United States Nuclear Regulatory Commission - Protecting People and the Environment

EA-01-164 - J. L. Shepherd & Associates

July 3, 2001

EA-01-164

JL Shepherd & Associates
Mary Shepherd, Vice President
and Acting QA/QC Manager
1010 Arroyo Ave.
San Fernando, California 91340-1822

SUBJECT: ORDER WITHDRAWING QUALITY ASSURANCE APPROVAL

Dear Ms. Shepherd:

The enclosed Order is being issued as a result of our findings during the May 29-31, 2001, inspection. The U.S. Nuclear Regulatory Commission (NRC) no longer has confidence that JL Shepherd & Associates (JLS&A) implementation of the QA Program approved by NRC in accordance with 10 CFR Part 71, Subpart H, will assure the required preparation and use of transportation packages in full conformance with the terms and conditions of the NRC Certificate of Compliance and NRC regulations. The inspection identified significant concerns with the implementation of JLS&A quality assurance program regarding the design, use, repair, and maintenance of transportation packages approved for use by NRC under Certificate of Compliance No. 6280. JLS&A has not complied with its commitment to implement the quality assurance program approved by the Commission. On August 15, 2000, JLS&A delivered for export to the United Kingdom radioactive material in a transportation package that did not comply with the requirements of 10 CFR Part 71.

Pursuant to Section 223 of the Atomic Energy Act of 1954, as amended, any person who willfully violates, attempts to violate, or conspires to violate, any provision of this Order shall be subject to criminal prosecution as set forth in that section. Violation of this order may also subject the person to civil monetary penalty.

Questions concerning this Order should be addressed to Frank J. Congel Director, Office of Enforcement, who can be reached at 301- 415-2741.

In accordance with 10 CFR 2.790 of the NRC's "Rules of Practice," a copy of this letter and its enclosure will be placed in the NRC Public Document Room (PDR).

Sincerely,

/RA/

Frank J. Congel, Director
Office of Enforcement

Docket No. 71-0122
Approval No. 0122

Enclosure: Order Withdrawing Quality Assurance Approval

cc:
Rick Boyle, Department of Transportation
Michael Wangler, Department of Energy
Ed Bailey, State of California
Registered Users


UNITED STATES
NUCLEAR REGULATORY COMMISSION

In the Matter of )
JL Shepherd & Associates ) Docket No. 71-0122
San Fernando, California ) Approval No. 0122
) EA-01-164

ORDER WITHDRAWING QUALITY ASSURANCE PROGRAM APPROVAL
(EFFECTIVE IMMEDIATELY)

I

JL Shepherd & Associates (JLS&A or Approval Holder) is the holder of Quality Assurance (QA) Program Approval for Radioactive Material Packages No. 0122 (Approval No. 0122), issued by the Nuclear Regulatory Commission (NRC or Commission) pursuant to 10 CFR Part 71, Subpart H. The approval was issued pursuant to the QA requirements of 10 CFR Section 71.101. QA activities authorized by Approval No. 0122 include: design, procurement, fabrication, assembly, testing, modification, maintenance, repair, and use of transportation packages subject to the provisions of 10 CFR Part 71. Approval No. 0122 was originally issued January 17, 1980. Revision No. 5 was issued January 24, 1996, with an expiration date on January 31, 2001, and is under timely renewal. In addition to having a QA program approved by the NRC to satisfy the provisions of 10 CFR Part 71, Subpart H, to transport or deliver for transport licensed material in a package, JLS&A is required by 10 CFR Part 71, Subpart C, to have and comply with the package's CoC issued by the NRC.

II

On November 3-4, 1999, NRC staff conducted an inspection of the JLS&A QA activities. The extent and nature of problems identified during this limited scope inspection raised serious concerns about implementation of the JLS&A QA program and missed opportunities, over the period of several years, to self-identify and correct package deficiencies. The inspection identified multiple examples of violations of 10 CFR Part 71. These violations concerned shipments of licensed material in Type B packages that were not in accordance with two CoCs. JLS&A made nineteen shipments using two different package designs that did not meet the requirements of the CoCs. The team further identified six nonconformances: specifically, these included 10 CFR Section 71.13(a), using a package that was fabricated after August 31, 1986; 10 CFR Section 71.87, failure to determine that the package with its contents satisfies the applicable requirements of Part 71; 10 CFR Section 71.107(c), package design control, where new wood liners were constructed with a wood that did not comply with the design specifications approved by NRC; and 10 CFR Section 71.111, failure to prepare formal procedures or instructions to establish and maintain model 181361 or model A-0117 packaging in conformance with the CoC. Both a Notice of Violation and a Notice of Nonconformance were issued on March 2, 2000. As a result of the extent and nature of the problems identified during the November 3-4, 1999, inspection, NRC issued a Confirmatory Action Letter on April 24, 2000. As part of its December 4, 2000, response to the NRC Confirmatory Action Letter, JLS&A stated that the packaging used in the August 15, 2000, export to be shipped to Ethiopia via the United Kingdom, which contained 18,000 curies of cobalt-60, met the terms and conditions of the NRC-issued CoC No. 6280.

