Detailed Information on the
Fuel Facilities Licensing & Inspection Assessment

Improve and limit the number of performance measures for the program, ensuring that measures capture the scope of program activities, demonstrate year-to-year progress, and promote continued improvement.

Improve integration of budget and performance information.

More transparency is needed in how resource allocation decisions are made and how the program contributes to achievement of the agency's long-term goals. In response, the NRC will better demonstrate contributions of program activities and resources to outputs.

The NRC will better demonstrate contributions of program activities and resources to outcomes and outputs. Through an agency-wide working group, NRC will improve the efficiency of operating plans. The scope of the project was separated into two phases to address: 1) improvements that could be implemented in the short-term; and 2)improvements that require longer-term planning and evaluation.

Measure: No inadvertant criticality events

Explanation:

Measure: No acute radiation exposures resulting in fatalities

Explanation:

Measure: No releases of radioactive materials that result in significant radiation exposures.

Explanation:

Measure: No releases of radioactive materials that cause significant adverse environmental impacts.

Explanation:

Measure: No instances where licensed radioactive materials are used domestically in a manner hostile to the security of the United States

Explanation:

Measure: Stakeholders are informed an involved in NRC processes as appropriate.

Explanation:

Measure: No significant licensing or regulatory impediments to the safe and beneficial uses of radioactive materials.

Explanation:

Measure: Number of events with radiation exposures to the public and occupational workers that exceed Abnormal Occurrence Criterion I.A

Explanation:

Measure: Number of radiological releases to the environment that exceed applicable regulatory limits.

Explanation:

Measure: Unrecovered losses or thefts of risk-significant radioactive sources.

Explanation:

Measure: Number of security events and incidents that exceed Abnormal Occurrence Criteria I.C 2-4

Explanation:

Measure: Number of significant unauthorized disclosures of classified and/or safeguards information.

Explanation:

Measure: Percentage of stakeholders that perceive the NRC to be open in its processes is equal to or greater than other Federal Agency measures, when available.

Explanation:The Federal Agency Weighted Average is obtained from a survey done by the American Customer Satisfaction Index, which has ratings for a number of federal regulatory agencies. The measure is new in FY 2006. There was no survey of NRC stakeholders in FY 2005, though one was conducted in FY 2004.

Measure: Percentage of selected openness output measures that achieve performance targets.

Explanation:

Measure: Percentage of selected processes that deliver desired efficiency improvement.

Explanation:

Measure: Number of instances where licensing or regulatory activities unnecessarily impeded the safe and beneficial uses of radioactive materials.

Explanation:

Measure: Percentage of stakeholder formal requests for information that receive an NRC response within 60 days of receipt.

Explanation:

Measure: Percentage of non-sensitive, unclassified regulatory documents generated by the NRC and sent to the agency's Document Processing Center that are released to the public by the sixth working day after the date of the document.

Explanation:

Measure: Percentage of non-sensitive, unclassified regulatory documents received by the NRC that are released to the public by the sixth working day after the document is added to the ADAMS main library

Explanation:

Measure: The NRC achieves a user satisfaction score for the agency's public website greater than or equal to the Federal Regulatory Agency Mean score based on results of the yearly American Customer Satisfaction Index for Federal Web sites.

Explanation:

Measure: Median number of days for responding to Freedom on Information Act requests.

Explanation:

Measure: Percentage of Director's Decisions under 10 CFR 2.206 that are issued by the NRC within 120 days.

Explanation:

Measure: Percentage of stakeholders that believe they were given sufficient opportunity to ask questions or express their views.

Explanation:

Measure: Percentage of Category 1, 2, and 3 meetings on regulatory issues for which the NRC issues public notices 10 days in advance of the meeting.

Explanation:

Measure: Percentage reduction in average enforcement processing time.

Explanation:Enforcement Process for Handling Discrimination Allegations

Measure: Improving effectiveness of fuel cycle licensing

Explanation:FY 2006: For the next cycle of license renewals for Category III fuel cycle facilities, reduce time spent conducting these renewals by 25% as compared to the historical averages with the ultimate goal to eliminate renewals for these licenses. FY 2007: Eliminate the requirement for license renewal and approve a living license for the two Category III facilities which have been renewed in FY 2006 and FY 2007 (1 each fiscal year).

Measure: Percentage reduction in resources expended in support of each interagency exercise while still accomplishing agency goals for each exercise.

Explanation:Incident Response and Emergency Preparedness Exercises

Measure: No losses, thefts or diversion of formula quantities of strategic special nuclear material; radiological sabotages; or unauthorized enrichment of special nuclear material regulated by NRC. (Transferred to another office in 2002.)

