02-9889. In the Matter of Centennial Engineering & Research, Inc., Sheridan, WY; Order Imposing Civil Monetary Penalty

I

Centennial Engineering & Research, Inc. (Licensee) is the holder of Materials License No. 49-26861-01 issued by the Nuclear Regulatory Commission (NRC or Commission) on January 22, 1987. The last amendment, Amendment No. 3, was issued June 8, 2001. The license authorizes the Licensee to possess and use portable moisture/density gauges containing byproduct material in accordance with the conditions specified therein.

II

An inspection and investigation of the Licensee's activities were completed in September 2001. The results of the inspection and 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 Penalty (Notice) was served upon the Licensee by letter dated December 3, 2001. The Notice stated the nature of the violations, the provisions of the NRC's requirements that the Licensee had violated, and the amount of the civil penalty proposed for the violations.

The Licensee responded to the Notice in two letters dated December 26, 2001. In its responses, the Licensee admitted the violations that were the basis for the civil penalty, but disagreed that there was any willfulness associated with the violations and requested mitigation of the civil penalty.

III

After consideration of the Licensee's responses and the statements of fact, explanation, and argument for mitigation contained therein, the NRC staff has determined that violations cited in the Notice were willful, and that the civil penalty proposed for the violations should be imposed.

IV

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 a civil penalty in the amount of $3,000 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.

V

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 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 Materials Litigation and Enforcement at the same address, and to the Regional Administrator, NRC Region IV, 611 Ryan Plaza Drive, Suite 400, Arlington, Texas 76011.

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 issues to be considered at such hearing shall be: Whether on the basis of the violations admitted by the Licensee, this Order should be sustained.

Dated this 9th day of April, 2002.

For the Nuclear Regulatory Commission.

Frank J. Congel,

Director, Office of Enforcement.

Appendix to Order Imposing Civil Penalty

NRC Evaluation and Conclusion of Licensee's Request for Mitigation of Civil Penalty

On December 3, 2001, a Notice of Violation and Proposed Imposition of Civil Penalty (Notice) was issued for violations identified during an NRC inspection and investigation. Centennial Engineering & Research, Inc., (CER or Licensee) responded to the Notice on December 26, 2001. The Licensee admitted Violations A and B, but denied that there was any willfulness associated with the violations and requested mitigation of the civil penalty. The NRC's evaluation and conclusion regarding the licensee's response are as follows:

Summary of Licensee's Request for Mitigation

The Licensee provided three bases for mitigating the civil penalty in its December 26, 2001 Answer to a Notice of Violation:

(1) The violations created no actual or potential safety consequences. The Licensee stated that the portable gauges were cared for properly at all times, and that complying with NRC regulations regarding the care of byproduct material and fully protecting the public interest is an extenuating circumstance.

(2) The Licensee now believes that willfulness did not occur. The Licensee's radiation safety officer intended to submit the license amendments in a timely manner, but was distracted by what he considered more pressing deadlines associated with his other responsibilities. The Licensee's radiation safety officer admitted to willfulness under “pointed questioning” by NRC investigators, and then that information was used against CER.

(3) The civil penalty was not applied consistently in that Roetech, LLC, also should be fined based on an equal level of knowledge regarding amendment submittal requirements that did not occur on a timely basis. The Roetech Radiation Safety Officer (RSO) had primary responsibility to submit the amendment transferring the location of the gauges and authorizing him to receive byproduct material.

NRC Evaluation of Licensee's Request for Mitigation

The NRC's evaluation of the Licensee's three arguments follows:

(1) The NRC acknowledged in its December 3, 2001 letter and Notice that the violations created no actual or potential safety consequences. This factor was taken into account in determining the severity level of the violations. Absent willfulness, the violations would have been classified at Severity Level IV, and no civil penalty would have been considered. As our letter stated, willfulness resulted in these violations being classified as a Severity Level III problem.

(2) The NRC maintains its position that there was willfulness associated with the violations. We maintain our position because the radiation safety officer acknowledged that he knew what was required, because he took no action to comply until the NRC became involved, because he stated during his initial interviews and at the predecisional enforcement conference that cost was a factor in his procrastination (implying a conscious decision to delay action), because his failure to take action to comply continued for several months, and because he was reminded during this period that he was expected to take action to comply.

(3) The NRC took enforcement action against Roetech, LLC, based on its failure to obtain an NRC license before taking possession of portable gauges containing byproduct material. However, we concluded that the Roetech RSO's failure to submit the amendment transferring the location of the gauging device and authorizing himself to receive byproduct material was not willful because the radiation safety officer for the company believed he could use the gauges under CER's license as long as he was completing jobs covered by a contractual arrangement with CER. Following NRC's enforcement process, Roetech was issued a Severity Level IV NOV for possession of radioactive material without a license. NRC's policy is to not assess a Civil Penalty for violations cited a Severity Level IV.

NRC Conclusion

The NRC concludes that CER has not provided a sufficient basis for mitigation of the proposed civil penalty. Consequently, the proposed civil penalty in the amount of $3,000 should be imposed by Order.