, 

since, in many cases it is the most accurate technology which can correctly diagnose a 

number of diseases and provide. guidance with regard to treatment protocols. Furthermore, 

nuclear medicine provides non-invasive diagnostic and therapeutic .services at a cost much 

lower than other options. 

ACNP and SNM's objective throughout this statement is to offer our professional opinion 

and focus attention, on the unnecessary and duplicative aspects of Nuclear Regulatory 

Commission (NRC) regulation of nuclear medicine. However, there is a practical incentive 

for concern as well. Since NRC became funded from 100 percent user fees, costs have sky 

rocketed, due to regulations with little demonstrated benefit. New health care 

reimbursement systems, now generally based on capitations, mean that any additional 

regulatory compliance costs cannot be recovered by the provider and may not be passed on 

to the patient. 

NRC conducted an evaluation of the medical ~ction in 1985. At that time, the NRC 

estimated that by 1987, NRC regulations would cost the medical community approximately 

$92 million . . States regulate two thirds of all medical licensees under an NRC agreement so 

this figure is much larger on a nation:ll scale. Combine this estimate with costs associated 

with new regulations and one can come close to identifying a $1 billion burden on society 

as a result of NRC regulation. While some of this regulation is important to ensure public 

health and safety, ACNP and SNM would argue that much is unnecessary and 

counterproductive. 
ACNP/SNM 

Page 2 

172 

A petition to the NRC regarding user fees is currently under consideration. On October 13, 

1992, the NRC published a request for comment on the ACNP/SNM petition for rulemaking 

on the revised fee schedule. We are convinced that the current fee inequities unfairly 

burden medical licensees and threaten the continuation of many nuclear medicine practices, 

as indicated by the cancellation of approximately 400 medical licenses since the fee schedule 

was implemented. ACNP and SNM's primary ·interest is to obtain an exemption for medical 

licensees based on the fact that NRC has already exempted non-profit educational 

institutions based on their limited ability to pass on regulatory costs to their clients. 

NRC received 96 comments on the petition; 79 supportive and 17 against. Generally, those 

favoring the proposal including the American College of Radiology, the Department of 

Veterans Affairs, the American Hospital Association, and the Small Business Administration 

- Office of Chief Counsel for Advocacy, pointed out the unique health services provided by 

nuclear medicine and the difficulty in passing on license fee costs to patients. A decision by 

the NRC on the ACNP/SNM petition is expected sometime in 1993. 

However, even if our petition is favorably resolved, that does not justify the unbridled 

regulatory actions of the NRC. We have attached two letters from the Office of 

Management and Budget which severely criticizes NRC's Medical Quality Management Rule 

(attachments B and C). The following is a quote from a Iune 26, 1992 letter, signed by 

James B. MacRae, Ir. Acting Administrator and Deputy Administrator, Office of 

Information and Regulatory Affairs, OMB; 

"To the extent that the NRC imposes costs on the regulated community to conduct 

programs that are llQ1 cost-effective. it will divert resources from programs that m 

cost-effective and, as such, would result in greater improvements in public health and 

safety. Thus, the NRC should review its actions in the context of this larger 

framework of the costs and risk management needs of the health care system as a 

whole. 
ACNP/SNM 

Page 3 

173 

''For the reasons set forth above, OMB believes that the reponing and record 

keeping requirements in this ICR [information coUection request] have little if any 

practical utility. Therefore, the significant burdens imposed on the regulated 

community are unreasonable and I am disapproving this ICR under the authority of 

the PRA [paper reduction act]." 

Since NRC is an independent agency, it completely ignored OMB. Please do not let this go 

unaddressed! 

In April, the OMB reviewed NRC regulations under 10 CFR Part 35 Medical Use of 

Byproduct Material (attachment D). Comments signed by the Presidents of ACNP and 

SNM illtistrated that NRC regulations cost an estimated $212 million per year. Therefore, 

almost one fifth of the $1 billion results from the regulation of medicine and not radiation 

safety. This represents $21.20 per procedure allocated to just NRC regulation of medicine. 

The regulation reviewed on June 26, 1992 is perhaps the most duplicative and uneconomical 

regulation imposed by the NRC on the medical community to date, and accounts for an 

estimate $5.80 per procedure alone. 

In summary, the nuclear mc:dicine community strongly urges Congress to review the medical 

application's program budget in great detail. Since the NRC's budget does not impact the 

deficit as it is funded through user fees, we fear that it does not receive the in-depth scrutiny 

as do other programs funded from general reve~ue funds. If the American health care 

system is required to bear the burden of user fees and compliance costs, it must be for 

regulation with merit and benefits to the public health and safety as a whole. Assertions of 

such benefit by NRC need to be documented by independent studies. The use of NRC staff 

as consultants to evaluate such programs and design new ones does not satisfy the criteria 

of impartiality or meet standards for outside review. 

Thank you for this opportunity to highlight our concerns. If you have any questions please 

feel free to contact Kristen Morris, Director of Government Relations, at (202) 429-5120. 
174 

ATTACHMENT -A 

AMERICAN COLLEGE OF NUCLEAR. PHYSICIANS 

PROFESSIONAL AND PUBLIC INFORMATION PROGRAM 

NUCL.EAA MEDICINE: THE PHYSIOLOGIC SPECIALTY 

Nuclear medicine began with the development of biologically radioactive materials 

approximately 50 years ago. Since then, nuclear medicine has evolved into its present state as 

a major medical specialty for both diagnosis and therapy. 

MEDICAL IMAGING - The imaging section of nuclear medicine - the most visible to 

the public - utilizes radiopharmaceuticals (radioactive drugs that have no effect on the patient 

in general) to localize in various organ systems. By mimicking physiologic systems, organs 

such as the hean, bones, brain, lung, liver, gallbladder, and kidneys, can be "fooled" into 

concentrating the radiopharmaceutical. The addition of standard pharmaceuticals to alter 

physiology may enhance the diagnostic information obtained from a nuclear medicine 

procedure. 

The distribution of the radiopharmaceutical is sensed by a camera-like detector which feeds 

the information to a computer. The computer displays a digital image of the specific organ, 

showing any abnormalities. Since detailed knowledge exists of the behavior of radioactive 

drugs in the normal, the abnormal states can be easily detected and quantified. 

Radiation doses from nuclear medicine procedures are, in genera~ comparable or less than 

those of diagnostic radiology. Today, nuclear medicine covers the broad span of the medical 

specialties ranging from pediatrics to cardiovascular disease to dementia. There are nearly 

100 different nuclear medicine imaging examinations available at the present time. 

