EA-02-151 - Maxim Technologies, Inc.

August 29, 2002

EA-02-151

Randolph B. Gainer, President
Maxim Technologies, Inc.
6178 South Stratler Street
Salt Lake City, UT 84107

SUBJECT:

NOTICE OF VIOLATION AND PROPOSED IMPOSITION OF CIVIL PENALTY -$3000 (NRC SPECIAL INSPECTION REPORT NO. 03035713/2002-001(DNMS))

Dear Mr. Gainer:

This refers to the inspection conducted on June 27, 2002, at the Maxim Technologies, Inc., Kansas City, Kansas facility. This was a special inspection to review the circumstances surrounding the theft of a moisture density gauge on May 2, 2002. The inspection report was transmitted to Maxim Technologies, Inc., on July 16, 2002, and identified an apparent violation of NRC requirements for the failure to secure from unauthorized removal or limit access to licensed material stored in an unrestricted area.

In the letter transmitting the inspection report, we provided you the opportunity to address the apparent violation identified in the report by either attending a predecisional enforcement conference or by providing a written response before we made our final enforcement decision. In a letter dated July 30, 2002, you provided a response to the apparent violation.

Based on the information developed during the inspection and the information that you provided in your response to the inspection report, dated July 30, 2002, the NRC has determined that a violation of NRC requirements occurred. The violation is cited in the enclosed Notice of Violation (Notice) and the circumstances surrounding it are described in detail in the subject inspection report. On May 2, 2002, Maxim Technologies, Inc., notified the NRC that a portable moisture density gauge was stolen from the back of an open bed pickup truck on May 2, 2002, while parked at a restaurant/bar in Independence, Missouri. The gauge had been used in Missouri on that day under an NRC license issued to your Wausau, Wisconsin office. The gauge and case were locked and secured to the truck with a bungee cord and chain; however, the chain was not locked to the case. The gauge was recovered the following day when members of the public observed the device and informed the local police department, who in turn notified Maxim Technologies, Inc. The gauge was recovered undamaged.

The failure to adequately secure and limit access to a portable moisture density gauge resulted in the loss of licensed material. This failure is safety significant in that implementation of adequate security measures for licensed materials is intended to prevent members of the public from being unknowingly and unnecessarily exposed to radiation. Therefore, this violation has been categorized in accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions" (Enforcement Policy), NUREG-1600 at Severity Level III.

In accordance with the Enforcement Policy, a civil penalty is considered for a Severity Level III violation involving the loss of a device such as the moisture density gauge lost by Maxim Technologies, Inc. Because your facility has not been the subject of escalated enforcement actions within the last two inspections, the NRC considered whether credit was warranted for Corrective Action in accordance with the civil penalty assessment process in Section VI.C.2 of the Enforcement Policy. Credit was warranted for corrective actions that included: (1) reprimanding the individual involved with the loss; (2) retraining the individual and other gauge users in the proper method of transporting gauges; (3) continuing to perform periodic audits of gauge users focusing on gauge security; (4) revising the emergency procedures manual to more clearly state that the gauge and case are to be locked to the truck bed during transportation; and (5) sending electronic messages from the Maxim Technologies president to corporate officers, radiation safety officers, and office managers reiterating the importance of security procedures for licensed materials.

In your response, you requested that no civil penalty be issued in this case, since this was the first non-willful violation at the Kansas City Office, the NRC was promptly notified of the loss, and corrective actions were prompt and comprehensive. Application of the normal civil penalty assessment process would not result in a civil penalty in this case. However, the revised Enforcement Policy published December 18, 2000, (effective February 16, 2001), provides that, notwithstanding normal application of the civil penalty assessment process, a civil penalty of at least the base amount should normally be proposed in this type of case to reflect the significance of the violation and to emphasize the importance of maintaining control of licensed material (see Section VII.A.1(g) of the Enforcement Policy). The base civil penalty values in the Enforcement Policy were developed to correspond to approximately three times the average cost of disposal. Application of the civil penalty assessment process for a lost source, as reflected in Tables 1A.f.2 and 1B of the Enforcement Policy, would result in a civil penalty of $7500 in this case.

The revised Enforcement Policy also provides that civil penalties may be adjusted to correspond to three times the actual expected cost of authorized disposal. Based on recent cases, the NRC is aware that three times the actual expected cost of disposal for a gauge of this type is less than the lowest base civil penalty of $3000. However, the NRC has concluded that a civil penalty amount less than the lowest base civil penalty is not sufficient to adequately emphasize the importance of maintaining control of radioactive material in the circumstances of this case. Therefore, I have been authorized, after consultation with the Director, Office of Enforcement, to issue the enclosed Notice of Violation and Proposed Imposition of Civil Penalty (Notice) in the amount of $3000 for this Severity Level III violation. In addition, issuance of this Notice constitutes escalated enforcement action, that may subject you to increased inspection effort.

The NRC has concluded that information regarding the reason for the violation, the corrective actions taken and planned to correct the violation and prevent recurrence, and the date when full compliance was achieved, is already adequately addressed on the docket in Inspection Report No. 030-35713/2002001(DNMS), and your letter, dated July 30, 2002. Therefore, you are not required to respond to the provisions of 10 CFR 2.201 unless the description herein does not accurately reflect your corrective actions or your position. In that case, or if you choose to provide additional information, you should follow the instructions specified in the enclosed Notice.

