EA-99-097 - Testing Engineers & Consultants, Inc.
September 24, 1999
EAs 99-097 & 99-169
Ms. Katherine Banicki, President
Testing Engineers & Consultants, Inc.
1333 Rochester Road
Troy, MI 48099
SUBJECT: ORDER IMPOSING CIVIL MONETARY PENALTY - $5,500
Dear Ms. Banicki:
This refers to your letters dated August 4 and August 13, 1999, in response to the Notice of Violation and Proposed Imposition of Civil Penalties (Notice) sent to you by our letter dated July 8, 1999. The Notice described two violations identified during an NRC inspection and an investigation. To emphasize the importance of compliance with all regulatory requirements, including the provision of complete and accurate information to the NRC and the unacceptability of deliberate violations, we proposed civil penalties totaling $5,500. In your letters, you admit to the violations addressed in the Notice but request mitigation or remission of the civil penalties.
After consideration of your responses, we have concluded for the reasons given in the Appendix attached to the enclosed Order Imposing Civil Monetary Penalty that neither mitigation nor remission of the civil penalties is warranted. Accordingly, we hereby serve the enclosed Order on Testing Engineers & Consultants, Inc., imposing a civil monetary penalty in the amount of $5,500. As provided in Section IV of the enclosed Order, payment should be made within 30 days in accordance with NUREG/BR-0254. In addition, at the time payment is made, a statement indicating when and by what method payment was made, is to be mailed to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852-2738. We will review the effectiveness of your corrective actions during a subsequent inspection.
In accordance with 10 CFR 2.790 of the NRC's "Rules of Practice," a copy of this letter and the enclosures will be placed in the NRC's Public Document Room.
|R. W. Borchardt, Director
Office of Enforcement
Docket No. 030-14016
License No. 21-18668-01
1. Order Imposing Civil Monetary Penalty
2. NUREG/BR-0254 Payment Methods
cc: State of Michigan
NUCLEAR REGULATORY COMMISSION
|In the Matter of
Testing Engineers & Consultants, Inc.
|Docket No. 030-14016
License No. 21-18668-01
EAs 99-097 & 99-169
ORDER IMPOSING CIVIL MONETARY PENALTY
Testing Engineers & Consultants, Inc. (Licensee) is the holder of Byproduct Materials License No. 21-18668-01 which was last renewed in its entirety by the Nuclear Regulatory Commission (NRC or Commission) on September 17, 1996. The license authorizes the Licensee to use certain byproduct material in accordance with the conditions specified therein.
Between July 28, 1998 and March 23, 1999, an inspection and an investigation of the Licensee's activities were conducted. The results of the inspection and the investigation indicated that the Licensee had not conducted its activities in full compliance with NRC requirements. A written Notice of Violation and Proposed Imposition of Civil Penalties (Notice) was served upon the Licensee by letter dated July 8, 1999. The Notice states the nature of the violations, the provisions of the NRC's requirements that the Licensee had violated, and the amount of the civil penalties proposed for the violations.
The Licensee responded to the Notice in letters dated August 4 and 13, 1999. In its responses, the Licensee agreed with the information presented in the Notice, admitted the violations, but requested mitigation or remission of the civil penalties.
After consideration of the Licensee's response and the statements of fact, explanation, and argument for mitigation contained therein, the NRC staff has determined, as set forth in the Appendix to this Order, that the violations occurred as stated and that the penalties proposed for the violations designated in the Notice should be imposed.
In view of the foregoing and pursuant to Section 234 of the Atomic Energy Act of 1954, as amended (Act), 42 U.S.C. 2282, and 10 CFR 2.205, IT IS HEREBY ORDERED THAT:
The Licensee pay civil penalties in the amount of $5,500 within 30 days of the date of this Order, in accordance with NUREG/BR-0254. In addition, at the time of making the payment, the Licensee shall submit a statement indicating when and by what method payment was made, to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852-2738.
The Licensee may request a hearing within 30 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. A request for a hearing should be clearly marked as a "Request for an Enforcement Hearing" and shall be submitted to the Secretary, U.S. Nuclear Regulatory Commission, ATTN: Rulemakings and Adjudications Staff, Washington, DC 20555. Copies also shall be sent to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555, to the Assistant General Counsel for Hearings and Enforcement at the same address, and to the Regional Administrator, NRC Region III, 801 Warrenville Road, Lisle, Illinois 60532.
If a hearing is requested, the Commission will issue an Order designating the time and place of the hearing. If the Licensee fails to request a hearing within 30 days of the date of this Order (or if written approval of an extension of time in which to request a hearing has not been granted), the provisions of this Order shall be effective without further proceedings. If payment has not been made by that time, the matter may be referred to the Attorney General for collection.
