United States Nuclear Regulatory Commission - Protecting People and the Environment

EA-02-189 - Cooperheat-MQS, Inc.

February 19, 2003

EA-02-189

Joseph E. Milliron, President and
Chief Executive Officer
Cooperheat-MQS, Inc.
5858 Westheimer Road
Suite 625
Houston, Texas 77057

SUBJECT: NOTICE OF VIOLATION AND PROPOSED IMPOSITION OF CIVIL PENALTY - $6,000 (NRC INSPECTION REPORT No. 030-35252/01-08 AND OI INVESTIGATION REPORT 4-2002-004)

Dear Mr. Milliron:

This refers to the predecisional enforcement conference conducted with members of your staff on October 31, 2002, in the NRC RIV office in Arlington, Texas. The conference was conducted to discuss two apparent violations involving failures to amend your NRC license to reflect changes in Radiation Safety Officers (RSO), and the use of two new field stations and a permanent radiographic installation prior to receiving NRC authorization. We noted that these findings were of particular concern because they may have involved deliberate or willful actions on the part of your personnel. These findings were discussed with members of your staff during an exit briefing on September 19, 2002, and were documented in the subject inspection report dated September 26, 2002.

Based on the information developed during the inspection and the investigation, and the information that you provided during the conference, the NRC has determined that two violations of NRC requirements occurred. These violations are cited in the enclosed Notice of Violation (Notice) and the circumstances surrounding them are described in detail in the subject inspection report. The violations are: (1) a failure to amend your license to reflect a change in the RSO, and (2) a failure to amend your license to add two new field stations and to use a permanent radiographic installation prior to receiving NRC authorization.

Further, the NRC has concluded willfulness was involved in these violations. Specifically, in July 2001, the NRC rejected the qualifications of the individual whom Cooperheat had named as RSO. Even after discussions between the NRC and Cooperheat management in late July 2001 and again in January 2002, neither Cooperheat management nor the RSO took concrete actions to correct the issues until February 2002. Regarding the second violation, the NRC noted that Cooperheat personnel were aware that a license amendment was needed to add two field stations to the license prior to use, but allowed other priorities (albeit significant priorities) to substantially delay the amendment request. In both cases, Cooperheat implemented changes to its license requirements before submitting license amendment requests to the NRC.

The significance of the violations rests with the determination that willfulness was involved with the violations. Therefore, these violations have been categorized collectively in accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions" (Enforcement Policy), NUREG-1600 as a Severity Level III problem.

In accordance with the Enforcement Policy, a civil penalty in the base amount of $6,000 is considered for a Severity Level III problem. Because willfulness is associated with these violations, the NRC considered whether credit was warranted for Identification and Corrective Action in accordance with the civil penalty assessment process in Section VI.C.2 of the Enforcement Policy. In evaluating whether you were deserving of Identification credit, we note that although Cooperheat management was aware of the issues, no actions were taken for a significant period of time. As such, we have determined that you are not deserving of Identification credit. However, we have determined that you are deserving of corrective action credit. Your corrective actions included hiring an individual who meets the RSO qualifications, designating a qualified individual as standby corporate RSO, setting up a radiation safety management committee to ensure regulatory requirements are being met, conducting additional training to vice presidents and regional managers on license requirements, and providing additional guidance to facility RSOs on temporary jobsites.

Therefore, to emphasize the importance of obtaining NRC approval prior to modifying activities governed by the license, and the significance of willful violations, 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 base amount of $6,000. In addition, issuance of this Notice constitutes escalated enforcement action, that may subject you to increased inspection effort.

You are required to respond to this letter and should follow the instructions specified in the enclosed Notice when preparing your response. The NRC will use your response, in part, to determine whether further enforcement action is necessary to ensure compliance with regulatory requirements.

In accordance with 10 CFR 2.790 of the NRC's "Rules of Practice," a copy of this letter, its enclosure, and your response will be made available electronically for public inspection in the NRC Public Document Room or from the NRC's document system (ADAMS), accessible from the NRC Web site athttp://www.nrc.gov/reading-rm/adams.html. The NRC also includes significant enforcement actions on its Web site at www.nrc.gov; select What We Do, Enforcement, then Significant Enforcement Actions.

