On December 15, 2004, the Office of the Chief Counsel issued an Order L. Gray Barrel & Drum Company, Inc. (Respondent), finding Respondent had committed the following violation of the Hazardous Materials Regulations (HMR) and assessing a penalty in the amount of $8,400: Representing, marking, certifying, selling, and offering tight-head steel drums, marked in part UN1A1/Y1.4/200/USA/2003/1513RL, as meeting the requirements of the Hazardous Materials Regulations, when design qualification testing was not performed as prescribed. Respondent’s request for a reduction in the penalty amount to $275 is denied. Respondent’s financial condition warrants an additional 20 percent reduction of the civil penalty assessed in the Chief Counsel’s Order of December 15, 2004. The civil penalty of $6,720 is appropriate in light of the nature and circumstances of these violations, their extent and gravity, Respondent’s culpability, Respondent’s ability to pay, the effect of a civil penalty on Respondent’s ability to continue in business, Respondent’s prior violations and all other relevant factors.