United States Nuclear Regulatory Commission - Protecting People and the Environment

EA-98-021 - Ground Engineering and Testing Service, Inc.

March 25, 1998

EA 98-021

Ground Engineering and Testing Service, Inc.
ATTN:  Mr. Jerry Vandevelde, Branch Manager
13005 Middletown Industrial Blvd.
Suite D
Louisville, KY 40223

SUBJECT: NOTICE OF VIOLATION AND PROPOSED IMPOSITION OF CIVIL PENALTY - $5,500
(NRC INSPECTION REPORT NO. 150-00016/97-03)

Dear Mr. Vandevelde:

This refers to the inspection conducted on December 12, 1997, at your Louisville, Kentucky facility. The purpose of the inspection was to determine whether activities conducted by your staff were performed with the proper authorization from the Nuclear Regulatory Commission (NRC). The results of the inspection were formally transmitted to you by letter dated January 23, 1998. An open and transcribed predecisional enforcement conference was conducted in the Region II office on February 18, 1998, to discuss the apparent violation, the root causes, and your corrective actions to preclude recurrence. A list of conference attendees and copies of the Nuclear Regulatory Commission's (NRC) presentation material are enclosed.

Based on the information developed during the inspection and the information you provided during the conference, 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. The violation is associated with the performance of NRC-regulated activities in 1997 in the Non-Agreement states of West Virginia and Indiana, and in certain areas of exclusive federal jurisdiction at Fort Knox, Kentucky without a specific or general license issued by the NRC. Specifically, you failed to submit a "Report of Proposed Activity in Non-Agreement States," (NRC Form 241) prior to the use of licensed materials at these sites and failed to obtain a specific license when your work activities at these sites exceeded 180 days. You stated at the predecisional enforcement conference that you did not obtain a specific or general license because it was your understanding that an NRC license for use of licensed materials in areas of NRC jurisdiction would be sought and obtained by your corporate office in Birmingham, Alabama.

Your failure to obtain a specific or general license resulted in the NRC being unaware, for an extended period, that activities involving the use of radioactive materials were being conducted by your company in areas of NRC jurisdiction. Notification of the NRC is important because the NRC, rather than the State of Kentucky, regulates the use of licensed material in the states of West Virginia, Indiana, and in areas of exclusive federal jurisdiction such as Fort Knox, Kentucky. Because of your failure to notify, the NRC was denied an opportunity to verify that nuclear gauges (containing radioactive materials) possessed under your Commonwealth of Kentucky license would be properly used in areas subject to NRC jurisdiction.

At the conference, you indicated that: (1) your corporate office assumed responsibility for handling all licensing activities in 1997; (2) you did not know who was going to be responsible for licensing at the corporate office; and (3) you never received a copy of any NRC license or reciprocity permit from the corporate office. From your experience filing with the NRC for reciprocity in 1995 and operating under your Kentucky license, it should have been obvious to you that an NRC license and reciprocity permit impose limitations and conditions on your operations. You needed to have a copy of any reciprocity agreement or NRC license that your corporate office had obtained for you so that you would know the conditions and limitations under which you were required to operate when in NRC jurisdiction. Additionally, you should have been aware that 10 CFR 19.11 requires that you post the NRC license, license conditions, or documents incorporated into a license by reference, and amendments thereto.

Even after the need to comply with the terms of your Kentucky license was emphasized by a Kentucky inspection in 1997, and although you were reminded at that time of the need to file for reciprocity or have an NRC license for your operations conducted in NRC jurisdiction, you still failed to contact your corporate office to determine if your activities in areas of NRC jurisdiction were properly authorized or to obtain a copy of the documentation so that you would know the limitations and conditions thereof. Additionally, your Kentucky license was amended in September 1997 to clearly state that it did not authorize use of licensed material in areas under exclusive federal jurisdiction.

In light of the above, the failure to obtain an NRC license or file for reciprocity represents careless disregard as defined in the "General Statement of Policy and Procedures for NRC Enforcement Actions" (Enforcement Policy) NUREG 1600, Section IV.C. Accordingly, this failure is classified at Severity Level III in accordance with the "General Statement of Policy and Procedures for NRC Enforcement Actions" (Enforcement Policy), NUREG-1600.

