Text

Partial Initial Decision LBP-86-15 Granting Applicant 850312 Motion for Summary Disposition of Concerned Citizens Against Nuclear Power Contention 4 & Resolving CLI-80-32,Issues A,B, C & D.Served on 860613
	ML20211E666
Person / Time
Site:	South Texas
Issue date:	06/13/1986
From:	Bechhoefer C, John Lamb, Shon F; Atomic Safety and Licensing Board Panel
To:	; HOUSTON LIGHTING & POWER CO.
References
	CON-#286-566 79-421-07-OL, 79-421-7-OL, CLI-80-23, LBP-86-15, OL, NUDOCS 8606160214
	Download: ML20211E666 (382)
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i c , M 6-15 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION ATOMIC SAFETY AND LICENSING BOARD S9VED JUN 1319Ei6 Before Administrative Judges Charles Bechhoeft., , Chairman Dr. James C. Lamb Frederick J. Shon

)

In the Matter of ) ASLBP No. 79-421-07 OL

)

HOUSTON LIGHTING AND ) Docket Nos. STN 50-498 OL POWER COMPANY, ET AL. ) STN 50-499 OL

)

(South Texas Project ) June 13, 1986 Units 1 and 2) )

)

PARTIAL INITIAL DECISION (Operating License)

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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION ATOMIC SAFETY AND LICENSING BOARD SEwtc JUN 131986 Before Administrative Judges Charles Bechhoefer, Chairman Dr. James C. Lamb Frederick J. Shon

)

In the Matter of ) ASLBP No. 79-421-07 OL

)

HOUSTON LIGHTING AND ) Docket Nos. STN 50-498 OL POWER COMPANY, ET AL. ) STN 50-499 OL

)

(South Texas Project ) June 13, 1986 Units 1 and 2) )

)

PARTIAL INITIAL DECISION (Operating License)

(Phases II/III)

N TABLE OF CONTENTS i

Page 0 PINION.......................................................... 2 I. INTRODUCTION........................................... 2 A. Procedural Posture of the Case.................... 4 B. Su mma ry o f De c i s i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 1

II. OPINION ON INDIVIDUAL PHASE II ISSUES.................. 13 A. Reportability or Notifiability of Quadrex Report and of Replacement of B&R; HL&P's Candor............................................ 13

1. Background................................... 13

2. Contention 9: Reportability Pursuant to 10 C.F.R. 9 50.55(e) of Quadrex Report.... 21

3. Contention 10: Notifiability Pursuant to McGuire Doctrine of Quadrex Report and B&R Replacement; Candor of HL&P Phase

! I Testimony.................................. 31

a. The McGuire Doctrine..................... 32

b. Effect on Character of McGuire Doctrine Violations, and Instances of Lack of Candor........................... 36 B. Current Competence of HL&P and Its Contractors (Issues B and D).................................. 43

! 1. Background................................... 43 l 2. Summary Disposition: Standards.............. 48

3. Ruling on CCANP's April 25, 1985 Response.... 50

4. Reasons for Granting Partial Summary l Disposition.................................. 60

5. 10 C.F.R. 9 50.55(e) Reporting............... 62

6. Soils and Foundations........................ 66

( 7. General Update on Current Competence of

HL&P and Its Contractors..................... 70 i

i l

C. Contention 4: Hurricane Design and Contruction... 71 i 1. Background................................... 72

2. Design Questions............................. 74 1

a. Reported Wind Speeds.................... 75

b. Nonconforming Structures................ 78

c. CCANP's Opposition to Summary Disposition............................. 87

3. Construction Questions....................... 89 III. OPINION ON PHASE III ISSUES............................ 91 A. Introduction...................................... 91 B. Issue C........................................... 93 C. Issue F (Summary Disposition).................... 103 IV. MOTIONS IV AND V TO RE0 PEN PHASE II RECORD............ 105 A. Background....................................... 106 B. Motive for Filing Motion IV...................... 108 C. Ruling on Motions................................ 113 D. Additional Information in Saltarelli Deposition.. 117

, E. Additional Comments on HL&P Candor............... 120 t

. V. CONCLUSION............................................ 124 1

I FINDINGS OF FACT AND CONCLUSIONS OF LAW. . . . . . . . . . . . . . . . . . . . . . . . . 127 I. FINDINGS OF FACT...................................... 127 A. Procedural Background............................ 127 B. Reportability or Notifiability of Quadrex Report and of B&R Replacement; Candor of HL&P Phase I Testimony................................ 136 ii

iii 612 ......ynomitseT I esahP s'P&LH fo rodnaC .c 312 ........cnI..,.tooR &..nworB fo tnemecalpeR .b 102 ..........

......tropeR xerdauQ .a 002 ............................... 01 noitnetnoC 2 991 9 noitnetnoC ot tcepseR htiw noisulcnoC .f 791 ..........)j(1 3 gnidnif cireneg xerdauQ 591 ..........)i(1 3 gnidnif cireneg xerdauQ 391 . . . . . . . . . . )h(1 3 gnidnif cireneg xerdauQ 191 . . . . . . . . . . )g(1 3 gnidnif cireneg xerdauQ 881 . . . . . . . . . . )f (1 3 gnidnif cireneg xerdauQ 781 . . . . . . . . . . )e(1 3 gnidnif cireneg xerdauQ 581 ..........)d(1 3 gnidnif cireneg xerdauQ 381 . . . . . . . . . . )c(1 3 gnidnif cireneg xerdauQ 871 ..........)b(1 3 gnidnif cireneg xerdauQ 571 . . . . . . . . . . )a(1 3 gnidnif cireneg xerdauQ 371 ...................tropeR xerdauQ eht fo sgnidniF cireneG eht fo ytilibatropeR .e 271 ..............)g(1 2 8 4 gnidnif xerdauQ 171 ..............)f(1 2 8 4 gnidnif xerdauQ 171 ..............)e(1 2 8 4 gnidnif xerdauQ 071 ..............)d(1 2 8 4 gnidnif xerdauQ 961 ..............)c(1 2 8 4 gnidnif xerdauQ 761 ..............)b(1 2 8 4 gnidnif xerdauQ 761 ..............)a(1 2 8 4 gnidnif xerdauQ 561 ..............)k(1 3 7 4 gnidnif xerdauQ 561 ..............)b(1 3 7 4 gnidnif xerdauQ 461 ..............)a(1 3 7 4 gnidnif xerdauQ 361 ..............)n(1 2 6 4 gnidnif xerdauQ 261 ..............)b(1 2 5 4 gnidnif xerdauQ 061 ..............)n(1 2 3 4 gnidnif xerdauQ 951 ..............)d(1 2 3 4 gnidnif xerdauQ 751 ..............)a(1 2 3 4 gnidnif xerdauQ 551 . . . . . . . . . . . . . . )b(1 2 1 4 gnidnif xerdauQ 451 .......)e(55 05 % .R.F.C 01 rednU tropeR xerdauQ eht fo sgnidniF enilpicsiD laudividnI demaN fo ytilibatropeR .d 151 ...)e(55 05 6 .R.F.C 01 rednu elohW a sa tropeR xerdauQ eht fo ytilibatropeR .c 831 ...........tropeR eht fo yrotsiH lareneG .b 631 ..............................dnuorgkcaB .a 631 ................................ 9 noitnetnoC 1

(1) Quadrex Report.................... 217 (a) Testimony of Mr. Goldberg.... 217 (b) Testimony of Mr. Jordan. . . . . . 220 (c) Testimony of Mr. Oprea. . . . . . . 222 (d) Testimony of Mr. Frazar. . . . . . 224 (2) Testimony Concerning Adequacy of B&R Design Engineering Services... 226 (a) Testimony of Mr.-Goldberg.... 226 (b) Testimony of Mr. Jordan...... 226 (c) Testimony of Mr. Oprea. . . . . . . 227 (d) Conclusion with Respect to Contention 10..................................... 228 C. Current Competence of HL&P and its Contractors... 228

1. Partial Summary Disposi tion. . . . . . . . . . . . . . . . . 228

2. 10 C.F.R. 5 50.55(e) Reporting.............. 240

3. Soils and Foundations....................... 249 i

4. General Update on Current Competence of HL&P and Its Contractors................. 269 D. Contention 4 (Hurricane Design and Construction). 276 E. Issue C.......................................... 293 F. Issue F (Summary Disposition).................... 300 II. CONCLUSIONS OF LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304 0RDER........................................................... 306 APPENDICES (unpublished)

Appendix A: List of Phase II Witnesses and Prefiled Testimony............................... A A-2 Appendix B: List of Phase II Exhibits............... B B-15 Appendix C: Transcri pt Corrections. . . . . . . . . . . . . . . . . . C C-55 iv

LBP-86-15 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION ATOMIC SAFETY AND LICENSING BOARD Before Administrative Judges Charles Bechhoefer, Chairman

' Dr. James C. Lamb Frederick J. Shon

)

In the Matter of ) ASLBP No. 79-421-07 OL

)

HOUSTON LIGHTING AND ) Docket Nos. STN 50-498 OL POWER COMPANY, ET AL. ) STN 50-499 OL

)

(South Texas Project ) June 13, 1986 Units 1 and 2) )

)

PARTIAL INITIAL DECISION (Operating License, Phases II and, in part, III)

Appearances Jack R. Newman, Esq. , William H. Allen, Esq., Maurice Axelrad, Esq.,

Klvin H. Gutterman, Esq., Donald J. Silverman, Esq. and Steven P.

Frantz, Esq., Washington, D.C., and Finis E. Cowan, Esq., Houston, Texas, for Houston Lighting and Power Co. (HL&P), et al., Applicants Lanny Alan Sinkin, Esq., Washington, D.C., and Ray Goldstein, Esq.,

Austin, Texas, for Citizens Concerned About Nuclear Power, Inc. (CCANP),

l Intervenor Brian E. Berwick, Esq., Austin, Texas, for the State of Texas, Interested State Edwin Reis, Esq., Oreste Russ Pirfo, Esq. , and Robert G. Perlis, Esq.,

Bethesda, Maryland, and William L. Brown, Esq., Arlington, Texas, for the United States Nuclear Regulatory Commission Staff l

l l

OPINION I. INTRODUCTION This is our second Partial Initial Decision (PID-II) in this l

proceeding, which involves the application for operating licenses for the South Texas Project, Units 1 and 2 (STP) by Houston Lighting & Power Company (HL&P), the City of San Antonio, Central Power and Light Company, and the City of Austin, Texas (hereinafter referred to collectively as the Applicants). Our earlier decision (PID-I) was issued on March 14, 1984. LBP-84-13, 19 NRC 659,1 affirmed in part, ALAB-799, 21 NRC 360 (1985), review declined by Commission, letter dated i

July 30, 1985.

This proceeding previously was divided into three phases. The first included various issues emanating frcm the Commission's ruling in CLI-80-32, 12 NRC 281 (1980) that bear on the character and competence of HL&P, the lead Applicant, as well as numerous contentions of the two Intervenors who were then participating--Citizens Concerned About Nuclear Power, Inc. (CCANP) and Citizens for Equitable Utilities, Inc.

(CEU). (CEV withdrew from the proceeding prior to the conclusion of the Phase I hearings.) We dealt with those issues in PID-I. As a result of 1

We here note a typographical error in the printed version of LBP-84-13. At the bottom of the text on p. 681 of 19 NRC, the following words were omitted: " conclusions as to HL&P's competence and character. For reasons de ." The slip opinion did not contain this error. See slip op., p. 31.

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information that was revealed during the course of the Phase I hearings--particularly (1) the issuance of the Quadrex Report, a consultant's study that was extremely critical of the design-engineering efforts of HL&P's contractor, Brown & Root, Inc. (B&R) and (2) the subsequent replacement of B&R by new contractors--we were not able to complete the record on the character and competence issues. We thus l

deferred to Phase II several aspects of those issues that were not resolved in PID-I. In Phase II, we also considered a contention dealing with the design and construction of the STP to withstand hurricanes.

These issues are dealt with in this Decision. Phase III was to have included several remaining issues or contentions. Two of those, which will not require further hearings, are also dealt with in this Decision.

(See further description of issues in Part I.A of this Opinion.)

For the reasons set forth below, we are resolving all but one of the issues currently ripe for decision in favor of the Applicants (subject in certain instances to caveats or conditions). We are further concluding (similarly subject to caveats or conditions) that the Applicants currently possess adequate managerial character and competence to be permitted to complete construction of and to operate the STP. However, we are requiring further development of the record l with respect to one aspect of the hurricane design issue. Beyond that, one additional element of the hurricane issue (construction of the STP to withstand hurricanes) remains for possible further adjudication.

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A. Procedural Posture of the Case (Findings 426-445)

The early procedural history of this proceeding is set forth in PID-I and need not generally be repeated here. Suffice it to say that, in our Phase I decision, we considered, inter alia, several issues bearing upon the character and competence of HL&P, the lead Applicant, to complete construction of and to operate the STP.

These issues were among the six (designated Issues A through F) that were formulated as a result of the Commission's ruling in CLI-80-32, supra. That ruling, which followed the issuance on April 30, 1980 by the NRC Staff of a Show-Cause Order based on alleged quality assurance (QA) deficiencies, expanded the scope of a number of Intervenor-sponsored QA contentions already at issue in this proceeding.

In PID-I, we issued rulings on various aspects of CLI-80-32 Issues A

through E, together with the QA contentions sponsored by the Intervenors. The remaining CLI-80-32 issue (Issue F), which questions the adequacy of HL&P's QA program for operations, was deferred to Phase III (Fourth Prehearing Conference Order, dated December 16, 1981 (unpublished), at 6). (We are granting summary disposition of Issue F later in this Decision (infra, pp. 103-04).)

Of the CLI-80-32 issues which we considered in PID-I, we issued a final ruling only on Issue E, which questioned the adequacy of certain in-place structures and components. We found that, as of the close of the Phase I record, there was reasonable assurance that the structures in place at the STP were in conformity with applicable regulatory requirements (PID-I, supra, 19 NRC at 702).

Issues A, B, C, and D question specified facets of HL&P's character and/or competence to complete construction of, and thereafter to operate, the STP. Our PID-I rulings on each of them were subject to further consideration or updating later in the proceeding.

Issue C--concerning HL&P's planned organization for operation and its competence and commitment to operate the STP safely--was resolved favorably to HL&P, but only on the basis of preliminary information then available. Our ruling was subject to updating in Phase III (when actual operational programs and personnel would have been selected by HL&P).

However, on the basis of uncontroverted affidavits provided by the Applicants and Staff, we are ruling finally on this issue in Part III of this Opinion (see infra, pp.93-103).

Our resolution of the other CLI-80-32 issues (A, B and D) was in each case subject to modification as a result of questions to be considered in Phase II. Specifically:

1. Issue A questioned whether HL&P's record of compliance with NRC requirements was so inadequate that HL&P should be regarded as lacking the necessary competence or character to be granted operating licenses. This issue explicitly excluded any I

consideration of the effectiveness of corrective actions adopted by HL&P as a result of QA deficiencies that had been discovered earlier.

l We concluded that, without taking into account corrective actions resulting from the April 30, 1980 Show-Cause Order, HL&P's character was adequate but that its competence was questionable in l

certain respects. Whether HL&P's competence had been sufficiently improved was considered under Issues B and D. The favorable ruling on the adequacy of HL&P's character was subject to modification as 4

a result of the Phase II consideration of the Quadrex Report. That report did not become available to the Board and parties until late September 1981, after much of the hearings in Phase I had been completed, although the Staff had been apprised of its content in i the spring of 1981, shortly after its issuance. Fourth Prehearingi Conference Order, supra, at 4-5; PID-I, supra,19 NRC at 691; Findings 473, 619, 638, infra.

As described in detail in Part II.A of this Opinion, as well as in LBP-85-6, 21 NRC 447 (1985), and in our Fifth Prehearing Conference Order, dated November 16, 1984, at 5-9 (unpublished),

our Phase II consideration of the Quadrex Report was limited to the effect on HL&P's character of its handling of that report--

particularly its notification of the NRC (including this Board) of the report. Two contentions were involved, designated as CCANP Contentions 9 and 10. In litigating these questions, we reexplored the truthfulness of certain of HL&P's Phase I testimony concerning the adequacy of B&R's design engineering efforts. LBP-85-6, supra, 21 NRC at 459-60. We also considered certain questions raised by CCANP's April 17, 1985 Motion to Reopen Phase I Record, concerning the timeliness of HL&P's notification of this Board of the replacement of B&R. See Memorandum and Order (Explanation of

, Ruling on CCANP Motion to Reopen Phase I Record), LBP-85-19, 21 NRC 1707 (1985).

2. Issue B questioned whether HL&P has taken sufficient remedial steps to correct earlier deficiencies and provide

~

assurance that it now has the managerial competence and character to operate the STP safely. Given our findings and conclusions on Issue A, our consideration of the adequacy of corrective actions under Issue 8 focused on HL&P's competence. We reached preliminary conclusions that HL&P had corrected the competence deficiencies which we had found to have existed. But we found that we could not reach definitive conclusions on this subject, since the record did

] not reflect construction activities carried out by HL&P using its

new contractors. Accordingly, we directed that that aspect of l Issue B be considered in Phase II. Thus, our resolution of Issue B 4

! in PID-I was subject to further consideration in Phase II of the competence of HL&P and its contractors.

l Similarly, Issue D--dealing with the adequacy of the construction QA program, including its implementation--was decided only insofar as it raised programmatic questions. We found that the QA organizations and practices for the STP met regulatory requirements. Although we also preliminarily found reasonable assurance that the program would be properly implemented, this preliminary finding was made subject to the Phase II report on competence that we were directing on Issue B. Our consideration of these competence questions appears in Part II.B of this Opinion.

l 3. PID-I also ruled on Intervenor Contentions 1 (including its multiple subparts) and 2. These rulings were not subject to l supplementation in later phases of the proceeding. Contention 3

(concerning overpressurization) was scheduled to be considered in Phase III. But CCANP subsequently moved to withdraw this contention, and we dismissed it. In doing so, we reviewed the Staff's resolution of the unresolved generic safety issue that had given rise to the contention. LBP-86-5, 23 NRC 89 (February 14, 1986). Contention 4 (concerning hurricanes) was considered in Phase II. Our granting of summary disposition on most aspects of this contention, which we announced in our Sixth Prehearing Conference Order, dated May 17, 1985, at 4-6 (unpublished), is dealt with in Part II.C of this Opinion. Several portions of this contention remain to be resolved later in Phase III. Except for Contentions 9 and 10, which are considered in this PID, the remaining Intervenor contentions accepted to date (numbers 5-8) have been dismissed. See LBP-82-91, 16 NRC 1364 (1982), affirmed, ALAB-799, supra, 21 NRC at 381-84; LBP-85-8, 21 NRC 516 (1985).

We provided the parties with ample opportunities for pretrial discovery on Phase II issues (Finding 437). CCANP did not take advantage of those opportunities. Therefore, as the Phase II hearings approached, we denied several requests by CCANP for additional discovery. The Board itself, however, determined that certain categories of documents were potentially relevant to the Phase II issues to be litigated, and we directed the Applicants to furnish the Board and parties with copies of such documents. We comend the Applicants for their willing and (insofar as we can ascertain) thorough compliance with our document requests. The availability'of those documents enhanced the

f l

ability of all parties (and the Board) to develop the Phase II record adequately.

In preparing for the Phase II hearings, we held two prehearing conferences--in Houston, Texas, in October 1984, and in Bethesda, Maryland on April 30 - May 1,1985. The Phase II evidentiary hearings were held in Bay City, Texas and Houston, Texas. They occupied 21 hearing days in July and August, 1985. Oral limited appearance statements were received at both hearing locations. The Phase II record was initially closed on August 14, 1985, except for the receipt of an affidavit. (That affidavit, of Mr. Charles G. Thrash, was filed on September 6,1985, and is part of the Phase II record.)

Subsequent to the close of the Phase II record in August 1985, CCANP filed five separate motions to reopen the record. With respect to the first of these motions, we reopened the record to admit a single exhibit offered by CCANP (CCANP Exh. 148) but denied the remainder of the motion. We granted (in part) CCANP's second motion and held two additional hearing days (December 5-6,1985) in Houston, Texas. CCANP moved to withdraw the third motion, and we pm W ted it to do so.

Following the reopened hearings, the Phr.st- il r. ord was closed on December 6,1985, except for the receipt of an additional affidavit.

That affidavit, of Mr. Loren Stanley, was filed on December 17, 1985, and is part of the Phase II record. CCANP thereafter filed its fourth and fifth motions on January 17, 1986 and February 28, 1986, respectively. In Part IV of this Opinion, we are denying both of these motions.

To prepare for Phase III of this proceeding, we held a prehearing conference in Bethesda, Maryland, on March 21, 1986. On the basis of the rulings at that conference, together with the Applicants' March 12, 1986 motion for summary disposition of Issue F and a letter dated March 26, 1986 from CCANP, we are able to dispose of two of the remaining Phase III issues in this Decision (Issues C and F). We are doing so in Part III of this Opinion.

Proposed findings of fact and conclusions of law covering the basic Phase 11 record (together with CCANP Exh. 148) were filed by the Applicants, CCANP, and the NRC Staff.2 Supplemental proposed findings and conclusions on the reopened Phase II hearings were filed by the same parties.3 2 Applicants' Proposed Findings of Fact and Conclusions of Law, Phase II, dated September 30, 1985 (App. F0F-II); Intervenor's

[CCANP] Phase II Proposed Findings of Fact and Conclusions of Law in the Form of a Partial Initial Decision, dated November 5,1985 (CCANP F0F-II); NRC Staff's Proposed Findings of Fact and Conclusions of Law, dated November 19, 1985 (Staff F0F-II);

Applicants' Reply to Proposed Findings of Fact and Conclusions of Law submitted by the Other Parties, Phase II, dated November 27, 1985 (App. Reply F0F-II). References to particular proposed findings will be designated "PF".

3 Applicants' Proposed Findings of Fact for Reopened Phase II Hearing, dated December 13,1985 (App. Supp. F0F-II); CCANP Proposed Findings of Fact and Conclusions of Law in the Form of a Partial Initial Decision for Reopened Phase II Hearings, dated December 12,1985 (CCANP Supp. F0F-II); NRC Staff's Supplemental Proposed Findings of Fact and Conclusions of Law on the Reopened Phase II Hearing Record With Regard to Contention 10, dated December 13, 1985 (Staff Supp. F0F-II). We had authorized the (Footnote Continued)

B. Sunnary of Decision Issue A, insofar as it questioned the character of HL&P, was left open by PID-I to the extent that it involved HL&P's handling of the Quadrex Report. Contentions 9 and 10 define those aspects of HL&P's handling of the Quadrex Report that were accepted for adjudication. In Part II.A of this Opinion, we consider these contentions.

Under Contention 9, we conclude that HL&P should have reported one additional Quadrex Report finding pursuant to 10 C.F.R. @ 50.55(e) as a "potentially reportable" item, but that its failure to have done so does not reflect adversely on its character in any way. Under Contention 10, we reiterate our earlier conclusion that HL&P should have provided the Quadrex Report to the Licensing Board earlier than it did. We also find that, by not doing so or mentioning that report on several specific occasions, HL&P provided less-than-complete information to the Board and demonstrated less-than-desirable candor. Nonetheless, although we find that this conduct diminishes to some extent the high marks we previously accorded to HL&P for its openness, and hence diminishes to some extent our previous highly favorable evaluation of its character, it does not do so to a degree sufficient to warrant the denial of operating licenses for lack of character.

(Footnote Continued) simultaneous filing of the supplemental proposed findings and conclusions, no later than December 13, 1985 (Tr. 15708-09).

References to particular proposed findings will be designated "PF".

In Part II.B of this Opinion, we consider the competence questions left open by PID-I under Issues B and D. Although we find certain deficiencies to have existed, we conclude that HL&P has demonstrated sufficient competence to be permitted to complete construction of and to operate the STP.

In Part II.C of this Opinion, we provide reasons for our grant of summary disposition on most of the design aspects of Contention 4 (concerning hurricanes). We are requiring further development of the record with respect to the hurricane design of several safety structures (or portions thereof). In that connection, we are offering comments on the probabilistic methodology used by the Applicants and approved by the Staff for analyzing the necessity for hurricane-missile resistance of those structures. Except for such structures, we are concluding at this time that the STP has been adequately designed to withstand hurricanes.

In Part III of this Opinion, we consider the update to the evidence on Issue C that PID-I determined to be necessary. Subject to favorable findings by the Staff on certain open items--noteworthy among which is the adequacy of HL&P's shift technical advisor (STA) program--we find HL&P's organization and staffing for operations to be adequate. In Part III, we are also ruling on (and granting) the Applicants' motion for summary disposition of Issue F (QA program for operation).

Finally, in Part IV of this Opinion, we deny two motions of CCANP to reopen the Phase II record.

II. OPINION ON INDIVIDUAL PHASE II ISSUES A. Reportability or Notifiability of Quadrex Report and of Replacement of B&R; HL&P's Candor

1. Background The Quadrex Report was initially provided to the Board and parties through the Applicants' letter of September 28, 1981, almost five months after HL&P's receipt of the report. CCANP proposed to add new contentions based on the Quadrex Report (including both the substance of the report and the handling of the report by HL&P) through its motion dated November 21, 1981. CCANP sought to have those issues litigated in Phase I. At the December 8, 1981 prehearing conference, we deferred consideration of all Quadrex Report issues to Phase II, including those raising questions as to HL&P's furnishing of the report to NRC. We determined that "[a]ny findings made at the conclusion of Phase I will be subject to change in Phase II to reflect the information in and reviews of the Quadrex Report." Fourth Prehearing Conference Order, supra, at 4-5; Memorandum and Order (Denying CCANP Motion for Reconsideration of Schedule for Hearing Quadrex Matters), dated March 25, 1982 (unpublished).

Accordingly, as pointed out earlier (supra, pp. 5-6), our resolution in PID-I of Issue A--particularly insofar as it ruled on the adequacy of HL&P's character--was subject to modification as a result of the Phase II consideration of the Quadrex Report. Reflecting claims made in CCANP's November 21, 1981 motion, such consideration was

initially viewed as encompassing both the substance of the report and its procedural aspects (i.e., its handling by the Applicants).

During the course of Phase II discovery, we established further guidance with respect to the resolution of questions raised by the Quadrex Report. The first occasion was our Memorandum and Order (Granting Applicants' Motion to Compel Responses to Certain Discovery Requests, Delineating Procedural Format for Resolving Various Phase II Issues and Establishing Briefing Schedules for Certain Legal Questions),

dated June 22,1983(unpublished). There, we recognized that the report embodied extensive factual information but that a portion of that information was not safety-related. We also took note of the extensive and apparently thoroughgoing reviews of the Quadrex Report that had been performed by Bechtel Corp. (for the Applicants) and by the NRC Staff.

We accordingly called on CCANP and other parties to " identify, prior to hearing, those portions of the Quadrex Report and the reviews thereof which impact the safety issues before us and which they seek to litigate." We specifically pointed out that, as a predicate to litigation, CCANP "must identify particular safety questions which it claims arise from the Quadrex Report and have not, in its opinion, been adequately resolved through the Bechtel or NRC Staff reviews." Id. at 4.

In the same Memorandum and Order, we recognized that the questions raised by CCANP concerning reportability and notifiability of the Quadrex Report might present legal questions. We called on the Staff to i

brief these legal questions and permitted other parties to respond. M.

at 6-7.

Following the issuance of PID-I in March 1984, we offered additional guidance on the defining of Quadrex Report issues. In granting in part CCANP's request for additional discovery, we reiterated our earlier view that the Quadrex Report issues had to be narrowed:

"[t]he Quadrex Report is so broad, and covers topics with varying applicability to safety, that greater particularization is necessary to permit informed inquiry into potentially unresolved safety questions."

Memorandum and Order (Ruling on CCANP Motions for Additional Discovery and Applicants' Motion for Sanctions), dated May 22, 1984 (unpublished),

at 4. We also clarified the permissible scope of the Quadrex Report issues in light of our previous holdings in PID-I (M. at 5-6).

Thereafter, in denying reconsideration but clarifying certain aspects of the latter ruling, we elaborated on the aspects of the Quadrex Report that we deemed material to Phase II issues (Memorandum and Order (Denying Reconsideration but Clarifying Memorandum and Order of May 22, 1984), dated July 10, 1984 (unpublished)).

After receipt of briefs from all parties on the reportability (or notifiability) of the Quadrex Report, and of the positions of the parties on the proper scope of Quadrex Report issues, we discussed those issues at the Fifth Prehearing Conference, held in October 1984. We concluded, as to the substantive questions arising from the Quadrex Report, that CCANP had not identified any issues suitable for adjudication. We dismissed all Quadrex-related issues except those

challenging the reporting or furnishing to NRC (including this Board) of that report. Fifth Prehearing Conference Order, dated November 16, 1984 (unpublished), at 7-9.

Thereafter, in a Memorandum and Order dated February 26, 1985, we admitted two contentions bearing on HL&P's reporting to or notifying NRC of the Quadrex Report. The first (Contention 9) challenged the failure to report the entire Quadrex Report, and most findings of that report, to the NRC pursuant to 10 C.F.R. 5 50.55(e). The second (Contention 10) 4 challenged the timeliness of the Applicants' furnishing of the report to this Board pursuant to the McGuire doctrine (see infra, pp. 33-38). In both contentions, CCANP claimed that HL&P's performance reflected a lack of character sufficient to require a denial of the operating licenses.

LBP-85-6, supra, 21 NRC at 462-63.4 In admitting Contention 9, we included claims involving the reportability pursuant to 10 C.F.R. 6 50.55(e) of the Quadrex Report as a whole, together with several specified findings therein, premised upon claims that CCANP had made in its November 21, 1981 motion. We also provided a mechanism for parties (or the Board) to identify further findings the reportability of which warranted adjudication (including the reflections, if any, on HL&P's character of a failure to have 4 In the same Memorandum and Order, we denied CCANP's motion for reconsideration of our earlier ruling dismissing all Quadrex-related issues other than reportability or notifiability.

LBP-85-6, supra, 21 NRC at 464-66.

reported various findings determined to be reportable). On April 22, 1985, CCANP submitted additional Quadrex Report findings that it claimed i should have been reported and should be adjudicated. The Applicants filed a reply dated April 26, 1985, opposing the adjudication of any additional findings and suggesting further refinement of the findings we l had identified in LBP-85-6.

We considered these positions (together with that of the Staff) at the April 30 - May 1,1985 prehearing conference. By letter dated May 3, 1985, CCANP clarified one of the positions it had taken at the conference. In our Sixth Prehearing Conference Order (Further Definition of Phase II Issues), dated May 17, 1985 (unpublished), we admitted one additional generic finding and several additional proposed 5

discipline findings but rejected most of the additional findings proffered by CCANP. We later further clarified the findings to be litigated in our Memorandum and Order (Applicants' Motion for Clarification of Sixth Prehearing Conference Order), dated May 24, 1985 (unpublished).

Our rulings that rejected litigation of the additional Quadrex findings proposed to be litigated by CCANP were set forth in summary form, with details to be provided in this PID. (We have already 5

The Quadrex Report included both discipline findings and generic findings (which were based, in large part, on various interrelated discipline findings). For further explanation, see infra, pp.

21-22.

explained our reasons for accepting some of CCANP's proposals, and are not repeating those explanations here.) Our reasons for rejecting the proposals of CCANP are as follows:

1. CCANP sought to litigate generally all of the findings of the Quadrex Report that were designated as "most serious," all of the discipline findings that undergirded a "most serious" generic finding, and all of the findings identified by the Staff as " safety significant." (See infra, pp. 21-22.) In permitting CCANP to identify additional Quadrex findings for litigation, we directed that it provide a basis for its claims. LBP-85-6, supra, 21 NRC at 463. The brief explanations that CCANP provided for these broad categories of findings do not constitute adequate bases for litigating the reportability of these findings. Specifically, CCANP has made no attempt to demonstrate how these groups of findings are comprehended by the rather precise criteria of 10 C.F.R. $$ 50.55(e)(1)(1) and (ii), (See infra, pp. 22-24.) For example, just because the Staff regards a finding as " safety significant" does not mean that there is necessarily a

" deficiency," a "QA breakdown," or that the matter had been

" released for construction." The Staff review (NUREG-0948) uses the safety-significant designation only for purposes of evaluating corrective actions and not for purposes of reportability. Staff Exh. 136, at 24. Moreover, it is apparent from the wording of the Quadrex Report itself, as well as from testimony provided in Phase II, that the "most serious" category is far broader than matters

reportable under 10 C.F.R. % 50.55(e). See, e_.3., Quadrex Report (App. Exh. 60), Vol. I, f 3.0(1) at p. 3-1; Finding 470, infra.

2. CCANP attempted to justify the adjudication of the reportability of four findings (4.1.2, 4.5.5, 4.6.2, and 4.8.2) on the basis that selected excerpts represent "[b] road conclusions of the Quadrex Report which concern design inadequacies with potential quality assurance implications" (CCANP April 22, 1985 response, at 3). For reasons set forth in our Sixth Prehearing Conference Order, supra, we accepted for litigation a portion of one of these findings (4.8.2.1). As for the rest, CCANP failed to analyze these findings against the reportability criteria of 10 C.F.R. 9 50.55(e)(1)(i) or (ii) and also provided no other bases for litigation. For lack of an adequate basis, we rejected litigation of the reportability of these findings.

3. The final group of findings sought to be litigated by CCANP (4.6.2.4, 4.4.2.1, 3.2(n), and 4.8.2.2) is denominated only as "[s]pecific areas of concern for the adequacy of design."

Finding 4.4.2.1 was in fact reported, and additionally was discussed to some extent during the Phase II hearings (eg .,

Goldberg, ff. Tr.11491, at 23, 34). Finding 4.6.2.4 is a group of the findings that were not designated as "most serious" findings but only as " potential problem findings." CCANP made no demonstration why it believed these findir.gs were covered by the 10 C.F.R. 5 50.55(e) reporting criteria. Findings 3.2(n) and 4.8.2.2 are also not among the "most serious" findings; they are " serious"

findings which are said only "to impact the generation of reliable power." Lacking any showing of safety significance, we fail to see how they would be reportable under 10 C.F.R. Q 50.55(e). In any event, CCANP has not provided an adequate basis for litigating any of this group of findings.

In admitting Contention 10, we initially only included a claim that the Quadrex Report should have been furnished to the Licensing Board shortly after its release, pursuant to the McGuire doctrine (see infra,

p. 32). LBP-85-6, supra, 21 NRC at 460-63. As part of that claim, we designated for litigation the accuracy of the information provided us by the Applicants during Phase I concerning the performance by B&R as a contractor (jd. at 460). Thereafter, in denying CCANP's motion to reopen the Phase I record, we ruled that Contention 10 could be read as broad enough to incorporate one of the issues raised by that motion--specifically, the Applicants' failure to inform us prior to September 24, 1985 of the potential change in contractors for the architect-engineer and construction managbr of the STP. We designated that matter also to be considered under Contention 10. LBP-85-19, supra, 21 NRC at 1715. When we granted CCANP's second motion to reopen the Phase 11 record, it was to complete the record on Contention 10 insofar as that contention considered the notification of this Board of the Quadrex Report.

We turn now to Contentions 9 and 10.

2. Contention 9: Reportability Pursuant to 10 C.F.R. 6 50.55(e) of Quadrex Report (Findings 446-614)

Contention 9 claims that the Applicants' failure to notify the NRC (Region IV) of the Quadrex Report, and of many findings beyond those actually reported, within 24 hours2.777778e-4 days 0.00667 hours 3.968254e-5 weeks 9.132e-6 months from the time HL&P became aware of the findings or prospective findings of the report (including drafts),

violates 10 C.F.R. @ 50.55(e)(2) and reflects adversely on the character and competence of the Applicants and on their ability to manage the construction and operation of a nuclear power plant. LBP 85-6, supra, 21 NRC at 462-63. In approving this contention, we restricted the specific findings at issue to the ten "most serious" generic findings, 16 named discipline findings, as well as the report as a whole. Id. at 463; Sixth Prehearing Conference Order (Further Definition of Phase II Issues), dated May 17, 1985 (unpublished); Memorandum and Order (Applicants' Motion for Clarification of Sixth Prehearing Conference Order),datedMay 24, 1985 (unpublished).

By way of background, the Quadrex Report includes categories of findings denominated as " discipline findings" and " generic findings."

Quadrex had been asked to assist HL&P in review of the following nine technical disciplines (App. Exh. 60, at p. 1-1):

Civil / Structural Computer Programs and Codes Electrical / Instrumentation and Control Geotechnic Heating, Ventilating, and Air Conditioning (HVAC)

Mechanical Analysis Nuclear Analysis Piping Supports / Stress and Special Stress Analysis Radiological Control

The Quadrex Report included findings in each discipline, albeit the disciplines were grouped in slightly altered order and a section on In-serviceInspectionAspectswasadded(M.atpp.i,4-1,etseq.).

From the individual discipline findings Quadrex derived a set of

" generic" findings based on a detailed evaluation of each technical discipline and intended to present matters applicable to most, if not all, of the individual disciplines ( M. at p. 3-1).

Quadrex grouped each set of discipline findings, and the set of generic findings, according to what Quadrex deemed their seriousness, as defined at pages 3-1 and 4-1 to 4-2 of the report (App. Exh. 60). With respect to the generic findings, these consisted of "most serious" and

" serious" findings. Only the former included findings with an impact on safety. Id. at p. 3-1. With respect to discipline findings, there were five categories: "most serious," " serious", " noteworthy", " potential problem" and "other." Again, only the "most serious" findings included matters of safety significance. M.atpp.4-1to4-2.

In LBP-85-6, supra, 21 NRC at 452-53, we outlined the reporting requirements of 10 C.F.R. 5 50.55(e) applicable to holders of construction permits. For ease of reference, we will rehearse, and to some extent supplement, that discussion here. The section requires:

(1) If the permit is for construction of a nuclear power plant, the holder of the permit shall notify the Commission of each deficiency found in design and construction, which, were it to have remained uncorrected, could have affected adversely the safety of operations of the nuclear power plant at any time throughout the expected lifetime of the plant, and which represents:

(i) A significant breakdown in any portion of the

i quality assurance program conducted in accordance with j the requirements of Appendix B to this part; or (ii) A significant deficiency in final design as approved and released for construction such that the design does not conform to the criteria and bases stated in the safety analysis report or construction permit; or (iii), A significant deficiency in construction of or significant damage to a structure, system, or component which will require extensive evaluation, extensive redesign, or extensive repair to meet the criteria and bases stated in the safety analysis report or construction permit or to otherwise establish the adequacy of the structure, system, or component to j perform its intended safety function; or (iv) A significant deviation from performance specifications which will require extensive evaluation, extensive redesign, or extensive repair to establich the adequacy of a structure, system, or component to me+i the criteria and bases stated in the safety analysis report or construction permit or to otherwise establish the adequacy of the structure, system, or component to perform its intended safety function.

(2) The holder of a construction permit shall within 24 hours2.777778e-4 days 0.00667 hours 3.968254e-5 weeks 9.132e-6 months notify the appropriate Nuclear Regulatory Commission Regional Office of each reportable deficiency.

(3) The holder of a construction permit shall also submit a written report on a reportable deficiency within thirty (30) l days to the appropriate NRC Regional Office * * *.

Under these requirements, reportability is determined by a three-

! part test: a deficiency must be found, it must have the potential to l affect safety adversely if left uncorrected, and it must fall into one of the categories numbered (i) through (iv) in the regulation. All three parts of the test must be met for an item to be considered reportable. As we also ruled earlier, since categories (iii) and (iv) concern construction and the Quadrex Report concerns only design, any

reportable matters resulting from the Quadrex review, including the report itself as a whole, would necessarily have to fit categories (i) or (ii). LBP-85-6, supra, 21 NRC at 452-53.

Applying these criteria to the myriad of situations that arise in nuclear power plant construction is not a simple task. A previous Board found that 10 C.F.R. % 50.55(e) "do[es] not provide precise definitions for events that are reportable" and that "[m]uch is left to the judgment of licensee's staff and of the NRC Staff." Virginia Electric and Power C_o. (North Anna Nuclear Power Station, Units 1 & 2), LBP-78-10, 7 NRC 295, 299 (1978). In the time since that decision, the NRC Staff has issued guidance to clarify the circumstances and procedures for reporting deficiencies under this regulation. The latest version of this guidance was that issued in 1980. Heishman, ff. Tr.14846, at 2; Staff Exhs. 137,6 139. It was made available to NRC applicants The generally, including HL&P (Johnson / Constable, ff. Tr. 14846, at 5).

Staff guidance attempts, inter alia, to clarify some of the phrases used in the regulation (i.e., "could adversely affect," " significance,"

" extensive," "significant breakdown in quality assurance," and

" notification and reporting"). The chief difference between that version and the guidance available earlier was the creation of a category of items called the "potentially reportable deficiency." This 6 " Guidance - 10 CFR % 50.55(e) Construction Deficiency Reporting,"

dated April 1,1980 (hereinafter "% 50.55(e) Guidance"). A copy is attached to the testimony of Mr. Robert F. Heishman, ff. Tr.14846.

category was meant to allow for the fact that determining reportability might be time-consuming. Thus, it required early reporting where all facets of reportability could not be quickly established, set reasonable time limits for evaluation (recommended time limit of 14 days) and recognized that some matters reported as "potentially reportable" items might eventually be evaluated as not meeting the criteria and hence not ultimately requiring a report. Staff Exh.137, at 6-7.

The matter of reportability under 10 C.F.R. 6 50.55(e) is thus multi-faceted and complex, involving judgmental considerations that span both legal requirement and technical evaluation. In the case of a design matter in particular, we reiterate that a reportable item must represent a deficiency, that deficiency must have the potential to affect safety adversely, and it must either represent a significant breakdown in quality assurance or reflect a deficiency in final design as released for construction. Furthermore, uportability of a given item is frequently a matter of engineering judgment about which knowledgeable experts may reasonably differ, despite the efforts of the NRC Staff to provide guidance intended to make the requirements clearer and more uniformly applied. Indeed, a technical expert may well l experience a change of mind on reportability as his or her familiarity with the specific matter changes (Findings 482,484,606, infra). The Staff's 6 50.55(e) Guidance, which creates the "potentially reportable" category, recognizes that a particular determination may be time-consuming and that some potentially reportable items may ultimately prove to be nonreportable. See 6 50.55(e) Guidance, at 6-7. The Staff

l l

does not regard a failure to submit a "potentially reportable" item as a violation, since the "potentially reportable" category stems from Staff guidance rather than regulation. Tr. 14989 (Taylor); Tr. 14990, 15024-25(Johnson). Nor do we. On the other hand, a failure to submit as a potentially reportable item an item that later proves to have been reportable does constitute a violation of NRC requirements that may lead to the imposition of penalties. See 10 CFR Part 2, Appendix C, Supplement II, C.3.

In considering Contention 9, we have examined in detail the process by which HL&P decided what it would report under 10 C.F.R. % 50.55(e) and what it would not report (Findings 463-71). We have also examined the results of that process: in particular, we have considered whether i the entire report should have been submitted to NRC under 10 C.F.R. %

4 50.55(e) (Findings 480-87), whether there were specific discipline findings (other than those that led to the reports actually made) that should have been reported (Findings 488-553), and whether the "most serious" generic findings should have been reported (Findings 554-613).

In doing so, we have considered the analyses presented by witnesses for the Staff and Applicants, witnesses subpoenaed by CCANP, and reports prepared by the NRC Staff and by Bechtel Corporation (for HL&P).

In LBP-85-6, supra, 21 NRC at 454, we criticized the interpretation of 10 C.F.R. 9 50.55(e) that had been advanced by the Staff.

Specifically, we found that the Staff had improperly interpreted the regulation by its position that the significant QA breakdown in design contemplated by 10 C.F.R. 9 50.55(e)(1)(1) could not satisfy the j

- - - - - , , - . . , - - - - - , , - - - , - ~ - , ,

requisite potential adverse effect on safety test unless the design had in fact received approval to be released for construction. By so construing the section, we observed, the Staff was essentially ignoring the requirement for reportability set forth in 10 C.F.R. Q 50.55(e)(1)(1). In its Phase II testimony, however, the Staff, although indicating that it had in fact given some consideration to whether a significant QA breakdown had occurred (Johnson / Constable, ff. Tr. 14846, at 4), corrected any interpretive error it might have made in this regard by specifically considering anew whether any of the findings under consideration represented significant QA breakdowns, as interpreted by us in LBP-85-6 (Taylor, ff. Tr. 14846, at 3).

Examination of the testimony concerning reportabilit3 of the Quadrex Report as a whole shows that none of the witnesses believed after due analysis that the entire report should have been turned over as a reportable item (Findings 481-85). Nor did the Staff's independent investigations conclude otherwise (Staff Exh.140 at 2; Staff Exh.136 at23). It is true that one Staff witness felt, on first impression, that the Quadrex Report might have been reportable (Finding 482).

Indeed, even one member of HL&P management thought, on first impression, i that it might be necessary to report it in its entirety, and he frankly l

told us so (Finding 484). But all the expert sources, having examined l

I the report in detail and viewed it against a background of more complete knowledge of the situation, concluded that there was no requirement to report it and that it would have been inappropriate to submit the entire report under 10 C.F.R. % 50.55(e) (Findings 481-86). We agree, i

As for the specific discipline findings admitted for litigation, the Staff's expert viewed as potentially reportable three out of sixteen of those previously-unreported findings (Findings 491,520,531),

l altnough he characterized one of these as a "close call." Of these, we believe that one should have been reported as "potentially reportable" I but that the other two (based on information possessed by HL&P of which the Staff reviewer was not aware) were neither reportable nor potentially reportable (Findings 522,494,533). Bechtel advised HL&P that one additional unreported finding was potentially reportable; HL&P reported it but later withdrew it as not reportable (Finding 497). We ourselves additionally see as a close call (but not in fact reportable) one generic finding (Finding 561).

Thus it is evident that the violation of the regulations alleged in e

Contentico 9 is ephemeral at best. We find no instance, either with l

respect to the Quadrex Report as a whole or the individual findings being adjudicated, where a clear failure to report a deficiency occurred. We find, in fact, only a bare handful of instances in which the opinions of experts regarding reportability even differed, and in each of these instances the question centered only on " potential l

< reportability," all experts agreeing that the matters were not reportable once all the facts were in.

We find no evidence of any conspiracy to withhold the Quadrex Report from NRC, as alleged by CCANP. We reject CCANP's claim that the process utilized by HL&P to evaluate and determine reportability constituted such a conspiracy. Indeed, considering the complex

, - - .. . -- .-. .- ---. , . - - - . . - - _ . - - - . = . - - - - -

legal-technical nature of the decision to report and the short time in which that decision must be made, we believe that HL&P's behavior here was exemplary. HL&P used its three most experienced nuclear engineers I to determine reportablility. HL&P's practice represents about as good a balance as a licensee can strike between reporting everything required and overwhelming NRC with unneeded reports.

We shall here apply the same criteria of character and competence to reporting under 10 C.F.R. 9 50.55(e) that we describe in more detail (and apply) to informing the Board under the McGuire doctrine (see infra, pp. 36-38), viz, that the failure to inform does not in itself reflect a deficiency in , character or competence, but that such failure would have to be a deliberate breach of a clearly defined duty, a pattern of conduct to that effect, or an indication of bad faith. In applying these criteria here we note, at the threshold, that it is questionable whether any failure to report occurred at all.7 Still less During the hearing, a dispute arose between CCANP and the i

Applicants concernfng the interpretation of the regulation as elucidated by the Staff 5 50.55(e) Guidance. CCANP adopted the position that " potential reportability" was a thing apart from ultimate reportability and that failure to notify NRC of a "potentially reportable" item could not be justified by the fact that the item ultimately proved unreportable. Further, CCANP

argued that items that were potentially reportable but for which no notification was made reflected adversely on the Applicants' character or competence (Tr. 11471, 11474; CCANP F0F-II, PF II.7).

The Applicants argued that there is only one variety of reportability, that an item which ultimately proves nonreportable was not reportable to begin with, and that the fact that thorough review shows an item to be nonreportable is relevant (Tr. 11472,

(Footnote Continued)

.--w . - - . - . . , - - . - - , - - - - , , , ---w m, .- , -,,.,-,,,-,----m.-,. - - - , , - -, , . - - , - - - -

was there any indication of a breach of a clearly defined duty, a pattern of conduct to that effect, or an indication of bad faith. HL&P clearly made every good-faith effort to comply with the existing requirements and generally succeeded well in doing so. The one instance where we have found that reporting a matter as "potentially reportable" would have been preferable is clearly a "close call"--a matter where reasonable opinions may differ.

A few additional comments on certain of CCANP's claims are here warranted. First, CCANP would have us find that, by the end of April 1981, HL&P knew enough from informal briefings by Quadrex to make notifications to NRC under 10 C.F.R. 5 50.55(e); in particular, that i

HL&P knew that B&R was inexperienced in some nuclear engineering matters and was far behind in design work. CCANP characterizes the failure to report at this stage as a " willful act of concealment." CCANP F0F-II, PF 111.22, at 72. We do not find that either inexperience or slow accomplishment is per se reportable. We find that preparation at this stage for review of the final report by both HL&P and B&R was an entirely appropriate procedure. We note that in the one instance where

! Quadrex felt that a matter might be reportable, that matter was reviewed l 4

(Footnote Continued) 11474-75; App. F0F-II, PF 11.3-11.9; App. Reply F0F-II, PF RII.46).

The dispute seems to us to have more or less evaporated. CCANP ends its discussion by saying of this difference that "the distinction between the parties is not material" (CCANP F0F-II, PF II.7); the Applicants say that their " differences with CCANP are of little significance" (App. F0F-II, PF II-9; App. Reply F0F-II, PF RII.46).

i i

, by B&R and by the HL&P Incident Review Committee and was found not to be

! reportable. HL&P maintained records of the IRC's consideration of this matter. Finding 462, infra. Such a procedure scarcely suggests an attempt at concealment.

, Second, we are particularly displeased with the wildly speculative and fundamentally irresponsible charges that CCANP expressed on the j basis of minor discrepancies between the testimony of the Applicants' and Staff's witnesses (CCANP F0F-II, PF III.91-III.92). We are faced with serious charges of witness misconduct, supported only by statements that begin "[w]e cannot help but suspect that * * *," or "[i]t is quite 1 possible * * *." We have repeatedly warned CCANP about its irresponsible behavior in bringing unsubstantiated charges. See LBP-85-45, supra, 22 NRC at 827-28; cf. Part IV of this Opinion, infra, at pp. 108-12. We will discuss this matter again under Contention 10 (infra, pp. 38-39). Here we note only that such excursions beyond the bounds of propriety do nothing to further CCANP's cause before this Board.

In sum, we find that there is nothing in HL&P's handling of the Quadrex Report under 10 C.F.R. 9 50.55(e) that reflects adversely in any I way on the organization's character or competence.

3. Contention 10: Notifiability Pursuant to McGuire Doctrine of Quadrex Report and B&R Replacement; Candor of HL&P Phase I Testimony (Findings 615-77)

As originally formulated, Contention 10 claimed that the Quadrex Report was relevant and material to issues of character and competence

I addressed in Phase I and, under the McGuire doctrine, should have been furnished to the Board and parties shortly after its receipt by HL&P; and that the Applicants' failure to have furnished the report at that 2

time reflects adversely on their character and competence and on their ability to manage the construction and operation of a nuclear power plant. LBP-85-6, supra, 21 NRC at 463. In discussing this claim, we asked the Applicants to explain at the hearing any inconsistency between the Quadrex Report and Phase I testimony concerning the adequacy of B&R's services, and the Applicants' reasoning for not mentioning the Quadrex Report or the review of B&R's engineering services during the Phase I testimony (id, at 460). We later determined that the contention was broad enough to encompass CCANP's claim (set forth in its April 15,1985 motion to reopen the Phase I record) that the Board and parties should have been notified on a more timely basis of the potential removal of B&R as architect-engineer and construction manager.

Sixth Prehearing Conference Order, dated May 17,1985, at 3-4 i

(unpublished); LBP-85-19, supra, 21 NRC at 1715.

i All of the foregoing natters bear upon the Applicants' candor in dealing with regulatory authorities. We shall discuss them in this portion of our Opinion.

a. The McGuire Doctrine

As we observed in LBP-85-6, supra, the McGuire doctrine stems from a long line of Appeal Board decisions, extending as far back as 1973, j

{ which obligate applicants and licensees to keep Licensing or Appeal l

Boards informed of newly developiag information that is " relevant and s + --. r--- -e . . . -

,,,n,. --.---n.- --- ------ - _-,---w,,, - , , , ,- , - - - - - - - - - - , - ~ ~ - . . , - , _ - - ___ -

4 l

material" to issues pending before such Boards (21 NRC at 460-62 and

cases cited). The doctrine has been enunciated only through adjudicatory decisions and has not been promulgated into a rule or 4

regulation. During the 1981 time period at issue in Contention 10, management officials at HL&P were aware of the substance of the doctrine

, and the general obligations engendered thereby (Finding 632).

In their first filings on whether the Quadrex Report should have i

been furnished to the Board shortly after its issuance pursuant to the McGuire doctrine, the Staff and CCANP each took the position that the i

report was relevant and material.to Phase I issues and accordingly should have been furnished to the Board shortly after its receipt by HL&P. The Applicants took a contrary position. In LBP-85-6, we agreed with the Staff and CCANP "that the Quadrex Report was relevant and material to matters before the Board and, as a matter of law, should have been turned over under the McGuire doctrine shortly after its '

receipt by HL&P" (21 NRC at 461-62). We went on to hold, however, that a mere failure to notify the Board would not, per se, reflect a character deficiency. We held that question to warrant an adjudicatory hearing and accordingly approved for hearing the issue that we denominated as CCANP Contention 10.

The Applicants now ask us to revisit our conclusion that the Quadrex Report, as a matter of law, was comprehended by the McGuire doctrine (App. F0F-II, at pp. III-3 through III-5). They reason that relevance and materiality are dependent on facts; that the facts demonstrate that the Quadrex Report has little bearing on the Phase I

issues, which focused on quality assurance (QA) in construction; and that the facts of record undercut our previous conclusion that 4

"[c]onstruction and design QA are not so disparate as to be considered unrelated subjects" and, accordingly, that the Quadrex Report should have been furnished to us shortly after its issuance as a matter of law.

CCANP and the Staff would each have us adhere to our earlier legal conclusion. They each assert that it was correct on the merits (CCANP F0F-II, at 26; Staff F0F-II, at 114-119). In addition, CCANP asserts that we should not even entertain the Applicants' request for us to revisit our previous legal conclusion since it represents an untimely and improper motion for reconsideration of our ruling in LBP-85-6 (CCANP F0F-II, at 27-28). In their reply, the Applicants acknowledge that they are seeking reconsideration, but only on the basis of new information developed at the hearing. That being so, they claim that their position seeking reconsideration is neither untimely nor improper. App. Reply F0F-II, at 75-76.

We agree with the Applicants that it was not improper for them to have sought reconsideration on the basis of new factual information not available at the time a motion for reconsideration of LBP-85-6 would normally have been required to have been submitted. That being said, we have re-examined our previous ruling and find no reason to modify it.

Indeed, evidence at the hearing confirms that the Quadrex Report had enough bearing on Phase I issues to be considered relevant and material, within the meaning of the McGuire doctrine.

- .~. -. _ _ . - . - . - . . - - - - . - - . , _ ~ _ - . - - . . - - - , _ - . _ - _ . , _ _ _ _ - _ _ _ . _

1 For example, several Quadrex findings related directly to operation of HL&P's QA program--indeed, two of them were reported to NRC as significant QA breakdowns (Finding 468). As we previously pointed out, and as the Staff again states (Staff F0F-II, at 115), "[c]onstruction and design QA are not so disparate as to be considered unrelated subjects." LBP-85-6, supra, 21 NRC at 462. Although we were furnished copies of the two reports that were deemed to represent significant QA breakdowns, those reports would have assumed added significance to the litigation before us in the context of the Quadrex Report as a whole.

Furthermore, the Quadrex review was exemplary of HL&P's efforts to exercise managerial control over its contractor. Thus, it fell within

]

the " abdication of responsibility" issues authorized by the Commission in CLI-80-32, supra, and delineated in more detail through Issues A and B. We therefore reiterate our conclusion that the Quadrex Report should 4

have been furnished to the Board pursuant to the McGuire doctrine

, shortly after its issuance.

On the other hand, the record establishes that the decision to seek an alternative to B&R as architect-engineer was not made until June 29, 1981, that the potential availability of practical alternatives was not known until mid-August 1981 (after proposals had been received) and that, until mid-to-late September 1981, various uncertainties with respect to selection of a replacement contractor were not yet resolved (Findings 649-50). That being so, the advice to us on September 24, 1981 of the replacement of B&R conformed to standards required by the

! McGuire doctrine.

b. Effect on Character of McGuire Doctrine Violations, and Instances of lack of Candor.

As we also pointed out in LBP-85-6, supra, 21 NRC at 462, and as all parties recognize, failure of an applicant to inform a Licensing Board pursuant to the McGuire doctrine does not, by itself, reflect a deficiency in character or competence (App. F0F-II, at pp. III-5 to III-7; CCANP F0F-II, at 27-28; Staff F0F-II, at 116-17). Additionally, it would have to be demonstrated that the failure to notify the Board

was itself motivated by or reflective of a character deficiency.

LBP-85-6, supra, 21 NRC at 458-59, 462.

The additional showing that the Applicants would require is that the failure to provide information to a Licensing Board was "a deliberate breach of an unmistakable duty, a pattern of conduct to that effect, or any indications of bad faith" (App. F0F-II, at p. III-5).

The Staff, for its part, would require a showing that the information subject to the McGuire doctrine was " intentionally concealed" from the Board (Staff F0F-II, at 119). In that connection, the Staff stresses (id at 118) that the Appeal Board has viewed the timely submission of infonnation to the Staff (although not to a Board) as countering a claim that a licensee intentionally acted to conceal from such Board information that should have been furnished earlier. Metropolitan Edison Co. (Three Mile Island Nuclear Station, Unit 1), ALAB-774,19 NRC 1350 (1984).

CCANP does not elaborate on what showing it believes would be required to demonstrate a deficiency in character. As we understand its

I i position, it is asserting that the facts or inferences on which it is relying are sufficient to constitute such a deficiency, without inquiry into the totality of elements that might be deemed a contribute to such a deficiency.

The Applicants' proposed standards are more precise, and not substantively different, from those advanced by the Staff. In our view,

they are generally appropriate for determining whether a potentially disqualifying character deficiency for failing to furnish information to the Board as required by the McGuire doctrine has been demonstrated. In using these standards, we are interpreting " unmistakable" to mean

" clearly defined," and "tiad faith" as including "a design to mislead or i

deceive another"--i.e., not an " honest mistake." Black's Law

! Dictionary, Rev. Fourth Ed. (1986), at 176. In determining whether a showing of alleged character deficiencies proved to be disqualifying, we would view it in the context of an applicant's overall record in supplying information to the Board, the reasons why specified information was not furnished to the Board, and (assuming a demonstration of less 'than-full candor in certain instances) the significance of the information and the number of instances of less-than-full candor. In our view, these standards are consistent with the " intentional lack of truthfulness or candor condoned by management" and the "w'illful misrepresentations * *

or representations made with

~

disregard for their truth," which we cited in PID-I as demonstrating a _

potentially disqualifying lack of character. LBP-84-13, supra, 19 NRC at 678.

CCANP would have us find a disqualifying lack of character on the basis that there was a " conspiracy" on the part of senior HL&P management to withhold information about the Quadrex review or report I

from the Board. Given such a conspiracy, CCANP reasons that the violation of the McGuire doctrine (which we have found) perforce reflects adversely on the Applicants' character sufficiently to disqualify them from continuing to manage the construction, and eventually managing the operation, of STP. CCANP perceives the conspiracy in the manner in which HL&P organized its reportability review of the Quadrex Report. CCANP F0F-II, at 28, 145-46.

