oversight

Department of Energy: DOE's Nuclear Safety Enforcement Program Should Be Strengthened

Published by the Government Accountability Office on 1999-06-10.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                  United States General Accounting Office

GAO               Report to the Chairman, Committee on
                  Commerce, House of Representatives



June 1999
                  DEPARTMENT OF
                  ENERGY
                  DOE’s Nuclear Safety
                  Enforcement Program
                  Should Be
                  Strengthened




GAO/RCED-99-146
          United States
GAO       General Accounting Office
          Washington, D.C. 20548

          Resources, Community, and
          Economic Development Division

          B-282435

          June 10, 1999

          The Honorable Thomas J. Bliley, Jr.
          Chairman, Committee on Commerce
          House of Representatives

          Dear Mr. Chairman:

          The Department of Energy (DOE) has a widespread complex of research
          and nuclear facilities that contain large quantities of nuclear materials.
          Some of the materials are in a deteriorated condition, not properly
          packaged for storage, and may pose a significant risk to workers, the
          public, and the environment. With few exceptions, DOE’s facilities are not
          inspected or licensed by independent regulators to help ensure that
          operations are safe. Instead, since 1946, DOE and the agencies that
          preceded it have relied on their own staff to ensure the safety of these
          facilities.

          Most of the work at DOE facilities is carried out by organizations under
          contract to DOE. Because of the risks inherent with handling nuclear
          materials, and the potential liabilities associated with inadvertent
          exposure for workers, the public, and the environment, the law authorizes
          DOE to indemnify, or agree to pay damages for, those contractors that
          could have an accident in handling nuclear materials, and whose actions
          could cause damage. In 1988, the Congress enacted legislation permitting
          DOE to hold its contractors accountable for meeting its nuclear safety
          requirements through a system of civil monetary penalties. DOE determined
          that to be able to assess civil penalties, existing safety requirements would
          have to be reissued as enforceable rules.1 The legislation also named
          certain contractors as exempt from having to pay the penalties.2
          Concerned about DOE’s efforts to implement its nuclear safety enforcement
          program, you asked us to determine

      •   what enforceable nuclear safety rules DOE has issued,
      •   which DOE facilities and contractors are covered by these rules,
      •   how DOE has enforced the nuclear safety rules, and
      •   whether there is a continued need for exempting certain contractors from
          paying penalties for violating nuclear safety rules.

          1
           Rules that have gone through the rule-making process, including a published notice of proposed
          rule-making and the receipt of public comments, as specified in the Administrative Procedures Act, are
          considered enforceable.
          2
           The Price-Anderson Amendments Act of 1988 (P. L. No. 100-408). The civil penalties provision is
          codified at 42 U.S.C. 2282a.



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                   Since 1988, DOE has issued enforceable rules covering only 2 of 11 safety
Results in Brief   areas originally proposed—radiation protection for workers and quality
                   assurance issues that define how work is planned and carried out. The
                   other nine safety areas not included in the rules, such as training and
                   certification of employees performing vital operations, are still covered in
                   DOE orders, and DOE generally includes compliance with them as part of its
                   contracts. However, enforceable rules provide another mechanism to help
                   DOE ensure safe nuclear practices. DOE officials said that finalizing safety
                   rules has gone slowly for several reasons, including the need to work on
                   other safety issues and internal discussions about how best to proceed.
                   DOE currently has no definite schedule for issuing additional rules. Not
                   elevating safety orders to the status of enforceable rules means that DOE
                   has fewer options to ensure that contractors are meeting safety
                   requirements and quickly correcting any deficiencies.

                   Nuclear safety rules are to be enforced at any DOE facility with the
                   potential to cause radiological harm to workers, the public, or the
                   environment. Although no problems have been identified with the
                   application of the occupational radiation protection rule, DOE field offices
                   have been inconsistent in the degree to which they have placed facilities
                   under the quality assurance rule. For example, closed-down nuclear
                   reactors are subject to the rule at DOE’s Savannah River site in South
                   Carolina, but not at the Hanford site in Washington State. Not properly
                   classifying DOE facilities as subject to the rules could potentially affect the
                   type of safety oversight carried out by contractors, as well as the
                   enforcement activity undertaken by DOE.

                   DOE began its enforcement program in 1996 and concentrates its
                   investigations and enforcement actions on those violations of nuclear
                   safety rules that are the most significant. Since 1996, DOE has taken 33
                   enforcement actions and assessed more than $1.8 million in penalties.
                   Violations have included such things as unnecessarily exposing workers to
                   radioactivity and not following procedures intended to prevent an
                   uncontrolled nuclear reaction from occurring. DOE has concluded that the
                   enforcement program is a valuable tool for increasing the emphasis on
                   nuclear safety. Our analysis indicates that the program makes nuclear
                   safety issues more visible, places additional emphasis on corrective action,
                   and is a relatively independent and objective approach to ensuring safe
                   nuclear practices.

                   Of the $1.8 million in assessed penalties, certain nonprofit contractors did
                   not pay about $605,000, or 33 percent, because they are exempt from civil



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             penalties. Although DOE recommended in March 1999 that the statutory
             exemption be continued and expanded to include all nonprofit
             contractors, subcontractors, and suppliers, the exemption may no longer
             be needed. DOE cited three reasons for continuing the
             exemption—nonprofit contractors’ unwillingness to put their assets at risk
             for civil penalties, the effectiveness of existing contract mechanisms, and
             consistency with other regulatory agencies’ treatment of nonprofit
             organizations. However, nonprofit contractors now have contract-related
             fees available that could be used to pay penalties, contract mechanisms
             have not been sufficient to address safety-related problems, and, in
             contrast to DOE, other regulatory agencies do collect penalties from
             nonprofit organizations. Because DOE is not externally regulated for
             nuclear safety, it must rely on its own system of oversight and controls to
             hold its contractors accountable. The enforcement program is an
             important complement to existing contract-related mechanisms for
             ensuring that contractors have safe nuclear practices.

             In addition to suggesting that the Congress consider eliminating the
             provision for exempting some contractors from paying penalties when
             they commit safety violations, this report recommends that the Secretary
             of Energy strengthen DOE’s nuclear safety enforcement program and
             ensure that field offices are consistent in applying it.


             DOE maintains nuclear facilities at 34 sites in 13 states.3 These sites
Background   support, among other things, research, testing, and the production of
             nuclear weapons and, more recently, clean-up and environmental
             restoration activities. To carry out these missions, DOE relies on outside
             contractors. Under both the Department of Energy Organization Act and
             the Atomic Energy Act of 1954, as amended, it is DOE’s responsibility to
             regulate its contractors and ensure public health and safety, as well as the
             safety of workers at these sites. DOE’s primary approach to ensuring safe
             nuclear operations has been to require its contractors to follow DOE
             directives, including policies, orders, and standards, by incorporating
             these requirements into the contracts.

             Since 1957, under the Price-Anderson Act,4 a government-sponsored
             system of financial protection has been in place for both those in the
             business of handling nuclear materials and for the persons and property

             3
              DOE’s sites include numerous facilities and the activities conducted therein. For simplicity, we use
             the term “facilities” to refer to facilities or activities.
             4
              Section 170 of the Atomic Energy Act of 1954 provided the authority for the indemnification.



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that may be harmed by a nuclear incident. Under this law, DOE typically
indemnified, or agreed to pay damages for, its eligible contractors under
provisions in their contracts. However, nuclear incidents at two civilian
reactors—Three Mile Island in 1979 and Chernobyl in the former Soviet
Union in 1986—heightened concerns about protecting the public from
radiation and the financial damages. When the Congress reauthorized the
Price-Anderson Act in 1988, it expanded both the coverage and amount of
statutory indemnification and made it mandatory for all DOE contractors at
risk of public liability for a nuclear incident. In exchange for this increased
protection from liability, the 1988 amendments also gave DOE the authority
to impose civil monetary penalties on its contractors, and their
subcontractors and suppliers, for violating the rules, regulations, or orders
related to nuclear safety.

The 1988 amendments also named seven contractors at research
laboratories, that, along with their subcontractors and suppliers, were
subject to nuclear safety requirements but were specifically exempted
from having to pay civil penalties. During the congressional debate on the
act, several reasons were cited for exempting nonprofit contractors from
paying civil penalties. The primary reason appears to have been that the
contractors operating DOE’s laboratories at the time received no fees in
addition to their reimbursable costs and, therefore, had no
contract-generated funds available to pay any penalties assessed. There
was concern that the contractors that ran the national laboratories, mostly
nonprofit educational institutions, would be unwilling to assume the
financial risk of being subject to penalties and thus put the assets of their
organizations at risk, and that these contractors may leave the research
field rather than accept this financial exposure. The 1988 act also gave the
Secretary the authority to determine whether other contractors that were
nonprofit educational institutions should receive automatic exemption
from paying any civil penalties. In a rule DOE issued in 1993 describing the
procedures it would follow in carrying out the enforcement program, DOE
specified that all nonprofit educational institutions would receive an
automatic exemption from paying the penalties.5

When DOE began to implement the enforcement program, nuclear safety
requirements were generally compiled in DOE orders—a system of
documents that define requirements and procedures for work performed
at DOE facilities. DOE determined that to make these requirements subject
to the civil penalty provision, the requirements should be re-issued

5
 Some nonprofit DOE contractors are not educational institutions and are not specifically exempted by
legislation. Those contractors would be subject to civil penalties—for example, Brookhaven Science
Associates, Inc., at the Brookhaven National Laboratory.



