Work that is not related to the formulation of regulations or related regulatory guidance to be applied to DOE as a licensee may continue to be placed with DOE. Examples of work that generally does not present a COI when performed at the DOE laboratories are: technical training, administering reactor operator licensing examinations, collection of data (without analyses) on selected technical issues, technical assistance and research for commercial power reactors, and review of licensee application materials when DOE has no organizational relationship with the licensee and is not subject to the portion of the regulation under which the application is submitted.

No DOE facility can review any DOE license application materials. In addition, as NRC becomes more involved in the licensing of DOE facilities, DOE laboratories will not be able to provide technical assistance or research for NRC's regulatory activities whenever those activities affect DOE facilities.

For example, if DOE is governed by NRC's non-power reactor regulations, a COI would result should DOE give NRC technical advice interpreting or applying NRC's non-power regulations to any entity operating a non-power reactor, including non-DOE licensees. In summary, an entity that is subject to a particular NRC regulatory scheme may not assist NRC in interpreting or applying that regulatory scheme to others, absent a COI waiver.

NRC has used commercial contractors or placed work on a very limited case-by-case basis at CNWRA to resolve recent organizational COI issues regarding DOE laboratories. Examples of these areas include: sealed source and device reviews, dosimetry for radiopharmaceuticals, and high-level waste issues at facilities other than Yucca Mountain. As explained more fully in the Attachment, NRC's ability to utilize the CNWRA is restricted by its charter and the Federal procurement regulations governing the operation of FFRDCs.

In light of NRC's experience with NWPA, where NRC was unable to locate qualified commercial firms to provide technical support for NRC's regulatory activities because DOE was using essentially all qualified commercial resources, there is a strong possibility that NRC will not be able to rely on commercial sources to support NRC's expanded regulation of DOE in the future, should that situation recur. It should be noted that some DOE laboratories capabilities, such as criticality assessments, may simply not be available from any other source in the U.S. Similarly, certain essential facilities, such as hot cell facilities, are unlikely to be available commercially, or if available, would be licensed by the NRC which would produce a similar COI concern.

• Continuing to place work at DOE laboratories will ensure continuity for existing programs and access to essential unique facilities.
• Avoids potentially costly start-up costs for new facilities or an expanded FFRDC. In the case of some unique facilities, such as hot cells, construction and start up costs are estimated to be hundreds of millions of dollars.
• Maintains NRC management's authority to make decisions regarding COI issues.
• Easy to implement because the use of waivers relies on existing statutory and regulatory authority.
• Expertise would be readily available.

• Frequent granting of waivers may degrade the credibility of the NRC's COI policy and imposes a greater administrative burden on NRC management.
• Inconsistent with concept that the NRC should act within its established policy and, if necessary, amend the policy rather than deviating frequently.
• Appears to create a lesser standard for COI considerations for DOE activities, which may be contrary to what is needed.
• For some cases, the use of a DOE laboratory may not satisfy the criteria for granting a waiver.

• Could result in more flexibility to place work at DOE laboratories.
• Continuing to place work at DOE laboratories will ensure continuity for existing programs and access to essential unique facilities.
• Avoid potentially costly start-up costs for new facilities or an expanded FFRDC. In the case of some unique facilities, such as hot cells, construction and start up costs are estimated to be hundreds of millions of dollars.
• Has many of the attractions of an FFRDC in that skilled expertise would be readily available to support NRC's regulatory activities.

• Legislation may be difficult to obtain if Congress and/or OMB do not see a need for it.
• While this helps to ensure less rigidity in utilizing DOE laboratories, it could result in a COI statute that is inconsistent with the independence NRC needs to perform its regulatory oversight role properly.
• Easing of rules may degrade NRC's credibility as an independent regulator.

• Expertise would be readily available.
• FFRDC offers longevity.
• Permits NRC to build a foundation of experts who are dedicated to NRC's regulatory approach. The current FFRDC was able to attract top graduates and now attracts top experts in the nuclear field.
• Essentially eliminates COI concerns, since NRC controls all the "work for others" that an FFRDC may perform.