Explanation:

Measure: No unauthorized disclosure or compromise of classified information causing damage to national security. (Transferred to another office in 2002.)

Explanation:

Measure: No more than 30 events per year resulting in radiation overexposures from radioactive material that exceed applicable regulatory limits (with another Division in NRC)

Explanation:Measure discontinued after FY 2005.

Measure: No more than 5 releases per year to the environment of radioactive material from operating facilities that exceed the regulatory limit (with another Division in NRC)

Explanation:

Measure: No non-radiological events that occur during the NRC regulated operations that cause impacts on the environment that can not be mitigated within applicable regulatory limits, using reasonably available methods (with another Division in NRC)

Explanation:Measure discontinued after FY 2005.

Measure: No more than 5 substantiated cases per year of attempted malevolent use of source, byproduct, or special nuclear material. (Transferred to another office in 2002.)

Explanation:

Measure: No breakdowns of physical protection or material control and accounting systems resulting in a vulnerability to radiological sabotage, theft, or unauthorized enrichment of special nuclear material. (Transferred to another office in 2002.)

Explanation:

Is the program purpose clear?

Explanation: The U.S. Nuclear Regulatory Commission (NRC) regulates the Nation's civilian use of byproduct, source, and special nuclear materials to ensure adequate protection of public health and safety, to promote the common defense and security, and to protect the environment. To support the NRC's mission, the licensing program ensures applicants for licenses can and will control safety and national security related risks to acceptable levels. The mission of inspection is to verify licensee performance in accordance with the regulatory requirements.

Evidence: The Atomic Energy Act of 1954, Energy Reorganization Act of 1974, Section 204; NRC FY2002 Performance and Accountability Report, pp4-6 and 10. Manual Chapter (MC) 2600 and Fiscal Year 2003 Master Inspection Plan. "Fiscal Year 2003 Master Inspection Plan" modifications - memos dated - 11/12/02, 3/6/03, 7/3/03.

Does the program address a specific and existing problem, interest, or need?

Explanation: The fuel cycle licensing and inspection program regulates all of the nation's non-defense related fuel fabrication facilities (~34 in 2002). Its licensing program is designed to issue licenses to facilities to receive title to, own, acquire, deliver, receive, possess, use, and transfer special nuclear material (SNM). It verifies that companies can safely use SNM prior to taking possession and starting operations. The inspection program's purpose is to obtain objective information that will permit NRC to assess whether its licensed fuel cycle facilities are operated safely, and that licensee activities do not pose undue safety and safeguards risks. This needs to be performed routinely since companies continue to make changes to facilities, staff, and operations.

Evidence: The Atomic Energy Act of 1954, NRC Inspection Manual, Manual Chapter 2600, 'Fuel Cycle Facility Operational Safety and Safeguards Inspection Program,' 9/30/02; 10 CFR Part 70, 'Domestic Licensing of Special Nuclear Material;' and 10 CFR Part 40, 'Domestic Licensing of Source Material.'

Is the program designed so that it is not redundant or duplicative of any Federal, state, local or private effort?

Explanation: This program uniquely regulates commercial fuel facilities in the U.S. (those not operated by government agencies). Certain commercial facilities (primarily those related to uranium milling and leaching) are regulated by the States under the 'Agreement State' program, wherein 33 States have signed formal agreements with the NRC. Those States have assumed regulatory responsibility over certain byproduct, source, and small quantities of special nuclear material. In these cases the NRC oversees State regulatory activity, but does not duplicate it. The facilities regulated by NRC are subject to regulation by the U.S. EPA, the DOT, and the OSHA. However, NRC has entered into memoranda of understanding with these agencies to ensure that there are no duplicative efforts for the fuel cycle facilities that we regulate.

Evidence: 'Memorandum of Understanding between the Nuclear Regulatory Commission and the Occupational Safety and Health Administration: Worker Protection at NRC-Licensed Facilities,' 53 FR 43950; 'Memorandum of Understanding Between the U.S Environmental Protection Agency and the U.S. Nuclear Regulatory Commission; Consultation and Finality on Decommissioning and Decontamination of Contaminated Sites,' 67 FR 65375; "Transportation of Radioactive Materials; Memorandum of Understanding Between the Department of Transportation and the U.S. Nuclear Regulatory Commission," 44 FR 38690; NRC-SECY-92-165, and the Atomic Energy Act of 1954. Section 274, "Cooperation With States," Agreement States Procedure SA-700.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: The fuel cycle licensing and inspection program is performing well against its measures, but continually strives to do better. Mechanisms include constant self-assessments against the operating plan (see response to question 2.3), management reviews, IMPEP reviews (see response to question 2.6) and concerted efforts to involve stakeholders, particularly licensees and the public, in the regulatory process. These activities are performed to ensure that the program operates efficiently and effectively. Related rulemakings are subject to a cost/benefit analysis. A recent rulemaking codified a procedural change for licensing (Integrated Safety Assessments) that uses resources in the highest risk areas, and inspection efforts at fuel cycle facilities are based on the type of facility, the associated risk, and the historical performance of that facility.