As a result of an April 17, 2001, letter from the French Competent Authority raising concerns about noncompliance of the August 15, 2000, transportation package undergoing multilateral approval, NRC staff conducted an inspection of the returned package at JLS&A's facility to determine if JLS&A had delivered for export a model A-0109 irradiator and the A-0117 overpack design that were not in accordance with CoC No. 6280. The inspection conducted on May 29-31, 2001, identified significant concerns with the implementation of the JLS&A QA program regarding the design, use, repair, and maintenance of transportation packages approved for use by NRC under CoC No. 6280. The inspection determined that JLS&A failed to implement portions of the QA program Approval No. 0122. The failure to implement portions of the QA program resulted in JLS&A delivering for export radioactive material in a transportation package that did not comply with the requirements of 10 CFR Part 71. A description of the significant findings from the inspection follows:

  1. The team determined that the package JLS&A delivered for export was not in accordance with the drawings listed in CoC No. 6280, Condition 5(a)(3). For example, the irradiator contained in the package did not conform to the drawings listed in the CoC No. 6280. The "stacks" used to restrict lateral movement of the irradiator were made of fir and pine woods and not hardwood as required by the CoC No. 6280. The "spacers" used to center the irradiator did not conform to the drawings listed in the CoC No. 6280.

  2. The team determined that JLS&A had not notified NRC of the design changes to the A-0109 irradiator and did not provide a detailed analysis to support these changes to the conditions of the CoC No. 6280 for approval by NRC. This is of significant concern because the A-0109 is described in CoC No. 6280 as part of the packaging. As such, any changes to the drawings listed in CoC No. 6280, Condition 5(a)(3), required NRC approval. JLS&A made numerous changes to the irradiator design features that were not in conformance with the drawings listed in CoC No. 6280, Condition 5(a)(3).

  3. The team determined that the JLS&A did not implement QA procedures to assure that the bolts used to attach the lid to the cask met the performance specifications required by CoC No. 6280. JLS&A also could not demonstrate that the balsa wood used to repair the A-0117 overpack met the density specifications identified in Drawing No. A-0117-B, listed in CoC No. 6280 Condition 5(a)(3). The team also determined that JLS&A had not established measures for the identification and control of materials, parts, and components used in the repair of the A-0117 overpack as required by 10 CFR Section 71.117.

  4. The team determined that the A-0109 irradiator included in the shipment, an integral part of the packaging, was manufactured after August 31, 1986. Fabrication of previously approved packaging must have been completed by August 31, 1986 as required by 10 CFR Section 71.13.

  5. The team determined that JLS&A had not obtained multilateral approval required by 10 CFR Section 71.13 before delivering the package for export shipment since the package was not of the design authorized by the NRC CoC No. 6280 nor as approved by the Competent Authority for the transportation of radioactive materials in the United Kingdom. The United Kingdom approval was issued about 3 months after JLS&A delivered the package for export to Ethiopia via the United Kingdom. The package was subsequently returned to the United States from the United Kingdom.

  6. The team determined that the Vice President of JLS&A, who is also the Acting QA/Quality Control Program Plan Administrator, does not have sufficient independence from cost and schedule. JLS&A had not implemented procedures appropriate to preclude a conflict of interest from cost and scheduling as described in the JLS&A QA Program Plan and as required by 10 CFR Section 71.103(d).

III

As a result of the findings during the May 29 - 31, 2001, inspection the NRC no longer has confidence that JLS&A will implement the QA Program approved by NRC in accordance with 10 CFR Part 71, Subpart H, in a manner that will assure the required preparation and use of transportation packages in full conformance with the terms and conditions of an NRC CoC and with 10 CFR Part 71. This is of significant concern because JLS&A, in addition to holding CoC No. 6280, also holds CoC No. 5984 for transportation packages which may be used by eight licensees, including JLS&A.