• Requires Office of Federal Procurement Policy (OFPP) approval. OFPP generally discourages the establishment of an FFRDC or substantial expansion of an existing FFRDC, absent compelling justification.
• May be difficult for an FFRDC to maintain a full complement of required expertise to support NRC requirements in areas in which NRC does not call upon given types of expertise frequently enough to support full-time employees.
• Increases cost to NRC, to the degree that new resources must be developed. As stated earlier, in the case of some unique facilities, such as hot cells, construction and start up costs are estimated to be hundreds of millions of dollars.
• May take years to build technical expertise and credibility.
• Requires long-term financial commitment.

• Avoidance of COI would be ensured.
• Expertise would be readily available. Has many of the attractions of an FFRDC, in that skilled expertise would be readily available and dedicated to NRC's regulatory activities.

• May take years to build up the necessary expertise in one location.
• Does not fully comply with NRC's COI statute, regulations and policies and may require a revision to those authorities or a class deviation.
• May not be possible to assemble a diversified staff in one location for the wide range of work that the DOE laboratories now perform for NRC.
• Whether DOE would be willing to give NRC the assurances and safeguards that NRC would need to use a laboratory is uncertain. These assurances include the right for NRC to assign and direct work at the laboratory without DOE's review, approval or involvement (other than processing payment) or the right for NRC to exclude DOE work that conflicts with NRC's work at the laboratory.

With the advent of external regulation of DOE facilities by the NRC, there is a possibility that AEOD will require increased support similar to that provided by the DOE laboratories. Because emergency response programs would need to be expanded to include the DOE facilities, a potential COI issue may occur in the emergency response support activities currently provided by DOE labs. Comparable expertise is available within the NRC (with one exception) and with commercial contractors to handle most of these activities.

Within AEOD's emergency response programs, support of the RASCAL consequence analysis code may involve a potential conflict of interest. This work is done by PNL and ORNL, which employ leading experts in the field. The code is currently being updated and should not require another update for several years. Future updates cannot be ruled out, however, and at this time there does not seem to be a viable alternative to using DOE laboratories.

Also in NMSS, DOE laboratory technical support for transportation and transportation package reviews, cask analyses, and spent fuel movement systems and facilities does not involve scarce skills and abilities. Therefore, if DOE facilities were not available, the office's work could be competitively procured.

Recently, NMSS proposed assignment of three technical support tasks to DOE National Laboratories in circumstances where DOE is the license applicant or is otherwise subject to NRC's regulatory authority. In view of the language of Section 170A of the AEA, the potential for an organizational conflict of interest was a significant consideration in NRC's determination of whether or not to assign this work to DOE laboratories. A short synopsis of each proposed assignment of work to DOE laboratories and the Office of General Counsel's (OGC) conflicts analysis for each case follows. In these cases, management approved that the work be done at CNWRA within the FAR guidelines, without objection from OGC after OGC review and a determination of no legal objection. However, the mechanism allowing placement of this work at the CNWRA would not apply to the vast majority of NRC work performed at the DOE laboratories unless the charter is expanded.

DOE elected to seek an NRC license under the provisions of 10 CFR Part 72 for the construction of an Independent Spent Fuel Storage Installation (ISFSI) to house TMI-2 debris canisters, to be located at DOE's Idaho National Engineering and Environmental Laboratory (INEEL). NMSS asked DOE's Pacific Northwest Laboratory (PNL) to provide technical and engineering services to support the review of this license application.

On January 27, 1997, PNL submitted a conflicts disclosure which indicated that PNL staff provided support to a number of DOE projects involving dry storage of spent fuel, including PNL's membership on the National Spent Fuel Nuclear Program Technology Integration Technical Working Group sponsored by DOE's Office of Environmental Management. However, PNL did not work directly supporting DOE's design, construction and operation of the ISFSI.

