EA-95-025 - Power Inspection, Inc.

February 18, 1997

EA 95-025

Mr. Paul Chambers, President
Power Inspection, Inc.
c/o PEC Contracting Engineers
4420 Lorigan Street
Pittsburgh, PA 15224

SUBJECT:

NOTICE OF VIOLATION AND PROPOSED IMPOSITION OF CIVIL PENALTIES – $40,000 (NRC Inspection Report No. 030-20644/93-002 and Investigation Report No. 1-93-069R)

Dear Mr. Chambers:

This refers to the NRC inspection conducted on December 2-3, 1993, at the Power Inspection, Inc., (PI) facility in Wexford, Pennsylvania, as well as the findings of a subsequent investigation by the NRC Office of Investigations (OI). The inspection report and OI Synopsis were sent to the former President of PI on August 9, 1996. On October 18, 1996, a Predecisional Enforcement Conference was conducted with the former President of PI to discuss the violations, their causes, and corrective actions. Given that you are the current owner of PI and had owned 49% of the company assets when the violations occurred, this letter is being sent to you for your attention and action.

Based on the information developed during the inspection, subsequent investigation, and conference, the NRC has determined that numerous violations of NRC requirements occurred. These violations are cited in the enclosed Notice of Violation and Proposed Imposition of Civil Penalties (Notice) and the circumstances surrounding them are described in detail in the subject inspection and investigation reports. The violations involved activities conducted by PI as both a vendor providing nuclear-related services to the nuclear industry, such as eddy current testing (ET), and an NRC materials licensee.

The violation cited in Section I of the Notice (i.e., the vendor-related activities) involves four examples of deliberate failure to provide to the Cleveland Electric Illuminating Company and Nebraska Public Power District, both licensees of the NRC, accurate information in accordance with the requirements of 10 CFR 50.5(a)(2) and 10 CFR 73.56(b)(2)(i). Specifically, at the direction of PI's former President, PI deliberately submitted inaccurate information to the two licensees regarding the reliability or trustworthiness of individuals who used illegal substances, and regarding the certifications of individuals who performed eddy current testing.

Deliberately directing employees to fabricate false records, and deliberately providing false information to licensees of the NRC, are of very significant regulatory concern because the conduct of licensed activities in accordance with the Commission's requirements depends in large part on the integrity of individuals conducting licensed activities. These actions are particularly egregious given the prior conviction of PI and its former President in 1988, for falsifying ET equipment calibration certification involving work performed at the Beaver Valley Nuclear Plant in Shippingport, Pennsylvania. Despite the prior actions taken against PI and its former President, your company and its representatives continued to engage in wrongdoing. Because the inaccurate information was provided by the former PI president, the violation is classified at Severity Level I in accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions" (Enforcement Policy), NUREG-1600.

The violations cited in Section II of the Notice (i.e., the materials-related radiography activities) include an example of deliberate failure to provide to the NRC complete and accurate information in accordance with the requirements of 10 CFR 30.9(a), and an example of deliberate failure to maintain information required by 10 CFR 34.27. Specifically, PI's former Vice President/Radiation Safety Officer deliberately submitted inaccurate information to the NRC in response to a prior Notice of Violation, and PI's former President directed PI employees to fabricate source utilization records. In addition, seven other violations are cited including failure to: (1) observe the performance of a radiographer at intervals not to exceed three months; (2) maintain utilization logs at the licensee's facility located in Wexford, Pennsylvania, for certain radiographic operations; (3) administer the required training to radiography personnel; (4) perform scheduled routine maintenance and inspection of a radiographic camera; (5) promptly return a film badge to a vendor for processing; (6) request a license amendment before appointing an individual to assume the duties of the RSO; and (7) test two radiography sealed sources for leakage within an interval of six months.

The violations in Section II of the Notice are of very significant regulatory concern because the inaccurate information submitted to the NRC by PI's former Vice President/Radiation Safety Officer influenced the NRC as to whether corrective actions had been taken in response to prior violations. In addition, the former PI President's direction to fabricate source utilization records is also of very significant regulatory concern. These actions are particularly serious because the President and the Radiation Safety Officer are charged with ensuring that PI staff adhere to NRC requirements and perform activities in a safe manner. Therefore, the violations have been classified, in accordance with the Enforcement Policy, in the aggregate as a Severity Level I problem.