We have found no evidence of any conspiracy to withhold information from this Board. The similarity of views of upper management officials as to the scope of the Phase I hearings--although not in accord with our own view--does not represent a conspiracy. Nor does the manner in which HL&P organized its reportability review of the Quadrex Report. HL&P could have undertaken such a review in a number of ways, but the manner ,

chosen by.HL&P (whether or not the most efficient or effective) had justifiable bases warranting its consideration and selection. In any event, we have found the method of review selected by HL&P to have been appropriate under the regulations and guidelines then extant. See supra, pp. 28-29.

In developing its conspiracy theory, CCANP advances arguments that attack the credibility of two of the Staff witnesses (Messrs. Sells and Collins). CCANP attempts to portray Mr. Sells as being untruthful because of a recent illness (and hospitalization) which he

experienced--indeed, CCANP even portrayed Mr. Sells as part of the conjectured conspiracy. CCANP's argument is based only on unsubstantiated conjecture without a fact cited, other than a slight difference in details between the testimony of Mr. Sells and that of an Applicants' witness (CCANP F0F-II, at 113-14). Similarly, CCANP asserts that a portion of Mr. Collins' testimony possibly was only a " cover story," derived to explain an alleged failure of Mr. Collins to take actions that CCANP deemed to be appropriate (CCANP F0F-II, at 116-17).

Absolutely no evidence supporting CCANP's theory (other than a slight difference between Mr. Collins' testimony and that of one Applicants' witness) is either cited or is present in the record.

Both of these arguments of CCANP overstep the bounds of propriety.

g. Memorandum and Order (CCANP Motions II and III to Reopen Record),

LBP-85-45, 22 NRC 819, 827-28 (1985). We regard Messrs. Sells' and Collins' testimony as true to the best of their recollections, despite some differences in detail from testimony of the Applicants. Indeed, in both of the instances cited, we have accepted the version advanced by i

the Staff witnesses (although we ao not doubt that the Applicants' I

witnesses in this regard were also testifying truthfully, to their best recollections). Ad hominem arguments of the type being employed by CCANP do not advance its position; if anything, they undercut the credibility of the proposed findings that CCANP is asking us to adopt.

l Applying the criteria for measuring character that we have found l

appropriate, we find the McGuire doctrine to have constituted a clearly defined duty the general obligations of which were well known to HL&P officials back in 1981. We also note, however, that certain details of i

i the doctrine were not well known at that time--in particular, that close questions as to relevancy or materiality are to be resolved by the l Board, not by the Applicants. We find that HL&P misconstrued the scope of the Phase I hearings, but we find no evidence that HL&P witnesses intentionally sought to avoid obligations imposed by the McGuire doctrine. Clearly there was no pattern to that effect. For as far as we can ascertain, HL&P in many instances has provided us and the parties i

with information beyond that which would technically be required to be furnished under the McGuire doctrine. The failure to furnish or mention the Quadrex Report or review represents an isolated--although by no j means insignificant--deviation from that pattern.

In terms of the last of the criteria for ascertaining character, we have found a few instances where HL&P witnesses in Phase I provided testimony or answered questions with less-than-desirable candor. The i

> most significant was HL&P's description of its management of B&R's engineering services. HL&P witnesses may have viewed B&R's design engineering services as outside the scope of the Phase I hearings, as they claim. But when their direct testimony deals with HL&P's management of design engineering services, they have an obligation to

! provide a full story to the Board--including HL&P's undertaking of the l

Quadrex review and its direction to B&R as to how to respond to Quadrex findings (Finding 658).

HL&P's explanation that the direct testimony dealt only with activities of the Project Engineering group and that such group had no function with respect to the Quadrex review or Quadrex Report (Tr.

l 12616-17 (Goldberg)) is specious at best. The Phase I testimony could 1

only be properly construed as describing for the Board HL&P's organization for providing prograrrrnatic direction to the B&R technical support effort, and the process by which HL&P performed this engineering review. Specific examples were provided of " action HL&P has recently taken as part of its direction of B&R * *

design efforts."

i Goldberg/Frazar, ff. Tr. 906, at 11-12. If the testimony were limited ,

only to the Project Engineering group, it was patently incomplete and misleading, since that group obviously was not the only means through which HL&P performed its engineering review during 1981. That group had significance only insofar as it represented a methodology employed by HL&P for performing such review. In any event, it is clear to us that the Quadrex review or report and the directions to B&R resulting i therefrom were two of the most significant elements in HL&P's engineering review of B&R during the spring of 1981 and, as such, should have been mentioned.

l We have also found several instances where the Quadrex review or Quadrex Report should have been mentioned in resporise to cross-examination inquiries (Findings 656,665). Irrespective of the witness' view of the scope of the Phase I hearings, full answers to these questions (which directly mentioned design engineering activities) i should have brought forth a reference to the Quadrex review or report.

As for the replacement of B&R, we have found no McGuire doctrine violation as a result of our not being notified prior to September 24, 1981. But the answer of one witness to a question concerning potential

consideration of the replacement of B&R may not have been fully responsive (Findings 646,675).

These instances of less-than-full disclosure do not represent a pattern of conduct. They do not represent a conspiracy. Insofar as the Quadrex Report and review are concerned, they do not reflect a withholding of information from NRC as a whole (as distinguished from the component of NRC represented by this Board). Nor do they represent a deliberate effort to mislead the Board. They appear to reflect only a higher threshold for relevancy and materiality on HL&P's part than we view as appropriate. Indeed, they represent a situation where valid operational considerations may conflict with the openness and candor i

which NRC's regulatory system mandates.

Taking these considerations into account, we believe that these instances do reflect less-than-desirable candor and do detract in some degree from the high marks that we gave to HL&P's character in Phase I.

In PID-I, we found the most important character trait to be HL&P's truthfulness and candor and we gave high marks to HL&P managerial personnel for their responsiveness to Staff inquirics and their willingness to communicate with NRC about project developments. We found no basis for determining that HL&P was anything other than open and frank with the NRC Staff and this Board--subject, of course, to the further hearings on the Quadrex Report. LBP-84-13, supra, 19 NRC at 683-86. Although the few instances of less-than-full disclosure that 1

we have described undercut to some extent our previous evaluation of HL&P's character, they do not do so to a degree sufficient to warrant

the denial of operating licenses for lack of character. As in TMI, ALAB-774, supra, they do not establish a lack of management integrity.

We trust, however, that our findings herein will serve as a guide for future HL&P communications with NRC, including this Board. If instances of lack of candor (either with this Board or other elements of

NRC) should recur in the future, their import should necessarily be evaluated against a background of the instances of lack of full disclosure identified herein.

In sum, we hold that the instances of less-than-full disclosure identified in the resolution of Contention 10 are not significant enough for us to conclude that HL&P lacks character to a degree that would

, warrant the denial of operating licenses.

B. Current Competence of HL&P and its Contractors (Issues B and 0)

(Findings 678-762)

1. Background In PID-I, we reached only preliminary conclusions on those aspects of Issues B and D that question the competence of HL&P to complete construction of and thereafter to operate the STP, and the effectiveness of corrective actions adopted following the 1980 Show-Cause Order. We did so because the record at that time on these subjects was largely composed of programmatic-type information (i.e., the organization, proposed personnel, and construction and QA programs), together with the reputations of HL&P's new contractors, Bechtel and Ebasco, derived from work on other projects. The record included little information l

concerning implementation of those programs by HL&P and its new contractors.

PID-I established a procedure for enhancing the record to enable us to resolve the competence issues that had been left open. We directed the Staff to provide a report concerning the performance of HL&P, Bechtel and Ebasco at STP since the close of the Phase I record. This report was to be presented during Phase II and was to encompass (although not necessarily be limited to) such matters as the effectiveness of Bechtel and Ebasco procedures in areas that had been subject to Phase I litigation, violations (if any) of applicable regulatory requirements, nonconformances (particularly, although not limited to, the civil structural area), altercations (if any) between construction and quality control (QC) personnel, and SALP (" Systematic Assessment of Licensee Performance") evaluations. We explicitly sought the Staff's evaluation of the ad,quacy of implementation of the QA/QC program for construction. We also invited other parties to supplement or comment on the Staff's report, or to provide their own reports if they wished. LBP-84-13, supra, 19 NRC at 697, 700.

In considering CCANP's motion for additional discovery with respect to the Phase 11 competence inquiry (and in granting that motion in part), we made it clear that we did not envisage an open-ended extension into Phase II of the competence issues addressed in Phase I. Rather, the inquiry in Phase II would be whether our expectations as to improvement of HL&P's competence (set forth in PID-1) were in fact being fulfilled. We emphasized that the centerpiece of the Phase II issue

would be the Staff's report, which we anticipated would be founded upon such documents as various Office of Inspection and Enforcement (I&E) and Office of Investigations (01) reports, SALP reports, and 10 C.F.R.

9 50.55(e) reports filed by HL&P. We made certain that all parties would have access to those documents. Memorandum and Order dated May 22, 1984, supra, at 7-11.

We further discussed the scope of the competence issue at the Fifth Prehearing Conference in October 1984, and established schedules (later modified in several respects) for the submission of various parties' reports or comments. We determined that the Staff report would be submitted in affidavit form. We also made it clear that the competence report would not be automatically considered at an evidentiary hearing, but that it would be necessary for parties to define explicitly any competence issues that they believed required further hearings. Fifth Prehearing Conference Order, supra, at 3-4.

The Staff filed its affidavit on December 21, 1984. It filed an amended and updated affidavit on January 24, 1985. The Applicants filed their own supplementary affidavit on February 25, 1985. On the same t date, CCANP filed comments on the Staff affidavit, together with several motions. As a result of a misunderstanding with respect to certain documents, we permitted CCANp to file an additional response te the Staff affidavit, along with its response to the Applicants' affidavit.

Memorandum (Telephone Conference Call of 2/26/85), dated February 28, 1985. By letter dated March 13, 1985, CCANP advised that it would forego its opportunity to submit # ose responses. On March 14 and 25,

1985, the Applicants and Staff, respectively, submitted responses to CCANP's filings on the competence questions; each asserted that CCANP had not set forth facts with sufficient particularity to warrant a further hearing on the competence of HL&P and its contractors.

In the interim, we had identified two elements of HL&P's competence that we viewed as unresolved by the affidavits. In LBP-85-6, 21 NRC 447 (1985), which accepted for litigation several questions arising from the reportability of the Quadrex Report, we also accepted as a competence issue HL&P's practices and procedures for reporting 10 C.F.R. 9 50.55(e) deficiencies. Shortly thereafter, in LBP-85-9, 21 NRC 524 (1985), we denied a proposed late-filed contention of CCANP dealing with soil stability but accepted as part of the competence issue the matter of the Applicants' current organization, procedures and activities in soils areas. Both 5 50.55(e) reporting and soils were functional areas wnere the Staff had given HL&P a category 3 (below-average) rating in the SALP t

report for the period December 1, 1982 - November 30, 1983 (I&E Rept.

83-26).

As for other aspects of the competer.ce issue, we held that CCANP's February 25, 1985 comments did not identify ariy facts with sufficient particularity to warrant an evidentiary hearing. See LBP-85-9, supra, 21 NRC at 530, n.6. Rather, CCANP for the most part took issue with the procedural method we had adopted for resolving the competence issue.

CCANP claimed that it should not be required to identify factual matters in the Staff affidavit that required a hearing, inasmuch as Issue B had already been accepted for litigation. CCANP listed some general areas

that it indicated it wished to explore (including the Staff's SALP report), but it set forth no particular facts that explained why a further hearing on such areas was warranted, i By their filings dated March 14, 1985 and March 25, 1985, the Applicants and Staff, respectively, had urged that the portions of the competence issues not already identified for litigation be resolved on the basis of the filed affidavits. We perceived that resolution in that manner would be comparable to the grant of partial summary disposition pursuant to 10 C.F.R. $ 2.749 of portions of Issues B and D. Because we regarded CCANP as not adequately informed that such method of resolving Issues B and D would be utilized, we advised CCANP that we would treat the Staff's and Applicants' affidavits as affidavits seeking summary 4

disposition and provided further opportunities for CCANP to respond. We explicitly pointed out that, to warrant litigation of additional aspects of the competence issue, CCANP would have to identify " specific material facts in controversy * *

which could undermine the conclusions reached by the Applicants or Staff in their affidavits or tend to demonstrate a lack of competence of HL&P or its contractors in implementing the QA/QC program for construction." Memorandum and Order (Telephone Confererice Call of April 4,1985), dated April 5,1985 (unpublished). CCANP filed its response on April 25, 198F.

I Following oral argument at the Sixth Prehearing Conference (Tr.

11074-182), we granted sumary disposition on all aspects of HL&P's competence except reporting under 10 C.F.R. @ 50.55(e) and soils questions (both of which we defined more precisely than our earlier l

descriptions). We also called upon Staff witnesses to update generally their evaluations of HL&P's competence. We indicated that we would explain this ruling in our Phase 11 PID. Sixth Prehearing Conference Order (Further Definition of Phase II Issues), dated May 17,1985(as corrected by Errata dated June 14, 1985) (unpublished).

2. Summary Disposition: Standards The standards for ruling on motions for summary disposition are well accepted and not in dispute here. Summary disposition of an issue may be granted if the filings in the proceeding, including affidavits, demonstrate that there is no genuine issue as to any material fact and the moving party is entitled to a decision as a matter of law.

10 C.F.R. 6 2.749. Here, we are treating the Staff's and Applicants' affidavits as motions for sunmary disposition by those parties.

The burden of proof with respect to summary disposition is on an applicant /movant to demonstrate the absence of any genuine issue of material fact. Cleveland Electric Illuminating Co. (Perry Nuclear Power Plant, Units 1 and 2), ALAB-443, 6 NRC 741, 753 (1977). As set forth in 10 C.F.R. 6 2.749(b), a response to affidavits "may nct rest upon * *

mere allegations or denials * * * [but] must set forth specific facts showing that there is a genuine issue of fact." In determining whether a motion for summary disposition should be granted, the record must be reviewed in the light most favorable to the opponent of such a motion.

Dairyland Power Cooperative (Lacrosse Boiling Water Reactor), LBP-82-58, 16 NRC 512, 519 (1982). To preclude summary disposition, the opponent must set forth specific facts; naked assertions or general denials are

not sufficient. Houston Lighting & Power Co. (Allens Creek Nuclear Generating Station, Unit 1), ALAB-529,13 NRC 75 (1981);

Virginia Electric and Power Co. (North Anna Nuclear Power Station, Units 1 and 2), ALAB-584, 11 NRC 451 (1980).

CCANP provided no affidavits in response to the Staff's and Applicants' affidavits. Its failure to respond with evidentiary materials, however, does not mean that the summary disposition motion must be granted. Perry, supra, 6 NRC at 754, citing Adickes v. Kress &

Co., 398 U.S. 144, 159 (1970). To grant sumary disposition, we must still find no genuine issue of material fact and that the movant is entitled to prevail as a matter of law. Moreover where, as here, significant health and safety issues are involved, a Licensing Board should only grant an applicant's motion for sumary disposition "if it is convinced from the material filed that the public health and safety *

will be satisfactorily protected." Cincinnati Gas & Electric Co.

(William H. Zimmer Nuclear Station), LBP-81-2, 13 NRC 36, 40-41 (1981);

see also Carolina Power & Light Co. (Shearon Harris Nuclear Power Plant), LBP-85-27A, 22 NRC 207 (1985).

CCANP's April 25, 1985 response relied almost entirely on CCANP's interpretation of ISE inspection reports, notices of violation, the Staff's SALP report, and HL&P's 10 C.F.R. 5 50.55(e) reports. In evaluating the safety significance of material of this type, it is important to remember that

[P]erfection in plant construction and the facility construction quality assurance program is not a precondition for a license under either the Atomic Energy Act or the

Commission's regulations. What is required instead is reasonable assurance that the plant, as built, can and will be operated without endangering the public health and safety.

Pacific Gas and Electric Co. (Diablo Canyon Nuclear Power Plant, Units 1 and 2), ALAB-756, 18 NRC 1340, 1344-45 (1983).

Furthermore, it is clear that every QA deficiency, such as those commonly discussed in I&E reports, does not perforce " reflect an attitude or lack of discipline that undermines confidence that the QA program has been successful." Long Island Lighting Co. (Shoreham Nuclear Power Station, Unit 1), ALAB-788, 20 NRC 1102,1141-42 (1984).

Nor, in our view, does the identification of a QA deficiency, however minor, per se reflect adversely on the overall conclusion we must reach on HL&P's competence.

With these general principles in mind, we turn to our rulings on the claims set forth by CCANP in its April 25, 1985 filing, and our reasons for granting summary disposition of portions of Issues B and D.

3. Ruling on CCANP's April 25, 1985 Response In Part II of its response, CCANP advanced several procedural objections to the method we had selected for resolving the competence issues. In paragraphs a. and b. below, we treat those of CCANP's procedural claims on which we have not previously expressed cur opinion, f

Iri Part III of its response, CCANP advances a number of substantive claims. We treat those claims in paragraphs c. through 1., below.

a. CCANP first asserts that our order of April 5, 1985, which set forth the suninary disposition procedure we would follow for those aspects of the competence issue not already designated for

litigation, narrowed the scope of Issue B by not including the

" character" aspects of the issue. Therefore, according to CCANP, the character aspects of Issue B were still open for litigation in Phase II.

This position ignores the circumstance that the character aspects of Issue B were disposed of by PID-I. The only character question remaining open for Phase II adjudication involved HL&P's handling and reporting of the Quadrex Report, including its reporting of the change in contractors that, in our view, stemmed at least in part from the revelations of that report. This open character question (which we consider in this PID) is part of Issue A, not B (or D).

b. CCANP also claimed that, since we would hear "many genuine issues" concerning Issues B and D (i.e., those matters we previously had identified), Issues B and D were no longer subject to summary disposition. To the contrary, however, the summary disposition procedures may be utilized with respect to "all or any part of the matters involved in the proceeding". 10 C.F.R. 9 2.749(a) (emphasis added). It is clearly appropriate for a Board to grant partial summary I

disposition of an issue, where such result is warranted. See, e.g.,

Cleveland Electric Illuminating Co. (Perry Nuclear Power Plant, Units 1 and 2), LBP-82-114, 16 NRC 1909, 1913-18 (1982); cf. Pennsylvania Power A Light Co. (Susquehanna Steam Electric Station, Units 1 and 2),

ALAB-641, 13 NRC 550 (1981).

CCANP's observation that the procedure we adopted would have us rule on Issues B and D without the benefit of testimony and cross-examination merely states the obvious: Any grant of summary

l l

disposition pursuant to 10 C.F.R. 5 2.749 produces that result. The purpose of the procedures, however, is not to deny a litigant the right to a full hearing on legitimately disputed issues of material fact but, rather, to ensure that " evidentiary hearing time is not unnecessarily l devoted" to issues as to which there is no genuine issue of material fact. Statement of Policy on Conduct of Licensing Proceedings, CLI-81-8, 13 NRC 452, 457 (1981).

c. CCANP claimed that all "open" items, as well as all

" closed" items, in I&E inspection reports since the close of the Phase I record, constitute unresolved factual questions bearing on the adequacy ..

of HL&P's competence and of its QA program for construction. With respect to this general claim, CCANP makes no attempt to demonstrate the significance or " materiality" of most of the open or closed items, or of the total number of such items; it advanced no specific factual basis by which we could conclude that these items reflect adversely on the competence of HL&P or its new contractors. CCANP's lack of particularity as to the significance of most of the open or closed items caused us to conclude that, in these general claims, CCANP had not identified a material unresolved fact.

CCANP also generally took issue with the Staff's open-item system, claiming that the Staff should instead have issued violations. CCANP cited the Staff's definition of an open itec as one about which more information is required to ascertain whether it is an acceptable item, violation, or deviation. CCANP would have us assume that each open item constitutes a " violation" until proved otherwise. CCANP asserts that it

traced the history of 70 open items since the close of the Phase I record and that, as of March 22, 1985, 44 remained open. CCANP would have us add these 44 items to the number of violations set forth in the Staff's affidavit. On the basis of such assumption, CCANP asserts that there are material facts in dispute concerning statements in the affidavits concerning numbers of violations and their significance.

We find no persuasive reason to adopt the assumption proposed by CCANP. As the Staff asserts, there are many reasons for an item being designated as open. Some, if not most, of those reasons are not traceable to activities of an applicant or licensee--eg., time limitations imposed by NRC on particular inspections or inspection activities, and the relative importance of the item under review. See Tr. 11131-32; see also Tr. 11095-96.

Indeed, we view CCANP's proposed assumption as likely to lead to less thorough enforcement than exists under the open-item system. For,

it is likely that with most open items, the Staff would not have sufficient information to issue a Notice of Violation. The open-item system in our view serves as a regulatory device to highlight areas where further NRC review is warranted. We have been given no persuasive reason to indicate or suggest that the NRC has been abusing this system.

In sum, CCANP's general claim is not based on reasons why -

particular open items should instead have been violations. CCANP did not even attempt to relate particular open items to the NRC criteria for l

! violations. See 10 C.F.R. Part 2, Appendix C. Thus it failed to set l forth a material fact in dispute concerning the open-item system. In i

any event, a licensing proceeding is not an appropriate forum for challenging the Staff's methodology for carrying out its functions, at least in the absence of a showing (not made here) that the functions are inconsistent with regulatory requirements or were performed other than normally for the particular plant under review.

For these reasons, we are giving weight to the affidavits' statements regarding the number and significance of violations and deviations attributable to HL&P during the period under review.

d. CCANP did list 12 open items and 7 closed items which, it claimed, raised significant issues. CCANP provided little more than its conclusion to this effect. It never explained adequately why any of the items would be material to an evaluation of the competence of HL&P and its new contractors, or to the adequacy of implementation of the QA/QC program for construction.

There are other reasons why the listed open or closed items cannot be considered as raising a material factual question. For example:

(i) As the Applicants have pointed out, CCANP has mischaracterized or misunderstood the nature of some of the listcd items. For example, one of the listed cpen f tems had in fact been closed (item numbered by CCANP as III.A.6). /nother represented an inaccurate reading of an I&E report (item III.A.12). To its credit, CCANP conceded that it had made some errors in its filing, as a result of lack of time for its preparation; it apologized for any such errors (Tr. 11141).

(ii) Four of the open items (numbered III.A.1, III.A.2, III.A.3 and III.A.4 in CCANP's filing) arose from inspections of B&R procedures or practices. They thus are beyond the scope of the Phase II competence issues. CCANP's main claim of error seems to hinge on the length of time in which these items remained open. That complaint would appear to relate to the Staff's procedures rather than to the current competence of HL&P or its contractors.

(iii) Several of the open items (numbered III.A.6, III.A.7, and III.A.11) represented questions by inspectors concerning the absence of particular procedures. These items represented areas in which QA procedures were not mandatory. That such procedures may eventually have been written does not reflect adversely on HL&P's competence or undermine the affidavits before us.

(iv) One of the open items (numbered III.A.5) was concerned with the question as to whether a particular item of equipment was safety related. When it was later determined to be safety related (a matter of several weeks), HL&P promptly filed a report pursuant to 10 C.F.R. 5 50.55(e). We note that we in fact took evidence on HL&P's reporting practices pursuant to 10 C.F.R. 9 50.55(e).

i (v) With respect to six cf the seven closed items which CCANP l asserts affect HL&P's competence (items numbered III.B.1 through l

l III.B.6), CCANP's major complaint seems to be that the Staff treated l

them as open items rather than violations. CCANP fails, however, to i

explain how, on the basis of information known to the Staff when the l

item was flagged, any of those items could have been determined to fall i

within the NRC criteria for violations. CCANP's conclusory allegations fail to show a genuine issue exists and are therefore insufficient to defeat a motion for summary disposition.

(vi) With respect to the final closed item listed (III.B.7),

j CCANP has apparently misunderstood or misstated the facts involved. See Tr. 11176-77 (explanation by Applicants),

e. CCANP lists eight items (III.C.1(a)-III.C.1(h)) that it claims either should have been reported pursuant to 10 C.F.R. % 50.55(e) or should have been reported sooner than they actually were. CCANP provides only conclusory statements as to how any of the items fall within the criteria of 10 C.F.R. % 50.55(e). In any event, the adequacy of HL&P's reporting practices under 10 C.F.R. 9 50.55(e) was earlier designated as a topic for hearing under the competence issue. In that regard, we asked the parties to address HL&P's methodology for handling "close questions" as to reportability. CCANP provided no facts by which we might conclude that any of its listed items that were not in fact reported were even close questions. Thus, we did not litigate any of CCANP's designated % 50.55(e) items as close questions, but we covered the substance of CCANP's claims under the issue we had defined.

f. In its item III.C.2, CCANP challenges the NRC Staff's positive conclusions concerning the effectiveness of HL&P's responses to

,1 notices of violation. CCANP cites one instance (III.C.2.a) where NRC required a further response, another instance (III.C.2.b) where HL&P apparently could not find certain records, and a final instance (III.C.2.c) where, instead of undertaking its own corrective action.

HL&P decided to contract out the particular activity. In our view, these three examples do not present serious challenges to HL&P's competence, and CCANP fails to elucidate its general claim in this regard,

g. In its item III.C.3, CCANP challenges the Staff's

, generally favorable conclusions concerning the involvement of HL&P

" upper management" in construction and QA-related activities. Without specificity, CCANP bases its challenge on the " record of the project reviewed in this response" (CCANP response, at 24). CCANP then goes on to highlight one NRC finding that, it claims, reflects lack of involvement by HL&P managerial personnel. This finding, according to CCANP, reflects "that HL&P upper management does not review QA audits for substance" and that HL&P " leaves it up to Bechtel to review NCR's

[Nonconformance Reports] for possible 50.55(e) notification (while insisting HL&P be permitted to screen such determinations)" (id.).

In our view, CCANP has misread the inspection report on which it is relying (I&E Rept. 83-12, at 11). That report shid no more than that HL&P did not routinely review NCRs but had assigned that responsibility to Bechtel. HL&P audits Bechtel's performance of this function. The re.nort also noted that the "use of QA audit reports by upper management was not reviewed" (id.). We have no reason to disagree with the Applicants' statement that the review method being used by HL&P is comparable to that used by every utility that utilizes an architect-engineer and constructor (Tr. 11093-95). For these reasons, we concluded that CCANP's item III.C.3 does not set forth any material

l i

unresolved facts. In any event, we had already designated as a competence issue HL&P's program for developing and reviewing 10 C.F.R.

i 5 50.55(e) reports, so that the substance of this item was in fact open for litigation.

h. During Phase I, allegations of harassment of B&R QC

< inspectors constituted a major issue that we considered. As we suggested in PID-I, HL&P's recent experience with questions of this nature would be relevant to the report we were requesting. Both the Staff and Applicants included this topic in their affidavits. Both of them describe a new organization established by HL&P, denominated "Safeteam", to consider quality or safety-related allegations. Staff Aff. (Tomlinson/Crossman), 11 20, 21 (corrected); App. Aff. (Geiger),

11 17-20.

CCANP observes (in item III.C.4) that it has not had access to

! records of Safeteam investigations but expresses a " concern" that NRC is abdicating its investigatory responsibilities to the Applicants.

Further, CCANP claims (in item III.C.5) that NRC improperly abdicated its investigative responsibilities to the Department of Labor (D0L) or the Occupational Safety and Health Administration.

Nothing that CCANP has mentioned in this regard would suggest to us a material unresolved issue regarding HL&P's competence. As we describe infra, the Safeteam organization appears to be a worthwhile addition to HL&P's methodology for resolving allegations. The NRC Staff does not appear to have abdicated any of its investigative responsibilities; as the Staff points out, CCANP has identified no facts to support its bare

l assertions in this regard (Tr. 11134-36). But even if CCANP's claims had a basis, that would not necessarily bear on the competence of HL&P or its contractors. Furthermore, NRC has a Memorandum of Understanding with the D0L under which 00L assumes responsibilities in conjunction with alleged unjust terminations (to which CCANP's response refers).

Memorandum of Understanding Between NRC and Department of Labor; I

Employee Protection, 47 Fed. Reg. 54585 (December 3, 1982).

i. In item III.C.6, CCANP raises questions about the Staff's SALP report (I&E Rept. 83-26), particularly the areas where HL&P received a "3" rating (satisfactory but below average). CCANP provides i

no material facts to contradict the filed affidavits. In any event, two of the three areas in which HL&P had received a "3" rating are ones bearing upon matters that we previously had designated for hearing.

j. In item III.C.7, CCANP mentions one HL&P violation relative to a concrete pour but sets forth no additional facts that could raise a material question concerning the competence of HL&P and its contractors in this area. Given the lack of an" requirement for perfection, one violation (without more)'does not suggest a material unresolved question. Indeed, CCANP appears to be advancing this item as much to criticize Staff inspection practices as to cast doubt on HL&P's competence. In that context, the comments are beyond the scope of Phase II issues.

k. In item III.D, CCANP cites several of HL&P's responses to t

I&E bulletins as being inadequate. See also Tr 11164-65. s From the I

Applicants' response (Tr. 11177-79), it appears to us that CCANP's l

]

claims are based on a misunderstanding of the particular responses in question and, in one respect, its claim was simply not accurate.

Clearly CCANP here set forth no material unresolved question concerning the competence of HL&P or its contractors.

l 1. Finally, in item III.E, CCANP lists several of what it describes as " generic issues"--issues that arose in more than one I&E report. CCANP provides no specific references, or reasons why the issues would materially derogate from the conclusions reached by the Staft or Applicants in their affidavits. For these reasons, these claims are not sufficient to reflect a material unresolved question concerning the competence of HL&P or its contractors.

4. Reasons for Granting Partial Summary Disposition As detailed in our Findings (infra, Findings 678-99), the affidavits submitted by the Staff and Applicants (and not controverted by CCANP) establish that there was a controlled transition from the performance of design engineering, construction management and construction functions by B&R to the performance of those functions by Bechtel and/or Ebasco. Safety-related construction under B&R was halted ,

by December 1, 1981 and was not resumed by the new centractors until November 1982, following detailed review and approva? ty the Staff.

From that time until the summer of 1983, construction efforts and i

activities were increased incrementally.

We have reviewed HL&P's record of violations and deviations from the restart of construction through January 1985, its record of .

responding to violations and deviations during that time period, and the

l qualifications of senior personnel employed at STP since the change in contractors. We have also examined changes in the QA program for construction adopted since the close of the Phase I record. Finally, we have reviewed the SALP report undertaken by the Staff for the period December 1, 1982 - November 30, 1983. That report rated the STP as below-average in three areas. Since two of those areas (soils and foundations, and corrective actions and reporting) involved issues or contentions with which we dealt extensively in PID-I, we identified those areas for further hearings in Phase II. (Those areas are considered later in this PID. See infra, pp. 62-70.)

We also reviewed HL&P's efforts to resolve questions involving the harassment, or alleged harassment, of QC inspectors by construction personnel. We had devoted considerable attention to this subject in PID-I. On the basis of the affidavits, we are satisfied that intimidation or harassment of QC inspectors by construction personnel no longer appears to constitute a significant problem area at STP. We particularly take note of the establishment by HL&P of its Safeteam

, organization, an investigatory organization the sole function of which is to identify, investigate, report and dispose of items that present,

~

tormer or exiting employees believe could affect plant safety. This organization complements those previously and currently maintained by HL&P, Bechtel and Ebasco and represents, in our view, a logical outgrowth of the further steps that HL&P indicated it might take to deal with harassment, intimidation or threats against QC inspectors. See PID-I, supra, Findings 395 and 398, 19 NRC at 825-26.

On the basis of the affidavits, we have concluded that, except with respect to (1) soils and foundations and (2) 10 C.F.R. 9 50.55(e) reporting, there are no material facts about which there are genuine issues in dispute concerning the competence (as of February 1985) of

.I HL&P and its contractors. We also have concluded that the QA program described in those affidavits (through Revision 7) meets all applicable requirements. We have reasonable assurance, based on the affidavits, that as of February 1985, HL&P had remedied the competence deficiencies dealt with in PID-I, except in the two areas indicated.

We have therefore granted partial summary disposition of the competence questions left open in PID-I. We required further hearings with respect to (1) soils and foundations and (2) 10 C.F.R. 5 50.55(e) reporting. We also asked that the competence questions be updated from the February 1985 cutoff date of the affidavits. These matters are dealt with infra, pp. 70-71.

5. 10 C.F.R. 5 50.55(e) Reporting (Findings 700-17)

In LBP-85-6, supra, 21 NRC at 460, we set forth as matters appropriate for adjudicatory consideration in Phase II HL&P's system for evaluating deficiencies and ascertaining their reportability under 10 -

C.F.R. 5 50.55(e). We also examined, in that connection, changes in procedures or personnel since 1981 and methods for establishing trends in violations or deficiencies, and we requested explanation of procedures where reportability presented a "close question." In particular, we asked for witnesses who could address an open item in a

1983 I&E report (Finding 700).

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j We received evidence on these subjects from both the Applicants and Staff, evidence that included the testimony of witnesses involved in or reviewing the procedures and exhibits detailing the procedures themselves. While CCANP presented no direct testimony, it was afforded extensive opportunity to cross-examine the witnesses presented by the other parties.

HL&P's reporting program is implemented through procedures that require employees of HL&P, Bechtel, and Ebasco to bring to the attention of supervisory personnel any conditions that may represent significant deficiencies within the meaning of 10 C.F.R. G 50.55(e). The mechanism for this is, for HL&P, a Deficiency Evaluation Form (DEF) and, for Bechtel (and, through Bechtel, for Ebasco), a Deficiency Evaluation Report (DER). These DEFs and DERs are reviewed by HL&P Engineering. If Engineering determines that no deficiency exists, the basis for that determination is documented. If a deficiency is found to exist, the DEF or DER is sent to the Chairman of the Incident Review Committee (IRC) l (Finding 706). The IRC conducts an initial evaluation and, if the deficiency is reportable or if there are insufficient data to determine reportability, the IRC chairman notifies the Manager, Nuclear Licensing, or the Group Vice-President, Nuclear, and with concurrence of one of them (or on his own if neither is available), he notifies the NRC. The purpose of concurrence by one of these officials is to ensure that complete information is supplied to the NRC. Neither the present incumbents nor the past Nuclear Licensing Manager has ever overruled an IRC decision to notify the NRC. Finding 710.

l

Once a reportable or potentially-reportable condition is transmitted to the NRC, the IRC chairman initiates a technical review to confirm the reportability of the condition. Both the initial evaluation and the technical evaluation are carefully documented using forms specified for the purpose. If the technical evaluation finds the condition is in fact reportable, a report is sent to the NRC within 30 days. If it is not found reportable, NRC is notified within 30 days and the finding is documented. If the evaluation cannot be completed in 30 days, an interim report is sent to the NRC. Finding 711. To assure that DEFs and DERs that do not reach the IRC do not include reportable items, such DEFs and DERs are periodically reviewed (Finding 712).

Those who are charged with making the system work seem to us to be well-qualified (Findings 701,707-09). Review by the Staff inspectors has found that the process meets the requirements of 10 C.F.R. 5 50.55(e) at present and has met it in the past. No deficiencies in the reporting system have been observed by the Staff since 1983, and NRC inspectors have been favorably impressed both before and since that time. Findings 703-704. The changes in the reporting system since 1981, aside from the institution of the DEF, have been minor (Finding 713). I We also examined the methods used by HL&P for discovering trends in deficiencies and thus ascertaining whether a group of deficiencies, each in itself nonreportable, might when taken together constitute a reportable QA breakdown. There is indeed an established trending program. All deficiency documents are collected; coded according to

company, discipline, activity and other appropriate cate' gor.ics; and '

analyzed to determine whether, taken tcgether, they show a trend. The deficiencies are normalized for this purpose against hours of work 'or inspection time or quantities installed. Finding 714. The system seems to us well-calculated to attain its purpose.

We also reviewed the circumstances surrounding Open item 83-12-01 in I&E Report 83-12, an item concerning an apparent failure to report a QA breakdown which we had asked the parties to address. As ultimately ,

analyzed, this matter was deemed not to show such a breakdown by both ,

HL&P's experts and those of the NRC Staff. Findings 715-16. We see nothing to indicate a failure in the reporting system.

During our adjudication of soils issues (see infra, pp. 66-70), an '

instance of a failure by HL&P properly to respond to a notice of violation was revealed. We do not evaluate this instance as demonstrating any systemic deficiency in the 10 C.F.R.'5 50.55 (e) reporting system but are nevertheless recommending certain corrective action (infra, p. 69).

\

In sum, we have looked carefully at HL&P's system for reporting deficiencies under 10 C.F.R. s 50.55(e). All evidence points to a system that works as well as one can reasonably expect. CCANP educed no direct evidence to the contrary, brought out nothing on '

cross-examination seriously to question the system, and produced no arguments in proposed findings that would persuade us to find otherwise (Finding 717).

1 l'

l

6. Soils and Foundations (Findings 718-51)

In ruling on Issues B and D in PID-I, we left open certain questions relating to the competence of HL&P and its new contractors (Bechtel and Ebasco) to complete construction of the STP. Although we have granted summary disposition of most of the competence questions (supra, pp. 60-62; Finding 699, infra), we nevertheless designated for hearing as a competence question HL&P's current organization, procedures and activities in soils areas. We did so because (1) HL&P had experienced substantial difficulties in soils matters, which were reviewed in PID-I; (2) subsequently HL&P was charged with several violations in this area and also received the lowest SALP rating (Category "3") for this area, for the period from December 1, 1982 through November 30,1983 (during which substantial soils activities were undertaken); (3) HL&P's own audit undertaken in 1984 also uncovered certain questionable practices or procedures in this area; and (4) the Staff's SALP report had portrayed one of the alleged violations as

" represent [ing] a failure on the part of the licensee to rectify issues raised in the Show-Cause Order concerning the adequacy of backfill inspection"--one of the particular issues we had considered in Phase I.

See LBP-85-9, supra, 21 NRC at 529-30; Finding 718, infra.

The soils questions were admitted as Issue B/D-1. That issue questioned whether backfill placed at the STP by Ebasco conformed to the requirements of the construction permits and applicable regulations in light of the two alleged violations discussed in the referenced SALP report and two named findings from the HL&P audit. The issue was

l l

addressed by three expert witnesses of the Applicants, and the Staff i

inspector responsible for discovering the alleged violations as well as for' compiling the soils portion of the SALP report. We have found all of these individuals qualified to address Issue B/D-1. CCANP presented no direct testimony and filed no proposed findings on this issue.

Findings 718-19, 721-22.

None of the alleged violations or audit items turned out to have 4

significant safety implications. The first alleged violation (Notice of Violation 83-24-02) involved a failure to follow the standard laboratory test method for determining " minimum density" of backfill. Bechtel had evaluated and ordered a different method to be used but had neglected to 3 implement a corresponding change in the construction specifications or to generate an FSAR change. The second (which in fact was an unresolved item--number 83-24-01--rather than a violation) concerned Ebasco's procedures for quality control inspections of the backfill operations:

There was a discrepancy between the written procedures (which were ambiguous and possibly deficient) and the procedures actually followed (which were adequate). Similarly, the two audit findings involved ambiguous specifications or directions. The first turned out to be overly conservative, whereas the second involved a practice that Ebasco was properly following even though it was not clearly required by the governing specifications.

The evidence of record demonstrates a thorough examination of both the sufficiency of the procedures followed and the adequacy of the backfill. All witnesses agreed that the backfill was of high quality and that the procedures followed were adequate. Furthermore, as for the

l future, most backfill work had already been undertaken as of the time of the evidentiary hearings.

Three natters warrant additional comment. First, the remark of the Staff inspector in ISE Report 83-26 that Unresolved Item 83-24-01 represented a failure to correct practices that had been highlighted in the Show-Cause Order was explained by the inspector, Mr. Tapia, as a matter which " fell in the crack" during the transition to a new construction organization. Although disturbed by Ebasco's failure to fine-tune its backfill operation, Mr. Tapia had no technical concern with the resulting backfill. Tr. 13784-85 (Tapia); Finding 740, infra.

Second, Mr. Tapia was questioned concerning a difference of opinion that reportedly had arisen between him and another NRC Staff inspector relative to the Staff close-out of soils matters discussed in Phase I.

(Information concerning the difference of opinion had arisen as a result of a deposition of the other inspector taken as part of tne lawsuit between the Applicants and B&R.) In response to inquiry by the Board, Mr. Tapia indicated that the other inspector had a procedural difference of opinion concerning the manner in which NRC had closed out its original soils concerns but that there was no technical difference of opinion concerning the adequacy of the soil. The other inspector had not filed a differing professional opinion on the matter, as he would have had a right to do if he had felt it necessary. Tr. 13756-63 (Tapia). Given these circumstances, the referenced difference of opinion has no safety significance and casts no doubt on the credibility of Mr. Tapia's opinions.

Finally, one deficiency in the implementation of the system for responding to notices of violation did manifest itself during the course of the soils hearings before us. In considering its response to Notice of Violation 83-24-02, the Applicants advised that, during preparation of testimony for this proceeding, they discovered an error in the response they had previously submitted to the Staff in response to the Notice of Violation. They also acknowledged that their procedures should have precluded the error from having taken place. They attributed the error to a failure to use controlled drawings, and they indicated that Bechtel's engineering judgment was that drawings and related documentation that are part of the backup to a response to a notice of violation should be subject to the same controls or checks as are drawings issued for construction. Finding 735.

The Staff also perceived a problem in HL&P's failure to use controlled drawings in responding to notices of violation (Finding 735).

We agree. Although this procedural change had not been implemented at the time of the hearing (id.), we strongly reconnend that such a change in requirements be put into effect.

Notwithstanding the foregoing, we have found no systemic deficiencies in HL&P's overall methodology for reporting or responding to notices of violation, in the soils area or elsewhere. Further, we find reasonable assurance that the backfill placed by Ebasco conforms with the requirements of the construction permits and Commission regulations; and that the deficiencies in backfill activities considered

y

l in Issue B/D-1, and their handling by HL&P, do not reflect unfavorably on the competence of HL&P.

7. General Update on Current Competence of HL&P and Its Contractors (Findings 752-62)

Earlier in this Opinion, we evaluated the competence of HL&P and its new contractors on the basis of affidavits filed by the Staff and Applicants (supra, pp. 60-62), together with our resolution of two designated competence issues (supra, pp. 62-66 and 66-70). In our Sixth Prehearing Conference Order, supra, at 9, we directed the Staff to update its affidavits by evaluating (generally) the competence of HL&P and its new contractors, as compared with the competence existing in September 1981. We had in mind a general supplementation of the Staff's 5 ALP report (I&E Rept. 83-26) orid uit. Regional Adiriinistrator's letter of j June 22, 1984, which transmitted that report to the Applicants.

At the hearing, several Staff witnesses addressed this update on the competence of HL&P and its new contractors, including one who had joined in authoring the Staff affidavit and the SALP report. All of them believed that such competence was satisfactory and improving and compared well with that at other utility sites. No testimony to the contrary was provided or elicited. On the scale of SALP ratings ranging from "3" (satisfactory, although lowest) to "1" (highest), HL&P was evaluated generally as better than "2"--i.e., as falling between "1" and "2" (Finding 761). Moreover, as we have seen, HL&P's competence has

substantially improved in the two areas that were specifically litigated (in which the SALP rating had been "3").

t i

In sum, on the basis of the entire record, we conclude that the competence of HL&P and its current contractors meets NRC regulatory requirements and provides reasonable assurance that the STP will be completed in conformance with the terms of the construction permits and other applicable requirements. Issues B and D are resolved on that basis.

C. Contention 4 (Hurricane Design and Construction) (Findings 763-93)

CCANP Contention 4 questions whether Category I structures at the STP have been adequately " designed and constructed" to withstand hurricanes, including hurricane-generated missiles. In our Sixth Prehearing Conference Order, supra, we indicated that we were granting 1

summary disposition of the design aspects of this contention but not of the construction aspects. We deferred setting forth our reasons for that ruling to this PID. Thereafter, in January 1986, we became aware of information that cast some doubt on a limited aspect of our design ruling. We therefore sought supplementary affidavits. On the basis of those affidavits, we find that on the record before us there are material unresolved factual issues and, accordingly, that we cannot grant summary disposition of the limited aspect of the design ruling which gave rise to the supplementary affidavits. We are requiring further development of the record in this regard. Most of our earlier design ruling, however, remains in effect. We here present the reasons t

_ . _ _ _ , , . ,. __, -__ __ _ _ _ . _ _ ~ , _ _ . _ _ _ _ _ _ _

for both our earlier and our supplementary rulings, including the findings on which we are relying.8

1. Background (Findings 763-67)

Contention 4 had initially been sponsored by CEU, the Intervenor that withdrew from the proceeding prior to the conclusion of Phase I.

i By our Memorandum and Order of October 15, 1982, LBP-82-91, supra, we permitted CCANP to adopt this contention. The primary basis for the contention was reported wind speeds in the Gulf coastal areas in excess of the 125 mph for which safety structures at STP assertedly were designed. Further, although the contention by its terms does not specifically address the effects of heavy rainfall and hurricane-induced storm surge on the STP, certain of the Intervenors' discovery responses do refer to such conditions. These collateral effects, as well as the hurricane wind loads, together with certain questions raised by the Board, are addressed by the affidavits of the Applicants and/or Staff, filed in support of summary disposition, supplemented by the supplementary affidavits referenced above.

O We note that CCANP had indicated at the Sixth Prehearing Conference that it might wish to file certain affidavits on the design aspects of the contention. We indicated in the Sixth Prehearing Conference Order, at p. 5, n. 5, that to do so, CCANP would have to meet the standards for reopening a record. CCANP has not filed or attempted to file any such affidavits. Further, at the Seventh Prehearing Conference, CCANP indicated that it would not respond to the supplementary affidavits filed by the Applicants and Staff (Tr.

15905).

i

l 1

l As set forth earlier in this Opinion (supra, pp. 48-50), suninary disposition should be granted only if the filings in the proceeding, including affidavits, demonstrate that there is no genuine issue as to l

l any material fact and the moving party is entitled to a decision as a matter of law. On the other hand, where the filings in the proceeding, t

including affidavits, fail to make an adequate demonstration, summary disposition should not be granted, irrespective of the merit or lack of merit of responses which oppose such a motion. Where appropriate, l summary disposition may be granted in part (supra, p. 51).

Here, CCANP's April 5, 1985 response to the Applicants' March 12, 1985 motion included no affidavits but mainly focused on the adequacy of the methodology used by the Applicants and approved by the Staff for determining the wind speed for which STP safety structures would be designed. With respect to certain structures where the Applicants and Staff analyze hurricane design through a probability approach, we have factored CCANP's comments into our analysis of the material before us.

However, except for those legally-oriented comments, and for reasons set forth below, CCANP has not set forth facts which demonstrate the existence of an unresolved genuine issue of material fact concerning the design of STP to withstand hurricanes. Nonetheless, as we construe the affidavits filed by the Applicants and Staff, we find an unresolved genuine issue of material fact that precludes us from granting summary disposition of all aspects of the design portion of Contention 4.

, -- -- -..----- _. - -- -. --\

2. Design Questions (Findings 768-91)

Under NRC rules, structures, systems and components of nuclear power plants important to safety shall be designed to withstand the effects of natural phenomena, including hurricanes and tornadoes. 10 C.F.R. Part 50, Appendix A, 9 I, General Design Criterion (GDC) 2. Such structures, systems and components are also required to be appropriately protected against dynamic effects, including the effects of missiles.

GDC 4.

In evaluating the design of STP safety structures to withstand hurricanes, we must differentiate between the design-basis wind speed (DBW) and the operating-basis wind speed (0BW). A plant must be designed to operate safely in the event of an OBW but must be able to withstand a DBW and be shut down safely, without an adverse effect on the public health and safety. The 125-mph wind speed referenced by CCANP is the OBW; the DBW is the tornado-based wind speed (design basis tornado) of 360 mph (rotational speed of 290 mph plus translational speed of 70 mph). See NRC Regulatory Guide 1.76; Standard Review Plan (SRP), NUREG-0800 Rev. 2, July 1981, %D 3.3.1, 3.3.2.

Furthermore, defining the OBW, the Staff, through its SRP, takes the position that a nuclear power plant's design should withstand an operating-basis wind load, in combination with other severe loads, calculated on the basis of the 100-year recurrence " fastest-mile wind

, speed." That wind is the "most severe wind that has been historically reported for the site and surrounding area with sufficient margin for s

the limited accuracy, quantity, and period of time in which historical i

I 9

l l

1 data has been accumulated." SRP, 59 2.3.1, 3.3.1. Data to be used to calculate the fastest-mile wind speed are to be taken from standard meteorological records from representative National Weather Service, i military, or other stations recognized as standard installations with long periods of record (SRP, 9 2.3.1).

Under GDC 2 and 4, proper design to withstand hurricane windspeeds includes the requirement to protect against objects or " missiles" that 1 may be generated by such wind speeds. Under Staff guidance, the missiles against which safety structures must be protected are set forth in 9 3.5.1.4 of the SRP (" Missiles Generated by Natural Phenomena").

Particular examples of " design basis" missiles are set forth (SRP, at pp. 3.5.1.4-2 through 3.5.1.4-4) and include objects such as an 1800-kg automobile, a 125-kg 8-inch armor piercing artillery shell, and a 1-inch solid steel sphere, all impacting at a specified windspeed (identified as Spectrum I). (Certain acceptable alternative spectra of missiles are f also set forth.)

a. Reported Wind Speeds

, CCANP (or, previously, CEU) advanced a number of reported wind speeds that exceeded the 125-mph OBW. None of them even approached the 4

DBW for which the plant is designed. The Board asked questions to l ascertain whether structures designed to resist tornado pressures I

(relatively short-lived) would withstand hurricane pressures, which

! extend for considerably longer durations. We were assured that the i design loads for which STP was designed are greatly in excess of those l anticipated for hurricanes and are applicable regardless of the

f 4 -

76 -

wind-load duration (Finding 778). Indeed, we were specifically advised that STP could withstand hurricane wind loads generated by wind speeds in excess of 200 mph,9 greater than any of the reported wind speeds on which CCANP was relying.

Although the design aspects of Contention 4 could be disposed of for all except three nonconforming structures solely on the above basis, I i

we also recognize that not all of the windspeeds advanced by CCANP are l

appropriate for evaluating the STP design under the SRP criteria l

referenced above, particularly with respect to " standard installations."

The Applicants analyzed each of the windspeed readings cited by CCANP, demonstrating that many were of dubious value in terms of SRP standards.

Although most of them were derived from weather service or other reputable sources, those not utilized by the Applicants in analyzing the

! STP were unverifiable, or lacked adequate indications of reliability, or for varying reasons (particularly location) were not relevant to the STP, The weather stations primarily relied on by the Applicants are Port Arthur, Galveston, Corpus Christi, and Brownsville, Texas.10 These i

9 Linderman Aff., 1 17; Tr. 10922-23, 10929-30.

10 The FSAR analysis (in the form utilized during the early adjudication of Contention 4) originally had relied on data from Victoria, Texas, approximately 45 miles from the coast. As amended in 1984, the FSAR used near-coastal stations exclusively, since hurricane wind speeds typically decrease as storms move inland.

Wolfe Aff., t 11, at 5.

h 4

-, .-,,.___-______m .______--..__,,_-__.,--,_____.-.m___ -

l weather-station locations are all within 10 miles of the Gulf Coast and are 150, 80, 105 and 220 miles, respectively, from the STP site (FSAR, Table 2.3-40; Tr. 10915). Two of the readings relied on by l CCANP--Matagorda and Port Lavaca, Texas--are much closer to the site: 8 miles and 37 miles, respectively (FSAR, Table 2.1-1, at pp. 2.1-9 and 2.1-12). The 170-mph wind speed at Port Lavaca was discounted because:

--non-fastest mile wind speed; estimated value; observation height unknown; quality of observer training and equipment indeterminate."

The 150-175 mph wind speed recorded in the Matagorda area was discounted because

--observation height unknown; quality of observer training and equipment indeterminate."

, Another reading at Port Lavaca (175 mph) was discounted because

--observation height unknown; quality of observer training and equipment indeterminate."

Wol fe Aff. ,1 18, at pp.10-11.

In accordance with SRP guidance, it was appropriate for the Applicants not to rely on these readings in calculating the fastest-mile wind speed (Finding 781). However, it would be desirable if readings as i

close to the site as these could either be factored into an analysis of hurricane design or, alternatively, a more detailed explanation for their non-use provided. Better data would be desirable either to justify the lack of reliance on such readings or (alternatively) to permit nearby readings to at least be taken into account to some degree.

We recommend that the Staff consider devising better criteria for giving some weight to nearby wind readings that do not necessarily satisfy in i

1

, . _ _ . _ _ - - . _ . _ -. _ _ _ - - . - - - - . - - . - _ . - - - _ _ - ~_ _ . - _ _

I full all of the SRP criteria (see Tr. 10936). In particular, we believe j that some reliance might well be placed on otherwise acceptable readings i from stations lacking a long period of service. Otherwise readings from I newly established stations might be unjustifiably ignored.

1 In any event, the readings at Port Lavaca and Matagorda on which CCANP relies are significantly lower than the DBW. Failure to have taken them into account accordingly imposes no undue risk to the public

! health and safety, even if they were to be accorded a reliability that i

they apparently do not possess,

b. Nonconforming Structures Several safety-related structures have not been designed to withstand the effects of hurricane- or tornado-generated missiles, as l required by GDC 4 (Findings 785-86). The affidavits initially filed by the Applicants and Staff had indicated that the STP safety structures all meet the NRC design criteria for missiles generated by a DBW (or 4

design-basis tornado (DBT)) except with respect to one portion of one structure: the roof area of the isolation valve cubicle (IVC). With respect to that structure, the Applicants employed a probabilistic risk

' assessment to demonstrate that the probability of a tornado- or hurricane-generated missile is sufficiently low (2 X 10-10 and 1.2 X 10-10, respectively) that the design need not consider it.

(Collectively, these probabilities total 3.2 X 10-10 ) The Staff .

I calculated a somewhat higher probability (3 X 10-9 for both tornado- and hurricane-generated missiles), which was still less than the risk at which such matters must be considered under a long-standing Staff i

acceptance criterion (1 X 10-7). Finding 780. See Reg. Guide 1.117 (Rev. 1, April 1978) and SRP, s5 2.2.3 and 3.5.1.4. In response to Board inquiries, the Applicants and Staff each confirmed that the plant

! was not being subdivided into small segments to reduce the risk of i

damage to specified portions of structures and hence lower the safety standards for these portions of the structures. Rather the probabilities of damage from all natural phenomena to relatively few

portions of the plant not meeting the design criteria were summed and determined to be lower than the Staff's 1 X 10-7 acceptance criterion (Tr. 10924-29, 10940).

In our Sixth Prehearing Conference Order, supra, we had indicated that the method used by the Applicants and Staff to evaluate the IVC roof is occepto' ule.

coler, riowever, riew iriforriioliori developed wiiicii raised significant questions concerning the Applicants' and Staff's

application (s) of this evaluation method to STP safety structures. By i

virtue of a January 10, 1986 filing by HL&P with the Staff (of which we and the parties were sent copies),II we learned that there was at least one other safety structure that had not been designed to withstand l missiles generated by tornadoes (or, under the Applicants' analysis, l

l hurricanes). Through a telephone conference call generated by our i

j receipt of this information, we learned that there could be yet another 11

We regard these copies as a McGuire doctrine communication which provided us relevant and material information on a timely basis.

safety structure not designed to withstand tornado or hurricane missiles. We asked the Applicants and Staff (and other parties that I

wished to do so) to address the conformance of those and possibly other structures with safety requirements. We also asked the parties' views concerning the numbers of safety structures (or portions thereof) that

! permissibly could fail to be designed to withstand natural phenomena, as long as the probability of damage remained lower than the Staff's acceptance criterion of 1 x 10-7 . Memorandum (Telephone Conference Call

- January 28,1986), dated January 29, 1986 (unpublished).

The Applicants and Staff filed supplementary affidavits on February 18 and 28, 1986, respectively. They each indicated that, in addition to the IVC roof, certain Mechanical Electrical Auxiliary Building (MEAB)

HVAC openings, as well as diesel generator exhaust stack openings, have not been designed to withstand the impact of tornado missiles.12 The Applicants determined that the median probability of a tornado missile striking the MEA 8 HVAC dampers is 2 X 10-10/ year, and that the median probability of a tornado missile striking the exhaust stacks or entering the stack openings is 1.2 X 10-12/ year. The Staff calculated these additional probabilities collectively at about 50% of the probability (3 X 10~9) of a missile striking the IVC roof--i.e., the probability of a i

12 The Applicants further advised that two doors in the MEAB are also l not designed to withstand a tornado missile but that other internal barriers protect safety-related equipment and components in the

MEAB. Linderman Supp. Af f. , at 2, n. *. We are accepting that representation (Finding 791).

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tornado- or hurricane-generated missile striking the MEAB HVAC dampers and the diesel generator exhaust stacks is 1.5 X 10-9 . Combining the l probabilities of a tornado missile striking any of the three structures, the Applicants' combined probability is 4.012 X 10-10 . The Applicants' l

l combined probability for tornado and hurricane missiles striking these structures is approximately 6 X 10-10/ year. The Staff's is 4.5 X 10-9 for both tornado and hurricane missiles. All of these calculated probabilities are well below the Staff's acceptance criterion of 1 X 10-7 . Findings 785-86; see also Finding 788.

With respect to our inquiry as to the numbers of structures or portions thereof that may be encompassed by the 1 X 10-7 acceptance criterion, both the Applicants and Staff focus only on the probabilities

! and whether they meet the 1 X 10-7 acceptance criterion. irrespective of the number of safety structures or portions thereof that may fail to be I protected because they collectively fall within the acceptance criterion. As the Staff's affidavit states:

l l The number of locations, where barriers are not provided to protect against tornado generated missiles, is not a critical factor in the Staff's review. The important point is whether the overall probability of tornado missiles striking these locations meets the l Staff's criteria.

l l Supplementary affidavit of Jerry N. Wilson, dated February 27, 1986, at 14.

We cannot accept this position in its entirety. In our opinion, this p~osition amounts to regulation by probability or safety goal--a position that the Commission itself has explicitly rejected. In the words of a currently effective Commission Policy Statement:

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4

[D]uring the evaluation period [for the safety goal program), the preliminary safety goals and preliminary numerical design objectives will not replace the NRC's reactor regulations. Rather, NRC will continue to use conformance to regulatory requirements as the exclusive licensing basis for plants. ***

The Commission recognizes that some probabilistic risk analyses have already been performed for individual nuclear plants and that safety inferences might be made as a result of comparing the results of these analyses to the preliminary design objectives.

The Commission cautions against the use of such inferences to reach bottom-line safety conclusions. ***

i Safety Goal Development Program, 48 Fed. Reg.10772 (March 14,1983)

(emphasis supplied). For that reason, we do not believe it permissible to allow an unlimited number of safety structures to fail to conform to regulatory requirements on the ground that the probability of being adversely affected by a natural phenomenon (or natural phenomena) is i

less than 1 X 10-7 ,

We stress here that, for the three structures in question, NRC design requirements are technically not being satisfied (Findings 785-86). On the other hand, in the situation before us, assuming the u

probabilities have been adequately ascertained, the probability of the three structures being struck by tornado or hurricane missiles would be far below the Staff's acceptance criterion. Moreover, as the Applicants point out, the probability of radiation releases in excess of limits in 10 C.F.R. Part 100--on which the 1 X 10~7 acceptance criterion is premised--would be even lower. For that reason, if the probabilities were adequately determined, we would regard the failure to meet safety standards for the portions of the three structures in question to be de minimis and consistent with an overall conclusion that STP safety 4

i i

l

i i structures have been adequately designed to withstand hurricanes and hurricane missiles, as required by GDC 2 and 4 (Finding 789).