IN VITRO - The in vitro - or laboratory • practice of nuclear medicine are of key 

imponance in measuring small concentrations of drugs and narurally occurring substances, 

such as chemotherapeutic agents and tumor-associated antigens. 

THER.APY - The therapeutic aspects of nuclear medicine, present since its inception, 

are of increasing imponance today. Cenain diseases are only curable by use of a 

radiopharmaceutical. The growing ability to target a malignant disease with a combination of 

immunologic and radioactive materials holds a tremendous promise for an expanded 

therapeutic role in nuclear medicine. 

There are currently 3500 hospital-based nuclear medicine depanments in the United 

States. Of the 100 million nuclear medicine procedures performed each year, approximately 

12 million are imaging examinations. Each hospital patient is likely to have at least one or 

more nuclear medicine examination during his/her hospital stay, because of the imponant role 

nuclear medicine is playing in diagnosis, maintenance, and therapy of the patient. 

- ' _-_j _ .__ _ 1101 Conn«ticul Av~nueo. ~W Suit~ 700 Washincton. DC 200~ C202l 857·1135 (8001 Hi AC~P 
175 

AMERICAN COLLEGE OF NUCLEAR PHYSICIANS 

PROFESSIONAL AND Pl:BLIC INFORMATIOS PROGRAM 

ATTACHMENT A 

WHY DO PHYSICIANS ORDER NUCLEAR MEPICINE STUDIES? 

A PARTIAL LIST OF REASONS 

NEUROLOGIC APPLICATIONS 

diagnose stroke 

diagnose Alzheimer's Disease 

demonstrate changes in AIDS dementia 

evaluate patients for carotid surgery 

loc:alize seizure foci 

evaluate post concussion syndrome 

diagnose multi-infarct dementia 

ORTHOPEDIC APPLICATIONS 

quantify osteoporosis 

loc:allze sites for biopsy In tumor patients 

measure extent of certain tumors 

identify occult bone trauma (sports injuries) 

diagnose osteomyelitis 

identify bone infarcts in sickle c:eU disease 

evaluate arthritic: c:banges and extent 

RENAL APPLICATIONS 

detect renal obstruc:tion 

dispose renovascular hypertension 

measure differential renal function 

separate mec:banical from physlolopcal obstruction 

detect renal transplant rejection 

(over) 

_ _ -~ · _ __ 1101 Connrclicut A'·rnur. S\\' Suitr iOO \\'ashing1on, DC :!0036 (2()2) 83i· ll35 (R(H)) -IH-.-\C' I" 
176 

ONCOLOGIC APPLICATIONS 

tamor locallzatloa 

tamor stqiDI 

icleatU)' metutatlc litel Ia skeletoa 

Jud&e respoue to lberapy ollbletal a.tutues 

eftlaate ._.. or ampatatloa Ia primary boDe tumon 

PULMONARY APPLICATIONS 

detect palmoDuy am~plicatloas ol AIDS 

cliapole ptdmoaary emboli 

quatU)' Inc ftlltilatioa IUld perfulo. 

detect 

detect 

111111 

IDlaalatioD 

trusplaat 

~Ill)' 

~ 

iD blma patlellts 

CARDIAC APPLICATIONS 

cliapole c:oroury artery .u- mamre die eft'edhalell ol bJpus AJ'III'1 

meuare ena:u- ol daenp.r l'or llean tllllare 

detect beut trusplaat ~ 

select patieats ror bJpus or •JIIiolllul1 

ATTACHMENT A 

kleatU)' patleat at liiP risk ol ~ a~mplicatloas 101111 to su~ery 

ror other reuoas ldeatU)' ri&fat llean tllllare 

meuare cllemodterapy c:ardlac IOidclty 

eftlute ftlftlar lleut .... 

icleatil) padeatl wid! ... polithe EJ[Gs 

ldeatil) left to rtpt HUll .... ~ diem 

diapole, ..... .._._ -te lllut .......... before eazyme cbaaps 

01BER APPLICATIONS 

...... ud treat~ (Gntft'l Diaue) 

detect -te clllllec:ylllltil 

detect acate psll'obatestillal bleedlac 

detect tellllealar t.onioa 

detect ocatlt illfecdou 

dlapose IUld treat blood cell diMrien 
~ 

,,~;~ •. . 

Mr. James Taylor 

177 

EXECUTIVE OFFICE OF THE PRESIOENT 

OF~ICE OF MANAGEt.IINT ANO BUDGET 

WASHINGTON. D.C. 20503 

JAN 2 4 1992 

Executive Director for Operations Nuclear Requlatory Commission 

Washinqton DC 20555 

Dear Mr. Taylor: 

ATTACHMENT B 

on December 24, 1991, the Nuclear Raqulatory co .. iasion (NRC) 

resubaitted to the Office of Kanag ... nt and Budget (OMB) an information collection request (ICR) entitled •The Medical use of 

Byproduct Material• for review under the Paperwork Reduction Act 

(PRA). This ICR would establish aa a part of ita quality 

management (QM) proqraas several additional racordkeeping and 

reporting requirements for practitioners of nu~ear medicine and 

several types of therapy which usa byproduct material. I am concerned with the NRC's failure to demonstrate clearly the 

practical utility of these requirements and to provide estimates 

of their burden aa required by the PRA. 

NRC reports that the purpose of thia ICR ia to require practitioners of nuclear aedicine to maintain records and submit 

certain data to the NRC aa . part of ita QM proqraaa. These 

programs are designed to assure that radiopharmaceutical• are administered aa prescribed by the authorized user physician, and 

that procedures are carried out •• prescribed by authorized 

physicians. The NRC has not, however, clearly d .. onstrated that 

there ia currently a significant probl .. requiring such a quality 

management proqraa. Given the already high coat of medical care, 

it is important that the Federal government avoid further burdens 

for the health care sector, unless thea• additional requirements have practical utility and are likely to yield significant benefits. The NRC baa not made this demonstration. 

