Detailed Information on the
Nuclear Materials Users Licensing & Inspection Assessment

Schedule an evaluation of the program consistent with guidance in OMB Circular A-11 prior to the submission of the 2007 Budget. Discuss with OIG the feasibility of having them conduct independent evaluations as required in PART assessments. NRC's Office of the Inspector General (OIG) is currently conducting a review in the Nuclear Materials Users program area.

Improve integration of budget and performance information.

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.

Provide with the 2007 Budget a clearer demonstration of the contributions of specific program activities to agency goals.

Create program goals that will support the mission of the agency. Complete the NRC review of operating plan format and content to improve the plans' effectiveness as management tools. This project will be carried out in two phases to address: 1) improvements that can be implemented in the short-term; and 2) improvements that would require longer-term planning and evaluation. The short-term improvement efforts were completed in December 2004 through the development of a performance reporting framework containing common reporting criteria and format. This framework was implemented during the first quarter of FY 2005. The longer-term efforts to improve the efficiency of operating plans are currently being addressed by an agency-wide working group.

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 and 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 the 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 is no less than 70 percent.

Explanation:

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

Explanation:Measure discontinued for this program after 2007.

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: 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 more than 300 losses of control of licensed material per year.

Explanation:Safety + Security Measure. See endnote 11, pg. 80 of NUREG-1100, Vol. 20.

Measure: Percentage of licensing actions completed in timely manner.

Explanation:Goal: 85% in 90 days for new applications, amendments. 180 days for license renewals. See NUREG-1100, Vol. 20, p. 73.

Measure: No more than 30 events per year resulting in radiation overexposures from radioactive materials that exceed applicable regulatory limits.

Explanation:Safety Measure. See endnotes 14 and 15. pg. 80 of NUREG-1100, Volume 20.

Measure: No more than 45 medical events per year.

Explanation:Safety Measure. See endnote 17, pg. 80 of NUREG-1100, Volume 20.

Measure: No more than 5 substantiated cases per year of attempted malevolent use of source, byproduct, or SNM.

Explanation:Security Measure. See endnote 20 of NUREG-1100, pg. 80 Volume 20.

Is the program purpose clear?

Explanation: The U.S. Nuclear Regulatory Commission (NRC) and 33 Agreement States (AS) regulate 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 Nuclear Materials Users Licensing and Inspection program (hereafter referred to as the materials program) ensures applicants for licenses can and will control safety and national security related risks to acceptable levels, verifies licensee performance in accordance with the regulatory requirements, and takes rulemaking and enforcement actions as necessary to enable mission outcomes.

Evidence: The Atomic Energy Act of 1954, Energy Reorganization Act of 1974, Section 204; NRC FY 2003 Performance & Accountability Report, p. 4 & pp. 42-44. "Statements of Principles and Policy for the Agreement State Program," 62 FR 46517-25. Manual Chapter (MC) 2800, "Materials Inspection Program." 'Consolidated Guidance About Materials Licenses,' NUREG-1556, Vol. 1-20; 10 CFR Parts 20, 30-36, 39, 40, 70, 71, and 150 and equivalent AS regulations and licensing and inspection guidance. NUREG-BR-0053 Rev. 5 Regulations Handbook, March 2001.

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

Explanation: The materials program regulates all of the Nation's non-defense related use of byproduct, source, and special nuclear materials in medical, academic, and industrial applications (~20,000 specific and 150,000 general licensees in 2004). Its licensing program is designed to issue licenses to receive title to, own, acquire, deliver, receive, possess, use, and transfer these materials. It verifies that licensees can safely use byproduct, source, and special nuclear materials prior to taking possession and starting operations. The inspection program's purpose is to obtain objective information that will permit NRC and AS to assess whether licensees are handling materials safely, and that licensee activities do not pose undue safety and safeguards risks.

Evidence: The Atomic Energy Act of 1954, NRC Inspection Manual, Manual Chapter 2800, 'Materials Inspection Program,' 11/25/03; and equivalent AS procedures.

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

Explanation: NRC regulates materials licensees in 17 non-Agreement States. Thirty-three States have entered into Agreements with NRC whereby they assume responsibility to regulate, issue licenses and conduct inspections within their borders. NRC maintains regulatory authority over certain activities in AS and oversees AS to ensure the overall national materials program is free of conflicts, duplication, or gaps. The NRC has memoranda of understanding with the U. S. Environmental Protection Agency (EPA), Department of Transportation (DOT), Department of Energy (DOE), Food and Drug Administration (FDA) and Occupational Safety and Health Administration (OSHA) to ensure that there are no duplicative efforts for the materials licensees that we regulate.

Evidence: Thirty-three State Agreements (e.g., SECY-03-0096, 6/6/03,"Section 274b Agreement with the State of Wisconsin"). 10 CFR Part 150. Memorandum of Understanding (MOU) between the US Environmental Protection Agency (EPA) and the NRC; Consultation and Finality on Decommissioning and Decontamination of Contaminated Sites, 67FR 65375. "Transportation of Radioactive Materials; Memorandum of Understanding" 44 FR 38690; NRC - SECY-92-165, SECY - 02-0146, and the Atomic Energy Act of 1954. MOU with OSHA, SA-700 and Management Directives (MD) 5.6, 5.8, and 5.9.