Evidence: Inspection Manual Chapter 2600, Inspection Manual Chapter 2604, and 10 CFR Part 70. Office of the Inspector General "Audit of NRC's Regulatory Oversight of Special Nuclear Materials, May 23, 2003". The Nuclear Materials Safety Arena Division of Fuel Cycle Safety and Safeguards FY 2003 Operating Plan (updated quarterly): and the recent IMPEP review (3/24/03-3/28/03) focused on the fuel cycle inspection program in Region III. The management review board was held on 6/10/03, and the report should be available shortly. MRB notes (6/20/03) and Paperiello memo (5/30/03). Zimmerman memo (2/27/03). Transmittal of MD 5.6 "Integrated Materials Performance Evaluation Program (IMPEP) November 5, 1999".

Is the program effectively targeted, so program resources reach intended beneficiaries and/or otherwise address the program's purpose directly?

Explanation: The NRC conducts the fuel cycle licensing and inspection program to ensure that we identify and resolve safety issues at all commercial fuel cycle facilities before they affect safety. The program resources are allocated between the headquarters and regional offices, and about 80% go to mission direct work with approximately 20% spent on overhead.

Evidence: Nuclear Materials Safety Arena Division of Fuel Cycle Safety and Safeguards FY 2003 Operating Plan (updated quarterly)

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The NRC has four strategic goals listed in the Agency's Strategic Plan. The second goal applies specifically to the fuel cycle licensing and inspection program. 'In the Nuclear Materials Safety Arena, the NRC will conduct an efficient regulatory program that allows the Nation to use nuclear material for civilian purposes in a safe manner to protect public health and safety and the environment by working to achieve the following strategic goal, 'Prevent radiation-related deaths and illnesses, promote the common defense and security, and protect the environment in the use of source, byproduct, and special nuclear material.' ' This goal encompasses the activities of the fuel cycle licensing and inspection program. The NRC has identified five measures to determine if it is meeting this strategic goal.

Evidence: 'U.S. Nuclear Regulatory Commission Strategic Plan, Fiscal Year 2000-Fiscal Year 2005,' NUREG-1614, Volume 2, pp 1, 11, and 12; and 'Budget Estimates and Performance Plan, Fiscal Year 2004,' NUREG-1100, Vol. 19, page 65

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: Specific strategic measures have been developed to demonstrate progress toward achieving the fuel cycle licensing and inspection program strategic goal listed in the response to Question 2.1. The measures are listed in the FY2000 Agency Strategic Plan. The strategic measures and additional precursor measures are included in Operating Plans which are discussed and evaluated quarterly. Resource adjustments are made based on these outputs.

Evidence: 'U.S. Nuclear Regulatory Commission Strategic Plan, Fiscal Year 2000-Fiscal Year 2005,' NUREG-1614, Volume 2, page 12; and 'Budget Estimates and Performance Plan, Fiscal Year 2004,' NUREG-1100, Vol. 19, page 68 and the Nuclear Materials Safety Arena Division of Fuel Cycle Safety and Safeguards FY 2003 Operating Plan. Commission memo (7/19/03) "Update to the Planning, Budgeting and Performance Management Process (PBPM)".

Does the program have a limited number of specific annual performance measures that demonstrate progress toward achieving the program's long-term measures?

Explanation: In addition to the specific strategic goals and strategic measures the Agency has developed performance goals, which focus on outcomes and are the key contributors to achieving the strategic goal. There are associated annual performance measures (operating plans) which indicate whether the NRC is achieving its goals and establish the basis for performance measurement. Information from inspections and reports made by licensees are used to demonstrate progress toward the goals.