These inspection findings are of particular concern in light of the fact that on December 4, 2000, in response to an NRC Confirmatory Action Letter, JLS&A stated that the packaging used in the August 15, 2000, export to Ethiopia via the United Kingdom met the terms and conditions of the NRC issued CoC No. 6280. This package contained 18,000 curies of cobalt-60 in special form sources. The ability of the package to meet the performance requirements for transportation packages is evaluated for a specific design. The package that was to be shipped to Ethiopia via United Kingdom had been modified and did not meet the design that was approved by the NRC. Accordingly, the unapproved package design had not been demonstrated to meet the transportation package approval standards for both normal and accident conditions. This could have resulted in significant safety consequences.

Consequently, I lack the requisite reasonable assurance that the Approval Holder's current operations can be conducted under Approval No. 0122 in compliance with the Commission's requirements and that the health and safety of the public, including the Approval Holder's employees, will be protected. Therefore, the interests of protecting public health and safety, require that Approval No. 0122 be withdrawn. Accordingly, JLS&A may no longer certify to any person that its 10 CFR Part 71 transportation activities are conducted under an NRC approved Quality Assurance Program. JLS&A is no longer authorized to design, procure, fabricate, assemble, test, modify, maintain, repair, and use transportation packages for which a 10 CFR Part 71 QA program approval is required by 10 CFR Part 71, Subpart C. Furthermore, pursuant to 10 CFR Section 2.202, I find that the significance of the conduct described above is such that the public health, safety, and interest require that this Order be immediately effective.

IV

Accordingly, pursuant to Sections 62, 81, 161b, 161i, 182 and 186 of the Atomic Energy Act of 1954, as amended, and the Commission's regulations in 10 CFR Section 2.202 and 10 CFR Parts 71 and 110, IT IS HEREBY ORDERED, EFFECTIVE IMMEDIATELY, THAT APPROVAL NO. 0122 IS WITHDRAWN PENDING FURTHER ORDER. The Director, Office of Nuclear Material Safety and Safeguards may, in writing, relax or rescind this order upon demonstration by the Approval Holder of good cause.

V

In accordance with 10 CFR Section 2.202, the Approval Holder must, and any other person adversely affected by this Order may, submit an answer to this Order, and may request a hearing on this Order, within 20 days of the date of this Order. Where good cause is shown, consideration will be given to extending the time to request a hearing. A request for extension of time must be made in writing to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555, and include a statement of good cause for the extension. The answer may consent to this Order. Unless the answer consents to this Order, the answer shall, in writing and under oath or affirmation, specifically admit or deny each charge made in this order and set forth the matters of fact and law on which the Approval Holder or other person adversely affected relies and the reasons as to why the Order should not have been issued. Any answer or request for a hearing shall be submitted to the Secretary, U.S. Nuclear Regulatory Commission, ATTN: Rulemakings and Adjudications Staff, Washington, DC 20555. Copies of the hearing request also should be sent to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555, to the Director, Office of Nuclear Material Safety and Safeguards at the same address, to the Assistant General Counsel for Materials Litigation and Enforcement at the same address, to the Regional Administrator, NRC Region IV, 611 Ryan Plaza Drive, Suite 400, Arlington TX, 76011, and to the Approval Holder if the hearing request is by a person other than the Approval Holder. If a person other than the Approval Holder requests a hearing, that person shall set forth with particularity the manner in which his interest is adversely affected by this Order and shall address the criteria set forth in 10 CFR Section 2.714(d).

If a hearing is requested by the Approval Holder or a person whose interest is adversely affected, the Commission will issue an Order designating the time and place of any hearing. If a hearing is held, the issue to be considered at such hearing shall be whether this Order should be sustained.

Pursuant to 10 CFR Section 2.202(c)(2)(i), the Approval Holder, or any other person adversely affected by this Order, may, in addition to demanding a hearing, at the time the answer is filed or sooner, move the presiding officer to set aside the immediate effectiveness of the Order on the ground that the Order, including the need for immediate effectiveness, is not based on adequate evidence but on mere suspicion, unfounded allegations, or error.

In the absence of any request for hearing, or written approval of an extension of time in which to request a hearing, the provisions specified in Section IV above shall be final 20 days from the date of this Order without further order or proceedings. If an extension of time for requesting a hearing has been approved, the provisions specified in Section IV shall be final when the extension expires if a hearing request has not been received. AN ANSWER OR A REQUEST FOR HEARING SHALL NOT STAY THE IMMEDIATE EFFECTIVENESS OF THIS ORDER.

FOR THE NUCLEAR REGULATORY COMMISSION

/RA/

Frank J. Congel, Director
Office of Enforcement

Dated this 3rd day of July 2001

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