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

Explanation: Numerous internal and external program audits have shown no major design flaws limiting effectiveness or efficiency. (ALSO SEE Q2.6, Q3.4, Q 4.5) Effectiveness is demonstrated through success against NRC Strategic and Performance goals. Rigorous training and qualification programs ensure that license reviewers and inspectors are qualified. Efficiency is demonstrated through continued operation within budget constraints, mindful of the program's cost to taxpayers and licensees' fees. Each of the program's rulemaking actions includes a regulatory analysis that evaluates the cost/benefit of the proposed action. The program is continuing to focus efforts and resources on the most risk-significant regulatory activities. The program's Operating Plans track work and resolve expenditures and help ensure efficiency and effectiveness.

Evidence: NUREG-1100, Volume 20, Performance Budget, Fiscal Year 2005, 'Green Book' (primarily pages 59-82), and Appendix IX. FY2004 1st Quarter Leadership Operating Plan, Nuclear Materials Safety Arena (see cost metrics on page 5. Inspection Manual Chapter 1246. SECY-00-0048, Nuclear Byproduct Material Risk Review, dated 2/24/00. NUREG-BR-0058, Rev. 3. "Regulatory Analysis Guidelines of the USNRC"; OIG report, "Inspector General's Assessment of the Most Serious Management Challenges Facing NRC (OIG-04-A-01) dated 11/5/03. Other effectiveness and efficiency report citations appear in Evidence for 2.6, 3.4, 4.5.

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

Explanation: The program enables and ensures that licensees use radioactive material in a safe and secure manner. This protects public health and safety and the environment and allows licensees to conduct business with significant societal benefits. The program uses a Planning, Budgeting, Performance Management budget approach, with assumptions made about key internal and external factors that might influence the program's resource allocation. All new and ongoing projects are prioritized annually based on contributions to the NRC's strategic goals. Work that cannot demonstrate direct links to the goals is eliminated in favor of higher-priority projects. The Operating Plans are the performance management tools used to evaluate success and inform the next planning cycle.

Evidence: NUREG-1100, Volume 20, Performance Budget, Fiscal Year 2005 (primarily pages 59-82). 2/04. FY 2004 1st Quarter Leadership Operating Plan, Nuclear Materials Safety Arena. Memo dated 4/16/03 illustrates prioritization methodology used in FY 2005 budget.

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: Three long-term measures are used (Items 1, 3 & 4 in the Measures section) to define the ultimate safety and security outcomes for the program. These measures accurately reflect the primary purpose of the program as stated in 1.1. Program activities, outputs, and annual measures are all designed to position the program for success relative to its long-term objectives (i.e., to minimize the risk of breaching one of the long-term targets). The long-term measures are essential to program success for nuclear materials since they establish a zero-tolerance threshold for significant adverse events. Any such outcomes, or near misses such as abnormal occurances (AO's), would lead to immediate review of the causes of the event, and evaluation of what program changes would be required to prevent recurrence. AO's are events or accidents involving a major reduction in the degree of protection of public health and safety, are reported to Congress in compliance with Acts enacted in 1974 and 1995. Long-term measures (set at zero adverse events) are linked to the annual measures (set at lower thresholds to target key precursor events that the program can influence). Data are collected on these measures each month, and quarterly meetings are held to determine if program changes are needed to ensure both long-term and annual success. The program's performance measures are in the process of being updated to support the revised Strategic Plan for 2004-2009. As part of this effort, new annual and long-term programmatic measures will also be developed (e.g., potential changes to reduce the number of events by 2009).

Evidence: 'U.S. Nuclear Regulatory Commission Strategic Plan, Fiscal Year 2000-Fiscal Year 2005,' NUREG-1614, Volume 2, pp. 11 and 12; and 'Performance Budget, Fiscal Year 2005,' NUREG-1100, Vol. 20, pp. 60-63; 'Strategic Plan, Fiscal Year 1997 - Fiscal Year 2002,' September 1997, NUREG-1614, Vol. 1; 'Draft U.S. Nuclear Regulatory Commission FY 2004-2009 Strategic Plan, NUREG-1614, Vol.3,' 68 FR 65968-9; COMSECY-04-0009, March 16, 2004, Key Planning Assumptions and Performance Measures for the FY2005-FY2006 Budget (confidential/pre-decisional document). OMB White Paper "Performance Measurment Challenges and Strategies," June 18, 2003, p. 11. Section 208 of the Energy Reorganization Act of 1974 and the Federal Reports and Sunset Act of 1995. NRC Management Directive 8.1, 'Abnormal Occurrence Reporting Procedure.'

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

Explanation: The targets for the long-term measures, set at zeros, are extremely challenging and are intended to focus NRC programs on preventing the most significant adverse outcomes relative to its safety and security mission. These targets are set against a regulatory environment that is becoming more challenging due to the variety and complexity of technologies that use nuclear materials, the increasing volume and complexity of work and constant-to-declining resources for the program over the next several years. Historically, the licensing actions show continual increases, even as much as 20% increase in one of the last five years. The program is continually challenged to absorb the increasing complexity and volume of work, such as the introduction and deployment of new technologies, while ensuring that the risk of breeching the long-term measures remains acceptably low. Even with these challenges, the materials program has demonstrated a good uncontested safety record.