Evidence: 'U.S. Nuclear Regulatory Commission Strategic Plan, FY 2000 - FY 2005,' NUREG-1614, Volume 2, page 15; and 'Budget Estimates and Performance Plan, FY 2004,' NUREG-1100, Vol. 19, page 69, the Nuclear Materials Safety Arena Division of Fuel Cycle Safety and Safeguards FY 2003 Operating Plan (updated quarterly). Bulletin 91-01 and NRC reporting requirements in 10 CFR Parts 20 - Standards for Protection Against Radiation, 21 - Reporting of Defects and Non-compliance, 40 - Domestic Licensing of Source Material, and 70 - Domestic Licensing of Special Nuclear Material.

Does the program have baselines and ambitious targets and timeframes for its annual measures?

Explanation: For the performance goals, in several cases, the targets are zero events each year. Where the target is other than zero, the number is based on historical data and risk-assessment, and has decreased over time. Data for the annual performance measures has been collected and reported for several years, establishing an adequate baseline for each measure. The existing targets are considered to be ambitious and appropriate given the high consequence of the events being measured. Further, for each measure that applies to the fuel cycle licensing and inspection program, operating plan goals and measures which are very specific mechanisms for meeting and measuring progress toward the higher level goals have been developed. The measures and metrics for these goals are continually evaluated to determine whether they are meaningful, and whether the measures are sufficiently ambitious.

Evidence: 'U.S. Nuclear Regulatory Commission Strategic Plan, Fiscal Year 2000-Fiscal Year 2005,' NUREG-1614, Volume 2; and 'Budget Estimates and Performance Plan, Fiscal Year 2004,' NUREG-1100, Vol. 19 and Nuclear Materials Safety Arenda Division of Fuel Cycle Safety and Safeguards FY 2003 Operating Plan

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, etc.) commit to and work toward the annual and/or long-term goals of the program?

Explanation: We regulate the fuel facilities in concert with States in our Agreement State program and with EPA, DOT, and OSHA in order to ensure protection of the public and the environment. Interested parties also include licensees and industry groups. Agreement States commit to adequate and compatible programs as part of their agreeements, and are periodically reviewed for conformance. This process was coordinated with the States. The MOUs with EPA, DOT, OSHA are joint agreements between agencies to ensure each meets its own goals consistent with one anothers'.

Evidence: STP Procedure Approval: Processing an Agreement - SA-700, April 2, 2001. NRC Management Directives 5.6, 11.7 and 11.8; MC 1007 and 'Memorandum of Understanding between the Nuclear Regulatory Commission and the Occupational Safety and Health Administration: Worker Protection at NRC-Licensed Facilities,' 53 FR 43950; MOU with EPA.

Are independent and quality evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: The General Accounting Office (GAO), the Agency's Office of the Inspector General (OIG), the Advisory Committee on Reactor Safety (ACRS) and the ACNW (Advisory Committee on Nuclear Waste) have all conducted independent reviews of the program. The ACRS is independent of the NRC staff. One of its primary purposes is to review nuclear facility safety-related items.) The OIG and the ACRS each recently reviewed a fuel facility licensing and inspection activity. In addition, NRC has a review process for Agreement State and NRC materials programs called the Integrated Materials Performance Evaluation Program (IMPEP). The IMPEP process employs a team of NRC and Agreement State staff to assess both Agreement State and NRC materials licensing and inspection programs.

Evidence: NRC Organization Chart, 4/8/02. ACRS and Advisory Commission on Nuclear Waste (ACNW) charters. IMPEP review (3/24/03-3/28/03) focused on the fuel cycle inspection program in Region III. The management review board was held on 6/10/03, and the report should be available shortly. Draft OIG Report "Oversight of Special Nuclear Materials, May 23, 2003". Complete review of Agreement States are on NRC's website.

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: The direct costs for the planned activities performed by the fuel cycle licensing and inspection program are clearly identified in the NRC budget, as are annual performance goals. These annual goals are linked directly to the agency's long term goals. Program activities and the associated budget are designed to accomplish those annual and long-term goals. Activities are prioritized during the budget process each year based on the strategic goals and performance goals. This is described in the NRC's Plannng, Budgeting and Performance Management (PBPM) process. Other agency support costs, such as administrative activity costs, agency support office costs and agency and office labor overhead are assigned to the program according to a cost allocation process.

