EA-03-076 - C&J Nondestructive Testing, Inc.

May 19, 2003

EA-03-076

Mr. Charles Schaan, President
C&J Nondestructive Testing, Inc.
6605 Sonora Way
Bismarck, North Dakota 58501

SUBJECT:

NRC INSPECTION REPORT 150-00033/02-001, INVESTIGATION REPORT 4-2002-050 AND NOTICE OF VIOLATION

Dear Mr. Schaan:

On February 20, 2003, the NRC Region IV Office of Investigations (OI) concluded an investigation of your licensed activities at the Williston Basin Interstate Pipeline Company field location in Whitewood, South Dakota. The investigation reviewed activities conducted under the General License pursuant to 10 CFR 150.20 as they relate to radiation safety and compliance with the Commission's rules and regulations and with the conditions of the license. A final telephonic exit briefing was conducted with you on April 23, 2003. The enclosed report presents the results of this investigation.

During the April 23^rd telephonic exit briefing, you were informed that the NRC was considering escalated enforcement action for an apparent violation involving a failure to file NRC Form 241, "Report of Proposed Activities in Non-Agreement States, Areas of Exclusive Federal Jurisdiction, or Offshore Waters," with the NRC prior to conducting licensed activities in NRC jurisdiction. Additionally, you were informed that NRC believed it had sufficient information regarding the apparent violation and your corrective actions to make an enforcement decision without the need for a predecisional enforcement conference or a written response from you. You indicated that C&J Nondestructive Testing (C&J) did not believe that a predecisional enforcement conference or written response was needed.

Therefore, based on the information developed during the inspection, the NRC has determined that a violation of NRC requirements occurred. The violation is described in the enclosed Notice of Violation (Notice), and involves your failure to file NRC Form 241, with the NRC prior to conducting licensed activities in NRC jurisdiction. While the NRC did not conclude that willfulness was associated with the violations, the NRC still considers this type of violation important because it prevents the NRC from conducting inspections at temporary jobsites to ensure that licensed radioactive material is being used safely and in accordance with NRC regulations. Therefore, this violation has been categorized in accordance with the General Statement of Policy and Procedure for NRC Enforcement Actions (Enforcement Policy), NUREG-1600, dated May 1, 2000, at Severity Level III. The NRC also includes Issued Significant Enforcement Actions on its Web site.

In accordance with the Enforcement Policy, a civil penalty with a base value of $6,000 is considered for a Severity Level III violation. Because your facility has not been the subject of escalated enforcement action, the NRC considered whether credit was warranted for Corrective Action in accordance with the civil penalty assessment process in Section VI.C.2 of the Enforcement Policy. Based on your prompt actions to address the violation, the NRC has determined that you are deserving of corrective action credit. C&J's corrective actions included filing NRC Form 241 upon the realization they had failed to file, and changing company procedures by carrying to each jobsite additional NRC Form 241s so that C&J can file from any location prior to conducting radiographic operations.

Therefore, to encourage prompt and comprehensive correction of violations, and in recognition of the absence of previous escalated enforcement action, I have been authorized, after consultation with the Director, Office of Enforcement, not to propose a civil penalty in this case. However, you are on notice that significant violations in the future could result in a civil penalty. In addition, issuance of this Severity Level III violation constitutes escalated enforcement action that may subject you to increased inspection effort.

In accordance with 10 CFR 2.790 of the NRC's "Rules of Practice," a copy of this letter, its enclosures, and your response (if any) will be made available electronically for public inspection in the NRC Public Document Room or from the NRC's document system (ADAMS), which is accessible from the NRC Web site at the Public NRC Library. To the extent possible, your response (if any) should not include any personal privacy, proprietary, or safeguards information so that it can be made available to the public without redaction.