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                           through the rule-making process. Doing so would allow the affected
                           contractors, as well as members of the public, to express their views and
                           to clarify any ambiguities in the requirements, and would provide a
                           stronger legal basis for DOE to assess penalties against its contractors.


                           DOE’s progress in its efforts to re-issue existing nuclear safety requirements
DOE Has Issued             as enforceable rules has fallen far short of its original goal of converting all
Fewer Nuclear Safety       requirements into rules. Although DOE issued proposed rules covering a
Rules Than Initially       broad range of safety issues, only two areas of safety requirements have
                           been addressed with completed rules. DOE largely suspended work on the
Planned                    nine remaining proposed rules because of work on other safety issues and
                           internal discussions about how best to ensure nuclear safety.


Two of 11 Proposed Rules   DOE issued several proposed safety rules beginning in December 1991.6
Issued                     These proposed rules included existing DOE orders on such matters as
                           protecting workers from exposure to radiation, issuing safety analysis
                           reports, reporting defective items and services, and reporting
                           safety-related problems. In March 1993, DOE issued one more proposed
                           rule dealing with the protection of the public and the environment from
                           radiation. As table 1 shows, only two of the proposed rules have been
                           issued as final rules.7 After a public comment and review process, DOE
                           issued the rule on radiation protection of occupational workers in
                           December 1993 and the rule on quality assurance requirements in
                           April 1994. The remaining rules have not been finalized.




                           6
                            These proposed rules also included a procedural rule setting up the process that DOE would use to
                           investigate potential violations of nuclear safety rules, issue notices of violation to the contractor, and
                           assess penalties based on the severity level of the violation. After receiving comments and making
                           revisions, DOE issued this procedural rule as a final rule in August 1993.
                           7
                            In addition to these two substantive rules that directly relate to nuclear safety, DOE has identified
                           other rules that are subject to enforcement, including accuracy of information and whistleblower
                           protection.



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Table 1: Status of Nuclear Safety Requirements Proposed as Rules by DOE
Title                                                         Requirement
Rules issued
Radiation protection for occupational workers                           Requires that radiation doses to workers at DOE facilities be
                                                                        maintained within specified limits.
Quality assurance requirements                                          Requires the development and implementation of a quality
                                                                        assurance program at nuclear facilities to perform and assess
                                                                        work so that it meets requirements for accomplishing work safely
                                                                        and effectively.
Requirements proposed as rules but not issued
Safety analysis reports                                                 Requires reports that will document the design of each facility, and
                                                                        establish and evaluate the safety basis of the design.
Unreviewed safety questions                                             Addresses situations outside the bounds of the current safety
                                                                        analysis report for a nuclear facility, such as the discovery of a
                                                                        safety risk that could indicate the need for a change in the facility’s
                                                                        design.
Defect identification and reporting                                     Requires contractors to identify, evaluate, and report defective
                                                                        items and services.
Conduct of operations at DOE nuclear facilities                         Requires a program to control the conduct of operations at a
                                                                        nuclear facility, including operations organization, shift routines,
                                                                        and communications.
Technical safety requirements                                           Establishes and documents the facility’s operating limits,
                                                                        surveillance requirements, administrative controls, and other
                                                                        requirements.
Training and certification                                              Ensures that employees whose performance is vital to the safe
                                                                        operation of DOE nuclear facilities are trained to conduct duties in
                                                                        a safe and effective manner.
Maintenance management                                                  Develops a maintenance program that identifies all structures and
                                                                        systems performing a safety function, those responsible for
                                                                        maintenance, and inspection and testing programs.
Categorization, notification, reporting, and processing of              Requires contractors to identify and report all occurrences
operational occurrences at DOE nuclear facilities                       exceeding defined safety thresholds.
Radiation protection of the public and the environment                  Requires a contractor to establish a program to manage
                                                                        radioactive waste and to handle the decontamination and disposal
                                                                        of property in a way that limits exposure of the public and
                                                                        contamination of the environment.
                                                Source: The Federal Register.




DOE Has Delayed                                 DOE received extensive comments from contractors and other interested
Implementation of Other                         parties on the remaining nine safety requirements proposed as rules. DOE’s
Proposed Rules                                  plan was to issue these remaining rules as final after it completed the
                                                analysis of the comments received. However, DOE’s progress in doing so




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    has been slow. DOE officials said two major factors contributed to the slow
    progress:

•   Work on other safety issues. During the years of the rule-making process,
    initiatives from both inside and outside DOE have necessitated action and,
    therefore, delayed finalizing the proposed rules. For example, Vice
    President Gore’s National Performance Review in 1993, which focused on
    improving and streamlining government, stressed reducing the costs and
    increasing the effectiveness of government regulations. In response to that
    initiative, DOE conducted an extensive review of its system of safety
    standards. In addition, the Defense Nuclear Facilities Safety Board
    recommended that DOE make its rules more consistent with its changing
    mission and proposed that DOE review and combine its safety rules, orders,
    and other requirements into an integrated safety management program.
    DOE is currently implementing integrated safety management at its
    facilities.
•   Discussions within DOE about how best to proceed with safety regulation.
    During the same period, there have been initiatives within DOE to
    determine the best way to achieve safety results across the DOE complex of
    facilities. These include an effort to develop an approach to safety that
    would recognize the differences in activities and related hazards at DOE
    facilities and allow safety procedures that are “necessary and sufficient”
    to address those hazards. In addition, there have been discussions within
    DOE on how best to ensure safety—whether by specifying detailed
    requirements or using an outcome-based approach that would state the
    desired objective and give the contractor greater flexibility on how to
    achieve the objective. Finally, some of DOE’s program offices, such as the
    Office of Science, have expressed concerns about whether enforceable
    rules are the most effective approach to ensuring that contractors follow
    nuclear safety requirements, or whether using the existing contract
    mechanisms is sufficient. These discussions and initiatives caused DOE to
    defer work on the other proposed rules.

    Although the Secretary concluded in a recent report to the Congress that
    the enforceable rules have been beneficial in improving contractors’ safety
    performance,8 the system of enforceable nuclear safety rules originally
    envisioned by DOE has not been fully realized. DOE’s inaction in converting
    the many other aspects of nuclear safety into final published rules has
    limited the overall effectiveness of the enforcement program. Although
    DOE officials stated in April 1999 that there was a renewed effort within the



    8
     Department of Energy Report to Congress on the Price-Anderson Act, (Mar. 1999).



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                       Department to address the need for additional enforceable rules, DOE has
                       no definite schedule for finalizing the remaining proposed rules.


                       The two enforceable rules—concerning occupational radiation protection
Clarification Needed   and quality assurance—have somewhat different criteria for determining
About Facilities to    which facilities should be subject to them, with the occupational radiation
Which the Rules        protection rule having broader coverage. Under the occupational radiation
                       protection rule, DOE facilities are subject to its provisions if the activities
Apply                  conducted there have the potential to result in the occupational exposure
                       of an individual to radiation or radioactive material. DOE field offices have
                       so far determined that about 2,000 facilities meet this standard. The quality
                       assurance rule adds a second test—a facility must be defined as
                       “nuclear.” To be a nuclear facility, a facility must have either a nuclear
                       reactor or activities or operations that involve radioactive and/or
                       fissionable materials in such a form and quantity that a nuclear hazard
                       potentially exists to employees or the public. DOE field offices have so far
                       determined that about 560 facilities are covered by this rule.

                       Although there are no apparent problems with the application of the
                       occupational radiation protection rule, the number of facilities subject to
                       the quality assurance rule may be somewhat understated. According to the
                       1998 annual report of DOE’s Office of Enforcement and Investigation,9 the
                       office has identified a number of facilities that should have been included
                       but were not. Our review of data on DOE facilities’ classification confirmed
                       that there are problems in applying the quality assurance rule. The
                       classification of reactors at DOE’s Savannah River site in South Carolina
                       and Hanford site in Washington State is an example. Both sites have
                       reactors that produced nuclear weapons material between the 1940s and
                       1980s. Although none of the reactors are currently operating, radiation
                       exposure remains a potential problem, because, for example, all have
                       reactor blocks or vessels in place that contain residual radioactive
                       material. Nevertheless, Savannah River categorized its reactors as nuclear
                       facilities, while Hanford did not. Therefore, only the Savannah River
                       reactors would be subject to the quality assurance rule. According to DOE’s
                       Directors of the Office of Enforcement and Investigation and the Office of
                       Nuclear Safety Policy and Standards, the reactors at both sites are nuclear
                       facilities and should be subject to both the quality assurance and
                       occupational radiation protection rules.



                       9
                        1998 Annual Report, Price-Anderson Nuclear Safety Enforcement Program, (Jan. 1999).