Our reluctance at this time to accept the probability calculations of the Applicants and Staff, insofar as they establish probabilities for a missile strike on the three nonconforming portions of the structures, stems from the supplementary affidavits of the Applicants and Staff considered in conjunction with the earlier affidavits. There appear to i be potential shortcomings in the probability calculations, steming not from the probability of occurrence of hurricanes or tornadoes but, rather, from the population of missiles considered in ascertaining the i probability of a missile strike.

In considering whether STP safety structures generally are designed to withstand missiles, the Applicants' March 1985 affidavit emplo.yed as

! its missile source a spectrum of missiles including a steel reinforcing bar, several varieties of steel pipe, utility poles, wooden planks and automobiles. This is one of the acceptable spectra of design-basis missiles recognized by 5 3.5.1.4 of the SRP. These spectra are said to envelope missiles that could be generated from non-Category I structures, and encompass missiles generated by both tornadoes and hurricanes. Linderman Aff. 11 22, 23. The Staff raised no question with respect to the source of missiles used by the Applicants (Ma Aff.).13 l

13 See also SER, 6 3.5.1.4, at p. 3-11, where the Staff approves such missiles.

4

With respect to its probability calculation for the IVC roof, the Applicants state that the number of potential missiles is based on data from Electric Power Research Institute (EPRI) surveys at seven nuclear power plant sites. These data, although referenced, have not been provided to us. Linderman Aff., Attachment II, at Attachment 3 (p. 2) ;

and Attachment III, at Attachment 2 (pp. 2 and 4). We are unable to ascertain from the material before us whether the missiles considered are limited to a spectrum of design-basis missiles set forth in 6 3.5.1.4 of the SRP. We assume that to be so, however, in view of the Staff's statement that the Applicants' probabilistic risk assessment considered specified design-basis missiles as set forth in 6 3.5.1.4 (Linderman Aff., Attachment IV, at Staff's Safety Evaluation Report, p.

4). Indeed, because of the height of the IVC wall (55 feet), the Staff i was able to exclude the utility pole and car as missiles, as permitted by the SRP (id.).

The likely reliance on design-basis missiles to ascertain

! probabilities of hurricane or tornado damage became more apparent through the supplementary affidavits of the Applicants and Staff dealing with the MEAB HVAC openings and the diesel generator exhaust stack openings. The Applicants stated that they used the "results of the probability calculations for the IVC roof * *

to evaluate the probability of a tornado missile striking the diesel generator exhaust stack openings with a correlation using appropriate target specific parameters (target area and target elevation)." Linderman Supp. Aff.,

Attachment A, at 2. The Staff apparently utilized its earlier l

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l CdlCulations and merely increased the target area by about 50%, and accordingly concluded that the 50% probability increase that would result would still leave the probability of a missile strike during a hurricane or tornado at "much less than 1 X 10-7" for the three structures. Wilson Supp. Aff., at 4. The Staff apparently did not modify its new probability calculation for differences in target i

elevation or the missiles that would strike at different elevations. It incorporated by reference 6 3.5.2 of the SER, which had not yet been issued. Now that it has been issued (see n. 14, infra), we have examined it and it sheds no further light on the particular missiles utilized for the probability calculations. It indicates, however, that the HVAC dampers and other openings in the MEAB were greater than 64 feet above grade, and the diesel generator exhaust pipe openings were 67 feet above grade (compared with 55 feet for the IVC roof). If the 1

design basis missiles were to be used, no further modification of the IVC calculation for differences in target elevation would be called for.

If our understanding of the affidavits before us is correct, there is a fundamental flaw in the probability calculations undertaken by both

the Applicants and Staff. The flaw stems from their apparent reliance l

on design-basis missiles (as set forth in 5 3.5.1.4 of the SRP) to undertake the probability calculations. The design-basis missiles are appropriate for evaluating the design of safety structures; they include the worst-case examples that can be said to envelope the less severe missiles that almost surely also will impact a structure during a I hurricane or tornado. We refer, for example, to missiles such as pieces

of sheet metal, tree limbs, small fence rails, pieces of wood, or even chickens or birds. A structure designed to withstand a design-basis missile may be presumed to withstand a missile of this type. The strike probability of missiles of this type, however, may be considerably higher than the strike probability of a spectrum of design-basis I

missiles.

i But where, as here, a structure is not designed to withstand design-basis missiles, a probability calculation based on such missiles is meaningless. Missiles of lower severity but likely higher probability must also be considered, as long as they could strike a safety structure not designed to resist them. On the present record, we have no basis for ascertaining the missile resistance of the IVC roof, the MEAB HVAC openings and the diesel generator exhaust stack openings.

(In the case of the IVC roof, we understand that it is open (Linderman i

Aff., Attachment IV, Safety Evaluation Report at 4), but we have no e

basis for ascertaining the missile protection afforded to components 1

inside a given IVC.) That being so, we cannot conclude on the present record that the probability of a missile strike to a given structure (or collectively the three structures) from a hurricane and/or tornado is less than 1 X 10-7 ,

Accordingly, we conclude that, with respect to the three nonconforming portions of the structures, there is an unresolved material issue of fact that precludes our granting summary disposition of Contention 4 (insofar as it involves the IVC roof, the MEAB HVAC openings and the diesel generator exhaust stack openings) at this time.

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In the near future, we will issue questions to the parties covering, ;

j inter alia, the probability calculations involved and the missile resistance of the three structures. When we have received responses, we will evaluate whether summary disposition may then be granted or whether

, further hearings may be required.

With respect to all of the design aspects of Contention 4 other

than those dependent on the probability calculations refercnced above, we reiterate our conclusion that there is no genuine issue as to any material fact and that the Applicants are entitled to a decision in their favor as a matter of law.

c. CCANP's 0pposition to Summary Disposition As for CCANP's reasons for our denying summary disposition of the

{

design aspects of this contention, as set forth in its filing of April i 8, 1985, we have commented earlier on the legal basis for employing i

probability calculations as a foundation for ascertaining compliance with NRC requirements--a use to which CCANP takes issue (Response, at j 8). The large margin of error to which CCANP points is one of the sources for our caution in employing this methodology to the extent l

espoused by the NRC Staff or Applicants. However, for reasons set forth above, we would be prepared to sanction use of the probability method in situations where such use is de minimis. Our requirement that the record be further developed was imposed so that we could ascertain whether the de minimis situation in fact is present.

I Beyond that, we find none of CCANP's reasons for denying summary i disposition to establish an unresolved material factual issue or to i

represent a reason why the Applicants are not entitled to prevail as a i matter of law. Briefly:

i 1. CCANP asserts, correctly, that the SRP guidance is not the exclusive basis for selecting data on severe weather phenomena. It claims that a "more comprehensive approach" is called for. But it 4

has provided no selected alternative approach. Although, as expressed above, improvements in the SRP approach might be desirable, we find no fatal flaw in that approach that would make the results achieved incompatible with the regulatory requirements i of GDC 2 and 4.

2. Although wind speeds in excess of 125 mph have been i

observed in the area of the plant, as claimed by CCANP, the Intervenne has presented no grounds for our disregarding the reasons offered by the Applicants or Staff for discounting those j particular wind speed readings.

1

3. CCANP has presented no adequate basis to support its claim i that unverifiable observations of wind speeds of hurricanes in I

other locations should have been considered in designating the OBW i

for the STP. Moreover, rejection of the use of unverifiable observations does not constitute a shifting of the burden of proof to CCANP. The Applicants have explained (through affidavit) why they did not utilize each of these readings. .

i We reiterate, however, that the DBW is greater than any of the 1

]

readings relied on by CCANP (whatever be their reliability). That t

reason alone is an adequate basis for granting sunnary disposition of i

i

! the design aspects of Contention 4 insofar as the contention applies to properly-designed structures.

i 3. Construction Questions (Findings 792-93)

Contention 4 also claims that the STP has not been adequately 4 " constructed" to withstand hurricanes. Since the Applicants' affidavits i did not directly address these questions, and the Staff indicated it had not completed its review of these matters (Ma Aff., 1 3; Tr. 10929-30),

we declined to grant summary disposition of this aspect of Contention 4.

We described methods by which CCANP could litigate such construction 1

questions. To be timely, CCANP must raise any such questions within 30 days after release of the Staff's Safety Evaluation Report (SER). The questions must arise from information in the SER. Sixth Prehearing Conference Order, supra, at 6.14 Any such construction questions will t

l 14 The Staff's " Safety Evaluation Report related to the operation of South Texas Project, Units 1 and 2" (NUREG-0781) was dated " April i 1986" but was not received by the Board until May 7, 1986. By Order dated May 20, 1986, we provided that CCANP must raise any hurricane construction questions by June 9, 1986.

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be res71ved later in Phase III, either through hearings or summary disposition.15 i 1 j

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15 As we mentioned during the Seventh Prehearing Conference (Tr.

l 15907-09), CCANP had forwarded to us and the parties (in another context) a newspaper article indicating that an alleged deficiency in construction of the HVAC system could affect protection against tornadoes. Article from Houston Post of June 18, 1985, forwarded by letter from CCANP dated June 26, T985. Since the Applicants and i

Staff are relying to some extent on tornado protection to respond i to Contention 4, a deficiency in construction affecting protection j against tornadoes would likely also impact on protection against hurricanes. By letter dated April 25, 1986, the Applicants advised us that the HVAC construction question to which the Houston Post <

article refers concerned the MEAB HVAC louvers, which have been ;

subject to the probability analysis that we discussed earlier. We will consider these louvers as a design rather than a construction question. See supra, pp. 78-87.

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III. OPINION ON PHASE III ISSUES A. Introduction We earlier set forth the issues that we had contemplated hearing in Phase III (supra, pp. 3, 4 and 9). They included an update of Issue C (concerning HL&P's planned organization for operation and its competence and. commitment to operate the STP safely); Issue F (concerning the adequacy of HL&P's QA program for operation); CCANP Contention 3, which we dismissed at CCANP's request (LBP-86-5, supra); and certain aspects of Contention 4 (concerning hurricanes).

Our Order dated November 18, 1985 (unpublished) set forth a discovery schedule for Phase III, applicable only to Issue F (as to which discovery had not previously been authorized). CCANP's discovery requests were limited to essentially one subject that CCANP sought to include within Issue F: the alleged preferential administration of HL&P's program for controlling use and/or sales of illegal drugs by STP personnel. At the Seventh Prehearing Conference, held on March 21, 1986, we acted on a motion for a protective order filed by the Applicants and motions to compel discovery filed by CCANP, holding that the alleged preferential administration of the drug control program does not fall within the permissible scope of questions litigable under Issue i F. We did not decide whether the drug issue falls within Issue C or could be entertained as a new contention, since we believed that CCANP had not set forth an adequate basis for its claim, as required by 10 C.F.R.%2.714(a). Seventh Prehearing Conference Order, LBP-86-8, 23 NRC 182 (March 28, 1986).

i l

l We provided CCANP the opportunity to set forth its basis adequately--in brief, by identifying (under protective order) the source i

of the anonymous allegations giving rise to the claim of preferential administration of the drug program. By letter dated March 26, 1986 I

j (which confirmed a telephone comunication to the Board), CCANP declined to identify its informant. CCANP also advised that it would not be responding further to the affidavits on Issue C which had been filed by

! the Applicants and Staff or to the Applicants' previously filed motion for summary disposition of Issue F.

! Since we have the views of all parties who intend to submit them on Issue C, we are deciding that issue in this PID. See infra, Part III.B, pp.93-102. With respect to the Applicants' motion for summary j disposition of issue F, we advised the Staff that it need not respond, absent further order from us. LBP-86-8, supra, 23 NRC at 187, n. 4. We have reviewed the Staff's views on the QA program for operation as set forth in its recently issued SER (see supra, n.14) and have determined that no further Staff response is necessary. As a result, we are granting the Applicants' motion for summary disposition of Issue F.

We still need to await the time we provided CCANP to review certain defined matters in the SER, together with the additional supplementation of the record that we have found to be necessary (pp. 78-87, supra), to conclude our consideration of CCANP Contention 4.

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B. Issue C (Findings 794-607) '

Issue C questions whether, in light of HL&P's'~ planned organizatien for operation and the alleged deficiencies in its management of .

t construction (including its past actions or lack of action, revised programs for monitoring the activities of its architect-engineer-

constructor and those matters set out in Issues A and B), there is s reasonable assurance that HL&P will have the competence and commitment to operate the STP safely. In PID-I, we resolved this issue favorably to HL&P, but solely on the basis of the preliminary information then of record. We called for the record to be updated in Phase III, and our resolution of Issue C in PID-I was conditioned on any updated information to be added to the record. LBP-84-13, supra, 19 NRC at 697-99, 781-87.

i On February 18, 1986, the Applicants filed the affidavit of Mr.

Jerrold G. Dewease, currently HL&P's Vice President, Nuclear Plant Operations, updating the Applicants' previous testimony on Issue C.10 On March 14, 1986, the Staff filed the affidavit of Mr. Lawrence P.

Crocker, updating the Staff's previous testimony on this issue.17 On May 16, 1986, the Staff filed a supplemental affidavit of Mr. Crocker.

16 That previous testimony was presented by a panel consisting of Mr.

Dewease and Mr. Jerome H. Goldberg.

1 I That previous testimony was presented by two panels, each including Mr. Crocker. The testimony of both panels was entered into the ,

record by stipulation. LBP-84-13, supra,19 NRC at 786, n. 50.

i On May 19, 1986, the Applicants filed additional information concerning Mr. Dewease's affidavit.

There have been numerous changes since 1982 in the organizational structure contemplated for operation of the STP. Mr. Dewease's affidavit, which incorporates an updated version of relevant sections of the FSAR, describes these changes in considerable detail. Mr. Crocker has reviewed this affidavit for the Staff, as well as the sections of the FSAR; he has forwarded an advance copy of Chapter 13 (" Conduct of Operations") of the Staff's SER.IO In PID-I, we reviewed HL&P's progress in developing plans for operation. We stressed the apparent intimate involvement of HL&P's upper management with construction activities during the period following the issuance of I&E Report 79-19 (which, itself, had led to the issuance of the April 30, 1980 Show-Cause Order). We noted that HL&P officials seemed dedicated to safe plant construction and operation. We also found that key officials who were then identified possessed appropriate qualifications. Finally, we observed that i.he NRC Staff had reviewed HL&P's plans for operation and concluded that HL&P's 18 The final version of the SER (NUREG-0781 (April 1986)) was recently t

issued. See n. 14, supra. Chapter 13 does differ in minor ways l from the advance copy on which Mr. Crocker's affidavit is based.

Mr. Crocker's supplemental affidavit analyzes generally an FSAR j submission (Amendment 53) subsequent to that which the SER (or Mr.

Crocker's previous affidavit) reviews. In their May 19, 1986 letter, the Applicants advised that Mr. Dewease's affidavit l identified the changes which were incorporated into the FSAR by l

Amendment 53.

planned management and operating organizations met the requirements of applicable NRC rules and regulations. Although the Staff review was preliminary, we found no reason at that time to disagree with its conclusion.

The Staff has again reached a similar conclusion, although on the basis of a much more complete record. Mr. Crocker notes, that a number j of minor changes in the Applicants' preparations for operations have recently been made and, indeed, that the Staff "would be concerned if there were not such changes" (Crocker Aff., 1 6; see also Crocker Supp.

Aff., 11 4-5). Mr. Crocker also notes that a number of " minor items" call for Staff verification, currently tentatively scheduled for early fall, 1986. He concludes that the still unresolved items "may be safely left for [S]taff confirmation on the [S]taff site visit" (Crocker Aff.,

1 7).

On the basis of our review of the affidavits before us, including the matters requiring further Staff verification, we conclude that four of the open items are of importance in terms of the matters to be considered under Issue C. Specifically, under this issue, we are evaluating HL&P's organization and staffing for operations in light of the deficiencies uncovered in Phase I. One of those open questions

relates to HL&P's organizational structure, and three relate to staffing. The deficiencies considered in Phase I have a bearing on each of them.

In terms of organizational adequacy, we earlier found that one of l the reasons why, at lower organizational levels, HL&P failed to exercise i

effective control prior to the Show-Cause Order was the excessively long chains of command and lines of communication, particularly between onsite personnel and offsite managers (LBP-84-13, supra, 19 NRC at 688-89,690,693). The extended lines of communication were a prime source of the quality-related difficulties that had arisen at STP (id.

l at693,751,754-55). We also found, however, on the basis of the evidence before us, that HL&P had taken steps to shorten those chains of command and lines of communication (id. at 693,695).

The open item relating to organization that we find important to this issue concerns HL&P's procedures governing the interface of offsite and onsite groups. The Staff has not yet reviewed these procedures (Finding 804).19 Given the significance of such interface in terms of the QA problems discussed in PID-I, we question whether this matter might properly be deemed a " minor item" to be left for Staff verification or confirmation (Crocker Aff., 1 7). However, in the absence either of a particular question raised by a party or an affirmative indication of improper procedures (neither of which is present here), we will leave this matter for final Staff resolution.

In that connection, we also call the Staff's attention to the somewhat longer chain of communication currently attending certain portions of HL&P's organizational structure (Finding 802). We have no !

19 For information purposes, this open item appears at pp. 13-3 and 13-14 of the final version of the SER.

1 I

l l basis for concluding that such organization is not consistent either l with an NRC requirement or with the commitments made by HL&P in Phase I.

Nonetheless, we anticipate that, in reviewing the interface procedures, the Staff will bear in mind the communications difficulties discussed in Phase I and the Applicants' commitment to shorten and simplify lines of communication to avoid such difficultiesi in the future.

The other three open items that we deem to be significant concern the experience and qualifications of operations personnel. In PID-I, we found that lack of experience wr.s the "most significant" reason for HL&P's difficulties that led to the April 30, 1980 Show-Cause Order (LBP-84-13, supra, 19 NRC at 687-89, 691-93, 694-95, and findings referenced). Given the past history of this project, as set forth in PID-I, any deficiencies showing lack of experience for operations become significant predictive tools.

The first of these open items is a finding by the Staff that "there is little previous experience at the corporate level in nuclear plant operations" (Advance SER, 5 13.1.1.2; Finding 805, infra).20 The Staff observes that, although such experience is desirable, it is not required. On a generic basis, the Staff's conclusion appears to be accurate. In the context of this proceeding, however, given the history 20 For information purposes, this open item appears at p.13-3 of the ,

final version of the SER. The statement was modified to read l "there apparently is little previous experience * * * " (emphasis '

supplied).

of nonconforming conditions resulting from lack of experience, as well as the Applicants' commitment to upgrade the level of experience of HL&P officials and employees, there may be more requirements in this regard applicable to HL&P than to licensees generally. We decline to resolve this question at this time, since the issue before us is currently uncontested. Nonetheless, we urge the Staff to give serious consideration to the nuclear experience (or lack thereof) of operations ;

personnel before approving any operating licenses for STP.

Similarly, the other two open items relevant to the qualifications of operating personnel--both relating to the qualifications of shift crews--also have a bearing on how well the Applicants are meeting their Phase I commitments to upgrade the qualifications and experience of operating personnel. First, the Staff indicates that it will verify l that HL&P (per its own commitment to the Staff) will meet the guidelines of Generic Letter 84-16, to ensure that each operating shift crew has

.N sufficient hot operating experience (Advance SER, @ 13.1.2.1(1); Finding 805, infra).21 We urge the Staff to condition any grant of operating licenses on satisfactory fulfillment of this commitment.

Finally, the Staff has expressed reservations about HL&P's shift technical advisor (STA) program. In PID-I, we described HL&P's plans for assuring engineering expertise on shift as follows:

21 For information purposes, this open item appears at p. 13-5 of the final version of the SER.

l HL&P does not currently contemplate a Shift l Technical Advisor (STA) in its shift l

organization but, rather, plans to provide for the expertise envisioned for an STA through increased training of its Shift Supervisors [who were to have had Senior Reactor Operator (SR0) licenses]. If, however, in the future the NRC requires that a specific Shift Technical Advisor position be established, HL&P has committed to creating such a slot, possibly using an additional licensed operator (probably an SR0) for that purpose.

LBP-84-13, supra, Finding 244, 19 NRC at 785-86. In its current affidavit, HL&P advises that it has decided to include separate STAS as part of the shift organization (Finding 803). One STA on shift is to serve two operating units. The STAS are also to serve as reactor performance engineers in the Reactor Performance Section of the Technical Support Division.

Current NRC requirements regarding STAS are set forth in a Commission Policy Statement on Engineering Expertise on Shift, 50 Fed.

Reg. 43621 (October 28, 1985, effective as of that date).22 This Policy Statement was forwarded to licensees and applicants by Generic Letter 86-04, dated February 13, 1986. The Policy Statement offers licensees and applicants two options for meeting current regulatory requirements for engineering expertise on shift:

22 Although the Policy Statement is denominated in those terms rather than as a rule or regulation, the Commission utilized notice-and-comment procedures comparable to those required for rulemaking in adopting the Policy Statement. Given those (Footnote Continued)

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1. Elimination of separate STA position by combining one of the required SR0 positions with the STA position into a dual role (SR0/STA) position, occupied by an individual with specified qualifications.

2. Continuation of NRC-approved STA program (with a dedicated STA who meets criteria of NUREG-0737, Item 1.A.1.1) while meeting licensed operation staffing requirements.

Option 1 is encouraged. If option 2 is chosen, the Commission encourages licensees to work toward having the dedicated STA assume an active role in shift activities in certain described ways. d hoc approval of another system is permitted if it " meets the intent of this Policy Statement" (50 Fed. Reg. at 43623).

In its advance SER, the Staff finds the proposed STA program to be

" acceptable," even though "it does not meet the desires of the Commission as expressed in Generic Letter 86-04 * * * "(Advance SER, 6 13.1.2.1(1), at p. 13-7).23 The Staff does not provide enough detail to explain why the proposed program fails to qualify under option 2 of the generic letter. The Staff indicates, however, that HL&P "may wish to revise the STA program in light of the new policy statement."

(Footnote Continued) circumstances, the Policy Statement must be accorded considerable regulatory weight.

23 This item appears at p.13-5 of the final version of the SER. In that version, the statement concerning the Commission's " desires" is omitted, although suggestions for revising the STA program to conform to options of the Generic Letter remain. Our ruling here is premised, as it must be, on the material provided us under affidavit. In any event, the Staff has not explained whether it has changed its view on this matter and, if so, how.

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l Although cursory examination of the material before us suggests either that the STA may not qualify as " dedicated," that the STA's activities do not constitute the active role in shift activities as defined by the Policy Statement or that the STA may lack appropriate qualifications, the Applicants have, by letter to the Staff dated May 8, 1986 (ST-HL-AE-1659, File No.: G3.8, with copies to parties and the l

Board) submitted additional information concerning the STA program. The letter expresses HL&P's intent to conform to the generic letter (and hence the Policy Statement). This may be the revision to which the Staff referred. We express no view as to whether the revised STA program in fact conforms to the Policy Statement. But we stress that em the Staff cannot find the STA program " acceptable" absent an additional finding that it meets either option 1 or 2 or "the intent of [the]

Policy Statement." The Policy Statement provides the exclusive methods for satisfying applicable regulatory requirements (including the ad hoc

" intent" finding). Absent a finding that the Policy Statement has been satisfied through one of these mechanisms, we conclude that the Applicants will not have demonstrated compliance with all applicable i

regulatory requirements.

Although we do not have sufficient information before us to reach a l

l definitive conclusion, it appears to us that the organizational structure we reviewed in 1982 might well qualify under option 1 of the

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policy statement.24 The May 8, 1986 revision that we have just received might qualify under option 2 (or a combination of options, which is permissible). Although we leave the resolution of this open item to the Staff, we here urge the Staff to consider this open item against a backdrop of PID-I findings that attributed many QA difficulties to a lack of adequate experience. We subject our resolution of Issue C to a finding by the Staff that HL&P's shift program conforms to one of the Policy Statement options or otherwise " meets the intent of [the] Policy Statement." 25 In sum, subject to resolution satisfactory to the Staff of various open items, and in the absence of any issue currently raised by a party, we have no reason to change our earlier preliminary conclusion on Issue C. We particularly note with approval the commitment of HL&P to achieve strong nuclear expertise throughout upper management, up to the level of the Board of Directors (which includes a former Chairman of the NRC)

(Tr. 12185-86 (D. Jordan)). Subject to resolution by the Staff of the referenced open items, we now conclude that the Applicants' organization and staffing for operations, as set forth in the affidavits and record 24 The particular Shift Supervisor whose qualifications were provided would not, however, appear to meet the educational requirements of the Policy Statement (App. Exh. 56, Q 13.1.3.2, 1 12, at p.

13.1-29).

25 The statement in the final version of the SER (n. 23, supra) does not suffice.

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before us, meet all regulatory requirements, and we have reasonable assurance that HL&P possesses the competence and commitment to operate the STP safely.

C. Issue F (Summary Disposition) (Findings 808-15)

As set forth in detail in the cited findings, we have determined that summary disposition of Issue F is appropriate. That issue questioned whether HL&P's QA program for operation of the STP would meet the requirements of 10 C.F.R. Part 50, Appendix B, the Commission's quality assurance regulation. The Applicants moved for summary disposition on March 12, 1986, offering the affidavit of Mr. James E.

Geiger, HL&P's Manager, Nuclear Assurance.

We earlier rejected CCANP's attempt to litigate under Issue F certain allegations concerning the administration of HL&P's program for controlling drug use. See supra, p. 91. That was the only matter that CCANP scught to raise under this issue. CCANP thus offered no reply to the Applicants' motion. Indeed, in response to interrogatories, CCANP had made clear that it "does not contend that the [q]uality [a]ssurance

[p]rogram * *

will not fully satisfy the requirements of 10 C.F.R.

Part 50, Appendix B * * *" (Findings 810,811). The Staff did not reply to the Applicants' motion, but the Staff's recently issued SER specifically finds that "[t]he QA program describes requirements, procedures, and controls that, when properly implemented, comply with Appendix B to 10 CFR 50 * * *" (Finding 5).

On the basis of the affidavit of Mr. Geiger, which is uncontroverted by any party, the Applicants assert, inter alia, that

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"[t]he STP operations QA organization will have a staff and organization sufficient to perform its functions in compliance with Appendix B * * *"

and "[t]he STP operations QA program satisfactorily addresses each of the 18 Criteria of Appendix B" (Finding 814). Mr. Geiger is qualified to address these matters (Finding 813).

Since the affidavit of a qualified person asserts that the QA program will meet 10 C.F.R. Part 50, Appendix B, the Staff's analysis finds that program in accord with the named regulation, the Intervenor disclaims any intent to show noncompliance (other than the drug matter that we have rejected), and there are no other matters under this issue for which we perceive a need for further adjudicatory consideration, we have found that there is no genuine issue as to any material fact respecting Issue F and the Applicants are entitled to a decision in their favor as a matter of law. We are accordingly granting summary disposition of Issue F.

1

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IV. MOTIONS IV AND V TO RE0 PEN PHASE II RECORD We observed earlier (supra, p. 9) that, since the conclusion of the hearings held in August 1985, CCANP has filed five separate motions to reopen the Phase II record. We previously ruled on the first three of those motions--the first resulting in the inclusion in the record of an additional CCANP exhibit, and the second resulting in two additional days of reopened evidentiary hearings, held in December 1985.

Subsequent to those reopened hearings, CCANP filed its fourth and fifth motions (Motion IV and Motion V). Because the motions are based on similar types of information, we will treat them together.

Although we find no warrant for further evidentiary hearings on the new information on which CCANP is basing its motions, and hence are not granting either of the motions (or the related discovery sought by CCANP), we do find that certain of that information was relevant and material to the Phase II testimony of the Applicants and, accordingly, should have been furnished by the Applicants to the Licensing Board and parties as direct testimony during the hearings held in July-August 1985. Although the information could arguably be said to be included in some general language of that testimony, it was not explicitly set forth. As a result, the Applicants' testimony was somewhat less complete than would have been desirable and represents an additional instance of less than full disclosure, albeit only marginally so.

As is the case with certain other instances arising in Phase I (see supra, pp. 40-43), however, we find no basis for concluding that the Applicants deliberately sought to withhold pertinent information from or

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to mislead the Board--indeed, they might not have even perceived its significance. Moreover, reference was freely made to this information ,

1 during cross-examination (Tr. 11584 (Goldberg)). Accordingly, we do not regard this additional possible lack of full disclosure as significant enough (either alone or in conjunction with the other instances of less than full disclosure) to warrant license denial for want of character.

A. Background

~

26 Motion IV was filed on January 17, 1986. It sought to reopen the record to include (1) portions of a deposition of Mr. Eugene A.

Saltarelli taken on July 18, 1984 as part of the litigation between B&R and HL&P; and (2) a memorandum prepared by Mr. Saltarelli in December 1980 or January 1981 (together with portions of Mr. Saltarelli's July 17, 1984 deposition concerning that memorandum) setting forth an overview of the engineering at STP. Mr. Saltarelli was head of B&R engineering during the period from the inception of the Quadrex review until the removal of B&R as design engineer for the STP. Motion IV also sought hearings on this material involving certain named witnesses, additional discovery for CCANP and, on the assumption the motion to reopen were to be granted, a suspension of further activity in Phase III.

26 Citizens Concerned About Nuclear Power, Inc. Motion to Reopen the Phase II Record: IV; For Discovery and to Suspend Further Activity in Phase III.

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On February 3, 1986, the Applicants and the State of Texas each

! filed responses to Motion IV. The Applicants sought denial of the motion in all respects, whereas Texas favored granting of the motion and reopening of the record. Along with their response, the Applicants provided copies of several letters between CCANP's counsel and their counsel, concerning the background for the filing of Motion IV. On February 6, 1986, the Staff filed its response, which opposed the motion in all respects.

Upon review of the responses of the Applicants and Staff, including the correspondence forwarded to us by the Applicants, we determined that we needed further information to resolve various of the questions raised by Motion IV. By our Memorandum and Order (Additional Information Required to Resolve CCANP Motion to Reopen Phase II Record: IV), dated February 7, 1986 (unpublished), we requested the Applicants, Staff and CCANP to file such information.27 Each of them filed responses on February 21,1986 (with CCANP's response being furnished in two

,l segments). On February 28, 1986, the Applicants filed a proposed reply to portions of CCANP's response.28 27 Following our delayed receipt of Texas' response, we invited Texas also to respond to our request for additional information. Order dated February 10, 1986 (unpublished). By letter dated February 26, 1986, Texas advised that it had no further information to provide.

28 The Applicants' proposed reply was accompanied by a motion for leave to file the proposed reply. CCANP did not respond to the (Footnote Continued) f

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On February 28, 1986, CCANP filed its fifth motion to reopen the Phase Il record.29 That motion sought to reopen the record to include a portion of another deposition taken in the suit between HL&P and B&R--the January 30, 1985 deposition of Mr. Joseph W. Briskin, who l served as head of HL&P's task force that responded to the April 30, 1980 Show-Cause Order. CCANP sought hearings involving certain named witnesses, as well as additional discovery. On March 14 and 19, 1986, respectively, the Applicants and NRC Staff filed responses opposing the motion. The Applicants' response was accompanied by an affidavit of Mr.

Briskin.30 We heard oral argument on certain aspects of both Motion IV and Motion V at the prehearing conference on March 21, 1986 (Tr.

15715-53).

B. Motive for Filing Motion IV Before addressing the motions, we turn first to questions raised by the correspondence that the Applicants forwarded to us along with their response to Motion IV. This correspondence consisted of (1) a letter, (Footnote Continued) motion; by response dated March 19, 1986, the Staff favored it. We hereby grant that motion.

29 Citizens Concerned About Nuclear Power, Inc. (CCANP) Motion to Reopen the Phase II Record: V and for Board Ordered Production of Documents by Applicants. The motion was dated "2/21/86" but in fact was not served until February 28, 1986. We are treating it as ,

filed on the latter date, and have provided response dates based on i that date. Order (Response Dates for CCANP Motions), dated March :

3, 1986 (unpublished).

30 Mr. Briskin is no longer employed by HL&P.

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dated January 17, 1986, from CCANP's counsel to one of the Applicants' counsel, transmitting Motion IV and setting forth some of the background that led CCANP to file the motion; (2) a subsequent letter, dated January 24, 1986, from CCANP's counsel to the Applicants' counsel, explaining to some degree the January 17 letter; and (3) response of the Applicants' counsel, dated February 3, 1986, to both of the foregoing letters. We had not previously been provided copies of CCANP's letters.

The January 17, 1986 letter recounted a meeting of unidentified

" interested parties" to discuss how the STP might be cancelled. This group apparently decide'd to pursue a " negotiated cancellation" with the Applicants, but to take steps to " force" the STP partners to respond to a cancellation plan. Motion IV was forwarded to the Applicants in that context, the subject matter of which being portrayed as a " smoking gun"

'l concerning the Quadrex study and likely to lead to the disqualification (by NRC) of senior HL&P management. The letter identified the motion as a first step, with other steps under consideration, including a complaint to the Justice Department alleging perjury and a conspiracy by HL&P senior management to obstruct the NRC, a grievance to the District of Columbia Bar regarding the performance of Applicants' counsel, and discussions with Congressional contacts to convene Congressional hearings on the commissioning, findings and handling of the Quadrex Report. The letter added that if good faith cancellation discussions commenced, CCANP's counsel would stipulate for the suspension of further

! proceedings on Motion IV. In the January 24 letter, CCANP's counsel l

j described the earlier letter as a sincere attempt to initiate settlement l

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negotiations and to describe what other non-parties to this proceeding perceive as a necessary future course of action.

The Applicants transmitted these letters to us, together with their reply which rejected the proposals and commented negatively on the tenor of the letters, for "such consideration as the Board may consider appropriate" (letter from Applicants to Licensing Board dated February 3,1986). We found those letters could bear on CCANP's motive for filing Motion IV--i.e., an arguable attempt to utilize threats of criminal sanctions against various individuals, or complaints to the Bar concerning Applicants' attorney (s), to achieve a result in this proceeding--and that, if so, such a course of action would represent conduct inconsistent with standards of " honor, dignity, and decorum" expected of representatives of parties before us. See 10 C.F.R. Q 2.713(a). Accordingly, we directed CCANP to show cause why we should i not impose sanctions for the letters in question. The potential sanctions we described ranged from striking Motion IV to the various forms of sanctions contemplated by 10 C.F.R. 5 2.713(c) (reprimand, i censure, suspension).

CCANP furnished its response in two segments. The first explained CCANP counsel's reasons for sending the two letters and filing Motion IV; and it advocated that no sanctions be imposed.31 The second focused 31 This response was dated " Friday, January 21, 1986." As can be seen from the certificate of service, the " January" represents a (Footnote Continued)

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solely on why it would be improper for us in any event to impose the sanction of striking Motion IV.

In the first segment, CCANP explained that its first letter was

" motivated by a sincere belief" that the documents provided in Motion IV

" represented the proverbial ' smoking gun'" and that, as a result, the Board would be compelled to deny the operating licenses because of lack of character on the part of HL&P. The letter was an attempt in a private and confidential manner to inform * *

Applicants themselves that there was a cancellation process under way and to offer [CCANP counsel's] services in expediting that process so Applicants could avoid the harshest consequences of their actions.

CCANP February 21, 1986 Response, at 2.

CCANP's counsel added that he was not attempting (and did not intend) to threaten the Applicants; and that, prior to sending the first letter, he had it reviewed by another attorney to ascertain whether it would be understood. Thereafter, when it appeared that the letter might be misconstrued as a threat, CCANP's counsel advises that he sent the second letter to clarify his intent. He explained the circumstance of his earlier contact with the Department of Justice. He also reiterated his belief that cancellation negotiations would be in the best interests of both the Applicants and CCANP.

(Footnote Continued) l typographical error. The response was served on February 21, 1986 and shall be considered as filed on that date (a timely response).

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Finally, CCANP apologized for the forceful language in the initial letter. Although criticizing the Applicants for making the letters an adversarial matter, intended to damage CCANP counsel's credibility, l CCANP admits an error in judgment in " assuming the Applicants or their attorneys would perceive current settlement opportunities as I do." Id. l at 4.

We are convinced by this response that we need not impose sanctions for the letters in question. The NRC encourages attempts by parties to reach " fair and reasonable" settlements (10 C.F.R. Q 2.759). Giving CCANP the full benefit of any doubt that may exist, and taking into account the points of view that CCANP is espousing in this proceeding, we shall assume that CCANP was attempting sincerely to initiate a

settlement negotiations. CCANP's first letter was not a very articulate attempt to do so. It was easily taken as a threat, of which Motion IV was but a first step. In that context, the letter represented not only a

poor judgment but also conduct unbecoming a member of the bar. However, the second letter attempted to place the first letter into a settlement context, and the first segment of CCANP's response to our show-cause order did so to an even greater degree. Given the apparent sincerity of CCANP's explanation, coupled with its counsel's apologies, we decline to impose sanctions for the two letters in question.

The second segment of CCANP's response argues that dismissal of Motion IV is an inappropriate sanction. Since we are not imposing any sanction for the letters in question, we need not treat the second segment of CCANP's response in this context. Because that segment

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includes further argument on the merits of Motion IV, we will treat it in that context.32 C. Ruling on Motions

! All parties acknowledge the legal standards we must apply in determining whether to reopen a record. We have stated them on several occasions: e.g., LBP-85-42, supra, 22 NRC at 798-99; LBP-85-45, supra, 22 NRC at 821-22. The Commission has recently reiterated them.

Louisiana Power & Light Co. (Waterford Steam Electric Station, Unit 3),

CLI-86-1, 23 NRC 1, 4-5 (January 30,1985). Briefly, three criteria must be satisfied:

1. The motion must be timely filed.

2. It must address a significant safety (or environmental) issue.

3. It must demonstrate that the information sought to be added to the record might potentially alter the result the Board would reach in its absence.

No party disputes that the information proffered by both motions addresses a significant issue, and we agree. The second criterion has accordingly been satisfied for both motions.

The Applicants and Staff each take the position that both motions were untimely. They claim that CCANP could have developed the information during the original periods set for Phase II discovery, 32 For that reason, we are permitting the Applicants to file a reply.

See supra, n. 28.

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during 1983 and 1984, as well as during the period beginning in May 1985, after the depositions and document in question were released from the protective order of the Texas court.

CCANP does not argue the timeliness of Motion IV. Rather it cites authority to the effect that the timeliness criterion may be waived when the matter presented is of such gravity that lack of timeliness is outweighed by the need to render a fair and meaningful decision.

LBP-85-45, supra, 22 NRC at 822-23. In Motion V, CCANP advances a similar argument but also cites barriers that it viewed as preventing it from undertaking timely discovery, particularly during the time frame following May 1985.

We recognize that CCANP should have inquired about information of the type involved here in earlier discovery periods during 1983 and 1984. Indeed, we have previously ruled that by failing to do so CCANP forfeited an opportunity for additional discovery that it was seeking.

Fifth Prehearing Conference Order, dated November 16, 1984, supra, at 9-10; LBP-85-6, supra, 21 NRC at 466. We also recognize that during the summer of 1985, while Phase II hearings were taking place, CCANP (because of its limited resources) could not practically have been expected to engage in discovery. Because of the protective order imposed by the Texas court, it could not have obtained access to the depositions in question (as distinguished from the underlying information) prior to May 1985. By that time, the period for Phase II discovery had long been terminated.

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Following the hearings during the summer of 1985, however, the material relied on by CCANP in support of Motion IV was available in the Matagorda County Courthouse (Tr. 15745), although its retrievability was questionable (Tr. 15747). The material involved in the B&R litigation (including the material relied on for both Motions IV and V) was i

available in Austin, Texas, to parties involved in a proceeding before the Texas Public utilities Commission (Tr. 15743-44). Although CCANP was not such a party, CCANP's representative was closely associated with 1 a party to such proceeding. The Applicants also advise that HL&P i

maintained the document room and permitted non-parties to have access (Tr. 15742, 15744). Thus, even though it had no legal right of access to the Austin document room, CCANP perhaps could have discovered the depositions earlier, around the time it submitted Motion II. The information proffered by Motions IV and V was relevant to the reopened hearings in December 1985, which grew out of Motion II. Balancing these equities, and taking into account both the potential significance of the subject matter of the new information and the circumstance that CCANP had no legally protected access to some of the information (see Tr.

15745-46), we note that Motions IV and V might have been filed earlier but we decline to bar those motions on timeliness grounds.

In our view, the most important criterion for reopening the record

is the potentiality of the information in question to alter the result reached. In our view, the information in question is not conceptually different from information already in the record and, indeed, would to some extent be cumulative.

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Both Mr. Saltarelli's deposition and Mr. Briskin's deposition appear to us to be not inconsistent with the proposition that a " side benefit" of undertaking the Quadrex review was to prepare HL&P witnesses at the Phase I hearings to respond to engineering questions should any be asked. See Motion IV, Saltarelli dep., Tr. 615, 620; !!ation V, Briskin dep., Tr. 411. Indeed, Mr. Briskin explicitly characterized the Quadrex review in terms of "an independent review of design made so that he [Mr. Goldberg] could state an opinion on the quality of the design should he be asked by the ASLB" (Motion V, Briskin dep., Tr. 411, emphasis supplied). That is a far cry from the asserted undertaking of the review to respond to Phase I issues or contentions. It is much more akin to the " side benefit" that Mr. Goldberg initially acknowledged on cross-examination during Phase II (Tr. 11584 (Goldberg)), and was the subject of extended consideration in the reopened hearings (eg .,

Applicants' Exhs. 79-81 and explanatory testimony). Neither deposition provides the additional step sought by CCANP--that a motivating purpose of the Quadrex review was to prepare for the Phase I hearings. Indeed, Mr. Briskin answered negatively to the question whether it was Mr.

Goldberg's desire to "have an independent review of the design that he could present to the ASLB" (Motion V, Briskin dep., Tr. 411). In our view, this information is not the " smoking gun" that CCANP portrays it to be; it might more justifiably be termed a " hidden alibi" for HL&P!

As for Mr. Saltarelli's memorandum attached to Motion IV, that document additionally emphasizes what the record already demonstrates--that there were serious problems of safety significance

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1 l

l with B&R's engineering. It does not demonstrate that there were any l a'dditional matters that fall within the reporting criteria of 10 C.F.R.

5 50.55(e).

We do not view the material forwarded by Motions IV and V as adding materially to information already in the record or as potentially changing the result we are reaching in this Decision. Hence we are denying both those motions (including the subsidiary relief, such as discovery, sought thereby).33 i

l D. Additional Information in Saltarelli Deposition

- One aspect of Mr. Saltarelli's deposition (attached to Motion IV) warrants our further comment. At dep. Tr. 613-14, Mr. Saltarelli recounted a meeting between Quadrex Corp. and B&R personnel which HL&P did not attend. He explained the absence of HL&P representatives on the t

basis that he had been told by an unidentified HL&P licensing engineer j that HL&P would not be present since "if there were any findings that i

j were reportable, they would be under the obligation to go report them t

within twenty-four hours and they wouldn't have had all the information out * * *" (id. at 614). Because we viewed this reason as reflecting an attitude possibly inconsistent with that required of personnel engaged i

33 Although we concur with Texas' position that there be a full adjudication of HL&P's character and competence, we do not believe that the information proffered by Motion IV (or V) would contribute j

materially to that result, given the evidence already in the

, record. Moreover, we cannot authorize discovery to permit a party I to develop information to be used to ascertain whether the record should be reopened. Waterford, CLI-86-1, supra, 23 NRC at 6.

i w- - . - - , - - ,- - ,,.. - ---c - -- --m-r--..w.~.--,----- -y,,-- 3,e - .,,.--- .m-,-. y,-- , - - - , ---,---,

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in activities with safety significance, we called upon the Ar911 cants and Staff (and other parties that wished) to file additional information. Memorandum and Order dated February 7,1986, supra. The ;

Applicants and Staff responded.

At the outset, we are rejecting the Staff's position--namely, that the reason the HL&P engineer declined to attend the meeting was not important since it did not overwhelm the " vast weight" (in the Staff's view) of evidence showing that HL&P was open and candid and responsibly fulfilled the reporting requirements imposed on it by NRC. That position is oversimplified, since it essentially would have us ignore information that, if proven accurate, might have consequences for the public health and safety. That position, if followed, could lead us to overlook evidence that has been brought to our attention of what could range from an essentially flawed program for reporting pursuant to 10 C.F.R. 5 50.55(e) to a significant defect in character or competence to complete construction of or to operate the STP (issues that, as of the time of Motion IV, were still not completely resolved). We decline to take that course.

On the other hand, the Applicants' response provided a full explanation for the deposition statement. It identified the HL&P engineer--Mr. Cloin Robertson, a previous witness in this proceeding l

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(called at the urging of CCANP).34 Mr. Robertson filed an affidavit that explained (inter alia) that the meeting in question took place on j May 1, 1981 and was a briefing of B&R by Quadrex; that HL&P had received a briefing on the same information the previous day (a matter reflected in the record);35 that HL&P's absence from the B&R briefing would not result in any failure to inform the NRC of reportable items because HL&P would already have been briefed on the information and, in addition, B&R had a system for routinely identifying and advising HL&P of information

covered by the 10 C.F.R. Q 50.55(e) reporting requirements; and that, on the basis of his former employment by an architect-engineer, he felt that HL&P's presence at the B&R briefing'might inhibit full and free discussion of problem areas between Quadrex and B&R. Mr. Robertson further stated that he was concerned that, if HL&P were present during the briefing of B&R, the exchange between B&R and Quadrex might lead HL&P immediately to undertake a 24-hour review for reportability and, in effect, short circuit the orderly process in place for Q 50.55(e) reviews.

Acknowledging that Mr. Saltarelli in his deposition was conveying what he most likely had heard, Mr. Robertson opined that he had not 34 At the time of his February 21, 1986 affidavit, Mr. Robertson was General Manager of Nuclear Engineering for HL&P. During the spring of 1981, when the meeting in question took place, Mr. Robertson was Manager of Nuclear Licensing for HL&P. See also infra, n. 36.

35 See Goldberg, ff. Tr.11491, at 12; Tr.11727 (Goldberg); Tr.

13163-64 (Stanley).

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conveyed to Mr. Saltarelli the full reasoning behind the decision for HL&P not to attend the B&R briefing. Mr. Robertson stressed that he was-not trying to avoid HL&P's reporting responsibilities.

This affidavit in our view resolves the questions that we felt were raised by the relevant portions of Mr. Saltarelli's affidavit. Although we express no opinion on whether we agree with HL&P's decision not to attend the B&R briefing, we believe that it was a reasonable decision that casts no doubt on HL&P's character or competence to operate the STP. Beyond that, from our observance of Mr. Robertson as a witness, we have no hesitancy in accepting the sincerity of his response.36 E. Additional Comments on HL&P Candor As we have seen, the potential " side benefit" of the Quadrex review for providing information to respond to engineering questions at the Phase I hearings, should any such questions arise, was the most important information that Motions IV and V could add to the record.

Although information to this effect is already in the record, causing us to deny Motions IV and V, the depositions in those motions indicate to us that this side benefit was viewed by HL&P management officials as somewhat more important than they led us to believe in Phase II (including the reopened hearings). Rather than merely being one of many 36 By letter dated March 10, 1986, the Applicants advised us that Mr.

Robertson had accepted employment outside HL&P. That circumstance did not influence our ruling here. We wish Mr. Robertson success in his new endeavors.

/

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facets of the Quadrex review discussed by the Management Committee, it appears from the Saltarelli and Briskin depositions, coupled with other evidence of record, that the side benefit was conceived as an import 5nt '

consideration attendant to undertaking the Quadrex review. It was viewed in this context both before the initiation of the Quadrex review and during the course of that review.37 That being so, we agree with CCANP that we should have been independently and explicitly informed of this side benefit by the' Applicants as part of HL&P's direct testimony in Phase II. That testimony did state that one purpose of the Quadrex review was to

" provide information [Mr. Goldberg] would find useful for. discussions of the status of the Project with IIL&P management, the co-owners of STP'and regulatory authorities" (Goldberg, ff. Tr.11491, at 5). The Applicants r

explained that this testimony was intended to encompass discussions with the Licensing Board and that discussions with other regulatory authorities were as important as with the Licensing Board (Tr.

15729-33). Be that as it may, we agree.with CCANP (Tr. 15740-41) that, given the focus of Contention 10, the side benefit of answering questions before the Licensing Board, should any arise, was directly pertinent to the issue in controversy and should have been explicitly 37 See, e. ., App. Exh. 79, at 2052 (discussion on December 4, 1980);

App. . 81, at 2091 [9:35] (discussion on February 20,1981);

Briskin dep., attached to Motion V, at 403, 410-11 (discussions in October - November 1980).

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mentioned. C_f.

f Consumers Power Co. (Midland Plant, Units 1 and 2),

CLI-83-2, 17 NRC 69, 70 n. 2 (1983). This is particularly so in view of the Applicants' general position that the purposes of the Quadrex review were limited to other than usage in the licensing hearings and, accordingly, that it was "not unreasonable" for them to believe that the Quadrex Report did not contain information that was relevant and material to the issues in Phase I. App. F0F-II, at pp. IX-3 to IX-5 (PF IX.5-IX.9) and p. III-5.

In our view, this represents another instance (albeit a marginal one) where the Applicants' testimony was not as open and forthright as it should have been. That testimony did not provide the full story that we have a right to expect. It circumscribed the scope of matters at issue more narrowly than was appropriate. To some extent, it may be viewed as akin to a failure to adhere strictly to McGuire doctrine standards. And to some degree it derogates from the high standards of corporate character that we perceived in PID-I.

On the other hand, we do not find that the Applicants intentionally tried to deceive the Board.38 Their witnesses have uniformly viewed the i

scope of the issues in dispute as somewhat narrower than we have.

Although we disagree with that view, we do not believe it outside the 38 In response to our inquiry as to whether, if we should find a McGuire violation, we should reopen the evidentiary hearings to provide the Applicants an opportunity to explain, the Applicants declined the opportunity for reopened hearings (Tr. 15735-36).

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bounds of a professional difference of opinion. Moreover, HL&P freely acknowledged the side benefit during Phase II cross-examination (Tr.

l 11584 (Goldberg)). That being so, we do not find that this additional instance of less-than-full disclosure--either alone or in conjunction with the other instances outlined under Contention 10 (supra, pp.

40-43)--constitutes a sufficient character deficiency to warrant denial of the operating licenses. As under Contention 10, however, this instance may be taken into account by us or the Staff, as appropriate, in any future evaluation of the candor of HL&P managerial personnel.

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V. CONCLUSION In PID-I, we characterized the STP as a project that, although in 4 trouble at an earlier date, appeared to have " turned the corner." We traced the earlier QA/QC problems not to character defects on the part of HL&P but, rather, to deficiencies in two key ingredients of competence. We concluded, inter alia, that HL&P was not deficient in character and that its competence, although questionable at one time, was not so deficient as to preclude, without more, the award of operating licenses. Furthermore, that competence appeared to have substantially improved. All of these conclusions were subject to the outcome of later phases of the proceeding. LBP-84-13, supra, 19 NRC at 721-23.

In reaching this Decision on various issues left for resolution in Phase II or III, we have completed our consideration of all issues ruled on in PID-I but left open in certain respects. We have also completed our consideration of the issues set forth by the Commission in CLI-80-32, supra. Only specified aspects of one Intervenor contention currently remain for resolution later in this proceeding.

CCANP, the only remaining Intervenor, devoted most of its efforts to issues questioning the character or competence of HL&P's management, particularly in its handling and dissemination of the Quadrex Report.

Through its assistance, a more-than-adequate record on these matters has been developed. We have reviewed all of CCANP's claims with great care, including the entire record of this proceeding and the proposed findings of fact and conclusions of law submitted by the various parties.

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On the basis of the foregoing Opinion, the Findings and Conclusions on which it relies, and the entire record, we conclude that HL&P's handling of the Quadrex Report does not establish a lack of character to a degree sufficient to warrant the denial of operating licenses. HL&P complied with the technical requirements of 10 C.F.R. 5 50.55(e) in informing the NRC of matters encompassed within the Quadrex Report. In some respects, HL&P might have been more open and forthcoming with respect to the report, particularly with this Board. Its conduct in this regard was apparently motivated by very real operational considerations bearing upon its relationship with its contractor, considerations that are not always consistent with the regulatory openness to which an applicant must adhere. But in general its handling of the Quadrex Report did not exhibit any intent to mislead the Board or deprive the NRC of information needed to complete its review of the STP application.

Additionally, we conclude that HL&P now appears to possess competence adequate to complete construction of and to operate the STP.

This conclusion is subject to several additional Staff findings on items of staffing ar.d organization. We are leaving these findings to the Staff because it has flagged these items for later consideration and because CCANP apparently has no interest in pursuing them. HL&P's QA program for operation appears to be adequate and to warrant the grant of the Applicants' motion for summary disposition of the issue relating thereto.

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Finally, except for three structures, we have reasonable assurance that STP is adequately designed to withstand hurricanes and hurricane missiles. In this regard, however, the three structures do not conform to all NRC safety requirements, and we have expressed certain reservations as to the probabilistic methodology utilized by the Applicants and approved by the Staff for analyzing the hazards posed by hurricane missiles with respect to those three structures or portions thereof. We are requiring further development of the record with regard to the three structures.

This Opinion is based upon, and incorporates, the Findings of Fact and Conclusions of Law that follow. Any proposed findings or conclusions submitted by the parties that are not incorporated directly or inferentially in this Partial Initial Decision are rejected as being unsupportable in law or in fact or as being unnecessary to the rendering of this Decision.

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FINDINGS OF FACT AND CONCLUSIONS OF LAW I. FINDINGS OF FACT A. Procedural Background 426.39 The. procedural background of this proceeding is set forth in the Licensing Board's Partial Initial Decision dated March 14, 1984, LBP-84-13, 19 NRC 659 (PID-I), and will not generally be repeated here.

See LBP-84-13, supra, Findings 1-12, 19 NRC at 723-726.

427. Prior to the completion of hearings in Phase I, we had divided the proceeding into three phases. See PID-I, supra, Finding 11, 19 NRC at 725-26. Phase I issues were dealt with in PID-I. They included the determination of numerous questions bearing on the character and competence of the lead Applicant (Houston Lighting and Power Co. (HL&P))

to construct and operate the South Texas Project (STP). Phase II was to address the Quadrex Report (see infra, Findings 452-54,469), including its effect, if any, on certain determinations as to HL&P's character and competence which we reached in PID-I; CCANP Contention 4, relating to the ability of the STP to withstand hurricanest and a report that we directed the NRC Staff to provide, concerning the current competence of Findings 1 through 425 appear in PID-I. To avoid the potential .

l confusion that could stem from the use of duplicate numbered l l findings in an ongoing proceeding, and for ease of reference, we i are designating the findings in this Decision as following the numbered findings in PID-I.

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HL&P and its new contractors to complete construction of STP. Phase III was to address Issue F concerning the operations QA program; an updating of Issue C, concerning HL&P's character and competence to operate the STP; CCANP Contention 3, relating to overpressurization of pressurized water reactors; and any remaining issues. Id. at 697, 699, and 726, 428. Participants in the Phase II hearings included the Applicants (HL&P, the project manager; the City of San Antonio; Central Power and Light Co.; and the City of Austin), the Intervenor (Citizens Concerned About Nuclear Power, Inc. (CCANP)), and the NRC Staff. The State of Texas, an interested State, undertook discovery but did not participate in the Phase II hearings. Proposed findings of fact and conclusions of law (including supplementary findings and conclusions from reopened hearings) were submitted by the Applicants, CCANP, and the NRC Staff.

See supra, p. 10, nn. 2 and 3.

429. To facilitate the definition of issues for Phase II, the Licensing Board conducted two prehearing conferences. The first, which was the fifth conducted in this proceeding, was held in Houston, Texas on October 16, 1984. Following that conference, the Board determined that CCANP had failed to develop adequately any substantive issues arising from the Quadrex Report, but the Board deferred ruling on issues relating to the reportability to NRC of that report. The Board also established a procedural framework for considering the competence issues left open by PID-I (Issues B and D), and the hurricane issue. Fifth Prehearing Conference Order, dated November 16, 1984 (unpublished).

i

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430. On December 21, 1984, in accord with the Licensing Board's arrangements for dealing with the competence issues left open by PID-I, the NRC Staff filed affidavits dealing with these issues. The Staff corrected and supplemented these affidavits by a filing dated January 24, 1985. On February 25, 1985, the Applicants filed affidavits dealing with their competence and supplementing the Staff affidavits.

i On the same date, CCANP filed comments on the Staff affidavits.

431. In our Memorandum and Order (Phase II Hearings on Quadrex Report Issues), dated February 26, 1985, LBP-85-6, 21 NRC 447, we authorized hearings on several CCANP issues dealing with the reportability of the Quadrex Report to NRC and this Board, pursuant to 10 C.F.R. 9 50.55(e) and the McGuire doctrine (see Duke Power Co.

(William B. McGuire Nuclear Station, Units 1 and 2), ALAB-143, 6 AEC 623, 625-26 (1973), and other cases cited by us in LBP-85-6, 21 NRC at 461). These issues included both character and competence questions that had been left open by PID-I. In LBP-85-6, we also authorized the filing by CCANP of additional Quadrex Report issues. CCANP filed such a request on April 22, 1985.

432. On March 12, 1985, the Applicants filed a Motion for Summary Disposition of CCANP Contention 4 (dealing with the ability of STP to withstand hurricanes). The motion was supported by two affidavits. (A corrected motion was filed on March 13,1985.) On April 8, 1985, CCANP filed a response in opposition to the Applicants' motion. On April 15, 1985, the NRC Staff filed a response in support of the Applicants' motion, supported by four affidavits. CCANP did not file a written i

1

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response to the Staff's position. The Board heard oral argument on the motion during the Sixth Prehearing Conference (Tr. 10914-45).

433. In our Memorandum and Order (Denying Proposed Contention on Soil Stability but Directing Hearing on Certain Soils Questions), dated March 29, 1985, LBP-85-9, 21 NRC 524, we designated, as one of the

" competence" questions to be litigated in Phase II, the matter of the Applicants' current organization, procedures and activities in soils areas.

434. Following a conference call on April 4, 1985, and for the reasons set forth in our Memorandum and Order (Telephone Conference Call of April 4,1985), dated April 5,1985 (unpublished), we determined that we would treat the affidavits filed by the NRC Staff and the Applicants on the competence issue (see Finding 430, supra), together with their filings of March 14 and 25,1985, as motions for sumary disposition of that issue (except to the extent that aspects of the competence issue had already been designated for litigation--see Findings 431 and 433, supra). We established a procedural framework for considering the competence questions.

435. On April 17, 1985, CCANP filed a Motion to Reopen Phase I Record. After consideration of the responses of the Applicants and Staff, together with oral argument at the Sixth Prehearing Conference on certain procedural aspects of tiie motion, we denied the motion. See Memorandum and Order (Explanation of Ruling on CCANP Motion to Reopen 4

Phase I Record), dated June 18, 1985, LBP-85-19, 21 NRC 1707. However, we ruled that certain matters raised by one exhibit to the motion could

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be litigated under the aegis of CCANP Contention 10, one of the Quadrex Report contentions that we had accepted for litigation in our Memorandum and Order of February 26, 1985 (see Finding 431, supra).

436. On April 30 - May 1,1985, the Licensing Board conducted a prehearing conference in Bethesda, Maryland, in order to define further the issues to be heard in Phase II. The rulings on those issues appear in the Sixth Prehearing Conference Order (Further Definition of Phase II Issues), dated May 17, 1985 (unpublished), as amended by our Memorandum and Order (Applicants' Motion for Clarification of Sixth Prehearing Conference Order), dated May 24, 1985 (unpublished), and as corrected by the Errata (Sixth Prehearing Conference Order), dated June 14, 1985 (unpublished).

