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EA-01-164 - J. L. Shepherd & Associates

September 19, 2001

EA-01-164

Mary Shepherd, Vice President
J. L. Shepherd & Associates
1010 Arroyo Ave,
San Fernando, CA 91340-1822

SUBJECT:   CONFIRMATORY ORDER RELAXING ORDER

Dear Ms. Shepherd:

The enclosed Confirmatory Order is being issued as a result of Mr. Don Irwin's letter dated August 17, 2001, on behalf of J. L. Shepherd & Associates (JLS&A) which provided copies of JLS&A's August 16, 2001, response to the U. S. Nuclear Regulatory Commission's (NRC) July 3, 2001, Order.

In response to the July 3, 2001, Order, JLS&A requested that the Order be relaxed for good cause. Specifically, JLS&A requested interim relief pursuant to JLS&A's proposed Near-Term Corrective Action Plan (NTCAP) to allow 66 shipments to 15 customers, in the Department of Transportation specification packaging designated as 20WC.

The NRC staff reviewed your relief request and identified, in a September 7, 2001, letter, those commitments required from JLS&A for the NRC staff to determine whether to grant the requested relief consistent with assurances that public health and safety will be maintained.

In its response dated September 13, 2001, JLS&A requested two additional shipments to support an additional customer and agreed to implement the corrective actions listed in the NRC staff's September 7, 2001, letter.

Based on our evaluation of the NTCAP and the commitments JLS&A has made, I find that good cause has been demonstrated to relax certain provisions of the NRC Order dated July 3, 2001. Accordingly, pursuant to the enclosed Confirmatory Order, I am hereby relaxing the July 3, 2001, Order to allow 68 shipments to 16 customers identified in JLS&A letters dated August 16, 2001, and September 13, 2001, in the Department of Transportation specification packaging designated as 20WC, and pursuant to the NTCAP. These shipments will only take place after JLS&A has completed the actions identified in the enclosed Confirmatory Order and the NRC has completed an inspection which confirms JLS&A's satisfactory completion of the identified commitments. Furthermore, issuance of this Confirmatory Order does not preclude the NRC from taking other enforcement actions in this matter and Quality Assurance Program Approval No. 0122 continues to be withdrawn pending further revision to the July 3, 2001, Order.

Questions concerning this Order should be addressed to me. I 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 and its enclosure will be placed in the NRC Public Document Room (PDR).

  Sincerely,
/RA/
Frank J. Congel, Director
Office of Enforcement

Docket No. 71-0122
Approval No. 0122

Enclosure: Confirmatory Order Relaxing Order

cc:
Don Irwin, Hunton & Williams
Rick Boyle, Department of Transportation
Michael Wangler, Department of Energy
Ed Bailey, State of California

UNITED STATES
NUCLEAR REGULATORY COMMISSION

In the Matter of
J. L. Shepherd & Associates
San Fernando, California

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)
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     Docket No. 71-0122
Approval No. 0122
EA-01-164)

CONFIRMATORY ORDER RELAXING ORDER
(EFFECTIVE IMMEDIATELY)

I

J. L. Shepherd & Associates (JLS&A or Approval Holder) was the holder of Quality Assurance (QA) Program Approval for Radioactive Material Packages No. 0122 (Approval No. 0122), issued by the U. S. Nuclear Regulatory Commission (NRC or Commission) pursuant to 10 CFR Part 71, Subpart H. The approval was previously issued pursuant to the QA requirements of 10 CFR Section 71.101. QA activities authorized by Approval No. 0122 include: design, procurement, fabrication, assembly, testing, modification, maintenance, repair, and use of transportation packages subject to the provisions of 10 CFR Part 71. Approval No. 0122 was originally issued January 17, 1980. Revision No. 5 was issued January 24, 1996, with an expiration date on January 31, 2001, and is under timely renewal. In addition to having a QA program approved by the NRC to satisfy the provisions of 10 CFR Part 71, Subpart H, to transport or deliver for transport licensed material in a package, JLS&A is required by 10 CFR Part 71, Subpart C, to have and comply with the package's Certificate of Compliance (CoC) issued by the NRC. Based on JLS&A failure to comply with 10 CFR Part 71, QA Program Approval No. 0122 was withdrawn, by the immediately effective NRC Order dated July 3, 2001.