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                       DOE does not know how widespread this misclassification problem is, so
                       its significance is difficult to determine. However, improper classification
                       could potentially affect the type of safety oversight being done by
                       contractors and DOE field offices, as well as the enforcement activity
                       undertaken by the Office of Enforcement and Investigation. The different
                       classification of some nuclear facilities initially occurred because of
                       confusing guidance issued by various DOE offices. While DOE field offices
                       and contractors were determining which facilities should be identified as
                       being subject to the quality assurance rule, DOE headquarters published a
                       notice in the Federal Register stating that DOE was considering not
                       applying the rule to nuclear facilities that had only the most limited
                       potential for nuclear hazards.10 Some DOE field offices apparently used this
                       rationale to exclude some of their nuclear facilities from the rule. DOE
                       clarified this point in a subsequent ruling, but since then DOE headquarters
                       has not taken steps to ensure that this ruling is being followed. According
                       to the Office of Enforcement and Investigation, some contractors may
                       have used the confusion over the guidance as a mechanism to avoid
                       accountability under the quality assurance rule. (A listing of DOE’s major
                       contractors that are subject to the nuclear safety rules is included in
                       appendix I.)


                       In 1996, DOE established the enforcement program, which relies primarily
DOE’s Enforcement of   on a system of self-reporting and corrective actions by its contractors, and
Nuclear Safety Rules   concentrates its enforcement actions on those violations of nuclear safety
Has Resulted in        rules that are the most significant. Since 1996, DOE has taken 33
                       enforcement actions with assessed penalties totaling $1.8 million. This
Penalties Against      enforcement program provides a tool in addition to contract mechanisms
Contractors            for DOE to ensure safe nuclear practices. The advantages of this program
                       include conducting a relatively objective and independent review,
                       following up to ensure that contractors take corrective action, and making
                       information readily available to the contractor community and the public.


DOE’s Enforcement      DOE modeled its enforcement program after that used by the Nuclear
Process                Regulatory Commission and determined as a matter of policy that it would




                       10
                        DOE Order 5480.23 categorizes nuclear facilities using hazard classifications. Facilities with only the
                       most limited potential for nuclear hazards are less significant than a Category 3 hazard classification,
                       which DOE defines as having the potential for “only significant localized consequences.”



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rely on a system of self-reporting by its contractors,11 as well as other
oversight activities and organizations to identify potential violations of
nuclear safety requirements. DOE concentrates its enforcement actions on
those violations of nuclear safety rules that are the most significant, and
on situations where the contractor has not aggressively identified,
reported, and corrected the problem. The Office of Enforcement and
Investigation, responsible for implementing the program, has a staff of
four investigators in the Environment, Safety, and Health headquarters
organization and a network of coordinators at DOE’s field offices and
contractor locations. The enforcement process is outlined in table 2.




11
 The level of contractor self-reporting may vary across the DOE complex. In January 1999, DOE’s
Office of Inspector General reported that at one site, potential instances of noncompliance were not
being identified by the contractor and reported to DOE. Reporting at Oak Ridge of Potential
Noncompliances With DOE Price-Anderson Amendments Act Implementing Rules, (DOE/IG-0438,
Jan. 25, 1999).



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Table 2: DOE’s Process for Enforcing Nuclear Safety Rules


Identifying potential violations of the nuclear safety rules              The Office of Enforcement and Investigation reviews instances of
                                                                          potential noncompliance reported by the contractors; by DOE field
                                                                          office personnel, and from other sources, such as Office of
                                                                          Inspector General and Defense Nuclear Facilities Safety Board
                                                                          reports.
Evaluating and investigating potential violations                         Potential cases are screened and evaluated to identify the most
                                                                          significant instances. DOE staff investigate the potential violation,
                                                                          and may hold a conference with the contractor to verify the facts
                                                                          and discuss appropriate corrective actions.
Determining severity level of violation                                   DOE categorizes violations by severity level:
                                                                          • level I, the most significant, are those violations that involve actual
                                                                          or high potential for an adverse impact on the safety of the public or
                                                                          workers at DOE facilities.
                                                                          • level II are those violations that show a significant lack of attention
                                                                          or carelessness by DOE contractors towards the responsibilities for
                                                                          the protection of the public or worker safety and that could, if
                                                                          uncorrected, lead to an adverse impact on public or worker safety.
                                                                          • level III are violations that are less serious but of more than minor
                                                                          concern and, if left uncorrected, could lead to a more serious
                                                                          condition.
Calculating civil penalty                                                 DOE calculates the civil penalty based on the severity level of the
                                                                          violation, a with severity level I penalties set at 100 percent of the
                                                                          base civil penalty (currently $110,000 per violation per day). DOE
                                                                          may also consider other factors in determining the amount of the
                                                                          penalty, including how promptly the contractor reported a potential
                                                                          violation and initiated corrective action and whether a pattern of
                                                                          repeated violations exists.
Notifying contractors and public of results                               When DOE issues a notice of violation and assesses a civil penalty,
                                                                          it also generally issues a press release providing the facts of the
                                                                          case to the public. In addition, the enforcement actions and press
                                                                          releases are made available on the Internet.b
                                                 a
                                                   In addition to the civil penalties, DOE has the authority to refer potential criminal violations to the
                                                 Department of Justice for consideration.
                                                 b
                                                  DOE’s Office of Enforcement and Investigation’s home page can be found at
                                                 http://tis.eh.doe.gov/enforce/.



                                                 In its March 1999 report to the Congress on the Price-Anderson
                                                 Amendments Act,12 DOE stated that its authority to impose civil penalties
                                                 has proven to be a valuable tool for increasing the emphasis on nuclear
                                                 safety and enhancing the accountability of its contractors. On the basis of
                                                 our analysis of the results to date, we agree that DOE’s enforcement
                                                 program appears to be a good mechanism for increasing contractors’

                                                 12
                                                  In the Price-Anderson Amendments Act of 1988, the Congress required DOE and the Nuclear
                                                 Regulatory Commission to report by August 1, 1998, on the need for continuing or modifying the
                                                 provisions of the act.



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                         awareness of and accountability for nuclear safety requirements and
                         complements existing contract mechanisms. We believe the advantages of
                         the enforcement program include these:

                     •   Independence: The Office of Enforcement and Investigation provides a
                         relatively independent review and oversight of DOE contractors’
                         operations. The director of the program reports directly to the Assistant
                         Secretary, Office of Environment, Safety and Health. Since this office is
                         organizationally separate from the program and field office structure, this
                         helps provide a degree of independence. Such independence is important
                         to improve the credibility of DOE’s self-regulation efforts.
                     •   Objectivity: DOE designed the investigation of potential violations to
                         include a process of gathering and analyzing evidence, comparing it to the
                         criteria in the rules, and discussing the facts in a meeting with the
                         contractor. Therefore, the results are likely to be objective and fact-based.
                     •   Corrective action: The Office of Enforcement and Investigation requires
                         the contractor to identify the appropriate corrective action to address a
                         violation of the rules and also ensures that the contractor has taken
                         corrective action. DOE’s practice is not to close out an enforcement action
                         case until the corrective action has been verified by the DOE field
                         coordinators and reviewed by the Office of Enforcement and
                         Investigation.
                     •   Visibility: When enforcement actions are finalized, the results of the
                         enforcement action, including the amount of civil penalties assessed and
                         the factors that affected the calculation of that amount, are generally
                         issued in a press release. In addition, the details of the enforcement action
                         and the press release are available through the Internet so that the
                         contractor community and others can be aware of the types of problems
                         that DOE considers to be significant, and lessons learned.


DOE’s Use of Civil       During the 3 years that the program has been in effect, DOE has issued a
Penalties                total of 33 notices of violation and assessed penalties totaling $1.8 million.
                         DOE issued 7 notices of violation in 1996, the first year of its enforcement
                         program, and 13 each in 1997 and 1998. During the first year of the
                         program, the highest penalty assessed was $37,500; the penalties became
                         larger during the following 2 years, with the highest penalty
                         assessed—$165,000—in November 1998. Since the program began, there
                         have been only two severity level I violations—one against EG&G Inc., at
                         DOE’s Mound, Ohio, site for deficiencies in its radiation dosage monitoring
                         program, and the other against the University of California at Lawrence
                         Livermore National Laboratory in California for exposing workers to



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                                              unnecessary levels of radiation. Table 3 shows the enforcement actions
                                              with assessed penalties over $100,000. For a complete listing of the
                                              enforcement actions, see appendix II.