Battelle Northwest, the corporation that operates PNL, does so under a Management and Operations (M&O) contract with DOE, which gives DOE the general right to approve all work that the laboratory performs for organizations other than DOE. Although the Energy Reorganization Act of 1974 grants the NRC a special right of access to DOE's national laboratories, DOE maintains the ability to control the work that its laboratory contractor performs for NRC. Under current guidelines, the license applicant, DOE, would have both the general ability to control work that PNL performs for NRC and would have a direct role approving and monitoring the specific work that NRC assigns to PNL, reviewing DOE's license application for the ISFSI.

DOE, the intended recipient of the license for ISFSI, continues to operate the national laboratories through its contractors. DOE continues to reserve the right to assign work to the laboratories without regard to the fact that DOE's work may conflict with current NRC work at the lab. Further, judging by the general description of the advisory work PNL performs supporting DOE's spent fuel program, PNL's work for DOE may encompass the same technical considerations as those required to support NRC's review of the ISFSI. For example, PNL is a member of a DOE work group which is charged with identification of technical issues associated with dry storage of DOE-owned spent fuel.

In light of these considerations, a potential for organizational COI resulted from (1) PNL's status as a

In connection with its consideration of DOE's license application to construct an ISFSI for storing TMI-2 debris at INEEL, discussed above, NRC planned to prepare an EIS. NMSS asked DOE's Oak Ridge National Laboratory (ORNL) to provide NRC with technical support for all phases of the EIS process, from an initial scoping of the work to the issuance of the final EIS. One step in this process is an assessment of DOE's programmatic EIS on its overall spent fuel management program to determine what additional information NRC needs for an EIS covering just the ISFSI.

ORNL's January 31, 1997. proposal disclosed information on potential conflicts relating to this work. Specifically, both ORNL and INEEL, are operated by subsidiaries of Lockheed Martin Corporation. ORNL advised that "...ORNL staff members that will be involved in this project are employees of [the ORNL sub] and have no direct association with [the INEEL sub] or DOE activities at INEEL." Also, ORNL advised that some ORNL staff served as reviewers of DOE's programmatic EIS on spent fuel management, but were not involved in its preparation.

OGC had concerns that a potential conflict resulted from the circumstance that the license applicant, DOE, had substantial control over the activities of the DOE contractor that NMSS intended to use to support NRC's review of DOE's license application. Moreover, two corporations affiliated with Lockheed Martin Corporation would be involved here supporting the license applicant, DOE, and the licensor (regulator), NRC, on the same technical matters. In this respect, consistent with its COI regulations, NRC considered the relevant activities of related corporations, including subsidiaries when analyzing potential conflicts. One Lockheed Martin subsidiary would be assisting NRC in assessing the environmental aspects of a facility to be built and operated by another Lockheed Martin subsidiary in this case. This circumstance of commonly controlled subsidiaries working for both NRC and the license applicant on the same matter, created a potential for organization conflict of interest that precluded assigning this work to ORNL, without an EDO waiver. In addition, ORNL participated in reviewing DOE's programmatic EIS, which must be reviewed as part of ORNL's work for NRC. These circumstances would

DOE submitted a TSAR to NRC for a Dry Spent Fuel Transfer System, consisting of a large shielded transfer-cell that would permit a nuclear utility or other spent fuel handling facility to perform cask to cask transfers of individual spent fuel bundles without the need to return the fuel to a spent fuel pool. While this transfer system could be used at the ISFSI, the system is generally applicable to DOE dry fuel handling operations and DOE was seeking separate approval of the system. NMSS asked PNL to support NRC's review of the TSAR. PNL's technical support would include reviewing the design criteria, performing structural, thermal, radiation, protection, criticality and confinement evaluations; performing an accident analysis; and reviewing the operating procedures.

PNL's letter of January 27, 1997, indicated that PNL had advised and was advising DOE at that time on matters pertaining to the dry storage of spent fuel, which includes cask to cask transfer of such fuels. Further, although NRC would not license the TSAR, NRC's review and approval of the TSAR for the Dry Spent Fuel Transfer System is a regulatory action that is bound by the same COI considerations as direct applicants may rely upon an approved TSAR in their requests to license spent fuel handling facilities. Therefore, due to DOE's general and specific ability to control the activities of its operating contractors, OGC advised that assignment of work to PNL reviewing DOE's TSAR submission would constitute an organizational COI. OGC agreed with staff that this work could be done under the CNWRA Charter, since it is related to NWPA activities.