While OMB initially approved the QM raquir .. anta at proposal, OMB 

staff have reexamined these requir .. anta in response to public 

comments that vera received when the final package vas submitted 

to OMB for review. OMB baa received written coaaents froa the 

Society of Nuclear Medicine/American college of Nuclear 

Physicians, and copies of letters concerning the final rule, and 

the pilot study froa the Small Business Administration and the 

University of california at Los Angeles. Following these initial 

contacts, OMB staff discussed these raquir ... nta extensively with 

other members of the raqulated coamunity. These include 

representatives of three agreement states (New York, California, 

and Louisiana), several physicians who practice nuclear aedicine, 

representatives of three other professional organizations 

(American College of Radiology, Joint commission on the 
178 

ATTACHMENT B 

Accreditation of Health care Organizations, and the Aaerican 

Medical Aeeociation), aa.bera of the NRC's Advisory co .. ittee on the Medical Use of Isotopes, and the staff of the Food and Druq Adainiatration. OMB has also received numerous written coaaenta 

froa physicians and health care facilities in recent weeks. 

While the concerns outlined below are baaed on our own evaluation, we believe they also reflect the concerns of aany of 

these individuals and orqanizationa. 

Practical utility 

2 

The current rate of aiaadainiatration of radiopharaaceuticala is 

already quite low.• There appears to be wideapread agre .. ent on this point UIOftCJ alaoat everyone faailiar with the issue. This 

is likeli a result of several factors. Moat practitioners already apl ... nt quality aanaq ... nt progr... on a voluntary basis; aany as part of .an accreditation or certification process sponsored by a professional association. There are important reasons for practitioners to do so. Firat, practitioners need to 

take every care that their procedures are done correctly to avoid 

aalpractice -ita. In addition, since recorda of their aiatakea are available to the qeneral public, such care is iaportant to 

aaintain their professional reputation. Finally, practitioners in the field are acutely aware of the public's 9eneral concerns about radiation, and take special cere to ensure that mistakes do 

not occur to aaintain the credibility of their specialty. 

The cere with which th-e procedur- are conducted ia reflected 

in the low rate of error for th ... procedur-. Mi .. dainiauationa or abnoraal occurrences Occur about one in 

every 3,300 procedures. 'l'be NRC's recorda indicate that there were 200 patients wbo receiv.d aieadainiatrationa between 1980 

and 1990 in 19 recordable events. (When adjusted to account for 

aiaadainiatrationa ~n aqre .. ent stat-, one can assume that there were perhaps 600 patients affected durlnq this tiae period nationwide.) Aeauainq 600 errors between 1910 and 1990, this 

would indicate on overall error rate of approxiaately 0.03t for 

nuclear aedicine, teletherapy and brachytberapy. zxtrapolatinq froa error rates in 1919 and 1990, o~ could rouqhly eatiaate 

that error. occur in o.on of all teletherapy procedures, in 

o.02t of all brachytberapy procedur- and in o.o3t of all nuclear 

aedicine proc:edur-. 

1

The NRC -tiaatea tbat there were approxiaately 600 

aiaadainiatrationa between 1910 and 1990, during approxiaately 

1,980,000 procedures. Moat aiaadainiatrationa have no significant health effects; there have been only a relatively 

aaall nuaber of incidents in which aiaadainiatrationa or abnormal occurrencea have clearly contributed to death or serious, 

peraanent, or debilitatinq injury. 
179 

ATTACHMENT B 

These are eepecially low aieadminietration rates when compared with rates of error in the administration of other druqe. A 

recent journal article reported that overall, medication errors occur in 13' to 18' of all hospital administered doses. 2 Amonq the errors found were the administration of the wronq dose, the 

wronq druq, or unordered druqe, administration to the wronq patient, at the wronq time, or by the wronq route. A published study of errors in the intensive care unit of one hospital indicated a aedication error rate of 2.2,. 1 Finally, a third 

study of medication errors in two children's hospitals found 

medication error rates of 0.49' and 0.45,. 4 The error rate in 

nuclear medicine and therapies, then, are ten to one thousand 

times lower than the error rate for other druqs. 

3 

Given the already low rate of aisadministrations and abnormal 

occurrences, the NRC has failed to demonstrate how these 

reportinq requirements are likely to further decrease these 

rates, and thus have any practical utility. The NRC atatea that 

moat medical facilities already have quality aanaqement proqrams in place which are similar to, the equivalent of, or even aore strinqent than the proqraa aandated by the NRC. The occurrence of misadministrations at these facilitiee in the paet deaonetrates that despite qood procedures, huaan fallibility will 

always result in soaa errors. Furthermore, there ia siqnificant concern within the aedical coamunity that any steps which aust be 

taken Which are not directly related to the delivery of safe and 

accurately administered procedures miqht be diatractinq and lead 

to other mistakes. 

&urdea of Ue Ica 

The NRC claims that these QM requir .. enta will iapoae only 6,490 

hours of burden on the requlated coaaunity. A review of the 

record suggests, however, that physician• tryinq to comply with 

this rule will probably bear a siqnificant recordkeeping and 

reportinq burden.' Physician• will need to deaiqn and implement 

2

•What We Know About Medication Errore: A Literature 

Review,• Journal of Nurainq Quality' Assurance, November 1988, 

paqe 1). 

'•Medication Adaini•tration Errors in an Adult Intensive 

Care Unit,• Heart ' Lunq, July 1987, paqe 450. 

••Medication Error Prevention by Clinieal Pharmacists in Two 

Children's Hospitals•, Pediatrics, May 1987, paqe 718. 

'Part of the problea in calculating our own eatiaate of the 

burden is the diaafJZ'e .. ent between the NRC and the requlated co .. unity as to what is required by these requlationa. Since 
180 

ATTACHMENT B 

a quality •••urance pr09raa and recordkeepinq ay•t .. to •atiafy the NRC'• requir .. ent•, even thouqh ao•t phy•ician• already have 

QM pr~ ... de•iqned and aonitored by prof•••ional aa•ociationa. 

In addition, it i• likely that the developaent of a coaplete quality aanaqeaent proqraa would take lonqer than the 40 houra 

indicated in the ICR'• aupportinq •tateaent. Thi• i• ba•ed on di•cu••ion• with ••veral phy•ician• who practice in the•• fielda, and their ••tiaate• of how lonq it took th .. to develop their 

proqr ... , and OMB'• own review of the requlatory guide for the 

rule. Purtberaore, thia eatiaate doe• not appear to include the 

tiae nece•.ary for tho•• who already bave quality aanaqement pr~... to review carefully their pr~... to determine whether or not they aeet the NRC'• criteria. 