437. The Licensing Board provided ample opportunities for pretrial discovery on Phase II issues. The initial discovery period on all such issues extended for 90 days, ending on April 25, 1983 (Memorandum dated June 24, 1982 (unpublished); Memorandum and Order (Ruling Upon CCANP's i Motion to Adopt Contentions of CEU), LBP-82-91,16 NRC 1364,1374-75 (1982)). We subsequently granted additional discovery opportunities to the State of Texas and to CCANP. See Memorandum and Order (Granting Attorney General of Texas' Motion for Extension of Discovery Deadline),

LBP-83-26, 17 NRC 945 (1983); Memorandum and Order (Ruling on CCANP Motions for Additional Discovery and Applicants' Motion for Sanctions),

dated May 22, 1984 (unpublished); Memorandum and Order (Denying Reconsideration but Clarifying Memorandum and Order of May 22,1984),

dated July 10, 1984 (unpublished). During this period, the State of

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Texas engaged in discovery, but CCANP failed to do so. (CCANP sought to participate in the State of Texas' deposition of one of HL&P's officials. At the request of the Applicants, we denied CCANP this opportunity, but we permitted CCANP to question this official at the Phase II evidentiary hearings concerning topics raised by Texas at the deposition. See Memorandum and Order (Denying CCANP Request to Conduct Cross-Examination at Goldberg Deposition), dated September 16, 1983 (unpublished); LBP-85-6, supra, 21 NRC at 466. CCANP conducted such cross-examination during the Phase II evidentiary hearings.

438. Because of CCANP's failure to pursue the discovery afforded to it as described in Finding 437, supra, as well as the inappropriateness or untimeliness of further additional discovery that it sought, we denied several additional discovery requests of CCANP. Fifth Prehearing Conference Order, dated November 16, 1984 (unpublished), at 9-10; LBP-85-6, supra, 21 NRC at 466; LBP-85-19, supra, 21 NRC at 1729-31. We made certain, however, with regard to the competence issues, that CCANP would have available to it the various 10 C.F.R. % 50.55(e) reports filed by HL&P since the conclusion of Phase I, together with relevant I&E reports prepared by the Staff. See Fifth Prehearing Conference Order, supra, at 3-4; Memorandum (Telephone Conference Call of 2/26/85),

dated February 26,1985(unpublished). We also directed the Applicants to furnish the Board and parties with copies of certain documents that we judged to be potentially relevant to the Phase II issues to be litigated. LBP-85-6, supra, 21 NRC at 463-64; LBP-85-19, supra, 21 NRC

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at 1730-31. In filings dated April 19, 1985, April 26, 1985, June 25, 1985 and July 2, 1985, the Applicants complied with these requests.

439. Two of the three Administrative Judges who participated in the Phase I hearings and Initial Decision--Charles Bechhoefer (Board Chairman) and Dr. James C. Lamb, III--continued to serve as Licensing Board members for the Phase II hearings. Effective May 10, 1985, the Licensing Board was reconstituted to substitute Administrative Judge Frederick J. Shon for Administrative Judge Ernest E. Hill, who became unable to continue to serve because of a schedule conflict. Notice of Reconstitution of Board, 50 Fed. Reg. 20635 (May 17, 1985). Phase II evidentiary hearings were held in Bay City, Texas, on July 11-13, 1985, 1

and in Houston, Texas on July 15-19 and 29-31, and August 1-3, 5-9, and 13-14, 1985. Oral limited appearance statements were received in both hearing locations. The Phase II record was initially closed on

August 14, 1985 (Tr. 15387), except for receipt of the affidavit of Mr. Charles G. Thrash. That affidavit, dated September 4,1985, was filed by the Applicants on September 6, 1985, and is part of the record of this proceeding (see Tr. 15381-85).

440. CCANP filed five motions to reopen the Phase Il record but i

subsequently moved to withdraw the third of these motions. By our j summary Order of October 16, 1985, the rationale for which was explained in a November 5, 1985 Memorandum and Order, we granted the first motion in part by reopening the record to include a document that we designated as CCANP Exhibit 148, authorizing the parties to address that document in their initial Phase II findings or reply findings. We denied the i

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remainder of the motion, which consisted of CCANP's attempt to include in the record an extensive report of a consultant. Order (Rulings on CCANP 9/30/85 Motion), dated October 16,1985 (unpublished); Memorandum and Order (Explanation of Rulings on CCANP Motion of 9/30/85),

LBP-85-42, 22 NRC 795 (November 5, 1985).

441. In our Memorandum and Order (CCANP Motions II and III to Reopen Record), LBP-85-45, 22 NRC 819 (November 14,1985), we permitted CCANP to withdraw its third motion to reopen the record and we granted (in part) CCANP's second motion. As a result, reopened Phase II hearings were held on December 5-6, 1985, in Houston, Texas. The reopened Phase II record was closed on December 6, 1985 (Tr. 15710),

except for the receipt of an affidavit from Mr. Loren Stanley. That affidavit, dated December 12, 1985, was filed by the Applicants on December 17, 1985, and is part of the record of this proceeding (Tr.

15394,15709-10).

442. On January 17, 1986, CCANP filed its fourth motion to reopen the Phase II record. On February 28, 1986, CCANP filed its fifth such motion. For reasons set forth in Part IV of this Opinion, supra, pp.

105-23, we are denying both of these motions.

443. By Memorandum and Order (Permitting Withdrawal of CCANP Contention 3), LBP-86-5, 23 NRC 89 (February 14,1986), we granted CCANP's motion to withdraw its Contention 3, relating to overpressurization of pressurized water reactors. That contention had been scheduled to be heard in Phase III. We examined the Staff's method r

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for resolving the overpressurization generic issue and found it to be a

" plausible" method for doing so.

444. On March 21, 1986, the Licensing Board conducted the Seventh Prehearing Conference. At that conference, we considered questions relating to the outstanding motions to reopen the Phase II record (infra, Finding 442) and concerning the unresolved Phase III issues. We d

determined that the one matter that CCANP wished to litigate was not properly within the scope of Issue F (QA for operations) and that CCANP had not set forth a sufficient basis for the matter to be considered under Issue C or as a new contention. Seventh Prehearing Conference Order, LBP-86-8, 23 NRC 182 (March 28, 1986).

445. On March 12, 1986, the Applicants filed a motion for summary i

disposition of Issue F. In view of our ruling that the one issue CCANP had raised for Phase III was not within the scope of that issue (see supra, Finding 444), CCANP advised by letter dated March 26, 1986 (confirming an earlier telephone communication) that it would not respond to the Applicants' motion. (In our Seventh Prehearing i Conference Order, supra, we advised the Staff that, unless we should indicate otherwise by future Order, it need not respond to the motion.

LBP-86-8, supra, 23 NRC at 187, n. 4.) In its March 26, 1986 letter, CCANP also advised that it would not be responding to outstanding affidavits of the Applicants and Staff on Issue C. We deal with Issues C and F in Part III of our Opinion, supra, pp.93-104, as well as infra, Findings 794-815.

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B. Reportability or Notifiability of Quadrex Report and of B&R Replacement, Candor of HL&P Phase I Testimony

1. Contention 9

a. Background 446. Contention 9, as admitted in LBP-85-6, supra, 21 NRC at 462-63, reads:

The Applicants' failure to notify the NRC (Region IV) of the Quadrex Report, and of. many findings beyond those actually reported, within 24 hours2.777778e-4 days 0.00667 hours 3.968254e-5 weeks 9.132e-6 months from the time HL&P became aware of the findings or prospective findings of the Report (including drafts), violates 10 C.F.R. 6 50.55(e)(2) and reflects adversely on the character and competence of the Applicants and on their ability to manage the construction and operation of a nuclear power plant.

447. By LBP-85-6, as well as the Sixth Prehearing Conference Order (Further Definition of Phase II Issues), dated May 17, 1985 (unpublished), and our Memorandum and Order (Applicants' Motion for Clarification of Sixth Prehearing Conference Order), dated May 24, 1985 (unpublished), we restricted the matters at issue to the reportability of 26 specific (unreported) findings of the Quadrex Report and of the report as a whole under the cited regulation. The specific findings named were: discipline findings 4.1.2.1(b), 4.3.2.1(a), 4.3.2.1(d),

J 4.3.2.1(n),4.5.2.1(b),4.6.2.1(n),4.7.3.1(a),4.7.3.1(b),4.7.3.1(k) and 4.8.2.1(a) through 4.8.2.1(g) inclusive, plus the ten "most serious" i generic findings (designated 3.1(a) through (j), inclusive).

448. The Applicants called three witnesses to address these matters. Two appeared as a panel: Dr. Sydney A. Bernsen and Mr. Frank Lopez, Jr., both employees of Bechtel Power Corporation (Bernsen/Lopez, ff. Tr. 13441). Mr. Jerome H. Goldberg of HL&P gave extensive testimony 1

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alone on these findings (Goldberg, ff. Tr. 11491). Certain other witnesses of the Applicants also testified on matters concerning the 4

reportability of the Quadrex items at issue. They are cited below where

their testimony applies.

449. The NRC Staff presented Messrs. Eric H. Johnson, George L.

Constable, Robert G. Taylor, and Robert F. Heishman. Messrs. Johnson and Constable submitted co-authored prefiled testimony (Johnson / Constable, ff. Tr. 14846). Messrs. Heishman and Taylor submitted separate prefiled testimony (Taylor, ff. Tr. 14846; Heishman, ff. Tr. 14846). All were cross-examined as a panel (Tr.14871 et seq.).

Other Staff witnesses also mentioned the reportability questions. Their testimony is cited where applicable.

450. A number of written evaluations of the reportability of the Quadrex findings were admitted into evidence. They include a Brown &

Root assessment of the most serious discipline findings (App. Exh. 62);

a report by a Bechtel Task Force (App. Exh. 63); two reports by the NRC

Staff, NUREG-0948 (December 1982) and I&E Report 82-02 (June 3, 1982)

(Staff"Exhs. 136,140); and an August 24, 1984 analysis by the NRC Staff (App. Exh. 77).

451. CCANP subpoenaed and presented two witnesses addressing these issues: Mr. Jesse Poston of The City Public Service Board of San Antonio (Tr. 14199 et, seq.) and Mr. Cloin G. Robertson of HL&P (Tr.

14583e]. seq.).

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b. General History of the Report 452. The Quadrex Report was commissioned by HL&P in January 1981, at the urging of Mr. Goldberg, who was then HL&P's Vice President, Nuclear Engineering and Construction (Goldberg, ff. Tr.11491, at 4-5; Tr. 12760-61 (Sumpter)). The main purpose of the review by Quadrex was to enable Mr. Goldberg (who had been recently hired) to comprehend more exactly the status of the project (Tr. 15505 (Goldberg); Tr. 15409 (Jordan)). He had been informed by his staff of various concerns regarding B&R engineering, and his own observations had led him to suspect that the project might not be proceeding well (Goldberg, ff. Tr.

11491, at 4; Tr.11572 (Goldberg); Tr. 12763-66(Sumpter)). Mr.

Goldberg notified the NRC Project Manager, Mr. Sells, of the fact that the Quadrex review was being initiated at the time and, somewhat later, told Mr. Sells that he expected some reports under 10 C.F.R. 6 50.55(e) would result from the review (Sells, ff. Tr.15190, Attached Typewritten Statement at 1).

453. An important side benefit contemplated from the review was to prepare Mr. Goldberg for possible discussions of the status of the project with HL&P management, the co-owners of STP, and regulatory authorities (including this Board). Goldberg, ff. Tr.11491, at 5; Tr.

11582-84(Goldberg).

454. Quadrex was told to concentrate the review on areas where problems were likely to be found (Tr. 11574-77(Goldberg); Stanley,ff.

Tr. 13047, at 3). Quadrex conducted its review by analyzing B&R's response to selected issues known to present difficulties in the nuclear

-- - ,. ,_ .-.-....- - - - - _ _ - . _ . - ~ - - _ . _ - _ - , - _ _ - _ - _ - - - _ _ - .

4

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industry or matters in which HL&P suspected B&R was encountering problems (Stanley, ff. Tr. 13047, at 3; Tr. 13073 (Stanley); App. Exh.

60, at p. 1-1). The person in charge of the project for Quadrex, Mr.

Loren Stanley, did not envision the review as being directed at evaluating B&R's conformance with the quality assurance requirements of 10 C.F.R. Part 50, Appendix B (Stanley, ff. Tr.13047, at 4).

455. The review was conducted through a series of questions 4

prepared by Quadrex and by evaluation of various design documents, such as drawings and calculations (App. Exh. 60, at 12.0; Goldberg, ff. Tr.

11491, at 7-8; Sumpter, ff. Tr.12699, at 5-6). A series of meetings was held between Quadrex and B&R in the time period February to March 1981 to clarify the questions put to B&R by Quadrex and to identify materials on which B&R's answers were based, so that Quadrex could examine those materials (Goldberg, ff. Tr.11491, at 7; App. Exh. 60, at

p. 2-12).

456. Although HL&P's involvement in the review process was kept to a minimum in order to preserve the objective of an independent third-l party assessment, HL&P did receive briefings from Quadrex on several occasions (Goldberg, ff. Tr.11491, at 8-14; Sumpter, ff. Tr.12699, at 6, 8; Tr. 12836-37 (Sumpter); Stanley, ff. Tr. 13047, at 3; Tr. 13116 (Stanley)).

457. The first of these briefings occurred on March 18, 1981 l

(Goldberg, ff. Tr. 11491, at 9). The comments presented by Quadrex at that meeting were based on early results and were presented as being possibly subject to change as evidence was gathered (Tr. 13083 '

, , - , _ , , , , - ,--,--,..-._,----------------.--,------..,__m

'I

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(Stanley)). At the next briefing on April 13, 1981, a large number of findings were summarized on a discipline-by-discipline basis (Goldberg, ff. Tr. 11491, at 10; Tr. 12807-08 (Sumpter); Tr. 14590 (Robertson)).

Certain problems, including in particular the matter of computer code verification, mentioned at that meeting were deemed by HL&P to be of

! sufficient importance to warrant close attention, but Quadrex did not specifically identify any finding as being reportable or potentially reportable to NRC (Goldberg, ff. Tr. 11491, at 11; Tr. 14598-99 (Robertson)). Mr. Goldberg's notes of the meeting include some items that he noted as "potentially reportable" (Goldberg, ff. Tr. 11491, at 11, 14; App. Exh. 57). But most of these items ultimately turned out not to be reportable under 10 C.F.R. % 50.55(e) (Goldberg, ff. Tr.

11491, at 14). At the time, Mr. Goldberg did not believe he had sufficient basis to call any item "potentially reportable" (id. at 15).

458. At the April 13 meeting, Mr. Goldberg suggested that Quadrex categorize its findings in a manner that would facilitate HL&P's reportability review and would assist in setting priorities for

corrective action (id. at 15-16; Tr. 11646-47, 11658-60 (Goldberg)). He further suggested that Quadrex establish a category to be called "most serious" for areas where B&R had not satisfied NRC requirements (Goldberg, ff. Tr. 11491, at 11-12; Tr. 11646 (Goldberg); Sumpter, ff.

Tr. 12699, at 9-10; Tr. 11646, Goldberg; Tr. 12809 (Sumpter)).

459. Quadrex believed that the category "most serious" as defined l by Mr. Goldberg was too narrow and accordingly broadened that category i

I

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to include any matters that could interfere with licensing the plant, whether or not NRC requirements had been met (Goldberg, ff. Tr.11491, at 16; Sumpter, ff. Tr. 12699, at 10; Stanley, ff. Tr. 13047, at 5; Tr.

13137-40 (Stanley); App. Exh. 60, at pp. 3-1, 4-1). Quadrex felt it lacked sufficient information to judge which items were potentially reportable under 10 C.F.R. 6 50.55(e), although HL&P had asked that Quadrex do so (Stanley, ff. Tr.13047, at 5; Tr.11645 (Goldberg)).

Instead Quadrex put everything with possible licensing implications into the "most serious" category, believing that the category would thus encompass all reportable matters as well as some nonreportable ones (Stanley, ff. Tr.13047, at 5; Tr.13140,13143,13149-50 (Stanley)).

460. After the April 13 meeting, on April 21, 1981, Mr. Goldberg called Mr. Sells and told him that the report was expected soon (Goldberg, ff. Tr.11491, at 49; Sells, ff. Tr.15190, at Typewritten Statement p. 1; Tr. 15261 (Sells)). He informed Mr. Sells that some reports under 10 C.F.R. ! 50.55(e) were expected, and he offered to give 2

Mr. Sells and NRC's Office of Nuclear Reactor Regulation a briefing on the report as soon as it became available (Goldberg, ff. Tr. 11491, at 49). When Mr. Sells asked whether HL&P intended to file the report witt NRC, Mr. Goldberg told him HL&P did not intend to do so, but that he could review the report at HL&P's offices at his convenience (jd_; Tr.

12658, 12671 (Goldberg); Tr. 14740 (Robertson)).

461. HL&P was next briefed on Quadrex's progress on April 30, 1981; B&R received a similar briefing the following day. HL&P did not believe that any of the information presented at the April 30 briefing was

I

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potentially reportable under 10 C.F.R. Q 50.55(e) and did not immediately initiate a reportability review. Instead, HL&P took steps to have a reportability review initiated, both within its own organization and by B&R, as soon as the report might be received.

Goldberg, ff. Tr. 11491, at 13-14; Tr. 14602 (Robertson). On May 6, 1981, Mr. Goldberg wrote a letter to B&R directing B&R to advise HL&P on the reportability of Quadrex findings and the steps that would be taken to resolve those findings (Goldberg, ff. Tr. 11491, at 22; App. Exh.

61).

462. CCANP would have us find that, by the end of April 1981, HL&P knew enough from these informal briefings to make notifications to NRC under 10 C.F.R. 5 50.55(e); and, in particular, that HL&P knew that B&R was inexperienced in some nuclear engineering matters and was far behind in design work (CCANP F0F-II, PF III.22). We do not find that either inexperience or slow accomplishment is reportable under 10 C.F.R. 9 50.55(e). We note that in the one instance where, prior to the issuance of the report, Quadrex felt that a matter might be reportable, that matter was reviewed by B&R and by the HL&P Incident Review Committee (IRC) and was found not to be reportable (Tr. 12783-93(Sumpter);CCANP Exhs. 94, 95). HL&P maintained records of the IRC's consideration of this matter (CCANP Exhs. 94, 95).

463. On May 7, 1981, the Quadrex Report (App. Exh. 60) was delivered to HL&P, and personnel from both HL&P and B&R were briefed on its content (Goldberg, ff. Tr. 11491, at 17-18). Representations at that meeting by Quadrex suggested that all " generic" findings in the

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l report were based upon findings in individual disciplines. Since the broad general nature of the generic findings occasioned dispute between B&R and Quadrex, and since only the cattgory "most serious" was expected to result in reportable items, Mr. Goldberg determined that B&R need review only the most serious discipline findings for reportability under 10 C.F.R. 6 50.55(e) (Goldberg, ff. Tr.11491, at 18-19; cf. Findings 469-71, infra).

464. During the 24 hours2.777778e-4 days 0.00667 hours 3.968254e-5 weeks 9.132e-6 months following delivery of the report, the most serious discipline findings were reviewed by both HL&P and B&R, Advice on reportability of those findings was supplied to HL&P by B&R on May 8, 1981 (App. Exh. 62), and HL&P convened a special review team to decide on reportability that same day (Goldberg, ff. Tr. 11491, at 22; Sumpter, ff. Tr. 12699, at 12-13). The special review team consisted of Mr.

Goldberg, Dr. Sumpter and Mr. Robertson. Use of this team was not the usual HL&P practice, because HL&P would normally review information for reportability through its IRC. However, Mr. Goldberg felt that the nature of the report and its findings required the attention of the most experienced nuclear engineers available; himself, Dr. Sumpter, and Mr.

Robertson with 26, 11 and 15 years, respectively, all having great j familiarity with the requirements of 10 C.F.R. 6 50.55(e) (Goldberg, ff.

Tr. 11491, at 25).

l l 465. On May 8, Mr. Goldberg received a reply to his request for B&R's advice on Quadrex. The letter also responded to his request for BAR's plans to resolve the Quadrex findings, and it expressed B&R's

! judgment that no stop work orders would be necessary. App. Exh. 62; Tr.

l l

.n, . , - - . - . ,

n ..

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11713(Goldberg). The review team met that same day to go through the findings, review B&R's advice and make decisions on reportability (Goldberg, ff. Tr.11491, at 22).

466. At his first reading of the Quadrex Report, Mr. Goldberg's reaction had been that the magnitude of B&R's engineering problems was indeed great. However, after discussions with Mr. Stanley on May 7, and the meeting of the review team on May 8, he concluded that the problems were much less formidable. Tr. 11706-08, 12525-26, 12537-38 (Goldberg).

For the most part the deficiencies were ones that had already been identified and were being resolved (Goldberg, ff. Tr. 11491, at 19).

467. The review team read each of the Quadrex findings and considered B&R's advice. The team called the chairman of HL&P's standing IRC, Mr. Michael Powell, and had him join the meeting when it became evident that at least one reportable item would result. At the end of the meeting Mr. Powell telephoned NRC and reported three items that the team had identified as potentially reportable under 10 C.F.R. 6 50.55(e). Goldberg, ff. Tr. 11491, at 23-24.

468. The three items initially reported were:

1. that certain faulted condition heat loads may not have been considered in designing the heating, ventilating and airconditioningsystem(HVAC).

2. that computer program users could not readily determine whether or not certain program versions had been properly verified.

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3. that certain shielding design calculations might not have been verified in a manner consistent with the required verification of safety-related correlations.

Goldberg, ff. Tr.11491, at P3-24. The second and third of these items were considered by HL&P to be potentially reportable as significant breakdownsintheQAprogram(M.at28). Later, in March of 1982, HL&P notified NRC of one additional item (an instrument air line that did not meet the single-failure criterion) from the Quadrex Report ( M. at 37).

469. The Quadrex Report made findings concerning nine technical disciplines: Civil / Structural; Computer Programs and Codes; j Electrical / Instrumentation and Control; Geotechnic; Heating, Ventilating and Air Conditioning (HVAC); Mechanical; Nuclear Analysis; Piping and Supports / Stress and Special Stress; and Radiological Control (App. Exh.

60, at p. 1-1). It made generic findings based upon the separate i

discipline findings (App. Exh. 60, at p. 3-1; Goldberg, ff. Tr.11491, at 18-19; cf. Finding 463, supra). The generic findings were l categorized as either "most serious" or " serious" (App. Exh. 60, at p.

3-1), while the findings in individual disciplines were categorized as l "most serious", " serious", " noteworthy", " potential problem", and "other"(M.atpp.4-1,4-2). Quadrex indicated that only those findings in the "most serious" category would be likely to be reportable to NRC (Stanley, ff. Tr. 13047, at 5). Consequently, HL&P focussed its review on those most serious findings (Goldberg, ff. Tr.11491, at 29).

l l 470. The review team did not simply report all of the most serious l

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discipline findings because the definition of that category did not automatically imply reportability under 10 C.F.R. 6 50.55(e). For example, some of the Quadrex most serious findings related to activities that had not been completed by B&R. The fact that certain design activities may not yet have commenced or been completed does not necessarily mean there is a deficiency in a design or in QA. Goldberg, ff. Tr. 11491, at 31-32. Similarly, a finding might address "a matter of serious concern to the NRC at this time" but would not necessarily reflect a " deficiency" in design or construction (M. at 32). Mr.

Stanley confirmed that the most serious category included findings "which clearly were not reportable" (Stanley, ff. Tr.13047, at 5).

471. The other four categories of discipline findings were not reviewed by HL&P en May 8 because the characterization of them by Quadrex indicated that they were not reportable (Goldberg, ff. Tr.

11491, at 29). The serious findings were not reportable because they did not relate to safety but only to "the generation of reliable power" (M. at 29; see also App. Exh. 60, at p. 4-1.) The noteworthy findings were not reportable because they did not relate to safety but only to

" project schedule and/or cost increases" ( M .). The potential problem findings were not reportable because they did not identify deficiencies but only identified subjects warranting "further investigation" (Goldberg, ff. Tr.11491, at 29; App. Exh. 60, at p. 4-2; Tr.12578-80 (Goldberg)). The Board asked whether the potential problem findings could include matters that might eventually be reportable. Mr. Stanley indicated that these findings were based on very preliminary and limited

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information, and that further investigation would have been necessary to determine whether or not the finding might eventually be reportable (Tr.

13143-44(Stanley)). Finally, "other findings" were not reportable because they did not identify significant deficiencies but only identified " minor items or items that are not amenable to corrective action" (Goldberg, ff. Tr. 11491, at 29; App. Exh. 60, at p. 4-2).

472. HL&P did bring the report to the NRC Staff's attention. In January or February 1981, Mr. Goldberg informed Mr. Sells, who was then S1P project manager for the Staff, that HL&P was contracting with an outside firm to review B&R design. On April 21, 1981, Mr. Goldberg told Mr. Sells during a telephone conversation that the Quadrex Report would be completed in early May. Mr. Goldberg also stated that he expected some reports pursuant to 10 C.F.R. 6 50.55(e) to result from the report.

Sells, ff. Tr.15190, at Typewritten Statement p.1; Findings 452 and 460, supra. Mr. Goldberg raised a question concerning what the best method would be for him to present the results of the report to both NRC headquarters and Region IV, and he offered to show Mr. Sells the report

when HL&P received it (Sells, ff. Tr.15190, at Typewritten Statement p.

l 1; Goldberg, ff. Tr. 11491, at 49; Tr. 15225-26 (Sells)).

473. During the week of May 11, 1981, while the Phase I evidentiary l hearings were being conducted in this proceeding, Mr. Sells met with Mr.

Goldberg for a briefing on the Quadrex results at the Holiday Inn in Bay City, Texas (Sells, ff. Tr.15190, at " Statement" p. 2; Staff Exh.140, l I&E Rept. 82-02 at 5; Goldberg, ff. Tr. 11491, at 49-50). The meeting was brief, about 20 minutes, and there is some disparity in the two l

l 1

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men's recollections of it: Mr. Goldberg remembered bringing a copy of Volume 1, at least, of the report, while Mr. Sells does not recall seeing the report himself. Nevertheless, Mr. Goldberg discussed the findings and again assured Mr. Sells that the report would be available for his perusal at HL&P's offices. M.;Tr.12336-37,12532-35 (Goldberg); Tr. 15225-26 (Sells); Tr. 14402-03 (0prea).

474. We would here pause to note that we view the minor differences between Mr. Goldberg's and Mr. Sells' recollections as being both understandable and unimportant. The important facts of the meeting were that Mr. Golcoerg briefed Mr. Sells on the report and offered to allow him to review it on HL&P premises. We see absolutely no evidence of Mr.

Sells becoming Mr. Goldberg's "co-conspirator" or Mr. Goldberg

" suborning" an NRC official, as CCANP alleges (CCANP F0F-II, at 114-15).

475. Mr. Goldberg believed at the time that, by informing Mr. Sells about the Quadrex Report and reporting the items required by 10 C.F.R. 9 50.55(e) to NRC's Region IV Office, HL&P had fulfilled its responsibilities to be completely candid (Goldberg, ff. Tr.11491, at 50-51). Both he and Mr. Oprea believed that NRC's Office of Nuclear Reactor Regulation, as represented by Mr. Sells, was the appropriate arm of the agency to inform of the report (M; Oprea, ff. Tr.14095, at 5-6; Staff Exh. 140, I&E Rept. 82-02, at 4). The Staff witnesses found that belief understandable and drew no adverse conclusions regarding HL&P's competence or character from the decision to discuss the report with Mr.

Sells rather than Region IV (Constable, ff. Tr. 14846, at 9-10; Tr.

15058-59(Johnson)).

)

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j 476. During the course of an investigation in August 1981, an NRC inspector, Mr. H. Shannon Phillips, and an NRC investigator, Mr. Richard Herr, requested a copy of.the Quadrex Report from HL&P's Quality

) Assurance Manager, Mr. Richard A. Frazar. Mr. Frazar did not have a copy, so he called Mr. Opreaf. Frazar, ff. Tr.' 14412, at 3-4. Mr. Oprea made it clear that a copy should be provided to the NRC~for review (0prea, ff. Tr.14095, at 6; Frazar, ff. Tr.14412, at 3-4; Tr.14179-81 (0prea);Tr. 14418-20(Frazar)). A copy was indeed made available to Messrs. Phillips and Herr the next day and again to Mr. Phillips the

~

following week. He reviewed it, and neither Mr. Phillips nor Mr. Sells perceived any reluctance on HL&P's part to allow review of the report or

! answer questions about it. Phillips, ff. Tr. 15192, at 3-4; Tr. I 15252-53(Phillips, Sells).

477. In late August 1981, HL&P management decided to arrange a 1

briefing on the Quadrex Report for personnel from NRC's Region IV

! office. There is some haziness in the testimony concerning just how and why this notion arose. Mr. Goldberg says that Mr. Oprea " suggested Region IV would be interested" and then arranged a briefing (Goldberg, ff. Tr.11491, at 53). Mr. Oprea said he arranged the briefing when he realized Region IV might not be aware of the contact made earlier with Mr. Sells (0prea, ff. Tr.14095, at 6). A chronology prepared by NRC l

suggests that Mr. John Collins, then Deputy Director of Region IV, called Mr. Oprea about that time and requested review of the report i

l (CCANP Exh. 138; Tr. 15344 (Collins)). Mr. Oprea does not remember the phone call (Tr. 15372 (0prea)). For reasons set forth infra, Finding i

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i 642, we believe that the telephone call took place, and we so find.

However, as with the slight discrepancy between the recollections of Messrs. Goldberg and Sells (Finding 474, supra), CCANP would again have us scent a conspiracy, proposing that we find "[i]t is possible that a cover story was created * * *" (CCANP F0F-II, PF III.97, at 117).

Again we merely note that the discrepancy is of vanishingly : mall significance, human memory is notably fallible, and CCANP's unfounded accusation is unworthy of our consideration.

478. The proposed briefing was held on September 8, 1981. Messrs.

Oprea and Goldberg described the Quadrex review and its results to Mr.

Karl Seyfrit (then Regional Director), Mr. Collins and other personnel from Region IV. CCANP Exh. 140. The briefing covered the review and its results as well as HL&P's plans for resolving the problems identified in the findings (Goldberg, ff. Tr.11491, at 53; Oprea, ff.

Tr. 14095, at 6-7; Tr. 12417-18 (Goldberg); Tr. 14303-04 (0prea); Tr.

15292(Collins)).

479. At the meeting on September 8, the question whether the Quadrex report as a whole was reportable under 10 C.F.R. 6 50.55(e) arose. Mr. Goldberg attributes the question to Mr. Seyfrit; Mr. Collins believed he (Collins) had suggested it himself (Goldberg, ff. Tr.11491, at 53; Tr. 15345-47 (Collins)). Whatever the source of the question, Mr. Goldberg answered it in the negative (Goldberg, ff. Tr.11491, at 53). While Mr. Collins may have raised the question then, he testified that, knowing what he now does, he does not presently believe the report

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J in its entirety should have been submitted under 10 C.F.R. 5 50.55(e)

(Tr. 15348 (Collins)).

c. Reportability of the Quadrex Report as a Whole Under 10 C.F.R. 9 50.55(e) 480. In our Opinion (supra, pp. 22-26), as well as in LBP-85-6, supra, we described the criteria for reportability under 10 C.F.R. 9 50.55(e). We turn now to a consideration of whether or not the HL&P team properly applied those criteria to the Quadrex Report as a whole.

481. The Staff has concluded that the Quadrex Report, taken as a whole, was not reportable under the regulation (Johnson / Constable, ff.

Tr. 14846, at 8, 9). The Staff carried out an extensive investigation, culminating in I&E Report 82-02 (Staff Exh.140), aimed at determining whether HL&P deliberately withheld the Quadrex Report from NRC as alleged by CCANP. The investigation concluded that the allegation was "not substantiated" (Staff Exh.140. I&E Rept. 82-02, at 2). That same report concluded that two of the items that HL&P reported after examining the Quadrex Report were items that should properly have been reported much earlier, on the basis of information available in November 1980 and January 1981, before Quadrex had even started work (Johnson / Constable, ff. Tr. 14846, at 7; Staff Exh. 140, I&E Rept.

, 82-02, at 2). That, however, does not suggest any failure to evaluate l

the Quadrex Report properly.

l

! 482. Mr. Collins of the NRC Staff had believed at first contact that the report as a whole might be reportable under 10 C.F.R. 6 l

l l

l

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50.55(e), although he did not think it necessarily showed a " breakdown" of quality assurance (c_f_. Finding 479, supra; Tr. 15291-92 (Collins)). l Indeed, he did not assign it to a specific criterion or category, thinking merely that it might be a " potential" deficiency (Tr. 15345-47 (Collins)). After subsequent detailed review by the Staff, however, he now believes that the report as a whole was not reportable under 10 C.F.R. $ 50.55(e). He also noted that, at the time of the first briefing, HL&P had the benefit of more information about the report than

, did NRC, information that led HL&P not to report it. Johnson / Constable, i ff. Tr.14846, at 4; Tr.15347-50 (Collins).

483. CCANP introduced into evidence an exhibit, CCANP Exhibit 147A, containing testimony before a Congressional committee by Mr. William Dircks, then Executive Director for Operations of NRC. In it, Mr.

Dircks suggests that the Quadrex Report brought to NRC's attention quality assurance problems of greater magnitude than those already known to the agency at that time (CCANP Exh. 147A, at 94). Mr. Collins reviewed that testimony and had input into it (Tr. 15316, 15291 (Collins)), and it reflected his beliefs in November 1981. At the time of his present testimony, however, in the light of further in-depth evaluation, he would change the wording of the statement. He does not now believe the Quadrex Report shows a breakdown in quality assurance.

Tr. 15291-92 (Collins).

484. Mr. Goldberg testified that the Quadrex Report did not, in his judgment, identify a widespread breakdown in quality assurance or

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sugges.t that a significant amount of the safety-related design was flawed, and he did not think it appropriate to submit the entire report under 10 C.F.R. 9 50.55(e) (Goldberg, ff. Tr. 11491, at 48-49). "On first reflection," he did believe the problems might be large enough to justify submitting the entire report, and it was only after he received the opinions of an independent engireering team whom he respected that he became convinced that the report was not as bad as the first glance might suggest (Tr. 12536-37 (Goldberg)). With the benefit of the detailed review provided by Dr. Sumpter, Mr. Robertson and the B&R engineering group, Mr. Goldberg felt there was not enough substance to see the report as a broad indictment of engineering and submit it under 10 C.F.R. 6 50.55(e) (Tr. 12604-06 (Goldberg)). Mr. Goldberg explained that the report, in his opinion, reflected neither a limited number of observations that projected a broad or far-reaching concern about engineering practices that could extend to many areas, nor numerous items that, while not significant individually, collectively might reach out into a broad area of design importance (Tr. 12539-41 (Goldberg)).

485. Nor did Dr. Sumpter believe the report as a whole should be submitted under 10 C.F.R. 9 50.55(e) (Tr. 12831-33 (Sumpter)). Asked whether they believed the report as a whole should have been submitted as a quality assurance breakdown, Dr. Bernsen and Mr. Lopez, Bechtel engineers who reviewed the report, agreed with Mr. Goldberg and Dr.

I Sumpter, and with the present opinion of the NRC Staff witnesses (Tr.

14022-23 (Bernsen/Lopez)).

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486. CCANP would have us find, contrary to the testimony set forth immediately above, that the Quadrex Report as a whole reflected a serious quality assurance breakdown, thus coming under 10 C.F.R. 9 50.55(e)(1)(1) (CCANP F0F-II, PF 111.34,111.92). But CCANP offered no direct testimony to that effect and elicited no agreement with that theory on cross-examination. Indeed, it appears that at the time the Quadrex Report was produced, the Quality Assurance Manager at the STP site was not involved and was not even asked to review it (Frazar, ff.

Tr. 14412, at 2-4). Thus it is unlikely that the report was viewed by those who commissioned it and received it as being primarily a quality assurance review.

487. We conclude that the report as a whole was not reportable under 10 C.F.R. 9 50.55(e).

d. Reportability of Named Individual Discipline Findings of the Quadrex Report Under 10 C.F.R. % 50.55(e) 488. As noted in Finding 447, supra, we named the following discipline findings of the Quadrex Report to be considered as " findings beyond those actually reported," mentioned in Contention 9, which are alleged by the contention to reflect adversely on the Applicants' character and competence because they were not reported: 4.1.2.1(b),

4.3.2.1(a),4.3.2.1(d),4.3.2.1(n),4.5.2.1(b),4.6.2.1(n),4.7.3.1(a),

4.7.3.1(b), 4.7.3.1(k) and 4.8.2.1(a) through (g), inclusive. We treat each of these findings seriatim.

489. Although CCANP produced no direct testimony supporting the reportability of any of these findings, educed nothing under cross-

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examination that would support their reportability, and indeed did not even deign to address the majority of them in its proposed findings, CCANP would, nevertheless, have us find that the Applicants' testimony (generally supported by the Staff) was a " web of deception" and " false and misleading" (CCANP F0F-II, PF III.56). We specifically decline to make such a finding, and we again express our total disapproval of CCANP's gratuitous attack on the Applicants' integrity. Where CCANP did address a specific discipline finding we note that fact below.

490. Quadrex Report finding 4.1.2.1(b) states:

There was no evidence of Civil / Structural evaluation of the reasonableness of postulated internal missiles or that the criteria for internal missiles presented in TRD [ Technical Reference Document] 1N209RQ013-A had been implemented in the design (see Question C-9).

App. Exh 60, at p. 4-6.

491. The Staff's witness, Mr. Taylor, analyzed and evaluated this finding. He interpreted it as relating to missiles postulated to come from a pump, and he noted that he would not expect a civil engineer to l be able to challenge the reasonableness of missiles postulated perhaps i

by a pump engineer. He noted that even the Quadrex assessment of the referenced Quadrex question, C9, indicates that the civil / structural discipline was handling postulated missiles according to the state-of-the-art. He saw in the finding no violation of NRC quality assurance requirements. Taylor, ff. Tr. 14846, at 36.

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Asked if he thought the finding reportable under 10 C.F.R. %

50.55(e), Mr. Taylor replied that more information would be needed. He characterized it as "a very close call" but thought it should have been reportedasa"potentialdeficiency"(M.at37). He saw in the failure to report no lack of candor on HL&P's part, and he noted that HL&P may well have known enough about B&R's practices at the time to feel certain thiscommentwasnothingtobeconcernedabout(M.). He did not believe that the failure to report this finding reflected adversely on i

HL&P's character or competence (id. at 39).

492. Mr. Goldberg testified that the finding did not identify a deficiency in design, but only an activity that still had to be performed (Goldberg, ff. Tr. 11491, at 38-39). Indeed, he asserted that certain parts of the missile protection program had not even commenced (M.;Tr.11795(Goldberg)). In particular, according to Dr. Sumpter, who also testified on this point, design to resist postulated missiles is done late in the design process after final layout and orientation of equipment (Tr. 15368 (Sumpter)). Mr. Goldberg also noted this point (Tr. 11805 (Goldberg)). It was, in fact, precisely this additional knowledge by Messrs. Goldberg, Sumpter and Robertson of the incomplete state of missile protection design that led the review team to reject this finding as a reportable item (Tr. 11804-07(Goldberg)).

493. Dr. Bernsen and Mr. Lopez, also testifying on behalf of the Applicants, made much the same points: Design to resist missiles is generally accomplished late in the design process; Quadrex found B&R's response to Question C9 to be " state-of-the-art"; the finding did not

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suggest a quality assurance breakdown (Bernsen/Lopez, ff. Tr.13441, at 91-92).

494. We find that, viewed from the standpoint of the HL&P review team, Quadrex finding 4.1.2.1(b) was not a deficiency reportable under 10 C.F.R. 9 50.55(e). Failure to have reported it accordingly does not reflect adversely on the Applicants' character or competence.

495. Quadrex Report finding 4.3.2.1(a) states:

The common instrument air line, as depicted in FSAR drawing 9.4.2-2 attached to Question R-6, does not meet the single failure criterion required by IEEE 279-1971 and 10 CFR 50 (see QuestionE-15). The occurrence of this design error in the late 1970's in concert with the B&R response to other single failure criterion questions suggests that B&R is not sufficiently experienced in the performance of a Failure Mode and Effects Analysis that crosses discipline boundaries.

[fn.](5) In most organizations, the I&C [ instrumentation and control] discipline would detect and immediately correct this type of design error by performing a rigorous examination of the separation provided between redundant dividions in the safety-related portions of the plant for all involved disciplines.

[fn.](5) Instrument line blockage was identified as a potential concern for single failure analyses in the 1970 period when an early B&W [ Babcock & Wilcox] plant had three instruments connected to two piping taps. Technicians repeatedly replaced the instrument connected to one tap because it read differently than the other two instruments connected in common to the other tap; only later did they discover that a blocked instrument line was causing the two common instruments to read erroneously.

App. Exh. 60, at p. 4-21.

496. Mr. Goldberg testified that this finding was not reported because the drawing involved had not been released for construction J

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l (thus failing to meet 5 50.55(e)(1)(ii)); and, as a limited aspect of design, it did not indicate a significant breakdown in quality assurance (thus not meeting 5 50.55(e)(1)(1)) (Goldberg, ff. Tr.11491, at 39-40).

497. After Bechtel reviewed the Quadrex Report, it notified HL&P that this finding was potentially reportable, and HL&P reported the matter to NRC on March 15, 1982, as a potentially reportable item.

Further investigation revealed that failure of the line would not result in a safety hazard and that the design had not been released for construction, nor did it represent a quality assurance breakdown. It was therefore deemed not actually reportable, and NRC was so notified on April 8,1982. Bernsen/Lopez, ff. Tr. 13441, at 93-94; Goldberg, ff.

Tr. 11491, at 37-38; App. Exh. 63, at p. 4-9 and Appendix B, p. B-27.

498. The NRC Staff reviewed Quadrex finding 4.3.2.1(a) and concluded that it did not represent a significant breakdown in quality assurance (Taylor, ff. Tr. 14846, at 19-21),

499. CCANP would have us find that the finding itself, which notes that the error " suggests that B&R is not sufficiently experienced,"

taken together with Bechtel's suggestion that a generic review of design be undertaken (App. Exh. 63, at p. B *7), would compel a finding of

~

quality assurance breakdown. We reject that reasoning and find that the item was not reportable. Clearly, as we have noted above, reportability under 10 C.F.R. 5 50.55(e) is a matter about which reasonable experts may reasonably differ. The fact that all the expert witnesses here ultimately agreed that the finding need not be reported bolsters an objective observer's confidence in HL&P's character and competence.

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500. Quadrex Report finding 4.3.2.1(d) states:

No formal methodology or documentation exists to verify adequate separation or the single failure criterion (see Questions E-1, E-8, and E-19).

App. Exh. 60, at p. 4-22.

501. Mr. Goldberg testified that HL&P knew that B&R did, in fact, have a formal procedure in place. As to the documentation Quadrex found lacking, Mr. Goldberg testified that such documentation is neither required by NRC nor universally used in the industry. He asserted that the finding "did not identify a deficiency in design or in quality assurance". Goldberg, ff. Tr.11491, at 40, 502. Dr. Bernsen and Mr. Lopez testified that B&R did in fact have a formal methodology for verifying separation requirements and the single-failure criterion, but had no formal methodology for demonstrating how these requirements had been incorporated into the design. They noted that many projects have been successfully completed without the latter methodology. Bernsen/Lopez, ff. Tr. 13441, at 95.

They saw no quality assurance breakdown in the Quadrex finding (id. at

{ 96).

503. Mr. Taylor testified that the finding did not identify a potentially reportable deficiency (Taylor, ff. Tr.14846, at 40-41).

504. Quadrex carried out its assignment by meetings with B&R, by l site visits, and by analyzing B&R's answers to a prepared series of questions (App. Exh. 60, at p. 2-4). CCANP would have us look at the

! Quadrex analysis of Questions E-1, E-8, and E-19 referenced in finding 4.3.2.1(d) and conclude, on the basis of certain phrases therein taken l

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out of context, that the finding represents a deficiency reportable under 6 50.55(e)(1)(i), i.e., a significant breakdown in quality assurance (CCANP F0F-II, PF 111.60). We see no reason to do so. The finding lacked the elements of reportability in 10 C.F.R. 9 50.55(e) and ,

was not reportable.

505. Quadrex Report finding 4.3.2.1(n) states:

It is planned that various types of isolation devices will be used. Actual devices are still under evaluation and qualification. There is no existing document that provides guidance to the designers on the circuit application of these various types (e.g., optical couplers vs. fuses vs. relays, etc.). It is our opinion that lack of such a document (TRD) could result in design errors and licensing problems (see Question E-14).

App. Exh. 60, at p. 4-23.

506. Mr. Goldberg pointed out that the finding itself says that the isolation devices are "still under evaluation and qualification." (Thus there is no way that this matter could be a deficiency in final design or a quality assurance breakdown.) A TRD of the type mentioned would be useful but not necessary until the isolation devices had been selected.

Goldberg, ff. Tr. 11491 at 41.

507. Mr. Taylor likewise felt no violation of quality assurance criteria could occur "until a design had been developed" (Taylor, ff.

Tr. 14846, at 38). He, too, believed that an engineering contractor like B&R could develop satisfactory designs without the document Quadrex thought necessary (id. at 39).

508. Dr. Bernsen and Mr. Lopez also note that the finding explicitly states that the devices were still under evaluation. Thus no

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quality assurance breakdown had occurred. They, too, felt the recommended document was not needed at the time. Bernsen/Lopez, ff. Tr.

13441, at 96.

509. CCANP would make much of the fact that standards and a regulatory guide requiring that these devices be specified had been issued years before the Quadrex review, asserting that long-term failure to implement constitutes, ipso facto, a quality assurance breakdown (CCANP F0F-II, PF III.61). The argument strikes us as specious.

510. CCANP would also have us interpret the cross-examination of Mr. Loren Stanley, at Tr. 13153-57, as indicating that orders for equipment, released to vendors without specification of isolation devices, would constitute final designs released for construction while containing deficiencies affecting safety (CCANP F0F-II, PF III.62). We note the witness said a few pages later that "there would be many checks and balances before the equipment was installed" and "the designs weren't done * *

it was correctable, and easily correctable" (Tr.

13159-60 (Stanley)). Here, too, CCANP's argument must be rejected.

511. Lastly, CCANP would have us find that, taken in concert with certain other findings (whose significance was not litigated) this finding shows that "a potential for quality assurance problems already existed" (CCANP F0F-II, PF III.63). We decline to base our opinion on matters not litigated, and we note that nowhere in 9 50.55(e) is there a requirement to report every matter having "a potential for quality i

assurance problems."

512. We conclude that the finding was not reportable.

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513. Quadrex Report finding 4.5.2.1(b) states:

EDS did not perform a design review or design verification of preliminary loads transmitted to B&R; these loads have, however, been used as a basis for plant design (see Questions C-4 and M-8).

App. Exh. 60, at p. 4-39.

514. EDS Nuclear, Inc., was a subcontractor to B&R, performing pipe-rupture analysis for piping inside containment (App. Exh. 60, at pp. 1-2, 4-36). Mr. Goldberg testified that preliminary designs are often used as a basis for design and construction activities not only at STP but at every other nuclear project with which he is familiar. Where such data are used, an extra margin of safety is included. Such preliminary use does not represent a deficiency. Goldberg, ff. Tr.

11491, at 41.

515. Mr. Taylor testified that nearly all the projects in heavy field construction in which he had been involved used conservative preliminary data for some parts of the construction. He noted this usually resulted in foundations being more overdesigned than originally contemplated. Such a practice would not be a quality assurance violation unless a nonconservative design was ultimately found to exist.

Taylor, ff. Tr. 14846, at 42.

516. Dr. Bernsen and Mr. Lopez confirmed that the use of preliminary loads is acceptable and not uncomon. They also note that Quadrex' " major concern" with respect to this matter is potential overconservatism. Bernsen/Lopez, ff. Tr. 13441, at 97; App. Exh. 60, at

p. 4-38.

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517. CCANP offered no argument. The finding does not seem reportable to this Board. It identifies neither a design deficiency nor a quality assurance breakdown.

518. Quadrex Report finding 4.6.2.1(n) states:

Assumptions regarding the availability of various heat sinks under varying Question N-17) plant conditions should be re-examined (see App. Exh. 60, at p. 4-61.

519. Mr. Goldberg testified that inspection of the referenced Quadrex question, N-17, showed that the unanalyzed condition of which Quadrex complained was one that he knew had, in fact, actually been analyzed. Further, B&R had subcontracted with NUS Corp. for a reanalysis of the heat loads to the essential cooling pond (ECP), the heat sink mentioned in Question N-17; thus the recommended reexamination was already in progress. He saw no design deficiency or quality assurance breakdown. Goldberg, ff. Tr. 11491, at 42.

520. Mr. Taylor would have made this an unresolved item in 1981.

He believed it should have been reported as a potential 5 50.55(e) matter; and, indeed, when a reanalysis of ECP heat loads was completed in October 1982, it was so reported. Taylor, ff. Tr. 14846, at 44; Staff Exh.136, at 267. In December of 1982 the notification was withdrawn, since it was found that all safety-related components would still function even with the higher temperature water in the ECP (Taylor, ff. Tr. 14846, at 44-45). Mr. Taylor still believes the matter should have been reported in May, 1981, but he stated that his conclusion simply reflects a "somewhat lower threshold" of

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reportability. He did not feel that HL&P's failure to report the finding reflected a lack of candor or reflected adversely on corporate character or competence. M.at45-46.

521. Dr. Bernsen and Mr. Lopez stated in their direct testimony that, in fact, as Mr. Goldberg noted, the required analysis had been done (Bernsen/Lopez, ff. Tr. 13441, at 97).

522. CCANP offered no argument concerning this finding. We note the somewhat checkered history of this finding's reportability: at first not reported, then reanalyzed as " potential," later withdrawn. We are inclined to agree with the Staff's position: The finding should have been reported in May 1981 as potentially reportable. However, the potential reportability was, as in other instances, a judgmental matter about which experts might reasonably differ. Failure to have reported it certainly does not suggest shortcomings in HL&P's character or competence.

523. Quadrex Reoort finding 4.7.3.1(a) states:

B&R has not yet developed a criteria for jet impingement protection on unbroken piping systems (see Question P-20). A future TRD is planned.

App. Exh. 60, at p. 4-78.

524. All witnesses testified that this finding simply noted a failure on B&R's part to develop criteria and did not represent a quality assurance failure or a design deficiency (Goldberg, ff. Tr.

11491, at 43; Taylor, ff. Tr. 14846, at 46-47; Bernsen/Lopez, ff. Tr.

13441, at 98; Tr. 11695-96 (Goldberg)).

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525. The Board finds this matter concerned only work to be performed. It was not reportable under 10 C.F.R. s 50.55(e).

526. Quadrex Report finding 4.7.3.1(b) states:

Approximately 50% of the reviewed SDDs [ System Design Descriptions] do not yet contain system operating temperatures (see Question P-1).

App. Exh. 60, at p. 4-78.

527. Mr. Goldberg testified that, in fact, all but one of the SDDs reviewed either contained design temperatures or referenced documents that did (Goldberg, ff. Tr.11491 at 43-44). Dr. Bernsen and Mr. Lopez confirmed this, adding that either approach is acceptable, and noting that the referenced Quadrex Question P-1 did not identify any pattern of deficiency, only an isolated case of an SDD, in draft form, that lacked design temperatures (Bernsen/Lopez, ff. Tr.13441 at 99-100). Mr.

Taylor lumped this finding with finding 4.7.3.1(a) as simply not showing either a design deficiency or a quality assurance violation (Taylor, ff. Tr. 14846 at 46-47).

528. We find this matter not reportable under 10 C.F.R. 9 50.55(e)(1)(ii).

529. Quadrex Report finding 4.7.3.1(k) states:

B&R assumptions for seismic to nonseismic boundary anchors are i

probably unconservative and difficult to technically justify as adequate (see Question P-29).

App. Exh. 60, at p. 4-79.

530. Mr. Goldberg testified that this finding did not represent a reportable deficiency because it did not indicate a quality assurance I

--m. .-,

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breakdown and nothing embodying the B&R assumptions had been released for construction (Goldberg, ff. Tr. 11491, at 44).

531. Mr. Taylor agreed that the finding did not indicate a quality assurance breakdown. He concluded that it should have been reported as a potential deficiency because he was uncertain whether designs based on it had been released for construction (Taylor, ff. Tr. 14846, at 48-49).

He believed, however, the designs had probably not been released, but he based that notion only on the fact that B&R's reply to Quadrex used the future tense (id.).

532. Messrs. Bernsen and Lopez, although agreeing that the B&R approach to the design was in need of revision, saw the difference between B&R and Quadrex as a simple difference of engineering approach and not as a quality assurance breakdown (Bernsen/Lopez, ff. Tr.13441, at 100).

533. CCANP, citing Mr. Goldberg's statement under cross-examination to the effect that B&R's approach might not be conservative, his statement that he was not sure that B&R knew that fact, and B&R's own jtatementthattheapproachfollowedindustrypractice,wouldhaveus find the matter reportable as a quality assurance breakdown (CCANP F0C-II, PF III.64, citing Tr. 12255-56 (Goldberg); App. Exh. 62, linclosure (1),40 at Item 4.7.3.1(k)). CCANP cites no specific portion 40 We observe that, in the cover letter of Exhibit 62, Enclosures (1) and (2) are incorrectly identified. Our citations refer to the (Footnote Continued)

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of 10 C.F.R. Part 50, Appendix B which has been violated. We cannot follow the logic which would classify this as a quality assurance breakdown. The matter is, however, another close call, since we are uncertain whether the design had been released for construction. In view of the uncertainty expressed by Mr. Taylor, we will accept Mr.

Goldberg's assertion that it had not been released and, on that basis, find the matter not reportable.

534. Quadrex Report finding 4.8.2.1(a) states:

The instrument air piping, between the valves actuated by redundant radiation monitors and the valves that divert air flow through safety-related filter trains in the FHB [ fuel handling building] HVAC exhaust subsystem, does not meet the single failure criterion (see Question R-6).

App. Exh. 60, at p. 4-86.

535. This finding pertains to the same matter as finding 4.3.2.1(a)

(Taylor, ff. Tr. 14846, at 19-21, 50; Goldberg, ff. Tr. 11491, at 45; Bernson/Lopez, ff. Tr. 13441, at 101; Tr. 13517-21 (Bersen/Lopez)). The Board has already ruled with respect to finding 4.3.2.1(a) (see supra, Findings 495-99). HL&P correctly determined that this finding did not identify a potentially reportable deficiency.

536. Quadrex Report finding 4.8.2.1(b) states:

No procedures exist that define the minimum qualification requirements for ALARA reviewers. Some design drawings have been reviewed and signed off for ALARA. There is limited evidence that proper follow-up has occurred to verify incorporation of ALARA specified designs (see Question R-1).

(Footnote Continued) enclosures as they are actually labelled, not as they are referred to in the cover letter.

l

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App. Exh. 60, at p. 4-86.

537. Mr. Goldberg testified that this item was not reportable since it did not identify a deficiency in a design released for construction and did not represent a quality assurance breakdown. ALARA considerations had been incorporated appropriately. He agreed the program could be improved in a manner suggested by Quadrex but noted 3 that HL&P had instituted an ALARA program that was one of the most comprehensive in the industry. Goldberg, ff. Tr. 11941, at 45-46, 538. Mr. Taylor noted that NRC is " heavily involved" in assaring that licensees implement the ALARA concept in both design and operation of a nuclear plant. His view was that Quadrex meant to call attention to the fact that designs and verification had not progressed as expected and that, unless B&R improved, NRC would not license the plant. He did not think the item reportable under 10 C.F.R. 5 50.55(e). Taylor, ff.

Tr. 14846, at 50-52.

539. In the view of Dr. Bernsen and Mr. Lopez, reportability of this item, at least as a quality assurance breakdown, was precluded i

directly, since they believe that the quality assurance provisions of 10 C.F.R. Part 50, Appendix B are meant to apply only to equipment and actions meant to protect the general offsite public from the consequences of accidents. They testified that ALARA activities are not encompassed therein. Bernsen/Lopez, ff. Tr.13441, at 101-02.

. Nevertheless, they analyzed this Quadrex finding as if it could impact upon a quality assurance (Appendix B) matter and concluded that it still would not constitute a quality assurance breakdown (id, at 102-03).

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540. CCANP would have us note that Quadrex's analysis of the referenced question, R-1, contains the language " reviews performed by B&R to date of plant design from an ALARA standpoint have not been adequate." It would also have us note that Quadrex recommended that "a complete re-review" be performed, but that such a program had not been implemented (CCANP F0F-II, PF III.65; App. Exh. 60, Vol. III, at R-1).

Because of that, and because of testimony elicited from Mr. Goldberg on cross-examination, testimony relating B&R's ALARA deficiencies to B&R's

, weakness in nuclear analysis, CCANP would have us find that "[a]s a whole the ALARA process and products constituted a generically reportable deficiency." CCANP F0F-II, PF III.65. We are aware of no provision for reporting such a deficiency under 10 C.F.R. S 50.55(e),

and CCANP has pointed to none. We conclude that the item was not reportable.

541. Quadrex Report finding 4.8.2.1(c) states:

Modification of the MAB [ Mechanical Auxiliary Building] HVAC system to eliminate filter media needs to be reexamined (see Question R-5 and R-29).

App. Exh. 60, at p. 4-86.

542. Mr. Goldberg testified that this finding was not potentially reportable because the design of the MAB HVAC system complied with the requirements of Appendix I to 10 C.F.R. Part 50 and therefore was not deficient (Goldberg, ff. Tr. 11491, at 46-47). The NRC Staff also testified'that this finding was not potentially reportable because it did not identify a potential deficiency or indicate a significant breakdown in quality assurance, but merely represented the lack of l

l

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progress in engineering completion that Quadrex perceived (Taylor, ff.

Tr. 14846, at 50-52). The Bechtel witnesses testified that the STP design complied with applicable requirements and the finding did not identify a significant breakdown in any portion of the QA program for the STP (Bernsen/Lopez, ff. Tr.13441, at 104). Other reviews also concluded that the finding was not reportable (Staff Exh. 136, at 336; cf. id. at 19-20; App. Exh. 63, at p. B-152; App. Exh. 77, Enclosure at 10). CCANP neither produced evidence to the contrary nor presented arguments to the contrary in its proposed findings. We find that the matter was not reportable.

543. Quadrex Report finding 4.8.2.1(d) states:

B&R's position that shielding calculations are not-safety-related needs to be re-examined (see Question R-7).

Several shielding analyses were performed by NUS; however, there is no indication that B&R has verified this work.

Standard models and codes have been used in analyses performed by B&R, yet B&R exhibited a lack of familiarity with and understanding of the codes. A re-review of plant shielding is necessary reflected in to ensure design that (see analysisR-11, Questions results areand R-12, properly R-14 ).

App. Exh. 60, at p. 4-86.

544. Although B&R's assessment of May 8, 1981 concluded that this item was not reportable, the HL&P team reported it to NRC (App. Exh. 62, Enclosure (1), Item 4.8.2.1(d); Goldberg, ff. Tr. 11491, at 35-36; CCANP Exh. 132; Bernsen/Lopez, ff. Tr. 13441, at 50).

Subsequent analysis led HL&P to the conclusion that it was not reportable. Shielding calculations are not generally considered safety related in the industry, but B&R was processing those calculations as if they were safety related, nonetheless. Goldberg, ff. Tr. 11491, at

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35-36; Bernsen/Lopez, ff. Tr. 13441, at 50; CCANP Exh. 132. Mr. Taylor also testified that the matter was not reportable (Taylor, ff. Tr.

