Second Degree. Performance failures that have been determined, in accordance with applicable law, regulation, or DOE directive, to have actually resulted in, or that can reasonably be expected to result in, serious damage to the national security. The following are examples of performance failures or performance failures of similar import that will be considered second degree: (i) Theft, loss or diversion of Category III SNM that is due to a failure or inadequacy of performance by the Contractor. (ii) Inventory differences of Category I/II/III SNM beyond alarm limits where there is no evidence that the difference is created by loss, theft, or diversion. (iii) Any amount of SNM found in a dangerous/hazardous or unapproved storage environment, or unapproved mode of transportation/transfer. (iv) Failure to implement corrective action(s) in response occurrence of any second degree performance failure.
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