Evidence: 'NRC Strategic Plan, Fiscal Year 2000-2005,' NUREG-1614, Volume 2, p. 12; 'NRC Performance and Accountability Report, Fiscal Year 1999', NUREG-1542, Vol. 5, p. 10; Performance Budget, FY 2004 & 2005, NUREG-1100, Vol. 19 (p.71 & 87, Endnotes 29-32), Vol. 20 (pp. 63-64); Div. of Industrial and Medical Nuclear Safety FY 2004 Operating Plan and Performance Budget, FY 2005; Commission memorandum, 7/19/03, "Update to the Planning, Budgeting and Performance Management Process (PBPM);" FY 2003 Leadership Level Operating Plan, 1st Quarter, Nuclear Materials Safety Arena (memorandum from Melvyn Leach to William Dean, 11/21/03, ML033250555; Plan: ML033250473); FY 2004 Leadership Operating Plan, 1st Quarter, Nuclear Materials Safety Arena (memorandum from Melvyn Leach to William Dean, 2/11/04, ML040420432; Plan: ML040420019).

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

Explanation: Five annual measures with quantitative non-zero values (Items 2, 5, 6, 7 & 8 in Measures) are essential links to the long-term goals, and to lower-level (operational) implementing activities. These annual measures are designed to monitor trends and identify critical precursor events of lower safety significance, but of higher probability, over which the program can have a direct influence. These are valuable in terms of day-to-day program management since they can indicate weaknesses that need to be immediately addressed. The annual measures, if met, are designed to position the program for success in meeting its long-term safety and security goals (i.e., provide confidence that the risk of breaching one of the long-term measures remains acceptably low). One other measure (Item 9 in Measures) was added in response to current events to ensure security of radioactive material. Programmatic activities are designed and adjusted, as needed, to achieve the annual measures. The program analyzes the Nuclear Materials Events Database (NMED) every day, and calls its regions each morning to evaluate current events, monitor trends, and determine if immediate or longer-term actions are required by the program or its licensees. The measures are tracked in the operating plan and are reviewed quarterly to indicate whether the program is achieving its annual and long-term goals, and they serve as an interim performance measurement tool. In addition to measures specific to radiation safety, the program has quantitative measures to ensure program effectiveness, efficiency, and timeliness (e.g., Item 10 in Measures).

Evidence: 'U.S. NRC Strategic Plan, FY2000-05,' NUREG-1614, Vol.2, p.15; and 'Performance Budget, FY 2005,' NUREG-1100, Vol.20, pp 63-68 and 73-74; Div. of Industrial and Medical Nuclear Safety FY04 Operating Plan (updated quarterly); FY03 Leadership Level Operating Plan, 4th Quarter (memorandum from M. Leach to W. Dean, 11/21/03, ML033250555; Plan: ML033250473); FY 2004 Leadership Operating Plan, 1st Quarter (memorandum from M. Leach to W. Dean, 2/11/04, ML040420432; Plan: ML040420019); Nuclear Materials Events Database (NMED, http://nmed.inel.gov/); Policy and Procedures Letter (P&PL) 1-57 (trending using NMED data), ML020170155; March 2004 report on Materials Licensing, Inspection, and Events, SECY-04-0064, Annual Report to the Commission on Performance in Materials and Waste Arenas.

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

Explanation: The program has had ambitious annual targets since 1997. Annual targets focus on events over which the program has direct influence that are more likely to occur than events associated with the long-term goals. For example, several million medical procedures occur each year using radioactive material, so even a small percentage of adverse outcomes will result in a measurable level of events. The current target of 45 or fewer medical events is very challenging given the increasing volume and complexity of medical procedures (see Question 2.2), and is designed to provide confidence that the risk of breaching higher-level goals (e.g., deaths from acute exposures) remains acceptably low. Targets for each annual measure are based on analyses of historical data, and have generally decreased over time. Data for the annual targets are collected in NMED, enabling the program to set an adequate baseline for each measure. Existing targets are ambitious, challenging and appropriate given the consequence of the events being measured. The measures and metrics for these targets are continually evaluated to determine whether they are meaningful, and whether the measures are sufficiently ambitious. The program also established color-coded implementation tools to trigger preventive action well before the targets are reached or exceeded (i.e., the 'yellow' zones, in the operating plan).

Evidence: 'U.S. NRC Strategic Plan, Fiscal Year 2000-Fiscal Year 2005,' NUREG-1614, Volume 2; 'Performance Budget, Fiscal Year 2005,' NUREG-1100, Vol. 20, Nuclear Materials Safety Arena; Division of Industrial and Medical Nuclear Safety FY 2004 Operating Plan (updated quarterly); Information Notice 2003-09, 7/19/03, "Source Positioning Errors...Intravascular Brachytherapy;" NRC FY 2003 Performance & Accountability Report, p. 47; Information Notice 2003-21, 11/24/03, "High-Dose Rate Remote Equipment Failure;" Information Notice 2004-003, "Radiation Exposure to Members of the Public...;" http://www.nrc.gov/materials/miau/mat-toolkits.html (see Guidance section); Office of NMSS Corporate (Management and Support) Strategies FY 2004 Operational Operating Plan - 1st QTR Update; Nuclear Materials Events Database (NMED, http://nmed.inel.gov/): Quarterly Reports; Policy and Procedures Letter (P&PL) 1-80 (data verification in NMED), ML032380589; P&PL 1-57 (trending using NMED data), ML020170155; STP Procedure SA-300 (State input to NMED).