Table 3: Enforcement Actions Taken by DOE With Assessed Penalties Exceeding $100,000
Contractor                  DOE site                 Description of violation                                 Penalty assessed
Babcock & Wilcox                Mound, Ohio               Quality Assurance and Radiation Protection
                                                          Rules: Numerous deficiencies in planning
                                                          work and changing filters, which exposed
                                                          workers to excessive radiation. Delays in
                                                          notifying workers of exposure, repeated
                                                          problems with internal dose evaluation
                                                          program, and failure to report promptly and
                                                          initiate corrective actions.                                 $165,000
University of California        Lawrence Livermore        Quality Assurance and Radiation Protection
                                National Laboratory,      Rules: Radiation exposures of personnel
                                California                exceeding limits at material shredder facility
                                                          due to numerous failures to implement
                                                          established radiological protection
                                                          requirements and quality controls necessary
                                                          to protect workers.                                          $159,375a
University of California        Lawrence Livermore        Quality Assurance Rule: Repeated violations
                                National Laboratory,      of safety procedures designed to prevent
                                California                uncontrolled nuclear reactions. Numerous
                                                          failures to implement established quality
                                                          assurance requirements and repeated
                                                          failure to identify causes and initiate
                                                          corrective actions.                                          $153,750a
Associated Universities, Inc.   Brookhaven National       Radiation Protection Rule: Inadequate
                                Laboratory, New York      training and certification of radiological
                                                          control technicians. Exposure of personnel
                                                          to unnecessary radiation. Inadequate
                                                          controls over radioactive material. Repeated
                                                          problems and failure to comply with
                                                          procedures.                                                  $142,500a
Fluor Daniel Hanford, Inc.      Hanford, Washington       Quality Assurance Rule: Multiple safety
                                                          infractions of procedures designed to
                                                          prevent uncontrolled nuclear reactions at
                                                          the Plutonium Finishing Plant. Violations of
                                                          radiological and work control requirements
                                                          in connection with a May 1997 explosion at
                                                          the Plutonium Reclamation Facility.
                                                          Continuing failure to establish and
                                                          implement safety standards.                                  $140,625
                                                                                                                     (continued)




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                                         B-282435




Contractor                 DOE site                      Description of violation                                      Penalty assessed
Lockheed-Martin Idaho      Idaho National Engineering    Quality Assurance and Radiation Protection
Technologies Company       and Environmental             Rules: Multiple failures to follow procedures
                           Laboratory, Idaho             for ensuring safety. Deficiencies in
                                                         radiological control training. Continuing
                                                         trend of failure to adhere to radiological
                                                         work control requirements resulting in
                                                         exposure of workers and contamination of
                                                         the facility.                                                           $125,000
Lockheed-Martin            Oak Ridge, Tennessee          Quality Assurance Rule: Multiple failures to
                                                         follow work process controls, resulting in a
                                                         reduction in the safety margin and in the
                                                         operation of a reactor outside of the facility
                                                         authorization basis requirements.                                       $123,750
            b
EG&G, Inc.                 Mound, Ohio                   Quality Assurance and Radiation Protection
                                                         Rules: Failure to adequately ensure that the
                                                         program for sampling workers’ internal
                                                         dosage levels was implemented in
                                                         accordance with requirements. Deferring
                                                         corrective actions multiple times and then
                                                         cancelling them. Failure to ensure that
                                                         workers were protected from exceeding
                                                         annual radiation dose limits.                                           $112,500
University of California   Los Alamos National           Quality Assurance and Radiation Protection
                           Laboratory, New Mexico        Rules: Inadequate work controls and failure
                                                         to follow procedures. Inadequate monitoring
                                                         of radiological contamination. Repeated
                                                         problems and inadequate corrective actions.                             $112,500a

                                         a
                                           The contractors were exempt from paying these penalties under the provisions of the
                                         Price-Anderson Amendments Act of 1988.
                                         b
                                          EG&G’s contract for the Mound, Ohio, site ended on September 30, 1997. The current contractor
                                         is Babcock & Wilcox.

                                         Source: DOE’s Office of Enforcement and Investigation.




                                         Under the Price-Anderson Amendments Act of 1988, certain contractors
Continuing to Exempt                     are exempt from paying civil penalties primarily because these contractors
Nonprofit Contractors                    received no fees in addition to their reimbursable costs and, therefore, had
From Paying Civil                        no contract-generated funds available to pay the penalties. Although DOE
                                         now generally pays a fee in addition to reimbursing allowable costs to its
Penalties May Not Be                     major contractors, including the nonprofit educational institutions, the
Warranted                                Department recently concluded that the exemption from civil penalties
                                         should be continued and expanded to include all nonprofit contractors,
                                         subcontractors, and suppliers. DOE determined that it was not necessary to
                                         collect penalties from nonprofit contractors because the incentive




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                       B-282435




                       provisions in existing contracts were adequate to ensure that these
                       contractors followed safety requirements. Although performance-based
                       contracting can be an effective way to emphasize nuclear safety, DOE has
                       not taken full advantage of this mechanism. Therefore, DOE has not made a
                       convincing case that the nonprofit contractors should be exempt from
                       civil penalties.


Certain Nonprofit      Of the $1.8 million in civil penalties assessed by DOE from 1996 through
Contractors Exempted   1998, the exempt contractors did not pay about $605,000, or 33 percent of
From Paying Civil      the total penalties assessed. Table 4 shows the current DOE contractors
                       that are exempted by statute from paying penalties, and examples of
Penalties              contractors exempted by administrative rule:




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Table 4: DOE Contractors Exempt
From Paying Penalties             Contractor                                          DOE site
                                  Exempted by statutea
                                  University of Chicago                               Argonne National Laboratory, Illinois
                                                                                      Argonne West, Idaho
                                  University of California                            Los Alamos National Laboratory, New
                                                                                      Mexico
                                                                                      Lawrence Livermore National Laboratory,
                                                                                      California
                                                                                      Lawrence Berkeley National Laboratory,
                                                                                      California
                                  Universities Research Association, Inc.b            Fermi National Accelerator Laboratory,
                                                                                      Illinois
                                  Princeton University                                Princeton Plasma Physics Laboratory, New
                                                                                      Jersey
                                  Batelle Memorial Institute                          Pacific Northwest National Laboratory,
                                                                                      Washington
                                  Exempted by rule
                                  Stanford University                                 Stanford Linear Accelerator Center,
                                                                                      California
                                  Iowa State University                               Ames Laboratory, Iowa
                                  Southeastern Universities Research                  Thomas Jefferson National Accelerator
                                  Association, Inc.c                                  Facility, Virginia
                                  University of Notre Dame                            Notre Dame Radiation Laboratory, Indiana
                                  a
                                   Two laboratory contractors named as exempt in the 1988 amendments are no longer performing
                                  those contracts—American Telephone and Telegraph Company at Sandia National Laboratories
                                  and the Associated Universities, Inc., at Brookhaven National Laboratory. Their successors are
                                  not nonprofit educational institutions exempted by rule, and, therefore, these laboratory
                                  contractors no longer have an exemption from paying civil penalties.
                                  b
                                   Universities Research Association, Inc., is a consortium of 87 universities in the United States,
                                  Canada, Japan, and Italy. The U.S. universities are located in 33 states, including Alabama,
                                  Arizona, California, Colorado, Connecticut, Florida, Hawaii, Illinois, New Mexico, New York, North
                                  Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Indiana, Iowa, Kansas,
                                  Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, South Carolina,
                                  Tennessee, Texas, Utah, Virginia, Washington, and Wisconsin.
                                  c
                                    Southeastern Universities Research Association, Inc., is a consortium of 44 universities in 13
                                  southeastern states and the District of Columbia. Member institutions come from the states of
                                  Alabama, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina,
                                  South Carolina, Tennessee, Virginia, and West Virginia.




Need to Continue                  One part of DOE’s March 1999 report on the Price-Anderson Amendments
Nonprofit Exemption Is            Act reassessed the merits of the enforcement program and the need to
Questionable                      continue exempting nonprofit educational institutions from civil penalties.
                                  Although DOE concluded that the authority to impose civil penalties has



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    proven to be a valuable tool for increasing the emphasis on nuclear safety
    and for enhancing contractors’ responsibility and accountability, DOE also
    concluded that the exemption for nonprofit contractors should be
    continued for the reasons discussed below.13 Our analysis of DOE’s reasons
    raises several questions about the merits of continuing the exemption.

•   Fees available to pay civil penalties. DOE states that the exemption should
    be continued because major universities and other nonprofit contractors
    would be unwilling to put their assets at risk for contract-related expenses
    such as civil penalties. This argument presumes that the nonprofit
    contractors have no contract-related funds available to pay the penalties.
    For at least two reasons, however, penalties could be collected from
    available funds without threatening those assets. The first reason is that
    DOE is now implementing performance-based contracting, which includes
    making a fee available to its nonprofit contractors. This fee is in addition
    to the reimbursable costs under the contract. For fiscal year 1999, all but
    one of the contractors that manage and operate DOE facilities have the
    opportunity to earn a fee.14 (See app. I.). This fee could be used to pay any
    civil penalties imposed on the contractor. The second reason is that in
    setting the amount of a civil penalty, the Secretary of Energy has the
    authority to consider factors such as the contractor’s ability to pay and the
    effect of the fine on the contractor’s ability to continue to do business. The
    Secretary could limit the amount of the penalty to no more than the
    amount of the available fee. Therefore, a situation should not occur where
    a nonprofit contractor had its assets at risk because of having to pay the
    civil penalty.
•   Use of contract mechanisms. DOE states that contract provisions are a
    better mechanism than civil penalties for holding nonprofit contractors
    accountable for safe nuclear practices.15 Although performance-based
    contracting can be an effective way to emphasize nuclear safety, DOE has
    not taken full advantage of this mechanism. For example, in 1999, DOE’s
    Inspector General reported that major site and facility contracts may not
    include all pertinent safety requirements and that contracting officers may
    not be using existing contract mechanisms as effectively as possible to

    13
     DOE also recommended changing the law to (1) eliminate the distinction between nonprofit
    educational institutions and other nonprofit organizations by extending the exemption to all nonprofit
    contractors and (2) eliminating the exemption for the for-profit subcontractors and suppliers of
    nonprofit DOE contractors.
    14
     Stanford University has a no-fee contract to operate the Stanford Linear Accelerator Center in
    California. According to DOE, the contractor wants no fee because a fee would be inconsistent with its
    role as a university research organization.
    15
     However, DOE concluded that civil penalties are an appropriate mechanism to ensure safe nuclear
    practices by for-profit contractors.