14846,at50-51).

No contrary evidence was educed. We find the matter not reportable and find HL&P's behavior in reporting it as a potential deficiency reflects positively on HL&P's character and competence.

545. Quadrex Report finding 4.8.2.1(e) states:

B&R has not correlated radiation zones to the shielding design and shielding design has not adequately considered ISI

[In-Service Inspection] requirements or the potential locations for temporary shielding (see Question R-10).

App. Exh. 60, at p. 4-86.

546. Mr. Goldberg testified that this finding was not potentially reportable because it identified a requirement for future work and not a deficiency in design (Goldberg, ff. Tr. 11491, at 47). The NRC Staff also testified that this finding was not potentially reportable on the same basis (Taylor, ff. Tr. 14846, at 50-52). The Bechtel witnesses explained that the finding related to activities that had not yet been performed and it did not identify a significant breakdown in any portion of the QA program for STP (Bernsen/Lopez, ff. Tr. 13441, at 105-06.)

i CCANP adduced no evidence to the contrary. We find this finding not to be reportable under 10 C.F.R. 9 50.55(e).

547. Quadrex Report finding 4.8.2.1(f) states:

Radiation zone drawings based on accident conditions have not been prepared (see Question R-30).

App. Exh. 60, at p. 4-87.

l l

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548. All the expert witnesses testified that, in their respective opinions, this finding was not reportable. It represented only work still to be done, not a deficiency in design or a quality assurance breakdown. Goldberg, ff. Tr.11491, at 47-48; Tr.12273-74 (Goldberg);

Taylor, ff. Tr.14846, at 50-52; Bernsen/Lopez, ff. Tr.13441, at 106.

Reviews of the Quadrex Report by other experts also found this item to be not reportable (App. Exh. 62, Enclosure (1), Item 4.8.2.1(f); Staff Exh. 136, at 19-20; App. Exh. 63, at p. B-155). CCANP neither adduced evidence to the contrary nor presented argument to the contrary in proposed findings.

549. We find that Quadrex finding 4.8.2.1(f) was not reportable under 10 C.F.R. Q 50.55(e).

550. Quadrex Report finding 4.8.2.1(g) states:

A design basis governing removable concrete block walls was not evident (see Question R-11).

App. Exh. 60, at p. 4-07.

551. All the expert witnesses testified that this matter merely represented an activity as yet unperfermed rather than a design deficiency or a quality assurance breakdown (Goldberg, ff. Tr.11491, at 48; Taylor, ff. Tr.14838, at 106-07; Bernsen/Lopez, ff. Tr.13441, at 106-07). Other analyses also concluded it was not reportable (App. Exh.

62, Enclosure (1), Item 4.8.2.1(g); Staff Exh.136, at 19-20).

552. CCANP presented no evidence to the effect that this item was reportable. CCANP does argue, however, that a contradiction exists t

--e -

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between Mr. Goldberg's testimony on the one hand and the Quadrex finding, taken with B&R's response, on una other (CCANP F0F-II, PF III.66.) We see no contradiction. Mr. Geldberg says the finding represents " concern for an activity to be performed in the future" (Goldberg, ff. Tr.11491, at 48). The finding is based on Quadrex Question R-11, the analysis section of which concludes " additional review and analysis is (sic) necessary" (App. Exh. 60, Vol. 3, at Question R-11). B&R's analysis says "the design basis * *

is being developed" (App. Exh. 62, Enclosure (1), Item 4.8.2.1(g)). Mr.

Goldberg explained under cross-examination just what portion of the work had been done and what had not. Criteria governing seismic and radiation design for normal conditions were in place, but criteria governing conditions when removable walls had been removed were not (Tr.

12274-84 (Goldberg)).

553. We find this item was not reportable under 10 C.F.R. Q 50.55(e). It merely identified work still to be done.

e. Reportability of the Generic Findings of the Quadrex Report 554. In LBP-85-6, supra, 21 NRC at 456, as modified by our Sixth Prehearing Conference Order, supra, we accepted-for litigation the ten most serious generic findings of the Quadrex Report, numbered 3.1(a) through 3.1(j) inclusive.41 As we explained in LBP-85-6, the mere fact 41 A typographical error in the original Quadrex Report led to one of (Footnote Continued)

._ . . . . _ . . ~ .

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that the generic findings of Quadrex were based on the individual discipline findings does not, in itself, ensure that evaluation of the discipline findings for reportability under 10 C.F.R. 5 50.55(e) will obviate the necessity for evaluation of the generic findings. The whole may well, as we then opined, be greater than the sum of its parts. For 10 C.F.R. 9 50.55(e)1(i), the portion related to quality assurance breakdown, a number of relatively small lapses, pervading a large number of disciplines, may have a common thread that bears reporting.

555. As with the individual discipline findings, CCANP's proposed findings dealt with only a few (3.1(a), 3.1(g), 3.1(1) and 3.1(j)) of the ten generic items we accer ad for litigation. Indeed, CCANP states that "a detailed examination of each generic finding is simply unnecessary" and that "anyone with comon sense reading these findings *

would have no doubt that such findings should be supplied to the NRC imediately" (CCANP F0F-II, PF III.38, III.51). We do not believe

" common sense" (a rather unwynon attribute) compels any such sweeping conclusion. We treat each generic finding below. Because of the lengthy text of each finding, we are here setting forth sumaries rather than repeating each in full. These sumaries represent the Board's own I

(Footnote Continued) these findings, 3.1(i), being misnumbered 3.1(j); our original order had thus considered the substance of two findings numbered 3.1(j). That error was corrected in our Sixth Prehearing Conference Order of May 17, 1985, which renumbered one finding as 3.1(i).

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distillation, taking careful account of the analyses by various expert witnesses.

556. Finding 3.1(a) (App. Exh. 60, at pp. 3-1 to 3-2) faults B&R for lacking certain aspects of interdisciplinary communication and standardization. The Staff witness, Mr. Taylor, perceived the lack as fourfold: ineffective interdisciplinary interfaces; lack of overall standards for separation of systems and components; no overall interpretation of the single-failure criterion; and (from the analysis of Question H-6) a failure to produce a control document based on fire hazard analysis (Taylor, ff. Tr. 14846, at 3; App. Exh. 60, Vol. II, Question H-6). Dr. Bernsen and Mr. Lopez saw the problem as a two-pronged one: Effective systems integration, overview and engineering functions may not exist at B&R; and multidisciplinary design guidance for system separation and the single-failure criterion was lacking (Bernsen/Lopez, ff. Tr. 13441, at 14).

557. Mr. Taylor testified that his evaluation showed no violation of any of the criteria of 10 C.F.R. Part 50, Appendix B, concerning quality assurance and that he used American National Standards Institute (ANSI) Document N45.2.11 (Staff Exh. 138) as an aid in this evaluation (Taylor, ff. Tr. 14846, at 3-4). He saw no requirement in either Appendix B or N45.2.11 that would make an integrated systems level review a necessity ( M. at 4). As to the matters of ineffective interfaces and a lack of an overall single-failure criterion, he saw no reference in the report supporting tnese assertions. The lack of separation criteria and the failure to produce a fire hazard control

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document, he noted, seemed to come from Question H-6 (id.). He stated that "the lack of factual support for the assertions has made it difficult to determine if a violation exists" (jd. at 4-5).

558. With respect to this item, CCANP argues that it shows a lack of interdisciplinary coordination and that interdisciplinary coordination is a fundamental requirement of 10 C.F.R. Part 50, Appendix B, Criterion III. That regulation states, in pertinent part:

Measures shall be established for the identification and control of design interfaces and for coordination among participating design organizations.

Thus CCANP would presumably consider this finding reportable under 10 C.F.R. 9 50.55(e)1(i), as a quality assurance breakdown (CCANP F0F-II, PF 111.52). The Intervenor cites a passage from the transcript as evidence that "quite a few" Quadrex findings support generic finding 3.1(a), presumably evidence of the widespread nature of this supoosed quality assurance breakdown. Unfortunately, at the place cited (Tr.

13092-94 (Stanley)), the person in charge of the Quadrex review, Mr.

Loren Stanley, when specifically asked, "Would that reach the level of a significant QA breakdown in design?" answered "Not in my opinion * * *"

(Tr.13094 (Stanley)).

559. Messrs. Bernsen and Lopez testified that, although Criterion III of 10 C.F.R. Part 50, Appendix B requires control of design interfaces, it does not specify the exact manner in which such control should be achieved. In their view, B&R did have appropriate procedures to control such interfaces. Further, B&R had systems integration and systems engineering functions; and, at the time of the Quadrex review,

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had taken action to strengthen these functions by establishing a Systems Design Assurance Group (SDAG), the activities of which Quadrex did not review (Bernsen/Lopez, ff. Tr. 13441, at 23-25). Mr. Stanley confirms that, although Quadrex had "some exposure" to SDAG it did not specifically review that group (Tr.13200 (Stanley)). In sum, Messrs.

Bernsen and Lopez opined that the concerns expressed by Quadrex in this finding simply did not identify a significant breakdown in any portion of the quality assurance program for the STP (Bernsen/Lopez, ff.13441, at26,28-29).

560. Mr. Cloin Robertson, one of the members of the HL&P team that reviewed the Quadrex Report for reportability under 10 C.F.R. 6 50.55(e), appearing as a witness upon subpoena by CCANP, noted that, in his view, B&R had a very rigorous interdisciplinary control process, so rigorous that it was "almost a hindrance to getting work done." What he saw as lacking was the sort of informal interdisciplinary communication that could ensure that the formal process would not become a stumbling block. Tr. 14730-31 (Robertson).

561. The Board sees this finding as another rather close call.

Clearly, since the QA regulations require " coordination among

( participating design organizations" and the Quadrex Report questioned l the existence of an " effective systems integration * *

and overview function" (App. Exh 60, at pp. 3-1, 3-2), one might, on the face of the l

matter, elect to report at least a potential item. But we note that Quadrex had not reviewed the SDAG, that the review team was aware of the j SDAG, and one member, at least, of the review team Knew the situation

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l was not exactly as portrayed by the Quadrex Report (Finding 560, supra).

For that reason, we do not believe that, from the standpoint of the review team, this item was potentially reportable. In any event, we do not believe that the failure to have reported finding 3.1(a) reflects adversely on the character or competence of HL&P.

562. Quadrex generic finding 3.1(b) asserts that its generic concern is in three parts:

1. Input data to technical groups are not checked by those groups for reasonableness, nor do groups supplying such data check to see that their output is correctly used.

2. Calculations containing errors are reviewed and verified as correct with a higher frequency than should be.

3. B&R review of vendor reports is not consistent; sometimes the reviews are well done, sometimes they are poorly done.

In addition to the three numbered items, we discern at least a fourth concern: B&R's policy of relying on work by major subcontractors to be correct without B&R review for acceptability and consistency. What may be viewed as a fifth matter is also mentioned: B&R's failure to provide vendors with adequate guidance concerning analysis and testing methods.

App. Exh. 60, at pp. 3-3, 3-4. The Staff's and Applicants' witnesses enumerated the concerns in varying ways but dealt with all of them ultimately.(Taylor, ff. Tr.14846, at 6 et seq.; Bernsen/Lopez, ff. Tr.

13441, at 29 g seq.). CCANP, in its proposed. findings, addressed a "Quadrex generic finding 3.1(g)" which, from its nature and the 9

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citations covering it, we take to be finding 3.1(b), or at least a part of it (CCANP F0F-II, PF III.53).

563. As to the matter numbered 1 above, Messrs. Bernsen and Lopez pointed out that it is not normal industry practice to require a supplier of data to conduct a review of the way a recipient uses such data. Although it is good practice for tbc recipient to review the data for reasonableness, in many cases the recipient may not have the requisite knowledge or experience to conduct such reviews. Instead, the adequacy of data provided across interfaces is ensured by such measures as interdisciplinary document review and design verification.

Bernsen/Lopez, ff. Tr. 13441, at 33-34, 39-41. In response to Board questions, these witnesses asserted that it would be a good practice for a receiving group to review data for reasonableness and a supplying group to know how its data were to be used; that variations in knowledge and experience mean that such informal processes cannot be relied upon; and, thus, that formal methods (such as interdisciplinary meetings, coordination reviews and design reviews) are used. Tr. 13888-94 (Bernsen,Lopez). B&R did have in place procedures for conducting these activities, and Quadrex did not identify any significant deficiencies that had not been reported to NRC (Bernsen/Lopez, ff. Tr.13441, at 33-34).

564. Mr. Taylor agreed. After a review of finding 3.1(b) and the direct and indirect references applying to it he found no violation of 10 C.F.R. Part 50, Appendix B. He noted several portions of Appendix B that, in his view, recognize that all the necessary expertise to review

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l a given design output may well lie in the group that produced it, and he found nothing in Appendix B that would imply that a group that provides data must monitor how those data are used. Taylor, ff. Tr.14846, at 6-7, 9.

565. The witnesses also dealt with the excessive error rate noted 4

in material that had been checked (Finding 562, item 2). Dr. Bernsen and Mr. Lopez testified that the Quadrex statement regarding errors in verified calculations did not indicate a significant breakdown in quality assurance. Of the four questions cited in support of the statement, one referred to an error previously reported to NRC, one identified an error that was conservative, one did not involve an error at all, and the last mentioned a "significant number" of mistakes but did not identify the mistakes, their number, or the number of calculations reviewed. Bernsen/Lopez, ff. Tr. 13441, at 30-32. They noted that it is unreasonable to expect a quality assurance program to eliminate all errors (id. at 32).

566. Mr. Taylor testified that ANSI Standard N45.2.11 recognizes that some errors will reside in designs throughout the life of the design work. He pointed out that Quadrex neither quantified the error rates found nor stated what error rate is acceptable. He did not view the statement as indicating any violation of the requirements of 10 C.F.R. Part 50, Appendix B. Taylor, ff. Tr. 14846, at 8.

567. Similarly, other witnesses saw no reportable item here. Mr.

Goldberg pointed out that of four possible errors identified, only two

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were really errors and one of those was on the conservative side (Tr.

12627-29 (Goldberg)). Mr. Stanley said that he did not view the error rate his company mentioned as being potentially reportable. Quadrex, he said, had looked at 80 to 100 calculations and found only a four or five percent error rate, including conservative errors. He saw no quality assurance problem. Tr. 13353-55 (Stanley).

568. CCANP's treatment of finding 3.1(b) focussed on the matter of error rate in verified calculations. CCANP argues that this finding, taken in conjunction with finding 3.1(j), discussed below, and with Bechtel's recomendation of a " detailed audit," constitutes a potentially reportable item. CCANP F0F-II, PF III.53. We cannot follow the leap of logic. Even CCANP cites the fact that Quadrex itself did not think of the matter as a quality assurance breakdown (id.; Tr.

13353-55 (Stanley)). We see no reportable matter here.

569. Messrs. Bernsen and Lopez testified that none of the Quadrex concerns regarding B&R-vendor relationships constituted breakdowns of quality assurance. Criterion VII of 10 C.F.R. Part 50, Appendix B, requires that measures be established to assure that purchased services conform to procurement documents, but it does not identify specific

( measures. The purchaser may select measures it deems appropriate.

Criterion VII does not require that a purchaser verify design work j performed by vendors. Indeed, in many cases it would not be possible for a ' purchaser to verify work performed by the vendor, since the l vendors often possess specialized knowledge or expertise that the purchaser lacks. Bernsen/Lopez, ff. Tr. 13441, at 37-38. Nor does O

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?

Af pendix B require purchasers to review and approve an31csis methods used by vendors ( M. at 38). As to the absence of guidance on analysis and testing methods, the witnesses noted that purchasers need only include in their procurement documents " applicable regulator [

requirements, design bases, and other requirements necessary to assbre

(

adequate quality" under Appendix B. Guidance on analysis and testi. rig methods may be, but is not required to be, included. M.at34-35.*'

i Finally,thewitnessesalsonotedthatB&Rdid,infact,havedocumentep procedures governing the review of vendor reports. While the witnesses

^

agreed with Quadrex that additional guidance in this respect might be desirable, the procedure was, in their view, adequate to satisfy the requirements of Appendix B. M.at39.

570. Mr. Taylor asserted that the degree to which B&R would review vendor designs would depend on the contractual arrangements involved (a matter of which he had no specific knowledge) and that B&R would review such designs only if directed to do so by HL&P. He saw no evidence in the Quadrex Report that that had been done. ANSI Standard N45.2.11 holds each group responsible for its own work. He, like the Bechtel witnesses, observed that architect-engineering firms, as purchasers, often lack the specialized design expertise that vendors have. He saw no violations of Appendix B in the matters addressed in finding 3.1(b).

Taylor, ff. Tr. 14846, at 8-9.

571. On the basis of the foregoing, we find generic finding 3.1(b) not to be reportable.

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572. According to the Applicants' witnesses, Quadrex Report finding 3.1(c) expresses three primary concerns:

1. That there was a lack of overall consistency in the operating modes and environmental conditions considered by B&R designers and an absence of written guidance to designers concerning the combinations of events and operating modes they were to deal with.

2. That the STP design criteria seemed to reflect industry practice in the 1973-75 period, ignoring more recent developments.

3. That analyses of certain specific systems did not reflect appropriate plant operating modes and environmental conditions.

Bernsen/Lopez, ff. Tr.13441, at 43-44; App. Exh. 60, at pp. 3-4 through 3-5; see also Taylor, ff. Tr. 14846, at 11-12. We ourselves note also a l statement, not obviously subsumed by the three concerns above, to the effect that "[c]onsideration of degraded equipment performance was also not evident" (App. Exh. 60, at p. 3-4).

573. Dr. Bernsen and Mr. Lopez testified that the first concern above was apparently predicated upon the lack of project-wide documented bases for plant operating and environmental conditions, as noted in discipline finding 4.3.2.1(1). They stated that there is no Appendix B requirement that plant operating and environmental conditions be

specified for designers in a project-wide document. At STP, the design bases for individual systems were provided by System Design Descriptions

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(SSD) and Technical Reference Documents (TRD). Fur'ther, B&R procedures required SSDs to address off-normal and postaccident conditions and to list the casualty events to be considered in the design of the systems.

This, they said, was sufficient to satisfy NRC requirements under

. Appendix B. Bernsen/Lopez, ff. Tr. 13441, at 44. From both the Quadrex Report and Bechtel's own review of B&R work during the transition period, Messrs. Bernsen and Lopez determined that B&R was reviewing industry developments since 1975, but had not, at least in some cases, revised its design criteria. They considered this a productivity and scheduling matter. Id. at 45. As to the concern that certain systems did not, in fact, reflect appropriate plant operating modes and environmental conditions, these witnesses pointed out that Quadrex had relied upon three examples for this conclusion: First, Quadrex pointed to deficiencies in the HVAC design basis. These deficiencies were reported to NRC under 10 C.F.R. % 50.55(e). The other examples involved a failure to consider the worst-case conditions in designing the i essential cooling pond (ECP) and the failure to consider postulated line cracks and breaks outside containment. However, design of the ECP I

actually did consider the required conditions--and B&R simply had not started work on the pipeline cracks and breaks. Id. at 46.

574. Mr. Taylor gave a paragraph-by-paragraph analysis of finding 3.1(c). (He counted only six paragraphs and we count seven, presumably because he ignored the first paragraph as being merely a summary). He considers that the matters of the failure to provide design bases to designers and the failure to consider degraded equipment performance

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were " moderated" by their proximity to the mention of failure to update requirements. In other words, we presume that, in his view, Quadrex put forth the criticisms regarding design bases and modes considered only to indicate failures to use the latest design practices. He addressed these matters only against that backdrop, pointing out that the Staff has not, in general, required continual upgrading of design bases for facilities under construction. Taylor, ff. Tr. 14846, at 11-12. He, too, pointed out that the HVAC problem was duly reported, and that the ECP problem was (in his view) potentially reportable (see supra, Finding 520), but he saw them as simple instances of error in engineering judgment, not quality assurance breakdowns. The failure to consider pipeline cracks and breaks he viewed as another instance of the use of dated standards by B&R, standards the voluntary updating of which was not necessarily required (id. at 13-14). He saw no violation of Appendix B and no requirement to report the generic finding (id. at 14-15).

575. CCANP neither presented witnesses nor made argument about finding 3.1(c) in its proposed findings. We see nothing reportable in finding 3.1(c) that was not reported as a separate matter.

576. Quadrex Report finding 3.1(d) states that B&R drew a sharp distinction between safety-related and non-safety-related equipment, omitting design verification for non-safety-related items, 61d that in several instances design activities that affected plant safety were designated non-safety-related (App. Exh. 60, at pp. 3-5, 3-6). It then lists seven cases in which the B&R position was felt to be either

,- r - -

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inaccurate or questionable with respect to safety classification (id. at p.3-6). Quadrex also noted that "[i]t was frequently stated during the review that only NRC requirements must be met whether or not those requirements are accurate, reasonable, or even meet the intent of the regulations" ( M., emphasis in original) and that there had been no planned effort on B&R's part to review new NRC requirements other than those new requirements stemming from the Three Mile Island accident (M.).

577. The Applicants' witnesses reviewed the seven listed instances of alleged misclassification. Of the seven only three seemed to them to involve safety classification: Two of these were related to the HVAC deficiency (which had already been reported); the third, to possible uncertainty about the safety class of computer codes, which also had been reported. One example, the safety class of shielding calculations, later turned out indeed to be non-safety-related. The other instances, in their view, had nothing to do with safety classification. None of these matters represented a significant breakdown in the safety I classification system. The examples involving the HVAC system were isolated instances. The entire finding did not, in their view, identify a significant breakdown in quality assurance. Bernsen/Lopez, ff. Tr.

13441, at 49-53.

578. Mr. Taylor testified that licensees are required to develop a list of structures, systems, and components having a direct impact on safety. Such lists are included in Safety Analysis Reports (SAR).

Further, piping and instrumentation diagrams generally mark items to

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show safety classifications. Taylor, ff. Tr. 14846, at 16-17. He found neither the generic finding nor any of the seven subitems (other than items already reported) to be reportable (id,. at 18).

579. Mr. Stanley testified that the statement saying that B&R believed "only NRC requirements must be met" was meant by Quadrex to call HL&P's attention to the fact that, built that way, the plant might be licensable but would not be of optimum design (Tr. 13241-42 (Stanley)). The design might not meet operating, maintenance and test requirements, but there would be no safety issue neglected (Tr. 13243 (Stanley)). We shall accept Mr. Stanley's explanation of his own work as valid, although clearly another reading of this part of the finding is possible when the words are taken in context.

580. CCANP produced no witnesses and offered no argument in its proposed findings on this point. We see nothing reportable in Quadrex finding 3.1(d) that was not already reported.

581. Quadrex Report finding 3.1(e) states that there are no written guidelines for failure mode and effects analyses (FMEA); that the only such analyses available were those in the FSAR, analyses Quadrex deemed

" superficial"; that there was no documented evidence that the single-failure criterion had been satisfied; and that the individual disciplines could not supply lists of the single failures for which they were designing their systems. Quadrex reviewers pointed out one instance (in instrumentation and control of HVAC) in which the single-failure criterion was not satisfied. App. Exh. 60, a t, p. 3-7.

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582. Mr. Taylor testified that the essential purpose of failure analysis is to demonstrate that the single-failure criterion of 10 C.F.R. Part 50, Appendix A, has been met. He also noted that the only real requirement for failure analyses was a requirement for inclusion in the FSAR. Taylor, ff. Tr. 14846, at 19-20. He saw no regulatory requirement for separate identified FMEA as such, and he saw no reason to report this finding under 10 C.F.R. 6 50.55(e) (id at 20-21).

583. The Bechtel witnesses testified that the type of project-wide guidance and documentation that Quadrex found lacking was not necessary.

They further stated that the one violation of the single-failure criterion that Quadrex found did not represent a quality assurance breakdown. They noted that B&R had not yet begun to perform FMEA for key systems (other than the single-failure tables presented in the FSAR). Bernsen/Lopez, ff. Tr.13441, at 56-57. B&R, indeed, had not started the more sophisticated analyses needed to elaborate on the single-failure analyses of the FSAR (Tr. 13555 (Lopez)).

584. A separate review by the Staff concluded that this finding was not reportable (Staff Exh. 136, at 23, 404-05).

585. CCANP offered no witnesses and presented no argument on this point in its proposed findings. We do not find any reportable matter in finding 3.1(e).

586. The principal thrust of Quadrex Report finding 3.1(f) is that B&R had no systematic way of assuring that designs for STP would meet FSAR commitments, and that there were inconsistencies between design and the FSAR. The finding noted that there was no method to assure timely

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updating of the FSAR. It also faulted B&R for lack of a consistent interpretation of codes and standards, the American Society of Mechanical Engineers Boiler and Pressure Vessel Code in particular.

. App. Exh. 60, at pp. 3-7, 3-8.

587. Messrs. Bernsen and Lopez testified that B&R actually did have methods to ensure that FSAR commitments were implemented. These methods included a review and comment process for design documents, review by SDAG, and design verification. These witnesses, looking at the relevant Quadrex discipline findings and the question on which they were based, could find no support for Quadrex's statement. Bernsen/Lopez, ff. Tr.

13441, at 58-60, 64. As to inconsistencies between design and the FSAR, they pointed out that, on many projects, the FSAR does not control 4

design; rather, as the design evolves, the FSAR is amended to incorporate the changes. Since that involves some delay, there are ofteninconsistencies(M.at60). As long as such differences are

identified and controlled, such inconsistencies do not pose a quality assurance problem ( M . at 61). As to timely updating of the FSAR, B&R had a formal procedure for doing so ( M. at 61-62).

588. Mr. Taylor's testimony appeared at first blush to take issue with the Quadrex Report's position regarding the use of the FSAR as a design document (Taylor, ff. Tr. 14846, at 22-23). The matter was resolved during examination of Mr. Stanley, in which Mr. Stanley, in essence, simply said that Quadrex's position was very similar to Mr.

Taylor's but had been misinterpreted (Tr. 13246-47(Stanley)). Both

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these witnesses stressed the difficulty of revising the FSAR to stay abreast of design development (id.; Taylor, ff. Tr.14846, at 23).

589. Mr. Taylor noted that, although an applicant is required to update the FSAR periodically, there is no requirement that it be kept current at all times (Taylor, ff. Tr. 14846, at 23). A failure to keep the FSAR up to date does not generally constitute a violation of Appendix B (id. at 23-24). Since Quadrex did not cite specific examples of such failures, Mr. Taylor could not say for certain whether such a violation might have existed (id_. at 24).

590. The Bechtel witnesses pointed out that, where Quadrex actually 4

identified differences between the designs and the FSAR, the designs were adequate and the differences would not have adversely affected the safety of plant operations (Bernsen/Lopez, ff. Tr. 13441, at 65).

591. Mr. Taylor noted that the portion of the finding that deals with a lack of consistent, centralized interpretation of codes and standards does not relate to the issue of differences from the FSAR. In his understanding of the NRC regulations, there is no requirement for a centralized interpretation, and the lack of such interpretations does not violate requirements. Whether the particular code cited was misinterpreted he could not decide without further information. He saw nothing reportable in the finding. Taylor, ff. Tr. 14846, at 24.

592. CCANP produced no testimony and made no argument on finding 3.1(f) in its proposed findings. The separate review by the Staff concluded that this finding was not reportable (Staff Exh. 136, at 23, 404-05). We see nothing reportable in the finding.

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593. Quadrex Report finding 3.1(g), captioned " Plant Design Basis,"

is a long, and in some measure diffuse, finding (App. Exh. 60, at pp.

3-8 to 3-10). The Applicants' witnesses interpreted it as primarily a finding that Quadrex saw little evidence of a well-thought-out, consistent basis for design, and found much of the design basis rooted in engineering judgment with little documented rationale for that judgment. These witnesses saw most of the observations mentioned in the 3

finding as support for the concerns above. Bernsen/Lopez, ff. Tr.

13441, at 65-66. The Staff's witness saw the finding as ten "more-or-less separate" issues (Taylor, ff. Tr.14846, at 26-27). It is clear that the finding seems to repeat some concerns dealt with elsewhere; e_.3., it faults B&R for a lack of interface design information between disciplines (Bernsen/Lopez, ff. Tr. 13441, at 66; Taylor, ff. Tr.14846, at 26; App. Exh. 60, at p. 3-9) and for a failure to require subcontractor reviews of B&R (and other subcontractor) designs (Bernsen/Lopez, ff. Tr. 13441, at 65-66; Taylor, ff. Tr. 14846, at 26; App. Exh. 60, at pp. 3-9 to 3-10). These concerns are very similar to some of those expressed in findings 3.1(a) and 3.1(b) and certain discipline findings (c_f. Quadrex findings 4.1.2.1(b) and i 4.5.2.1(b); Findings 490,513, supra). Quadrex found, inter alia, that B&R was late in developing a safety classification document (c_f.

Findings 576-78, supra) and TRDs for inservice inspection and environmental qualification (App. Exh. 60, at p. 3-9). Quadrex also criticized the " quality variations" it found in design review comments

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for B&R internal documents and noted that the B&R Materials Group did not review subcontractor :naterial selections (id.).

i 594. Messrs. Bernsen and Lopez noted the Quadrex concern that each discipline seemed to be establishing its own design basis. They referred to their earlier testimony on findings 3.1(a), 3.1(b) and J

3.1(c) to the effect that this is acceptable practice. Further, they deemed the use of engineering judgment appropriate and saw no need for documenting that judgment, provided the design itself is documented Bernsen/Lopez, ff. Tr. 13441, at 66-67. These witnesses went through the supporting statements in the finding and found none to represent a quality assurance breakdown, either individually or in aggregate (id. at 67-76).

595. Mr. Taylor found insufficient information in finding 3.1(g) to reach a real conclusion on the validity of Quadrex's concerns for seven of the ten subitems he discerned. One item he thought "much stronger than the cited facts seem to warrant." The other two he saw as a repeat of finding 3.1(a) and a display of Quadrex's own philosophy, respectively. He saw no violation of Appendix B and no reason to report the finding under 10 C.F.R. 5 50.55(e). Taylor, ff. Tr. 14846, at 27-28.

596. We note also that Mr. Stanley, in discussing B&R's failure to produce overall design bases at an early date, suggested that such failure resulted primarily in an overbuilt rather.than inadequate design (Tr.13129-33 (Stanley)).

N

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597. CCANP presented no witnesses on this point, but mentioned finding 3.1(g) in its proposed findings (CCANP F0F-II, PF III.53, III.54).42 At 111.54, CCANP argues essentially as follows: Mr. Stanley testified that lack of some of the documents found missing in finding 3.1(g) could create a safety problem if " strong technical leadership" was lacking in each discipline (Tr. 13278-79 (Stanley)). CCANP then asserts that lack of these documents is, ipso facto, indicative of a lack of such leadership. (The circular nature of this reasoning is evident.) CCANP also cites certain other portions of the record as evidence of " absence of strong technical leadership." We do not find the citations convincing.

598. The Staff's separate review of the Quadrex report concluded that this finding was not reportable (Staff Exh.136, at 23, 405). We Concur.

599. Quadrex Report finding 3.1(h) concerns reliability of equipment. It notes that specific reliability requirements have not been established, citing Quadrex Questions E-7 and E-8 which concern the engineered safety feature (ESF) sequencer. It also mentions an absence of reliability requirements in both electrical and mechanical safety-related specifications and a lack of " specifications to constrain 42 The mention at 111.53 is apparently in error (d. Finding 562, supra).

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spurious operation." App. Exh. 60, at p. 3-11. Both these latter assertions are without supporting citations.

600. Mr. Taylor testified that the two questions cited, and their replies, only partially support the finding. Question E-7 indicates that some parts of Quadrex's inquiry were satisfactorily answered and others were not, apparently because the B&R design work was incomplete.

Question E-8 does deal with the concept of reliability, in part by criticizing the lack of a formal FMEA. Taylor, ff. Tr. 14846, at 29.

The last part of Quadrex's analysis of this question notes directly that therearenoreliabilitycriteriafortheESFsequencer(M; App.Exh.

60, Vol. II, at Question E-8). Mr. Taylor saw no requirement in NRC regulat;ons for a reliability acceptance standard other than the single-failure criterion and a special requirement for diesel generators. He saw no need to report the finding to NRC. Taylor, ff.

Tr. 14846, at 30.

601. Dr. Bernsen and Mr. Lopez explained that Appendix B does not require that procurement documents for equipment specify reliability, nor is it general industry practice to do so. Instead it was B&R's practice (consistent with that of the industry) to specify a level of quality consistent with the equipment's intended function, to rely on historical data and experience, and to perform qualification tests and analysis. In addition, reliability analyses or tests may be specified (and B&R had done that for the ESF sequencer). Ber,nsen/Lopez, ff. Tr.

13441, at 76-77. These witnesses saw no quality assurance breakdown in finding 3.1(h)(M.at78).

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602. CCANP introduced no evidence and made no argument on this matter in its proposed findings. The Staff's separate review concluded the finding was not reportable (Staff Exh.136 at 23, 404-05). We find finding 3.1(h) was not reportable under 10 C.F.R. 9 50.55(e).

603. Quadrex finding 3.1(1) (erroneously numbered 3.1(j) in the Quadrex Report, see Finding 554, n. 41, supra) is captioned " Nuclear Analysis." Its thrust is that, although B&R's analytical methods were adequate in more conventional disciplines, they were much less adequate in disciplines of the sorts peculiar to nuclear power plant design.

~

Quadrex noted that insufficient work had been accomplished, that the error rate in calculations was abnormally high, that a large amount of work was being contracted out and that B&R did not provide adequate guidance or review for these contractors. Quadrex gave four examples to 2

support these assertions. App. Exh. 60, at pp. 3-11, 3-12.

604. Dr. Bernsen and Mr. Lopez saw two main concerns here

1. Quadrex was concerned about the failure of B&R to complete nuclear-related analyses, about the technical inadequacy of B&R's analytic methods and assumptions, and about the high error rate in these calculations; and

2. Quadrex was concerned that a large amount of f nuclear-related analysis was contracted out with inadequate guidance to the subcontractor and inadequate review of the work.

Bernsen/Lopez, ff. Tr.13441, at 78-79.

I

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l The witnesses saw primarily a productivity and scheduling problem in the first concern. As to the inadequate techniques and high error rate, they reviewed the findings cited as support for this one and, with the exception of deficiencies already reported, they found no safety-related significant deficiencies. The witnesses believed that Quadrex's concern was actually founded primarily on a general impression that B&R personnel were not as knowledgeable as Quadrex thought they should have been, not on specific errors. Id. at 80-81. The witnesses noted that, since the actual errors involved were of limited scope or of no safety significance, the concern did not represent a quality assurance breakdown (id. at 80). As to the second main concern, the witnesses noted that nothing in Appendix B prohibits subcontracting.

They also referred to their testimony on finding 3.1(b) (see Findings 563,569) in which they asserted that technical guidance to subcontractors and review of subcontractor analysis were not necessarily required by Appendix B (Bernsen/Lopez, ff. Tr. 13441, at 38-39, 83).

605. Mr. Taylor found the exact thrust of finding 3.1(i) " difficult to grasp" (Taylor, ff. Tr. 14846, at 31). He believed the finding was meant to point out that B&R lacked expertise in those areas that are uniquely nuclear. He felt that the finding was simply a caution to HL&P that delays in licensing and design might occur in areas the licensee was unaware of. Id. at 31-32. He believed it would be "very difficult" to see the finding as a quality assurance violation (id, at 32).

Without further references, he did not believe the finding suggested any reportable deficiency (id. at 33).

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606. In its proposed findings CCANP characterizes finding 3.1(1) as

"[p]erhaps the most striking generic finding," because it addresses nuclear analysis (CCANP F0F-II, PF 111.55). CCANP notes that witness Cloin Robertson testified that he, a member of HL&P's reportability review team, thought at first reading that this section might present a reportable deficiency (CCANP F0F-II, PF III.53; Tr.14639-40 (Robertson)). Mr. Robertson also testified that, after reading the report more completely, he changed his mind. Further, he testified that the change was his own idea and resulted from the fact that he i discovered that B&R's nuclear analysis group was not putting out a defective product but was, in fact, putting out no product at all (Tr.

14640-41 (Robertson)). CCANP would have us accept Mr. Robertson's first impression and reject his considered opinion. CCANP gives no sound reason why.

607. The Staff's separate review of finding 3.1(i) noted that one matter dealt with in this finding had been reported to NRC on August 25, 1980, before the Quadrex review, and concluded the remainder of the Quadrex finding was not reportable (Staff Exh.136, at 51-52). So do we.

608. Quadrex Report finding 3.1(j) expresses four concerns: (1) that B&R's design verification process pennitted the use of preliminary data up to the point of fuel loading, (2) that there were no documented standards regarding the minimum qualifications for a design verifier, (3) that the only evidence of a completed design verification was a

! signature, and (4) that errors we,re not detected by design verifiers

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(App. Exh. 60, at p. 3-13; Bernsen/Lopez, ff. Tr. 13441, at 85; Taylor, ff. Tr. 14846, at 34). Quadrex considered the matter mentioned as number (3) above, i.e., simple sign-off by the verifier without use of checklists, to be evidence that key design verification questions were not being adequately considered (App. Exh. 60, at p. 3-13).

609. Dr. Bernsen and Mr. Lopez testified that B&R's procedures did require a check of preliminary design prior to release for construction or procurement. Further, although Criterion III of Appendix B does require design verification, it does not include specific requirements regarding the timing of verification. It is good practice, when possible, to require verification before release for construction or procurement, but it is not uncommon to defer verification until construction is well under way or even complete. Plant structures are often built in accordance with conservative preliminary estimates of loads, and the design is verified after the structure is completed.

Bernsen/Lopez, ff. Tr. 13441 at 85-86. The generally accepted nature of this procedure was affirmed by Mr. Goldberg (Goldberg, ff. Tr. 11491, at

41) and Mr. Stanley (Tr.13122 (Stanley)).

610. Mr. Taylor saw no requirement in either Appendix B or ANSI Standard N45.2.11 that verification of design be accomplished at a specific time. He noted that it would seem prudent to accomplish the verification before releasing the design for use but saw many factors that might bear on the risk of using a preliminary design and its benefi ts. Taylor, ff. Tr. 14846, at 3. Mr. Stanley, we note, saw those

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risks as involving economic and licensability considerations (Tr.

13122-23 (Stanley)).

611. Messrs. Bernsen, Lopez, and Taylor all agreed that the absence of documented standards for qualification of design verifiers was not a violation of Appendix B. Mr. Taylor testified that ANSI Standard N45.2.11 had no such requirement either. Bernsen/Lopez, ff. Tr. 13441, i

at 87; Taylor, ff. Tr.14846, at 34.

612. Dr. Bernsen and Mr. Lopez testified that Appendix B had no requirements for verification checklists. There are many means available for design verification control, including means mentioned in B&R's documented procedure. Bernsen/Lopez, ff. Tr. 13441, at 87-88. As to the high error rate noted, the witnesses connected that with Quadrex finding 3.1(b) (Finding 565, supra). They did not think it sufficient to support a determination that a quality assurance breakdown had taken J

place. Bernsen/Lopez, ff. Tr.13441, at 88-89.

613. Mr. Taylor and the Bechtel witnesses all concluded that generic finding 3.1(j) was not reportable under 10 C.F.R. Q 50.55(e)

(Bernsen/Lopez, ff. Tr. 13441, at 89-91; Taylor, ff. Tr. 14846, at 34-35). The separate Staff review reached the same conclusion (Staff l Exh. 136, at 23, 404-05). CCANP presented no evidence to the contrary and offered no argument in its proposed findings. We find that the item was not reportable,

f. Conclusion with Respect to Contention 9 614. We have found one additional Quadrex Report item where, in our opinion as well as that of the Staff, HL&P should have informed"NRC of a

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I potentially reportable matter. That item was a close call, where informed professional judgment might vary. Moreover, that item later 1

proved not to be reportable under 10 C.F.R. 6 50.55(e). In these circumstances, and in light of the plethora of findings where HL&P's determination to report or not report appears to have been correct, we conclude that the failure to notify the NRC (Region IV) of the Quadrex Report, and of many findings beyond those actually reported, within 24 hours2.777778e-4 days 0.00667 hours 3.968254e-5 weeks 9.132e-6 months from the time HL&P became aware of the findings or prospective findings, does not reflect adversely on the character and competence of the Applicants or cn their ability to manage the construction and operation of a nuclear power plant.

2. Contention 10 615. Contention 10, as admitted in LBP-85-6, supra, u 21 NRC at 463, states:

The Quadrex Report was relevant and material to issues of character and competence addressed in Phase I of this proceeding and should have been furnished to the Licensing Board and parties shortly after its receipt by HL&P, under obligations imposed by the McGuire line of decisions. Failure to have furnished this Report reflects adversely on the character and competence of the Applicants and on their

ability to manage the construction and operation of a nuclear ,

power plant.

616. The contention was thereafter determined by the Licensing Board to be broad enough to encompass CCANP's claim (set forth in its

April 15, 1985 motion to reopen the Phase I record) that the Board and parties should have been notified before September 24, 1981, pursuant to obligations imposed by the McGuire doctrine, of the potential removal of B&R as architect-engineer and ccostruction manager. The Board viewed

---yu-- .,- ,i-.

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the replacement of B&R in part as an outgrowth of the Quadrex Report.

Sixth Prehearing Conference Order, supra, at 3-4; LBP-85-19, supra, 21 NRC at 1715.

617. Finally, in LBP-85-6, we raised questions concerning the consistency of certain testimony of HL&P witnesses in Phase I, presented prior to the Board notifications in late September 1981 of the Quadrex Report and the replacement of B&R, with the revelations of the Quadrex Report and the resulting concerns of HL&P officials with the adequacy of B&R's engineering services. The questions, which bear on the candor of HL&P witnesses with this Board, will be discussed under the aegis of this contention.

a. Quadrex Report 618. The McGuire doctrine obligates applicants to advise licensing boards of new information that is " relevant and material" to issues pending before such boards. See Opinion, supra, pp. 32-33. The Applicants initially addressed various aspects of their obligation to have supplied this Board with the Quadrex Report before September 28, 1981, through the testimony of Messrs. Don Jordan, Jerome Goldberg and George Oprea (Jordan, ff. Tr. 11908, at 3-4; Goldberg, ff. Tr. 11491, at 53-55; Oprea, ff. Tr. 14095, at 11-13). During the reopened Phase II hearings, the Applicants presented additional testimony by Messrs.

Jordan, Goldberg, and Oprea, together with the testimony of Dr. James R.

Sumpter and Messrs. Charles G. Thrash, Jr. and David G. Barker (Tr.

15398-401 (Jordan); Tr. 15504-21 (Goldberg); Tr. 15588-95 (0prea); Tr.

15695-99 (Sumpter); Tr. 15437-55 (Thrash); Tr. 15643-49 (Barker)). In

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response to a request by CCANP, which was sanctioned by the Board (Tr.

13019-20), the NRC Staff presented testimony bearing on Contention 10 through Mr. John Collins (Tr. 15286-353 (Collins)). CCANP presented no other witnesses in support of Contention 10 but identified several documents relevant to that contention.

l 619. In its finished form, the Quadrex Report was received by HL&P on May 7, 1981. It was not furnished to the Licensing Board and parties pursuant to McGuire obligations until September 28, 1981, almost five months later. Goldberg, ff. Tr. 15491, at 17, 54-55; letter from Applicants' counsel to Licensing Board (with copies to all parties),

dated September 28, 1981. During the interim period, evidentiary hearings in Phase I were held on 34 days: May 12-15, 18-22, June 1-4, 15-20, 22-26, July 20-24, and September 14-18, 1981 (official notice; see also PID-I, supra, Finding 12, 19 NRC at 726).

620. Witnesses testifying for the Applicants concerning the relevance and materiality of the Quadrex Report to Phase I issues or contentions focussed both on the content or findings of the report and HL&P's reasons for undertaking that review. The review, which was commissioned in January 1981, was particularly sought by Mr. Jerome Goldberg, who had joined HL&P as Vice-President, Nuclear Design and Construction, on October 20, 1980. The Applicants' witnesses uniformly testified that the purpose, or the primary purpose, of the review was to obtain an objective assessment of the status of B&R's nuclear engineering and design activities. Goldberg, ff. Tr. 11491, at 4-7; Tr.

I j 11574-77, 11583-84, 12600-02, 15504 (Goldberg); Sumpter, ff. Tr. 12699, 1

l l

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at 5-10; Tr. 12760-61 (Sumpter); Jordan, ff. Tr. 11908, at 2-4; Tr.

11921-23 (Jordan);.0prea, ff. Tr. 14095, at 2-5; Tr. 14383 (0prea); see also supra, Findings 452-53.

621. In elaborating on HL&P's reasons for commissioning the Quadrex review, Mr. Goldberg stated that the objective in hiring Quadrex was to i

gain a third-party assessment of B&R's nuclear engineering and design activities in order to judge what improvements were needed to complete ,

the STP successfully, as well as to provide useful information regarding the status of the project for discussions with HL&P management, the other STP co-owners and " regulatory authorities." Those regulatory authorities included the NRC Staff and the Licensing Board. Goldberg, ff. Tr.11491, at 4-5; Tr.11582,11584,15556 (Goldberg); see also Tr.

12763(Sumpter).

622. The development of information for use at the Phase I hearings was not a primary or even a motivating purpose of the Quadrex review (Tr. 11583, 15507-08, 15554, 15560 (Goldberg)). Nonetheless, Mr.

Goldberg recognized such a result as a " side benefit" of the review. He referred to that side benefit in discussions with co-owners and HL&P officials prior to the commissioning of the project and during the early stages of the review. Tr. 11584, 15507, 15512-13, 15553-56, 15559-60 (Goldberg); Tr. 15495-96 (Thrash); Tr. 15589, 15623-24 (0prea); Tr.

l 15647 (Barker); Tr. 15697-98 (Sumpter); App. Exh. 79.

623. As it progressed, the Quadrex review turned out differently from its originally stated purpose. Among other matters, the review uncovered many details that were not "in the mainstream of the original

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premise or purpose of the review." Tr. 12600-602 (Goldberg); see also Tr. 15226-27 (Sells).

624. The Quadrex review was not commissioned as a review of the QA program for engineering; nor was it commissioned as a review of the implementation of that QA program (Goldberg, ff. Tr. 11491, at 55; Tr.

12536 (Goldberg); Stanley, ff. Tr.13047, at 4). Nonetheless, there were quality concerns addressed in the report. The three items that HL&P identified as potentially reportable are examples. Two of those items (findings 4.2.2.1(a) and 4.8.2.1(d)) were evaluated by HL&P as potentially constituting a significant breakdown in a portion of the QA

, program, within the meaning of 10 C.F.R. 5 50.55(e)(1)(i). Goldberg, ff. Tr.11491, at 28, 55; Tr.12536 (Goldberg).

625. Other findings of the Quadrex Report, although not reportable pursuant to 10 C.F.R. 9 50.55(e), nevertheless were relevant and material to the QA program for design engineering, or the implementation of that program by B&R. Examples of such findings include (but are not limited to) the asserted failure of the common instrument air line to meet the single-failure criterion (findings 4.3.2.1(a) and 4.8.2.1(a))

and an instance where a system design document failed to identify or refer to a design temperature (finding 4.7.3.1(b)). Goldberg, ff. Tr.

11491, at 39-40, 43-45; see supra, Findings 495-99, 534-35, 526-28.

626. The issues considered in Phase I were broader in scope than the " quality control-related issues" that were raised by the NRC's April 30, 1980 Order To Show Cause and Notice of Violation or by Intervenors' Contentions 1 and 2. These Phase I issues were prescribed by the

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Commission to include "the broader ramifications of the charges" bearing upon whether operating licenses should be awarded, conditioned or denied. CLI-80-32, supra, 12 NRC at 291-92.

627. During Phase I, the Applicants sponsored testimony by Mr.

Goldberg concerning HL&P's current (i.e., May 1981) management of the STP. That testimony discussed, inter alia, HL&P's organization for directing the engineering activities at STP and the means by which HL&P provided programmatic direction and review of B&R's engineering design and technical support effort. Included in this testimony were specific examples of action HL&P had "recently" taken as part of its direction of B&R design efforts. On cross-examination, Mr. Goldberg testified about

" principal problem areas" in which B&R design activities had been found

" lacking." Neither the testimony (including corrections made at the time of its introduction) nor the responses to questions on

cross-examination mentioned either the Quadrex review or the Quadrex Report (which had been received by HL&P five days prior to the introduction and receipt into evidence of the direct testimony).

Goldberg/Frazar, ff. Tr. 906, at 10-12; Tr. 2404-06 (Goldberg). This testimony was relevant and material to issues considered in Phase I. 10 C.F.R. 5 2.743(c).

628. At the time of the Quadrex review, it was innovative for a utility to comission an independent review of the work of its architect-engineer. In Mr. Goldberg's view the commissioning of the Quadrex review (inter alia) demonstrated both competence and good character on the part of HL&P. Goldberg, ff. Tr. 11491, at 68; Tr.

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15578 (Goldberg). At the reopened hearing, Mr. Goldberg acknowledged that the Quadrex review would " serve some end" in demonstrating (positively) that HL&P was fulfilling a licensee's responsibility to ensure that its contractors were performing acceptably (Tr. 15560-61 (Goldberg)). We agree. We also find that the commissioning of the Quadrex review, as well as the resulting Quadrex Report, were relevant and material to HL&P's management of the STP and to the character and competence demonstrated by HL&P in managing the STP.

629. Since the Quadrex review and the resulting Quadrex Report were relevant and material both to QA questions and to questions concerning HL&P's character and competence to manage the STP, we reiterate the conclusion we previously reached, that the Quadrex Report should have been provided to this Board shortly after its receipt by HL&P, pursuant to the McGuire lir.e of decisions (LBP-85-6, supra, 21 NRC at 461-62).

630. Whether HL&P's failure to provide the Quadrex Report to this Board on a timely basis, as set forth supra in Finding 629, reflects a defect in character that must be taken into account in a licensing decision depends upon a consideration of other factors bearing on HL&P's decision not to provide the report to this Board during the pendency of hearings in the spring and summer of 1981.

631. Mr. Goldberg was the HL&P official who was responsible for determining whether to provide the Quadrex Report to this Board shortly after its receipt by HL&P. Mr. Oprea, who was Mr. Goldberg's supervisor at that time, was informed about matters that were reported (pursuant to 10 C.F.R. 6 50.55(e)) but was not consulted as to whether various

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matters should be submitted to NRC, including this Board (pursuant to 10 C.F.R. 9 50.55(e) or any other authority, including McGuire). Tr.

12559-60(Goldberg);Tr. 15594 (0prea).

632. Mr. Goldberg testified that, at the time the Quadrex Report was received by HL&P, he was aware of HL&P's obligation to provide the Licensing Board with newly developing information that was " relevant and material" to issues pending before the Board (Tr. 12548-49 (Goldberg)).

The McGuire obligations have never been prescribed by regulation but, rather, have been the product of Appeal Board and Commission decisions on discrete, ad hoc questions. Reflecting that circumstance, although the McGuire obligation was first enunciated in 1973, many of its facets had not been announced until after the May-September 1981 period. Thus, the scope of the obligation--and particularly the caveat that, in the event of reasonable doubt as to materiality, the information should be disclosed to the Licensing Board "for the board to decide its true worth"--was not defined with precision until 1984. Metropolitan Edison Co. (Three Mile Island Nuclear Station, Unit 1), ALAB-774,19 NRC 1350, 1358(1984).

633. HL&P has during the course of these proceedings forwarded to the Licensing Board (and parties) information beyond that which is

strictly " relevant and material" to issues before us. For example, as we understand it, HL&P has forwarded copies of virtually all reports submitted to the Staff pursuant to 10 C.F.R. 6 50.55(e), responses to notices of violation, and other correspondence regarding the STP. We do not construe the Applicants' delay in furnishing the Quadrex Report to

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this Board as suggesting a pattern of withholding " relevant and material" information from the Board.

634. Mr. Goldberg testified that, in terms of distribution outside HL&P, the Quadrex Report was treated like numerous other reports and studies on STP. It was distributed to individuals whom HL&P management regarded as having a need to use the information in it. Mr. Goldberg also testified that it was not HL&P's general practice to file consultant reports with the NRC. On the other hand, Mr. Goldberg stated that he regarded consultant reports as "just extensions of the day to day business of the licensee." Goldberg, ff. Tr.11491, at 52; Tr.

12404-06, 12554 (Goldberg); Tr. 12885-88 (Sumpter).

635. Mr. Goldberg repeatedly expressed his belief that there was no ,

i regulatory requirement for HL&P to have submitted the Quadrex Report (as a whole) to NRC, either pursuant to 10 C.F.R. Q 50.55(e) or otherwise (Goldberg, ff. Tr.11541, at 52; 12507-08; 12612 (Goldberg); see Tr.

12886 (Sumpter)). He also acknowledged that he did not wish to submit the Quadrex Report to the NRC gratuitously (Tr. 12405, 12605-06 (Goldberg)). Mr. Goldberg explained this position on the basis that, if the Quadrex Report were transmitted to the NRC, it would be sent, in the ordinary course of business, to the Public Document Room. He viewed the report as having been written rather hurriedly and, in some cases, on the basis of incomplete information; and as reflecting some judgments about acceptable engineering practice that he did not share. As a result, Mr. Goldberg foresaw a high likelihood that the report could be misread or quoted out of context, if it had been made publicly available

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without extensive explanatory materials. Goldberg, ff. Tr.11491, at 52; Tr. 12603-05 (Goldberg); see also 0prea, ff. Tr. 14095, at 6.

4 636. Mr. Goldberg acknowledged certain instances where HL&P had submitted documents or information to NRC without being required to do so (Tr.12410-12 (Goldberg)).

637. Although HL&P made no effort to provide copies of the Quadrex Report to NRC gratuitously, it informed certain NRC officials of the existence of the review and (when available) the report. NRC was first informed of the review in January or February 1981, when during a meeting, Mr. Goldberg advised Mr. Donald E. Sells, NRC Project Manager for STP, that the review had been authorized. Sells, ff. Tr. 15190, at 1 and Typewritten Statement, p. 1; Tr. 15229 (Sells); Goldberg, ff. Tr.

11491, at 9; Tr. 12498-99 (Goldberg); CCANP Exh. 138; CCANP Exh. 144, Enclosure 2. On April 21, 1981, Mr. Goldberg advised Mr. Sells by l telephone that the Quadrex Report would be completed in early May 1981, that the review would likely result in some 10 C.F.R. 5 50.55(e) reports i and that Mr. Sells could see the report once HL&P received it (Sells, op. cit. , Typewritten Statement, at 1; Goldberg, ff. Tr.11491, at 49-50; CCANP Exh. 138; CCANP Exh. 144. Enclosure 2).

638. During the week of May 11, 1981, Mr. Goldberg briefed Mr.

Sells on the general content reflected in the Quadrex Report, including the scope of its findings as well as a more detailed description of the three items that had been reported pursuant to 10 C.F.R. 6 50.55(e).

The briefing took place at the Holiday Inn in Bay City, Texas, during a luncheon break at the Phase I hearings and lasted for about 15 to 20 a

l l

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^

minutes. At that briefing, Mr. Goldberg advised Mr. Sells that he (Sells) could look at the report at any time, but only within the confines of HL&P facilities. Apparently review of the report by other NRC officials was not discussed. Sells, ff. Tr.15190, Typewritten Statement, at 2; Tr. 15225-26 (Sells); Goldberg, ff. Tr. 11491, at 49-50; Tr. 14402-03 (0prea).

639. The record is not clear whether Mr. Sells was shown the Quadrex Report during the May 1981 briefing by Mr. Goldberg. Mr.

! Goldberg recollects showing the report (or at least Volume I) to Mr.

Sells at that meeting (Tr. 11336-37,12532-35(Goldberg)). On the other hand, Mr. Sells does not recall whether Mr. Goldberg had any notes or papers with him but states that Mr. Goldberg did "not" have a copy of the report with him and did "not" offer to allow Mr. Sells to see the report at that time (Sells, ff. Tr. 15190, Typewritten Statement, at 2).

Given the size and bulk of the report (see App. Exh. 60), we believe that Mr. Sells would have remembered being shown the report if Mr.

Goldberg had, in fact, done so. Given the predilection of Mr. Goldberg i

to limit any review of the report to the confines of HL&P facilities, we believe it likely that Mr. Goldberg did not have the report with him at the briefing, which took place offsite. In any event, the scope, length and complexity of the Quadrex Report would have precluded any meaningful review of the report during the 15- to 20-minute briefing. Moreover, as we found previously (supra, Findings 473-74), whether or not Mr. Sells was shown the report at this briefing is of little, if any, significance to our evaluation of HL&P's character.

i

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640. Although Mr. Goldberg did not voluntarily provide the report to the public, he did not attempt to conceal its existence. During the opening week of the Phase I hearings, Mr. Goldberg mentioned the report in response to the inquiry of an Austin, Texas newspaperman. Tr.

12557-59, 12598-99 (Goldberg).

641. Subsequent to the May 1981 briefing, Mr. Sells advised Mr. H.

Shannon Phillips, senior resident inspector at STP from September 1979 to January 1982, of the existence of the Quadrex Report and of the three 10 C.F.R. $ 50.55(e) items that HL&P had identified therein. On August 18, 1981, during the course of a new NRC Staff investigation of B&R Engineering, Mr. Phillips made a broad request for documents that could

, identify adverse conditions at B&R Engineering. On August 19, 1981, he was provided, inter alia, with the Quadrex Report; he was advised that the report was company confidential and strictly controlled, and that he j could neither remove it from the offices nor reproduce any part of it.

l Mr. Phillips was unable to review the report at that time because of lack of time to do so, but he later received and reviewed the report at the site on August 25, 1981. Mr. Phillips advised Mr. Sells by telephone that he had seen the report and expressed some concern about

! the report to Mr. Sells. Phillips, ff. Tr.15192, at 3-4, and Professional Qualifications at 1; Sells, ff. Tr. 15190, Typewritten Statement, at 2.

642. On the morning of August 27, 1981, Mr. Phillips also informed Mr. John Collins, then Deputy-Director of Region IV, of the report.

Later on August 27, 1981, Mr.CollinscalledMr.Oprea(ofHL&P)by

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l telephone for the purpose of requesting that the Staff have unrestricted access to the report. At the same time, Mr. Collins advised and encouraged Mr. Oprea seriously to consider turning over the report to the Licensing Board. Mr. Collins indicated that if HL&P failed to follow this suggestion, the Staff would turn the report over to the Board. Mr. Collins did not remember Mr. Oprea's precise response to the request but recalls that the response was not negative. Tr. 15288, 15295, 15344-45 (Collins); CCANP Exh. 138. Mr. Collins advised several NRC officials of his recommendation to Mr. Oprea and, at a later date, included a reference to the recommendation in a chronology that he prepared concerning the reporting of the Quadrex Report to NRC (Tr.

15342 (Collins); CCANP Exh. 138). Although Mr. Oprea did not remember the August 27, 1981 conversation or recommendation (Tr. 14300-04, 15372-73 (0prea)), we find that it likely took place as described by Mr.

Collins, on the basis of his later-prepared chronology to that effect as well as his testimony before us.

643. Following the making available of the Quadrex Report to Mr.

Phillips on August 19, 1981, Mr. Oprea called Mr. Karl Seyfrit, then Administrator of Region IV, to suggest a briefing of Region IV personnel by HL&P on the Quadrex Report. The briefing was to be held, and was held, at Region IV offices on September 8, 1981. The HL&P employees who conducted the briefing included Messrs. Oprea and Goldberg. The HL&P officials did not bring a copy of the Quadrex Report with them and did not provide Region IV a copy. Region IV was not provided a copy until Mr. Sells did so in October 1981, subsequent to the date that the report

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was transmitted to the Board and parties. Tr. 13311-12, 15350-51 4 (Collins); Oprea, ff. Tr. 14095, at 6-7; Tr. 15372 (0prea); Goldberg, ff. Tr. 11491, at 53.