Also in NMSS, SCALE (Standardized Computer Analysis for Licensing Evaluation) is a system of codes used to perform nuclear criticality, shielding, depletion, radiation and decay heat source term, and heat transfer calculations. The SCALE system was developed by Oak Ridge National Laboratory (ORNL) for the NRC in the late-1970s to give the NRC staff an accurate and reliable computational tool for performing safety evaluations of nuclear systems. For almost 20 years, SCALE has been the primary code used by the staff to perform nuclear and thermal reviews and confirmatory analyses of transportation packages and spent fuel storage systems. Today, SCALE is also used by the NRC to perform safety reviews of fuel cycle systems and waste disposal systems. SCALE is also used by DOE, private industry, and many international organizations (both private and governmental).

SCALE is a large, complex code system, available in nine platforms and consisting of 37 code modules, 250,000 lines of coding, 4,200 pages of documentation and 113 MB of data libraries. Continued maintenance and development are needed to preserve the code's reliability and state-of-the art computing capabilities. ORNL continues to maintain and develop the SCALE.

The staff needs SCALE to perform its safety reviews, and the staff needs assurance that the code remains accurate and reliable. The continued accuracy and reliability of SCALE depends heavily on the expertise available at ORNL. The staff at ORNL are the experts in the programming of SCALE. In addition, the ORNL staff are world-renowned experts in nuclear physics, criticality safety, shielding assessment, and heat transfer. Thus, ORNL has the expertise in both the programming of SCALE and its technical/theoretical basis. This level of expertise is not available elsewhere.

There is concern that with both the NRC and the DOE using the same laboratory, there may be potential for organizational COI if the NRC staff is using SCALE as part of a review of a DOE application. Also, it is possible that industry will request the laboratories to perform analyses in support of licensing submittals that draw on specialized capabilities at the laboratories. For example, recently EPRI requested that ORNL perform neutron transport calculations. There have been similar requests from the industry for other analyses that were rejected by the laboratories in the past.

One area of support to NMSS and NRC is in the area of radiation effects and internal dosimetry modeling. The REACT/TS function at Oak Ridge is the national and internationally recognized center of expertise on radiation effects and treatments. The NRC has accessed this source in dealing with events, and has contract vehicles available to obtain assistance in dosimetry modeling and assessment of intakes. However, this resource is not available in the commercial sector in a single location.

NRR has a technical assistance contract with the Idaho Engineering and Environmental Laboratory (INEEL) for the review of non-power reactor applications and other technical issues. If NRR assumes the regulation of DOE non-power reactors, use of INEEL may pose an organizational COI situation for DOE reactors and technical assistance and research related to the regulation of DOE as a licensee.

The impact on the research program of the COI concerns discussed in this paper are potentially much more severe than those that resulted in establishment of the FFRDC because very expensive test facilities are involved. For example, the NRC's research program makes extensive use of hot cell facilities at two of the DOE laboratories, where the cost of operating those facilities is shared among NRC and DOE programs. It would not be financially practical for the NRC to move that work to universities or commercial facilities. Further, even if the work could be moved to the private sector, the hot cell facility operators would still be NRC licensees which could raise another COI concern.

The research program also makes use of certain highly specialized facilities that are primarily funded by DOE programs. It would not be feasible to reconstruct these facilities at another laboratory and then fully subsidize their operation.

Several of the research programs that use the hot cell and other unique facilities are involved with internationally funded research programs and the disruption of those programs while new facilities were constructed, or the work moved to other existing facilities if they could be identified, would have a significantly adverse impact on the programs and on the NRC's ability to leverage our funding through participation in those programs.

The loss of the DOE laboratories on the research program would have a major negative impact on the research program. The potential financial impact in establishing credible expertise, and in constructing new, highly specialized facilities, could be measured in the hundreds of millions of dollars. Further, these changes would disrupt the programs for several years.

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Thursday, February 22, 2007