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maximize DOE’s ability to promote and enforce safety requirements.16 In
addition, even when safety requirements are incorporated into a site
contract, the effect of poor safety performance on the fee earned may be
relatively small. For example, at the Lawrence Livermore National
Laboratory in California, DOE’s main contractor—the University of
California—received 96 percent of its $6.4 million available fee in fiscal
year 1998, even though it had significant nuclear safety deficiencies
resulting in enforcement actions and $313,125 in civil penalties assessed.
For fiscal year 1999, it will receive about $1.1 billion to operate the facility
and up to $6.4 million in fees for meeting or exceeding performance goals,
including compliance with health and safety requirements. If the
contractor does not perform satisfactorily in the safety and health area,
the most this fee could be reduced is $252,000, according to the agreement
with DOE. In the overall context of the available fee, this potential
reduction is relatively small. In contrast, there is no preset limit on civil
penalties, which are established depending on the severity and duration of
the violation.17

Our 1997 report on safety and health problems at the Brookhaven National
Laboratory further illustrates weaknesses in DOE’s use of contract
mechanisms to ensure safe nuclear practices.18 Tritium leaking from a
nuclear fuel storage basin at the site contaminated the aquifer that
provides drinking water to nearby residents. Although the contractor,
Associated Universities, Inc., failed to properly carry out its safety and
health responsibilities, the performance measures in the contract did not
reflect a priority for safety and health issues. In the 1996 contract, only
7.5 percent of the performance evaluation criteria addressed safety and
health activities. Furthermore, despite these safety problems, DOE
consistently rated the contractor’s performance on safety and health as
either good or excellent. For its part, DOE failed to properly oversee the
contractor’s operations at the laboratory or to hold the contractor
accountable for meeting all of its regulatory requirements. Eventually, DOE
terminated its contract with Associated Universities, Inc.

Recent actions by DOE may help strengthen the impact of contract
mechanisms on contractors’ safety performance. In March 1999, DOE

16
   Inspection of Selected Issues Regarding the Department of Energy Accident Investigation Program,
(DOE/IG-0442, Apr. 1, 1999).
17
  The statute allowed a maximum penalty of $100,000 per violation, with each day of a continuing
violation considered a separate violation. In 1997, DOE adjusted the maximum civil penalty in
accordance with the Federal Civil Penalties Inflation Adjustment Act of 1990. The base civil penalty
amount is now $110,000 per violation.
18
 Department of Energy: Information on the Tritium Leak and Contractor Dismissal at the Brookhaven
National Laboratory, (GAO/RCED-98-26, Nov. 4, 1997).


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    revised its acquisition regulation to increase the amount of a contractor’s
    available fee that could be affected by poor safety performance. This was
    part of a broader initiative by the Secretary to strengthen DOE’s capabilities
    to protect the safety and health of people who work at or live near its
    facilities. In a March 1999 memorandum to all DOE and contractor
    employees, the Secretary directed several actions, including holding a
    contractor’s entire fee at risk for poor safety performance and improving
    the timely resolution of safety deficiencies identified by the Office of
    Oversight. In addition, DOE’s Director, Office of Procurement and
    Assistance Management, provided additional guidance to contracting
    officers to better ensure that (1) contractors are held accountable for
    implementing an integrated safety management system and (2) work tied
    to specific incentive fees is evaluated for adherence to safety requirements
    as part of the assessment of the contractors’ overall performance of the
    work.

    It remains to be seen how aggressive DOE program and field offices will be
    in implementing these changes. For example, holding a contractor’s entire
    fee at risk for poor safety performance may have to be incorporated into
    existing contracts as part of renegotiating those contracts in order to
    implement this provision. In addition, the above examples show that even
    when contractors have significant safety problems, DOE has paid
    substantial performance fees. In contrast, DOE’s enforcement program is
    relatively independent from the program and field offices and from the
    process of negotiating contracts. Because DOE is not externally regulated
    for nuclear safety, it must rely on its own system of oversight and controls
    to hold its contractors accountable. The enforcement program is an
    important complement to any contract-related mechanisms for ensuring
    that contractors have safe nuclear practices.

•   Consistency with other regulatory agencies. DOE states that its current
    approach is consistent with the Nuclear Regulatory Commission’s
    treatment of nonprofit organizations. For example, the Commission
    imposes relatively low penalties on nonprofit organizations, which serve
    the purpose of publicizing lapses in safety. Similarly, DOE issues notices of
    violation to these nonprofit organizations without collecting penalties but
    can apply financial incentives or disincentives through the contracts.
    However, DOE’s approach generally is not consistent with that of the
    Commission or other regulatory agencies. The Commission imposes
    penalties on any organization it regulates for violating safety requirements
    without regard to the profit-making status of the organization. In doing so,
    the Commission sets lower penalty amounts for nonprofit organizations



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              than for the for-profit organizations. Although this option is also available
              to the Secretary, DOE does not currently take this approach. In addition,
              the Commission has in the past assessed and collected penalties for
              violating nuclear safety requirements from an organization that DOE
              exempts from payment. In 1985, the Commission assessed and collected a
              penalty of $2,000 against Princeton University for a breakdown in safety
              practices that led to exposing an employee to excessive amounts of
              radiation. Other regulatory agencies also assess and collect penalties from
              some of the same nonprofit contractors that DOE exempts from payment.
              For example, the California State Department of Toxic Substances Control
              has assessed and collected administrative costs from the University of
              California for violating environmental laws at two DOE national
              laboratories—Lawrence Livermore and Lawrence Berkeley.19 Because of
              violations of hazardous waste laws between 1989 and 1993 at those DOE
              laboratories, the University of California paid a total of over $88,000 in
              administrative costs to the state of California. Because of the contract
              agreement with DOE at the time, DOE reimbursed the University of
              California for those costs.


              DOE is solely responsible for nuclear safety at its facilities. The nuclear
Conclusions   safety rules complement other mechanisms that encourage safe nuclear
              practices, such as performance-based contracting, and are a valuable
              component of DOE’s efforts to ensure that its contractors and their
              subcontractors and suppliers are following nuclear safety requirements.
              These rules provide DOE with a relatively objective, independent, and
              solution-oriented approach to ensuring that contractors meet safety
              requirements. However, over 10 years after the Congress authorized DOE to
              assess civil penalties when contractors violate nuclear safety
              requirements, DOE’s original goal is far from being achieved. Requirements
              relating to many aspects of nuclear safety, including training and
              certification, maintenance, and operating procedures, carry no civil
              penalty for failing to follow them because they have not been issued as
              enforceable rules. In addition, DOE officials cannot fully agree on which
              facilities are covered by the few rules that exist. Completing the transition
              to enforceable rules and holding the contractors fully accountable for
              complying with those rules would provide added assurance that
              contractors are following safe nuclear practices.



              19
                Prior to the Federal Facilities Compliance Act of 1992, states were not allowed to assess penalties
              against federal facilities. Therefore, the state of California characterized these amounts as
              “administrative costs.”.



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                      DOE has proposed that the statutory exemption from paying civil penalties
                      for violating the rules, which now applies to contractors at only five DOE
                      research laboratories and to nonprofit educational institutions, be
                      expanded to include all nonprofit contractors, subcontractors, and
                      suppliers. DOE’s position is that contract mechanisms are sufficient to
                      ensure safe nuclear practices by nonprofit contractors, but that the ability
                      to assess civil penalties is a valuable tool to hold for-profit contractors
                      accountable. Ample evidence exists, however, that shortcomings in DOE’s
                      implementation of performance-based contracting have limited the
                      Department’s ability to hold contractors accountable for safe nuclear
                      practices. Therefore, it is unwise to limit any options that DOE has for
                      ensuring safe nuclear practices by its contractors. DOE has not made a
                      convincing case for doing so.


                      In order to strengthen DOE’s nuclear safety enforcement program, we
Recommendations       recommend that the Secretary of Energy

                  •   expeditiously complete the process of issuing enforceable rules covering
                      important nuclear safety requirements,
                  •   ensure that field locations are properly following DOE’s guidance in
                      determining which facilities must comply with the nuclear safety rule on
                      quality assurance, and
                  •   eliminate the administrative exemption from paying civil penalties for
                      violations of nuclear safety rules that DOE granted to nonprofit educational
                      institutions.


                      To ensure that both nonprofit and for-profit contractors are held fully
Matter for            accountable for meeting nuclear safety requirements, the Congress should
Congressional         consider eliminating the statutory and administrative exemptions from
Consideration         paying civil penalties for violating nuclear safety rules.

                      We provided a draft of this report to DOE for review and comment. DOE
Agency Comments       generally agreed with the report’s conclusions and recommendations. DOE
                      agreed with our recommendation that it needs to complete the process of
                      issuing enforceable rules covering important nuclear safety requirements
                      and outlined its strategy for doing so. DOE also agreed with our
                      recommendation to clarify the scope of coverage of the quality assurance
                      rule and described the steps it has taken and will take to clarify the
                      application of this rule to its facilities.