644. After Mr. Phillips advised Mr. Sells by telephone of his concerns with respect to the Quadrex Report (supra, Finding 641), Mr.

I Sells informed his supervisors of Mr. Phillips' concerns and requested ,

4 l

that he (Sells) go to Texas to examine the report. Mr. Sells was given the entire report in Houston, Texas during the week of the September 1981 Phase I hearings (September 14-18,1981). He reviewed Volume I j (the Executive Summary), discussed his reaction with Staff counsel

(Messrs. Reis and Gutierrez) and advised them that the Board should see the report. Mr. Reis agreed. Mr. Sells understood that Mr. Reis so advised the Applicants' lawyer, who within two weeks provided a copy of ,

the report to the Board and all parties. Sells, ff. Tr.15190,

! Typewritten Statement, at 3; Tr. 15222, 15254-55 (Sells); see Tr.

12555-56 (Goldberg); Tr. 15373 (0prea).

, b. Replacement of Brown & Root, Inc.

645. With respect to CCANP's claim that the Board (and parties) should have been notified earlier of the replacement or potential replacementofB&Rasarchitect-engineer (seesupra, Finding 616),the Applicants presented testimony of the three HL&P management officials who had principal responsibility for the STP during 1981: Mr. Jordan (then President and Chief Executive Officer), Mr. Oprea (then Executive l Vice President, Nuclear) and Mr. Goldberg (then Vice President, Nuclear i

_ _ _ _ . _ _ _ _ _ _ _ _ . . ___. _ . _. _...___ ~ _ _ , _ _ _ _

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Engineering and Construction). Jordan, ff. Tr.11908, at 4-14; Oprea, ff. Tr. 14095, at 8-11, 14-16; Goldberg, ff. Tr.11491, at 56-58.

646. Mr. Jordan, as Chief Executive Officer of HL&P in the 1980-1981 period, was the responsible officer for initiating any

] exploration of the feasibility of replacing B&R as architect-engineer.

l In June 1980, he and Mr. Oprea questioned whether an experienced A-E alternative to B&R would be available. At that time, Mr. Jordan explored the feasibility of replacing B&R, when he contacted tiso other architect-engineers (Bechtel and Ebasco) to determine the feasibility of replacing B&R. Mr. Jordan abandoned efforts to replace B&R at that time, when he was advised that those architect-engineers would not j consider taking the job and that the better course was for HL&P to attempt to improve B&R's performance. Jordan, ff. Tr. 11908, at 7; Tr.

11970,11974 (Jordan); Oprea, ff. Tr.14095, at 9.

647. Shortly after his assumption of duties for HL&P, Mr. Goldberg

began to raise questions concerning the adequacy of B&R's engineering services and, as early as January 1981, suggested to HL&P management that HL&P explore alternatives for completing the STP without B&R as architect-engineer. Messrs. Jordan and Oprea rejected that position at that time, since they felt the best option was to improve B&R's performance. Goldberg, ff. Tr.11491, at 58-59; Oprea, ff. Tr.14095, at 8-10; Jordan, ff. Tr. 11908, at 8; Tr. 11974 (Jordan); see also Tr. '

10518-20(Goldberg).

648. On April 10, 1981, executives of the STP co-owners met with B&R in Corpus Christi, Texas, to di. cuss, inter alia, measures to i

_ . , _ _ _ . _ . . - . - _n.__,_m._ . ,

..,_..,____.~.__.__..,_,______.sx__,.,..__y. c,. . _ . . , _ .___,_,,,,_.__._,-_-,,_.-.....,-_,_.-_,_.r.

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improve B&R's engineering performance at STP, including the need to attract more experienced personnel. At that meeting, Mr. Goldberg conveyed the view that B&R needed to acquire a senior executive with i

nuclear experience to take complete charge of its STP activities.

, Subsequent to this meeting, Mr. Goldberg met with B&R executives to follow up on various suggestions. B&R resisted hiring a senior nuclear executive who would report directly to the President of Blo. Mr. Jordan then undertook to pursue this suggestion with higher levels of B&R management. Following a meeting of the STP co-owners with B&R at San t

Antonio, Texas, on June 26, 1981 HL&P officials became convinced that I

the prospects for sufficient improvement by B&R were poor. Immediately thereafter, on June 29, 1981, Mr. Jordan met with Messrs. Oprea, Goldberg, and David G. Barker (then HL&P Project Manager for the STP),

and they agreed that HL&P should seriously investigate feasible

alternatives for B&R as architect-engineer. Jordan, ff. Tr. 11908, at 8-9; Tr. 11950, 11952 (Jordan); Goldberg, ff. Tr. 11491, at 56, 59-60; Oprea, ff. Tr.14095, at 9-11.

649. Despite recommendations from Mr. Goldberg early in 1981 to l consider alternatives to B&R as architect-engineer, Mr. Jordan did not authorize HL&P management officials actively to explore whether such alternatives were available until June 29,1981 (Jordan, ff. Tr.11908, at 9-10; Tr. 11999-12000 (Jordan)).

650. In early July 1981, within 7 to 10 days of the June 29, 1981 decision to investigate alternatives, Messrs. Goldberg and Oprea contacted four prospective contractors and ascertained that each would I

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be interested in undertaking the completion of the STP. Invitations to submit proposals were sent to them in late July, and all the proposals were received by mid-August 1981. After an evaluation process, Messrs.

Oprea and Goldberg made recommendations to the STP Management Committee, the HL&P Board of Directors and the Chief Executive Officers of the project owners that HL&P enter into negotiation with Bechtel. Those approvals were received on September 12, 14 and 15, 1981, respectively.

Negotiations with Bechtel resulted in an agreement in principle by September 24, 1981 (the day on which the Licensing Board was notified),

and the actual preliminary agreement was executed on October 3, 1981.

Goldberg, ff. Tr.11491, at 56-57; Tr.12607 (Goldberg); Oprea, ff. Tr.

14095, at 11; Tr. 14363 (0prea).

c. Candor of HL&P's Phase I Testimony 651. As set forth supra, Finding 617, in LBP-85-6 we raised

( questions about the candor of certain HL&P witnesses in Phase I, given their failure before late September 1981 to have mentioned either the Quadrex Report or their dissatisfaction with B&R's engineering services.

The witnesses in question were Messrs. Goldberg, Jordan, Oprea and Frazar. We supplemented the questions raised by LBP-85-6 with additional questions posed during Board questioning of those HL&P witnesses in Phase II. We here review HL&P's responses to the Board inquiries.

1 4

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' (1) Quadrex Report (a) Testimony of Mr. Goldberg i 652. At Tr. 1095-96, Mr. Goldberg was asked to identify " major" contractors at STP other than B&R and Westinghouse, and whether other contractors had responsibility for QA and QC. Mr. Goldberg did not l mention the Quadrex Corporation or the Quadrex Report because he j believed that Quadrex was not a " major" contractor and that it did not

! have any QA or QC responsibilities. Goldberg, ff. Tr. 11491, at 61-62.

l Although the questions asked clearly included " contracts for consulting I services" within their scope, we see no reason for doubting Mr. !

! Goldberg's stated belief that he did not regard Quadrex as a " major" contractor to be equated with BAR or Westinghouse. Moreover, the l Quadrex Corporation clearly did not have QA or QC responsibilities as i those terms are normally understood.

653. At Tr. 1143-52, Mr. Goldberg was asked questions about the B&R basic design documents that were reviewed by HL&P and how such reviews were performed. Mr. Goldberg explained that he regarded the questions i

1

as directed at the normal type of HL&P review and that he did not regard i

j the Quadrex review or report as an example of such a " normal" review. .

) He added that the Quadrex Report did not address the types of B&R design documents that would or should have been reviewed by HL&P and that the report did not focus on problems in the relationship between the HL&P and B&R engineering organizations. Goldberg, ff. Tr. 11491, at 62. We j find this explanation to be credible, although we do not subscribe in a i

! h j r 1

_____._._.._.m._-_.___._,__.-_,____-. - .__ ___. ,___. . _ ... ,_ _ _ _ -.__ _ _ _ _ ,, ,-..,_ ,_ __ ,, _ ,

J

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full to Mr. Goldberg's stated understanding of the import of the Quadrex l

Report.

654. At Tr 1158-59, Mr. Goldberg was asked to describe his overall i

l perception of the challenges he faced when he first joined HL&P (in October 1980). Given the time frame inherent in the question, as well as the generality of both the question and the response, we find no i

fault with Mr. Goldberg's failing to mention the Quadrex review or I report in this context.

, 655. At Tr. 2404-06, Mr. Goldberg was asked to evaluate B&R's then-current management of design, and specifically to delineate the

! principal areas in which he found B&R to be lacking. Mr. Goldberg reiterated his previously expressed view that there is always room for improvement, and he outlined two design areas where he felt B&R could 1

f improve. Those areas represented two of the three areas that were the

. subject of 10 C.F.R. 6 50.55(e) reports initially arising from the i

Quadrex Report. Mr. Goldberg explained that he did not mention the j third such area because he was interrupted for a clarification, after j which the examiner changed topics. Goldberg, f f. Tr.11491, at 64. We l accept that explanation for the omission of the third 6 50.55(e) area.

But Mr. Goldberg also explained his failure to mention or refer to the

(

Quadrex review or report on the basis that knowledge of the Quadrex Report was not necessary to understand his answer (id. at 65).

656. Although the foregoing observation may be accurate, it misses I

the point with respect to the obligation of witnesses to provide not only understandable but also full and complete answers to questions. l I

1

i i

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Full and complete answers to the questions on Tr. 2404-06 would have included references to the Quadrex review and report. Failure to have provided such references represents a character deficiency on the part of HL&P. However, we find no evidence of any intent to mislead or provide false testimony to this Board. We find that HL&P in this

instance construed its obligation to proside full and complete answers to questions too narrowly and accordingly that it did not satisfy its obligation for candor fully.

j 657. As part of his direct testimony in Phase I, Mr. Goldberg reviewed HL&P's organization and methodology for providing programatic direction to the B&R design effort. He described the function of HL&P's STP Project Engineering Group (which provided such programmatic i direction) and the process by which HL&P performed itr, engineering review. He also provided " specific examples of action HL&P has recently taken as part of its direction of B&R construction and design efforts."

1 That testimony was prepared and served on the parties before the Quadrex Report was issued; but it was updated and corrected and introduced int'o evidence on May 12, 1981, five days after HL&P's receipt of the report.

Goldberg/Frazar, ff. Tr. 906, at 10-12; Tr. 859 (Axelrad); Tr. 861-62

(Goldberg).

658. In describing HL&P's direction of B&R's engineering, the foregoing testimony referred neither to the Quadrex Report nor to HL&P's May 6, 1981 direction to B&R (App. Exh. 61) to provide an analysis of Quadrex findings. The Board finds that the Quadrex Report and the May l

6,1981 letter to BAR were prime examples of the types of activities j

l l

1

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I described by Mr. Goldberg in his direct testimony. That being so, the report and letter should have been mentioned, at the time the direct testimony was updated and introduced into evidence. As set forth in our l

Opinion (supra, pp. 40-41), we do not find Mr. Goldberg's explanation for the omissions to be credible. Nonetheless, we also find that, j although the omissions detract to some extent from HL&P's managerial l character, they do not do so to a degree that would warrant license j denial.

(b) Testimony of Mr. Jordan 659. At Tr.1269-70, Mr. Jordan was asked questions concerning the j- steps that HL&P was taking to ensure that quality was built into the project. He did not mention the Quadrex review or report. Mr. Jordan explained that he construed the questions as related to construction

l. quality and as not encompassing the engineering matters to which the i

Quadrex Report related. Jordan, ff. Tr. 11908, at 11-12. We find that

! response to be credible and reasonable.

1 660. At Tr.1294, Mr. Jordan was responding to questions concerning blame for activities that resulted in the Show-Cause Order. His statement that the project was in " good order" was clearly in that context. We agree that he need not necessarily have mentioned the Quadrex Report in responding to those questions. Jordan, f f. Tr.11908, l

, at 12.

)

661. At Tr. 1337, Mr. Jordan was asked questions concerning B&R's i

j nuclear experience during the period before the Show-Cause Order was I

issued. We agree with Mr. Jordan's explanation that, given the time 4

i

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frame of the questions, there was no reason for him to have mentioned 1

the Quadrex Report. Jordan, ff. Tr.11908, at 13.

662. At Tr. 1402-05, Mr. Jordan was asked to identify " major

problem areas" at STP. His answer reflected changes that were made or were to be made in the QA/QC program and in the construction organization; it made no reference either to design engineering or to the Quadrex Report. Mr. Jordan explained that he had in mind QA improvements resulting from the Show-Cause Order and additional changes t

relating to activities at the site, and that the questions asked did not bring to his mind the Quadrex Report or concerns regarding B&R I engineering. Mr. Jordan added that the reference to " major problem f areas" that he previously had mentioned referred (in his mind) to an earlier discussion of QA/QC problems. Jordan, ff. Tr. 11908, at 13-14.

Although we would not necessarily construe " major problem areas" as narrowly as did Mr. Jordan, given the context, and absent an explicit reference to engineering in the question, we find no reason for doubting the credibility of Mr. Jordan's response.

i 663. At Tr.1224-51, Mr. Jordan was asked questions that, he

understood, focussed on whether, in light of the discovery of the error I in B&R's estimate of the percentage of engineering complete at the time i the construction permit was issued, HL&P had subsequently conducted any 4

studies of BAR's integrity or the honesty of B&R's reports to HL&P. Mr.

Jordan responded negatively, to the best of his recollection, apparently believing this response covered the specific question asked completely i (Tr.1244,1246-51). He explained his failure to mention the Quadrex 3

4

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,-,.-w. . - - . . . , - - - - , - . _ ..my,~_,---_,y....7r___,_,,.,_m_,,

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4 review or report on the ground that he viewed the Quadrex Report as addressing B&R's engineering performance, not its integrity or truthfulness (Tr. 12139-41 (Jordan)). We agree that this explanation is satisfactory.

The Board notes, however, that it would not have been inappropriate for Mr. Jordan to have mentioned the Quadrex Report at this time. The Applicants had objected to the entire line of questioning at Tr. 1224-51, on the ground that the percentage completion

! of B&R's engineering was outside the scope of Mr. Jordan's testimony and, indeed, the proceeding itself (e_.3., Tr.1224,1226-27,1229-30,

1232-33). When these objections were overruled, it should have become l apparent that the degree of engineering completion was not outside the scope of Mr. Jordan's testimony, much less the proceeding (Tr.1233, 1234). Thus, even though Mr. Jordan properly viewed the Quadrex Report as not focussing on B&R's integrity, a complete answer to the line of questions might well have engendered a reference to the Quadrex review or report.

) (c) Testimony of Mr. Oprea 664. At Tr. 3469-70, Mr. Oprea was asked questions about an

" engineering discrepancy" and whether it provoked any study or further

analysis of the competence of B&R, We agree with Mr. Oprea that the questions related to a discrete time period before the Show-Cause Order was issued and, in that regard, would not have called for a mention of the Quadrex review or report. Oprea, ff. Tr. 14095, at 20.

1

. . . - - _ .-. _. -_- -_ . _ _ . = -

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665. At Tr. 3485-86, Mr. Oprea was asked whether, in hindsight, he should have established a system for more careful review of B&R's engineering work. He conceded that HL&P might have performed additional engineering reviews of B&R, without mentioning the recently completed Quadrex review, which had in fact been performed. Mr. Oprea explained that the question was the last in a series of questions pertaining to whether B&R's lack of experience as an architect-engineer for a nuclear project contributed to construction delays, and that his earlier answers had related the entire series of questions to excessively complex construction procedures. He went on to state that, because of the nature and context of the question, he did not consider mentioning the Quadrex Report or the pending review of b&R engineering services.

Oprea, ff. Tr. 14095, at 17-18.

We are not persuaded by this explanation. It appears to be an attempt at after-the-fact reconciliation, which construed the question more narrowly than is reasonable. Indeed, at Tr. 3484, Mr. Oprea indicated the broad nature of the question and went on to mention B&R's recruitment efforts in " engineering design", as well as other areas.

For that reason, not to have mentioned the Quadrex review or report at Tr. 3486 represented questionable judgment. However, these circumstances alone would not cause us to find that Mr. Oprea was consciously attempting to mislead this Board. He apparently viewed the scope of the hearing as narrower than was appropriate, and his answers to questions reflect that understanding. These responses, for reasons stated in the Opinion (supra, p. 41), would detract from HL&P's

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character but not to a degree sufficient to warrant the denial of operating licenses. In that connection, we note that Mr. Oprea is no longer an HL&P employee and does not appear to be likely to be involved in the management of STP operations. Oprea, ff. Tr.14095, at 1; Tr.

14096(0prea).

666. We agree with Mr. Oprea that the Quadrex review or report would not have been called for in response to questions at Tr. 3527 (0prea, ff. Tr.14095, at 19).

667. At Tr. 5458-74, Mr. Oprea was asked questions concerning the degree of responsibility left to B&R prior to the Show-Cause Order, as contrasted with HL&P's then-current (1981) supervision of B&R; the effect of the growing degree of supervision by HL&P on the working relationship between the companies; NRC's justification for the Show-Cause Order and the beneficial impact of the Order on the STP; and an allegation concerning construction at the STP and HL&P's efforts to resolve that and other incidents. We agree with Mr. Oprea (0prea, ff.

Tr.14095, at 19-20) that these questions would not have called for mention of the Quadrex review or report, since they were asked in the context of the Show-Cause Order and Inspection Report 79-19 and did not explicitly refer to engineering activities.

(d) Testimony of Mr. Frazar 668. Mr. Frazar never attended any of the Quadrex briefings, and he did not review the Quadrex Report. At the time he testified in Phase I, he had only limited familiarity with B&R's engineering performance. To the extent he was aware of such performance, he knew that HL&P QA and

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the NRC had audited and inspected B&R's engineering activities and, although some deviations had been uncovered, he believed that applicable QA requirements were generally being observed. Frazar, ff. Tr.14412,

> at 4-5. Absent explicit questions, he could not have been expected to mention the Quadrex review or report.

i 669. At Tr. 3249-50, Mr. Frazar was asked about HL&P's "immediate ,

needs." His response referred to the 7eed for better training and staffing for both HL&P and B&R but did not mention the Quadrex Report or the potential for fundamental changes with regard to B&R. Mr. Frazar explained that at that point his testimony was focussing on the j organizational structure for the STP QA function and improvements that nad been made to that structure, and that in his opinion the Quadrex Report and engineering QA had no relationship to such matters. Mr.

Frazar added that, even if he had thought that the questions encompassed engineering QA, he had no concerns to mention on those subjects.

Frazar, ff. Tr. 14412, at 6. Even though we may not share entirely Mr.

Frazar's opinions, given the generality of the questions posed and Mr.

Frazar's lack of detailed familiarity with the Quadrex Report, we have no reason to doubt the sincerity or veracity of Mr. Frazar's explanation.

670. Mr. Frazar explained that, at Tr. 3527-28, during the course of questioning of Mr. Oprea regarding a provision of the HL&P/B&R I

contract (CEV Exh. 1), he volunteered some information concerning implementation of the QA/QC program. In context, he viewed this information as bearing on QA and construction activities and as not

_m_ _ . . . ___,, _ , _ . _ _ . - - _ . _ , . _ _ _ . , _ _ - - , , _ . . _ . . _ _ _ . . _

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involving significant problems in QA implementation beyond those already reported to the NRC. Frazar, ff. Tr.14412, at 7. Given Mr. Frazar's lack of detailed knowledge at that time of the Quadrex Report, this response is reasonable.

671. At Tr. 5419-22, Mr. Frazar was questioned concerning several documents prepared in 1978 and 1980 in which B&R's QA program was discussed (App.Exhs.44-46). Testimony on those documents (or the meetings reflected thereby) would not logically have mentioned the Quadrex review or report, particularly in the absence of an explicit reference by the questioner to design engineering activities. Frazar, ff. Tr. 14412, at 7-8.

(2) Testimony Concerning Adequacy of B&R Design Engineering Services (a) Testimony of Mr. Goldberg 672. As set forth earlier (supra, Finding 654), Mr. Goldberg reasonably interpreted the questions at Tr. 1158-59 to relate to the time period when he first joined HL&P (October 1980). Given that understanding, Mr. Goldberg would not have been called upon to mention his concerns about B&R's engineering performance, which developed during the spring of 1981.

(b) Testimony of Mr. Jordan 673. At the time Mr. Jordan testified in May 1981, he had not yet determined to explore alternatives to B&R as design engineer. Earlier, in June 1980, he and Mr. Oprea had questioned whether alternatives were available, if necessary. See supra, Finding 646.

. . . - - _ . = - - . _ .

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674. Mr. Jordan's statement at Tr. 1294 that the project was in

" good order" was in the context of activities that led to the Show-Cause Order (see supra, Finding 660) and, in that context, need not have been qualified by the engineering difficulties that HL&P then perceived on the part of B&R.

l (c) Testimony of Mr. Oprea 675. At Tr. 3470-72, Mr. Oprea was asked whether he and his staff had discussed removal of B&R during the period prior to the Show-Cause Order. He discussed several such occasions in 1978 and 1979. At Tr.

3473, he was asked whether, during the period after the Show-Cause Order, he had had discussions with his staff or other individuals concerning removal of B&R. His negative answer would be completely candid only if " removal" were narrowly construed to include only the i formal steps requisite to removal. In answering questions at Tr.

1 3470-72, he had not construed removal in such a formalistic manner. At the very least, Mr. Oprea should have mentioned discussions he must have had with Mr. Jordan in 1980 (supra, Finding 646). Nonetheless, given i

then-current attempts to improve B&R's performance, we find no intent by Mr. Oprea to provide misleading testimony to the Board.

676. We have previously determined that Mr. Oprea should have mentioned the Quadrex review or report at Tr. 3485-86 (supra, Finding 665). For the same reasons, he should have mentioned his concerns at i

that time about B&R engineering services. However, for reasons also set forth in Finding 665, we do not believe that Mr. Oprea was consciously l attempting to mislead this Board or that his answers, although

1

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! detracting from HL&P's character, form a sufficient basis for denial of operating licenses (either considered alone or in conjunction with other

instances of less-than-complete candor of HL&P witnesses as set forth herein).

d. Conclusion With Respect to Contention 10 677. Although we have found several instances in Phase I where HL&P

witnesses should have mentioned the Quadrex review or report, or HL&P's f dissatisfaction with B&R design engineering services, we have found no instance where we could conclude that the witnesses were deliberately j attempting to mislead the Board. We also have found no evidence of a conspiracy to withhold information from the Licensing Board, as alleged by CCANP (CCANP F0F-II, at 28, 145). Although we do not regard HL&P's l candor as highly as we did in PID-I, we do not find sufficient bases for

~

concluding that HL&P's lack of candor in defined instances (as

.,; comprehended by Contention 10) is sufficient to demonstrate that HL&P lacks the character to complete or operate the STP.

C. Current Competence of HL&P and its Contractors i 1. Partial Sumary Disposition j 678. On December 21, 1984 (corrected and updated on January 24, 1985), the NRC Staff filed an affidavit on the current competence of HL&P and its new contractors, Bechtel and Ebasco (hereinafter " Staff i

j i

i i

B

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Aff.").43 Various paragraphs of that affidavit were executed by the following individuals:

a. William A. Crossman, Chief, Reactor Projects Section B, Branch 1, Region IV, NRC, since May 1974. From that date until April 1984, Mr. Crossman supervised the project inspectors who inspected the STP.

b. Johns P. Jaudon, Chief, Reactor Projects Section A, Branch 1, Region IV, NRC, since April 1984. In that position, Mr. Jaudon has supervised project inspectors who inspected the STP.

c. Dan Paul Tomlinson, Senior Resident Inspector, Reactor Projects Section B, Branch 1, Region IV, NRC, from September 1983, through February 1985. In that position, as well as that of itinerant inspector, Mr. Tomlinson has engaged in STP inspections from 1982 to the present and is a co-author of the SALP report (see Finding 758, infra) covering the period from December 1, 1982 through November 30, 1983 (I&E Rept. 83-26, June 22, 1984).

679. On February 25, 1985, the Applicants supplemented the Staff affidavit with a joint affidavit on HL&P's competence (hereinafter " App.

Aff."), with various paragraphs executed by Mr. Mark R. Wisenburg, 43 The affidavit filed on December 21, 1984 was in unexecuted form.

The executed copy of thel affidavit was filed on January 4, 1985.

l

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Manager, Nuclear Licensing, HL&P, and by Mr. James E. Geiger, P.E. ,

Manager, Quality Assurance, HL&P.

680. As set forth in PID-I, Finding 10, 19 NRC at 725, we were advised on September 24, 1981, that B&R had been dismissed as architect-engineer and construction manager for the STP, and on November 5, 1981, that B&R would not continue as constructor. See also Staff Aff. (Crossman),114-5. Following these announcements, all ongoing safety-related construction was brought to an orderly conclusion, and no new safety-related construction was commenced by B&R.

B&R left STP by December 1,1981, except for caretaking activities performed by B&R personnel under the surveillance of HL&P and Bechtel.

HL&P halted all safety-related work on December 1, 1981. Staff Aff.

(Crossman), 11 5-6; see also Memorandum and Order (Cancelling Evidentiary Hearing on Transition Period Construction Activities), dated November 13, 1981 (unpublished); Fourth Prehearing Conference Order, supra, at 2.

681. Prior to the restart of safety-related construction, HL&P developed a transition program to control or transfer engineering and construction management functions from B&R to Bechtel. In response to Staff imposed requirements, HL&P supplied information to the Staff concerning (1) organizational structure and relationships between HL&P, Bechtel and Ebasco with respect to QA, design review and design verification; (2) HL&P's program for resuming safety-related work; and (3) corrective actions (or explanations for the lack of such actions) for substantive issues raised in the Quadrex Report. Incremental work

L l

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packages were required to be submitted to the Staff 60 days prior to the scheduled restart of particular safety-related work. Staff Aff.

(Crossman), 11 6-7.

682. The NRC Staff developed an extensive program for the review and inspection of licensing activities associated with the change in contractors and the restart of safety-related construction. Primary review and inspection responsibilities for transition activities were vested in Region IV, but other NRC offices (particularly the Office of Nuclear Reactor Regulation (NRR)) also participated. (A further description of NRC's review efforts concerning the Quadrex Report appears in Findings 450, 481, supra.) Following detailed review and approval by the Staff, HL&P resumed safety-related construction activities in November 1982, when cadwelding in the Mechanical Electrical Auxiliary Building and concrete placement of the Unit 2 diesel generator building slab comir.enced. Thereafter, construction efforts and activities were increased incrementally, and the work force was fully staffed by July-September 1983. Staff Aff. (Crossman),

11 8-13. At the end of January 1985, the work force totalled 8277 persons, exclusive of HL&P personnel (App. Aff. (Wisenberg), 1 4).

683. Since the resumption of construction, considerable progress toward the completion of the STP has been achieved. In early 1982, when construction activities were halted, approximately 35% of STP (including Units 1 and 2 and balance-of-plant) had been completed. At the end of January 1985, approximately 65% of STP was complete (including approximately 75% of Unit 1). App. Aff. (Wisenberg), 1 4.

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684. The period of more than two years of safety-related construction activities from November 1982 until the close of the Phase II record in August 1985, together with the substantial work accomplished, as set forth in Finding 683, supra, prov des sufficient data for us to evaluate the current competence of HL&P and its new contractors and to complete our review of CLI-80-32 Issues B and D.

685. From July 1982 through December 1984, a total of 46 inspection reports on the STP were issued by the NRC Staff. These reports included one SALP report and one report on a special nondestructive examination inspection. A total of ten violations and one deviation were documented in these reports. One violation was later withdrawn because it was determined not to be a valid violation. The violations and deviation were as follows:

Identifying Severity Brief number level description 82-16-01 V Record storage area requirements 83-02-01 V Record retention requirements 83-11-01 V Procedures for concrete placement 83-17-01 IV Material control and identification 83-20-01 V Record retention requirements 83-20-02 Deviation Failure to perform on-site hardness tests 83-22-01 IV Failure to take corrective action 83-22-02 IV Failure to take corrective action 83-24-02 IV Failure to follow standard test method 84-02-01 Withdrawn 84-04-01 V Procedures for material control 84-07-01 IV Document control The Applicants further called attention to two additional violations dealing with activities before mid-1982 but documented in inspection reports issued after the closing date for reports included in the

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Phase I record. These violations were identified as numbers 82-01-01 (Severity Level V) and 82-02-01 (Severity Level IV). Staff Aff.

(Tomlinson), 11 15-18; App. Aff. (Wisenberg), 1 16.

686. The indicated severity levels for the foregoing violations conform to those set forth in 10 C.F.R. Part 2, Appendix C. As there set forth, the NRC considers violations of Severity Levels I, II or III to be serious. 10 C.F.R. Part 2, Appendix C, 6 V.D. On the other hand, Severity Level IV violations are less serious but are of more than minor concern, and Severity Level V violations are of minor safety or environmental concern (id., 6 III). The latter severity levels become more significant where repetition over a period of time indicates a programmatic breakdown (Staff Aff. (Tomlinson), 11 18-19). A deviation represents a failure to satisfy a commitment which has not been made a -

legally binding requirement. 10 C.F.R. Part 2, Appendix C, 6 V.E(2).

In general, civil penalties may be imposed for violations of Severity Levels I, II, and III. Civil penalties may be imposed for severity level IV violations that are similar to previous violations for which the-licensee did not take effective corrective action. Id., 6 V.B. No civil penalties were sought from HL&P as a result of the foregoing violations and daviation (Staff Aff. (Tomlinson),1 19).

l 687. The Staff indicated that HLaP acted promptly on each of the violations and deviation and that its responses appeared to be adequate with regard to corrective actions and recurrence controls. It further observed that HL&P has adopted a progressively more aggressive approach to dealing with quality-related issues since mid-1982. The Staff

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correlated this approach with the addition of new management personnel at the corporate level and onsite, and to the organizational shifting of other key personnel. The Staff evaluated these changes as greatly enhancing the positive attitude and direct management involvement at STP, notably in the construction and quality aspects of the project.

Staff Aff. (Tomlinson), 1 19. The Applicants described several such additions of or shifts in personnel and identified new STP personnel with extensive nuclear experience--namely Mr. James T. Westermeier, Project Manager (25 years' nuclear experience); Mr. E.W. Dotson, P.E.,

Project Engineering Manager (18 years' nuclear-related experience);

Mr. R.J. Daly, Startup Manager (27 years' nuclear-related experience);

and Mr. Dennis J. Cody, Manager, Nuclear Training Department (16 years' nuclear-related experience). In addition, Mr. Wisenberg had joined HL&P in May 1982, shortly before the close of the Phase I record. His appointment as Manager, Nuclear Licensing in September 1982, permitted the promotion of Mr. Cloin G. Robertson (with over 12 years' nuclear-related experience) to the position of General Manager, Nuclear Engineering. App. Aff. (Wisenberg), 11 5-12.

688. As set forth in Finding 685, supra, the Staff undertook one SALP report for the STP since mid-1982, covering the period from December 1, 1982 through November 30, 1983 (I&E Rept. 83-26). The previous SALP report (I&E Rept. 81-37, Staff Exh. 133 and CCANP Exh. 134) covered the period July 1, 1980 through June 30, 1981, before the replacement of B&R by Bechtel and Ebasco. No SALP evaluation was conducted for the period between June 30, 1981 and December 1, 1982, as

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a result of the limited engineering and construction activities carried out during the transition of project contractors. Staff Aff.

(Tomlinson),122; App. Aff. (Wisenberg),1 13.44 689. The December 1, 1982 - November 30, 1983 SALP report evaluated HL&P's performance in 11 functional areas. The three rating ca'tegories are defined as follows:

Category 1: Reduced NRC attention may be appropriate.

Licensee management attention and involvement are aggressive and oriented toward nuclear safety; licensee resources are ample and effectively used such that a high level of performance with respect to operational safety or construction is being achieved.

Category 2: NRC attention should be maintained at normal levels. Licensee management attention and involvement are evident and are concerned with nuclear safety; licensee resources are adequate and are reasonably effective such that satisfactory performance with respect to operational safety or construction is being achieved.

Category 3: Both NRC and licensee attention should be increased. Licensee management attention or involvement is acceptable and considers nuclear safety, but weaknesses are evident; licensee resources appear to be strained or not effectively used such that minimally satisfactory performance with respect to operational safety or construction is being achieved.

Staff Aff. (Tomlinson), 11 22-23.

690. In three of the 11 rated areas (piping systems and supports, electrical power supply and distribution, and licensing activities),

44 Subsequent to the clpse of the Phase II record, the Licensing Board l and parties received?a copy of the SALP report for the period

)

December 1, 1983 through June 30, 1985 (I&E Rept. 85-12, September 12,1985). We are giving no weight to this report, which has not been entered into evidence.

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HL&P was given a " Category 1" rating. In five areas (containment and safety-related structures, safety-related components, design control, quality assurance, and management control), HL&P was given a

" Category 2" rating. In three areas (soils and foundations, corrective action and reporting, and material control), HL&P was given a

" Category 3" rating. HL&P was not rated in two other areas (support systems and information and control systems). There were only three areas in which HL&P was rated in both of the SALP reports, and in each case the rating was the same--one each in Categories "1", "2", and "3".

The area in which HL&P was rated below average ("3") in both SALP reports was that of corrective action and reporting. Staff Aff.

(Tomlinson), 1 22; App. Aff. (Wisenberg and Geiger), 11 14-15.

691. Of the three functional areas in which HL&P received a below-average SALP rating of " Category 3", two represented areas that were comprehended by issues or contentions dealt with extensively in PID-I.

These two areas are (1) soils and foundations and (2) corrective action and reporting. In the soils and foundations area, HL&P had been charged with one violation (83-24-02). In addition, at the time of the SALP report, another item remained unresolved (83-24-01). Furthermore, HL&P had conducted an extensive programmatic audit of backfill activities that indicated several problem areas (App. Exh. 68). With respect to corrective action and reporting, HL&P had also been charged with two violations (83-22-01 and 83-22-02) and one deviation (83-20-02).

Furthermore, questions had been raised concerning the adequacy of HL&P's reporting in conjunction with Quadrex Report issues accepted for

i

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litigation in LBP-85-6, supra. Although HL&P initiated corrective actions in both areas, and although the Staff acknowledged improvements with respect to corrective action and reporting, we determined, on the basis of the affidavits, that there were material facts about which there were genuine issues in dispute concerning the competence of HL&P and its contractors in these areas.

692. One of the major areas of concern dealt with in PID-I was that of alleged harassment of QC inspectors by construction personnel. We noted that HL&P had made progress in resolving questions of this type but that, as of the close of the Phase I record, instances of harassment were still being reported. PID-I, Finding 223, 19 NRC at 780.

693. Between mid-1982 and January 1985, NRC became aware of 13 allegations involving activities at the STP. These allegations fell into the following categories:

! 1 - Lack of Qualification of QA/QC Personnel 1 - Efforts in Document Control 3 QA/QC Deficiencies 1 - Pay and Status of QC Personnel 1 - Falsification of Records 1 - Terminated for Complaining about Safety Problem 1 - Office of Investigations 3 - Improper Construction Practices 1 - Intimidation of QC Inspectors Staff Aff., f 21.

694. Only one of the allegations concerned harassment or intimidation of QC inspectors. HL&P investigated this allegation, and the Staff monitored the investigation. That investigation has been closed. Although the allegation was not substantiated, it identified a construction worker whose rough and direct criticisms of the work of QC

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inspectors may have been interpreted as intimidating. That individual was cautior:ed appropriately. Staff Aff., 1 21; App. Aff. (Geiger),

1 17(1)(a).

695. Of the other 12 allegations, 8 were closed as of February 1985. With respect to allegations that had some merit, the matter designated as " efforts in document control" resulted in a Severity Level IV violation (84-07-01) and was closed in I&E Rept. 84-14 at 4.

That categorized as " falsification of records" involved a violation of procedures for control of weld filler material. No safety-related welding was involved. The individual's welding certification was withdrawn and additional disciplinary action was taken. With respect to one of the matters designated as " improper construction practices", HL&P put an immediate hold on the work involved when it received the unsubstantiated allegation. It found the allegation to be substantiated but not representative of broad poor practice. As a result, a foreman and a general foreman or superintendent were discharged. The matter was closed in I&E Rept. 84-08, at 10-11. Staff Aff. (Tomlinson/Jaudon),

11 21, 32, 33; App. Aff. (Geiger), 1 17.

696. In September 1984, HL&P established a "Safeteam" organization, the sole function of which is to identify, investigate, report, and dispose of iteas that present, fomer, or exiting employees believe could affect plant safety. Provision has been made for employee reports to remain anonymous, if desired. Trained investigators were hired to form this group. As of early 1985, the supervisor reported directly to the HL&P Executive Vice President; currently the Manager, Safeteam, i

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reports to the Manager, Nuclear Assurance, HL&P's top-ranking QA official. Safeteam constitutes an investigatory organization in addition to those previously maintained by HL&P, Bechtel, and Ebasco.

Staff Aff. (Tomlinson), 1 20; App. Aff. (Geiger), 11 18-19; Crocker Aff.

(3/12/86), advance SER, 5 13.1.1.2(7).

697. The Board finds, on the basis of the affidavits before us, that intimidation or harassment of QC inspectors by construction personnel no longer appears to constitute a significant problem area at STP, that HL&P is considering and disposing of various allegations in a professional and effective manner, and that there is no evidence of any lack of competence in the handling of allegations by HL&P or its contractors since the close of the Phase I record.

698. In PID-I, we reviewed Revision 3 to HL&P's QA program for the remaining design and construction activities at the STP, dated March 9, 1982. We concluded that it met the requirements of 10 C.F.R. Part 50, Appendix B. The program has since been periodically revised, Revision 9 being the current version as of February 1985. The Applicants served each version on the Board and parties. The Applicants state that the revisions involved no relaxation of QA commitments; that Region IV has completed its review through Revision 7; and that by letter dated August 14, 1984, Region IV found Revision 7 to be acceptable. App. Aff.

(Geiger), 1 21. We are aware of no information to the contrary. On the basis of the record before us, we find no reason to alter the conclusions we earlier reached concerning the QA program or to question the standards governing the implementation practices that we are here reviewing.

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699. Except with respect to (1) 10 C.F.R. % 50.55(e) reporting and (2) soils and foundations, the affidavits of the Staff and Applicants provide reasonable assurance, as of February 1985, that HL&P remedied the competence deficiencies that were discussed in PID-I.

2. 10 C.F.R. 9 50.55(e) Reporting 700. In LBP-85-6, supra, 21 NRC at 460, in the course of outlining matters for adjudicatory consideration in Phase II, we said:

HL&P's system for ascertaining 6 50.55(e) deficiencies, including the level and competence of the persons charged with that responsibility, are matters appropriate for adjudicatory consideration in Phase II. Changes (if any) since 1981 would also be pertinent. In that connection, HL&P's current method for trending QA violations or deficiencies to ascertain their significance, including changes (if any) since 1981, would be a matter on which we would expect the Applicants (as well as other parties who wish to do so) to present testimony.

We further delineated that issue in our Sixth Prehearing Conference Order, dated May 17, 1985 (unpublished), at 8:

In connection with the 6 50.55(e) issue, we would expect the witnesses to be able to explain in some detail the operation of procedures with regard to one or more incidents that presented "close questions" as to reportability (particularly where an incident was found to be not potentially reportable and hence was not reported). In this connection, the Board may ask questions about c; en item 8312-01 (I&E Inspection Report 83-12, at 10, paracraph 7) (see Tr. 11127).

701. The Applicants presented Mr. Mark R. Wisenburg, HL&P's Manager, Nuclear Licensing, to testify on this issue (Wisenburg, ff. Tr.

14514). Mr. Wisenburg has ten years of commercial nuclear licensing experience with the Tennessee Valley Authority (TVA) and HL&P, including considerable experience with the requirements of 10 C.F.R. Q 50.55(e).

He also has 11 years of naval nuclear experience. He currently reviews

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all reportability determinations under 10 C.F.R. 9 50.55(e), and he prepared Revision 1 of the current HL&P reporting procedure. He has supervised the preparation of subsequent revisions of that procedure and has participated in training HL&P personnel in reporting procedures and regulatory requirements. M.at1-3. We find him well qualified to prepare such procedures and review their operation. Applicants' Exhibit 66, HL&P's procedure number PLP-02 entitled " Reporting Design and Construction Deficiencies to NRC," and Exhibit 66a, a minor revision thereto, were admitted into evidence on this issue (Tr. 14516).

702. The NRC Staff witnesses who addressed this issue were Mr. H.

Shannon Phillips, Senior Resident Inspector at the STP site from September 1979 to January 1982 (Phillips, ff. Tr.15116) and Mr. Donald L. Garrison, currently the Resident Construction Inspector at STP (Garrison,ff.Tr.15110). During his tenure at STP, Mr. Phillips routinely inspected HL&P's system for reporting deficiencies (Phillips, I ff. Tr. 15116, at 2). Mr. Garrison has routinely inspected the present system and has recently performed a detailed study of the functioning of that system (Garrison, ff. Tr. 15110, at 1-2, 4; Tr. 15128, 15167-68 (Garrison)). The Staff also presented as exhib'.ts two Bechtel documents telling how that organization handles deficiency reporting, one entitled General Project Requirements Reporting, Significant Deficiencies, Federal Regulation 10 C.F.R. Part 50.55(e) (Staff Exh. 143) and the other entitled Review of Nonconformance Reports for Deficiency Evaluation (Staff Exh. 144).

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703. Mr. Garrison summarized the procedures in Staff Exhibits 143 and 144 (Garrison, ff. Tr.15110, at 2-4). He testified that the process meets the requirements of 10 C.F.R. @ 50.55(e) and conforms to the requirements of Staff guidance contained in Staff Exhibit 137 (Garrison, ff. Tr. 15110, at 4-5). There have been no deficiencies --

observed in the HL&P reporting system since 1983 (id, at 5).

704. Mr. Phillips testified that, during the period when he was Senior Resident Inspector at the STP, he found HL&P forthright in identifying deficiencies and reporting them to NRC (Phillips, ff. Tr.

15116,at3). The utility reported a large number of deficiencies even when it could have taken an approach that would have resulted in fewer reports (M.). He was impressed by HL&P's sincere desire to do a good job even though its inexperience or oversight sometimes led to violationsof10C.F.R.%50.55(e)reportingrequirements(M.at3-4).

He has concluded that remedial steps taken since 1981 are adequate and

, reflect positively on HL&P's character (id. at 4).

705. The present STP procedure governing reportability under 10 C.F.R. 6 50.55(e) vests the responsibility for evaluation and reporting in HL&P (App. Exh. 66; Wisenburg, ff. Tr. 14514, at 3-4; Garrison, ff.

Tr. 15110, at 2-4). Procedures are also in effect defining the responsibilities of Bechtel and Ebasco personnel for identifying and evaluating deficiencies (M.).

706. Any HL&P employee who becomes aware of a condition that may constitute a deficiency is required promptly to prepare a Deficiency Evaluation Form (DEF) describing the condition (App. Exh. 66 at 8,

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15-17). Once the DEF is prepared it is evaluated by HL&P Engineering.

If Engineering determines that no deficiency exists, the basis for that determination is documented in the DEF; if a deficiency does exist, the DEF is transmitted to the chairman of the Incident Review Committee (IRC). A similar process for Bechtel employees provides for the initiation of a Deficiency Evaluation Report (DER) whenever a significant deficiency is identified, and HL&P is notified regardless of whether Bechtel's evaluation determines that a reportable deficiency exists. Ebasco employees are responsible for bringing conditions that may represent significant deficiencies to Bechtel's attention.

Wisenburg, ff. Tr. 14514, at 4-5. In the Bechtel procedure, even if the evaluation determines that a deficiency is insignificant (as well as nonreportable), it is informally forwarded to HL&P (id. at 10; Tr.

14517-18, 14530-31, 14576-77 (Wisenburg)).

707. The IRC is chaired by Mr. Michael Powell, HL&P's Supervisory Engineer, South Texas Project Licensing (Wisenburg, ff. Tr. 14514, at 5). Mr. Wisenburg testified as to Mr. Powell's background and qualifications. Mr. Powell's education includes a B.S. degree in electrical engineering and an M.S. degree in nuclear engineering. He has seven years of nuclear licensing experience. Id. at 6. Absent any evidence to the contrary, we find Mr. Powell qualified and competent to chair the IRC.

708. HL&P's Project QA Supervisor, Mr. Paul Ratter, also sits on the IRC. He has 14 years of commercial QA/QC experience, has participated as a utility representative in the development of N

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performance objectives and criteria for construction evaluations for the Institute of Nuclear Power Operations (INP0) and holds certificates as an ANSI Level III Inspector in Procurement, a Lead Auditor, a Quality Inspector Mechanical and a Level II Inspector in a number of nondestructiveexaminationtechniques(id.at7). We find him well qualified to sit on the IRC.

709. In addition, the IRC includes an engineering representative cognizant in the discipline affected by the condition being evaluated and other individuals familiar with the matters being evaluated who are designated by the chairman on a case-by-case basis (id at 5). Both the chairman and the QA Supervisor may designate others to sit in their stead when they are not available during the 24-hour period allowed for a determination and notification to NRC (id.). The Group Vice President, Nuclear (Mr. Goldberg) may also convene an ad hoc committee toperformanevaluationunder10C.F.R.950.55(e)(id.at6; App.Exh.

66 at 5; Tr. 14550-52 (Wisenburg)).

710. When the IRC is notified of a significant deficiency, it 1

conducts an initial evaluation to determine whether the deficiency is reportable (or at least potentially reportable) or not. If it is reportable, the IRC chairman is responsible for notifying the Group Vice-President, Nuclear, and the Manager, Nuclear Licensing, and notifying the NRC within 24 hours2.777778e-4 days 0.00667 hours 3.968254e-5 weeks 9.132e-6 months . Wisenburg, ff. Tr.14514, at 7-8; 1 App Exh. 66 at 7, 9. Either the Manager, Nuclear Licensing, or the Group Vice-President, Nuclear, concurs with the IRC determination and

, ensures that sufficient information is provided to the NRC. If neither

. . _ . , - . , , _ , , , , . , - , , , , . . ~, -

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of these officials is available, the chairman of the IRC notifies the NRC directly. The reason for this procedure is to provide for informing HL&P executive management so that management can respond to NRC inquiries immediately. Tr. 14552-53 (Wisenburg). Messrs. Wisenburg, Goldberg, and Cloin Robertson (HL&P's former Licensing Manager) all testified that they had not, in any instance, overruled an IRC determination to notify the NRC of a condition that IRC deemed either reportable or potentially reportable (Tr. 14553-54(Wisenburg);Tr.

12288 (Goldberg); Tr. 14721-24 (Robertson)).

711. After notifying the NRC of a reportable or potentially reportable condition, the IRC chairman initiates a technical evaluation to confirm the reportability of the condition. The technical evaluation is performed by a group with expertise as needed, designated on a case-by-case basis by the chairman. During both the initial evaluation and the technical evaluation, the chairman completes an IRC evaluation checklist documenting the determination with respect to the specific criteria of 10 C.F.R. 6 50.55(e). Wisenburg, ff. Tr. 14514, at 8; App Exh. 66 at 7, 10, 18-20. If the technical evaluation confirms that the deficiency is reportable, a written report is prepared and sent to NRC within 30 days. The Manager, Nuclear Licensing, reviews such reports and the Group Vice-President, Nuclear, signs them. Wisenburg, ff. Tr.

14514, at 8-9; App Exh. 66 at 11, 21. If the technical evaluation shows that the matter is not reportable, the finding of nonreportability is confirmed by the IRC, the justification for that finding is documented, and NRC is verbally notified within 30 days. A written report is

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subsequently prepared for NRC. Wisenburg, ff. Tr.14514, at 9; App Exh.

66 at 11. If the technical evaluation cannot be completed in 30 days, an interim report is prepared and sent to NRC (Wisenburg, ff. Tr. 14514, at9-10).

712. To ensure that those matters that are not reviewed by IRC do not, in fact, include reportable deficiencies, the IRC chairman periodically convenes the IRC to review those DEFs that were previously deemed not to warrant IRC review. Further, Bechtel DERs that were determined not to represent significant deficiencies are informally reviewed by HL&P Licensing and Engineering. Wisenburg, ff. Tr. 14514, at 10.

713. There have been soue changes since May 1981 in HL&P's procedures for reporting deficiencies, but they have not been fundamental changes. In 1981 there was no requirement for preparation of a DEF, but procedures both then and now require that any individual becoming aware of a possible deficiency bring the matter to the attention of appropriate supervisory personnel, who will then initiate IRC review. Both procedures provide for IRC review and reporting within the time limits of 10 C.F.R. Q 50.55(e). Differences include changes in the individuals responsible for reviews and climination of a previous requirement that the NRC Resident Reactor Inspector be notified when NRC Region IV is notified. (HL&P does, however, continue to keep the Resident Reactor Inspector informed of reportable items.) Wisenburg, ff. Tr.14514, at 10-11. The present system also provides greater

i

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detail in the documentation and records of matters that are determined not to warrant reporting to NRC (Tr. 14557-65 (Wisenburg)).

714. As requested in LBP-85-6 (see Finding 700, supra), the Applicants described the trending procedure that HL&P uses to ensure that a number of conditions, each nonreportable, will not constitute a quality assurance breakdown when taken together. The trending program 3

provides for review of all deficiency documents, DERs and DEFs, against the criteria of 10 C.F.R. 5 50.55(e) to determine whether, taken together, they may be reportable. All deficiency documents generated by HL&P, Bechtel, and Ebasco are collected, coded, and analyzed to determine whether, taken together, they show a trend. Whenever a trend l is identified, the condition is evaluated by HL&P Quality Ascurance for reportability under 10 C.F.R. 6 50.55(e). If there appears to be a reportable condition a DEF is initiated and sent to the IRC. To determine whether a trend exists, deficiency reports are coded by company, organization, discipline or group, activity (such as soils, receiving, or cadwelding) and deficiency type (such as drafting deficiencies, fabrication errors, or interferences). Deficiencies are normalized against criteria such as person-hours, quantities installed, and hours of inspection time. A summary of trends identified is included in monthly reports distributed to HL&P's upper level management. Quarterly trend reports are maintained and controlled as QA records. Wist.nburg, ff. Tr.14514, at 16-18.

715. In our Sixth Prehearing Conference Order, we noted that we would expect witnesses at this hearing to explain in some detail the

._y._ ,.y. , _m.-__ .,.- .- ._ -

.,c.. --_ _ ____,.7- - .-

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operation of procedures concerning incidents that presented "close 3

questions" as to reportability. In particular, we anticipated asking questiens about open item 83-12-01 in I&E Report 83-12. See Finding 700, supra. Mr. Wisenburg addressed this matter for the Applicants (Wisenburg, ff. Tr. 14514, at 13-16). The Staff presented the testimony of Messrs. Eric H. Johnson and George L. Constable (Johnson / Constable, ff. Tr. 14846, at 12-13).

716. Item 83-12-01 concerned the apparent omission of proper references to certain QA standards in procurement documents issued by j Bechtel. The matter had originally surfaced in two audit reports. An NRC inspector, noting reports of these omissions, suggested that the matter might be reportable under 10 C.F.R. 5 50.55(e) as a QA breakdown.

Wisenburg, ff. Tr. 14514, at 15; Johnson / Constable, ff. Tr. 14846, at 12-13. A DEF was prepared and reviewed by the IRC, which concluded that there had been no QA breakdown (Wisenburg, ff. Tr. 14514, at 15).

Subsequent review by NRC indicated there was no breakdown in the Bechtel QA program (Johnson / Constable, ff. Tr. 14846, at 13). It appears that, i

although HL&P's standard practice was different from Bechtel's and would have led to inclusion in the procurement documents of somewhat different standards, Bechtel had followed its own NRC-approved QA program I

(Wisenburg, ff. Tr. 14514, at 16). NRC had based its original concern solely on review of the audit documents. Additional information, available but not reviewed by the NRC inspector, showed later that no QA

breakdown had occurred. Johnson / Constable, ff. Tr. 14846, at 13.

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717. CCANP offered no evidence to contradict the conclusion that HL&P's current practices for identifying and reporting deficiencies under 10 C.F.R. % 50.55(e) are in full compliance with both the letter and the spirit of the regulation. CCANP does, in its proposed findings, question Mr. Goldberg's competence in applying the regulation. CCANP also suggests that the handling of the Quadrex Report reflects badly upon HL&P's competence in these matters (CCANP F0F-II, PF 111.213, III.215-III.216). We find no factual basis whatsoever for CCANP's position. The minor difference of opinion that we have with HL&P's reporting of one Quadrex Report finding (see Findings 518-22, supra) represents a difference of professional judgment on a close call and does not reflect adversely on the procedure utilized. The deficiency that we discuss in conjunction with the soils issue (Finding 735, infra) does not appear to be systemic but rather appears to represent an anomaly. Moreover, HL&P (and Bechtel) have proposed a remedy for the situation that caused the deficiency, one we believe should prove effective (id.). Both HL&P's present reporting procedures and the procedure utilized by HL&P for evaluating the Quadrex Report under 10 C.F.R. 6 50.55(e) reflect very positively upon HL&P's character and competence.

3. Soils and Foundations 718. In our Phase I decision on Issues B and D, we required the Staff to report to us in Phase II on the performance of HL&P and its new contractors (Bechtel and Ebasco) since the close of the Phase I record (LBP-84-13, supra,19 NRC at 697, 700). Subsequently, we ordered a

_ - . - _ . = _ .

i

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hearing in Phase II on HL&P's competence regarding soils questions, as raised in the Staff's 1984 Systematic Assessment of Licensee Performance (SALP) report and other HL&P and Staff documents described in LBP-85-9, supra, 21 NRC at 529-31. The soils questions were admitted as Issue B/D-1, stating more specifically:

Is there reasonable assurance that the backfill

! placed at STP by Ebasco is in conformity with the construction permits and the provisions of Commission regulations in light of the two violations in the area of " soils and foundation" discussed in I&E Rept. 83-26 (dated April 20, 1984) and findings 23 and 24 in the programmatic audit filed by HL&P on May 25, 1984 (ST-HL-AE-1095)?

Sixth Prehearing Conference Order (Further Definition of Phase II Issues), dated May 17, 1985 (unpublished), at 8.

719. The Applicants and NRC Staff each presented witnesses with direct testimony on Issue B/D-1 and submitted proposed findings of fact concerning matters covered by that issue (Jordan, et al., ff. Tr. 13645; Tapia, ff. Tr. 13752). CCANP offered neither direct testimony nor proposed findings of fact on Issue B/D-1. All witnesses were subjected to cross examination by the parties and the Board (Tr. 13653-749 (Jordan, et al .); Tr. 13753-812(Tapia)).

720. I&E Report 83-26 (dated April 20,1984) describes NRC's SALP of the South Texas Project covering the period December 1, 1982 through November 30, 1983 (Crossman, et al, Joint Affidavit, dated December 31, 1984, as corrected January 24,1985, at 10-11; Findings 688-91, supra). In that report, HL&P's activities in the area of soils

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and foundations were classified as " Category 3," the lowest of the three categories. Such classification indicates that in this area performance was only minimally satisfactory, that management's attention or involvement was acceptable but that weaknesses were evident that required increased NRC and HL&P attention (see Finding 689, supra).

Although no violations or deviations were reported during the period covered by the SALP, the report states that two violations subsequently were identified relating to activities that had been ongoing during the appraisal period. Sixth Prehearing Conference Order, supra, at 8-9; Tapia, ff. Tr.13752, at 2; Jordan, et al . , ff. Tr.13645, at 7,10,18.

The nature and significance of these violations, as well as the reactions of HL&P management and other personnel to them, were addressed in detail by the witnesses for HL&P and the Staff (Finding 719, supra).

721. HL&P presented a panel of witnesses consisting of Mr. Thomas J. Jordan, HL&P's Project QA Manager; Mr. Alfredo Lopez, Bechtel's Civil / Structural Engineering Group Supervisor for the STP; and Mr.

Walter R. Ferris, a geotechnical consultant to Bechtel Civil & Minerals, Inc. Mr. Jordan received a B.S. degree in Nuclear Engineering from Texas A&M University in 1975. Since 1976, he has worked for HL&P in severalQApositionsandin1984waspromotedtohispresentone,hith responsibility for ensuring proper planning, development, implementation, coordination and administration of the STP QA program.

Mr. Lopez received his B.S. degree in Civil Engineering in 1964 and his M.S. degree in Structural Engineering in 1966, bo'.h from the University of California, Berkeley. He worked as a senior structural engineer for

l l

l

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Fluor Corporation from 1966 until he joined Bechtel in 1972 as an Engineering Group Leader at the San Onofre Nuclear Generating Station.

His work there included responsibility for seismic dynamic analysis, .

general structural analysis and design, and technical interface with fabricators and equipment suppliers. He was subsequently promoted to Civil / Structural Engineering Group Supervisor and, in 1982, was assigned to the STP site as Civil / Structural Engineering Group Supervisor. He is a Registered Professional Engineer in California. Mr. Ferris received a B.S. degree in Civil Engineering from Queens University, Belfast, Northern Ireland, in 1951, and the S.M. degree in Soil Mechanics from Harvard University in 1955. He has extensive experience in soil mechanics and the design of dams, foundations, airfields, and highways.

He has consulted on and participated in the preparation of foundation reports and earthwork studies for many nuclear and fossil fuel plants in the United States and other countries. He is a Registered Professional Engineer in Minnesota and California and is a member of various i We professional organizations. Jordan, et al . , f f. Tr.13645, at 1-6.

find that the three witnesses are qualified to testify on this issue.

722. The NRC Staff presented the testimony of Mr. Joseph I. Tapia, ,

an NRC Reactor Inspector. He appeared before this Board during Phase I, ,

and his qualifications were presented and accepted at that time. Tapia, ff. Tr.13752; Crossman, et al . , ff. Tr.10010, Professional Qualifications of J. I. Tapia; Tr. 10004 (Tapia). Mr. Tapia was responsible for identifying and documenting the violation and the unresolved item described in I&E Report 83-26 and for evaluating l

I

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Findings 23 and 24 of the programmatic audit filed by HL&P on May 25, 1984, which are of special interest in Issue B/D-1 (Tapia, ff. Tr.

13752, at 1-2). He is well qualified to testify on this issue.

723. Mr. Jordan explained the roles of the four organizations that participate in Category I backfill activities at the STP. As the licensee, HL&P is responsible for ensuring that those activities meet all applicable regulatory and project requirements. It exercises those responsibilities by providing direction and oversight to the project contractors and by performing QA audits, surveillance and inspections.

Bechtel issues design documents, approves working procedures of contractors, performs audits and surveillance of implementation, and verifies performance of the testing contractor in testing backfill material. Ebasco Constructors, Inc. and Ebasco Services, Inc. (Ebasco) place and inspect backfill; supervise construction work; conduct audits, inspections and surveillance; and provide direction to the testing contractor concerning the number and location of tests to be performed.

Pittsburgh Testing Laboratory (PTL) is the testing contractor and is responsible for performing field and laboratory tests of the backfill.

Jordan, et al., ff. Tr. 13645, at 7-8 (Jordan).

724. About 2,000,000 cubic yards of Category I backfill were placed by B&R and about 200,000 cubic yards have been placed by Ebasco. Most of the backfill placed by Ebasco has been in areas around the essential cooling. water (ECW) intake and discharge structures, and small excavations for piping connections into buildings and for miscellaneous facilities within the power block. Virtually all of the backfill

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supporting Category I buildings within the power block was placed by B&R. As of July 1985, only about 106,000 cubic yards of Category I backfill remained to be placed, mostly in small amounts around various structures outside the power block. There is no single area in which future ba;kfill work is expected to exceed 5000 cubic yards and no Category I backfill remains to be placed under a major structure in the power block. Jordan, et al., ff. Tr. 13645, at 8-10 (Lopez).