In the event the Licensee requests a hearing as provided above, the issue to be considered at such hearing shall be:
Whether on the basis of the violations admitted by the Licensee, this Order should be sustained.
||FOR THE NUCLEAR REGULATORY COMMISSION
|R. W. Borchardt, Director
Office of Enforcement
Dated this 24th day of September 1999
EVALUATIONS AND CONCLUSION
On July 8, 1999, a Notice of Violation and Proposed Imposition of Civil Penalty (Notice) was issued for violations identified during an NRC inspection and an investigation. Testing Engineers & Consultants, Inc. (Licensee or TEC) responded to the Notice by two letters dated August 4 and 13, 1999. The Licensee admitted the violations occurred, but requested mitigation or remission of the civil penalties. The NRC's evaluation and conclusion regarding the licensee's requests are as follows:
Summary of Licensee's Request for Remission or Mitigation
The Licensee states that no escalated enforcement has occurred since September 1995 and that its overall performance of licensed activities has been good. The Licensee contends that compliance with license requirements as well as prompt identification and comprehensive corrective action of violations has always been emphasized and encouraged. The Licensee states that it understands the severity of the violations and will make every effort to regain the trust and confidence of the NRC by ensuring that it acts with integrity and abides by requirements designed to protect public health and safety.
The Licensee maintains that every effort is made to educate its employees to implement all of the terms and conditions of its NRC license. According to the Licensee, the employee involved had been properly trained and instructed and there was little else that could have been done to prevent this incident from occurring. The Licensee suggested that the NRC should fine the individual as well as the company.
NRC Evaluation of Licensee's Request for Remission or Mitigation
The NRC concurs with the Licensee regarding its enforcement history and overall good performance. Enforcement history and licensee performance are used in determining which enforcement action will be taken. In accordance with Section VI.B.2. of the "General Statement of Policy and Procedures for NRC Enforcement Actions" (Enforcement Policy), NUREG 1600, Revision 1, enforcement history is considered in two of the four decisional points in the civil penalty assessment process. Specifically, when the NRC determines that a non-willful Severity Level III violation has occurred, and the licensee has not had any previous escalated actions during the past 2 years or 2 inspections, whichever is longer, the NRC considers whether the licensee's corrective action for the violation is reasonably prompt and comprehensive. If a willful Severity Level III violation has occurred--or if, during the past 2 years or 2 inspections, the licensee has been issued at least one other escalated action—the civil penalty assessment normally considers the factor of identification in addition to corrective action. As to the second decisional point, the NRC may exercise discretion by either escalating or mitigating a sanction based, in part, on the enforcement history. For example, the NRC may either propose a civil penalty where application of the factors would otherwise result in zero penalty or escalate the amount of the resulting civil penalty in cases involving particularly poor licensee performance, or involving willfulness. On the other hand, the NRC may exercise discretion and refrain from issuing a civil penalty in cases where the overall sustained performance of the licensee has been good.
In this case, the Licensee's enforcement history is irrelevant with regard to the first decisional point because the violations were willful. As to the second decisional point, the NRC considered the Licensee's enforcement history and determined that, on balance, neither escalation nor mitigation was warranted because, while the Licensee's enforcement history has been good, the violations involved willfulness. Willful violations are of particular concern because the Commission's regulatory program is based on licensees acting with integrity and communicating with candor.
With regard to the assessment factors, both noncompliances were characterized as willful Severity Level III violations and, consistent with Section VI.B.2. of the Enforcement Policy, the NRC considered both identification and corrective action. In this case, the NRC concluded that credit was not warranted for identification because NRC staff identified the violations, but credit was warranted for corrective action based on the promptness and comprehensiveness of the actions taken. Consideration of the identification and corrective action factors yielded a base civil penalty of $2,750 for each of the violations described in the Notice.
As to the Licensee's argument about its efforts to educate employees and to prevent the incident, according to Section VI.B of the Enforcement Policy, management involvement, direct or indirect, in a violation may lead to an increase in the civil penalty; however, the lack of management involvement in a violation may not be used to mitigate a civil penalty. The Licensee is responsible for violations caused by its employees, whether arising from inadvertent error or willful acts. The licensee hires, trains, and supervises its employees. All licensed activities are carried out by employees of the licensee and, therefore, all violations are caused by employees of the licensee. A licensee enjoys the benefits of good employee performance and suffers the consequences of poor employee performance. To not hold the licensee responsible for the actions of its employees, whether such actions result from incompetence, negligence, or willfulness, is equivalent to not holding the licensee responsible for its use and possession of licensed material. If the NRC were to adopt such a premise, there would be no incentive for licensees to assure compliance with NRC requirements.
With respect to the licensee's suggestion about fining the individual as well as the company, the NRC notes that while it is not the Commission's general policy to monetarily penalize individuals, the NRC takes enforcement sanctions against individuals. Notices of Violation and Orders are examples of enforcement actions that may be appropriate against individuals. The Notice of Violation issued to the Licensee's employee was deemed the appropriate action in this case.
The NRC has concluded that the Licensee did not provide an adequate basis for remission or mitigation of the civil penalties. Consequently, the proposed civil penalty in the amount of $5,500 should be imposed.
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