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              B-282435




              Regarding our recommendation that the Secretary eliminate the
              administrative exemption from paying civil penalties that DOE granted to
              nonprofit educational institutions, the Department commented that the
              issue of exemption from civil penalties is ultimately one for the Congress
              to decide. We agree that Congress has the authority to determine whether
              to continue the statutory exemption in the Price-Anderson Amendments
              Act of 1988, and our report suggests that the Congress consider
              eliminating the statutory and administrative exemptions. In the meantime,
              however, the Secretary currently has the authority to determine whether
              nonprofit educational institutions should continue to be exempted by rule.
              We believe that, as a first step, the Secretary should eliminate the existing
              administrative exemption to provide DOE an additional tool to hold its
              nonprofit contractors accountable for nuclear safety.

              DOE also suggested several technical clarifications that we have
              incorporated as appropriate. Appendix III includes the full text of DOE’s
              comments.


              To determine the enforceable nuclear safety rules that DOE has issued
Scope and     since 1988, we reviewed the proposed and final rules as published in the
Methodology   Federal Register, the Code of Federal Regulations, and other
              documentation provided by DOE’s Office of Enforcement and Investigation
              and Office of General Counsel. In addition, we interviewed the Director of
              the Office of Enforcement and Investigation, the Director of the Office of
              Nuclear Safety Policy and Standards, and officials in DOE’s Office of the
              Assistant General Counsel for Civilian Nuclear Programs.

              To determine the DOE facilities and contractors covered by the nuclear
              safety rules, we reviewed the enforceable nuclear safety rules contained in
              the Code of Federal Regulations and DOE’s operational procedures for the
              enforcement program. We also interviewed the Director of the Office of
              Enforcement and Investigation, and the Deputy Assistant Secretary, Office
              of Oversight, Environment, Safety, and Health. We obtained a listing of
              contractors from DOE’s Office of Procurement and Assistance
              Management. To develop a listing of facilities subject to nuclear safety
              rules, we contacted the Price-Anderson Amendments Act coordinators at
              DOE sites for the total number of facilities at each site and the number that
              were categorized as radiological or as nuclear facilities. We did not
              attempt to validate the information provided by the coordinators. We also
              reviewed the implementation plans for the quality assurance rule that had
              been filed with the Office of Enforcement and Investigation. In addition,



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we obtained documentation from the Office of Enforcement and
Investigation and selected DOE field locations to determine what criteria
were being used to classify nuclear facilities.

To determine how DOE has implemented and enforced the nuclear safety
rules, we reviewed the June 1998 operational procedures developed by
DOE’s Office of Enforcement and Investigation for enforcing the
Department’s nuclear safety requirements under the Price-Anderson
Amendments Act of 1988 and for identifying, reporting, and tracking
nuclear safety noncompliances. We also reviewed the annual reports for
1996 through 1998 that include the enforcement actions taken by the
Office of Enforcement and Investigation. In addition, we interviewed the
Director of the Office of Enforcement and Investigation and reviewed
other documentation he provided. We also reviewed the January 1999 DOE
Inspector General report on contractors’ reporting of instances of
noncompliance at the Oak Ridge, Tennessee, site, and attended a
December 1998 conference of Price-Anderson Amendments Act
coordinators.

To determine the reasons for and against continuing to exempt certain
contractors from paying penalties for violating nuclear safety rules, we
reviewed the legislative history of the 1988 re-authorization of the
Price-Anderson Act and other reports on the act that outline the reasons
for the exemption from penalty for certain contractors. In addition, we
interviewed officials in DOE’s Office of the Assistant General Counsel for
Civilian Nuclear Programs, and the Director of the Office of Enforcement
and Investigation. We also reviewed the December 31, 1997, notice of
inquiry in the Federal Register that requested public comments on issues
associated with the future re-authorization of the Price-Anderson Act, the
comments received by DOE from various contractors and others, and DOE’s
March 1999 report to the Congress on the Price-Anderson Act. To
understand the contract mechanisms, we relied on our previous work on
performance-based contracting, which dealt mainly with for-profit
contractors. We also reviewed the Department of Energy Acquisition
Regulation and interviewed the Deputy Assistant General Counsel,
Procurement and Financial Assistance. To gain perspective on how the
contract mechanisms have worked at a nonprofit contractor, we
interviewed the Associate Manager for Site Management and the
Contracting Officer with DOE’s Oakland Operations Office and reviewed
the contract with the University of California for the Lawrence Livermore
National Laboratory and other supporting documentation.




Page 23                 GAO/RCED-99-146 DOE’s Nuclear Safety Enforcement Program
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We performed our review from November 1998 through May 1999 in
accordance with generally accepted government auditing standards.


As arranged with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days after the
date of this report. At that time, we will send copies to the Honorable Bill
Richardson, Secretary of Energy. We will also make copies available to
others on request. Please call me at (202) 512-3841 if you or your staff have
any further questions. Major contributors to this report were William R.
Swick, Margaret L. Armen, Carole J. Blackwell, Araceli C. Hutsell, and
Stan G. Stenersen.

Sincerely yours,




(Ms.) Gary L. Jones
Associate Director, Energy,
  Resources, and Science Issues




Page 24                  GAO/RCED-99-146 DOE’s Nuclear Safety Enforcement Program
Page 25   GAO/RCED-99-146 DOE’s Nuclear Safety Enforcement Program
Contents



Letter                                                                                             1


Appendix I                                                                                        28
Major DOE
Contractors, Fiscal
Year 1999 Budget and
Fee Amounts
Appendix II                                                                                       30
Enforcement Actions
1996 Through 1998
Appendix III                                                                                      37
Comments From the
Department of Energy
Tables                 Table 1: Status of Nuclear Safety Requirements Proposed as                  6
                        Rules by DOE
                       Table 2: DOE’s Process for Enforcing Nuclear Safety Rules                  11
                       Table 3: Enforcement Actions Taken by DOE With Assessed                    13
                        Penalties Exceeding $100,000
                       Table 4: DOE Contractors Exempt from Paying Penalties                      16




                       Abbreviations

                       DOE       Department of Energy


                       Page 26               GAO/RCED-99-146 DOE’s Nuclear Safety Enforcement Program
Page 27   GAO/RCED-99-146 DOE’s Nuclear Safety Enforcement Program
Appendix I

Major DOE Contractors, Fiscal Year 1999
Budget and Fee Amounts

                                             One or more of the nuclear safety rules applies to any contractor that has
                                             been indemnified from liability for possible damages caused by working
                                             with nuclear materials, as well as to its subcontractors and suppliers. A
                                             wide range of DOE contractors are indemnified from such liability,
                                             including for-profit organizations such as Lockheed Martin and Fluor
                                             Daniel (operators of DOE’s Oak Ridge and Hanford sites, respectively) and
                                             nonprofit organizations such as the University of California and the
                                             University of Chicago (operators of the Lawrence Livermore and Argonne
                                             National Laboratories, respectively). Although the total number of
                                             subcontractors and suppliers benefiting from indemnification is unknown,
                                             it likely runs into the thousands.20


                                                                                                                                         FY 1999
                                                                                                                                    fee available
Contractor                   Site/facility                                                FY 1999 budget                           to contractor
For-profit contractors
Lockheed Martin              Sandia National Laboratory, New
                             Mexico                                                         $1,500,000,000                           $15,900,000
                             Idaho National Engineering and
                             Environmental Laboratory, Idaho                                  $638,835,367                           $40,246,965
                             Oak Ridge Site (Y-12), Tennessee                                 $599,507,000                           $30,000,000
                             Oak Ridge National Laboratory,
                             Tennessee                                                        $583,163,000                            $8,600,000
Westinghouse                 Savannah River, South Carolina                                 $1,436,400,000                           $61,500,000
                             West Valley Demonstration Project,
                             New York                                                         $121,948,000                           $10,377,800
                             Waste Isolation Pilot Plant, New
                             Mexico                                                            $96,000,000                           $10,400,000
Fluor Daniel                 Hanford, Washington                                              $889,800,000                           $45,800,000
                             Fernald, Ohio                                                    $263,551,000                           $18,652,652
Kaiser-Hill                  Rocky Flats, Colorado                                            $611,000,000                           $17,945,000
Bechtel                      Oak Ridge, Tennessee                                             $449,156,000                           $18,985,347
                             Nevada Test Site, Nevada                                         $285,000,000                           $18,250,000
                             Hanford , Washington                                             $137,000,000                           $10,143,200
Allied Signal FM&T           Kansas City Plant, Missouri                                      $359,800,000                           $21,800,000
Mason & Hanger Corporation   Pantex Plant, Texas                                              $270,000,000                           $21,100,000
TRW                          National Civilian Radioactive Waste
                             Program, Nevada                                                  $244,425,000                           $12,630,000
                                                                                                                                      (continued)

                                             20
                                              For example, the University of Chicago has about 3,600 subcontracts for the Argonne National
                                             Laboratory. Not all subcontractors are performing work that involves nuclear materials, and those that
                                             are may have more than one subcontract. Accordingly, the number of subcontractors subject to the
                                             rules is probably lower than this figure.