Evidence: 'U.S. Nuclear Regulatory Commission Strategic Plan, Fiscal Year 2000-Fiscal Year 2005,' NUREG-1614, Volume 2; and 'Budget Estimates and Performance Plan, Fiscal Year 2004,' NUREG-1100, Vol. 19, and Memorandum to the Program Review Committee, "Prioritized Listing of Program Office Activities by Arena for FY2004 and FY2005 Budgets," dated April 16, 2003. The Nuclear Materials Safety Arena Division of Fuel Cycle Safety and Safeguards FY 2003 Operating Plan.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: The fuel cycle licensing and inspection program has performance goals that are linked directly to achievement of the agency's strategic goals. The Agency is currently developing its 2003-2008 Strategic Plan, in the context of which this program is updating its performance goals. The associated annual measures are re-evaluated every year as the budget cycle begins. The updated Strategic Plan will show more specific, ambitious long-term goals than were included in the previous Strategic Plan.

Evidence: 'U.S. Nuclear Regulatory Commission Strategic Plan, Fiscal Year 2000-Fiscal Year 2005,' NUREG-1614, Volume 2; and 'Budget Estimates and Performance Plan, Fiscal Year 2004,' NUREG-1100, Vol. 19, and 'Success Through Safety; U.S. Nuclear Regulatory Commission Performance and Accountability Report, Fiscal Year 2002.'

Are all regulations issued by the program/agency necessary to meet the stated goals of the program, and do all regulations clearly indicate how the rules contribute to achievement of the goals?

Explanation: This program issues specific guidance on the implementation of both its licensing and inspection programs. Before it is made final, the guidance is issued for comment by all stakeholders, and includes a clear discussion of its purpose and intent. The guidance includes a cost/benefit analysis which has supported changes to bring greater alignment between the activities of the program and its long-term goals. Two recent examples are the revisions to 10 CFR Part 70 to create a risk-informed, performance-based requirement, and the development of 2 guidance documents in place of a new 10 CFR Part 41 to update the regulatory framework for the uranium recovery licensing program.

Evidence: 'U.S. Nuclear Regulatory Commission Regulations Handbook,' NUREG-BR-0053, Revision 5; 'Regulatory Analysis Guidelines of the U.S. Nuclear Regulatory Commission,' NUREG-BR-0058, Revision 3; MC 0030 and MC 0040; NRC SECY-00-0111 and 65 FR 56211 (regarding 10 CFR Part 70); SECY-99-011, SECY-01-0026, and SECY-02-0204 (regulatory framework for the uranium recovery licensing program), SECY-99-0188 and SECY-02-0222. Commission memo (3/18/02) (Inspection Program).

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: We have a number of mechanisms for continually evaluating our performance. (1) We update our operating plan (described in the responses to 2.4 and 2.8) quarterly, with data on how we have been performing, including reported events, and use that information to adjust our priorities, focus our resources, and determine if there are areas that need specific management attention. (2) We routinely inspect our licensee performance. (3) We use a Public Licensee Performance Review (LPR) process. LPR results provide an overview of licensee performance to NRC management, and inform licensees and the public how the NRC assesses facility performance.

Evidence: Reporting requirements in 10 CFR Parts 20, 21, 40, and 70. NRC Bulletin 91-01. Recent LPRs include Westinghouse (3/5/2002), Nuclear Fuel Services (3/14/2003), Honeywell (4/15/2001), BWXT (5/2/2002), and Framatome ANP (6/19/2002). Manual Chapter 2604, 'Licensee Performance Review'. Link Ltr. (6/13/02). SECY-02-0216 "Proposed Process for Providing Information on Significant Nuclear Materials Issues and Adverse Licensee Performance" (12/11/02). NRC Management Directive 8.14 "Agency Action Review Meeting" (5/7/02). MD 5.6, SA-700, and MC 2600.

Are Federal managers and program partners (grantees, subgrantees, contractors, cost-sharing partners, etc.) held accountable for cost, schedule and performance results?

Explanation: Each manager in the Division of Fuel Cycle Safety and Safeguards is responsible for development and implementation of specific items in the Strategic Plan and Operating Plan. These items are in their SES contracts, elements and standards for performance appraisals, which are used, in part, to determine promotions and awards, and our work tracking and assignment system (ticketing). The SES program is being modified for FY2004 to link individual goals even more explicitly to NRC goals. Agreement States are evaluated for performance and licensees are routinely inspected.

Evidence: For more information see the SES contracts for the NMSS/FCSS Division Director, Deputy Division Director and Branch Chiefs, and the Elements and Standards for the NMSS/FCSS Section Chiefs. 7/15/03 Paul Bird memo on FY 2004 SES Performance Plans. MD 5.6, SA-700, MC 2600.

