The Nuclear Regulatory Comm. (NRC) regulates domestic medical, industrial, & research uses of sealed radioactive sources. Those attempting to purchase a sealed source must apply for a license & gain the approval of either NRC or an "agreement state (AS)." To become an AS, a state must demonstrate that its regulatory program is compatible with NRC reg's. & is effective in protecting public health & safety. NRC then transfers portions of its authority to the AS. In 2003, it was reported that weaknesses in NRC's licensing program could allow terrorists to obtain radioactive materials. NRC responded to this issue, incl. issuing guidance to license examiners. This report tests the licensing program using covert investigative methods.