                                             Page 28                         GAO/RCED-99-146 DOE’s Nuclear Safety Enforcement Program
                                                 Appendix I
                                                 Major DOE Contractors, Fiscal Year 1999
                                                 Budget and Fee Amounts




                                                                                                                                          FY 1999
                                                                                                                                     fee available
Contractor                       Site/facility                                               FY 1999 budget                         to contractor
Nonprofit contractors
University of California         Los Alamos National Laboratory,
                                 New Mexico                                                   $1,200,000,000                           $8,000,000
                                 Lawrence Livermore National
                                 Laboratory, California                                       $1,100,000,000                           $6,400,000
                                 Lawrence Berkeley National
                                 Laboratory, California                                         $320,000,000                           $1,600,000
University of Chicago            Argonne National Laboratory,
                                 Illinois/Idaho                                                 $490,000,000                           $3,500,000
Batelle Memorial Institute       Pacific Northwest National
                                 Laboratory, Washington                                         $469,000,000                           $7,100,000
Brookhaven Science Associates Brookhaven National Laboratory,
                              New York                                                          $426,655,000                           $7,000,000
University Research Associates   Fermi Laboratory, Illinois                                     $277,000,000                           $2,800,000
Stanford University              Stanford Linear Accelerator Center,
                                                                                                                                                    a
                                 California                                                     $174,579,000
Princeton University             Princeton Plasma Physics
                                 Laboratory, New Jersey                                          $58,000,000                               $10,000
Iowa State University            Ames National Laboratory, Iowa                                  $25,000,000                             $100,000

                                                 a
                                                  Stanford University has a no-fee contract to manage and operate the Stanford Linear Accelerator
                                                 Center.

                                                 Source: DOE’s Office of Procurement and Assistance Management.




                                                 Page 29                        GAO/RCED-99-146 DOE’s Nuclear Safety Enforcement Program
Appendix II

Enforcement Actions 1996 Through 1998



                                             Date of
Contractor                                   enforcement   Severity                                                    Penalty
(subcontractor)            Site              action        levela            Description of violation                assessed
University of California   Los Alamos        12/18/96      III               Quality Assurance Rule:
                           National                                          Unauthorized modification of
                           Laboratory,                                       monitors that alert workers to a
                           New Mexico                                        tritium (radioactive isotope of
                                                                             hydrogen) release to minimize
                                                                             potential exposures. Procedures
                                                                             for review of design changes not
                                                                             followed.                                   None
                                             09/21/98      II, III           Quality Assurance and Radiation
                                                                             Protection Rules: Inadequate
                                                                             work controls and failure to follow
                                                                             procedures. Inadequate
                                                                             monitoring of radiological
                                                                             contamination. Reflected
                                                                             repeated problems and
                                                                             inadequate corrective actions.           $112,500
                           Lawrence          03/09/98      I, II             Quality Assurance and Radiation
                           Livermore                                         Protection Rules: Radiation
                           National                                          exposures of personnel exceeded
                           Laboratory,                                       limits at material shredder facility
                           California                                        due to numerous failures to
                                                                             implement radiological protection
                                                                             requirements and quality controls
                                                                             necessary to protect workers.            $159,375
                                             07/28/98      II                Quality Assurance Rule:
                                                                             Repeated violations of safety
                                                                             procedures designed to prevent
                                                                             uncontrolled nuclear reactions.
                                                                             Numerous failures to implement
                                                                             established quality assurance
                                                                             requirements and repeated failure
                                                                             to identify causes and initiate
                                                                             corrective actions.                      $153,750
Lockheed Martin            Idaho National    02/27/97      II                Quality Assurance and Radiation
                           Engineering                                       Protection Rules: Inadequate
                           and                                               radiological monitoring of the
                           Environmental                                     workplace and failure to
                           Laboratory,                                       implement adequate work
                           Idaho                                             controls resulting in unnecessary
                                                                             internal radiation exposure of five
                                                                             workers.                                  $25,000
                                             09/19/97      III               Quality Assurance Rule: Failure to
                                                                             follow established operational
                                                                             safety requirements, resulting in
                                                                             operating nuclear facilities
                                                                             outside of their safety
                                                                             authorization basis.                        None
                                                                                                                    (continued)




                                            Page 30                   GAO/RCED-99-146 DOE’s Nuclear Safety Enforcement Program
                                Appendix II
                                Enforcement Actions 1996 Through 1998




                                 Date of
Contractor                       enforcement      Severity                                                    Penalty
(subcontractor)    Site          action           levela            Description of violation                assessed
                                 06/04/98         II                Quality Assurance and Radiation
                                                                    Protection Rules: Multiple failures
                                                                    to follow procedures for ensuring
                                                                    safety. Deficiencies in radiological
                                                                    control training. Continuing trend
                                                                    of failure to adhere to radiological
                                                                    work control requirements
                                                                    resulting in exposure of workers
                                                                    and contamination of facility.           $125,000
  (MAC Isotopes)                 06/04/98         II                Quality Assurance and Radiation
                                                                    Protection Rules: Failure to ensure
                                                                    that radiological hazards were
                                                                    identified and communicated to
                                                                    workers and prime contractor.
                                                                    Multiple failures to follow
                                                                    established safety procedures.
                                                                    Resulted in exposure of workers
                                                                    and contamination of facility.            $25,000
                                 09/21/98         II                Quality Assurance Rule:
                                                                    Unauthorized disabling of safety
                                                                    system designed to automatically
                                                                    shut down reactor if seismic
                                                                    movement is detected. Failure to
                                                                    properly conduct pre-start up
                                                                    activities, and preparation of false
                                                                    records showing that work had
                                                                    been done.                                $55,000
                   Oak Ridge,    09/21/98         III               Radiation Protection Rule:
                   Tennessee                                        Deficiencies in the administration
                                                                    of subcontractor’s program to
                                                                    monitor internal radiation doses to
                                                                    workers. Repeated failures to
                                                                    identify that workers had received
                                                                    significant intakes of radiation and
                                                                    failure to notify workers of
                                                                    exposure.                                   None
  (MK-Ferguson)                  09/21/98         III               Radiation Protection Rule: Failure
                                                                    to implement an internal dose
                                                                    evaluation program to ensure that
                                                                    all radiation exposure considered
                                                                    when determining compliance
                                                                    with annual exposure limits.
                                                                    Resulted in failure, on multiple
                                                                    occasions over a 2-year period, to
                                                                    identify significant intakes of
                                                                    radioactive material by two
                                                                    workers.                                    None
                                                                                                           (continued)




                                Page 31                      GAO/RCED-99-146 DOE’s Nuclear Safety Enforcement Program
                                Appendix II
                                Enforcement Actions 1996 Through 1998




                                  Date of
Contractor                        enforcement     Severity                                                    Penalty
(subcontractor)   Site            action          levela            Description of violation                assessed
                                  11/16/98        II                Quality Assurance Rule: Multiple
                                                                    failures to follow work process
                                                                    controls, resulting in reduction in
                                                                    safety margin and operation of a
                                                                    reactor outside of the facility
                                                                    authorization basis requirements.        $123,750
                  Sandia National 08/14/96        II                Radiation Protection Rule: Failure
                  Laboratory,                                       to control access and provide
                  New Mexico                                        necessary radiation warnings to
                                                                    preclude inadvertent entry of
                                                                    workers into high and/or very high
                                                                    radiation areas. Repeated failure
                                                                    to property control radiological
                                                                    work and take corrective actions.          $5,000
                                  08/14/97        II, III           Radiation Protection Rule:
                                                                    Multiple radiological work control
                                                                    deficiencies resulting in workers
                                                                    being exposed to highly
                                                                    radioactive particle while sorting
                                                                    waste material. Workers
                                                                    performing hazardous
                                                                    radiological activities without
                                                                    adequate planning and controls.
                                                                    Conflicting instructions resulted in
                                                                    workers continuing operations in
                                                                    area while airborne radiation
                                                                    monitoring alarms sounding.               $56,250
                                  08/14/97        II                Quality Assurance Rule: Multiple
                                                                    failures to follow established
                                                                    procedures for shutdown and
                                                                    subsequent restart of research
                                                                    reactor. Destruction of records
                                                                    that covered the unauthorized
                                                                    restart and operation of the
                                                                    reactor.                                    None
Westinghouse      Savannah River, 11/24/97        III               Quality Assurance Rule: Failure to
                  South Carolina                                    adequately review safety systems
                                                                    procured from nonqualified
                                                                    vendor to ensure compliance with
                                                                    design requirements. Failure to
                                                                    require vendor to comply with
                                                                    installation requirements. Failure
                                                                    of quality control program to
                                                                    identify inadequate welds and
                                                                    take corrective actions.                    None
                                                                                                           (continued)




                                Page 32                      GAO/RCED-99-146 DOE’s Nuclear Safety Enforcement Program
                                 Appendix II
                                 Enforcement Actions 1996 Through 1998