In accordance with 10 CFR 2.790 of the NRC's "Rules of Practice," a copy of this letter, its enclosure, and your response, if any, will be made available electronically for public inspection in the NRC Public Document Room or from the Publicly Available Records (PARS) component of NRC's document system (ADAMS). ADAMS is accessible from the NRC Web site at the Public NRC Library.

		Sincerely,
		/RA/
		J. E. Dyer Regional Administrator

Docket No. 030-35713
License No. 48-32185-01

Enclosure:
Notice of Violation and Proposed Imposition of Civil Penalty
NUREG/BR-0254 Payment Methods (Licensee only)

cc:
State of Kansas
State of Utah
State of Missouri
State of Wisconsin

---

NOTICE OF VIOLATION
AND
PROPOSED IMPOSITION OF CIVIL PENALTY

Maxim Technologies, Inc. Kansas City, Kansas

Docket No. 030-35713 License No. 48-32185-01 EA-02-151

During an NRC inspection conducted on June 27, 2002, a violation of NRC requirements was identified. In accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions," NUREG-1600, the NRC proposes to impose a civil penalty pursuant to Section 234 of the Atomic Energy Act of 1954, as amended (Act), 42 U.S.C. 2282, and 10 CFR 2.205. The particular violation and associated civil penalty are set forth below:

10 CFR 20.1801 requires that the licensee secure from unauthorized removal or access licensed materials that are stored in controlled or unrestricted areas. 10 CFR 20.1802 requires that the licensee control and maintain constant surveillance of licensed material that is in a controlled or unrestricted area and that is not in storage. As defined in 10 CFR 20.1003, controlled area means an area, outside of a restricted area but inside the site boundary, access to which can be limited by the licensee for any reason; and unrestricted area means an area, access to which is neither limited nor controlled by the licensee.

Contrary to the above, on May 2, 2002, the licensee did not secure from unauthorized removal or limit access to a Troxler Model 3440 portable moisture density gauge, Serial No. 22323, containing 8 millicuries of cesium-137 and 40 millicuries of americium-241 located in Independence, Missouri, which is an unrestricted area, nor did the licensee control and maintain constant surveillance of this licensed material. Specifically, the authorized user left the gauge unsecured in the back of an open bed pickup truck while at a restaurant/bar in Independence, Missouri, and the gauge was stolen.

This is a Severity Level III violation (Supplement IV).
Civil Penalty - $3000

The NRC has concluded that information regarding the reason for the violation, the corrective actions taken and planned to correct the violation and prevent recurrence, and the date when full compliance was achieved, is already adequately addressed on the docket in Inspection Report No. 030-35713/2002001 (DNMS), and your letter, dated July 30, 2002. However, you are required to submit a written statement or explanation pursuant to 10 CFR 2.201 if the description therein does not accurately reflect your corrective actions or your position. In that case, or if you choose to respond, clearly mark your response as a "Reply to a Notice of Violation," and send it to the U.S. Nuclear Regulatory Commission, ATTN: Document Control Desk, Washington, DC 20555-0001 with a copy to the Regional Administrator, Region III, within 30 days of the date of the letter transmitting this Notice of Violation (Notice).

The licensee may pay the civil penalty proposed above, in accordance with NUREG/BR-0254 and by submitting to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, a statement indicating when and by what method payment was made, or may protest imposition of the civil penalty in whole or in part, by a written answer addressed to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission. Should the licensee fail to answer within 30 days of the date of this Notice of Violation and Proposed Imposition of Civil Penalty, an order imposing the civil penalty will be issued. Should the licensee elect to file an answer in accordance with 10 CFR 2.205 protesting the civil penalty, in whole or in part, such answer should be clearly marked as an "Answer to a Notice of Violation" and may: (1) deny the violation listed in this Notice, in whole or in part, (2) demonstrate extenuating circumstances, (3) show error in this Notice, or (4) show other reasons why the penalty should not be imposed. In addition to protesting the civil penalty in whole or in part, such answer may request remission or mitigation of the penalty.

In requesting mitigation of the proposed penalty, the factors addressed in Section VI.C.2 of the Enforcement Policy should be addressed. Any written answer in accordance with 10 CFR 2.205 should be set forth separately from the statement or explanation in a reply pursuant to 10 CFR 2.201, but may incorporate parts of the 10 CFR 2.201 reply by specific reference (e.g., citing page and paragraph numbers) to avoid repetition. The attention of the licensee is directed to the other provisions of 10 CFR 2.205, regarding the procedure for imposing a civil penalty.

Upon failure to pay any civil penalty due that subsequently has been determined in accordance with the applicable provisions of 10 CFR 2.205, this matter may be referred to the Attorney General, and the penalty, unless compromised, remitted, or mitigated, may be collected by civil action pursuant to Section 234c of the Act, 42 U.S.C. 2282c.

The responses noted above (Reply to Notice of Violation, statement as to payment of civil penalty, and Answer to a Notice of Violation) should be addressed to: Frank Congel, Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852-2738, with a copy to the Regional Administrator, U.S. Nuclear Regulatory Commission, Region III, 801 Warrenville Road, Suite 255, Lisle, IL 60532-4351.

If you choose to respond, your response will be made available electronically for public inspection in the NRC Public Document Room or from the Publicly Available Records (PARS) component of NRC's document system (ADAMS). ADAMS is accessible from the NRC Web site at the Public NRC Library. Therefore, to the extent possible, the response should not include any personal privacy, proprietary, or safeguards information so that it can be made available to the Public without redaction.

In accordance with 10 CFR 19.11, you may be required to post this Notice within two working days.

Dated this 29^th day of August 2002.