II

NRC staff conducted an inspection on May 29-31, 2001, at JLS&A's facility. The inspection identified significant concerns with the implementation of the JLS&A QA program regarding the design, use, repair, and maintenance of transportation packages approved for use by NRC under CoC No. 6280. Specifically, NRC found that JLS&A failed to implement portions of the QA Program Approval No. 0122 which resulted in JLS&A delivering for export radioactive material in a transportation package that did not comply with the requirements of 10 CFR Part 71. As a result of the findings during the May 29-31, 2001, inspection the NRC lacked confidence that JLS&A would implement the QA Program approved by NRC in accordance with 10 CFR Part 71, Subpart H, in a manner that would assure the required preparation and use of transportation packages in full conformance with the terms and conditions of an NRC CoC and with 10 CFR Part 71. Consequently, as noted above, in the interest of protecting public health and safety, JLS&A QA Approval No. 0122 was withdrawn by an immediately effective Order issued July 3, 2001, (July 2001 Order).

III

By letter dated August 17, 2001, JLS&A responded to the U. S. Nuclear Regulatory Commission's July 2001 Order. In a response, dated August 16, 2001, JLS&A requested that provisions of the Order be relaxed based on a showing of good cause. Specifically, JLS&A requested interim relief from the July 2001 Order based on JLS&A's proposed Near-Term Corrective Action Plan (NTCAP), to allow 66 shipments to 15 customers, in Department of Transportation specification packaging designated as 20WC. The NRC staff reviewed JLS&A's relief request and identified, in a September 7, 2001, letter, information necessary for the NRC staff to determine whether to grant the requested relief consistent with assurances that public health and safety are maintained.

By letter dated September 13, 2001, JLS&A requested to make two additional shipments to an additional customer also using the 20WC packaging. With respect to the substantive concerns identified by the staff in the July 2001 Order, JLS&A agreed to take the following corrective actions listed below, before it makes any of the proposed 68 shipments to 16 customers in accordance with the proposed NTCAP.

1.   a.    JLS&A will correct the deficiencies or clarify language, as applicable, in the QA/QC implementing documents, including procedures, for the 1995 JLS&A Quality Assurance Program Plan (QAPP), identified in the Quality Assurance Audit (QA Audit) issued by Donald R. Neely Associates on December 4, 2000, with respect to those items that require full or limited application of the NTCAP as stated in Section 1.2 and Appendix A of the August response;
b.    JLS&A will make available to NRC inspectors a document indicating how each deficiency in the QA Audit was corrected;
2.   a.    JLS&A will use the implementing procedures for the 1995 QAPP, as revised and corrected in accordance with Item 1, to complete an inspection of all 20WC packages involved in the proposed NTCAP. The inspection will confirm that the packages and associated procedures are in conformance with 49 CFR 178.362, "Specification 20WC wooden protective jacket." Each inspection will include, at a minimum, actual physical measurements, and visual inspections for damage, corrosion, or other potentially unacceptable conditions;
b.    JLS&A will document the results of each inspection in separate reports approved by the QA Administrator and prepared in accordance with the revised QAPP and implementing procedures. The report will include the list of attributes verified, the acceptance criteria, and the results for each attribute;
3.   JLS&A will train all JLS&A's staff, contractors, and sub-contractors, involved in the NTCAP, in the revised QAPP and implementing procedures for NTCAP activities. Training of the QA Administrator will be performed by a QA auditor with the following minimum qualifications; an understanding of the NTCAP, a university degree in a physical science or engineering program or equivalent experience, experience in the review of engineering drawings, scientific technology, nuclear technology, transportation regulations, and at least 5 years experience with International and American national quality assurance standards and quality assurance programs. Training of the JLS&A staff, contractors, and sub-contractors shall be performed by either the QA Auditor or the QA Administrator once trained. The QA Auditor who will perform duties under this paragraph will be Mr. Donald R. Neely;
4.   JLS&A will provide certifications under oath and affirmation from both J. L. Shepherd and the independent auditor that the three conditions listed above have been completed;
5.   JLS&A commits to implement the actions in the August response;