The NRC •upportinq atat ... nt doe• not include the burden for the 

development of diaqno•tic clinical procedure aanuala de•cribed in 

10 CPR 35.2. Althouqb· there i• no clear requir .. ent to develop •uch aanual•, the NRC later defined •pre•cribec:t.doaaqe" aa •an activity aa documented: 1) In a written directive; or 2) Either 

in the diaqno•tic clinical procedure• aanual or in any appropriate record in accordance with the direction• of the 

authorized u.er for diaqno•tic procedure•.• NRC'• reference to 

the aanual ba• been interpreted by aany pbyaicien• aa aeaninq that the NRC require• •uch aanual•. 

The NRC aupportinq •tatement alao claiaa that there i• no burden 

aaaociated with maintenance of recorda concerninq adainiatered 

do••• or doaaqe• becauae theae recorda are already kept aa ·required by 10 CPR 35.53. But, the current requir ... nt• are not 

the •ace a• the new requir..ant•. The current requlationa require that facilitie• keep record• of do••• that have been 

adaini•tered. However, they do not appear to require the 

aaintenance of record•, in an auditable fora, of the pre•cription that led to the doae. To aaintain theee recorda in a faabion 

that would be ea•ily auditable1 pbyaiciana will probably have to 

keep a duplicate aet of filea. 

The NRC alao •tatea that there ia no burden a•aociated with 

chanqe• to e quality aanaq .. ent proqraa, •inca the•• chanqe• are 

there 18 no aqreeaent between the requlated coaauni ty and the NRC on what 1• required, it i• not po••ible for OMI to independently develop our own ••tiaate of the burden contained in thi• ICR. 

~y•ician• qenerally keep theee record• in each patient'• individual file•; however, upon beinq in•pected, be/•h• would 

have to remove the8e document• froa each patient file for the 

inapactor and then replace tbaa once tbe inapection wa• coaplete. 

Therefore, tbe be•t vey to -•t tbi• requirement i• to keep duplicate record•. 
181 

ATTACHMENT B 

voluntary. However, the t.pl-ntinq reCJUlation• for the PRA 

claarly state that voluntary reporting requir~t• are covered 

under the scope of the PRA (see 5 CPR 1320.7(c)), and auat 

therefore be included in the burden calculations. Furthermore, 

althouqh these atepe aay be vi-ed aa voluntary, to the extent 

that physicians feel they need to aodify their prQCJraaa consistent with qood practice, they will aake these chanqea. 

5 

OMB believes that .o.t facilities will iapleaent other 

recordkeeping procedur.. aa part of their prQCJraaa. The NRC 

program, as outlined in the rule end the reC)Ulatory CJUide, is 

allbiCJUOUS in •~ instance. and very apecific in other•. 7 The 

NRC'a failure to specify Vbat recorda aust be aaintained as part of a QM prQCJraa d~ not ... n that practitioners will not have to 

keep recorda. In fact, qiven the uncertainty within the . reCJUlated co .. unity aa to vbat conatitutea compliance with these 

requireaenta, it is likely that people will keep extensive 

recorda to ensure that they can produce any recorda that NRC 

inspector• request to a... · 

Finally, baaed on diecuaaiona which OMB has had with aeveral 

phyaicians, the periodic revi-. described in Section 6 of the 

ReCJUlatory Guidence ~ta are likely to impose a siCJnificant 

burden on practitionera without having any real practical utility. Since the overvbelaing aajority of licenaeea have no misadainiatration in any given year, the requirement to enqaqe in a lenqthy review of their procedures to ensure that they are doinq everything po .. ible to reduce aiaadainiatration to zero, 

appear• to have little if any value. Although it aiqht aake .sense for those faciliti .. that experienced aiaadminiatrations to 

review their proceduraa, thia requir~t is J..poaed on a siCJftificantly larger population with no apparent benefit. 

coacluaioa 

I aa concerned that the nev reporting and recordkeeping requirement• have little, if any, practical utility. I do not 

believe, baaed on the supporting docuaenta provided by the NRC, 

7

Por instance, the aabiguity as to whether or not clinical 

procedure aanuala are required vill probably result in physicians takinq the tiae to ciAnelop th- vbether or not the NRC intended 

to require th... On the other hand, the guideline• require that 

before any procedure the licena .. should verify the patient's identity by asking the patient their naae and then confiraed by 

croaa-referencinq inforaation in the patient record including at 

least one of the following: birth date, •ocial •ecurity nWiber, 

addres•, signature, or identification card. This is an extremely specific requireaent vbicb would better be left to the licensee'• 

discretion. 
182 

ATTACHMENT B 

6 

that thea• requirement& will reduce the number of 

miaadminiatrationa or abnormal eventa. I am alao concerned that 

the NRC and the requlated community have widely different 

eatimatea for the burden of meeting theae requir .. enta. 

Nonetheless, these requirement& will clearly impoae a burden on the requlated community, without any clear benefit&. I encourage the NRC to once again review the concern• we have outlined above 

with members of the requlated co .. unity ao that they may come to aome understanding of exactly what burden• are impoaed by this 

program on the requlated community, and what purpoae they will serve. Since there ia a aignificant discrepancy between what the 

NRC believe& ia the burden impoaed by thia program, and the 

burden which the requlated co .. unity feela they will be required 

to shoulder, we feel that auch a meeting would be useful. once both sides can agree on the requirement• of thia program both the 

NRC and OMB would be in a much better poaition to evaluate 

whether or not the burden impoaed by these requirements would be 

justified by its practical utility. 

cc: Hugh L. Thompaon, Jr. 

Ivan Selin, Chairman 

Sincerely, , 

'Q!111n&l 81Cned by .r1.,_ 1. )&aell.u, lr 

Jamea B. MacRae, Jr. 

Acting Adminiatrator 

and Deputy Adminiatrator 

Office of Information 

and Requlatory Affairs 

Kenneth c. Rogera, co .. iaaioner 

James R. curtiss, commiaaioner 

Forreat J. Remick, Commiaaioner 

E. Gail de Planque, commiaaioner 
183 

ATTACHMENT B 

,..~ UIIITUI\'ATU \¥) NUC~ ___ REGULA~Y .... _ COMMISSION 

••••• 

Mr • ., ..... Mlclu. ~­

Acttftg Adltntstrator lid 

OlputJ Adltnfstrater 

Office tf Jnfo,..tfOI lid 

Rteulator1 Affafrs 

Office of llanae-t ad ludget 

1125 - 17th Street • ., Washington, DC ID50I 

Dear Mr. tlldlaln 

~anuary 2•, 19P2 

Olspftt constdtnlllt lfforb b,J 11ot11 of 011r staffs to uttle tht dtfftrtncu 

of opfnton conc~mf, U. '""'td fnfoNIUtn colltetftn rtqllf,....nts associated wtth U. t .. l rule ..Sfllf l'trt· !1, a-:atUfactory. ruolutJon .l!.u. 

not btan raachtcl. 1tcaat tilt .JUUI'7 17. 1HZ t.t .. ntatfon date ts 

t•tnent. the IIIIC .at diet* 111 tilt tllforctabllttJ of tilt tnforutton 

colltetton requt,...u. 