In accordance with the Enforcement Policy, a base civil penalty in the amount of $10,000 is considered for a Severity Level I violation/problem. It is recognized that you no longer plan to maintain a materials license (and the license is being terminated by separate correspondence, based on a request for termination by the former President of PI, sent to the NRC in a letter dated December 30, 1993), and are not now providing services to the nuclear industry. However, given the egregiousness of the violations, the extensive record falsification, and the fact that management was directly involved in the deliberate misconduct, I have been authorized, after consultation with the Commission, to exercise enforcement discretion pursuant to Sections VII.A.1.(a) and (c) of the Enforcement Policy to issue the enclosed Notice in the amount of $40,000 for the Severity Level I violation and problem in the enclosed Notice (i.e., $20,000 for the Severity Level I violation in Section I and $20,000 for the Severity Level I problem in Section II). This civil penalty is being issued to emphasize the unacceptability of such actions, should Power Inspection engage in licensed activities in the future.

You are required to respond to this letter and should follow the instructions specified in the enclosed Notice when preparing your response. In your response, you should document the specific actions taken and any additional actions you plan to prevent recurrence. After reviewing your response to this Notice, including your proposed corrective actions, the NRC will determine whether further NRC enforcement action is necessary to ensure compliance with NRC 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 placed in the NRC Public Document Room.

Sincerely, Edward L. Jordan Deputy Executive Director for Regulatory Effectiveness, Program Oversight, Investigations and Enforcement

Docket No. 030-20644
License No. 37-21428-01

Enclosure:
Notice of Violation and Proposed Imposition of Civil Penalties

cc w/encls:
Commonwealth of Pennsylvania
State of Florida
State of Ohio
State of Nebraska
Nebraska Public Power District
Cleveland Electric Illuminating Company

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NOTICE OF VIOLATION
AND
PROPOSED IMPOSITION OF CIVIL PENALTIES

Power Inspection, Inc. Wexford, Pennsylvania

Docket No. 030-20644 License No. 37-21428-01 EA 95-025

During an NRC inspection conducted on December 2-3, 1993, and subsequent investigation by the NRC Office of Investigations (OI), violations of NRC requirements were identified. In accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions," NUREG-1600, the Nuclear Regulatory Commission proposes to impose these civil penalties 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 penalties are set forth below:

I. Violation Associated with Vendor-Related Activities

10 CFR 50.5(a)(2) requires, in part, that any contractor of any licensee may not deliberately submit to a licensee information that the person submitting the information knows to be incomplete or inaccurate in some respect material to the NRC.

Contrary to the above, Power Inspection, Inc. (PI), acting as a contractor to the Cleveland Electric Illuminating Company (CEIC) and Nebraska Public Power District (NPPD), both licensees of the NRC, deliberately submitted to the licensees information which was inaccurate in some respect material to the NRC. Specifically:

1. on March 5, 1993, PI deliberately submitted to the NPPD three inaccurate letters stating that the trustworthiness and reliability of two individuals had been established by an investigation, when PI knew that the individuals had used illegal substances. This information was material because, given the individuals' use of illegal substances, the reliability of the individuals was in question and the lack of information deprived the NPPD of an opportunity to investigate the matter, pursuant to 10 CFR Part 73.

2. on October 6, 1993, PI deliberately submitted to the CEIC three inaccurate letters stating that the trustworthiness and reliability of three individuals had been established by an investigation, when PI knew that the individuals had used illegal substances. This information was material because, given the individuals' use of illegal substances, the reliability of the individuals was in question and the lack of information deprived the CEIC of an opportunity to investigate the matter, pursuant to 10 CFR Part 73.