6.   a.    JLS&A commits to have an independent auditor, who has full authority, to review and inspect all aspects of JLS&A operations, shipments, and documentation, that the independent auditor believes are necessary, perform monthly performance based and in-depth audits of all ongoing NTCAP items. The independent auditor shall be approved by NRC or have been previously approved by NRC to perform audits at JLS&A. The QA Auditor who will perform duties under this paragraph will be Mr. Donald R. Neely;
b.    The audits described in paragraph 6. a. will, at a minimum, be performed using the inspection evaluation guidelines in Chapter 4 of NUREG/CR-6314, "Quality Assurance Inspections for Shipping and Storage Containers," and will include a combination of procedures and records review and observations of actual packaging activities, as appropriate for the audits performed;

c.    The independent QA auditor will document the objective, scope, findings and proposed corrective actions of the audits and will provide copies simultaneously to both JLS&A and NRC. The audit report shall be provided 20 calendar days after the end of each month; and
7.   JLS&A commits to hold all shipments until NRC has completed an inspection. At the conclusion of the inspection, NRC will notify JLS&A if shipments can commence.

In addition, on September 13, 2001, JLS&A consented to issuance of this Confirmatory Order granting interim relief from the July 2001 Order subject to the commitments, as described in Section IV below, agreed that this Confirmatory Order is to be effective upon issuance, and agreed to waive its right to a hearing on this action. Implementation of these commitments will provide assurance that sufficient resources will be applied to the QA program, and that the program will be conducted safely and in accordance with NRC requirements.

I find that JLS&A's commitments as set forth in Section IV 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 JLS&A's commitments be confirmed by this Confirmatory Order. Based on the above and JLS&A's consent, this Confirmatory Order is effective immediately upon issuance.

IV

Accordingly, pursuant to Sections 62, 81, 161b, 161i, 182 and 186 of the Atomic Energy Act of 1954, as amended, and the Commission's regulations in 10 CFR Section 2.202 and 10 CFR Parts 71 and 110, IT IS HEREBY ORDERED, EFFECTIVE IMMEDIATELY, THAT THE JULY 3, 2001 ORDER IS RELAXED TO GRANT INTERIM RELIEF TO ALLOW 68 SHIPMENTS TO 16 CUSTOMERS 20 WC PACKAGES IN ACCORDANCE WITH JLS&A'S NTCAP, THROUGH MARCH 2002, PROVIDED:

1.   a.    JLS&A will correct the deficiencies or clarify language, as applicable, in the QA/QC implementing documents, including procedures, for the 1995 QAPP, identified in the Quality Assurance Audit (QA Audit) issued by Donald R. Neely Associates on December 4, 2000, with respect to those items that require full or limited application of the NTCAP as stated in Section 1.2 and Appendix A of the August response;
b.    JLS&A will make available to NRC inspectors a document indicating how each deficiency in the QA Audit was corrected;
2.   a.    JLS&A will use the implementing procedures for the 1995 QAPP, as revised and corrected in accordance with Item 1, to complete an inspection of all 20WC packages involved in the proposed NTCAP. The inspection will confirm that the packages and associated procedures are in conformance with 49 CFR 178.362, "Specification 20WC wooden protective jacket." Each inspection will include, at a minimum, actual physical measurements, and visual inspections for damage, corrosion, or other potentially unacceptable conditions;

b.    JLS&A will document the results of each inspection in separate reports approved by the QA Administrator and prepared in accordance with the revised QAPP and implementing procedures. The report will include the list of attributes verified, the acceptance criteria, and the results for each attribute;

