EG&G Invitation to Bid No. 25-93, which included the surplus reprocessing equipment, indicates that "no commitment will be made or implied by the seller until such time as the bidder is notified, in writing, of acceptance of the offer." An EG&G Notice of Award for the equipment, signed by the Department's contracting officer, was issued on July 12, 1993, notifying Frontier Car Corral that it had submitted the high bid for the equipment. The purchaser signed the Notice of Award on August 11, 1993, indicating that he had received this written notification by at least that date. The General Sale Terms and Conditions accompanying the Invitation to Bid, however, specify that title to the property would vest in the Purchaser when removal of the property was affected, and that the Purchaser would be entitled to possession upon full payment of the bid price. Thus, assuming that Mr. Johansen made his final payment and took constructive possession of the equipment on August 11, as the Notice of Award indicates, the actual sale was completed on that date. It is important to note that the Department of Energy knew at the time the sale was completed that the purchaser would be notified by the appropriate federal authority (Nuclear Regulatory Commission) that the equipment would be subject to export restrictions and an export license if he planned to resell the equipment out of the country. The Department of Energy (DOE) had been working with the Department of State (DOS) and the Nuclear Regulatory Commission (NRC) since we learned of the sale. We were informed by NRC representatives that Mr. Johansen had been advised of the law regarding the export controls on the equipment, both verbally, and in writing by the NRC. Since the export of this type of equipment is licensed by the NRC, we felt this was the most appropriate form of notification. However, after DOE staff received phone calls from Mr. Johansen in February 1994 -- calls in which he questioned the need for an export license -- and was told at that time of his acquisition of diagrams and blueprints, -- items subject to DOE export authorization -- we thought it prudent to advise him in writing of all relevant export control laws regarding nuclear information, equipment, or materials. Mr. Rooney's March 3, 1994, letter did this. His use of the term "recently" was in reference to the new information he had learned in February 1994. COMMITTEE: HOUSE GOVERNMENT OPERATIONS SUBCOMMITTEE: ENVIRONMENT, ENERGY AND NATURAL 8/9/93 8/24/93 8/25/93 9/15/93 9/16/93 9/22/93 10/15/93 Robin DeLaBarre, Department of State (DOS) fax to Betty Wright, Licensing Office, Office of International Programs, Nuclear Regulatory Commission (NRC), regarding information received from the British Government concerning a U.S. firm's offer to sell salvaged DOE equipment. Robert Einhorn, Acting Assistant Secretary of State, Bureau of Political-Military Affairs, LOS, letter to Department of Energy (DOE) reports Frontier Salvage offer to sell DOE surplus reprocessing equipment to British Nuclear Fuels Ltd. Ron Hauber, Assistant Director, Export Security and Safety Cooperation, Office of International Programs, NRC letter to Mr. Johansen indicating the equipment purchased from EG&G Idaho is subject to export controls. John Rooney, then Director, Office of Export Controls and International Safeguards, DOE response letter to Einhorn/DOS notes U.S. export control would have prevented transfer to a proliferant but DOE taking measures to sensitize personnel to proliferation issues posed by surplus disposal. (See Keliher Memorandum dated 9/22/93.) Victor Alessi, then Director, Office of Arms Control and Nonproliferation, DOE Keliher memorandum to DOE program and field offices cautions surplus disposal personnel to familiarize themselves with export control laws and regulations and make sure purchasers are aware of export control requirements. DOE/Export Control Division to Distribution - New Edition of Nuclear Technology 1/28-2/1/94 Department of Energy informed by Department of State that Mr. Johansen had received technical information, e.g., blueprints, flow-charts. 1/28-2/1/94 DOE/Export Control Director, tasks Oak Ridge National Laboratory technical expert to gather and review the available information on the sale of equipment to determine sensitivity/export control classification. 2/3/94 2/25/94 3/3/94 7/5/94 Export Control Division received letter from Oak Ridge National Laboratory technical expert summarizing the information received regarding the equipment. NRC Chairman Ivan Selin letter to Department of Energy Secretary O'Leary states concerns about the Frontier Salvage case. Rooney/Office of Arms Control and Nonproliferation letter to Mr. Johansen cautions that export of surplus reprocessing equipment would require license or authorization by DOE, NRC, and/or DOC. This follows several DOE export control staff and DOE laboratory conversations with Mr. Johansen regarding export licensing/nonproliferation aspects of any sale of such equipment. Secretary's response to Selin notes DOE has put Frontier Salvage on notice regarding export licensing requirements. |