In accordance with the Enforcement Policy, a base civil penalty in the amount of $2750 is considered for a Severity Level III violation. Since the violation was associated with careless disregard, the NRC considered whether credit was warranted for Identification and Corrective Action in accordance with the civil penalty assessment process described in Section VI.B.2 of the Enforcement Policy. Credit for identification is not warranted, since the violations were initially identified by the Commonwealth of Kentucky and the NRC. Your corrective actions, as indicated at the predecisional enforcement conference, included initiating actions to file the necessary forms to obtain a proper NRC license for 1997 and considering anticipated uses of licensed material for calendar year 1998 with the intent to file the necessary documents to obtain a proper NRC license for 1998 before any such licensed material is used in areas of NRC jurisdiction. In addition, at the conference, you stated that in the future, you would maintain at your Kentucky site an appropriate NRC license for conducting activities in areas of NRC jurisdiction. However, your corrective actions were not prompt, in that you were notified by the NRC of your failure to obtain an NRC license on December 12, 1997, yet did not desist in the use of licensed materials in areas of NRC jurisdiction until December 18, 1997. Thus, based on these facts, the NRC determined that credit is not warranted for Identification or Corrective Action.

Therefore, to emphasize the importance of conducting NRC activities only after adhering to appropriate reciprocity requirements so that the NRC can verify that the activities are conducted safely and in accordance with requirements, 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 for twice the base amount or $5,500 for the Severity Level III violation. Issuance of this Notice constitutes escalated enforcement action, that may subject you to increased inspection effort. In addition, you should be aware that future similar violations may result in a prohibition against conducting licensed activities in NRC jurisdiction.

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

If you have any questions regarding this letter, please contact Douglas M. Collins, Director, Division of Nuclear Materials Safety at (404) 562-4700.

Sincerely,



Luis A. Reyes
Regional Administrator

Docket No. 150-00016
License No. Kentucky 201-431-51

Enclosures:
1. Notice of Violation
2. List of Attendees
3. NRC Slides

cc w/encls:
Commonwealth of Kentucky
State of Indiana

Atlanta Testing and Engineering, Inc.
3468 Highway 120, Suite B
Duluth, GA 30096


NOTICE OF VIOLATION
AND
PROPOSED IMPOSITION OF CIVIL PENALTY

Ground Engineering and Testing Service, Inc.
Docket No. 150-00016
License No. Kentucky 201-431-51
EA 98-021

During an NRC inspection conducted on December 12, 1997, a violation of NRC requirements was identified. In accordance with the "General Statement of Policy and Procedures 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 30.3 requires, in part, that no person shall possess or use byproduct material except as authorized by a specific or general license issued by the NRC.
10 CFR 150.20(a) provides, in part, that any person who holds a specific license from an Agreement State is granted an NRC general license to conduct the same activity in non-Agreement States and areas of exclusive federal legislative jurisdiction subject to the provisions of 10 CFR 150.20(b).
10 CFR 150.20(b)(1) requires, in part, that any person engaging in activities in non-Agreement States or areas of exclusive federal legislative jurisdiction shall, at least three days before engaging in each activity, file four copies of NRC Form 241, "Report of Proposed Activities in non-Agreement States," with the Regional Administrator of the Appropriate NRC Regional Office.
10 CFR 150.20(b)(3) requires, in part, that any person engaging in activities in non-Agreement States or areas of exclusive federal legislative jurisdiction shall not, under the general license concerning activities in non-Agreement States, possess or use radioactive materials, or engage in the activities authorized in paragraph 10 CFR 150.20(a), for more than 180 days in any calendar year.
Contrary to the above, between January 1, 1997 and December 18, 1997, the licensee used licensed materials for a total of 290 days at sites under NRC jurisdiction in West Virginia and Indiana, and in an area of exclusive federal jurisdiction at Fort Knox, Kentucky, without either a specific or general license issued by the NRC and without filing NRC Form 241, as required. The specific sites and periods of usage were as follows:

Month

January
March
April
May
June
July
August
September
October

November
December
Days
Used

21
9
30
31
30
31
31
30
28

30
19

Location

Fort Knox, KY
Buffalo, WV
Buffalo, WV
Buffalo, WV
Buffalo, WV
Buffalo, WV
Buffalo, WV 31; Ft. Knox 3
Buffalo, WV 30; Ft. Knox 7
Buffalo, WV 28; Ft. Knox 9
Clarksville/Jeffersonville IN 7
Buffalo, WV
Buffalo, WV
Cumulative
Days in 1997

21
30
60
91
121
152
183
213

241
271
290
(01013)

This is a Severity Level III violation (Supplement VI).
Civil Penalty - $5,500.

Pursuant to the provisions of 10 CFR 2.201, Ground Engineering and Technical Service, 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" 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 penalty 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 penalty 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 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 the time specified, 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.

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, letter with payment of civil penalty, and Answer to a Notice of Violation) should be addressed to: 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 II.

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). If safeguards information is necessary to provide an acceptable response, please provide the level of protection described in 10 CFR 73.21.

Dated at Atlanta, Georgia
this 25th day of March 1998

 

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