Are all funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: NRC agency systems for budget execution and the administrative control of funds comply with the requirements set forth in OMB circulars, the Antideficiency Act, the Impoundment Control Act of 1974, Chief Financial Officers Act of 1990, etc. Agency policies and procedures are documented in NRC Management Directive, Volume 4 'Financial Management'. NRC's Office of the Chief Financial Officer monitors commitments, obligations, and expenditures on a monthly basis and reports findings in monthly and quarterly reports in the Budget Execution Reports. In NRC's Office of Nuclear Material Safety and Safeguards, contract funds are tracked at the project manager, Division and Office level. We have specific targets for funding to be committed, obligated and expended each quarter. Through a rigorous oversight and accountability process we limit carryover (unobligated funds) at the end of each year. We use a computer tracking system (COSTS) to track this information for each of our contracts.

Evidence: NRC Management Directives, Manual Chapter 4.2 'Administrative Control of Funds'; Budget and Reporting Number Structure Guide; Regulatory Information Tracking System (RITS) Users Guide; Acquisition Certification and Training program for project managers, technical monitors, and all personnel who are part of the acquisition process as defined in the May 2000 memorandum to Office Directors and Regional Administrators from the Executive Director for Operations, FCSS Monthly Contract Reports.

Does the program have procedures (e.g., competitive sourcing/cost comparisons, IT improvements, approporaite incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: There are a number of programs in place to measure and achieve efficiencies. One such program is the Business Process Improvement (BPI) review of licensing activities, and a later BPI of inspection activities. There is also an ongoing BPI of the contracts process at the Office level. The staff revised MC2600 and MC2604 for efficiency and effectiveness. Operating Plans are evaluated quarterly in order to reallocate resources.

Evidence: Inspection Manual Chapter 2604, 10 CFR Part 70, and 67 FR 20555. Commission memo: "Status of the Office of Nuclear Material Safety and Safeguards Business Process Improvement Initiative, June 18, 2003". "Prioritized Listing of Program Office Activities by Arena for FY 2004 and FY 2005 Budgets, April 16, 2003," and Nuclear Materials Safety Arena Division of Fuel Cycle Safety and Safeguards FY 2003 Operating Plan.

Does the program collaborate and coordinate effectively with related programs?

Explanation: We regulate the fuel facilities in concert with States in our Agreement State program, and with EPA, DOT, and OSHA in ensure the safety of the public and the environment. The NRC has memoranda of understanding with the EPA, the DOT and OSHA to ensure that there are no duplicative efforts for the fuel cycle facilities that we regulate. Agreement States commit to adequate and compatible programs and are routinely evaluated.

Evidence: Memorandum of Understanding Between the U.S Environmental Protection Agency and the U.S. Nuclear Regulatory Commission; Consultation and Finality on Decommissioning and Decontamination of Contaminated Sites,' 67 FR 65375; "Transportation of Radioactive Materials; Memorandum of Understanding," 44 FR 38690; NRC-SECY-92-165, SECY-02-0146, Fee Recovery for Fiscal Year 2003, and the Atomic Energy Act of 1954. MOU with OSHA, SA-700 and MD 5.6.

Does the program use strong financial management practices?

Explanation: NRC financial management practices governing control of funds and resource allocation are codified in MD4.2 and are fully implemented by the fuel facilities licensing and inspection program. The adequacy of these practices is reflected in the fact that NRC's financial statements have earned unqualified opinions for nine consecutive years. NRC's cost accounting system was identified as having a material weakness because the system is not in full compliance with SFFAS Number 4 by capturing the full cost of program outputs. NRC is implementing a remediation plan to resolve the instance of non-compliance; all other financial systems are in full compliance. NRC offers a financial management training seminar to staff twice a year on Administrative Control of Funds and Financial Management.

Evidence: NRC's Performance and Accountability Report for FY 2002, Monthly Budget Execution Reports (BER), Quarterly review of BER by top Agency management, NRC Management Directive 4.2, 'Administrative Control of Funds;' NRC Financial Management Seminar. The day-to-day operations of the program are unaffected by the noted material weakness in cost accounting.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: Resources are reallocated in response to inspection findings, license reports and reviews of operating plans. Each quarter, the operating plan for the fuel cycle licensing and inspection program, including annual measures and metrics linked to strategic goals (discussed in the responses to questions 2.1-2.4) is updated and examined. In addition, in FY02, the Office of Nuclear Material Safety and Safeguards (NMSS) contracted with Gallup to survey the employees in an effort to build a stronger workplace. NMSS has already taken a number of actions in response to the survey results, and will continue to do so.