                                  Date of
Contractor                        enforcement      Severity                                                   Penalty
(subcontractor)    Site           action           levela            Description of violation               assessed
                                  12/05/97         II                Radiation Protection Rule:
                                                                     Multiple failures to follow
                                                                     radiological work control
                                                                     procedures during
                                                                     decontamination and removal of
                                                                     equipment. Failure to stop work
                                                                     and evacuate workers after
                                                                     determining that radioactivity in
                                                                     work area exceeded the stop
                                                                     work level of the permit by about
                                                                     100 times. Resulted in
                                                                     unnecessary exposure of worker
                                                                     to plutonium.                            $93,750
                                  09/21/98         II                Quality Assurance Rule:
                                                                     Repeated failures of quality
                                                                     control program to determine
                                                                     whether corrective actions had
                                                                     been effective in remedying
                                                                     identified problems. Failure of
                                                                     work processes and controls to
                                                                     ensure that workers following
                                                                     radiation dosage monitoring
                                                                     programs.                                $75,000
                   Hanford,       07/16/96         II                Radiation Protection Rule:
                   Washington                                        Inadequate controls over
                                                                     radiological work processes.
                                                                     Failure to follow established work
                                                                     processes. Lack of adequate
                                                                     monitoring equipment to protect
                                                                     workers. Resulted in exposure of
                                                                     worker during removal of device
                                                                     from high-level radioactive waste
                                                                     storage tank.                            $37,500
Babcock & Wilcox   Mound, Ohio    11/16/98         II                Quality Assurance and Radiation
                                                                     Protection Rules: Numerous
                                                                     deficiencies in planning work and
                                                                     changing filters that exposed
                                                                     workers to excessive radiation.
                                                                     Delayed notifying workers of
                                                                     exposure, had repeated problems
                                                                     with internal dose evaluation
                                                                     program, and failed to report
                                                                     promptly and initiate corrective
                                                                     actions.                                $165,000
                                                                                                           (continued)




                                 Page 33                      GAO/RCED-99-146 DOE’s Nuclear Safety Enforcement Program
                                             Appendix II
                                             Enforcement Actions 1996 Through 1998




                                              Date of
Contractor                                    enforcement      Severity                                                    Penalty
(subcontractor)              Site             action           levela            Description of violation                assessed
Fluor Daniel                 Hanford,         03/26/98         II                Quality Assurance Rule: Multiple
                             Washington                                          safety infractions of procedures
                                                                                 designed to prevent uncontrolled
                                                                                 nuclear reactions at the Plutonium
                                                                                 Finishing Plant. Violations of
                                                                                 radiological and work control
                                                                                 requirements in connection with
                                                                                 the May 1997 explosion at the
                                                                                 Plutonium Reclamation Facility.
                                                                                 Continuing failure to establish and
                                                                                 implement safety standards.              $140,625
                             Fernald, Ohio    07/29/97         III               Quality Assurance Rule: Failure to
                                                                                 effectively complete corrective
                                                                                 actions for deficiencies in records
                                                                                 of inspections to determine
                                                                                 structural integrity of nuclear
                                                                                 material storage containers.
                                                                                 Corrective actions taken not
                                                                                 adequate to prevent recurrence
                                                                                 of deficiencies.                          $10,000
Kaiser-Hill                  Rocky Flats,     10/07/96         II                Quality Assurance and Radiation
                             Colorado                                            Protection Rules: Repeated
                                                                                 failures to follow radiological work
                                                                                 controls resulting in exposure of
                                                                                 workers. Failure to report
                                                                                 exposure in timely manner.
                                                                                 Failure to take corrective actions
                                                                                 Failure to ensure that
                                                                                 subcontractor follows established
                                                                                 work controls.                            $37,500
  (Safe Sites of Colorado)                    10/07/96         II                Quality Assurance and Radiation
                                                                                 Protection Rules: Failure to follow
                                                                                 established radiological
                                                                                 protection program resulting in
                                                                                 exposure to workers to plutonium.
                                                                                 Failure to stop work to limit
                                                                                 exposure to workers. Inadequate
                                                                                 monitoring of operations.                 $37,500
                                              06/06/97         III               Radiation Protection Rule:
                                                                                 Inadequate radiological work and
                                                                                 contamination control processes.
                                                                                 Problems identified during DOE
                                                                                 on-site review rather than by
                                                                                 contractor. Reflects series of
                                                                                 problems with no corrective
                                                                                 actions.                                    None
                                                                                                                        (continued)




                                             Page 34                      GAO/RCED-99-146 DOE’s Nuclear Safety Enforcement Program
                                            Appendix II
                                            Enforcement Actions 1996 Through 1998




                                             Date of
Contractor                                   enforcement      Severity                                                     Penalty
(subcontractor)              Site            action           levela            Description of violation                 assessed
  (Rocky Mountain                            06/06/97         III               Radiation Protection Rule: Failure
  Remediation Services)                                                         to follow radiological work
                                                                                controls. Inadequate monitoring
                                                                                of work activities and area to
                                                                                detect contamination. Failure to
                                                                                promptly identify radiation release.         None
                                             04/14/98         Noneb             Radiation Protection Rule:
                                                                                Unnecessary exposure of workers
                                                                                to radiation at three separate
                                                                                times over 2 years. Collectively
                                                                                indicated significant weaknesses
                                                                                in the controls necessary to
                                                                                perform work safely. Rather than
                                                                                issue notice of violation, DOE
                                                                                chose to use a consent order as
                                                                                allowed in the procedural rule.
                                                                                The consent order reflects
                                                                                agreement between DOE and the
                                                                                contractor on the corrective
                                                                                action to be taken, and includes a
                                                                                schedule for completion.                  $100,000
Associated Universities, Inc. Brookhaven     12/18/97         II                Radiation Protection Rule:
                              National                                          Inadequate training and
                              Laboratory,                                       certification of radiological control
                              New York                                          technicians. Exposure of
                                                                                personnel to unnecessary
                                                                                radiation. Inadequate controls
                                                                                over radioactive material.
                                                                                Repeated problems and failure to
                                                                                comply with procedures.                   $142,500
  (Petsco & Son, Inc.)                       12/18/96         II                Radiation Protection Rule: Failure
                                                                                to follow radiological warning
                                                                                signs established by prime
                                                                                contractor. Failure to ensure that
                                                                                workers had adequate training
                                                                                and protective clothing prior to
                                                                                entering contamination areas.              $37,500
EG&G, Inc.                   Mound, Ohio     10/21/97         I, II             Quality Assurance and Radiation
                                                                                Protection Rules: Failure to
                                                                                adequately ensure that the
                                                                                program for sampling worker
                                                                                internal dosage levels was
                                                                                implemented in accordance with
                                                                                requirements. Corrective actions
                                                                                were deferred multiple times and
                                                                                then cancelled. Failure to ensure
                                                                                that workers were protected from
                                                                                exceeding annual radiation dose
                                                                                limits.                                   $112,500
                                                                                                                        (continued)



                                            Page 35                      GAO/RCED-99-146 DOE’s Nuclear Safety Enforcement Program
                                             Appendix II
                                             Enforcement Actions 1996 Through 1998




                                                 Date of
Contractor                                       enforcement        Severity                                                                   Penalty
(subcontractor)              Site                action             levela                Description of violation                           assessed
Mason & Hanger               Pantex, Texas       06/05/97           III                   Accuracy of Information Provided
Corporation                                                                               to DOE (Procedural Rule)c:
                                                                                          Falsification of work proficiency
                                                                                          records that reflect whether
                                                                                          worker properly trained and
                                                                                          certified to dismantle nuclear
                                                                                          weapons.                                                 None
Batelle Memorial Institute   Pacific             04/03/96           III                   Quality Assurance Rule: Failure to
                             Northwest                                                    properly respond to a high-level
                             National                                                     alarm condition, which was part of
                             Laboratory,                                                  a safety feature designed to
                             Washington                                                   prevent uncontrolled nuclear
                                                                                          chain reactions. Lack of controls
                                                                                          to ensure that workers recognized
                                                                                          the alarm condition as a safety
                                                                                          problem.                                                 None
Bechtel                      Hanford,            09/19/97           III                   Radiation Protection Rule:
                             Washington                                                   Inadequate monitoring of the
                                                                                          workplace to detect changes in
                                                                                          radiological condition. Inadequate
                                                                                          work controls allowed workers to
                                                                                          continue under conditions that
                                                                                          exceeded radiological work
                                                                                          permit “stop work” limits.
                                                                                          Resulted in two incidents where
                                                                                          workers unnecessarily exposed to
                                                                                          radiation.                                               None
Total penalties                                                                                                                             $1,830,000

                                             a
                                               Severity level I, the most significant, are those violations that involve actual or high potential for
                                             an adverse impact on the safety of the public or workers at DOE facilities; level II are those
                                             violations that show a significant lack of attention or carelessness towards the responsibilities of
                                             DOE contractors for the protections of the public or worker safety and that could, if uncorrected,
                                             potentially lead to an adverse impact on public or worker safety; level III violations are less
                                             serious but of more than minor concern and, if left uncorrected, could lead to a more serious
                                             condition.
                                             b
                                              Since this was not considered a notice of violation of the rule, there was no severity level
                                             assigned. In addition, the $100,000 was not considered a civil penalty, but instead was
                                             categorized as a “monetary remedy.”
                                             c
                                               In addition to the quality assurance and radiation protection rules, DOE determined that certain
                                             other requirements would be considered enforceable, such as accuracy of information provided
                                             to DOE in regards to nuclear safety.

                                             Source: DOE’s Office of Enforcement and Investigation.




                                             Page 36                           GAO/RCED-99-146 DOE’s Nuclear Safety Enforcement Program
Appendix III

Comments From the Department of Energy




               Page 37   GAO/RCED-99-146 DOE’s Nuclear Safety Enforcement Program
Appendix III
Comments From the Department of Energy




Page 38                   GAO/RCED-99-146 DOE’s Nuclear Safety Enforcement Program
           Appendix III
           Comments From the Department of Energy




(141259)   Page 39                   GAO/RCED-99-146 DOE’s Nuclear Safety Enforcement Program
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