EA-96-234 - HNU Systems, Inc.

August 22, 1996

EA 96-234

Mr. John Driscoll, President
HNU Systems, Inc.
160 Charlemont Street
Newton Highlands, Massachusetts 02161-9987

SUBJECT:

CONFIRMATORY ORDER MODIFYING LICENSE (EFFECTIVE IMMEDIATELY)

Dear Mr. Driscoll:

The enclosed Confirmatory Order Modifying License (which is immediately effective upon issuance) is being issued to you to confirm commitments that you made to the NRC in: (1) a June 18, 1996 letter in response to an NRC Demand for Information sent to you on June 7, 1996; (2) a telephone call on July 18, 1996; and (3) a written consent signed by you on August 7, 1996.

Questions concerning this Confirmatory Order should be addressed to Mr. James Lieberman, 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, its enclosure, and any response will be placed in the NRC Public Document Room (PDR). To the extent possible, any response should not include any personal privacy, proprietary, or safeguards information so that it can be placed in the PDR without redaction. However, if you find it necessary to include such information, you should clearly indicate the specific information that you desire not to be placed in the PDR, and provide the legal basis to support your request for withholding the information from the public.

Sincerely,

Joseph R. Gray, Acting Director Office of Enforcement

Docket Nos. 030-31621; and 030-31622
License Nos. 20-27938-03G; 20-27938-02

Enclosure: Confirmatory Order

cc w/encl:
Commonwealth of Massachusetts

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UNITED STATES
NUCLEAR REGULATORY COMMISSION

In the Matter of HNU Systems, Inc. Newton Highlands, Massachusetts

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Docket Nos. 030-31621 and 030-31622 License Nos. 20-27938-03G and 20-27938-02 EA 96-234

CONFIRMATORY ORDER MODIFYING LICENSE
(EFFECTIVE IMMEDIATELY)

I

HNU Systems, Inc. (Licensee or HNU), is the holder of Byproduct Materials License Nos. 20-27938-03G and 20-27938-02 (Licenses) issued by the Nuclear Regulatory Commission (NRC or Commission) pursuant to 10 CFR Part 30. The Licenses authorize the distribution, possession, and use of sealed sources in devices generally licensed, not to exceed 100 millicuries per source and 1,000 millicuries per foil, in accordance with the conditions specified therein. The Licenses were due to expire on March 31, 1996. However, on February 29, 1996, the Licensee filed a renewal application and, in accordance with 10 CFR 30.36(a), the Licenses are under a timely renewal.

II

As a result of a June 1995 inspection, a Confirmatory Action Letter (CAL) was issued on June 15, 1995 and a Notice of Violation (NOV) was issued on July 27, 1995 to HNU for numerous violations characterized in the aggregate as a Severity Level III problem. The violations included the failure to: (1) notify the NRC that the Radiation Safety Officer (RSO) listed on the Licenses had been laid off and had not been replaced; (2) conduct a physical inventory of radioactive materials; (3) conduct leak tests of sealed sources at the required six month intervals; (4) calibrate survey instruments at the required six month intervals; (5) perform monthly surveys; (6) monitor exposures of individuals to radiation and radioactive material; (7) review the radiation protection program content and implementation at least annually; (8) report to the NRC any transfers of generally licensed devices; (9) maintain radiation safety record notebooks; and (10) provide training to Licensee staff.

Subsequently, the NRC conducted a follow-up inspection from December 8, 1995, to April 23, 1996, to review the Licensee's implementation of the corrective actions taken in response to the June 1995 CAL and July 1995 NOV. Based on this inspection, the NRC identified several repetitive violations and determined that the Licensee had not implemented adequately the corrective actions in response to the Notice and CAL.

Therefore, the Commission required further information from HNU in order to determine whether the Commission can have reasonable assurance that in the future, should HNU be permitted by the NRC to continue to perform licensed activities under the Licenses, it will conduct the activities in accordance with NRC requirements, and whether further enforcement action is warranted against HNU. Accordingly, the NRC issued a Demand for Information (DFI) to the Licensee on June 7, 1996, which required the Licensee to submit to the NRC, within 30 days of the date of the DFI, in writing and under oath or affirmation:

1. a statement as to whether the Licensee will apply sufficient resources to manage an effective radiation safety program; and
2. a statement as to why the Licenses should not be revoked in light of the financial concerns and the repetitive violations.

In a letter, dated June 18, 1996, the Licensee responded to the DFI and indicated that it would: (1) commit the necessary resources to permit the RSO (who works part-time) to work up to 20 hours per week until full compliance with the radiation safety program requirement was achieved, which it stated could be done in 4 months, after which it believes that it can maintain compliance by the RSO working 10-12 hours per week; (2) designate an assistant RSO from a qualified member of the staff; (3) complete, by August 1, 1996, a Radiation Safety Refresher Course, including testing, for employees dealing with instruments containing sealed sources; (4) conduct an annual audit of the radiation safety program, and update quarterly reports of source transfers by October 1, 1996; (5) perform wipes of all sources taken from storage; (6) calibrate a second survey meter by July 15, 1996, to ensure one calibrated survey meter is available at all times; (7) continue its search for a missing 50 mCi Fe-55 source; (8) provide locked files for radiation safety records; (9) have an outside auditor conduct an audit of the organization after the program is brought into full compliance; and (10) meet the specified payment schedule that it negotiated with the NRC Fees Branch for the payment of fees.

