March Metalfab, Inc., Hayward, California; Confirmatory Order Prohibiting Involvement in NRC-Licensed Activities (Effective Immediately)

[Federal Register Volume 64, Number 26 (Tuesday, February 9, 1999)]
[Notices]
[Pages 6386-6387]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-3096]


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NUCLEAR REGULATORY COMMISSION

[Docket No. 72-1007, EA 98-529]


March Metalfab, Inc., Hayward, California; Confirmatory Order 
Prohibiting Involvement in NRC-Licensed Activities (Effective 
Immediately)

I

    March Metalfab, Inc. (MMI) is a subcontractor of Sierra Nuclear 
Corporation (SNC), which holds NRC Certificate of Compliance 72-1007 
for the VSC-24 cask, used by general licensees, Palisades Nuclear Plant 
(PNP) and Arkansas Nuclear One (ANO). The general license (10 CFR 
72.210) relied on by PNP and ANO is for the storage of spent nuclear 
fuel under 10 CFR part 72.

II

    In March 1995, PNP loaded spent fuel into a multi-assembly sealed 
basket (MSB) spent fuel cask that had been supplied by SNC and 
fabricated by MMI. When the cask was pressurized with helium, two leaks 
were identified in the wall of the MSB adjacent to the closure weld. 
Subsequent analysis by PNP metallurgical personnel determined that the 
defects were caused by underbead or hydrogen cracking, resulting from a 
base metal weld repair to the MSB shell inner wall that was performed 
during MSB manufacturing. The NRC staff learned of the problem 
experienced by PNP as a result of inspection activities following a 
similar closure weld failure at ANO. The staff became concerned that 
undetected cracks in other MSBs, produced by SNC that were already 
loaded with spent fuel, could propagate while the casks were in 
storage, affecting the integrity of the cask confinement boundary. As a 
result, during the week of March 17-21, 1997, a special inspection was 
conducted at SNC and MMI.
    During the special inspection, five MMI employees who were 
considered most likely to have been aware of the fabrication activities 
during the manufacture of the MSBs that failed were interviewed. They 
included two managers, the Project Manager and the Quality Assurance 
(QA) Manager. All of the individuals interviewed denied having any 
knowledge of any undocumented or unauthorized welds or weld repairs 
during the manufacture of the MSBs.
    In July 1997, the NRC conducted a further inspection of MMI and 
SNC. During that inspection, employees of both companies acknowledged 
that undocumented welds had been made on casks sold to ANO and PNP. In 
the course of this inspection, both the Project Manager and the QA 
Manager for MMI admitted that they were aware that repair welding had 
been performed on the inside of the MSBs during fabrication and that 
they had not informed the NRC inspectors of those welds during the 
March 1997 inspection interviews. The NRC continued to investigate the 
matter and the Office of Investigations issued its report on October 
16, 1998.
    The NRC has concluded that because the two managers were 
knowledgeable about the fabrication process and were aware that welding 
had been done on the insides of the MSBs, they deliberately made 
statements in March 1997 to SNC and to the NRC that were inaccurate 
concerning the internal welding. The information involved was material 
to the NRC's understanding as to the quality of the MSBs and delayed 
the NRC's action to ensure integrity of MSBs. As a result, the NRC has 
further concluded that in providing the information, MMI violated 10 
CFR 72.11, ``Completeness and Accuracy of Information'' and 10 CFR 
72.12, ``Deliberate Misconduct.'' The NRC believes that the 
circumstances of this matter raise questions as to MMI's willingness to 
comply with Commission requirements. MMI has not admitted that a 
violation occurred.

[[Page 6387]]

III

    In a telephone call on December 7, 1998, MMI agreed to issuance of 
a Confirmatory Order prohibiting MMI from engaging in NRC-licensed 
activities for a period of five years from the date that the Order is 
issued. The staff believes that such a prohibition will adequately 
protect the public health and safety and, therefore, finds this 
acceptable. MMI requested that if the Order is issued, it be allowed to 
complete work on one small existing contract to supply 10 plug 
assemblies for a NUHOMS cask. This provision is acceptable, as the 
assemblies have a limited safety function that can be verified by 
measurement at the time of use. On January 6, 1999, the staff forwarded 
to MMI a copy of the factual basis of the proposed order and the 
implementation paragraph. On January 10, 1999, MMI consented to the 
issuance of the order with those provisions and waived its rights to a 
hearing on this action.
    I find that MMI'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 MMI's commitments be confirmed by this Order. Based on the above 
and MMI's consent to this action, this Order is immediately effective 
upon issuance.

IV

    Accordingly, pursuant to sections 53, 161b, 161i, 161o, 182 and 186 
of the Atomic Energy Act of 1954, as amended, and the Commission's 
regulations in 10 CFR 2.202, 10 CFR part 72, and 10 CFR 72.12, it is 
hereby ordered, effective immediately, as follows:
    A. Except as noted in paragraph B, MMI is prohibited for five years 
from the date of this Order from any involvement in NRC-licensed 
activities. For purposes of this Order, licensed activities include 
providing or supplying, whether directly to NRC licensees or 
Certificate of Compliance holders, or as a contractor or subcontractor 
to a licensee or Certificate of Compliance holder, structures, systems, 
or components, subject to a procurement contract specifying compliance 
with 10 CFR Ch. I.
    B. Provided that MMI notifies Transnuclear West, the Certificate of 
Compliance holder for the NUHOMS cask, of the existence of this Order, 
MMI may complete work on the contract that was entered into prior to 
the date of this order to fabricate a total of 10 plug assemblies for a 
NUHOMS cask.
    The Director, Office of Enforcement, may relax or rescind, in 
writing, any of the above conditions upon a showing by the Licensee of 
good cause.

V

    Any person adversely affected by this Confirmatory Order, other 
than MMI, 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 also shall be sent to 
the Director, Office of Enforcement, U.S. Nuclear Regulatory 
Commission, Washington, DC 20555, to the Deputy Assistant General 
Counsel for Enforcement, and to the Director, Office of Nuclear 
Materials Safety and Safeguards, at the same address, and to Sierra 
Nuclear Corporation. If such a person requests a hearing, that person 
shall set forth with particularity the manner in which his or her 
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.
    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 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.

    Dated this 27th day of January 1999.

    For the Nuclear Regulatory Commission.
James Lieberman,
Director, Office of Enforcement.
[FR Doc. 99-3096 Filed 2-8-99; 8:45 am]
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