		Sincerely,
		/RA/
		Ellis W. Merschoff Regional Administrator

Docket No.: 150-00033
General License Pursuant to 10 CFR 150.20

Enclosures:
1. Notice of Violation
2. NRC Inspection Report 150-00033/2002-001

cc w/enclosures: North Dakota Radiation Control Program Director

---

ENCLOSURE 1

NOTICE OF VIOLATION

C&J Nondestructive Testing Bismarck, North Dakota

Docket No.: 150-00033 General License Pursuant to 10 CFR 150.20 EA-03-076

During an NRC investigation conducted on January 22, 2003, one 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 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 provided that the provisions of 10 CFR 150.20(b) have been met.

10 CFR 150.20(b)(1) requires, in part, that any person engaging in activities in non-Agreement States shall, at least 3 days before engaging in each such activity, file an NRC Form-241, "Report of Proposed Activities in Non-Agreement States," with the Regional Administrator of the appropriate NRC regional office.

Contrary to the above, C&J Nondestructive Testing failed to, at least 3 days before engaging in each such activity, file a NRC Form-241, "Report of Proposed Activities in Non-Agreement States", with the Regional Administrator of the appropriate NRC regional office. Specifically, on September 5, 2002, C&J Nondestructive Testing conducted radiographic operations at the Williston Basin Interstate Pipeline Company field location in Whitewood, South Dakota, prior to filing NRC Form 241.

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 in Inspection Report 150-00033/03-001. 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 IV, within 30 days of the date of the letter transmitting this Notice of Violation (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.

If you choose to respond, your response will be made available electronically for public inspection in the NRC Public Document Room or from the NRC's document system (ADAMS), which is accessible from the NRC Web site at the Public NRC Library.Therefore, to the extent possible, the response should not include any personal privacy, proprietary, or safeguards information so that it can be made available to the Public without redaction.

Dated this 19^th day of May 2003

---

ENCLOSURE 2

U.S. Nuclear Regulatory Commission
Region IV

Docket No.:	150-00033
License No.:	General License Pursuant to 10 CFR 150.20
Report No.:	150-00033/2002-001
EA No.:	03-076
Licensee:	C&J Nondestructive Testing, Inc.
Facility:	C&J Nondestructive Testing, Inc.
Location:	Bismarck, North Dakota
Dates:	October 28, 2002, through April 23, 2003
Inspector:	Randy R. Erickson, Health Physicist Nuclear Materials Inspection Branch
Approved By:	Mark R. Shaffer, Chief Nuclear Materials Inspection Branch
Attachment:	Supplemental Inspection Information

---

EXECUTIVE SUMMARY

C&J Nondestructive Testing (C&J)
NRC Inspection Report 150-00033/2002-001

This report is based on an investigation initiated by the Office of Investigations OI), Region IV Field Office on October 28, 2002, to determine if C&J of Bismarck, North Dakota, violated NRC requirements by conducting radiographic operations at the Williston Basin Interstate Pipeline Company field location in Whitewood, South Dakota, an area within NRC jurisdiction, without filing NRC Form 241, "Report of Proposed Activities in Non-Agreement States, Areas of Exclusive Federal Jurisdiction, or Offshore Waters.

Program Overview

• C&J is authorized under a General License pursuant to 10 CFR 150.20 to use byproduct material for industrial radiography. This nondestructive testing company is authorized to use licensed material at temporary jobsites in areas of NRC jurisdiction provided that the requirements of 10 CFR 150.20 are met.

Details of Investigation

• Based on interviews and the review of documentary evidence developed during the investigation, it was determined that on September 5, 2002, C&J conducted radiographic operations at the Williston Basin Interstate Pipeline Company field location in Whitewood, South Dakota, prior to filing NRC Form 241, "Report of Proposed Activities in Non-Agreement States, Areas of Exclusive Federal Jurisdiction, or Offshore Waters." This was identified as an apparent violation of 10 CFR 150.20 (Section 2).

Corrective Actions

• Corrective actions initiated by the licensee included filing NRC Form 241 upon the realization they had failed to file, and changing company procedures by carrying to each jobsite, additional NRC Form 241s so that C&J can file from any location prior to conducting radiographic operations.

