EA-03-187 - 21 st Century Technologies, Inc.
April 13, 2004
Mr. Arland Dunn
President & CEO
21st Century Technologies, Inc.
2700 West Sahara Avenue
Las Vegas, Nevada 89102
|SUBJECT: ||NOTICE OF VIOLATION AND PROPOSED IMPOSITION OF CIVIL PENALTY – $6,000 (NRC Inspection Report 030-34261/02-001 and Investigation Report 4-2002-006) |
Dear Mr. Dunn:
This refers to the referenced inspection and investigation of 21st Century Technologies, Inc., (21st Century) and to the predecisional enforcement conference conducted on January 20, 2004, to discuss four apparent violations of NRC requirements. On October 28, 2003, we informed you that the NRC was considering escalated enforcement action for the apparent violations, and on November 19, 2003, we issued an inspection report that documented the apparent violations. The violations involved the apparent willful distribution of tritium-bearing gun sights and other products not authorized by 21st Century's license, and the apparent failure to file a required 5-year report with the NRC. The predecisional enforcement conference, conducted in NRC's Arlington, Texas office, was held to give 21st Century an opportunity to provide its position on the apparent violations before the NRC made a final enforcement decision. A list of conference attendees is enclosed.
At the conference, 21st Century representatives denied having willfully committed any violations of NRC requirements. While acknowledging that the company may have violated NRC requirements by distributing products that were not authorized by the license, 21st Century attributed this to error, and to misinterpretations or misunderstandings of the license, and committed to developing processes and procedures to assure compliance in the future.
During the conference, 21st Century expressed the view that its license could be interpreted to authorize distribution of devices described in Attachment 16 to the Sealed Source and Device Registration Certificate No. NR-365-D-101E (Certificate), because the Certificate and all of its attachments were physically attached to the license. In order to prevent further misunderstandings of its license, 21st Century is advised that it is authorized only to distribute devices authorized by its license. Merely attaching another document to the license does not make it part of the license. In order for another document to be considered part of the license, that document must be tied to the license by the explicit language of the license itself. License Condition 10 authorizes 21st Century to distribute nine different series of gunsights, each to conform to models in specifically referenced attachments to the Certificate. For example, License Condition 10 authorizes a Series 100 gunsight as described in Attachment 17 of the Certificate. As a result, Attachment 17 of the Certificate is tied to the license. None of the sight models or nine series listed in License Condition 10 ties the entire contents of the certificate to the license.
Based on the information developed during the inspection and investigation, and our evaluation of the information that you provided during the conference, the NRC has determined that violations of NRC requirements occurred. The circumstances surrounding these violations remain cause for concern given 21st Century's history of noncompliance with its NRC license. Notwithstanding our concern about 21st Century's poor compliance history, after evaluating all of the information available to us in this case, we are not characterizing these as willful violations. The violations are cited in the enclosed Notice of Violation (Notice) and involve: (A) distributing various tritium-bearing products that had not been reviewed and approved by the NRC; (B) distributing tritium-bearing products after making an unauthorized change in the wall thickness of the tritium vials; C) distributing tritium-bearing products without the required labeling; and D) failing to file a required 5-year report describing the types and quantities of products distributed.
21st Century's distribution of unapproved products (Violations A and B) circumvented the regulatory processes that are designed to assure the acceptability of products distributed to members of the public. The NRC can have confidence in the acceptability of such products only if they are designed, manufactured and distributed in accordance with NRC requirements. In this case, 21st Century's negligence impacted the ability of the NRC to perform its regulatory function (Enforcement Policy, Section IV). The number of examples of these violations, and the extended time period over which they occurred, represent a programmatic concern with the potential to impact radiological safety. Therefore, these violations are categorized collectively in accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions" (Enforcement Policy), NUREG-1600, as a Severity Level III problem. See Enforcement Policy, Supplement VI, C.8
In accordance with the Enforcement Policy, a base civil penalty in the amount of $3,000 is considered for a Severity Level III problem. Because 21st Century has been the subject of escalated enforcement actions within the last two inspection periods,(1) the NRC considered whether credit was warranted for Identification and Corrective Action in accordance with the civil penalty assessment process in Section VI.C.2 of the Enforcement Policy. Credit for identification was not given because virtually all of the violations were identified by the NRC through its inspection and investigation. Credit for corrective action was not given because comprehensive actions to assure compliance were still in the developmental stages at the time of the conference, and had not been implemented, despite NRC's inspections leading to this enforcement matter having begun in January 2002. The application of these factors results in the assessment of a civil penalty of $6,000, or twice the base value.
