Nothing in this part shall be deemed to require a license for:

(a) The manufacture, production, or acquisition by the Department of Defense of any utilization facility authorized pursuant to section 91 of the Act, or the use of such facility by the Department of Defense or by a person under contract with and for the account of the Department of Defense;

(b) Except to the extent that Administration facilities of the types subject to licensing pursuant to section 202 of the Energy Reorganization Act of 1974 are involved;

(1)

(i) The processing, fabrication or refining of special nuclear material or the separation of special nuclear material, or the separation of special nuclear material from other substances by a prime contractor of the Department under a prime contract for:

(A) The performance of work for the Department at a United States government-owned or controlled site;

(B) Research in, or development, manufacture, storage, testing or transportation of, atomic weapons or components thereof; or

(C) The use or operation of a production or utilization facility in a United States owned vehicle or vessel; or

(ii) By a prime contractor or subcontractor of the Commission or the Department under a prime contract or subcontract when the Commission determines that the exemption of the prime contractor or subcontractor is authorized by law; and that, under the terms of the contract or subcontract, there is adequate assurance that the work thereunder can be accomplished without undue risk to the public health and safety;

(2)

(i) The construction or operation of a production or utilization facility for the Department at a United States government-owned or controlled site, including the transportation of the production or utilization facility to or from such site and the performance of contract services during temporary interruptions of such transportation; or the construction or operation of a production or utilization facility for the Department in the performance of research in, or development, manufacture, storage, testing, or transportation of, atomic weapons or components thereof; or the use or operation of a production or utilization facility for the Department in a United States government-owned vehicle or vessel: Provided, That such activities are conducted by a prime contractor of the Department under a prime contract with the Department.

(ii) The construction or operation of a production or utilization facility by a prime contractor or subcontractor of the Commission or the Department under his prime contract or subcontract when the Commission determines that the exemption of the prime contractor or subcontractor is authorized by law; and that, under the terms of the contract or subcontract, there is adequate assurance that the work thereunder can be accomplished without undue risk to the public health and safety.

(c) The transportation or possession of any production or utilization facility by a common or contract carrier or warehousemen in the regular course of carriage for another or storage incident thereto.

[40 FR 8788, Mar. 3, 1975, as amended at 65 FR 54950, Sept. 12, 2000]