'""" ,.. Jill'"' Nlllnr,atl• wt~ llllllltra of., 1\lff on .January u, we tXJitct 

to rtee1vt a lttttr nw. R ilaliiii'ilfllf GHI's rtM1ntng conc•rns. n nbte 

that NRC. subllttt.d • miNd paclcap atM Slptl!llbof 11, lHJ for the rtvh~ 

tnforutton coltecttlft nq~~t....nts tn tilt ftnal rule. Tilt latter rtductd tht 

burden fra. 11.000 heirs to 1.100 hours annua111. In vtew of tht fact that ve have not bten advtltd tf 11 aMI dtsapproval wtthin 10 dtJS of our submittal, .NRC's legal couastl lias ClftCllldtd tlltt we can procttei. with full fiiPlllltnhtton 

of the ... ndlltnt. lndttcl, ''"" tilt rtduetd tnforutton collection 

requtr.llftts in tilt ft .. 1 r~lt, tt ..... to 11 that OMB ravftw of the ftna1 

rult vas not ~. and that tilt ftaal rule can bleD~~ tffecttve on the bas1s 

Of IJIB"S March JO, 1110 ...,.tall Of tilt propostd rult. But WI ntYtrthtltSS can procttd wttll ~tfnild tlteractton with bMI to resolve your concerns on the COlltcttons tf fnfoNatfoa UIOCfated with a.ndtd Part 31. 

This txperttnct •utas tilt fiiJIOI"ttnct of yooc1 t1•11 co-unicatfon bttveen our ag1nct1s and I ~ J1U fOr JOI' persona efforts tn this aatter. 
184 

' '" ? 6 1992 

Mr. James Taylor 

Executive Director for Operations 

Nuclear Regulatory Commission 

Washington DC 20555 

Dear Mr. Taylor: 

ATTACHMENT C 

On December 24, 1991, the Nuclear Regulatory Commission 

(NRC) submitted to the Office of Management and Budget (OMB) an information collection request (ICR) for review under the 

Paperwork Reduction Act (PRA). This ICR would authorize the NRC 

to require that medical practitioners engaged in therapies using 

radioactive material maintain records as evidence ,of a quality 

management program, submit copies of quality management programs 

to the NRC, and report to the NRC when misadministrations occur. 

In a letter dated January 24, 1992, OMB asked NRC to address numerous issues that arose during our review of the ICR. OMB was concerned that the burden imposed on the regulated community by 

these reporting and recordkeeping requirements was not justified 

by the limited practical utility of the requirements. 

The NRC responded to OMB in a letter dated March 23, 1992, 

stating that the NRC had already discussed with the regulated 

community the issues raised by OMB, and had incorporated their 

suggestions into the final rule to the extent that it was appropriate. The NRC reiterated its position that these 

requirements are necessary in order to protect the health and 

safety of the public. · 

After further review of the ICR's supporting statement, the 

NRC's letter of March 23 and its attachments, and other materials 

which OMB has received during its review, I have concluded that 

the limited practical utility of the ~equirements imposed on the 

regulated community do not justify their burden. I am therefore 

disapproving this ICR. In order to approve the ICR, OMB would 

have had to determine that the practical utility derived from the 

requirements in the ICR outweighed the burdens imposed by those 

requirements. In this instance, we could not make that finding. 

Practical Utility of the Information Collection Request 

OMB strongly supports the NRC's goal of taking measures to 

protect hum-n health and the environment, as directed by the 

Atomic Energy Act. However, .OMB believes that the reporting and 
185 

ATTACHMENT C 

-2-

recordkeeping requireaents contained in this ICR would not 

contribute. to that goal. 

The practical utility of the reporting and recordkeeping requirements in this ICR may be maasured by the degree to which 

they assist in any action which further .protects human health and 

the environment. Therefore, in order to determine whether or not 

they have any practical utility, it is necessary to determine the 

degree to which they contribute to the NRC's ability to provide additional protection of public health above the current level of 

protection. 

Currently, most facilities implement quality management {QM) 

programs to meet standards established by professional accreditation organizations. In fact, according to the NRC, 90\ 

of all covered facilities already have a program that is 

equivalent to the requir.-nts in this ICR and th,e associated 

rule. Notwithstandinq these proqrams, however, 

misadministrations do still occur. The ICR and the associated 

rule is premised on the belief that mandating these proqrams for 

All covered facilities would further misadministrations, and in so doing provide additional protection for public health. 

The information that the NRC has provided to OMB with the 

ICR does not support these assumptions. First, it is far from 

evident that the ICR will actually reduce misadministrations. 

The NRC has not presented OKB with any evidence that errors reported to the NRC tended to occur at the lOt of facilities 

without QM proqrams and would have been prevented had such 

proqrams been in place. Moreover, when compared to the error rates in other aedical specialties, the error rates in the use of 

byproduct materials appear to be extremely low. In our letter of 

January 24, 1992, ve cited several journal articles which 

identified error rates in the administration of medications in 

hospitals vhicb vera .. veral orders or magnitude higher than the error rates cited by the NRC. 1 In addition to those studies, a Harvard University study of adverse events and negligence in 

hospitals which vas recently completed strongly supports our earlier conclusion. 2 Given that the level of errors in 

1

In the January 24, 1992 letter from James 8. MacRae, Jr. of 

OMB to James Taylor of the NRC, OKB cited s--veral journal articles which estimated medication error rates in hospitals of 

between o.st and lBt. 

2

According to the results of that study there vera 2.672 

million patients released fro. Hew York state hospitals in 1984. 