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

Explanation: The NRC co-regulates nuclear materials users with the AS and count their licensee events in the NRC's performance targets. Achieving the NRC's strategic goals requires the collective efforts of the NRC (includes both Headquarters and the Regional Offices), the AS, other partners as delineated below, and the licensees. NRC and the AS share the same data base (NMED) to achieve the national safety goals. NRC contractors are monitored in accordance with procedures that are aligned with our long-term goals by formally qualified project managers. The program maintains continual communication with the licensees and the AS through a number of channels such as the NMSS Licensee Newsletter, issued quarterly, and with generic communications.

Evidence: "Statement of Principles and Policy for the Agreement State Program," 62 FR 46517-25; STP Procedure: Processing an Agreement - SA-700, 4/2/01; STP Procedures SA-300 "Reporting Material Events, 5/23/01; NRC MD 5.6 and 5.9, 11.7 and 11.8; MC 1007; NRC-SECY-03-0096, 6/6/03, "Section 274b Agreement with the State of Wisconsin;" Nuclear Materials Events Database (NMED, nmed.inel.gov/); Contract management training: www.internal.nrc.gov/ADM/DCPM; NMSS Policy and Procedures Letter 1-36 (ML031780929); NMSS Licensee Newsletter, NUREG/BR-0177, No. 03-4, Dec. 2003.

Are independent 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: 1. Formalized, periodic Integrated Materials Performance Evaluation Program (IMPEP) assessments, conducted by teams of NRC and AS staff, evaluate the NRC and the AS programs to ensure adequacy and consistency in the Nation's materials safety program to protect health and safety. Teams are independent, staffed by qualified reviewers selected from outside the program being audited. The OAS, a separate, independent, non-profit organization, performs a key staffing role by coordinating AS personnel participation on IMPEP reviews. AS managers also help ensure objectivity in the review process by participating on the IMPEP Management Review Board. A GAO survey found the IMPEP program 100% adequate to assess the effectiveness of a regulatory program. 2. GAO evaluated the program's oversight of sealed sources; NRC is taking steps to resolve recommendations. 3. NRC's IG had an independent contractor survey NRC's workforce to measure the safety culture and compare with government and national benchmarks. IG found significant progress as compared to a similar survey in 1998. NRC scores exceeded national benchmarks. 4. The NRC contracted a risk study of the use of radioactive materials by the materials program. The analysis included a study of regulations already in place. In several uses, the analysis showed that the regulations helped lower the risk level, such as with gamma irradiators. 5. A 2003 internal audit identified training and procedural issues that the NRC also resolved. 6. NRC conducted a self-assessment review of the Event Reporting System; the recommendations are scheduled for implementation.

Evidence: STP Procedure Approval: Processing an Agreement - SA-700, April 2, 2001; NRC MD 5.6; NRC/STP Procedures SA-101 through SA'900 (available on NRC web-site); "Reviews of Agreement State and NRC Regional Programs" at NRC web site (e.g. Headquartes audit, 1/30/02); GAO Report 'Federal and State Action Needed to Improve Security of Sealed Radioactive Sources,' Aug. 2003, GAO-03-804 (p. 87); letter from Chairman Diaz to U.S. Representative Thomas Davis, 2/4/04; "Technical Quality of the Division of Industrial and Medical Nuclear Safety Product - Exempt Distribution Licensing," memorandum from T. Carter to C. Miller, 8/28/03; "IMNS Audit Results, MSIB, Section A, Responses on Recommendations to Address Identified Weaknesses", e-mail from M. Bailey to C. Miller, 10/2/03; "Technical Quality of NMSS Products", internal audit procedure, 12/11/02. www.internal.nrc.gov/safety-culture. NUREG/CR-6642, Vols. 1-3, "Risk Analysis and Evaluation of Regulatory Options for Nuclear Byproduct Material Systems, 2/2000. "Event Reporting Self-Assessment," 3/22/04, ML041600705.

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 Materials Program budget is explicitly linked to accomplishment of the agency and program performance goals. The program uses a prioritization process to rank each activity's contributions to agency strategic and performance goals in making budget decisions. 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. This process is to be made more transparent in the FY 2006 budget formulation cycle. The Operating Plans are structured in accordance with strategic goals and are used to monitor performance and make necessary adjustments. These are described in the NRC's Planning, Budgeting and Performance Management (PBPM) process. The methodology for allocating infrastructure and supports costs is consistent with the methodology used to prepare NRC financial statements.

Evidence: 'U.S. Nuclear Regulatory Commission Strategic Plan, Fiscal Year 2000-Fiscal Year 2005,' NUREG-1614, Volume 2; and 'Performance Budget, Fiscal Year 2005,' NUREG-1100, Vol. 20, 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 Industrial and Medical Nuclear Safety FY 2004 Operating Plan. GAO Report, 'Efforts to Strengthen the Link Between Resources and Results at the Nuclear Regulatory Commission,' December 2002. Commission memorandum, dated July 19, 2003, "Update to the Planning, Budgeting and Performance Management Process (PBPM)." Prioritized list of activities in support of the FY 2006 budget request (prepared by NMSS/PMDA, February 2004); Prioritized list of activities in support of the FY 2005 budget request (prepared by NMSS/PMDA, February 2003)

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

Explanation: NRC's updated Strategic Plan, now under final Commission review, includes new goals for Security, Effectiveness & Efficiency, and Management Excellence, which incorporates the five items of the President's Management Agenda. The new Management Excellence goal provides additional visibility and accountability for the Agency's support organizations and the role they play in ensuring programmatic success. The new Plan responds to significant external factors that have arisen since issuance of the previous Strategic Plan. The Plan also specifically outlines strategies and means to improve budget and performance integration. The formalized and systematic prioritization process links activities with their contributions to attaining long-term goals. Performance measures being developed to reflect the new Strategic Plan are fewer in number and are more refined and streamlined to better reflect program contributions to the NRC's strategic goals. These measures are evaluated annually through the validation and verification process.