Evidence: NRC Management Directive 4.4, "Annual Reasonable Assurance Statements; 'Success Through Safety; U.S. Nuclear Regulatory Commission Performance and Accountability Report, Fiscal Year 2002; Nuclear Materials Safety Arena Division of Fuel Cycle Safety and Safeguards FY2003 Operating Plan (updated quarterly). "Nuclear Regulatory Commission (NRC) Manager's Workbook, Building a Stronger Workplace," The Gallup Organization, and "NRC NMSS Executive Presentation (06/02)," The Gallup Organization

Did the program seek and take into account the views of all affected parties (e.g., consumers; large and small businesses; State, local and tribal governments; beneficiaries; and the general public) when developing significant regulations?

Explanation: One of our Agency Performance goals is 'increase public confidence.' To that end we have an open and participatory rulemaking process. The process takes into account the views of the affected parties, recognizes the public's interest in the proper regulation of nuclear activities, and provides opportunities for citizens to make their opinions known. The NRC elicits public involvement early in the regulatory process so that safety concerns that may affect a community can be resolved in a timely and practical manner. All rulemakings provide the public with at least one opportunity for comment. In some cases, NRC holds meetings and workshops before a proposed rule is drafted so that members of the public can express their concern early in the process. The NRC may also publish an Advance Notice of Proposed Rulemaking in the Federal Register to obtain public comments and provide clarification of certain issues before developing a proposed rule. NRC is subject to the Small Business Regulatory Enforcement Fairness Act, which evaluates impact on small businesses.

Evidence: Revised 10 CFR Part 70 and 65 FR 56211, revisions to Inspection Manual Chapters 2600, and 2604 and 67 FR 53815 and 67 FR 20555. NRC SECY-00-0111 and 65 FR 56211 (regarding 10 CFR Part 70); SECY-99-011, SECY-01-0026, and SECY-02-0204 (regulatory framework for the uranium recovery licensing program), SECY-99-0188 and SECY-02-0222. Commission memo (3/18/02) (Inspection Program).

Did the program prepare adequate regulatory impact analyses if required by Executive Order 12866, regulatory flexibility analyses if required by the Regulatory Flexibility Act and SBREFA, and cost-benefit analyses if required under the Unfunded Mandates Reform Act; and did those analyses comply with OMB guidelines?

Explanation: NRC is covered by SBREFA and the Regulatory Flexibility Act and is in full compliance with their requirements on applicable rulemakings. For example, the final Fee Rule for FY2003 (10CFR Parts 170 and 171), contains a Regulatory Flexibility Analysis and a SBREFA determination. As an independent agency, NRC is not bound by the Unfunded Mandate Reform Act, or for the most part, by Executive Order 12866. The one exception is the requirement in the Executive Order to regularly post the overall agency regulatory agenda, which the NRC does in full compliance with the order.

Evidence: 6/18/2003 Federal Register Notice 1010 CFR Parts 170 and 171 Revision of Fee Schedules; Fee Recovery for FY 2003; Final Rule". SECY-00-0111.

Does the program systematically review its current regulations to ensure consistency among all regulations in accomplishing program goals?

Explanation: We conduct ongoing assessments of the licensingand inspection program. For example, (1) We updated 10 CFR Part 70 to create a risk-informed, performance-based regulation. (2) Staff had proposed a new 10 CFR Part 41 in 1999 to update the regulatory framework for the uranium recovery licensing program, but later proposed a new strategy, to update the appropriate guidance documents instead. (3) Finally, Inspection Manual Chapters 2600 and 2604 were recently revised as a result of a larger project that is continually reviewing inspection program development and guidance. We also have a process to accept and evaluate Petitions for Rulemaking when stakeholders see an opportunity for greater regulatory effectiveness, and we review the fuel cycle regulations when changes are made to similar regulations. We assess the regulations as part of the regular trending and analysis of reported events.

Evidence: 10 CFR Part 2, NRC-SECY-00-0222. NRC SECY-00-0111 and 65 FR 56211 (regarding 10 CFR Part 70); SECY-99-011, SECY-01-0026, and SECY-02-0204 (regulatory framework for the uranium recovery licensing program), SECY-99-0188 and SECY-02-0222. Commission memo (3/18/02) (Inspection Program).

Are the regulations designed to achieve program goals, to the extent practicable, by maximizing the net benefits of its regulatory activity?

Explanation: NRC conducts regulatory impact analyses (RIAs) to determine whether proposed changes maximize benefits. NRC guidance states that "OMB maintains that the regulatory analysis should select the regulatory alternative that achieves the greatest present value-the discounted monetized value of expected net benefits. The NRC guidance also states, "[s]electing the alternative with the largest net value is consistent with obtaining the largest societal gain from among the alternatives analysed." However, not all benefits can be quantified, and in some cases qualitative benefits are determined to justify the costs. In some cases NRC determines that regulatory changes are the most cost effective, given the constraints of time.