3. in approximately March 1993, PI deliberately submitted to the NPPD, Cooper facility, three inaccurate eddy current qualification certifications for three individuals stating that the individuals had passed a Level-2 examination. The information was deliberately inaccurate in that PI knew that the individuals never obtained the required training in order to be qualified and, in addition, the individuals were given the correct answers while taking the certification examination. This information was material because it provided false verification to NRC licensees that the individuals were knowledgeable and capable of performing eddy current testing which provides information regarding the quality of equipment.

4. in approximately October 1993, PI deliberately submitted to the CEIC's Perry Nuclear Station two eddy current qualification certifications for two individuals stating that the individuals had passed a Level-2 examination. The information was deliberately inaccurate in that PI knew that the individuals never obtained the required training in order to be qualified and, in addition, the individuals were given the answers while taking the certification examination. This information was material because it provided false verification to NRC licensees that the individuals were knowledgeable and capable of performing eddy current testing which provides information regarding the quality of equipment. (01011)

This is a Severity Level I Violation (Supplement VII)
Civil Penalty $20,000

II. Violations Associated with Material License Activities

A. 10 CFR 30.9(a) requires, in part, that information provided to the Commission by a licensee be complete and accurate in all material respects.

Contrary to the above, in a July 14, 1993 letter to the NRC, the licensee provided the Commission information which was not accurate in all material respects. Specifically, in response to violations listed in the NRC Notice of Violation dated June 16, 1993, the licensee stated that:

1. observations of the licensee's radiographers had been made when, in fact, the observations had not been made;

2. a ratemeter had been sent for calibration when, in fact, the ratemeter had not been sent;

3. pocket dosimeters had been calibrated when, in fact, the dosimeters had not been calibrated;

4. source utilization logs had been maintained when, in fact, the logs had not been maintained; and

5. personnel monitoring reports were available when, in fact, the reports had not been available.

This information was material because it had the capability to influence the NRC evaluation of the licensee's corrective actions in response to the June 16, 1993, Notice of Violation. (02011)

B. 10 CFR 30.9(a) states, in part, that information required by the Commission's regulations to be maintained by the licensee shall be complete and accurate in all material respects.

10 CFR 34.27 requires, in part, that each licensee shall maintain current utilization logs, which shall be kept available for three years from the date of the recorded events, for inspection by the Commission, at the address specified in the license, showing for each sealed source: the make and model number of the radiographic exposure device or storage container in which the sealed source is located; the identity of the radiographer to whom assigned; and the plant or site where used and dates of use.

Contrary to the above, as of December 2, 1993, information required by the Commission's regulations to be maintained by the licensee was not accurate in all material respects. Specifically, the licensee's utilization logs maintained at the licensee's Wexford, Pennsylvania, facility for the period of November 1992 through April 1993, were inaccurate because they were fabricated by the licensee. Specifically, the logs were not created on the date of source use, but were created afterwards by PI staff in order to address questions asked by the NRC during a previous NRC inspection. This information was material because it had the capability to influence an NRC enforcement decision. (02021)

C. 10 CFR 34.11(d)(1) requires, in part, that an applicant have an inspection program that requires the observation of the performance of each radiographer and radiographer's assistant during an actual radiographic operation at intervals not to exceed three months.

License Condition 17 incorporates the inspection program containing the requirements stated in 10 CFR 34.11(d)(1) as submitted in the licensee's application dated March 7, 1988, into NRC License No. 37-21428-01.

Contrary to the above, as of December 2, 1993, the licensee had not observed the performance of a radiographer involved in radiographic operations since April of 1993, an interval in excess of three months. (02031)

D. 10 CFR 34.27 requires, in part, that each licensee maintain current utilization logs, which shall be kept available for three years from the date of the recorded events, for inspection by the Commission, at the address specified in the license, showing for each sealed source; the make and model number of the radiographic exposure device or storage container in which the sealed source is located; the identity of the radiographer to whom assigned; and the plant or site where used and dates of use.