725. The first violation was reported in Notice of Violation 83-24-02, derived from I&E Report 83-24, and was classified at Severity Level IV. It involved a failure to follow the standard laboratory test method for determining minimum density of backfill. The Bechtel specification for testing compaction of Category I backfill was based on the procedure specified in Standard D2049-69 of the /merican Society for Testing and Materials (ASTM), " Relative Density of Cohesionless Soils,"

which requires use of a funnel pouring device in the minimum density test for soil samples having a maximum soil particle size of 3/8 inch.

Contrary to the requirement, backfill of that size was tested for minimum density using the scoop method. Jordan, et al., ff. Tr. 13645, at 10 (Jordan, Lopez); Tapia, ff. Tr. 13752, at 2-3; App. Exh. 67, at 1.

PTL had been directed by Bechtel, in a letter dated April 6,1983, to modify its test procedure to implement use of the scoop for all samples.

That decision was based on Bechtel's evaluation that the scoop method was acceptable for determining soil minimum density of the STP backffil.

The change violated required procedures because no corresponding change was made in the applicable construction specifications and no FSAR

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, change was generated for review by HL&P. App. Exh. 67, at 1.

726. In response to the Notice of Violation, PTL was directed to perform future minimum density tests in strict conformance with ASTM D2049-69. Engineering evaluations were performed to determine 'the technical adequacy of using the scoop instead of the funnel for testing STP Category I backfill and the adequac of STP backfill placed after the change in test procedure on April 6, 1983. App. Exh. 67, at 2; Jordan, et al. , ff. Tr.13645, at 11 (Jordan). HL&P also initiated an investigation to determine whether similar improper changes in procedures through letters or memoranda, without corresponding changes in specifications, had occurred in other instances. The review of Bechtel interoffice memoranda, requests for engineering action, meeting notes, and other correspondence, totalling about 2000 documents, disclosed that no other such instances occurred. App. Exh. 67, at 5-6.

Further, HL&P management initiated a comprehensive programmatic /

technical audit of Category I backfill activities at STP (see Finding 741, infra) (App. Exh. 67, at 6; App. Exh. 68; Jordan, et al ., ff. Tr.

13645, at 11-12 (Jordan)).

727. The geotechnical consultant to Bechtel (Mr. Ferris) testified that the minimum density of soil is the loosest possible state of density that it can achieve, with the particles in grain-to-grain contact and without segregation of particle sizes or arching (Jordan, et a_l,., ff. Tr. 13645, at 12 (Ferris); Tr. 13687-89 (Ferris)). He stated that, accordingly, the laboratory method resulting in the lowest soil

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density should be judged as the one that is most representative of the actual minimum so11 density. With the Category I backfill at the STP, the scoop method produces minimum density values that are 1.3 to 3.3 pounds per cubic foot lower than those produced by the funnel method.

This suggests that values-determined with the scoop more closely reflect actual minimum densities of the backfill, making that the method of choice. Id. at 14-15. Further, an expert committee report submitted to this Board in Phase I concluded that "there is considerable evidence that the minimum density [of STP Category I backfill] may actually be somewhat lower than determined by the [ scoop] method" (id., at 15; App.

Exh. 6). Mr. Ferris concluded that, in his professional judgment, "the scoop method provides technically valid, consistent and more representative minimum density values than the funnel method" (Jordan, ff. Tr. 13645, at 15, 18; Tr. 13711-12 (Ferris)).

728. The minimum density, in-place density, and maximum density are l determined and used to calculate " relative density" of the compacted backfill. This parameter is used to judge compaction in fills to evaluate their acceptability for bearing loads and preventing liquefaction during earthquakes. For the STP, the criteria governing Category I structural backfill are a minimum relative density of 80% and a running average (or moving average) relative density of at least 84%.

The purpose is to provide a stable foundation support for Category I buildings under all loading conditions and to ensure their satisfactory performance during the life of the plant, including consideration of bearing capacity, settlement, and safe shutdown earthquake (SSE). For

(

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yard backfill outside the power block, the STP criterion is a minimum

~

relative density of 70%, to provide a margin of safety against liquefaction during an SSE event. Jordan, et al . , ff. Tr.13645, at 12-13, 17 (Ferris); Tr. 13687-89 (Ferris); App. Exh. 67, at 2; Tr. 13730 (Lopez).

729. In calculating the relative density, lower inimum density

~

values result in higher relat1ve densities. Accordingly, use of the scoop method, which produced lower measured values of minimum densities, resulted in higher calculated values of relative density and made it easier to satisfy the design criteria than would have be,en the case had the funnel method been used. Jordan, et al., ff. Tr. 13645, at 13-14 (Ferris); Tapia, ff. Tr. 13752, at 3. Comparison of the two test procedures revealed that calculations using data.basedron the funnel

.~ ,

method resulted in more conservative values for the yelatisc density of STP backfill -generally about 4-6% lower than the relative densities calculatedwithdataobtainedbythescoopmethod(App.Exh'.67,$t2; Tapia, ff. Tr. 13752, at 3).

730. The probable impact of using the scoop method was analyzed to assess its effect on calculated values of relative densities of STP backfill. The minimum density values obtained with the scoop method between April 6, 1983 and February 3, 1984 were increased by 3.3 pounds per cubic foot (see Finding 727, supra) and then used to calculate

onservative estimates of relative densities th}at could have been obtained using the funnel method. The lower relative density values obtained in this fashion were compared with the STP.criteri,a outlined in 9

s ;

e

l l

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Finding 728, supra. Jordan, et al., ff. Tr. 13645, at 16 (Ferris);

Tapia, ff. Tr.13752, at 3; App. Exh. 67, at 2; Tr.13700 (Ferris).

For structural backfill, this analysis produced 185 relative density values falling below the 80% criterion (four of which were found to be below 70%) out of 1134 total determinations (Tr. 13699-700 (Ferris);

Tapia, ff. Tr.13752, at 3). With respect to the requirement for running average relative densities to exceed 84%, it was determined that 122 of the recalculated values fell below that criterion (Jordan, et al., ff. Tr. 13645, at 16 (Ferris); Tr. 13705-708 (Ferris)). Of the 2351 test values for Category I yard backfill, 255 were below the minimum relative density criterion (Jordan, et al., ff. Tr. 13645, at 16 (Ferris)). Mr. Tapia, the NRC Staff witness, concurred with this method for re-evaluating the data (Tr. 13773-74 (Tapia)).

731. Mr. Ferris conducted another analysis in which he determined the percent compaction, which is the relationship between in-place density and maximum density, using data for the 185 samples that were below 80% relative density. He found that, of the 185 tests, one resulted in a value of 94% compaction, two in 95%, 46 in 96%, and 136 in 97% . He then determined a correlation between percent compaction and relative density, using data for the one year in which the funnel method had been used to measure minimum density. Using that correlation and the percent compaction results for the 185 low values in the period during which the scoop method had been used, he determined that 136 of those 185 values actually corresponded to 80% relative density based on use of the funnel method. Forty-six were 75% relative density and two

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were 70%. The one remaining test produced a value of 65%, but the in-place density of 116.1 pounds per cubic foot was, in his judgment, inconsistent with other fill data, leading him to suggest that the single 65% value probably was in error and should be discarded. He concluded that the fill "has 80% relative density with a small number of widely-distributed tests slightly less than that". Tr. 13701-03 (Ferris). The other members of the panel and Mr. Tapia agreed with the method by which the data had been analyzed (Tr. 13703 C opez, Jordan);

Tr. 13772-74 (Tapia)).

732. On July 30, 1985, HL&P reported to NRC that its initial response to Notice of Violation 83-24-02, dated March 23, 1984, contained errors in plotting the locations of backfill relative density tests (Tr. 13647-51 (Jordan, Lopez); Tr. 13668-69 (Lopez)). The corrected plots revealed that one relative density test value below 80%

is for a backfill location below the bearing foundation of a Category I structure (App. Exh. 67, Cover Letter at 1, and Attachment at 3). That value (78.7% relative density) is for a location below the foundation of the Unit 2 Auxiliary Feedwater Storage Tank (AFST). This situation is viewed by HL&P as acceptable because (1) the AFST is a relatively light structure that produces very low soil bearing pressure and (2) the in-place density of 120.4 pounds per cubic foot and the percentage compaction of 97% (in-place density divided by maximum density) for backfill at the test location both are representative of a relative density of 80%. App. Exh. 67, at 2-3. Mr. Ferris, in response to Board questions, stated that he does not regard the feedwater tank as a

, . , - - ~ - - - , . - - -

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" building" but as a " structure". In any event, he is convinced that the low value obtained below the tank (78.7% based on calculation using the adjusted minimum density) actually represents a relative density of 80%.

Tr. 13703-04, 13726-27 (Ferris). Furthermore, even if all of the soil below the tank had a relative density as low as 70%, he believes there should be no concern, because the ultimate bearing capacity of the soil would far exceed the applied loads. He judges that with 70% relative density there would be an increase in settlement of a fraction of an inch, but that would not affect performance of the tank and there would be no differential settling that could cause a structural problem. Tr.

13726-28 (Ferris). In Mr. Tapia's judgment, the difference between the required value of 80% and the observed value of 78.7% is insignificant.

In fact, he feels that a value of 75% would be satisfactory. He states that the value of 80% includes a very large margin of safety against compaction or bearing failures and that the backfill material is good.

Yr. 13775-79 (Tapia). After careful review of the testimony and responses to questions posed by the parties and the Board, we concur that the single value of 78.7% relative density under the AFST provides no reason for concern about safety. .

733. The plotting errors that were reported and corrected in Applicants' Exhibit 67 (see Finding 732, supra) also revealed that five relative density test values lower than 80% were for locations under the truck loading bay of the Unit 2 Mechanical Electrical Auxiliary Building (MEAB) (App. Exh. 67, Cover letter at 1; Tr. 13641 (Ferris)).

Mr. Ferris stated that the bay should be considered as an appendage to the MEAB. It will be constructed as a slab supported on foundations

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that rest on compacted fill below the levels at which the lower relative density values were identified. Accordingly, the slab does not derive any support from compacted soil having a relative density less than 80%.

In his judgment, based on evaluation of the reported degrees of soil compaction, the relative densities of three of the points are 75% and the remaining two are 80%. Tr. 13696-97, 13704, 13710 (Ferris). Mr.

Tapia testified that piers supporting the truck loading bay all derive their foundation bearing from levels below the elevation of the tests (Tr. 13774, 13779-84 (Tapia)). We conclude that no safety problem is indicated by the five observations that are below 80% relative density.

734. The locations for the remaining relative densities that are below specifications are random, and each is of very limited extent within a larger body of denser material (App. Exh. 67, at 3; Tapia, ff.

Tr. 13752, at 4; Tr. 13708-11 (Lopez, Ferris); Tr. 13718-19 (Ferris)).

The four test values below 70%, which are the lowest ones, are located near the surface and away from any structure (Tapia, ff. Tr.13752, at 4). Mr. Tapia indicated that the factor of safety against liquefaction for all of the test locations, after adjustment to compensate for using the scoop method, is above 1.7 and that this is an acceptable margin of safety (Tapia, ff. Tr.13752, at 4). Mr. Ferris stated that the factor

! of safety against liquefaction for all tests exceeds 1.6, and that 99%

of the values exceed 1.7. These factors of safety are viewed by both Mr. Ferris and Mr. Tapia as providing an ample margin above the conservative value of 1.5, which is well-established in the nuclear industry. Jordan, et al . , ff. Tr.136a5, at 17 (Ferris); Tr.13695

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(Ferris); Tapia, ff. Tr. 13752, at 4. We concur and find that the 4

deviation from the ASTM method described in this violation and the compaction attained in the backfill do not adversely reflect on safety of the facility against failures in bearing, differential settling, or liquefaction.

735. The HL&P witnesses attributed the plotting error to a failure to use controlled drawings in responding to the Notice of Violation and acknowledged that their procedures should have prevented it from occurring. They indicated that Bechtel's engineering judgment was that drawings and other documentation used in responding to a notice of violation should be subject to the same controls and checks as are those used for construction and that Bechtel management has decided to take steps in that direction. Tr. 13722-24 (Lopez). The Staff also viewed as a problem the failure to use controlled drawings in responding to the Notice of Violation (Tr. 13786-88 (Tapia)). We agree. The requirement for this change in procedure had not been implemented at the time of hearing (Tr. 13724 (Lopez)). Although we have not found systematic deficiencies in the overall methodology used by HL&P in reporting or responding to notices of violation, we strongly recommend that the planned change in procedure be put into effect. See 0 pinion, supra, p.

69.

736. On the basis of the testimony presented before us, including the results of cross and Board examinations, we conclude that this violation does not result in any safety problem and that there is

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reasonable assurance that the backfill conforms with the requirements of the construction permits and NRC regulations.

737. The second violation referred to in I&E Report 83-26 concerned Ebasco's procedure for QC inspections of the backfill operations. A specific concern was that the procedure only required daily monitoring of backfill operations and that this could leave too much potential for inadequate QC inspections. In addition, the one inspection form required for each day was inadequate because the specific locations of the QC inspections could not be determined. This was viewed as representing a failure by HL&P to rectify issues raised in the April 30, 1980 Show-Cause Order concerning adequacy of backfill operations.

Tapia, ff. Tr. 13752, at 4. Actually this was not classified as a

! violation, in the final analysis, but as Unresolved Item 83-24-01 (Jordan, et al., ff. Tr. 13645, at 18-19 (Jordan)).

738. Although the QC procedure only required daily monitoring,

! Ebasco QC personnel had, in fact, been inspecting virtually every significant lift on every work shift during the time that Ebasco had been placing safety-related backfill at STP. The QC staff was adequately monitoring placement activities. Jordan, et al, ff. Tr.

13645, at 19; Tapia, ff. Tr. 13752, at 5; Tr. 13653-54 (Jordan); Tr.

13689-93 (Jordan, Lopez).

739. In response to this unresolved item, the Ebasco QC procedure was changed to provide increased inspection verification and documentation. This made it conform more closely with Ebasco's actual practice by requiring that inspection of backfill placement be conducted on at least one lift per area, per work shift. The NRC Resident

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Inspector reviewed the changes and closed this unresolved item in Inspection Report 85-04. Tapia, ff. Tr.13752, at 4-5; Jordan, et al . ,

ff. Tr. 13645, at 19-20 (Jordan).

740. Mr. Tapia stated that the technical significance of his observation was minor because QC inspection had been occurring, although the procedure was weak; and that, more importantly, the acceptance of backfill material was based on in-situ testing of the compacted backfill. Test locations were selected in an unbiased manner and gave representative samples of field conditions. He concluded that the backfill placement had been systematic, considering the properties of the backfill material, the construction process, and the results of in-place density tests. Tapia, ff. Tr.13752, at 5. No question was raised as to the adequacy of the backfill resulting from this situation (Jordan, et al . , ff. Tr.13645, at 19-20; Tapia, ff. Tr.13752, at 5-6).

741. Violation 83-24-02 and Unresolved Item 83-24-01 were similar, generically, to deficiencies reported in the 1980 Show-Cause Order, leading to a decision by HL&P management to perform a comprehensive programmatic audit of licensing and criteria documents, FSAR commitments, specifications, testing procedures, test data results, and QC procedures of all organizations associated with Category I backfill activities. The audit was completed on April 3, 1984 and submitted to NRC under letter of May 25, 1984. Jordan, et al . , ff. Tr.13645, at 11-12 (Jordan); App. Exh. 68.

742. Finding 23 of the programmatic audit states:

The Soils Inspection Procedure does not provide 1

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criteria on density variation with depth to enable QC to determine the correct location for testing as required by Specification 3YO69YS0043 and the FSAR. Therefore, the field test eleva-tion selection process does not give repre-sentative density information for all depth intervals within the lift.

App. Exh. 68, at 8; Jordan, et al . , ff. Tr.13645, at 20-23 (Jordan);

Tapia, ff. Tr. 13752, at 5-6.

743. Finding 24 of the programmatic audit states:

The Soils Inspection Procedure does not require test depths to be recorded and thus no evidence, in general, can be provided to demonstrate backfill installed by Ebasco has been tested at the required depth. Specifically, no evidence exists to demonstrate tests below the 30-inch diameter ECW pipes are taken at a depth of 7 inches below the invert.

Additionally, test depth information has not been provided by PTL.

App. Exh. 68, at 9; Jordan, et al . , ff. Tr.13645, at 24 (Jordan);

Tapia, ff. Tr. 13752, at 5-6.

744. The FSAR required that testing depths be selected to provide representative density information for all depth intervals within the lifts. The Bechtel specifications, in turn, required that test depths be distributed to obtain the true condition of the backfill. The QC inspection procedure stated simply that testing should be performed in accordance with the specification. The concern of HL&P, reflected by audit finding 23, was that the inspection procedure did not provide sufficient instruction to QC inspectors as to the depth within a lift at which testing of soil density should be performed to ensure representative in-place density data for depth intervals within the

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lifts. Jordan, et al., ff. Tr. 13645, at 21-22 (Jordan). HL&P's concern with audit finding 24 was that the Ebasco procedart did not require that the test depths be recorded, and that test lepth information was not being provided to PTL for inclusion in the test reports. Actually, however, Ebasco was recording the elevation of the lift in which the sample was taken. Jordan, et al . , ff. Tr.13645, at 23-24 (Jordan); Tapia, ff. Tr. 13752, at 5-6.

745. The witnesses testified that variations of in-place density within backfill lifts are so small when the lift is overlayed by another lift that soil density determined at any depth within a lift will be representative of that lift. This has been confirmed through tests run at different depths within lifts at the STP. Also, QC inspectors vary the depths at which the density tests are performed, providing further assurance that the information obtained is representative. Jordan, et al., ff. Tr.13645, at 22-23 (Ferris); Tr. 13725-26(Ferris);Tr.

13790-95(Tapia). Further, the adequacy of STP backfili is evaluated on the basis of the overall horizontal and vertical distribution of test sample locations and a failure to obtain information on the depth of samples within each lift would not raise doubts about the adequacy of the backfill (Jordan, et al., ff. Tr. 13645, at 23 (Ferris); Tr.

13790-95(Tapia)).

746. Because the requirement to obtain density information at all depth intervals within each lift was deemed to be over-conservative, the a

response to finding 23 was to change the FSAR to state that testing must be done so that representative density information is obtained for all lifts within the fill, instead of for various depth intervals within

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, each lift. Also, the specification was modified correspondingly and to require that test locations be selected to ensure that their lateral and vertical distributions provide information on the true condition of the backfill. Jordan, et al., ff. Tr. 13645, at 23 (Lopez, Jordan); Tapia, ff. Tr. 13752, at 5. This requirement left the selection of depth to the judgment of the inspector. The specified testing technique was observed by Mr. Tapia, who found it satisfactory. Tapia, ff. Tr.13645, at 5.

, 747. Ebasco had been recording the elevation of lifts within which samples were taken, giving sufficient information to permit judging the quality of the fill. Accordingly, the response to Finding 24 consisted simply of changing the specification and inspection procedure to require l that the test depths be recorded and that Ebasco provide that information to pTL for inclusion in the test reports. Jordan, et al.,

ff. 13645, at 25 (Jordan).

748. With respect to findings 23 and 24, Mr. Tapia stated that the fact that depth criteria did not exist and documentation was not occurring, as noted in findings 23 and 24, was of minor significance.

This was in agreement with his conclusion in an earlier report reviewing the response to Noncompliance No. 4 in NRC I&E Report 79-19, which he closed out in NRC I&E Report 80-17. Tapia, ff. Tr. 13752, at 5-6.

749. The panel of Applicants' witnesses concluded that the Category I backfill placed at STP by Ebasco is "more than adequate to perform its intended structural function and there is reasonable assurance that such backfill conforms to applicable regulatory requirements." Further, they

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q concluded that there is reasonable assurance that future Category I backfill activities will comply with applicable requirements and that the backfill will be adequate to perform its intended structural function. Jordan, et al . , ff. Tr.13645, at 25-26.

750. Mr. Tapia testified that his review of the responses to the violations and audit findings led him to conclude that they " represent minor conditions that have not impacted the adequacy of the backfill material" and that there is reasonable assurance that the backfill placed at STP by Ebasco conforms with the design requirements of the 4

construction permits and Commission regulations (Tapia, ff. Tr. 13752, at 6). In response to Board questions, he stated that actions taken by HL&P since Phase I speak for its character in a positive sense. Also, he felt that every engineer with whom he had dealt had been very i competent. Tr. 13795-96 (Tapia). Further, he did not feel that any of the problems or violations in the soils area reflected an unwillingness by HL&P to abide by the regulatory requirements of the NRC or an abdication of authority or refusal to accept responsibility to protect

the public health and safety (Tr.13797 (Tapia)).

i 751. On the basis of the testimony presented before us and summarized in Findings 718-50, supra, and the lack of evidence to the contrary, we find that there is reasonable assurance that the backfill placed by Ebasco conforms with the requirements of the construction permits and Commission regulations. Also, we find that the deficiencies in backfill activities, and their handling by HL&P, do not reflect

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unfavorably on the competence of HL&P. To the contrary, in reporting (with one limited exception) and resolving these deficiencies, HL&P has continued to display candor, promptness, and effectiveness similar to its performance in earlier matters, as noted favorably by us in our

> Phase I decision. HL&P's error in responding to Notice of Violation

83-24-02 does not represent a systemic deficiency in such responses nor an intent to avoid responsibilities; and procedures have been proposed (which we encourage) to remedy the particular problem.

4. General Update on Current Competence of HL&P and Its Contractors 752. We earlier evaluated the competence of HL&P and its contractors on the basis of affidavits filed during December 1984 and January-February 1985 (supra, Findings 678-99), together with the adjudicatory record compiled with respect to 10 C.F.R. 5 50.55(e) reporting and soils (supra, Findings 700-17 and 718-51). In our Sixth Prehearing Conference Order, supra at 9, we directed the Staff additionally to evaluate the competence of HL&P and its contractors in general, as compared with their competence in 1981. We envisaged a general updating of the SALP evaluation set forth in I&E Report 83-26.

This updating was accomplished in portions of testimony by several Staff witnesses and in cross examination and Board questions during the hearing.

753. Messrs. Eric H. Johnson and George L. (Les) Constable presented joint direct testimony for the Staff (Johnson / Constable, ff.

Tr. 14846). Mr. John' son is the Acting Deputy Director of the Division

_ - _ _ __ . _ _ _ - _ - - _ = - - __ _ __.-

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of Reactor Safety and Projects and Branch Chief of Reactor Project Branch I, Region IV, NRC. He has been Chief of Reactor Project Branch I since 1983 and was responsible for directing NRC employees who inspected the STP from that time until the hearing. Id. at 1. The STP is assigned to that branch. Since his promotion to his current position in May 1985, he has coordinated the development of Region IV preparation for the Phase II hearings, reviewed filings before the Board, and

! discussed previous Region IV activities with those persons who were involved at the time, three of whom are now retired (M. at 3). The professional qualifications of these two witnesses are summarized in attachmentstotheirtestimony(M.,attachedprofessional qualifications of Eric H. Johnson and George L. (Les) Constable).

754. In updating the general conclusions of the SALP report (I&E Rept. 83-26), the witnesses testified that "[t]he current views of the NRC Region IV staff indicate that the [A]pplicant continues to improve in performance since the last SALP period, and the performance is indicative of a high degree of management involvement in all site activities." Discussions of those witnesses with inspectors involved in preparirig a new SALP report covering the period December 1,1983, to June 30, 1985, support that conclusion. Johnson / Constable, ff. Tr.

14846, at 11-12; see n. 44, supra.

755. Mr. Donald Garrison is an NRC Resident Construction Inspector who has been assigned to the STP since March 3, 1985. His professional qualifications are attached to his direct testimony. Garrison, ff. Tr.

i 15110, at 1 and attached professional qualifications. He testified that

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! HL&P began trending deficiencies in July of 1980 and has revised its trending procedures three times since then. Since January 1, 1984, the HL&P QA group has been responsible for all trending, and quarterly reports are sent to the HL&P Group Vice President, Nuclear, and other management personnel. Current trending procedures were reviewed and described by Mr. Garrison, who concluded that the program is satisfactory, broad enough to identify occurring trends, and similar to trending methods used by other projects of this type. Garrison, ff. Tr.

15110, at 5-6; Tr. 15164 (Garrison). In response to a Board question, and on the basis of his observations, he testified that he viewed HL&P as a competent organization (Tr. 15164 (Garrison)).

i 756. Mr. Danny Carpenter is an NRC Resident Inspector who was assigned to the STP from December 1983 to the time of the hearing. His i

professional qualifications are attached to his direct testimony.

Carpenter, ff. Tr.15114, at 1 and attached professional qualifications.

He conducted the inspection and enforcement program and met regularly

! with HL&P and contractor supervision and management (jd. at 1). He testified that he had reviewed the joint affidavit filed by Messrs.

Crossman, Tomlinson and Jaudon of the NRC Staff and had first-hand knowledge of and supported the positions or information stated in several paragraphs of it, which were identified by him. Those included statements that (1) since mid-1982, HL&P had adopted a progressively more aggressive approach in dealing with quality-related issues; (2) much improvement had been noticed during the past 18 months with regard to causes of reportable deficiencies and tracking of corrective actions; t

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(3) certain specific HL&P actions, cited by him, illustrated that HL&P was aggressive and thorough in resolving problems or allegations with respect to quality assurance; and (4) HL&P implemented a rather innovative program for design verification by retaining Stone and i

Webster, an architect-engineer itself, to verify Bechtel design work.

Id. at 2.

757. Since his assignment to the STP in 1983, Mr. Carpenter observed a steady increase in HL&P involvement in most of the activities j

associated with design, construction, and preparation for startup and operation of the STP. Experienced key people have been added to the management and supervision team. Carpenter, ff. Tr. 15114, at 3. In April 1985, HL&P established a Project Compliance Group to serve as the primary interface between HL&P, Bechtel, Ebasco, Westinghouse and NRC j

inspectors in closing open items relating to construction and startup before issuance of the operating licenses. This is not a legal requirement but was regarded by Mr. Carpenter as an example of HL&P's commitment and increased attention to construction and safety of the STP. M.at3-4;Tr.15181(Carpenter). He stated that HL&P corrective actions with respect to materials control, an area that was rated in the SALP report as " Category 3" (satisfactory but needing more attention),

were appropriate. He did not witness any areas in which HL&P or its contractors were deficient to the point of being a problem and concluded i

that "[t]he applicant and its contractors are performing competently i with due regard for any safety-related issues or concerns." Carpenter, i

ff. Tr. 15114, at 4; Tr. 15180-81 (Carpenter).

i i

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758. Mr. Dan Tomlinson is a Reactor Inspector, Engineering Section, Reactor Safety Branch, in Region IV of the NRC. From September 1983, through February 1985, he was the Senior Resident Inspector for construction activities at the STP and was responsible for conducting the inspection and enforcement program. He met regularly with the j management and supervisory personnel of HL&P and its contractors to discuss inspection results and construction status. He also was one of those filing the NRC affidavit of. December 21, 1984 (as amended January 24,1985) and was a co-author of the SALP report. His professional qualifications are attached to his December 21, 1984 affidavit. '

Tomlinson, ff. Tr. 15112, at 1-2.

759. Mr. Tomlinson had read the testimony of Mr. Carpenter (supra, i Findings 756-57) and agreed with it. He also reaffirmed his testimony in the affidavit of December 24, 1984 (as amended January 24,1985)and stated that the actions of HL&P and its contractors in response to violations and concerns were accomplished in an expeditious manner.

Tomlinson, ff. Tr. 15112, at 2-3; Tr. 15170 (Tomlinson). In response to a Board question, he stated that the people with whom he dealt at the

{

STP were very open and pursued problems aggressively and promptly (Tr.

15164-65(Tomlinson)). He had observed a trend toward improvement in j competence during the time that he was at the STP and had concluded that i "[t]he applicant and its contractors performed competently with due regard for safety-related issues or concerns" (Tomlinson, ff. Tr. 15112, at 2).

! 760. Mr. Claude Johnson is a Senior Resident Inspector in Region IV, NRC, assigned to the STP since March 1985. His professional I

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1 qualifications are summarized in an attachment to his direct testimony.

Johnson, C., ff. Tr.15118, at 1 and attached summary of professional qualifications. From February 1983 to July 1984, he performed about five inspections at the STP as a regional inspector. He observed that HL&P's participation in activities with its new contractors increased during that period. He opined that HL&P stays fully informed and maintains effective control and responsibility for design and construction. He stated that during his tenure at the STP the competence of HL&P, Bechtel, and Ebasco had improved over that which he had observed during earlier inspections as a regional inspector. HL&P had increased its staff and its management was more involved in the day-to-day decision-making activities at the site. He characterized HL&P's establishment of the Project Compliance Group (supra, Finding 757) as a good example of that Applicant's increased involvement and commitment to public health and safety. Johnson, C., ff. Tr. 15118, at 2; Tr. 15179-80 (C. Johnson).

761. In response to Board questions, Mr. Johnson testified that HL&P is very competent and compares favorably with utilities at the other sites that he has seen. He sees no faults in their competence.

Tr. 15165, 15175 (C. Johnson). When pressed further, he responded that on an overall basis he would rate HL&P as better than a "2" in competence on the scale used in SALP reports (Tr. 15174,15185(C.

Johnson)). In completing his direct testimony, he concluded that his perception of the competence of HL&P, Bechtel, and Ebasco was that they

- -. . . _- ~

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were satisfactory and had constantly improved since he first went on site as a regional inspector (C. Johnson, ff. Tr.15118, at 3).

762. To summarize this series of Findings, several Staff witnesses have updated NRC's views of the competence of HL&P and its contractors, both in direct testimony and in responses to questions of parties and the Board during the hearing. The witnesses appearing before us were NRC managers and inspectors who have had close contact with STP and were in excellent positions to observe activities at the site and judge the competence of the participants in those activities. They have presented a uniform perception of continued improvement in competence since the conclusion of the Phase I hearing. No testimony to the contrary was j

pre,ented and no supported proposed findings challenging those perceptions have been filed by CCANP. Accordingly, we conclude that our preliminary findings concerning improvement in competence in the Phase I PID can be considered as substantiated by information presented to us in Phase II. On the basis of the total record amassed in Phases I and II, we conclude with respect to Issues B and D that the competence of HL&P and its contractors since the close of the Phase I record has I

significantly improved and that it meets the requirements of NRC regulations and provides reasonable assurance that the STP will be l completed in conformance with the terms of the construction permits and j other applicable requirements.

276 -

D. Contention 4 (Hurricane Design and Construction) 763. Contention 4 was originally introduced by CEU, the Intervenor that withdrew from the proceeding during Phase I (Memorandum and Order, August 3, 1979, Attachment at 3). In our Memorandum and Order of October 15, 1982, we permitted CCANP to adopt this contention i (LBP-82-91, 16 NRC 1364). It states:

The South Texas Project (STP) Category I structures and equipment are inadequately designed and constructed with respect to wind loadings as demonstrated by the fact that actual wind velocities associated with hurricanes which have occurred along the Texas Gulf Coast have exceeded wind loadings for which STP structures have been designed and evaluated. Further, there are non-Category 1 structures containing equipment which if destroyed or damaged would i jeopardize the safe operation of STP. These non-Category 1

buildings are not designed to withstand winds generated by i hurricanes and if damaged would provide missile type projectiles which could penetrate Category I structures which are inadequately protected.

Subsequently, we ordered that this contention be litigated in Phase II (Fourth Prehearing Conference Order (December 16, 1981), at 5-6).

764. The principal basis for the contention was that there have been hurricane wind speeds reported in the Gulf coastal area in excess of the 125 mph operating-basis wind speed (0BW) used for design purposes, as specified in i 3.3.1.1 of the FSAR for the STP. Also, although the contention does not address directly the effects of heavy rainfall and stonn surge accompanying hurricanes, some of these effects were referred to in the Intervenor's discovery responses. The hurricane wind loads, other potential effects, and questions raised by the Board are addressed in HL&P and Staff affidavits in support of summary disposition. See Findings 765 and 767, infra.

t

- - . - . _ . _ , ---m,- ,--- ,,,~. . _ _ . . . , , .

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765. On March 12, 1985, the Applicants moved for sumary

! disposition of this contention, claiming that there were no material facts as to which there were genuine issues to be heard (Applicants' Motion for Summary Disposition on CCANP Contention Four, and attacted

affidavits (March 12,1985)). The affidavit of Mr. Dale E. Wolfe addresses the adequacy of the OBW for the STP, in light of historical 1

' data on wind speeds in the Texas Gulf Coast region. Mr. Wolfe, who practices as a private consultant, received the B.S. degree in Meteorology from Pennsylvania State University in 1964 and had 23 years' l

experience in various aspects of meteorology, including 11 years' experience with nuclear plants. Wolfe Aff., Attachment I. The 1

affidavit of Mr. R. Bruce Linderman describes how Category I structures and equipment for the STP are designed to withstand hurricane wind loads and hurricane-generated missiles. Mr. Linderman received the B.S.

degree in Civil Engineering from Utah State University in 1949, the M.S.

degree in Civil Engineering from California Institute of Technology in

' 1950, and the M.S.A. degree from Golden Gate University in 1974. He is a Registered Professional Engineer in California. His experience l- includes over 30 years with Bechtel Corporation, specializing in seismic and dynamic force cor.siderations in designing nuclear and fossil power 2 plants, dams, missile sites, and industrial complexes. Linderman Aff.,

Attachment I. We find that both affiants are professionally qualified .

in the areas of their testimony.

f 766. CCANP responded on April 8, 1985, opposing the Applicants' motion and contending that there were several material facts as to which l

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there was a genuine issue to be heard (CCANP Response to Applicants' Motion for Summary Disposition of CCANP Contention Four (CCANP Response)). No supporting affidavits were included with the CCANP Response.

767. The Staff response of April 15, 1985 supported the Applicants' motion and included four affidavits (NRC Staff Response in Support of Applicar.t's Motion for Summary Disposition of CCANP Contention Four).

Mr. James E. Fa.irobent is a meteorologist employed by the NRC in Washington. He received the B.S. and M.S. degrees in Meteorology from the University of Michigan in 1970 and 1972, respectively, and his NRC duties include evaluation of the meteorological aspects of nuclear reactor siting and operation. His affidavit addresses the matter of wind speeds used in the design of STP structures. Fairobent Aff. and attached Professional Qualifications. Mr. John S. Ma is a structural engineer employed by the NRC in Washington. He received the B.S. degree in Civil Engineering from Taiwan Christian College in 1962, the M.S.

degree in Civil Engineering from the University of Missouri at Rolla in 1966, and the Ph.D. degree in Civil Engineering from the University of Texas at Austin in 1971. His 21 years of experience included two years of structural concrete design for nuclear power structures with Bechtel I

and 11 years as a structural engineer in licensing review and standards development with the NRC. His affidavit addresses the acceptability of the design process for hurricane protection of Category I structures at l STP. Ma Aff. and attached Professional Qualifications. Mr. Jerry N.

Wilson is a Section Leader in the Auxiliary Systems Branch (ASB) of the Division of Systems Integration, Office of Nuclear Reactor Regulation,

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NRC. He received the B.S. degree in Physics and Mathematics from the University of Puget Sound in 1970 and the M.S. degree in Nuclear Engineering from the University of Washington in 1972. His prior experience included 3 years as a nuclear engineer with the Navy, 6 years as Project Manager in the Office of Nuclear Reactor Regulation, NRC, and 2 years as Senior Policy Analyst in the NRC Office of Policy Evaluation.

The purpose of his affidavit was to review missile protection for the

! isolation valve cubicles (IVCs) at STP. Wilson Aff. Mr. Gary B. Staley is a hydraulic engineer, employed by the NRC, Environmental and Hydrological Engineering Branch, Materials and Qualifications i

Engineering Group, Division of Engineering. He received the B.S. degree in Civil Engineering from South Dakota State University in 1960 and completed 18 hours2.083333e-4 days 0.005 hours 2.97619e-5 weeks 6.849e-6 months of graduate work in water resources engineering at i the University of Nebraska in 1965-1973. His present employment at NRC dates from 1974. From 1960 to 1973, he worked as a hydraulic engineer 1

with the Corps of Engineers on flood control and various other types of projects. His affidavit addresses hurricane water level effects at the

) STP. Staley Aff, and attached Professional Qualifications. We find each Staff affiant to be professionally qualified in the areas that he addresses.

768. Category I structures must be capable of performing their safety functions under various load combinations, which form the bases j for their design. Plant elements that are necessary for continued operation must be designed to remain functional under severe conditions without posing undue risk to the public health and safety. The i

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r OBW is used to calculate wind loadings that are used in combination with f other specified loadings to determine structural stresses that must be withstood while the plant continues in operation (operating-basis conditions). Under more extreme load combinations, the plant may not I continue in operation, but safety-related elements must be designed to ensure that no undue risk occurs to the public health and safety under those conditions. The design-basis tornado (DBT) provides the design-basis wind speed (DBW) that is combined with other specified

! loadings to permit the calculating of structural stresses that must be l

withstood under extreme conditions without undue risk to public health or safety. Linderman Aff., at 2-4; Fairobent Aff., at 3; 10 C.F.R. Part 50, App. A, GDC 2; SRP, 6 s.3.1; NRC Reg. Guide 1.76.

769. The " fastest mile of wind" is defined as the greatest average wind velocity associated with the passage of one linear mile of air past l

i a measurement point. It represents a sustained wind, rather than an instantaneous gust, and is measured using a standardized procedure, it i

is commonly recorded hourly and reported daily at major National Weather l

Service (NWS) stations. Wolfe Aff., at 2; Fairobent Aff., at 4. The l

t OBW is defined as the " fastest mile of wind" that is expected to occur with a frequency of once in 100 years. This wind velocity is used to i calculate loads on Category I structures in accordance with appropriate

sections of the SRP. Wolfe Aff., at 2; SRP, il 2.3.1, 3.3.1, 3.8.1, 3.8.4; Linderman Aff., at 3, 5; Fairobent Aff., at 4.

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1 770. " Gusts" are rapid fluctuations in wind speed with a variation of at least 10 knots (12 mph) between peaks and lulls. The reported value for a gust is the absolute maximum wir.d speed, often having only one or two seconds' duration. " Peak winds" represent the maximum wind speed observed and may be a gust or simply the greatest instantaneous wind velocity. Wolfe Aff., at 2-3. Gust and peak wind data are not used directly in establishing design criteria but are taken into consideration by applying design factors to loads calculated for the

! fastest-mile-of-winddata(id_.,at4;LindermanAff.,at3,5;Fairobent

Aff., at 6; SRP, 66 2.3.1, 3.3.1).

771. The SRP provides that wind speed data should be based on meteorological records from nearby representative NWS, military, or other stations recognized as standard installations with long periods of record (Wolfe Aff., at 3; SRP, 9 2.3.1). The OBW was determined through statistical analyses of historical data for four NWS Texas coastal ,

i l

weather stations having the longest record of representative and reliable data in the region (30-111 years). The stations--Port Arthur, i

Galveston, Corpus Christi, and Brownsville, Texas--all are within 10 miles of the Gulf and are 150, 80, 105, and 220 miles from the STP site,

respectively. Wolfe Aff., at 5; FSAR, Table 2.3-40; Tr. 10915. The j analyses produced a 100-year fastest-mile wind of 116 mph at a standard aeight of 10 meters (Wolfe Aff., at 4-6). Also, a composite data set was prepared using the highest annual fastest-mile wind speeds at any of the stations for the 30 years during which records were compiled at all t

l I

l of them. These data were used in a confirmatory analysis, producing a ,

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more conservative value of 118 mph for the 100-year fastest-mile wind at a 10-meter height. Adjustment of those values from a 10-meter height to the 30-foot height specified in design criteria would result in slightly lower wind speed values. Id at 5-6. On the basis of these and other analyses, a conservative value of OBW for the STP was established at 125 j

mph, measured at a standard reference height of 30 feet above the ground (Wolfe Aff., at 3, 6-7; Linderman Aff., at 5; FSAR, 6 3.3-1).

i 772. CCANP (or, previously, CEU) cited several reported wind speeds ll over the 125-mph OBW as a basis for its contention that the STP was not adequately designed with respect to wind loadings. Mr. Wolfe emphasized that 5 2.3.1 of the SRP requires use of standard meteorological data in evaluating severe weather phenomena and calculating fastest-mile wind speed values. His affidavit considers each reported wind speed over 125 j mph cited by the parties and the Board and concludes that, with one exception, they do not meet the reliability requirements of the SRP.

Specific reasons for discounting those wind speeds are identified for

each and include one or more of the following: Observation height was unknown, location was not representative of the STP site, the quality of f observer training and equipment was indeterminate, the wind speed was not a fastest-mile wind speed, or the observation was an estimate.

Wolfe Aff., at 7-11. The Staff made an independent examination of hurricane wind speeds over 125 mph in the North Atlantic Ocean and the Gulf of Mexico and concluded that the Applicants' concerns about the I

quality of many of the measurements were legitimate. They concluded i that the Applicants "made a reasoned consideration of oberservations of l

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extreme wind speeds * * *." Fairobent Aff. , at 4-7.

773. The one fastest-mile wind speed over 125 mph that was the exception was for the Corpus Christi station during hurricane Celia.

The actual NWS measurement was 120 mph at 23 feet, which was extrapolated to 125 mph at 30 feet and 128 mph at 10 meters. That value was included in the STP data base. Wolfe Aff., at 7, 11.

774. Mr. Wolfe concluded that the data showing wind speeds over 125 mph are inappropriate for use in calculating fastest-mile wind speeds for the STP. Use of reliable wind speed data and the most current 1

t statistical methods confirm the validity of the 125-mph OBW. Wolfe i Aff. , at 12.

775. The Staff reviewed material in the FSAR and data for hurricane wind speeds and agreed with the affidavit of Mr. Wolfe with respect to j methods for examining extreme wind speeds and calculating the OBW for the STP. The Staff agreed with the value of 125 mph selected for the OBW. Fairobent Aff. , at 2, 7.

776. In its response to the Applicants' motion for summary disposition, CCANP presented no affidavits or other credible evidence

contravening the affidavits of the Applicants and Staff with respect to the methods used in determining the 125- mph OBW or the validity of that l figure. The Intervenor's response consisted principally of l

unsubstantiated arguments or bald statements to the effect that reported wind speeds in excess of 125 mph should have been used in determining the OBW. The key theory that CCANP employs in developing its argument 4

_ _ . . - _ _ - . - . - - , . _ - __ _ , , _ . . . _ . . - . . . . . ., - --- - _ ,-~, , - . . - . - . . . _ _

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is that reported wind speeds that do not meet the measurement criteria required for acceptance under NRC guidelines nevertheless must be used in design unless they can be affirmatively proven to be in error. CCANP Response, at 2-6. As we have summarized earlier, the Applicants and Staff have explained why those measurements or estimates were not viewed as reliable and appropriate for design purposes and hence were not used.

See Findings 769-75, supra. CCANP has presented no factual grounds for us to disregard or reject those statements and conclusions in affidavits by the Applicants' and Staff's affiants. Accordingly, we conclude that CCANP has not identified any unresolved material factual issue with respect to the OBW or met the requirements for prevailing against the motion for summary disposition.

777. The plant design must also take into account a design basis tornado (DBT), as defined in Regulatory Guide 1.76, in combination with other appropriate loads. For the geographic region in which the STP is located, the maximum wind speed is specified as 360 mph, comprised of a rotational element of 290 mph and a translational element of 70 mph, with a pressure drop of 3.0 psi and a pressure drop rate of 2.0 psi per second. Protection against wind-generated missiles also must be provided, as specified in 10 C.F.R. Part 50, Appendix A, GDC 4, and the SRP. Linderman Aff., at 4-6; Fairobent Aff., at 7-8; Regulatory Guide 1.76; SRP, 9 3.5.1.4. The Staff reports that no tornado associated with any hurricane has exceeded a maximum wind speed of 260 mph,

, translational plus rotational. Also, the combination of an 0WB and DBT at the STP would have a probability of less than 10-9 per year.

I Fairobent Aff., at 7-8.

i L

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< 778. The Category I structures at STP have been designed to withstand the combined loads imposed by the DBT wind, pressure differential, and (except for the IVC roof, certain MEAB HVAC openings - -

and the diesel generator exhaust stack openings) postulated tornado missiles, in combination with other design-basis conditions (Linderman i .

Aff., at 4, 6-7, 9-11; Fairobent Aff., at 4, 7-8; Findings 785, 786, infra). These load combinations are far greater than those resulting from the load combinations associated with the OBW. Accordingly, the i STP Category I structures (except for the missile resistance of three structures) are designed to withstand loads far in excess of any that would be generated by hurricares. Lindennan. Aff. , at 7-8. The Category I structures also have been designed to ensure safety against the effects of failures of non-Category I structures at the plant (Linderman Aff.,at8-9). In response to Board questions, we were assured that designs for the high, but relatively short-lived, loads associated with j

the tornado-based DBW are applicable to the lower but longer duration loadings that accompany hurricane winds. Further, we were advised that the STP Category I structures we,re designed to withstand hurricane winds -

over 200 mph, which is higher than any reported wind speeds on which CCANP was relying in support of its contention. Linderman Aff., at 7-10; Tr. 10922-23. The Staff concurred that the STP was designed to withstand a 200-mph wind speed (Tr. 109E9-30).

779. The Staff agrees with the reasoning of Mr. Linderman that the STP Category I structures will withstand hurricares and (except for a

A

,w ,- . . - - . . - - . .

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structures set forth in Finding 778, supra) missiles generated by them because they are designed for a tornado wind speed of 360 mph, including tornado-generated missiles. The design process described by Mr.

Linderman is viewed as acceptable under applicable NRC guidance and regulations. Ma Aff., at 2.

780. The STP Category I structures also have been designed to withstand a spectrum of missiles that might be generated by a DBT, in accordance with the SRP, except for three " nonconforming" structures.

The first of these is the roof of the IVC (Linderman Aff., at 9; SRP, 6 3.4.1.4). Instead of designing the IVC roof to withstand DBT-generated missiles, the Applicants elected to demonstrate, in accordance with SRP, 9 3.5.1.4 and Regulatory Guide 1.117, that the probability of such a missile striking the IVC roof is sufficiently low (median value of 2 X 10-10 per year) that the design need not consider the possibility of that happening. The probability of a hurricane-generated missile striking the IVC roof was calculated to be lower (1.2 X 10-10 peryear).

Linderman Aff., at 10-11, and attachments. The Staff reviewed that

! matter and concluded that the probability of a tornado- or hurricane-generated missile damaging the IVCs and associated essential equipment was about 3 X 10~9 per year, within one order of magnitude.

Because both the Applicants' and Staff's calculated probability figures were less than the Staff acceptance criterion of 1 X 10-7 , the Staff concurred that additional missile protection need not be provided for the IVCs. Wilson Aff. , at 2-3. In response to Board questions, both

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the Applicants and Staff opined that this approach did not reduce safety standards for the STP because the probabilities of damage by natural phenomena to the few portions of the plant not meeting design criteria

/ere summed and determined to be below the acceptance criterion of 1 X 10-7 per year in total (Tr. 10924-29,10940).

781. In its response to the motion for summary disposition, CCANP argues against methods used by the Applicants in selecting and using the DBT wind speed of 360 mph in designing for protection against extreme wind loads and missiles. The arguments propose that the wind speeds used for design purposes should be based on the sum of the OBW and DBT winds, which assumes that the OBW and DBT occur together. No affidavits are included to substantiate those arguments. CCANP Response, at 6-8.

As we have summarized earlier, the Applicants' witnesses described the basis on which the DBT wind was selected and used in design, consistent with NRC guidelines. See Findings 776-79, supra. Those statements and conclusions were not refuted by CCANP. We conclude that CCANP has failed to identify any unresolved material factual issue with respect to the DBW or OBW as required for rejection of the motion for summary disposition with respect to design wind speeds.

782. In designing for protection against potential high water induced by storm surge accompanying hurricanes and the effects of heavy rains, calculations indicated that the probable maximum hurricane storm surge, combined with the 100-year flood level in the Colorado River, would produce a water surface elevation of 26.74 feet. That is below the grade level of 28.0 feet in the power block area, where Category I l

r

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structures are located, and below the elevation of roads bounding the power block (30.0 feet). It was concluded that the Category I structures will not be jeopardized by the potential rise in water level.

Linderman Aff. , at 11. The Staff agrees with that analysis and points out further that the STF site is some 15 miles from the coast and that surge effects that far inland would be greatly reduced and that shallow depths would limit velocities to essentially nonerosive values. Also, the STP Category I structures are designed to withstand failure of the main cooling reservoir, with water depths of 22 feet and the associated flood wave. Staley Aff., at 1-2.

783. CCANP, in its response, contends that the power of a storm surge is so immense that the roads could be overtopped and breached, putting the base of the power block at risk (CCANP Response, at 8-9).

No affidavit was presented to substantiate those arguments. The Staff addressed that question and concluded that erosion of the roads and plant fill are hydraulically infeasible, as envisioned by CCANP. Staley Aff., at 2. We conclude that CCANP has failed to identify any unresolved material fact or to present a substantiated reason why the Applicants are not entitled to prevail as a matter of law with respect to the storm surge question.

784. On January 10, 1986, the Applicants submitted to the Staff (with copies to the Board and parties) a document concerning STP design I

for tornado depressurization effects near the MEAB HVAC louvers that, in the Board's view, raised a question concerning the validity of some of the affidavits submitted earlier. In a telephone conference call, the

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Applicants indicated that yet another structure also should be covered by a revised affidavit. The Board asked the Applicants and Staff to update the earlier affidavits in light of the new information and asked both to respond to the following inquiry:

We have found that the fact that the IVC [] roof does not meet deterministic tornado criteria is acceptable because the probability of a serious release by this mechanism is low. We are now confronted with a similar argument with respect to certain MEAB HVAC louvers. Are two or three such failures to meet deterministic requirementspermissibly?,

does not exceed 1 X 10- provided the sum of the probabilities Memorandum (Telephone Conference Call - January 28,1986), dated January 29, 1986 (unpublished).

785. In response, the Applicants filed the supplementary affidavit of Mr. Linderman, with attachment, on February 18, 1986, indicating that, in addition to the IVC roof, certain MEAB HVAC openings and diesel generator exhaust stack openings also had not been designed to withstand the impact of tornado missiles (Linderman Supp. Aff., at 2). An analysis was made of the probability of a tornado missile striking the MEAB HVAC dampers, producing a calculated median value of 2 X 10-10 per year. A calculation of the probability of a missile striking or entering into a diesel generator exhaust stack opening produced a median value of 1.2 X 10-12 per year. The median probability of a tornado missile entering the stack openings, or striking the IVC roof area, or striking the MEAB HVAC dampers was calculated as about 4.012 X 10-10 per year. The median probability of a hurricane-generated missile striking any of those targets was calculated to be about 2 X 10-10 per year. The total calculated probability of a tornado or hurricane missile striking

-10 er year, well any of these targets was calculated at about 6 X 10 j

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below the NRC acceptance criterion. The probability of a release of radioactivity exceeding 10 C.F.R. Part 100 limits as a result of such an event would be even lower. Linderman Supp. Aff., at 2-4. Mr. Linderman concluded that, as a result of the low probabilities, no physical barriers are necessary to protect any of those Category I structures from hurricane or tornado missiles.

786. On February 28, 1986, the Staff filed a second affidavit by Mr. Wilson, addressing the Board question referred to supra, Finding 784. He acknowledged that the MEAB HVAC louvers and the diesel generator exhaust pipe openings were not protected from externally generated missiles (Wilson Supp. Aff., at 3-4). He stated that the number of locations where barriers are not provided to protect against tornado-generated missiles is not a critical factor in the Staff review.

The important consideration was said to be whether the overall probability of the missiles striking those locations meets the Staff's criteria (id. at 2). The position of the Staff in this matter, based on guidance in SRP Q 3.5.1.4 and Regulatory Guide 1.117, is:

The probability of significant damage to structures, systems and components required to prevent a release of radioactivity in excess of 10 C.F.R. Part 100 following a missile strike, assuminglossofoffs}tepower,shallbelessthanorgqualto a median value of 10~ per year or a mean value of 10- per year. Significant damage is damage that would prevent meeting the design basis safety function.

Wilson Supp. Aff., at 3.

787. At the March 28, 1986, Seventh Prehearing Conference, CCANP advised the Board that it had not filed, and did not intend to file, any response to the additional Applicants and Staff Affidavits (Tr.15905;

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Seventh Prehearing Conference Order, supra, 23 NRC at 189).

788. After the Applicants revised their calculations of probabilities to take into consideration the additional units not protected from missiles, described supra, the Staff prepared 6 3.5.2 of the STP SER, under the supervision of Mr. Wilson. In that document, the Staff concluded that the probability of tornado- and hurricane-borre missile damage to the IVCs, HVAC louvers, and diesel exhausts is "much less than 10-7 per year." Wilson Supp. Aff, at 4; see also SER, at pp.

3-11 and 3-12, 789. For reasons set forth in this Opinion, pp. 81-82, supra, the Board does not accept the legal position of the Staff in its entirety.

Nonetheless, were the probabilities of missile strike to be shown to be as low as calculated by the Applicants or Staff for the three

" nonconforming" structures, we would regard the failure to be designed to resist missiles as a de minimis departure from legally required design practices.

790. There are significant unresolved questions concerning the probability calculations of the Applicants and Staff with respect to the source of missiles used in those calculations. It appears that a spectrum of design-basis missiles as set forth in SRP, 9 3.5.1.4 was utilized. Such spectra are appropriate for evaluating the missile resistance of Category I structures but may be unsuitable for calculating the likelihood of missile damage to Category I structures not appropriately designed to withstand missiles. For that reason, the

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standards for granting sumary disposition (see Opinion, supra, pp.

48-50) have not been satisfied at this time with respect to the IVC roof, certain MEAB HVAC openings and the diesel generator exhaust stack openings.

791. Two doors in the MEAB also are not designed to i4ithstand a tornado missile, but other 1_nternal barriers protect safety-related equipment and components in the MEAB (Linderman Supp. Aff., at 2, n. *).

That design appears satisfactory insofar as tornado- or hurricane-missile protection is involved.

792. The Staff expressed the opinion that it could not comment on the construction aspects of Contention 4 before the issuance of its SER.

The Applicants did not address the construction questions in their affidavits. Pending the potential submission by CCANP of claims concerning construction to withstand hurricanes, we cannot consider sumary disposition of the construction aspects of Contention 4.

793. During the Seventh Prehearing Conference, we noted that CCANP had forwarded to us and the other parties a newspaper article indicating that an alleged deficiency in the construction of the HVAC system could affect its protection against tornadoes (Tr. 15907-09; Article from Houston Post of June 18, 1985, forwarded by letter from CCANP dated June 26,1985). We requested that the Applicants and/or Staff advise us of specific details of the HVAC construction problem (if any) to which the article referred, and their resolution of it. By letter dated April 25, 1986, the Applicants informed us that this matter was the same as that addressed by the supplementary affidavits concerning the design of HVAC

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dampers (see supra, Findings 784-85). We accordingly shall deal with this matter in that context, as a design rather than a construction ouestion.

E. Issue C 794. Issue C reads:

In light of (1) HL&P's planned organization for operation of the STP; and (2) the alleged deficiencies in HL&P's management of construction of the STP (including its past actions or lack of action, revised programs for monitoring the activities of its architect-engineer-constructor and those matters set out in Issues A and B), is there reasonable assurance that HL&P will have the competence and commitment to safely operate the STP?

Second Prehearing Conference Order, dated December 2, 1980 (unpublished), Attachment, at 2; see also LBP-84-13, supra, Finding 227, 19 NRC at 781.

795. In Findings 227-49, 19 NRC at 781-87, we reviewed this issue anc' concluded that, as of the time of issuance of PID-I, there was reasonable assurance that HL&P will have the competence and commitment to operate the STP safely. Because of the preliminary nature of the testimony on which those findings were based, however, we conditioned our conclusion upon an updating of that testimony prior to the issuance of any Decision authorizing facility operation. Finding 249, 19 NRC at 787. We anticipated that such updating would take place in Phase III (id. at 699).

796. On February 18, 1986, the Applicants submitted an affidavit, dated February 14, 1986, of Mr. Jerrold G. Dewease, Vice President,

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Nuclear Plant Operations, of HL&P. This affidavit, which included portions of the FSAR, updated testimany previously provided by Mr.

Dewease and Mr. Jerome H. Goldberg on HL&P's organization for operation of the STP. By letter dated May 19, 1986, the Applicants provided additional information concerning Mr. Dewease's affidavit.

797. On March 14, 1986, the NRC Staff submitted an affidavit, dated March 12, 1986, of Mr. Lawrence P. Crocker, Section Leader, Facility Operations Branch, Division of PWR Licensing-A, Office of Nuclear Reactor Regulation. This affidavit updated the Phase I testimony of two panels, each including Mr. Crocker. (This testimony had been entered into the record by stipulation. LBP-84-13, supra, 19 NRC at 786, n.

50.) On May 16, 1986, the Staff submitted a supplemental affidavit of Mr. Crocker (dated May 15,1986).

798. The organizational structure reviewed in PID-I was that set forth in the FSAR, as revised through Amendment 25 (App. Exh. 56). The organizational structure reviewed in Mr. Dewease's current affidavit is that set forth in the FSAR, as revised through Amendment 52, together with changes to HL&P's program not reflected (as of February 13,1986) in an FSAR amendment (Dewease Aff., 1 29). The Applicants' May 19, 1986 letter advised that these changes were included in Amendment 53 to the FSAR. The organizational structure reviewed by the Staff affidavit is that set forth in the FSAR, as revised through Amendment 51, together with the information set forth in Mr. Dewease's affidavit (Crocker Aff.,

11 3, 5). (The Board notes that certain of the organizational charts

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appended to the Staff's advance SER are designated as being derived from Amendment 53 of the FSAR. See advance SER, Figures 13.2 and 13.3. We further note that the SER (NUREG-0781), which was dated April 1986, analyzes the organizational structure as revised through Amendment 51 of the FSAR. SER, i 13.1.1.1, at p. 13-1.) Mr. Crocker's supplemental affidavit generally described the differinces in 3taffing and organization submitted by the Applicants in FSAR A u cment 53, 799. There have been a nurcber of organizational changes adopted by HL&P since the Phase I hearings. In 1982, the nuclear plant operations staff was overseen by the Vice President, Nuclear Plant Operations, who was to report directly to the Executive Vice President. The Manager of QA for Operations and the Director, Nuclear Fuels, also were to report to the Executive Vice President. The organization for plant operations was to be divided into four functional operating areas (operating, technical, maintenance and training) together with two additional organizations, the radiation protection group and an administrative group. The reporting chain for these groups ran through the Assistant Plant Superintendent and the Plant Superintendent to the Vice President, Nuclear Plant Operations. LBP-84-13, Findings 230-31, 19 NRC at 782; App. Exh. 56, Figs. 13.1-1 and 13.1-2.

800. Currently, the senior corporate officer in charge of nuclear matters is the Group Vice President, Nuclear, who reports directly to I the Chairman of the Board and Chief Executive Officer of HL&P. SER,S 13.1.1.2 and Fig. 13.1. The position of Group Vice President, Nuclear is equivalent in organizational stature to the former position of

{

t

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Executive Vice President (although the former position included certain non-nuclear responsibilities) (Tr. 11913-14 (Jordan)). Reporting to the Group Vice President, Nuclear are the Vice President, Nuclear Plant Operations; and the managers of Special Projects, Nuclear Assurance, Nuclear Licensing, Nuclear Engineering, Engineering Assurance, and STP Project (Dewease Aff., 1 4).