In a followup call with the Licensee on July 18, 1996, the Licensee agreed that: (1) the RSO would work at least 20 hours per week, rather than 10-12 hours per week, until this condition was relaxed by the NRC; (2) it would have an outside auditor complete an audit of the organization by December 1, 1996; and (3) it would meet the other commitments made in its June 18, 1996 letter. On August 7, 1996, the Licensee consented to issuing this Order with the commitments, as described in Section III below. The Licensee further agreed in its August 7, 1996 letter that this Order is to be effective upon issuance and that it has waived its right for a hearing. Implementation of these commitments will provide enhanced assurance that sufficient resources will be applied to the radiation safety program, and that the program will be conducted safely and in accordance with NRC requirements.

Therefore, I find that the Licensee's commitments as set forth in its June 18, 1996, and August 7, 1996 letters are acceptable and necessary, and conclude that with these commitments, the public health and safety are reasonably assured. In view of the foregoing, I have determined that the public health and safety require that the Licensee's commitments be confirmed by this Order. Based on the above and on the Licensee's consent, the Order is immediately effective upon issuance.

III

Accordingly, pursuant to sections 81, 161b, 161i, 161o, 182, and 186 of the Atomic Energy Act of 1954, as amended, and the Commissions's regulations in 10 CFR 2.202 and 10 CFR Part 30, IT IS HEREBY ORDERED, EFFECTIVE IMMEDIATELY UPON ISSUANCE, THAT LICENSE NOS. 20-27938-03G and 20-27938-02, ARE MODIFIED AS FOLLOWS:

1. The Licensee's Radiation Safety Officer will work a minimum of 20 hours per week until this commitment is relaxed by the NRC;
2. An assistant RSO will be designated within 15 days of the date of the Order, and the Licensee will provide written notification to NRC Region I of the individual designated as assistant RSO and the individual's qualifications within 30 days of the date of the Order;
3. A radiation safety refresher course, including testing, will be given by October 1, 1996 to all employees working with instruments containing sealed sources.
4. The required annual audit of the radiation safety program, and all previously submitted quarterly reports of source transfers, will be completed by October 1, 1996, and submitted to NRC Region I by November 1, 1996;
5. Wipes will be performed of all sources taken from storage; in determining compliance with License Condition 12, appropriate actions will be taken if contamination greater than 0.005 Uci is identified, and appropriate wipe tests and source disposition records will be maintained, effective immediately;
6. At least one calibrated survey meter will be available at all times;
7. Radiation Safety Records will be placed in locked files within 15 days of the date of the issuance of this Confirmatory Order;
8. An experienced outside independent auditor will conduct and complete an audit of the Licensee's adherence to the requirements of its NRC Licenses by December 1, 1996. The Licensee shall submit the name and qualifications of the outside auditor to the NRC for approval by October 1, 1996, and the outside auditor shall provide the audit results simultaneously to both HNU and the NRC; and
9. The Licensee will notify Mr. Francis Costello, Chief, Nuclear Materials Safety Branch 3, NRC Region I, if it does not adhere to the specified payment schedule that it negotiated with the NRC Fees Branch for the payment of fees, as noted in the Conditional Order Extending Time, dated June 24, 1996. If the payment schedule is not met, notification will be made within 10 business days from the missed payment due date.

The Regional Administrator, Region I, may relax or rescind, in writing, any of the above conditions upon a showing by the Licensee of good cause.

IV

Any person adversely affected by this Confirmatory Order, other than the Licensee, may request a hearing within 20 days of its issuance. 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, D.C. 20555, and include a statement of good cause for extension. Any request for a hearing shall be submitted to the Secretary, U.S. Nuclear Regulatory Commission, ATTN: Chief, Docketing and Service Section, Washington, D.C. 20555. Copies also shall be sent to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, Washington, D.C. 20555, to the Assistant General Counsel for Hearings and Enforcement at the same address, to the Regional Administrator, NRC Region I, 475 Allendale Road, King of Prussia, Pennsylvania, 19406, and to the Licensee. If such a person 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 2.714(d).

If a hearing is requested by 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 Confirmatory Order should be sustained.

Pursuant to 10 CFR 2.202(c)(2)(i), any person other than the Licensee, 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.

This Order is immediately effective upon issuance. 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 III 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 III 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 EFFECTIVENESS OF THIS ORDER.

FOR THE NUCLEAR REGULATORY COMMISSION Joseph R. Gray, Acting Director Office of Enforcement

Dated at Rockville, Maryland
this 23rd day of August, 1996