Evidence: 'U.S. Nuclear Regulatory Commission Strategic Plan, FY 2004-2009,' NUREG-1614, Volume 3; and 'Performance Budget, Fiscal Year 2005,' NUREG-1100, Vol. 20, and NRC Report, Fiscal Year 2003. 'Key Planning Assumptions and Performance Measures for the FY 2005- FY 2006 Budget,' COMSECY-04-0009, March 16, 2004.

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: Before a proposed rule is developed, a rulemaking plan (RP) is prepared for Commission approval. It is not required by the APA, but is used to describe the regulatory issue, analyze options, identify resource impacts, and how the rule would support achievement of the program's strategic goals. It provides opportunity for early input on the proposed regulatory change. The program works cooperatively with AS in developing the RP, as well as in developing regulations or guidance. The public and interested stakeholders have at least one opportunity to comment on proposed regulatory actions. The Statements of Consideration for each proposed and final rule provide a background and summary of the regulatory action and include a discussion as to why the program is taking the regulatory action.

Evidence: Administrative Procedures Act of 1946. MD 6.3, The Rulemaking Process. NUREG/BR-0053, Rev. 5, NRC Regulations Handbook, March 2001. NMSS Policy and Procedures Letter 1-63. NUREG-BR-0058, Revision 3, Regulatory Analysis Guidelines of the U.S. Nuclear Regulatory Commission, Final Report, July 2000. SECY-01-0072 (distribution of source material). Denial to Petition for Rulemaking, PRM-34-5, 68 FR 41757. Part 71: SECY-01-0035 and 67 FR 21390 (proposed rule) and SECY-03-0141 and 69 FR 3698 (final rule). SECY-03-0068 and 10/9/03 SRM (Interagency Jurisdictional Working Group). Control of the Disposition of Solid Materials: various SECYs, i.e. SECY-02-0133, SECY-00-0070.

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: The program has several mechanisms for evaluating performance. It updates its operating plan quarterly with licensee performance data, including reported events, and uses that information to adjust priorities, focus resources and determine which areas need specific management attention. The program collects and evaluates event information from all NRC and Agreement State licensees via our Nuclear Materials Events Database (NMED) system. It implements a systematic inspection program to evaluate licensee performance, and based on poor performance reduce the inspection interval.

Evidence: Reporting requirements in 10 CFR Parts 20, 21, 30, 40 and 70. SECY-02-0216 "...Significant Nuclear Materials Issues and Adverse Licensee Performance" 12/11/02. NRC MD 8.14 "Agency Action Review Meeting" 5/7/02. MD 5.6, SA-300, SA-700 and Manual Chapter 2800. NMED, http://nmed.inel.gov/: Quarterly Reports (trending analysis,; Policy and Procedures Letter 1-80 (data verification in NMED) ML032380589; P&PL 1-57 (trending using NMED data) ML020170155; SA-300 State input to NMED.

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: Managers implement specific tasks in support of the Strategic Plan and Operating Plan, including cost schedules and results. SES contracts and performance standards are used, in part, to determine promotions and awards. The SES program in FY 2004 links individual goals more closely to NRC goals. AS commit to administer adequate and compatible programs, and their performance is evaluated through the IMPEP process. The NRC does not establish costs or targets, except for inspection schedules, for its partners. AS must also adopt regulations that are compatible with NRC's to eliminate potential for conflicts, duplications or gaps in the nationwide program.

Evidence: 7/15/03 Paul Bird memo on FY2004 SES Performance Plans. NRC Form 351, FY 2004 SES Performance Plan and Appraisal, dated 12/2003. MD 5.6, SA-700 and MC 2800. NRC-SECY-03-0096, 6/6/03, "Section 274b Agreement with the State of Wisconsin." MD 5.6 and 5.9 and SA-200, "Compatibility Categories...," 2/6/01 and SA-201, "Review of State Regulations," 6/19/03.

Are 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 MD, Volume 4 'Financial Management'. NRC monitors commitments, obligations, and expenditures on a monthly basis and reports findings in monthly and quarterly reports in the Budget Execution Reports. Contract funds are tracked at the project manager, Division and Office level. The program has specific targets for funding to be committed, obligated, and expended each quarter. Through rigorous oversight and accountability, it limits carryover (unobligated funds) at the end of each year.

Evidence: NRC MD, 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, IMNS Monthly Contract Reports, OCFO Budget Execution Reports (prepared monthly and quarterly).

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

Explanation: The program has conducted numerous process reviews to achieve efficiencies within the materials program. The Business Process Review of inspection activities resulted in: 1) a reduction in the number of inspections required for low-risk licensees, and 2) a more efficient unit cost (labor rate) for each inspection. These changes saved over 6 FTE per year as compared to FY 2000. A BPI of the sealed source and device review function was conducted in 2003, and a second review is planned for FY 2005, in anticipation of similar efficiencies. Next, NRC intends to improve efficiency through web-based licensing. Each SES member has a contract element tracking performance in effectively managing human and financial capital. Annual review, analysis and updating of the NRC's fee structure provides other mechanisms for ensuring cost efficiency. Licensees and other stakeholders have opportunities to comment on the draft fee rule each year, prior to final rule publication. This provides external feedback that also encourages efficiency.