3.   JLS&A will train all JLS&A's staff, contractors, and sub-contractors, that will be involved in the NTCAP, in the revised QAPP and implementing procedures for NTCAP activities. Training of the QA Administrator will be performed by a QA auditor with the following minimum qualifications; an understanding of the NTCAP, a university degree in a physical science or engineering program or equivalent experience, experience in the review of engineering drawings, scientific technology, nuclear technology, transportation regulations, and at least 5 years experience with International and American national quality assurance standards and quality assurance programs. Training of the JLS&A staff, contractors, and sub-contractors shall be performed by either the QA Auditor or the QA Administrator once trained. The QA Auditor who will perform duties under this paragraph will be Mr. Donald R. Neely;
4.   JLS&A will provide certifications under oath and affirmation from both J. L. Shepherd and the independent auditor that the three conditions listed above have been completed;
5.   JLS&A commits to implement the actions in the August response;

6.   a.    JLS&A commits to have an independent auditor, who has full authority to review and inspect all aspects of JLS&A operations, shipments, and documentation that the independent auditor believes are necessary, perform monthly performance-based and in-depth audits of all ongoing NTCAP items. The independent auditor shall be approved by NRC or have been previously approved by NRC to perform audits at JLS&A. The QA auditor who will perform duties under this paragraph will be Mr. Donald R. Neely;
b.    The audits described in paragraph 6.a. will, at a minimum, be performed using the inspection evaluation guidelines in Chapter 4 of NUREG/CR-6314, "Quality Assurance Inspections for Shipping and Storage Containers," and will include a combination of procedures and records review and observations of actual packaging activities, as appropriate for the audits performed;
c.    The independent QA auditor will document the objective, scope, findings and proposed corrective actions of the audits and will provide copies simultaneously to both JLS&A and NRC. The audit report shall be provided 20 calendar days after the end of each month; and,
7.   JLS&A commits to hold all shipments until NRC has completed an inspection. At the conclusion of the inspection, NRC will notify JLS&A if shipments can commence for the proposed 68 shipments to 16 customers in accordance with the NTCAP.

The Director, Office of Enforcement or Office of Nuclear Material Safety and Safeguards, may in writing, relax or rescind this Confirmatory Order upon demonstration of good cause by the Approval Holder.

V

In accordance with 10 CFR Section 2.202, any person, other than JLS&A, adversely affected by this Confirmatory Order 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, DC 20555, and include a statement of good cause for the extension. Any request for a hearing shall be submitted to the Secretary, U.S. Nuclear Regulatory Commission, ATTN: Rulemakings and Adjudications Staff, Washington,  DC 20555. Copies of the hearing request also should be sent to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555, to the Director, Office of Nuclear Material Safety and Safeguards at the same address, to the Assistant General Counsel for Materials Litigation and Enforcement at the same address, to the Regional Administrator, NRC Region IV, 611 Ryan Plaza Drive, Suite 400, Arlington, TX 76011, and to the Approval Holder. If such person requests a hearing, that person shall set forth with particularity the manner in which his or her interest is adversely affected by this Confirmatory Order and shall address the criteria set forth in 10 CFR Section 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.

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 IV above shall be final 20 days from the date of this Confirmatory Order without further Order or proceedings. If an extension of time for requesting a hearing has been approved, the provisions specified in Section IV shall be final when the extension expires if a hearing request has not been received. A REQUEST FOR HEARING SHALL NOT STAY THE IMMEDIATE EFFECTIVENESS OF THIS CONFIRMATORY ORDER.

  FOR THE NUCLEAR REGULATORY COMMISSION
/RA/
Frank J. Congel, Director
Office of Enforcement

Dated this 19th day of September 2001

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