International Isotopes said Tuesday it would no longer provide radiological field services for the Department of Energy, after the federal agency put a hold on all existing contracts in the wake of a cesium-137 spill last May during a job in Seattle.
“Regardless of the DOE’s future plans for field service contracts, it is unlikely that the Company will seek this type of contract work in future years,” the Idaho Falls, Idaho, nuclear medicine company said in a press release on its 2019 earnings.
That applies to all radiological field services outside International Isotopes’ own facility, President and CEO Steve Laflin told Nuclear Security & Deterrence Monitor. The Energy Department has been the only client for this work over the latest year, though the company had previously provided the same service for the United Nations’ nuclear agency.
The work has primarily involved recovery of retired sealed sources used in hospitals, industry, and other settings, along with installation or extraction of select cobalt therapy devices, according to an International Isotopes 10-K document filed Monday with the Securities and Exchange Commission.
“The decision is based upon changing insurance requirements and carrier exclusions of covered activities,” Laflin said by email. “It is possible the coverage requirements could change in future years but it is unknown what future contract opportunities there could be.”
In May 2019, International Isotopes was removing a blood irradiator from a research facility at the University of Washington’s Harborview Medical Center for DOE’s National Nuclear Security Administration (NNSA). An accident caused the release of cesium-137, contaminating 13 people and seven floors of the building.
In the 10-K, management said DOE has since “indefinitely” frozen or terminated all contracts with International Isotopes for this work. Laflin did not discuss details of those contracts, and the NNSA did not respond to questions by deadline Friday.
Cleaning up the Seattle cesium-137 incident will cost the NNSA some $20 million in fiscal 2020, which ends Sept. 30, according to Congress’ detailed explanation of the semiautonomous Department of Energy nuclear-weapon agency’s 2020 budget.
International Isotopes aided the cleanup effort until August, after which Perma-Fix Environmental Services, of Atlanta, took over as the NNSA’s main cleanup contractor for the incident. The broken irradiator was shipped to the Pacific Northwest National Laboratory near Richland, Wash., for analysis.
In its 10-K, International Isotopes said its former contracts with the NNSA should indemnify the company — even if it is found legally liable for the incident — from financial damages, under the federal Price-Anderson Act. The law provides broad protection for licensed federal contractors involved with nuclear and radiological incidents, and International Isotopes has asked the NNSA to invoke those protections.
The cesium spill cost International Isotopes just under $2.5 million in 2019, almost all of which the company believes it can recover as expenses and from insurance, the 10-K says. In 2019, for example, International Isotopes recovered $950,000 related to the incident from its insurance company.
International Isotopes and the NNSA investigated the cause of the incident last year, and the company said it is still waiting for the results of that investigation from the federal government.
International Isotopes’ radiological services revenue dropped by roughly 58% from 2018 to 2019, according to the earnings release. Overall, International Isotopes reported a 14% drop in sales, year over year, from $10.4 million in 2018 to over $8.9 million in 2019. Its net loss spiked by 80%, from $844,576 in 2018 to over $1.5 million in 2019, on the back of higher operating costs and a one-two punch from increased other costs and loss of revenue due to the Seattle accident.