Evidence: 'U.S. Nuclear Regulatory Commission Regulations Handbook,' NUREG-BR-0053, Revision 5; 'Regulatory Analysis Guidelines of the U.S. Nuclear Regulatory Commission,' NUREG-BR-0058, Revision 3; and NRC Inspection Manual, Manual Chapters 0030 and 0040. Also see NRC-SECY-00-0222 for example regarding the Nuclear Fuel Safety Oversight program.

Has the program demonstrated adequate progress in achieving its long-term outcome performance goals?

Explanation: The NRC, including the fuel facility licensing and inspection program, has met all of its strategic goal measures since GPRA reporting began in 1997.

Evidence: 'Success Through Safety; U.S. Nuclear Regulatory Commission Performance and Accountability Report, Fiscal Year 2002, page 46.'

Does the program (including program partners) achieve its annual performance goals?

Explanation: The fuel cycle licensing and inspection program has met all of its annual performance goal measures since 1997.The NRC has a review process for Agreement States and NRC materials programs called the IMPEP. The IMPEP process employs a team of NRC and Agreement State staff to assess the performance of both parties' materials licensing and inspection programs. Operating plans are evaluated quarterly in order to reallocate resources.

Evidence: Success Through Safety; U.S. Nuclear Regulatory Commission Performance and Accountability Report, Fiscal Year 2002, page 47.'

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program performance goals each year?

Explanation: In developing the FY2002 budget, the Office of Nuclear Material Safety and Safeguards estimated that 10% efficiencies would be achievable in the fuel cycle licensing and inspection programs. The numbers reflected in the FY2002 budget include that decrease. Fuel cycle licensing and inspection has continued to get the work done, and meet the performance goals with fewer resources.

Evidence: Other efficiencies have also been planned and achieved in the fuel cycle licensing and inspection program. In FY2002, the staff revised Inspection Manual Chapter 2604, Licensee Performance Review, to make the LPR process more timely and efficient. See IMC 2604, and background information. Also see response to question 3.4.

Does the performance of this program compare favorably to other programs, including government, private, etc., that have similar purpose and goals?

Explanation: EPA and the chemical industry have some similar purposes and goals to the NRC's fuel facility licensing and inspection program. Although we have not benchmarked our performance with respect to the chemical industry, and the associated chemical and safety hazards, NRC's safety record with respect to radiation hazards as evidence by our strategic goal measure results compare favorably to other programs.

Evidence: U.S. Nuclear Regulatory Commission Performance and Accountability Report, Fiscal Year 2002, page 46.

Do independent and quality evaluations of this program indicate that the program is effective and achieving results?

Explanation: We have some independent evaluators, like the Agency's Office of the Inspector General (OIG), and the Advisory Committee on Reactor Safety (ACRS). (The ACRS is independent of the NRC staff and reports directly to the Commission, which appoints its members. One of its primary purposes is to review nuclear facility safety-related items.) The OIG and the ACRS each recently reviewed a fuel facility licensing and inspection activity. In addition, the fuel cycle inspection program, itself, indicates that our program is effective and achieving results, as does the IMPEP program (see response to question 2.6).

Evidence: Meeting transcripts for the ACRS Subcommittee on Reactor Fuel on 4/21/03, and the Full Committee, 502nd Meeting on 5/9/03 and Draft Audit Report, 'Audit of NRC's Regulatory Oversight of Special Nuclear Materials,' NRC Office of the Inspector General. IMPEP review (3/24/03 - 3/28/03) focused on the fuel cycle inspection program in Region III. Nuclear Materials Safety Arena Division of Fuel Cycle Safety and Safeguards FY 2003 Operating Plan.

Were programmatic goals (and benefits) achieved at the least incremental societal cost and did the program maximize net benefits?

Explanation: RIA's almost always show a net benefit for NRC regulations. Without this condition, there is a potential not to proceed with the rulemakings unless there is a question of public health and safety that will be degraded as a result. The Agency strives to implement regulatory change when there is a net benefit toward safe operation of fuel cycle facilities and the societal costs are minimized. However, in all aspects of rulemaking at the NRC, public health and safety is paramount where programmatic goals are concerned.

Evidence: Regulatory Analysis Guidelines of the U.S. Nuclear Regulatory Commission, "NUREG/BR-0058, Rev. 3, July 2000. SECY-00-0111.