Of· those patients, ~.-oat 99,000 (3.7\ of all discharges) suffered adverse events (the study defined an •adverse event• as •an injury that vas caused by 118Clical management (rather than the 

underlying disease) and that prolonged the hospitalization, 
186 

ATTACHMENT C 

-3-

procedures using byproduct materials is already extremely low 

(particularly when compa~ed to other medical procedures) and is 

in fact approaching the limits of human error, it appears to be 

unlikely that the NRC program would significantly increase the 

public's overall health and safety by reducing the incidence of 

misadministrations. 1 · 

The NRC states that since the rate of misadministration rose significantly from 1989 to 1990, it is possible to reduce the 

rate of misadministrations from their most recent level. Even if 

the NRC is correct that the increase from 1989 to 1990 means that 

it is possible to further reduce misadministrations, the NRC has 

not shown that this ICR is likely to yield such reductions. The 

NRC has not presented any evidence that the rise in 

misadministrations between 1989 and 1990 was the result of any 

specific type of failure that the requirements in this ICR would 

address. Second, even if the ICR would significantly reduce 

misadministrations (which is unlikely for the above reasons), the 

additional protection afforded to public health and environment 

would be marginal. The NRC cites statistics which indicate that 

there are approximately 60 misadministrations of byproduct 

materials each year, representing approximately 0.03t of 200,000 

covered procedures. Of the 60 annual misadministrations, few 

appear t.o have resulted in permanent injury.• In fact, a 

produced a disability at the time of discharge, or both") during 

their hospitalization; over 27,000 (27.6t of all adverse events) ware due to ne9li9ence (tha study defined "ne9li9ence" as "care 

that fell below the standard expected of physicians in their 

community"). Of those patients who suffered adverse events, 

approximately 13,450 (13.5\ of all adverse events) died as a result of the adverse event. Of the adverse events which 

resulted in the death of a patient, approximately 6,900 (51t of 

adverse events which resulted in death) resulted from negligence. 

(New England Journal of Medicine. Incidence of Adverse Effects 

and Negligence in Hospitalized Patients: Results of the Harvard 

Medical Practice study I. February 7, 1991. Vol 324 No 6 page 

370 - 376.) 

1

on page 21 of a brief filed on March 6, 1992 with the u.s. Court of Appeals for the D.C. Circuit by the NRC in the case Arnerican College of Nuclear Physicians and Society of Nuclear 

Medicine y. United states Nyclear Begylatory Commission and 

United States of Arnerica (Civil No. 91-1431) the NRC conceded 

that "it cannot be said with certainty that the QM rule will 

reduce misadministrations.• 

~en discussing the need for this program, the NRC most 

frequently cites the 1975 Riverside incident in which several 

patients were overexposed due to the incorrect calibration of a cobalt 60 machine, and some of the patients may have died as a 
187 

ATTACHMENT C 

-4-

substantial percentage of the aisadministrations probabli resulted in no peraanent_adverse effects to the patient. In sum, the information that the NRC has provided to OMB, and the 

other information that OKB has received, does not support a conclusion that the reporting and recordkeeping requirements in 

the rule will contribute to the achievement of the goal of 

reducing misadministrations, and thereby providing additional 

protection to public health. Accordingly, these requirements 

have little if any practical utility. 

Burden Imposed oa Ke4ica1 Practitioners 

OMB is unable to determine with confidence the magnitude of 

the burden imposed on the regulated community by these 

recordkeeping and reporting requirements. According to NRC 

estimates, the final rule would impose an annual" ··burden of almost 

result of that aistake. However, the NRC subsequently promulgated rules in 1979 that require frequent calibration of 

equipment by qualified experts. Since the NRC has already taken 

steps to reduce the frequency of this type of error, it is 

unclear how the proposed measures would yield any further 

reduction in such risks. Although the NRC asserted that there were one or two other ai.sadministrations whi.cb resulted in 

significant injury or death, the NRC never provided to OMB any background about other aisadministrations. 

~he NRC does not distinguish between that various levels of 

injury which patients bava suffered as a result of 

misadministrations, simply stating that any exposure to radiation 

greater than a certain percentage above the prescribed level is 

assumed to be haraful. However, there are various level of 

injury which one could sustain froa a aisadainistration, some more serious than others. A Harvard'University study (see 

footnote 2) on the rate of abnoraal events in hospitals, injuries were categorized as (1) Minimal iapairment, recovery 1 month or less, (2) Moderate t.pairaent, recovery 1 to 6 months, (3) Moderate impairment, recovery 6 :months or more,. (4) Permanent 

impairment, less tban 50,, (5) Permanent impairment, greater than 

sot, (6) Death, or (7) could not reasonably judge impairment. The NRC made no atta.pt to categorize the adverse effects caused 

by byproduct misadainistrations by level of severity or any other measure. OHB staff did review the aisadministrations listed in 

the Federal Register notice at 56 FR ~4104 with Dr. Terrence 

Bevin, President of the American College ·of Nuclear Physicians. 

He estimated, based on the lt.ited data, that as few as 4 of the 

66 misadministration aight have resulted in any significant adverse effect. 
1~ 

ATTACHMENT C 

-s20,000 hours on the regulated community.' According to the 

professional association the burden could easily reach 200,000 

hours -- a factor of ten ·times larger than estimated by the NRC.' 

The NRC has a clear conception of what is required by the 

ICR, and has calculated the burden based on how long it believes 

that it would take someone with an equally clear understanding of 

the ICR to meet its requirements. The professional associations, 

however, do not share this conception of the ICR. 1 Instead they 

face substantial uncertainty about what the NRC expects the 

regulated community to do, and what each individual NRC inspector 

expects to find when inspecting a regulated party. Given this 

uncertainty, the regulated individuals and facilities are likely 

to be overly cautious -- and assume a greater paperwork burden -- because they cannot continue to operate without an NRC license.' 

OMB suggested in January that the NRC and the regulated 

community meet to clarify the requirements of this ICR. 10 OMB 

felt that such large discrepancies in burden hour estimate could 

only be explained if the regulated community interpreted the ICR as imposing requirements which the NRC never intended to impose. 

However, since the NRC's chose not to meet with the professional 

'March 23, 1992 letter from James Taylor to James B. MacRae, 

Jr., enclosure 3. · 

7

November S, 1992 letter from Kristen Morris to Ronald 

Minsk. 

'During separate discussions between OMB and the NRC and 

between OMB and the professional associations, OMB realized that 

the NRC and the Professional Associations do not even agree on what reporting and recordkeeping requirements the regulated 

community will have to comply with under the final rule and the 

ICR submitted to OMB for review. If the two parties cannot even agree on what is required by the rule and the ICR, then they 

certainly ·will not be able to agree on the burden they impose on the regulated community. This led OMB to suggest that the NRC 

meet with representatives of the regulated community. 