Therefore, to emphasize the importance of distributing to the public only those products that have been reviewed and approved by the NRC, and the NRC's concern about 21st Century's history of noncompliance with such 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 (Notice) in the amount of $6,000 for the Severity Level III problem described above. In addition, issuance of this Notice constitutes escalated enforcement action which may subject you to increased inspection effort.
Violations C and D, involving the distribution of certain products without required labeling and the failure to file a 5-year report with the NRC, were classified at Severity Level IV and were not assessed any civil penalties.
You are required to respond to this letter and should follow the instructions specified in the enclosed Notice when preparing your response. In addressing item 4 in the Notice, i.e., the corrective steps that will be taken to avoid further violations, please describe how 21st Century's revised processes and procedures will assure future compliance, and describe how 21st Century will develop or obtain the expertise necessary to understand the licensing requirements and the engineering aspects of product design. 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 2.390 of the NRC's "Rules of Practice," a copy of this letter, its enclosures, and 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. The NRC also includes Issued Significant Enforcement Actions on its Web site.
| ||Sincerely, |
|/RA by Thomas P. Gwynn Acting for/ |
|Bruce S. Mallett |
Docket No.: 030-3426
License No.: 42-23850-02E
1. Notice of Violation and Proposed Imposition of Civil Penalty
2. Predecisional Enforcement Conference Attendance List
3. NUREG/BR-0254 Payment Methods (Licensee only)
cc w/Enclosures 1-2 only:
State of Texas Radiation Control Program Director
State of Nevada Radiation Control Program Director
James Tourtellotte, Esq.
NOTICE OF VIOLATION
PROPOSED IMPOSITION OF CIVIL PENALTY
|21st Century Technologies |
Fort Worth, Texas
| ||Docket No. 030-34261 |
License No. 42-23850-02E
During an NRC inspection and investigation completed in October 2003, violations of NRC requirements were identified. In accordance with the "General Statement of Policy and Procedure 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 violations and associated civil penalty are set forth below:
|I. ||Violations Assessed a Civil Penalty |
|A. ||10 CFR 30.3 requires, in part, that no person shall transfer byproduct material except as authorized in a specific license issued pursuant to 10 CFR Part 30. |
Condition 9 of NRC License No. 42-23850-02E, dated October 18, 1996, specifies in part, that the licensee is authorized to distribute only those luminous gunsights containing sealed light sources identified in Condition 10 of the license.
Condition 10 of NRC License No. 42-23850-02E, provides, in part, that the approved gunsights are limited to nine series, and that the model design for each series is limited to that described in a specified attachment to Registration Certificate NR-365-D-101-E.
Contrary to the above, between January 2000 and February 2003, 21st Century Technologies, Inc., distributed tritium-bearing gunsights and other products that were not described in both License Condition 10 and the specified attachments to Registration Certificate NR-365-D-101-E. Specifically:
|1. ||Between April 1, 2001, and July 31, 2001, the licensee transferred approximately 60,000 tritium filled inserts to TruGlo, Inc. |
|2. ||Between September 1, 2000, and August 31, 2001, the licensee transferred an undetermined number of ghost ring gunsights to both the DeSoto, Texas, police department and GT Distributors, gunsights which were not authorized by the license. |
|3. ||Between January 1, 2000, and December 31, 2001, the licensee transferred 48 sight demonstrator tubes to various vendors and distributors, products which were not authorized by the license. |
|4. ||Between January 1, 2002, and April 30, 2002, the licensee transferred approximately 80 tritium filled gunsights to Insight Technologies, gunsights which were not authorized by the license. |
|5. ||Between January 15, 2001, and February 27, 2003, the licensee transferred an undetermined number of customized gunsights which were not authorized by the license. |
|6. ||Between January 15, 2001, and February 27, 2003, the licensee transferred an undetermined number of tritium filled grenade launcher sights which were not authorized by the license. |
|B. ||10 CFR 30.34(c) requires, in part, that the licensee confine his possession and use of byproduct material to the purposes authorized in the license. |
Condition 7 of NRC License 42-23850-02E specifies, in part, that the licensee is authorized to possess Lumitec Model CL/1,5/4,85 sealed light sources.