Sincerely,

/RA/

Ellis W. Merschoff
Regional Administrator

Docket No. 030-35252
License No. 42-32219-01

Enclosure:   Notice of Violation and Proposed Imposition of Civil Penalty

cc:
Texas Radiation Control Program Director

Robert W. Hardy, Director of Operations
Cooperheat-MQS, Inc.
5858 Westheimer Road, Suite 625
Houston, Texas 77057


ENCLOSURE 1

NOTICE OF VIOLATION
AND
PROPOSED IMPOSITION OF CIVIL PENALTY

Cooperheat-MQS, Inc.
Houston, Texas
Docket No. 030-35252
License No. 42-32219-01
EA-02-189

During an NRC inspection and investigation which concluded on September 19, 2002, violations of NRC requirements were 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 violations and associated civil penalty are set forth below:


A.   10 CFR 30.34(c) requires, in part, that the licensee confine its possession and use of byproduct material to the location and purpose authorized in the license. License Condition 13 of NRC License 42-32219-01 identified Mr. Earl L. Banfield as the licensee's radiation safety officer.

Contrary to the above, the licensee failed to comply with the terms and conditions of the license. Specifically, from March 31, 2001, through February 2002, Mr. Banfield was no longer functioning as the licensee's radiation safety officer (RSO), and the licensee had appointed another individual to serve as RSO who was not identified on the license. Further, the appointed individual was unqualified to serve as RSO since he had not completed the testing requirement of 10 CFR 34.43(a).

B.   10 CFR 30.34(c) requires, in part, that the licensee confine his possession and use of byproduct material to the locations and purposes authorized in the license. License Condition 11-B of NRC License 42-32219-01 identifies authorized field stations.

Contrary to the above, the licensee failed to confine his possession and use of licensed material to locations authorized in the license. Specifically, in June 2001 a field station was opened in Richmond, Virginia; and in August 2001, a field station was opened in Kaukana, Wisconsin. Work was dispatched from both locations, however the licensee failed to apply for a license amendment to add the field stations to the license. Additionally, in 2001, the licensee constructed a permanent radiographic installation at a client facility in Indianapolis, Indiana. An amendment request to add the installation to the license was submitted in February 2002, however prior to receiving NRC approval of the amendment request, the licensee allowed Cooperheat MQS personnel to conduct radiographic operations in the facility.

This is a Severity Level III problem (Supplement VI).
Civil Penalty - $6,000 (EA-02-189)

Pursuant to the provisions of 10 CFR 2.201, Cooperheat-MQS, Inc. (Licensee) is hereby required to submit a written statement or explanation to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, within 30 days of the date of this Notice of Violation and Proposed Imposition of Civil Penalty (Notice). This reply should be clearly marked as a "Reply to a Notice of Violation; EA-02-189" and should include for each alleged violation: (1) admission or denial of the alleged violation, (2) the reasons for the violation if admitted, and if denied, the reasons why, (3) the corrective steps that have been taken and the results achieved, (4) the corrective steps that will be taken to avoid further violations, and (5) the date when full compliance will be achieved. Your response may reference or include previous docketed correspondence, if the correspondence adequately addresses the required response. If an adequate reply is not received within the time specified in this Notice, an order or a Demand for Information may be issued as to why the license should not be modified, suspended, or revoked or why such other action as may be proper should not be taken. Consideration may be given to extending the response time for good cause shown.

Within the same time as provided for the response required above under 10 CFR 2.201, the Licensee may pay the civil penalty proposed above or the cumulative amount of the civil penalties if more than one civil penalty is proposed, 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 violations 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 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 which 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 response 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: Mr. 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 IV, 611 Ryan Plaza Drive, Suite 400, Arlington, Texas 76011.

Because your response will be made available electronically for public inspection in the NRC Public Document Room or from the NRC's document system (ADAMS), to the extent possible, it should not include any personal privacy, proprietary, or safeguards information so that it can be made available to the public without redaction. ADAMS is accessible from the NRC Web site at http://www.nrc.gov/reading-rm/adams.html. If personal privacy or proprietary information is necessary to provide an acceptable response, then please provide a bracketed copy of your response that identifies the information that should be protected and a redacted copy of your response that deletes such information. If you request withholding of such material, you must specifically identify the portions of your response that you seek to have withheld and provide in detail the bases for your claim of withholding (e.g., explain why the disclosure of information will create an unwarranted invasion of personal privacy or provide the information required by 10 CFR 2.790(b) to support a request for withholding confidential commercial or financial information).

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

Dated this 19th day of February 2003

 

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