9

In addition to the paperwork burden borne by the regulated 

community in meeting the rule's requirements, they will also bear 

the costs of NRC's administration of this rule through fees 

imposed on the reporting community when NRC conducts its 

inspections. See 10 CFR 170 and 10 CFR 171 and 56 FR 31472, at 

which the NRC revised its fee schedule for licenses and 

inspections to recover approximately lOOt of its costs as required by the Omnibus Budget Reconciliation ACt of 1990. 

10January 24, 1992 letter from James B. MacRae, Jr. to James 

Taylor, page 6. 
189 

ATTACHMENT C 

-6-

associations, there is no additional information that would allow us to improve our estimates. 11 Accordingly, OMB can only·· conclude that the ICR's true burden hours lies somewhere between 

the NRC's and the professional association's estimates. 

As explained above, the available evidence indicates that 

the reporting and recordkeeping requirements will have little if 

any practical utility furthering the goal of reducing injuries from misadlllinistrations. Therefore, any significant burden is 

unreasonable, whether that burden amounts to 20,000 hours (as the 

NRC estimates) or 200,000 hours (as the professional association 

estimates). Thus, I conclude that this information collection 

request is not •necessary for the proper performance of the 

functions of the agency• and that the information collection will 

not "have practical utility for the agency." 44. u.s.c. 

3504(c)(2), 3508; A&A 5 C.P.R. 1320 . 4(b), (c) . 

conclusion 

currently, there is a growing concern about the ever increasing costs of medical care. Doctors can always run more tests, perform more procedures, take additional steps, and even perform more paperwork in an effort to reduce health risks. 

However, it is generally recognized that there are diminishing 

returns -- and that the medical collllllunity cannot conduct every 

test or take every possible precaution to prevent an adverse 

effect. As part of controlling the costs of medical care, 

society expects that the medical cOllllllunity will only incur those 

costs which have a reasonable likelihood of benefiting their 

patients. 

In this regard, the relevant question is not whether the ICR 

would be more cost-effective than the other steps that the NRC 

could take to reduce the risks associated with the medical use of 

byproduct materials. The relevant question is whether the ICR is 

cost-effective in an absolute sense -- rather than relative -- sense. While this program may be more cost-effective than any other step the NRC could take, the program is not cost-effective 

in an absolute sense, because the practical utility (if any) that 

the program will yield does not justify the significant burden 

the proqr~m will impose. To the extent that the NRC iaposes 

costs on the regulated collllllunity to conduct programs that are DQt 

cost-effective, it will divert resources from prograas that AXS 

cost-effective and, as such, would result in greater improvements in public health and safety. Thus, the NRC should review its 

actions in the context of this larger fraaework of the costs and 

risk management needs of the health care system as a whole. 

11March 23, 1992 letter. fro• Jaaes Taylor to Jaaes B. MacRae, 

Jr., page 2. 
190 

ATTACHMENT C 

-7-

For the reasons set forth above, OMB believes that the 

reportinq and recordkeepinq requirements in this ICR have little 

it any practical utility.- Therefore, the siqnificant burdens 

imposed on the requlated community are unreasonable and I am disapprovinq this ICR under the authority of the PRA. 

Sincerely, 

Orlgin&l Signed by 

.James :e. l4acRae, Jr 

James B. MacRae, Jr. 

Actinq Administrator 

and Deputy Administrator 

Office of Information 

and Requlatory Affairs 
191 

- 1101 Connecticut Avenue, N.W. • Suite 700 • Washington. D.C. 20038 

1 i American 

i Collegeof 

Nuclear 

Physicians 

March 8, 1993 

Ronald Minsk 

' Office of Information and Regulatory Affain 

NEOB-3019 

Office of M!uJaaement and Budget 

Washingtoa, DC 20503 

Fax (202) ~579 

ATTACIDIEli'I D 

The Society 

of Nuclear 

MP.nir.i11e 

: RE: Comments on the Nuclear Regulatory Commission Request for OMB review of 

10 CFR Part 3S Medical Use of Byproduct MateriaL 

Dear Mr. Minsk: 

These comments are submitted on behalf of the over 14,000 physicians, scientists, and 

technologists of the American CoUege of Nuclear Pbysicians (ACN'P) and the Society of 

Nuclear Medicine (SNM). in response to the nocice of S8 &s!...lk& 366. In this time of 

health care ~form it is imperative that costs, both din:ct and indirectly necessary to provide 

nuclear medicine services are identified. NRC regulation continues to be the most resource 

intensive practice expense. For this reason, we believe that the request for Office of 

Management and Budget Review regarding the coUection of ioformation by the Nuclear 

• Regulatory Commission (NRC) under the provisions of the Paperwork Reduction Act ( 44 

U.S.C. 3S) deserves scrutiny. Our concerns with the request for OMB review mainly consist 

of a signifieant underestimation of time and cost to comply with the regulations as stated in 

10 CFR 3S. These errors are listed as foUows: 

Sectioa 35.60{11) 

This section requires that the licensee label each syringe or radiation shield as to its 

contents. The NRC contends that approximately 2,600,000' syringes or shields must be 

· labeled annually Uliag apprmimately 0.00416' hoyn each. The aetual number of nuclear 

, medicine imagina procedures performed per year is closer to 10,000,000' studies. The great 

This value is taken from the NRC Request for OMB Review, Page 16, next 

to 35.60 (b). 

Ibid, Page 16. 

A value obtained from a marketing research consulting firm that was once 

hired by the SNM. Values ~ ranged from 8 to 12 million. These are in vivo procedures. 
192 

ATTACHME!IT D 

discrepancy between these values arises from the fact that the NRC value only represents 

those institutions that are not covered by agreement state regulations. Since many items 

require that the agreement states impose regulations that are compatible with those of the 

NRC to be in compliance, the regulation is passed on to indirect users as weD. So while only 

2,600,000 responses are directly due to this NRC regulation, close to an additional three 

times that number are indirectly required due to the compatibility issue. A!. the number of 

agreement states rise, this ratio wiD become even larger, giving the appearance that there 

is less regulation· by the NRC, when in fact it is either the same or increasing. 

The value of 0.00416 hours corresponds to slightly less than fifteen seconds. This value is 

obviously in error in that it takes significantly longer to type or print out a label, check for 

its legibility, peel it from its protective backing, and affix it to the syringe or shield. 

Performing this activity in such a short period of time would lead to an increase in 

mislabeling and subsequent misadministrations. A more accurate estimate of the required 

time to perform this correctly would be at least five times the value listed in the request for 

OMB review. Observing an c:xpc:rienced technologist in one of our computerized 

radiopharmacies, the time spent in record keeping was 75 seconds per dose. Using the 

above values, the total annual licensee burden would be 208,333 hours at a minimum rather 

than the 10,816 hours as submitted by the NRC. 

