The issue is related to quering a specific user.
Have you verified this record in FND_USER table? What's different about this user? Can you reset the password of this user from the backend (or do any other update via FND_USER_PKG) and see if it works.
I believe you need to obtain FRD log file here -- Search previous threads for "FRD R12" and you should find the MOS docs you need to follow.