Evidence: Revised Inspection Manual Chapter 2800 slide show, entitled "National Materials Program Pilot Project 5", Chair, Thomas Young. "NRC Form 351- Senior Executive Service Performance Plan and Appraisal" 12/03, page 6. 10CFR Parts 170 & 171, Revisions of Fee Schedules, Final Rule for FY 2003 (68 FR 26714), 6/18/03.. NMSS Licensing Business Process Improvement, Industrial and Medical Nuclear Safety, Management Briefing, 12/1/03. IMNS BPI Opportunities for Improvement, Quick Hit, 12/1/03

Does the program collaborate and coordinate effectively with related programs?

Explanation: The NRC co-regulates materials licensees in collaboration with AS, and work with EPA, DOT and OSHA to ensure the safety of the public, workers, and the environment. The NRC has MOUs with EPA, DOT and OSHA to ensure that there are no duplicative efforts for the materials licensees that we regulate, and to point out to one another possible problems that fall into each other's purview. AS commit to adequate and compatible programs and their performance is routinely evaluated through the IMPEP process to ensure they continue to administer programs adequate to protect public health and safety and compatible with NRC's program.

Evidence: MOU with EPA and NRC; Consultation and Finality on Decommissioning and Decontamination of Contaminated Sites," 67 FR 65375; "Transportation of Radioactive Materials; MOU " 44 FR 38690; NRC-SECY-92-165, SECY-02-0146, "Fee Recovery for Fiscal Year 2003; Atomic Energy Act of 1954. MOU with OSHA, SA-700 and MD 5.6. Individual IMPEP reports (e.g., Louisiana). NUREG-1100,Vol. 20,Appendix IX, "Cross-Cutting Functions" (pgs. 236-248).

Does the program use strong financial management practices?

Explanation: NRC financial management practices governing control of funds and resource allocation are codified in Management Directive 4.2 and are fully implemented by the nuclear materials users licensing and inspection program. The adequacy of these practices is reflected in the fact that NRC's financial statements have earned unqualified opinions for ten consecutive years, with no material weaknesses found in the FY 2003 audit. On-time payments improved from 87% in FY 2002 to 94% in FY 2003. The rate of improper payments at 0.5% of transactions and 0.1% of total funds is well within CFO Act and OMB criteria for low risk. 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 2003, NRC OIG: 'Audit of the Nuclear Regulatory Commission's FY 2003 Financial Statements,' (OIG-04-A-03), Monthly Budget Execution Reports (BER), Quarterly review of BER by top Agency management, NRC Management Directive 4.2, 'Administrative Control of Funds;' NRC Administrative Control of Funds and Financial Management Seminars.

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

Explanation: NRC or AS program deficiencies may be identified from IMPEP reviews, or OIG reports. IMPEP has specific procedures to effect performance improvements when needed. Corrective actions are tracked and effectiveness is evaluated in follow-up IMPEPs, or in the program's color-coded Operating Plan. No management deficiencies have been identified in the program recently, but NMSS strives for continuous improvement and has taken a number of self-initiated actions, including: 1) 10/03 reorganization consolidating all of NRC's Eastern regional activity in one Region; 2) a group to identify communication weaknesses and develop more successful strategies; 3) meetings within NMSS to share the Director's visions and values for the Office.

Evidence: 11/5/03, H. Bell memo, "Inspector General's Assessment of the Most Serious Management Challenges Facing NRC". FY 2003 Leadership Operating Plan 4th Quarter, Nuclear Materials Safety Arena (ML 022350555; ML 033250473.) NRC MD 5.6, provides IMPEP guidance, procedures and criteria. Attachment to COMSECY-02-0030, on the 10/03 Fuel Cycle and Materials Consolidation. 2/17/04 Communications WG Charter: Placard for NMSS Values, dated 1/9/02.

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: The NRC seeks involvement in many ways early in the rulemaking process. It coordinates early and closely with its co-regulator partners, the AS. It seeks early involvement from ACMUI on medical regulations. It may publish an Advanced Notice of PR or an Issues Paper in the Federal Register to obtain comments on regulatory actions under consideration. All PRs are published for comment. The program often holds multiple meetings/workshops at locations convenient to stakeholders, under an enhanced participatory rulemaking process, to address technical issues under consideration as in the case of its work on the Control of Disposition of Solid Materials. The program interacts with other organizations, such as CRCPD/OAS, EPA, OSHA, and DOE, often with representatives participating on its working groups. All final rules include a detailed comment analysis. Please also see response to 2.RG1.

Evidence: Part 2, Section 2.805. "US Nuclear Regulatory Commission Strategic Plan, FY 2000 - FY 2005"-NUREG 1614, Vol. 3. MD 6.3, The Rulemaking Process. NUREG/BR-0053, Rev. 5, NRC Regulations Handbook. ACMUI Meeting Summaries. Part 71: SECY-03-0141, 69 FR 3698, 65 FR 44360. Part 35: Final Rule - 67 FR 20250; Appendix BB to NUREG-1556, Vol. 9; SECY-03-0145 and SRM dated 10/9/03. Control of the Disposition of Solid Materials: 68 FR 9595; SECY-00-0070 and 8/18/00 SRM; NUREG/CR-6682; Issues Paper, 64 FR 35090, 6/30/1999. SECY-03-0092, 6/5/2003 (portable gauge PR). Public meeting notices and Public Feedback Forms for Interagency Jurisdictional Working Group and Control of the Disposition of Solid Materials