Using the NRC estimated cost of $123.00' per hour (including salaries and overhead), the 

annual cost to comply with this regulation alone is approximately $25,625,000 rather than 

the NRC submitted cost of $1,330,368, a difference of $24,294632. 

Sectloa 35.6l(b) 

This section requires that the vials that radiopharmaceuticals are drawn from also be 

labeled. Again since this is required for NRC compatibility, this regulation must be adhered 

to whether the licensee is under state or NRC supervision. We can apply the same 

correction factor as used above for radiopharmaceutical doses and state that approximately 

2,310,()()()! vials or radiopharmaceuticals require labeling. Using 75 seconds as the time 

required to create a label by an c:xpc:rienced technologist in a computerized radiopharrnacy. 

the time necessary for compliance is approximately 48,125 hours. At a cost of $123.00 per 

OMB request for review, pg. 16 

This value is generated by using the NRC values of total number of doses 

(2,600,000 syringes that need labeling) and their total number of vials that need labeling 

(600,000). This means that there are approximately 4.33 patient doses drawn per vial. 

Using the value obtained from the SNM approximation of the total number of patient doses 

(10,000,000) we can calculate that there are approximately 2,309,468 vials (10,000,000/4.33) 

that are used by agreement and NRC states together. 

2 
193 

ATTACIIMEIIT D 

hour this amounts to $5,919,375.00 which is again significantly higher that the NRC esti!Date 

of $307,008', a difference of $5,612,367. · 

Sectioa 35.ll(a)(4) aad (5) 

This section requires that a radiatio.n safety committee exist and consist of at least three 

members. Additionally, there must be at least one authorized user of each type of use 

permitted by the license presenL The committee must also meet at least quarterly. The 

average radiation safety meeting is approximately an hour in length. Thus, there is a 

minimum of 12 houn per year per licensee. This too, is required by the state for 

compatibility with NRC regulations so that users in agreement states, as well as those 

directly regulated by the NRC, are affected by this rule. Given that there are approximately 

1,900 NRC supervised licensees and 4,000 agreement state licensees (Total 5,900), this 

places a total burden of at least 70.800 hours upon the regulated community at a cost of 

approximately $8,708,400. This value is higher than the $1,476,000 as stated by the NRC 

in the record keeping requirements of the request for OMB review. 

Sectioa 35.32 

This section contains the requirements for a quality management (QM) program. This 

recent addition to 10 CFR 35 is duplicative in nature siDce a quality management progra.Di 

is already required by the Joint CoiiUDission on Accreditation of Health Care Organizations 

(JCAHO). Not only does the JCAHO require a quality management program. it requires 

a quality improvement program. Therefore, this section is not only duplicative, but it falls 

shon of the requirements made by another organization whose sole func:tion.is to ensure the 

proper health care of patients. 

The vague wording of the regulation makes it essential that the QM program contain much 

more detailed information and documentation than even these professional organizations 

require. 

The JCAHO consists of health care specialists who understand the aspects of quality 

management and improvemenL These trained professionals are well aware of the pitfalls 

of the practice of medicine and know how to expose potential problems. The NRC cannot 

hope to attain their level of expenise in the inspec:tion of quality management programs 

simply by creating broad regulatiom to that effeq. 

Physicians who desire an even greater level of quality assuranoe use the practice certification 

program of the American College of Nuclear Pbysic:iana. This program is significantly more 

detailed · and thorough than either the NRC or JCAHO programs. 

This value is taken from the NRC Request for OMB review, Page 20. line 2 

3 
194 

ATTACHMENT D 

This section carries a significant economic impact on medical care. Even assuming that 

currently existing quality management and quality improvement mechanisms can be modified 

to fit the broad requirements of the NRC regulations, it would require a minimum of two 

people, one week to update the procedure manuals at a cost of 60 hours for the tint year. 

Using the NRC rate of $123.00 per hour including salaries and overhead, this amounts to 

$9,840 per institution. This amounts to a staggering $58,056,000 for the tint year just to 

comply with a single aspect of the QM regulation. The procedure manual will need yearly 

revisions to ensure that it is complete. To comply with the record maintenance and audit 

as well as revising and updating procedures will take two people approximately three days 

to revise and update at a cost of 48 hours and 5,904 per institution. Nationwide this has an 

impact of $34,833,600 per year. This expense offers no additional safety to the public since 

more effective safety and quality assurance mechanisms are already in existence. 

Section 35.70 (a); 35.70 (h) is documentation portion 

This section requires that "a licensee shall survey with a radiation detection survey 

instrument at the end of each· day of use all areas where radiopharmaceuticals are routinely 

prepared for use or administered." Although this rule may appear reasonable, we feel it is 

not, because technologists and physicians monitor areas in which they have worked, generally 

just before leaving the area, if there is any chance of a spill. The individual handling the 

radioactive material knows just where to monitor, and doesn't waste time monitoring areas 

where spills would not have occurred. Monitoring at the end of the day is redundant and 

not justifiable from a health physics point of view. 

Let us imagine a situation in which a spill is "missed" and never found. As Tc-99m is used 

in 80% of diagnostic procedures at least, and the highest doses used are Tc-99m (1 to 30 

mCi doses), let us assume a 1 mCi drop is inadvertently spilled, not noticed, and stays there 

irradiating whomever comes by. Let us assume that a technologist is exposed to this spot 

for 3 hrs. per day at an average distance of 1 meter until total decay of the spill. This would 

result in a total dose or 86 microrem effective dose equivalent. As everyone receives about 

1000 microrem a day from background, and 2000 • 2500 microrem a day in high background 

areas, this is not significant. 

It takes about 1/2 hour to perform a complete survey and document it on average. 

Assuming an average of 6 surveys per week per licensee, and 5900 licensees, this comes to 

(3 hrslwk) (52 weeks/yr.) (5900) = 920,400 hours/year. At a cost of $123/hr, that comes to 

$113,209,200/year, not even counting the User Fees we have to pay the NRC to check for 

312 entries per licensee. Let us say it takes 1/2 hour to check 312 entries. That is 5900 (0.5) 

($123) = $362,850. The total cost for no significant decrease in radiation risk, is therefore 

$113,572,050. The NRC document to OMB stated the cost of complying with the paperwork 

portion of this requirement is listed as only $18,696,000, a difference of 94,876,050. 

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