GAO and the Fake Licensees

Duncan White
Senior Health Physicist

The Government Accountability Office (GAO) published a report today on a “covert operation” they conducted to test the NRC and some states on the process of issuing licenses for possession and use of radioactive materials.

First some facts: GAO established a fake company and made three attempts to obtain a license. GAO was successful in only one case. As part of their operation, GAO then altered the license and placed orders for radioactive material with two companies that could have resulted in GAO receiving double the quantity of material authorized in the license. That quantity of material would have posed a higher potential risk than what was actually authorized in the unaltered license, and would have required additional security measures.

In the language of radioactive materials categories (see box), the fake GAO company had a valid license for a Category 3 quantity, but used a modified copy of that license to order a Category 2 quantity.

It is important to note that the public’s safety was never at risk because GAO never actually obtained radioactive material.

The license GAO obtained was granted by one of our Agreement States (the 37 states that regulate radioactive materials under agreements with us). After we learned of the GAO actions, we immediately made sure that the Agreement State knew the license was obtained under false pretenses and revoked it, and notified manufacturers and distributors of the revocation. We also made sure that the 36 other Agreement States knew about the issue.

Our next step was to figure out what went wrong. Working with the Agreement State that issued the license, we found that the licensing staff did not complete all the required steps of the pre-licensing procedures. In GAO’s other two attempts, the licensing officials who correctly denied GAO’s fake company a license – in another Agreement State and in an NRC regional office – did follow all the steps of those procedures.

Knowing the root cause helped us to focus our corrective actions. The NRC and all the Agreement States responded with steps to improve training and underscore the importance of following procedures. All licensing and inspection staff at the NRC and in the Agreement States completed this re-training in December 2015.

NRC and Agreement State officials also formed joint working groups to see what additional lessons can be gathered from the GAO operation. These groups have been meeting since January 2016. Among their tasks, the groups are reviewing the pre-licensing guidance and evaluating new strategies to improve license verification and transfer procedures for the quantity and type of material involved in the GAO sting.

The groups will also consider GAO’s specific recommendations. Once this work is completed, the NRC staff will present to our management and Commissioners any policy questions that emerge from the reviews, including whether we think changes are needed to the current security and tracking requirements for radioactive materials.

The NRC takes radioactive materials security very seriously. We participate with 13 other federal agencies on a U.S. Government task force that has evaluated the security of radiation sources in the U.S. over the past 10 years. This group has identified no significant gaps in source security and recommended no legislative changes.

GAO reccomend__HorizontalBased on this comprehensive, ongoing review, we believe current NRC regulations for licensing radioactive sources remain adequate for protection of safety and security, consistent with the risks they pose. Nonetheless, the NRC is doing what it can to see what lessons from the GAO operation can be applied to strengthen radioactive materials security.

Maintaining Radioactive Material Security Through Rules, Not Orders

Kim Lukes
Health Physicist
Office of Nuclear Material Safety and Safeguards

The NRC’s rulemaking process can be lengthy. This ensures that members of the public and interested stakeholders have an opportunity to participate and provide feedback on new requirements as they are developed.

10cfrThere are occasions, though, when we need to move quickly. In these cases, the Commission can issue “orders” to any licensee to require them to address an issue promptly.

Following the Sept. 11 attacks, we revised our approach to security for certain radioactive materials. The NRC issued new security requirements via “orders” to certain licensees requiring added protective measures when using and transporting certain types and amounts of radioactive material. The new requirements focused on materials the International Atomic Energy Agency designates as Category 1 and 2; which are the two most safety significant quantities.

The strongest restrictions were placed on these categories of radioactive material through the NRC orders due to their type and quantity, which can pose the greatest potential risk to health if used to do harm.

The requirements included background checks to ensure that people with access to radioactive materials are trustworthy and reliable. The orders also required access controls to areas where radioactive materials are stored and security barriers to prevent theft of portable devices.

Over the longer term, the NRC developed new regulations to formalize the requirements in the security orders. The creation of Part 37 to Title 10 of the Code of Federal Regulations, published in 2013, was intended to replace the orders.  These rules ensure strong regulatory standards are maintained for the protection of certain types and quantities of radioactive material. NRC licensees were required to meet the new regulations in March 2014.

The NRC has agreements with 37 states allowing them to regulate radioactive materials. The Agreement States had to adopt compatible Part 37 security requirements, and their licensees had until March 19, 2016, to comply.

Because licensees are now in compliance with the new rules, the NRC has rescinded a series of material security orders. There is no change to security for these categories of radioactive material. These licensees have maintained the same higher level of security since we first issued the orders.

We are rescinding them because they are no longer needed. Licensees are complying with the Part 37 rules, instead of the orders. More details about the rescissions and our security requirements can be found here and in 10 CFR Part 37-Physical Protection of Category 1 and Category 2 Quantities of Radioactive Material.