Sealed Source and Device Registration Certificate No. NR-365-D-101-E, dated February 20, 1996, and as corrected on April 30, 1996, specifies the authorized technical parameters of Lumitec Model CL/1,5/4,85 sealed light sources, which requires that the walls of the tritium filled glass vials be 0.250 millimeters in thickness.
Contrary to the above, between March 1, 2001, and September 20, 2002, the licensee incorporated sealed light sources whose wall thickness was less than 0.250 millimeters in thickness into sights and transferred these sealed light sources to individuals exempt from licensing. Specifically, the licensee reduced the wall thickness of the Lumitec Model CL/1,5/4,85 sealed light sources to 0.200 millimeters.
|Violations A and B represent a Severity Level III problem (Supplement VI). |
Civil Penalty – $6,000. (EA-03-187)
|II. ||Violations Not Assessed a Civil Penalty |
|A. ||10 CFR 32.25(b) requires, in part, that each person licensed under 10 CFR 32.22 shall label or mark each unit so that the manufacturer, processor, producer, or initial transferor of the product and the byproduct material in the product can be identified. |
Contrary to the above, between January 1, 2002, and April 30, 2002, the licensee transferred approximately 80 gunsights (units) to Insight Technologies and these units were not labeled or marked so that the manufacturer, processor, producer, or initial transferor of the product could be identified.
This is a Severity Level IV violation (Supplement VI).
|B. ||10 CFR 32.25(c)(2)(i) requires, in part, that the licensee file a report with the Director of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC. The report must include, in part, a description or identification of the type of each product transferred, the total number of units transferred, and the total quantity of each radionuclide transferred. The licensee shall file the report within 30 days following 5 years after filing the preceding report. |
Contrary to the above, the licensee failed to file the required report within 30 days following 5 years after filing the preceding report. Specifically, the licensee filed the required report on July 7, 1993, and again on July 15, 2003, a period of 10 years.
This is a Severity Level IV violation (Supplement VI).
Pursuant to the provisions of 10 CFR 2.201, 21st Century Technologies, 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: EA-03-187" 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. Your response may reference or include previous docketed correspondence, if the correspondence adequately addresses the required response. 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 proposed above or the cumulative amount of the civil penalties if more than one civil penalty is proposed, in accordance with NUREG/BR-0254 and by submitting to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555, a statement indicating when and by what method payment was made, 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 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 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.
In requesting mitigation of the proposed penalty, the factors addressed in Section VI.C.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 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 234(c) of the Act, 42 U.S.C. 2282c.
The response noted above (Reply to Notice of Violation, statement as to payment of civil penalty, and Answer to a Notice of Violation) should be addressed to: Mr. Frank Congel, 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 IV, 611 Ryan Plaza Drive, Suite 400, Arlington, TX 76011-4005.
Because your response will be made available electronically for public inspection in the NRC Public Document Room or from the 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 2.390(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 are required to post this Notice within two working days.
Dated this 13th day of April 2004
1 Inspections of exempt distribution licensees are conducted at 5-year intervals. On May 15, 1996, a Severity Level III violation, $7,500 proposed civil penalty, and a confirmatory order were issued to Innovative Weaponry, Inc., a wholly owned subsidiary of 21 st Century Technologies, for similar violations (EA-96-135). The penalty was later reduced to $2,500 after considering the licensee's request for mitigation.
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