Contrary to the above, as of December 2, 1993, the licensee failed to maintain utilization logs at its facility located in Wexford, Pennsylvania, for radiographic operations conducted in May and June of 1993 utilizing a cobalt-60 source, as well as operations conducted from July through November 1993 with an iridium-192 source at various locations in Pennsylvania and Ohio. (02041)

E. Condition No. 17 of NRC License No. 37-21428-01 requires that the licensee conduct its program in accordance with statements, representations, and procedures contained in the Power Inspection, Inc. Radiation Safety Manual Administrative Procedures and Operating Procedures submitted as part of the licensee's application dated March 7, 1988.

1. Section 4.B.(1) of the Manual, entitled "Film Badge Procedures," states that new film badges are issued monthly to radiographic personnel and that badges worn during the previous period are returned promptly for processing by the vendor.

Contrary to the above, film badges issued to radiographers were not promptly returned by the licensee to the vendor for processing. Specifically, a film badge issued to a radiographer in April 1993 was not received for processing by the Landauer Company until September 17, 1993. Also, a film badge issued to another radiographer in February 1993 was not received for processing by Landauer until September 10, 1993. (02051)

2. Section 8.D of the Manual, entitled "Periodic Updating Training," requires that periodic training be given to radiographic personnel every 12 months.

Contrary to the above, the required periodic training had not been given to radiography personnel every 12 months. Specifically, training had not been given in either 1992 or 1993, a period greater than 12 months. (02061)

F. 10 CFR 34.28(b) requires that the licensee conduct a program for inspection and maintenance of radiographic exposure devices at intervals not to exceed three months or prior to the first use thereafter, to ensure the proper functioning of components important to safety.

Contrary to the above, as of December 3, 1993, the scheduled routine maintenance and inspection had not been performed on an Amersham Model 660B iridium-192 exposure device (Serial #8624). Specifically, the last inspection had been performed in June 1993, and although scheduled to be performed in September 1993, the routine maintenance had not been performed as of December 3, 1993, an interval in excess of three months. (02071)

G. Condition No. 12 of NRC License No. 37-21428-01 names a specific individual as radiation safety officer.

Contrary to the above, in August 1993, the licensee appointed an individual to assume the duties of radiation safety officer, and that individual was not named in License Condition No. 12. (02081)

H. 10 CFR 34.25(b) requires that each sealed source be tested for leakage at intervals not to exceed six months.

Contrary to the above, as of December 2, 1993, a leak test had not been performed on a 79-curie cobalt-60 source since December 2, 1992, and a leak test had not been performed on a 54-curie iridium-92 source since October 20, 1992, time intervals greater than six months. (02091)

These violations represent a Severity Level I problem (Supplements VI and VII).
Civil Penalty - $20,000.

Pursuant to the provisions of 10 CFR 2.201, Power Inspection, 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 Penalties (Notice). This reply should be clearly marked as a "Reply to a Notice of Violation" 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. 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. Under the authority of Section 182 of the Act, 42 U.S.C. 2232, this response shall be submitted under oath or affirmation.

Within the same time as provided for the response required above under 10 CFR 2.201, the Licensee may pay the civil penalties by letter addressed to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, with a check, draft, money order, or electronic transfer payable to the Treasurer of the United States in the amount of the civil penalties proposed above, or the cumulative amount of the civil penalties if more than one civil penalty is proposed, or may protest imposition of the civil penalties 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 the time specified, an Order imposing the civil penalties will be issued. Should the Licensee elect to file an answer in accordance with 10 CFR 2.205 protesting the civil penalties, 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 penalties should not be imposed. In addition to protesting the civil penalties in whole or in part, such answer may request remission or mitigation of the penalties.

In requesting mitigation of the proposed penalties, the factors addressed in Section VI.B.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 civil penalties.

Upon failure to pay any civil penalties 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 penalties, 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, letter with payment of civil penalties, and Answer to a Notice of Violation) should be addressed to: Mr. James Lieberman, 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 I, 475 Allendale Road, King of Prussia, PA 19406-1415.

Because your response will be placed in the NRC Public Document Room (PDR), to the extent possible, it should not include any personal privacy, proprietary, or safeguards information so that it can be placed in the PDR without redaction. 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).

Dated at Rockville, Maryland
this 18th day of January 1997