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 the SBREFA and the Regulatory Flexibility Act and is in full compliance with their requirements on applicable rulemakings. For example, the final Fee Rule for FY 2003 contains a Regulatory Flexibility Analyses and a SBREFA determination. The Fee Rule for FY 2004 will also address these requirements. 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: 68 FR 36714, 6/18/2003,10 CFR Parts 170 and 171 Revision of Fee Schedules; Fee Recovery for FY 2003; Final Rule. NUREG/BR-0053, Rev. 5, NRC Regulations Handbook, March 2001. SECY-03-0092 (portable gauge proposed rule). Part 2, 69 FR 2182, 1/14/2004. Part 35 Final Rule, 67 FR 20250, 4/24/2002. NUREG-0936, Vol. 22, No. 2, July - Dec. 2003 (Regulatory Agenda)

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

Explanation: The Materials Program (MP) participates in an interoffice Rulemaking Coordinating Committee (RCC) that meets monthly. One purpose of the RCC is to ensure that rulemaking is conducted consistently across the agency. The RCC chartered an interoffice Task Force to perform a broad review of the NRC rulemaking process. The MP conducts internal reviews of its regulations. One review led it to revise Part 35 to focus regulations on medical procedures that pose the highest risk, in accordance with its overall movement to risk-informed regulation. This revision decreased regulatory burden. The program periodically reviews regulations for the exemptions in Parts 30 and 40 to ensure that the requirements are still justified and protect public health and safety. It reviews and approves proposed State regulations for adequacy and compatibility as well as reviews State regulations during IMPEP reviews. The program also has a process to accept and evaluate petitions for rulemaking to provide the public and other stakeholders a process and opportunity to seek greater regulatory effectiveness.

Evidence: RCC meeting minutes, i.e. 01/14/03, 10/07/03, 12/02/03. Supplement 1 to NUREG-0053, 07/02/02. Direct Final Rule procedure change to the Regulation Handbook. Rulemaking Process Improvement (RPI) Implementation Plan, May 16, 2003 (ML031360205). RPI Task Force Final Report to the Rulemaking Coordinating Committee, November 6, 2002, (ML023180108). SECY-03-0131 Part 35: FR 67 20250, April 24, 2002, final rule for Part 35, along with direct final rules. Consumer Products Policy. SECY 02-0196 and 11/17/03 SRM. SECY- 99-259 and 03/09/20 SRM. SECY-01-0072 and 06/05/03 SRM. SECY-03-0068 and 10/09/03 SRM. NUREG-1717, Systematic Radiological Assessment of Exemptions for Source and Byproduct Material. STP Procedure SA-201, Review of State Regulatory Requirements. State reviews dated 07/31/03 for LA, and and 10/31/03 for ME. IMPEP reports dated 03/03/04 for LA (p. 10) and 05/01/03 for FL (pages 2 and 11). 10 CFR Part 2, Section 2.802, Petition for rulemaking.

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

Explanation: For all rulemakings, NRC conducts Regulatory Analyses (RA) that include a cost/benefit analysis to determine whether proposed changes maximize benefits. Its RA guidance includes OMB guidance about selecting regulatory alternatives that gain the largest net value/benefit. Rulemaking plans always include an analysis of options, including rejection of an action, with an evaluation of pros and cons. However, not all benefits can be quantified and the protection of the public health and safety remains paramount among its goals and drives its decisions. NRC regulations provide for many alternatives for maintaining records, including electronic means. To be in compliance with the Government Paperwork Elimination Act, the program amended the rules to clarify when and how licensees and other members of the public may use electronic means to communicate with the Agency.

Evidence: Management Directive 6.3, The Rulemaking Process. NUREG/BR-0053, Rev. 5, NRC Regulations Handbook, March 2001. NUREG-BR-0058, Revision 3, Regulatory Analysis Guidelines of the U.S. Nuclear Regulatory Commission, Final Report, July 2000. Part 35 final rule-67 FR 20250. Part 71-SECY- 03-0141 (FR citation-69 FR 3698). SECY-00-0236 and 1/18/01 SRM (reporting requirements). 10 CFR Section 20.2110, Section 30.51(c)(1), and Section 34.87. Electronic Maintenance and Submission of Information, 68 FR 58792, effective 1/1/2004.

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

Explanation: NRC, along with the AS, has met all of its long-term safety and security goals. The performance targets are evaluated and updated annually, if necessary. New security performance measures, now under final Commission review, reflect this evolution.

Evidence: NUREG-1100, Volume 20, Performance Budget, Fiscal Year 2005 (primarily pages 59-82). 02/04. Draft FY 2004-2009 Strategic Plan, draft 11/7/03. See Measures Tab for goals and performance data.

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

Explanation: The materials program, which includes AS event information, has met all of its safety and security related annual performance goal measures since 2000. Systematic integration of performance into programmatic and resource decisions occurs routinely and is documented in the annual performance report as well as in the operating plan. The program identifed ways to continually improve: e.g., improving the performance measures; continuing to revise the targets values, on the basis of quantitative analysis of the results in preceding years and on the evaluation of the events reported in NMED; and implementing the recommendations of the IMPEP audits. In addition, operating plans are evaluated on a quarterly basis to monitor performance.

