EA-02-081 - CTI Core Drilling Services, Inc.

July 23, 2002

EA-02-081

CTI Core Drilling Services, Inc.
ATTN: Chris Stevenson, CEO
14220-J Sullyfield Circle
Chantilly, VA 20151

SUBJECT:

NOTICE OF VIOLATION (NRC SPECIAL INSPECTION REPORT NO. 45-25383-01/01-01 AND OFFICE OF INVESTIGATIONS REPORT NO. 2-2001-018)

Dear Mr. Stevenson:

This refers to an NRC inspection conducted on June 6-7, 2001, at your facility located in Chantilly, Virginia, and an investigation completed by the NRC's Office of Investigations (OI) on March 25, 2002. The purpose of the inspection was to follow up on the circumstances surrounding the damage to a Troxler Electronics Laboratories, Inc. Model No. 3430-B portable moisture density gauge and its transfer to CTI Core Drilling Services, Inc. (CDS). The purpose of the OI investigation was to determine whether false statements were made to an NRC inspector and whether there was a deliberate failure to properly transfer and store the gauge. The preliminary findings of the inspection were forwarded to you by letter dated July 19, 2001. Additional details of the inspection and investigation were forwarded to you by letter dated May 17, 2002. At the NRC's request, a closed pre-decisional enforcement conference was conducted with you and members of your staff on June 17, 2002. The enclosures to this letter include the list of attendees at the predecisional enforcement conference, and copies of the material presented by the NRC at the conference.

Based on the information developed during the inspection and investigation, and the information you provided during the conference, the NRC has determined that one violation 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 involved CDS' storage of 40 millicuries of Americium-241 and 8 millicuries of Cesium-137 contained in a damaged portable moisture density gauge belonging to CTI Consultants (CTI), from January 17 to July 10, 2001. Storage of this by-product material was not authorized under Condition 6 of your NRC license. In addition, the NRC concluded that the storage of the by-product material was deliberate. Specifically, in April 2001, the Radiation Safety Officer (RSO) notified CDS management that the possession of the damaged gauge was a violation of NRC requirements. However, CDS did not transfer the gauge to an authorized recipient until July 10, 2001.

At the conference, you acknowledged that the above violation occurred as stated, and determined that the cause could be attributed to several factors including an initial lack of urgency with regard to finding a proper repository for the material. You stated that the unavailability of the RSO for CDS during the January through April 2001 time frame contributed to CDS management's failure to realize the significance of the non-compliance and the urgency necessary to resolve the issue. An additional contributing factor was company financial restraints that caused a delay in locating an authorized recipient for the by-product material.

Although the actions taken by CTI and CDS to provide a safe, temporary storage location for the by-product material immediately after the gauge was damaged was prudent from a safety perspective, given the circumstances, the possession of the material was not authorized by CDS' license. In April 2001, CDS management became aware that its storage of the by-product material was not in compliance with the conditions of its NRC license. However, CDS management deliberately failed to take prompt action to either obtain authorization to store the by-product material at this location through a license amendment or transfer the material to an authorized location. Compliance was eventually restored when the by-product material was transferred to an authorized recipient on July 10, 2001. The NRC would normally characterize the unauthorized storage of by-product material as a Severity Level IV violation, in accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions" (Enforcement Policy), NUREG-1600. However, because of the deliberate nature of this violation, the NRC has concluded that this violation should be characterized at Severity Level III, in accordance with the Enforcement Policy.

In accordance with the Enforcement Policy, a base civil penalty in the amount of $3,000 is considered for a Severity Level III violation. Because the violation was willful, the NRC considered whether credit was warranted for the factors of Identification and Corrective Action in accordance with the civil penalty assessment process described in Section VI.C.2 of the Enforcement Policy. Regarding the factor of identification, the NRC concluded that the problem requiring corrective action was identified by CDS' RSO, and as such, credit was warranted for the factor of Identification. Your immediate and long-term corrective actions were discussed in detail at the conference, and included the completion of activities to transfer the by-product material to an authorized recipient in July 2001. CDS requested a license amendment to remove the individual who authorized receipt of the by-product material from having any RSO responsibilities. CDS also provided assurances that under no circumstances would by-product material be accepted by CDS without the permission of the RSO. Through internal discussions of this event, CDS management and employees have been made keenly aware of the importance of this issue, and CDS has taken action to communicate the safety and regulatory consequences of the event. Based on the above, the NRC concluded that CDS' corrective actions were prompt and comprehensive, and credit was warranted for the factor of Corrective Action.

Therefore, to encourage identification and prompt and comprehensive correction of violations, I have been authorized to propose that no civil penalty be assessed in this case. However, similar violations in the future could result in further escalated enforcement action. 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 adequately addressed on the docket in NRC Inspection Report No. 45-25383-01/ 01-01, your discussion of the corrective actions presented at the predecisional enforcement conference, and in this letter. Therefore, you are not required to respond to this letter 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 enclosures, and your response (should you chose to provide one) 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.

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

		Sincerely,
		/RA/ BSM for
		Luis A. Reyes Regional Administrator

Docket No. 030-34342
License No. 45-25383-01

Enclosure: Notice of Violation

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NOTICE OF VIOLATION

CTI Core Drilling Services, Inc. Chantilly, Virginia

Docket No. 030-34342 License No. 45-25383-01 EA-02-081

During an NRC inspection conducted on June 6-7, 2001, and an investigation by the Nuclear Regulatory Commission's (NRC) Office of Investigations (OI) completed on March 25, 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 violation is listed below:

10 CFR 30.3 requires, in part, that except for persons exempted, no person shall possess or use byproduct material except as authorized by a specific or general license issued pursuant to Title 10, Chapter 1, Code of Federal Regulations.

Condition #6 of the CTI Core Drilling Services Inc. Materials License authorizes the licensee to possess Iridium-192, Cobalt-60, depleted uranium and Cesium-137 for use and storage in gamma radiography exposure devices for performing industrial radiography.

Contrary to the above, the licensee possessed radioactive by-product material not authorized by its license. Specifically, from January 17, until July 10, 2001, the licensee possessed 40 millicuries of Americium-241 and 8 millicuries of Cesium-137 contained in a damaged portable nuclear gauge and the possession of these materials was not authorized by the license.

This is a Severity Level III Violation (Supplement VI).

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 NRC Inspection Report No. 45-25383-01/ 01-01, your discussion of the corrective actions at the predecisional enforcement conference, and in the letter transmitting this Notice of Violation (Notice). 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 with a copy to the Regional Administrator, Region II within 30 days of the date of the letter transmitting this Notice.

If you contest this enforcement action, you should also provide a copy of your response, with the basis for your denial, to the Director, Office of Enforcement, United States Nuclear Regulatory Commission, Washington, DC 20555-0001.

Because any 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), 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 the Public NRC Library. 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.

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

Dated this 23rd day of July 2002