---

Report Details

1 Program Overview

1.1 Scope

C&J is authorized under a General License pursuant to 10 CFR 150.20 to use byproduct material for industrial radiography. This nondestructive testing company is authorized to use licensed material at temporary jobsites in areas of NRC jurisdiction provided that the requirements of 10 CFR 150.20 are met.

2 Details of Investigation

2.1 Investigation Scope

The investigation was initiated by the NRC's Office of Investigations (OI), on October 28, 2002, to determine if C&J of Bismarck, North Dakota, violated NRC requirements by conducting radiographic operations at the Williston Basin Interstate Pipeline Company field location in Whitewood, South Dakota, an area within NRC jurisdiction, without filing NRC Form 241, "Report of Proposed Activities in Non-Agreement States, Areas of Exclusive Federal Jurisdiction, or Offshore Waters." The investigation consisted of interviews with C&J senior management and contractor personnel.

2.2 Interview with C&J Company President

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, provided that the provisions of 10 CFR 150.20(b) have been met.

10 CFR 150.20(b)(1) requires, in part, that any person engaging in activities in Non-Agreement States, shall, at least 3 days before engaging in each such activity, file an NRC Form 241, "Report of Proposed Activities in Non-Agreement States," with the Regional Administrator of the appropriate NRC regional office.

During an interview conducted by the investigator, the president of C&J indicated that most of the company's work is performed within the State of North Dakota and most of that work is contracted by Williston Basin Interstate Pipeline Company of Baker, Montana (Williston). The president added that having worked in the radiography industry for many years, he was familiar with reciprocity requirements, however, due to the potential for not performing any work annually in NRC jurisdiction, he opted to wait until a job in NRC jurisdiction became available before filing NRC Form 241 and paying the associated fees.

On September 5, 2003, the president and his wife were performing radiography at a jobsite in North Dakota for Williston when their Williston contact telephoned them and asked them to travel to another Williston jobsite in South Dakota to perform radiography. Since they were already away from their home office, they decided to travel directly to the South Dakota project. It was not until about 4 weeks after C&J had completed the job in South Dakota that they realized the failure to file the NRC Form 241. When C&J realized this, the president mailed NRC Form 241 and the associated fees to NRC Region IV. The Form 241 was received in Region IV on October 8, 2002.

The failure to file NRC Form 241, "Report of Proposed Activities in Non-Agreement States, Areas of Exclusive Federal Jurisdiction, or Offshore Waters" prior to beginning radiographic operations in NRC jurisdiction was identified as an apparent violation of 10 CFR 150.20 (150-00033/0002-01).

3 Corrective Actions

Corrective actions included filing NRC Form 241 upon the realization they had failed to file, and changing company procedures by carrying to each jobsite, additional NRC Form 241s so that C&J can file from any location prior to conducting radiographic operations.

4 Exit Meeting Summary

On April 23, 2003, a final telephonic exit briefing was held with the president of C&J to review the findings as presented in this report. Licensee representatives acknowledged the findings. No proprietary information was identified.

---

ATTACHMENT

PARTIAL LIST OF PERSONS CONTACTED

Licensee

Charles Schaan, President and Radiographer
June Schaan, Radiographer's Assistant

ITEMS OPENED, CLOSED, AND DISCUSSED

Opened

150-00033/0002-01

VIO

An apparent violation involving the failure to file NRC Form 241, "Report of Proposed Activities in Non-Agreement States, Areas of Exclusive Federal Jurisdiction, or Offshore Waters" prior to the performance of radiographic operations in areas of NRC jurisdiction.

Closed
None

Discussed
None

LIST OF ACRONYMS USED

CFR	Code of Federal Regulations
C&J	C & J Nondestructive Testing, Inc.
NRC	Nuclear Regulatory Commission
OI	Office of Investigations
VIO	Violation