Evidence: U.S. Nuclear Regulatory Commission Performance and Accountability Report, Fiscal Year 2003, page 46; Performance Budget, Fiscal Year 2005, NUREG-1100, Vol. 20, page 63-64, Nuclear Materials Safety Arena; Division of Industrial and Medical Nuclear Safety FY 2004 Operating Plan.

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

Explanation: The program has quantitative output measures (e.g., Item 10 in Measures) to ensure program effectiveness, efficiency, and timeliness. Efficiencies have been planned and achieved in the materials program. In FY 2003, the staff revised Inspection Manual Chapter 2800, "Materials Inspection Program," to enhance risk-informed, relative priorities for routine inspections of all licensees and a program of special inspection activities. Concurrently, the Inspection Procedure 87100 series was revised to focus on the most risk-significant licensee activities. This saved 6 FTE per year (20% savings). NUREG-1556 provides a risk-informed, performance-based approach in licensing guidance and reduces the amount of information required to support license applications and renewals. Timeliness in reviewing licensing applications has also improved since 1999, from 94% to 97% resulting in savings to licensees.

Evidence: Manual Chapter 2800 p. 1 and p. 16, and background information. FY2003 Performance and Accountability Report, pp. 43-44. "Performance Budget, Fiscal Year 2005," NUREG-1100, Vol. 20, pp. 72-73. 'Consolidated Guidance About Materials Licenses,' NUREG-1556, Vol. 1-20. Inspection Procedure 87100 series.

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

Explanation: The materials inspection and licensing program is designed to prevent adverse events in contrast to other programs (i.e., OSHA, EPA) where the inspections are conducted in response to adverse events. The program conducts regular, scheduled inspections of its licensees based on the risk of the activities they conduct. Similarly, it issues licenses for the use of radioactive materials based on the same risk criteria used to establish inspection frequency. The program actively involves AS in the development of regulations and guidance, and provide oversight through IMPEP. The materials program has outcome-based measures and efficiency and cost-effectiveness measures, and performs cost-benefit comparisons in its Regulatory Impact Analyses.

Evidence: Atomic Energy Act of 1954, Public Law 83-703 (68 Stat. 919). Energy Reorganization Act of 1974, Public Law 93-438 (H.R. 11510) (88 Stat. 1233). The US Nuclear Regulatory Commission Performance and Accountability Report, Fiscal Year 2002, page 46. Manual Chapter 2800 (inspection program), NUREG-1556 Series documents (license issuance guidance). OMB PART Program Summaries, FY 2005 Budget.

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

Explanation: The program conducts both external and internal program quality audits such as third-party IMPEP reviews, the 2003 internal audit of exempt distribution licensing, evaluations of our Byproduct Materials program, and a recent review of the NRC rulemaking process by an interoffice task force. It regulates the use of radioactive materials by program area, or type of materials used. The two largest program areas are medical (doctors, clinics, hospitals, medical centers,) and industrial (portable and fixed gauges, radiographers, well-loggers, et. al.). Program evaluations are conducted by areas and across the entire program. Program area-specific studies have included such evaluations as: the National Academy of Sciences review of the NRC's decision-making process for disposition of slightly radioactive solid materials; the risk analysis of rulemaking actions (see Question 2.6) where the results showed that the regulations in place helped lower the risk level, such as with gamma irradiators. The IMPEP reviews constitute program-wide evaluations and when areas of performance improvement are identified through IMPEP reviews, IMPEP procedures have been effective in improving performance.

Evidence: Region III IMPEP report dated 5/30/03 (ML031530134). Technical Quality Audit of Division of IMNS, Exempt Distribution Licensing, dated 8/28/03. Phase II, Byproduct Material Review, August 2001. RPI Task Force Report, ML023180108. RPI Final Report to RCC, 11/6/02 ML031360205. NUREG/CR-6642, Vols. 1-3, "Risk Analysis of Regulatory Options for Byproduct Material Systems," 2/2000, p 5-3 through 5-5. IMPEP review (3/03) focused on the materials, decommissioning and fuel cycle inspection and licensing programs in Region III."Final Report for the Integrated Materials Performance Evaluation Review of the NRC Sealed Source and Device Evaluation Program," memorandum from Carl Paperiello to Martin Virgilio, 1/30/02. The NAS June 2002 report, "The Disposition Dilemma: Controlling the Release of Solid Materials from Nuclear Regulatory Commission-Licensed Facilities."

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

Explanation: The Regulatory Analysis supporting every rulemaking action addresses the direct costs or savings to licensees, NRC, and State/local gov't agencies; non-radiation risk-related costs or savings to the general public; averted onsite impacts; and changes in regulatory efficiency or scientific knowledge needed for regulatory purposes. RAs in most cases show a net benefit for regulations for the use of radioactive materials regulated by the Materials Program, such as medical uses (Part 35), and transportation (Part 71). Otherwise, the program proceeds with rulemaking only when public health and safety or common defense and security will be degraded without it. In all aspects of rulemaking, public health and safety remains paramount among its goals and will drive its decisions.

Evidence: MD 6.3, The Rulemaking Process. NUREG/BR-0053, Rev. 5, NRC Regulations Handbook, March 2001; NUREG-BR-0058, Revision 3, Regulatory Analysis Guidelines of the U.S. Nuclear Regulatory Commission, Final Report, July 2000. Strategic Plan, Fiscal Year 2000 - Fiscal Year 2005, p. ix. Part 35 final rule-67 FR 20250. Part 71-SECY-03-0141 (FR citation-69 FR 3698).