801. Reporting to the Vice President, Nuclear Plant Operations, are the Managers of Nuclear Training and Nuclear Security and the Plant Manager, STP. Reporting to the Plant Manager, STP is a Plant -

Superintendent who supervises four functional areas (reactor operations, chemical operations and analysis, technical support, and maintenance).

Also reporting to the Plant Manager, STP, are the Managers of Management Services, Health / Safety Services, and Outage, and the Facilities Services Supervisor. Dewease Aff., 11 3, 5 and Fig. 1.

802. The Applicants explain that the functions mentioned in the 1982 organizational description are all addressed in the revised organization, and that a "few more" staff functions have been added and the organization realigned "to provide * *

improved lines of management authority." The current Plant Manager has replaced the 1982 Plant Superintendent as the official responsible for plant management.

The Plant Superintendent, who now reports to the Plant Manager, has been freed from a number of administrative functions previously exercised by l

I that position and devotes his entire energies to plant operation and maintenance. Dewease Aff., 1 5. The net effect, however, results in a

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longer avenue of supervision between functions reporting to the Plant Superintendent and the Vice President, Nuclear Plant Operations.

803. In 1982, HL&P planned to provide the requisite expertise on shift through its Shift Supervisors, who were to have had Senior Reactor Operator (SR0) licenses (LBP-84-13, supra, Finding 244,19 NRC at 785-86). Currently HL&P plans to provide such expertise through Shift Technical Advisors (STAS). Dewease Aff., 1 11. The STA program resulted in an open item for further Staff review. See infra, Finding 805, and Opinion, pp.98-102, supra.

804. The Staff has found the Applicants' organizational structure for pinnt operations acceptable, with adequate provisions made for review and audit and for administrative controls, all in accordance with SRP requirements (see SRP, Q 13.1). The Staff notes a ncmber of " minor items" for later Staff verification. Crocker Aff., 1 7. With respect to organizational structure, we find one "open" item to be significant.

The Staff states that it has not yet examined the procedures governing the responsibilities of the onsite and offsite groups to coordinate their activities, but plans to explore this subject during a visit to the corporate office and the plant site and to report on interface matters in an SER supplement. Advance SER, @@ 13.1.1.2 (" Interface with South Texas Plant Organization") and 13.1.1.3. See Opinion, supra pp.

95-97, for further comments on this open item.

805. The Applicants have provided the qualifications of a large number of the managerial personnel who will have STP operational responsibilities (Dewease Aff., FSAR, @@ 13.1.1.4, 13.1.3.2, and Table

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13.1-1, together with applicable changes). The Staff shas reviewed plant staffing for operation and has found it acceptable, subject to several open items (Crocker Aff., 1 7; Advance SER, 9 13.1.1.2). Three of these we find to be significant. First, the SER notes that "there is little previous experience at the corporate level in nuclear plant operations" (Advance SER, 5 13.1.1.2 (" Personnel Qualifications"). Second, the Staff has indicated that it will confirm compliance with the shift crew operating experience guidelines of Generic Letter 84-16. Third, the Staff indicates the Applicants will "not meet the desires of the Commission as expressed in Generic Letter 86-04, ' Policy Statement on Engineering Expertise on Shift.'" The Staff finds the Applicants' program for engineering expertise on shift to be acceptable but adds that "[t]he applicant may wish to revise the STA program in light of the new policy statement." By letter to the Staff dated May 8, 1986 (ST-HL-AE-1659, File No: G3.8), the Applicants have submitted further information concerning the STA program. For reasons set forth in our Opinion (supra, pp.97-102), we find that satisfactory resolution of these open items is important. Our resolution of Issue C is specifically conditioned on a Staff finding that the Applicants' program for shift expertise meets the intent of the Policy Statement.

806. In the circumstances of this proceeding, we find that the open items identified supra in Findings 804 and 805, as well as others bearing on organizational structure and qualifications identified in Chapter 13 of the SER, may appropriately be resolved by the NRC Staff.

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807. We conclude that, subject to the resolution of various open items in a manner satisfactory to the NRC Staff, and in particular the open item concerning conformance with Generic Letter 86-04, the Applicants have satisfied applicable regulatory requirements regarding

their organization and staffing for operation. Subject to resolution satisfactory to the Staff of those open items, we have reasonable assurance that HL&P has the competence and commitment to operate the STP safely.

i

_____,.,_g..,-y. ,- , , _ 4 ,_. , -----,

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F. Issue F (Summary Disposition) 808. Issue F, as admitted for litigation by this Board in the Second Prehearing Conference Order of December 2, 1980, states:

Will HL&P's Quality Assurance Program for Operation of the STP meet the requirements of 10 CFR Part 50, Appendix B?

809. This issue was scheduled for litigation in Phase III (Finding 427, supra). Following completion of discovery, on March 12, 1986, the Applicants filed a Motion for Summary Disposition o[f] Issue F.

810. In CCANP's Answers to Applicants' Eighth Set of Interrogatories (at answer 5) and during the Seventh Prehearing Conference (Tr. 15783-85), CCANP indicated that the sole matter it intended to raise under Issue F was the allegedly inequitable enforcement of HL&P's drug detection program. In the course of the Seventh Prehearing Conference, we ruled that that matter did not fall under Issue F (Tr. 15888-89). We explained that ruling in our Seventh Prehearing Conference Order, supra, 23 NRC at 186, 187.45 811. Since CCANP's drug claims were the only matter it wished to raise under Issue F, it did not respond to the Applicants' motion (see Seventh Prehearing Conference Order, supra, 23 NRC at 187, n.4).

Indeed, concerning other matters bearing on whether the Applicants' QA program conforms to 10 C.F.R. Part 50, Appendix B, CCANP stated in its i

45 For reasons unrelated to the alleged nexus to Issue F, we also denied further consideration of the drug issue under Issue C or as 4

a late-filed contention (23 NRC at 189).

i

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Answers to Applicants' Eighth Set of Interrogatories, dated February 12, 1986, at 1:

CCANP does not contend that the Quality Assurance Program for the South Texas Nuclear Project, as amended through Amendment 52(November 15,1985) and HL&P's letters to the NRC staff through January 10, 1986, will not fully satisfy the requirements of 10 C.F.R. Part 50, Appendix B or that any revisions or additions to such QA program are necessary in order to satisfy the requirements of 10 C.F.R. Part 50.

812. Inasmuch as CCANP did not reply to the Applicants' motion, we did not require a reply from the Staff (Tr. 15910-11; Seventh Prehearing Conference Order, supra, 23 NRC at 187, n.4; see p.92, supra). We have, however, stayed our hand in ruling on the Applicants' motion, awaiting receipt of the Staff's SER (NUREG-0781). We did this in order to have the benefit of the Staff's opinion of the QA program for operation, which appears in Chapter 17 (" Quality Assurance") of the SER. By doing so, we sought to make certain that there would be no matter cognizable under the very general terms of Issue F that could be viewed as calling into question the adequacy of the QA program for operation. In fact, the Staff's report concludes (at p. 17-3) that:

(1) The organizations and persons performing QA functions have the required independence and authority to effectively carry out the QA program without undue influence from those directly responsible for cost and schedule.

(2) The QA program describes requirements, procedures, and controls that, when properly implemented, comply with Appendix B to 10 CFR 50 and with SRP Section 17.2 (NUREG-75/087, Revision 0).

813. The Applicants' motion is supported by the affidavit of James E. Geiger on Issue F, dated March 10, 1986, which bears, as

l

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attachments, Section 17.2 of the FSAR (Attachment A), a list of planned changes to Section 17.2 (Attachment B), and an organization chart for HL&P's Nuclear Assurance Department (Attachment C). Mr. Geiger is the Manager, Nuclear Assurance, for HL&P. He previously testified during Phase I, and his educational background and professional qualifications are included in that testimony. Geiger Aff., 1 1; Geiger et al., ff.

Tr.10580, at 1-3. We find Mr. Geiger to be qualified to address the matters dealt with in his present affidavit.

814. As required by 10 C.F.R. 5 2.749(a), the motion is also acccmpanied by a list of " Material Facts as to Which There is No Genuine Issue to Be Heard". These are asserted to be:

1. HL&P's QA program for the operation of STP (the STP operations QA program) is described in Attachments A, B, and C to the March 10, 1986 affidavit of Mr. James E.

Geiger.

2. The STP operations QA program includes appropriate plans for inspections, audits, surveillance, documenting, tracking and trending of deficiencies, review of vendor quality programs, and other monitoring of STP quality related programs (Affidavit of Mr. James E. Geiger, 11 5-9).

3. The STP operations QA program includes appropriate requirements for personnel qualification, experience, and training (Affidavit of Mr. James E. Geiger, 11 11-13).

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4. The STP operations QA organization will have a staff and organization sufficient to perform its functions in compliance with Appendix B,10 C.F.R. Part 50 (Affidavit of Mr. James E. Geiger,115-10 and Attachment C).

5. The STP operations QA organization is structured to provide organizational independence in the performance of its functions (Affidavit of Mr. James E. Geiger,13).

(6) The STP operations QA program satisfactorily addresses each of the 18 Criteria of Appendix B,10 C.F.R. Part 50 (Affidavit of Mr. James E. Geiger,1 15 and Attachments A and B).

We find no reason for disagreeing with these facts or for concluding that they do not adequately address all matters in question under Issue F.

815. The standards for summary disposition are well-known and are set forth supra, at pp. 48-50. Having carefully considered the motion in the light of those standards, having noted the position of CCANP as expressed in its answer to the Applicants' interrogatories (Finding 811, supra) and having noted the Staff's position as expressed in NUREG-0781 (Finding 812, supra), we find that there is no genuine issue as to any material fact; that the Applicants are entitled to a decision in their favor as a matter of law; and that, accordingly, the granting of summary disposition of Issue F is indeed appropriate.

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II. CONCLUSIONS OF LAW Based upon the foregoing Findings of Fact and upon consideration of the entire evidentiary record in this proceeding, the Board makes the following conclusions of law:

1. In its handling of the Quadrex Report, HL&P complied with the requirements of 10 C.F.R. 5 50.55(e). Although we conclude that one additional finding of the Quadrex Report should have been furnished to NRC as a "potentially reportable" item, failure to have done so does not constitute a violation of 10 C.F.R. $ 50.55(e), since the item later proved to be not reportable under that section.

2. HL&P's handling of the Quadrex Report under 10 C.F.R. S 50.55(e) does not detract from our earlier favorable evaluation of HL&P's character and competence.

3. HL&P's failure to furnish the Quadrex Report to the Licensing Board shortly after its release, and HL&P's failure to acknowledge the existence of the Quadrex Report in Phase I testimony or on cross-examination, violate the McGuire doctrine and, in addition, constitute less-than-full disclosure and, to some extent, less-than-desirable candor, which detracts somewhat from our earlier favorable evaluation of HL&P's character. The instances of less-than-full disclosure, taken individually or collectively, are not significant enough to conclude that HL&P lacks character to a degree sufficient to warrant denial of operating licenses.

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4. HL&P's organization and staffing for operation satisfy all applicable regulatory requirements. This conclusion is subject to specified findings to be made by the NRC Staff.

5. HL&P's QA program for operation satisfies the requirements of 10 C.F.R. Part 50, Appendix B.

6. The Applicants have demonstrated managerial competence sufficient to permit them to complete construction of and to operate the STP.

7. On the basis of the foregoing, and subject to the specified Staff findings, we have reasonable assurance that HL&P has the necessary managerial competence and character (including commitment to safety) to complete construction of and to operate the STP safely, in compliance with all applicable NRC requirements.

8. Structures, systems and components important to safety, except as indicated below, have been adequately designed to withstand hurricanes and hurricane-generated missiles, as required by General Design Criteria 2 and 4. This conclusion does not apply to the design to withstand hurricane missiles of the IVC roof, certain MEAB HVAC openings and diesel exhaust stack openings (as identified in Part II.C of this Opinion).

l

- 306 -

ORDER On the basis of the foregoing Findings of Fact, Conclusions of Law and Opinion, and the entire record, it is, this 13th day of June,1986 ORDERED:

1. CLI-80-32 Issues A, B, C, and D (to the extent not previously resolved in LBP-84-13) and CCANP Contentions 9 and 10 are resolved as described in this Decision, subject to the terms and conditions set forth herein (including further review and findings by the Staff, where applicable).

2. The Applicants' Motion for Summary Disposition of CCANP Contention 4, dated March 12, 1985, is hereby granted to the extent it relates to the adequacy of design of all safety structures to withstand hurricanes and hurricane missiles, except with respect to the design to withstand hurricane missiles of the IVC roof, certain MEAB HVAC openings and diesel generator exhaust stack openings. Further development of the record is necessary with respect to the design of those structures, as well as the construction of safety structures to withstand hurricanes and hurricane missiles.

3. The Applicants' Motion for Summary Disposition of Issue F, dated March 12, 1986, is hereby granted.

4. CCANP's fourth and fifth motions to reopen the Phase II record, dated January 17, 1986 and February 28, 1986, respectively, are denied.

5. In accordance with 10 C.F.R. 55 2.760, 2.762, 2.764, 2.785, and 2.786, as amended, this Partial Initial Decision shall become effective immediately and will constitute, with respect to the matters resolved

- 307 -

herein, the final decision of the Commission thirty (30) days after issuance hereof, subject to any review pursuant to the above-cited Rules of. Practice. Any party may take an appeal from this Partial Initial Decision by filing a Notice of Appeal within ten (10) days after service of this Decision. Each appellant must file a brief supporting its position on appeal within thirty (30) days after filing its Notice of Appeal (forty (40) days if the Staff is the appellant). Within thirty (30) days after the period has expired for the filing and service of the briefs of all appellants (forty (40) days in the case of the Staff), a party who is not an appellant may file a brief in support of, or in opposition to, any such appeal (s). A responding party shall file a single, responsive brief only, regardless of the number of appellants' briefs filed.

THE ATOMIC SAFETY AND LICENSING BOARD

& D CharlesBechhoefer,Chairmy ADMINISTRATIVE JUDGE

'wh f ., w N

gr/ James C. Lamb J0MINISTRATIVE JUDGE Axb Frederick J. Sho

~'

WW ADMINISTRATIVE DGE dated at Bethesda, Maryland this 13th day of June, 1986.

APPENDIX A ,

List of Phase II Witnesses and Prefiled Testimony Witness Panel Cited As Subject Barker, David G. Tr. 15643 (no prefiled Quadrex Report testimony) (reopened hearings)

Bernsen, Sidney A. Bernsen/Lopez, ff. Tr. 13441 Quadrex Report Carpenter, Danny R. Carpenter, ff. Tr.15114 Competence of HL&P Collins, John T. Tr. 15286 (no prefiled Quadrex Report testimony)

Constable, George L. Johnson / Constable, ff. Quadrex Report; 10 Tr. 14846 C.F.R. 5 50.55(e) reporting Ferris, Walter R. Jordan, et al., ff. Tr. 13645 soils (backfill)

Frazar, Richard A. Frazar, ff. Tr. 14412 Quadrex Report Garrison, Donald L. Garrison, ff. Tr. 15110 10 C.F.R. S 59.55(e) reporting / trending Goldberg, Jerome H. Goldberg, ff. Tr.11491 Quadrex Report; re-placement of B&R Tr. 15504 (no prefiled Quadrex Report testimony) (reopened hearings)

Heishman, Robert F. Heishman, ff. Tr.14846 10 C.F.R. 9 50.55(e)

(follows prefiled testimony reporting of Robert G. Taylor)

Johnson, Claude E. Johnson, C., ff. Tr. 15118 Competence of HL&P Johnson, Eric H. Johnson / Constable, ff. Quadrex Report; 10 Tr. 14846 C.F.R. 6 50.55(e) reporting Jordan, Don D. Jordan, ff. Tr. 11908 Quadrex Report; re-placement of B&R Tr. 15398 (no prefiled Quadrex Report

' testimony) (reopened hearings) t A-1 ,

Witness Panel Cited As Subject Jordan, Thomas J. Jordan, et al . , ff. Tr.13645 soils (backfill)

Lopez, Alfredo Jordan, et al., ff. Tr. 13645 soils (backfill)

Lopez, Frank, Jr. Bernsen/Lopez, ff. Tr.13441 Quadrex Report Oprea, George W. Oprea, ff. Tr. 14095 Quadrex Report; re-placement of B&R Tr. 15371 (rebuttal, no Quadrex Report prefiled testimony)

Tr. 15588 (no prefiled Quadrex Report testimony) (reopened hearings)

Phillips, H. Shannon Phillips, ff. Tr. 15116 10 C.F.R. 6 50.55(e) reporting Phillips, ff. Tr. 15192 Quadrex Report Poston, Jesse B. Tr. 14199 (no prefiled Quadrex Report; re-testimony) placement of B&R Robertson, Cloin G. Tr.14583 (no prefiled Quadrex Report testimony)

Sells, Donald E. Sells, ff. Tr. 15190 Quadrex Report Stanley, Loren Stanley, ff. Tr. 13047 Quadrex Report Sumpter, James R. Sumpter, ff. Tr. 12699 Quadrex Report Sumpter (supplemental), ff. Quadrex Report Tr. 15357 Tr. 15695 (no prefiled Quadrex Report testimony) (reopened hearings)

Tapia, Joseph I. Tapia, ff. Tr. 13752 soils (backfill) i Taylor, Robert G. Taylor, ff. Tr. 14846 (follows Quadrex Report prefiled testimon of Johnson / Constable Thrash, Charles G. Tr. 15437 (no prefiled Quadrex Report testimony) (reopened hearings)

Tomlinson, Dan P. Tomlinson, ff. Tr. 15112 Competence of HL&P Wisenburg, Mark R. Wisenburg, ff. Tr. 14514 10 C.F.R. 9 50.55(e) reporting A-2

(

, ---,, - - - ~ ~ . - . m , - . - . - - . - - - - - - , - - - ,- - - , - - , - , , - - - .- - , , . .

APPENDIX B List of Phase II Exhibits Admitted Identified (Rejected)

No. Description Date At Tr. At Tr.

Applicants' Exhibits 57 Handwritten notes re Quadrex 4/13/81 11466 11661 preliminary review 58 Memo, J.H. Goldberg to 4/15/81 11466 13050 J.R. Sumpter, re Quadrex Review of B&R Engineering Problem Categorization, with hand-written notes.

59 Typed and handwritten notes 4/27/81 11466 11662 by C.G. Thrash of Management Committee (corrected versionMeeting ) 12236 60 Quadrex Report, " Design Review 5/81 11466 11487 of B&R Engineering for STP" 61 Letter, J.H. Goldberg to 5/6/81 11466 11487 E.A. Saltare111, re STP Quadrex Engineering Review 62 Letter, E.A. Saltarelli to 5/8/81 11466 11487 J.H. Goldberg, enclosing B&R review for reportability of most serious findings of Quadrex Report 63 Bechtel Power Corporation 3/82 13442 13460 Report, "An Assessment of the Findings in the Quadrex Corpo-ration Report" 64 Bechtel Power Corporation 8/26/82 13463 (Rejected)

Final Work Package Report 13470 for Work Package EN-619,

" Review of the Quadrex Report" 65 Letter, L. Stanley to 3/16/81 13049 13049 J.R. Sumpter, re STP ALARA review J-1 i

l l

Admitted Identified (Rejected)

No. Description Date At Tr. At Tr.

66 Excerpt from STP Procedure 5/21/85 14515 14516 i

Manual Revisions on Reporting Design and Construction Deficiencies to NRC (PLP-02, Rev. 5) 66a PLP-02, Rev. 6 7/25/85 14573 14574 67 Letter, J.H. Goldberg to 7/30/85 13646 13652 R.D. Martin, re Supplemental Response / Clarification to the Response to Notice of Violation, Inspection Report 83-24 68 Letter, G.W. Oprea to 5/25/84 13646 13652 J.T. Collins, re Programmatic Audit of Backfill Activities and Audit Summary l 69 Handwritten notes re "New No Date 12163 12163 Cost and Schedule" 70 One page excerpt from C.G. 6/26/81 12675 (Not Thrash typed notes on 6/26/81 Offered)

Management Committee Meeting 12675 (p. 2143) 71 Handwritten notes re ALARA 3/13/80 12904 12905 review 72 Letter, R.L. Ashley to 11/24/82 13470 13473 B.L. Lex, re disposition of Brown & Root and Quadrex comments on Bechtel Task Force Draft Report t

73 Reports to NRC on Computer 14808 14809 Program Verification:

Letter, G.W. Oprea to 6/5/81 K. Seyfrit, transmitting 1st Interim Report concerning Computer Program Verification Letter, G.W. Oprea to 8/27/81 K. Seyfrit, transmitting 2nd Interim Report B-2

Admitted Identified (Rejected)

No. Description Date At Tr. At Tr.

Letter, G.W. Oprea to 12/18/81 J.T. Collins, transmitting 3rd Interim Report Letter, G.W. Oprea to 4/22/82 J.T. Collins, transmitting 4th Interim Report Letter,.G.W. Oprea to 9/13/82 J.T. Collins, transmitting 5th Interim Report concerning Computer Program Verification Letter, G.W. Oprea to 12/22/82 J.T. Collins, transmitting 6th Interim Report Letter, G.W. Oprea to 6/13/83 J.T. Collins, transmitting 7th Interim Report Letter, G.W. Oprea to 10/14/83 J.T. Collins, transmitting Final Report 74 Reports to NRC re HVAC 14809 14810 Design Letter, G.W. Oprea to 6/9/81 K. Seyfrit, transmitting 1st Interim Report concern-ing HVAC Design Letter, G.W. Oprea to 7/29/81 K. Seyfrit, transmitting 2nd j Interim Report Letter, G.W. Oprea to 10/23/81 K. Seyfrit, transmitting 3rd Interim Report Letter, G.W. Oprea 4/8/82 to J.T. Collins, transmitting Final Report concerning the Fuel Handling Building HVAC Control Air System B-3 i

A Admitted Identified (Rejected)

No. Description Date At Tr. At Tr.

Letter,G.W. Oprea to 5/26/82 '

J.T. Collins, transmitting 4th Interim Report concerning HVAC Design Letter, G.W. Oprea to 8/6/82 J.T. Collins, transmitting 4 5th Interim Report concern-ing HVAC (isolation dampers)

Letter, G.W. Oprea to 10/20/82 J.T. Collins, transmitting Final Report concerning HVAC Design Letter, G.W. Oprea to

~

5/17/84 J.T. Collins, transmitting Supplemental Report concerning HVAC Design Deficiency 75 Letter, G.W. Oprea to 6/5/81 14810 14810 K. Seyfrit, transmitting Final Report concerning Shielding Analysis Verification 76 Letter, G.W. Oprea to 9/9/82 14811 14811 J.T. Collins, transmitting Response to Notice of Violation 82-02 77 NRC Staff Response to 8/24/84 15025 15032 Licensing Board Memorandum and Order regarding the Reportability of Quadrex

, Report -

78 Letter, E.H. Johnson to 11/23/84 15032 15034 HL&P re I&E 84-12 (excerpt) 79 C.G. Thrash handwritten 12/4/80 15397 15397 notes of STP Management Committee Meeting of 1*2/4/80 (typed transcription also included) 80 C.G. Thrash handwritten 2/19/81 15397 15397 notes of STP Management Committee Meeting of 2/19/81 6 (typed transcription also included)

B-4

Admitted Identified (Rejected)

No. Description Date At Tr. At Tr.

81 C.G. Thrash handwritten 2/20/81 15397 15397 notes of STP Management Committee Meeting of 2/20/81 (typed Transcription also included) 82 Exhibits 2 and 3 to STP 12/4/80 15439 15441 Management Comittee Meeting Minutes of 12/4/80 83 Exhibit 5 to STP Management 2/20/81 15429 15441 Committee Meeting Minutes of 2/20/81 84 Excerpt of C.G. Thrash 7/18/84 15445 15450 deposition (pp. 1161-63) 85 Excerpts of D.G. Barker 11/80 15644 15686 handwritten notes of 11/80 4 86 Handwritten notes of L. 1/2/81 15696 (Not Stanley re 1/2/81 telephone Offered) conversation with J.R. Sumpter NRC Staff Exhibits 136 Special Inspection Report of 1/7/83 14848 14849 the Quadrex Corporation Report on Design Review of Brown and Root Engineering Work for the South Texas Project Units 1 and 2--NUREG-0948.

137 Guidance - 10 C.F.R. 50.55(e), 4/1/80 14847 14848 Construction Deficiency Reporting.

138 Quality Assurance Require- 1974 14860 14866 ments for the Design of Nuclear Power Plants--ANSI N45.2.11-1974.

139 NRC Regulatory Guide 6/76 14862 14853 1.64--Quality Assurance Requirements for the Design of Nuclear Power Plants (Rev. 2).

8-5

1 4

Admitted Identified (Rejected)

No. Description Date At Tr. At Tr.

140 Letter, G.L. Madsen to 6/3/82 14863 14864 G.W. Oprea, enclosing I&E Report 82-02.

141 Letter, G.L. Madsen to 8/11/82 14864 14865 G.W. Oprea, enclosing Notice of Violation 82-02.

142 STP Engineering Procedures no date 15119 15120 Manual STP-DC-021-D, Engineer-ing Procedure for Engineering Design Deficiencies.

143 General Project Requirements 6/1/84 15120 15120 Reportirig Significant Defi-ciencies, Federal Regulation 10 C.F.R. Part 50.55(e)

(Bechtel 2.20).

144 Review of Nonconformance 5/22/85 15123 15123 Reports for Deficiency Evaluation ( Bechtel WPP QCI 5.3 (Rev. 7).

145 PLP-02, Reporting Design and 5/21/85 15123 (Withdrawn)

Construction Deficiencies to 15125 NRC (Rev. 5).

146 PSQP-A8, Trend Analysis 2/15/82 15125 15127 Administration (Rev. 3).

147 PSQP-16.3, Project Specific 3/19/85 15126 15126 Quality Assurance Procedure, Trend Analysis (Rev. 3).

CCANP Exhibits 71 Memorandum, D.G. Barker 6/12/81 11501 12052 to C.G. Robertson, re Procedure (Corrected Deviations Concerning Report- Version) able Deficiencies (including attachments).

72 Section 3 of B&R's Quality no date 14186 14450 Assurance Manual (in effect in May 1981) (corrected copy)

B-6

Admitted Identified (Rejected)

No. Description Date At Tr. At Tr.

l 73 Letter, J.H. Goldberg to 2/2/81 11615 11620-21 E.A. Saltarelli, re in-depth

review of B&R technical activities on STP by Quadrex.

74 Handwritten notes by L. 3/18/81 11624 11639 Stanley for briefing of HL&P re Quadrex.

75 B&R Assessment of the 4/82 11789 12023 Quadrex Design Review of the STP (excerpt Quadrex Finding No. 4.1.2.1(b)).

76 Memorandum, D.D. Jordan 6/3/81 11956 11960 to STP Nuclear File, re meeting on 6/3 with Tom Feehan regarding Gibbs &

Hill letter of intent and B&R's recruiting efforts.

77 Memorandum, D.D. Jordan 9/15/81 11975 11977 to STP file, re meeting with project partners and with Tom Feehan.

, 78 Handwritten note, G.W. Oprea 9/11/81 11977 11985 to Mr. Jordan, transmitting attached draft STP Report on Contractor Replacement dated 9/8/81.

79 Handwritten notes of D.D. no date 12007 12013 l

Jordan re percent complete.

80 Handwritten notes of D.D. 9/18/81 12014 12018 Jordan for meeting with 4

Jack Harbin.

81 Excerpt from B&R Quadrex 4/82 12027 12030 Assessment re Quadrex Finding No. 4.3.2.1(n).

82 Quadrex Findings Previously no date 12064 (Not Reported Under 10 C.F.R. Offered) 50.55(e). 12076 i

B-7

=. -

Admitted Identified (Rejected)

No. Description Date At Tr. At Tr.

83 Meeting Minutes re 9/22/81 12217 12381 discussions among STP participants regarding replacement of Architect /

Engineer and Construction Manager.

84 Excerpt from B&R Quadrex 4/82 12277 12284 Assessment re Quadrex Finding No. 4.8.2.1(g).

85 L. Sinkin drawings numbered no date 12292 (NotAdmitted) 1-6, 12330 86 Letter, J.H. Goldberg 4/7/82 12332 12404 to D.W. Halligan, re HL&P Comments on Bechtel Task Force Report on STP.

67 Statement by J. Goldberg to 2/9/82 12337 12338 D.D. Driskill and J.E.

Gagliardo (NRC) concerning Quadrex Report (includes handwritten changes).

88 Slides for Quadrex no date 12342 12345 presentation.

89 Handwritten notes by J.H. no date 12423 12424 Goldberg re STP Quadrex Engineering Review.

90 Excerpt from J.H. Goldberg 10/84 12479 12481 PUC cross examination, pp.

1355-58, 91 Excerpt from J.H. Goldberg 10/84 12486 (Not PUC cross examination, pp. Offered) 1374-80.

92 Excerpt of Plaintiff's 12/17/84 12707 (Not Specification of Claims and Offered)

Issues (cover and pages 12742 31-39).

93 Letter, J.L. Hawks to 3/20/81 12756 12760 J.L. Blau re Engineering Review of B&R.

B-8

Admitted Identified (Rejected)

No. Description Date At Tr. At Tr.

94 Memorandum, A.B. Poole 3/31/81 12786 12787 to M.E. Powell, re Primary

& Secondary Stress Intensity of 3.35m for Upset Loads.

95 Memorandum, M.E. Powell 4/27/81 12788 12794 to L.R. Jacobi, re IRC Meeting concerning the Primary & Secondary Stress Intensity for Upset Loads in the Design of the Containment Mechanical Penetrations M9, M13 and M17; April 24, 1981 (Item #93).

96 Memorandum, J.A. . 5/8/81 12799 (Rejected)

Signorelli to D. Prelewicz, 14614 re Quadrex STP Review (attached Nuclear Analysis questions).

97 Memorandum, D.A.Prelewicz to 5/11/81 12800 (Rejected)

J.A. Signorelli, re NUS 14614 Responses to Quadrex STP Review.

98 Handwritten statement of Jim 2/10/82 12861 12863 Sumpter to D.D. Driskill (NRC) re Quadrex Review.

99 Letter, L. Stanley to L. 11/12/83 13051 (Rejected)

Sinkin, responding to 11/8 13053 inquiry regarding Stanley participation in ASLB hearings.

100 Letter, L. Stanley to 1/5/81 13058 13061 J.R. Sumpter, responding to request for audit.

101 Letter, J.R. Sumpter to 1/27/81 13061 13063 L. Stanley, authorizing Quadrex review.

102 " Engineering Review Schedule" no date 13069 (NotOffered)

--2/10/81-4/2/81 13070 103 Letter, L. Stanley to 2/13/81 13070 13071 J.R. Sumpter, outlining format for Quadrex review.

B-9

Admitted Identified (Rejected) ,

No. Description Date At Tr. At Tr. '

104 Letter, L. Stanley to 3/2/82 13128 13309 R.L. Ashley, re draft Bechtel Task Force Report 105 Letter, L. Stanley to 5/18/81 13205 (Not J.L. Wray, re HL&P/B&R 10 C.F.R. Offered) 21 Reporting Requirements, and attached memo.

106 Cover letter, T.J. 10/4/84 13680 13681 Jordan to L.W. Hurst transmitting STP audit report no. C11-401, with CAR G-508 attached.

107 Closed version of CAR G-508. 10/24/84 13683 13683 (HL&P closure date) 108 STP Management Committee 2/19-20/81 14104 14107*

Meeting Minutes of February 19-20, 1981.

109 STP Management Committee 3/19-20/81 14110 14113*

! Meeting Minutes of March 19-20, 1981.

110 STP Management Committee 4/27/81 14115 14117*

Meeting Minutes of April 27, 1981 l

111 STP Management Committee 6/26/81 14122 14125*

Meeting Minutes of June 26, 1981 (including meeting exhibit 13) (rev. 7/7/81) 112 Excerpts of C.G. Thrash type- 6/26/81 14125 14133*

, written and handwritten notes of STP Management Committee

. Minutes of 6/26/81 1

113 STP Management Cannittee 7/23-24/81 14142 14243*

Meeting Minutes of July 23-24, 1981 (including meeting exhibit 9)

- 114 Excerpt of J.B. Poston 14288 (Rejected) handwritten notes of 4/27/81 14291 Management Canmittee Meeting B - 10

Admitted Identified (Rejected)

No. Description Date At Tr. At Tr.

115 Letter to Karl Seyfrit 10/16/81 14306 (Rejected) I from G.W. Oprea, re STP 14311 Safety Related Activities to continue during Transition Phase (including attachments A and B).

116 Handwritten notes of Eeorge undated 14314 14322 Oprea for 7/2/81 0prea, 1 Goldberg, Saltarelli l and Rice meeting.

117 Letter, J.R. Newman to 9/8/81 14326 14327 G.W. Oprea transmitting draft report on contractor replace-ment for architect-engineering and construction management services at STP.

118 Agreement Not To Assert 12/28/79 14330 14349 Certain Defenses (Executed TollingAgreement).

119 Handwritten notes of G.W. undated 14339 (Rejected)

Oprea of September meetings. 14347-48 120 Meeting minutes of 9/15/81 9/22/81 14350 14370*

meeting re possible replacement of B&R as engineer and construction manager.

121 " Confidential" B&R office remo 9/22/81 14371 14837 from K.M. Broom to W.M. Rice re Telephone call to George 0prea of 9/22/81.

122 State:nent of G.W. Oprea to 2/12/82 14377 14377 0.0. Driskill re Quadrex 123 Letter, R.A. Frazar to 9/27/79 14423 14429 T.H. Gamon re Audit of B&k Engineering, Audit No. BR-28 (transmittalletter).

Memorandum, T.D. Stanley 10/1/79 to D.G. Barker re Audit No.

BR-28.

B - 11

Admitted Identified (Rejected)

No. Description Date At Tr. At Tr.

Memorandum, R.A. Frazar 10/1/79 to E.A. Turner re Audit No. BR-28 (transmittal letter).

Audit No. BR-28 9/4-7/79 Letter, R.A. Frazar to 12/26/79 T.H. Gamon re B&R response to Audit BR-28 (with attachments).

Memorandum, D.R. Valley 2/31/80 to T.D. Stanley re Resolution of Audit Findings of B&R Audit No. BR-28.

124 Memo to R.L. Ulrey from B.J. 1/21/81 14430 (Not Fite re Auditor's Handbook Offered) on Deficiency Reporting (includingenclosure).

125 Letter, R.L. Ulrey to 10/24/80 14435 14444 R.J. Vurpillat transmitting Audit No. BR-35.

4 Memo, R.L. Ulrey to G.W. 10/24/80 Oprea transmitting BR-35.

Audit No. BR-35. 9/22-26/80 126 HL&P QA Manual, Controlled Issued 14450 14453 Manual No. 70, with Phil D. 11/10/78 Franke noted as manual holder (excerpts from sections 1, 3 and 4 QA Program and South Texas QA Plan section 4).

126a Project Quality Assurance 10/29/80 15387 15387 Plan, Project Engineering Section 4.0 (Revs 5 & 6).

127 C.G. Robertson handwritten 4/81 14591 14597 notes from April 1981 i

B - 12

Admitted Identified (Rejected)

No. Description Date At Tr. At Tr.

128 Telephone Minutes, M.E. 5/8/81 14673 14674 Powell to L.R. Jacobi docu-menting call from M.E. Powell to W.A. Crossman notifying j NRC of three potentially ;

reportable items (HVAC, Computer Codes, Shielding Analysis).

129 Memo, M.E. Powell to 5/12/81 14675 14682 L.R. Jacobi re IRC Meeting Minutes of May 11, 1981 Meeting Concerning Computer Program Verification.

130 Memo, M.E. Powell to 5/13/81 14685 14687 L.R. Jacobi re IRC Meeting Minutes of May 11, 1981 Meeting Concerning Inadequate Design of HVAC Systems.

131 Memo, M.E. Powell to 5/19/81 14687 14691 L.R. Jacobi re IRC Meeting Minutes of May 11, 1981 Meeting Concerning Verification of Shielding Analysis Calculations.

132 Memo, M.E. Powell to 6/4/81 14691 14695 L.R. Jacobi re IRC Meeting Minutes of June 1,1981 Meeting Concerning Verifi-cation of Shielding Analysis Calculations.

133 Statement of Cloin G. 2/10/82 14704 14706 Robertson to D.D. Driskill re Quadrex.

134 Letter, J.T. Collins to 6/18/82 15005 15198*

G.W. Oprea re I&E Report 81-37 (SALP Board Report);

and letter, G.L. Madsen to G.W. Oprea enclosing SALP Report 81-37.

B - 13

Admitted Identified (Rejected)

No. Description Date At Tr. At Tr.

135 Letter, E.H. Johnson 11/25/83 15141 (Not to G.W. Oprea re I&E Offered)

Report 83-21.

136 Letter, J.H. Goldberg 7/19/85 15148 15154 to R.D. Martin re First Interim Report Concerning Record Packages for the 125 Vdc and 4KV AC Systems.

137 Evaluation of South Texas 4/85 15160 (Not Project by Institute of Offered)

Nuclear Power Operations

, (INP0).

138 Memorandum for P.A. Bradford 12/15/81 15206 15320 from W.J. Dircks re Chronology Related to The Quadrex Report on South Texas.

139 Handwritten Notes, H.S. 8/27/81 15211 15211 Phillips to J. Collins re Design Engineering STP.

140 Memorandum for File From 9/11/81 15212 15214 W.G. Hubacek thru G.L.

Madsen and W.A. Crossman re Meeting with HLP Management Related to Quadrex Review of B&R Engineering.

141 Handwritten Notes of D.E. no date 15215 15219 Sells re potential 50.55(e) items and availability of Quadrex Report.

142 Memorandum for D.G. Eisenhut 10/28/81 15219 (Rejected) from D.E. Sells thru R.L. 15221 Tedesco and F.J. Miraglia re Summary of Quadrex Report-STP.

143 Meeting Summary of Meeting 1/26/82 15232 (Not on 1/18/82 with HL&P by D.E. Offered)

Sells.

144 Note to D.G. Eisenhut from 1/26/82 15235 15428*

D.E. Sells thru R.L. Tedesco and F.J. Miraglia re Comments on South Texas Chronology.

B - 14

Admitted Icentified (Rejected)

No. Description Date At Tr. At Tr.

145 Letter, E.H. Johnson to 9/11/84 15293 (Not G.W. Oprea re I&E '

Offered Report 84-11 (enclosure inspection report).

146 Letter, G.W. Oprea to 9/18/81 15311 (Not K. Seyfrit re Unlimited Re- Offered)

Start for ASME Welding and Safety-Related Complex Concrete.

147 Testimony of Nunzio J. 11/19/81 15321 (Rejected)

Palladino before Subcommittee 15329-30 on Energy and Environment of Committee on Interior and Insular Affairs, U.S. House of Representatives.

147a Oversight Hearing--Cover 11/19/81 15330 15330 page and pages 92-95.

148 Chre' ology of events 6/26/81- CCANP ASLB rei ned to South 12/16/81 Motion Order Texas Nuclear Project, dated dated prepared by Don D. Jordan 9/30/85 10/16/85

Only an excerpt from the Exhibits designated with an asterisk has been admitted into evidence. Additionally, various Exhibits have been admitted only for a limited purpose. Accordingly, in each case, it is necessary to review the appropriate portion of the transcript to ascertain the scope of an Exhibit's admission.

8 - 15

APPENDIX C Transcript Corrections On October 4, 1985, the Applicants filed proposed transcript corrections for the initial Phase II hearings. In a response dated October 24, 1985, the Staff offered no objection to most of the Applicants' proposed corrections but disagreed with or offered alternatives to several of them. On January 9, 1986, the Applicants filed proposed transcript corrections for the December 5-6, 1985 reopened hearings. On January 29, 1986, the Staff offered no objection to those changes, although it viewed some of them as unnecessary. With minor clerical changes, we have adopted most of the proposed corrections or (as appropriate) the suggested alternatives, together with several additional corrections found appropriate by the Board. Following are the changes we have adopted:

July 11, 1985 -- Pages 11265-11491 Page Line Change 11273 4 Delete "that" 11273 14 " historical" to " hysterical" 11273 19 Delete "so" 11273 22 "other" to "or"; "1981," to "1981;"

11274 17 "820," to "82-02,"

11275 15 Delete " Efforts"; "at" to "At" 11275 19 " companies" to " Company's" 11276 2 " construction permanent" to "a construction permit" 11277 6-7 "I am part" to " impart" C-1

Page Line Change 11277 15 "we discovered" to "the hearings covered" 11278 4 "have be" to "have been" 11278 9 "information" to " inform" 11278 25 " staffs" to " Staff's" i

11281 1 "what" to "when" 11319 21 "now Mr." to "now.--Mr "

i 11320 7 " weld" to "we'd" 11321 8 Delete " Sin" l 11322 16 "BECCH0EFFER" to "BECHH0E?ER"; "tak" to "take" 1 11322 18 " written" to " filed written" 1

11323 15 "that he" to "that if he" 11323 23 Delete first " board" 11324 4 "in John 26" to "on June 26" 11327 15 "procere" to " procedure" 11330 16 "om" to "in" 11332 11 " degrees" to " agrees" 11364 21 " involved in" to " involving" 1

11364 22 " issue" to " requirement" 11365 5 Insert "is" after "as" 11365 7 Delete "by his attorney"; "him" to "his attorney" 11367 10 Delete "its privilege,"

11369 3 "a" to "that" 11371 15 "not" to "now"

, 11374 15 "the" to "that" C-2 i-

-__..---,-m- + . . _ . - - - - ,. ,. _ . - - - . --

Page Line Change 11374 22 Delete "that witnesses,"

11375 9 "of" to "or" 11376 6 "at" to "that" 11376 7 " Board;s" to " Board's" 11377 18 " error" to " errors" 11377 19 Insert "in" after " wholly" 11377 23 "Goldger's" to "Goldberg's" 11377 25 "stateed" to " stated" 11379 24 "was" to "were"; delete "reportability- "

11380 1 " reported" to " report" 11380 6 Insert "it" after "see" 11380 23 "riggery" to " inquiry" 11380 25 "they" to "that it" 11381 10 "do you" to "you do" 11382 6 "the Goldberg" to "Mr. Goldberg" 11382 7 Delete "is" 11382 19 " late" to " hate" 11383 3 Delete first "from"; "NRS" to "NRC" 11383 9 "ever" to "every" 11387 25 "santions" to " sanctions" 11388 9 " employees" to " parties" 11388 10 Delete "this" 11388 12-13 Delete "or as witnesses or whatever it is";

insert "which" before "the Board" 11388 17 "take" to " type" C-3

Page Line Change 11388 18 " participated in," to "not" l

11394 11 " aware of" to " aware that" l 11394 20 "Mewman" to "Newman" 11330 lo 'i t's" to "is" 11397 16 "comitted" to " admitted by" 11399 12 Insert " Midland" before " proceeding" 11399 14 "this" to "that" 11399 22 " appear" to " appeared" 11400 9 Insert "to" after " remanded" 11401 20 "you" to "I" 11425 17 "The" to "He" 11426 1 " principals" to " principles" 11428 11 Second "a" to "the" 11428 - 14 Insert "there" after "therefore" 11428 15 "Whether" to "Where"; "maybe" to "may be" 11428 18 "with" to "where" 11430 11 "did" to "in a" 11430 21 "them" to "him" 11431 6 "or tell" to "in" 11431 21 Delete the first "in" 11431 25 "that's" to "is that" 11432 2 Delete "did it" 11432 3 "likely" to " lightly" 11432 4 "of" to "for" l

C-4 1

2 fage Line Change 11432 17 " trial. Fr Robertson's statement that" to "--in Mr. Robertson's s tut ment--that" 11432 25 "that one- " to "that--one"; insert dashes

~

after " minutes" 11439 4 " fact of" to " fact that" 11439 5 "or" to "are"; "to" to "and the Board can" 11439 6 "on" to "under" 11440 2 "Versus" to "vs."

11462 23 Delete "the to"; insert " order" after

" sequestration" 11463 2 Insert "do not" after "they" 11464 4 "60,60." to "60,61,"

i i

11465 5 "two" to "three" 11465 6 "excertps" to " excerpts" 11465 7 " minutes" to " meeting"

11465 14 " volume one" to " volumes one" 11465 16 "May 7," to "May 6,"

11466 12 " mark" to " marked" 11476 8 " fact of" to " facts and" 11477 9 "those findings" to "this finding" 11477 10 "were" to "was"; " reportable, as" to

" reportable. As" 11477 12 "1982. It" to "1982, it"; "its" to "this"

) 11477 13 " findings" to " finding" 11477 15 " force, as" to " force. As" 11477 21 Insert a comma after "1981" 11479 11 "as- " to "as if read."

C-5 1

i

Line Change PaSe 11479 22 "prefile" to "prefiled" 11480 6 "prefile" to "prefiled" 11480 17 "prefile" to "prefiled" 11481 1 "prefile" to "prefiled" l 11483 20 "prefile" to "prefiled" 11484 11 "prefile" to "prefiled" 11487 6 "I" to "it" 11488 6 "nned" to "need" i 11489 1 " hospital" to " hope" 11489 3 Delete "has" 11489 15,21,24 "Standley" to " Stanley" J

! 11490 1,14 "Standley" to " Stanley" 11490 3 "an" to "be a" 11490 25 "any problem in" to "to file" 11491 4 " Text" to " Texas" ff. 11491 The prefiled testimony of Mr. Goldberg, ff.

Tr. 11491, should have been inserted ff.

Tr. 11479, l. 11. References to this testimony will nevertheless be cited as ff. Tr. 11491",

where the testimony is filed.

July 12, 1985 -- Pages 11492-11729 11496 3 Delete "a" 11500 20 Insert "to raise" after " purported" 11501 11 "Jacobe" to "Jacobi"

f 11501 12 "Jacobe" to "Jacobi" 11506 11 "prefile" to "prefiled" C-6

-Page Line Change I 11506 16 "prefile" to "prefiled" 11510 15 " feet" to " feature" 11510 16 Insert "the" before " resident"

, 11510 22 " inspectors" to " inspector" 11515 25 " POP-11" to " PEP-11"

11517 3 Insert "what" after "and" 11517 7 " Applicant" to " Applicants"; "that" to "have" 11518 12 "documenbt" to " document" 11518 14 " amount" to "as" 11519 8 "mathces" to " matches" 11519 9 "were" to "where"; " enter act" to " interact" 11519 10 "take" to " takes"

11519 16-17 "a view" to "an overview" 11520 19 " tend'" to " tend"; "porochial" to " parochial" l

11521 21 "witnes" to " witness would" l

l 11523 10 "porochial" to " parochial"

! 11525 18 " experiences" to " experienced" 11526 10 " advantage us" to " advantageous" t

11527 5 " inquiry" to " inquire" 4

! 11536 12 Insert " review of" after "a" 11536 13 " systems integration group" to " engineering" 11550 6 " difference" to "different"

] 11550 8 " construction" to " constructed" 11550 23 Insert "the" after the comma 11555 18 " Untimely" to " timely" I

1 C-7 f

I

Page Line Change 11557 14 Delete "and" after " mechanical" 11559 4 "known existant" to "non-existent" I

11562 1 " allegation" to " allocation" 11563 16 "faul ty" to "faul ted" 11564 8 "faul ty" to " faulted" 11564 13 "fauly" to " faulted" 11576 8 "Unfortunately," to " Fortunately,"

.i 11582 11 Insert "different." after " considerably" 11582 24 "1891" to "1981" 11583 4 Delete "that" 11583 12 Insert "as" after " fact that" 11588 14 " plant," to " planning,"

l 11588 15 "that were" to "they were not" 11588 25 Delete first " started four" 11590 19 " exception that is" to " exceptions that" l

11592 11 Delete the question mark 11595 12 "useed" to "used" i 11627 25 " billed" to " build" 11640 17 "that desogm" to "that design" 11641 13 "goes" to " attention" 11642 16 Insert "in" after " difficulty" 11643 4 " noticed" to " notified" 11643 12 " exclude" to " include" 11655 11-12 " size of" to " seismic" 11667 5 "properlyly" to " properly" C-8 i

- _. ,m-._ - _ . _ _ _ _ - . . , . _ . . . - , - _ _ _ . . _ . . - . , . _ , . _ _ _ , . _ , . - . . , , . -__ - - .

. _ ~. _ . .- - _ . _- - ____.

Page a Line Change 11682 8 Insert "in" after "are" ,

11682 11 Insert "he" after " category" 11683 18 "has" to "have" 11684 7 " check him" to " objectionable" 11688 20 "should be" to "has been" 11699 2 " find." to " final."

11699 3 "if" to "the" 11700 2 " find," to " final,"

11700 3 " constitute." to " constitute?"

11700 9 " deficiency that" to " deficiency--that" 11700 11 Insert "or" after "connitments" 11700 13 Delete " corrected" 11700 20 "their" to "there" 11700 23 "that that" to "then that" 11702 11 "every" to "ever" 11705 11 "my" to "May"

11709 21 "that you" to "you that" 11713 10 "if" to "the" 11721 12 " truthful" to "useful" 11723 18 Delete " care of" i 11724 21 Insert a comma after "right" 11724 22 Delete conna 11725 11 " dressed down for" to " stressed out with a" f

11725 17 "hadn't" to "had" i

I C-9 i

- - . . , ~ . , . , , - - . ~ - . _ - . ..- ,, -.-- .,.~,. ----r- , - - . - _ .- . , . -

.,,-~-2 --- _. -

Page Line Change July 13, 1985 -- Pages 11730-11883 1 11734 7 "or" to "on" l 11735 5 " recall. We" to " recall, we" 11736 7 " principle" to " principal" 11741 13 Delete "of"

11742 12 "8ut" to "Either" j r t

, 11750 11 "Page 2 of Line 18" to "Line 2 of Page 18"

! 11756 19 First "I" to "He" t

11759 12 " John" to "Jon"

11761 11 "categorie?" to " category?"

11762 10 " margines" to " margins" 11766 16 "there" to "their" j 11767 8 "3" to "III" i 11773 19 Delete "o" 11777 16 "ventillation" to " ventilation" 11779 3 "mor" to "or" 11783 15 "May 18," to "May 8,"

{ 11783 18 Second "on" to "from" 11785 21 "introcution" to " introduction" l 11789 21 "aailable" to "available" i

11790 18 "recprd" to " record" ,

l' 11792 2 " civil structural discipline" to

" Civil / Structural Discipline" ,

i 11792 3 "missles" to " missiles" i j 11792 4 "missles" to " missiles" t

) C-10 i

Page Line Change 11792 5 Insert a comma after " January"; "AD369RD002L" to "A369RD002,"; " Missies" to " Missiles" 1

11792 7 Insert commas after " September", "1975", and

" April" 11792 8 " civil" to " Civil /"

11792 9 " structural discipline." to " Structural i

Discipline."

11792 10 " civil structural discipline" to

" Civil / Structural Discipline" 11792 12 "missles" to " missiles" l 11792 14 "missles" to " missiles" 11792 18 "missles" to " missiles" 11792 21 "missle producing" to " missile-producing" 11792 24 Both "missle" to " missile"

) 11793 3 Capitalize first letters of " safety", " system",

" hazard", and " analysis" 11793 4 "missle" to " missile"

} 11793 6 "for" to "where" 11793 8 "missles" to " missiles" j 11793 11 " condition" to "cannot" 11793 12 "missle. It it" to " missile. It" l 11793 13 Quadrex'sG" to "Quadrex's" 11793 16 " structural discipline" to " Structural Discipline" i 11793 17 "missle" to " missile" 11793 21 "missles." to " missiles."

11793 23 "missle" to " missile" 8

I C-11 i

. - - . , . ~ _ . . . _ _ , _ . __

Pg Line Change 11794 2 "missle" to " missile"; "had" to "have" 11794 3 "missle" to " missile"

11794 4 "inFinal corporation" to " Final incorporation";

1 "missle" to " missile" .

j 11794 6 Capitalize first letters of " safety",

l " systems", " hazards", and " program" I

11794 10 "missles." to " missiles."

11794 20 " missies" to " missiles" 11795 23 "missle" to " missile"

11796 23 "it;s" to "it as" I 11797 15 "missles" to " missiles" 1

11799 20 Delete "that" j 11800 11 Delete "to put forth" 11800 12 "that" to "the"; "with is with respect to" to "of" 11800 14 "because of" to " deals with"; "as to whether or not" to "with" 11800 15 " aspects" to " finding" l 11800 16 " retrieved," to " retrieved. Otherwise that l argument" i 11800 24 "the" to "put" k 11800 25 "BECJJPEFER:" to "BECHH0EFER:"

11802 13 First "as" to "and" 11803 24 "four" to " finding" 11805 2 "missle" to " missile"

! 11805 8 "missles" to " missiles" i

i 11805 11 "missle" to " missile" A

C-12 P

- . _ - , _ _ _ _ _ _ . , _ _ . _ _ - _ _ _ , , . _ . . _ _ _ . _ . _ _ . _ ~ . _ . _ _ . , _ _ _ _ _ _ . _ . _ ~ . _ . _ . . _ . _ . . _

Page Line Change 11806 16 "of" to "are" 11807 1 "missle" to " missile" 11807 2 "they" to "there" 11807 25 "missle" to " missile" 11808 2 "missle" to " missile" 11808 24 "missle" to " missile" 11813 25 " weather" to "whether" 11815 9 "Q" to "A" 11818 6 Delete first " talking" 11824 6 " lanes" to " lines" 11825 12 "EDS's" to "EDS performed a" 11825 13 "was" to "of preliminary loads" 11827 20 "MA" to "M-8" 11827 23 " pars" to " parse" 11829 7 "referemce" to " reference" 11829 22 "knowh" to "know" 11829 23 "were" to "where" 11830 20 "4.1.2.1(b)F" to "4.1.2.1(f)"

11831 7 "4.1.2.1(b)F"to"4.1.2.1(f)"

11832 6 "killipound" to " KIPS" 11832 10 "jip" to " kip" 11832 23 "unrified" to " unverified" 11833 4 Delete "two" C-13

i Page Line Change July 15, 1985 -- Pages 11884-12127

) 11886 5 Delete "JER0ME H. GOLDBERG)"

11886 6 Insert "JER0ME H. GOLDBERG)"

11886 12 First "11977" to 11975" 11886 17 "12076" to "(Not offered) 12076"

.{

11886 18 Under " EXHIBITS" column, insert "CCANP Exhibit 71 (corrected)"; under "In EVD" column, insert "12052" 11887 10 Insert "the University of" after "from" 11910 11 Insert "not" after "0prea" l 11910 21 " dealing" to " deal" 11911 14 "taken" to "taking" 11912 19 Insert "the" after " retained" 11912 20 "Sycora" to "Sykora"; "a" to "as" 11912 23 Insert "and" after " construction" i 11913 8 "through me" to "to me" j 11913 9 "Sycora" to "Sykora" 11914 3 Delete comma after " responsibility" l 11915 11 Delete "other" after "HL&P" 11916 17 "that is" to "is that" j 11916 23 "their" to "this" i

11917 5 "their" to "this" i

{ 11918 20 Insert " testimony" after " Jordan's"; "and

wholly" to "are wholly"

! 11920 23 "punative"to " punitive" 11921 23 " Told" to "They told" l

11922 23 Delete last "the" C-14 i

k

P_a age Line Change 11926 1 Insert "a" after "was" 11926 10 Insert a comma before "that" 11926 22 "was" to "were" 11927 10 "giving" to "gave" 11927 20 "placee" to " place" 11928 17 Insert "and" after the comma; " presence" to

" presidents" 11928 20 Delete first "to"; "to attend" to "who attended" 1

11933 3 "Didn't" to "He didn't" 1 11942 17 "would" to "while"

! 11942 18 "be in some major" to "being in some state of" i

11943 24 "to" to "might" I 11945 11-12 " order definition" to " definition of order" 11954 6 Delete first "the" 11954 23 " discussions" to " discussion" 11955 3 " negotiations" to " negotiation" 4

11955 16 " quality assurance" to "Quadrex Report

assessment" 11957 1 "75" to "76" 11959 12 "Gibbs and hill" to "Gibbs & Hill"

+

11959 25 "CCANM 76" to " move CCANP 76"

! 11960 3 Delete "that" 11960 4 "CCANM" to "CCANP" 11960 9 "their" to "there"

. 11961 17 " DIRECT" to " CROSS" i

C-15

}

i

h Line Change 11963 7 "1918" to "1981"; "it's" to "it" 11963 21 "with" to "to" 4

11965 23 "be" to "been" 11965 25 Delete "had"; " Marine" to " marine"

)

11966 1 " Offshore" to " offshore" 11966 3 Insert " Project" after " Texas"

11966 6 "tallent" to " talent" i

11966 11 "hgave" to "have" l 11967 7 "tell that you" to "tell you" Insert "he" before " felt"

~

11967 9 11968 10 "thereinn" to "therein" 4

11968 21 "was" to "were" 11969 1 " pressured" to " pressed" i

i 11970 7 " Ranks" to " Reinsch" 11970 12 "which" to "where" 11970 14 "in" to "of" i

11970 16 Delete "he" 11971 6 "with any" to "within a" 11971 11 "insentive" to " incentive"; "which" to "so that" 11971 13 "insentive" to " incentive"; "We've" to "We'd" 11972 24 Insert " difficult" after "more" i

11972 25 " organization" to " position" 11973 21 Insert "be" after "would" 11975 18 First "for" to "or" i

C-16 i

,aage

P_ Line Change 11976 10 Change "that" to "where" 11977 14 Delete "go" 11977 18 "CCANNP 77 would" to "CCANP 77 will" 11978 12 Insert "78" after " number" 11999 16 "Goldber" to "Goldberg" 12001 18 "primaria11y" to "primarily" 12001 19 Delete " licensing" 12003 13 Delete "about" s

12004 6 Insert "a" after " suggested" 12004 12 Insert a comma after " permanently" 12006 3 " sat" to " set" 12006 5 " sat" to " set" 12011 5 " reported" to " report"; insert "was" before "made" 12012 8 "19th" to "29th" 1

12014 3 " notices" to " notes" 12015 13 " engineering cause" to " order" 12016 18 Insert "a" after " making" 12016 22 Insert "a" after "at" 12017 6 Delete "could" 12018 4 Delete second "that" 12026 14 " indulgence" to " intelligence" 12037 20 Delete "far" 12037 24 "would it" to "it would" 12037 25 "in" to "on" C-17 i

Pare Line Change 12048 5 " conclusion" to " concludes" -

" reportable" to "reportability" 12048 8 12049 13 Insert "that" after "information" 12049 20 "save guard" to " safeguard" 12054 21 " issue" to " issues" 12054 21-22 "through the files identified, to the" to ".

To the" 12054 22 Insert "in the preliminary review" after

" items" 12054 23 "over" to "or" July 16, 1985 -- Pages 12128-12357 12130 4 "Jerome H. Goldberg" to " Don Jordan"; move "12188" from " CROSS" to " RECROSS" column 12130 5 " Don Jordan" to "Jerome H. Goldberg" 12130 16 Insert " Applicants 59 (corrected)" in

" EXHIBITS" column, and "12236" in "In Evd" column 12135 12 " contractor" to " constructor" 12137 8 Insert "them" after "for" i 12137 10 Insert "- " after first "that" 12137 11 --that their fees who" to "not have control and their fees" 12138 23 "in it" to "it in" 12139 10 " report" to " order"; " original" to " additional" 12140 8 Delete first "the" 12142 13 Insert "there" after "Was" 12143 6 "he" to "it" C-18

Page Line Change 12145 3 Delete "let's" 12145 4 "but" to "we" 12145 12 Delete second "had"; "in" to "for" 12145 13 " engineers" to " engineering"; " filed" to

" signed" 12145 17 " issue of" to " tolling agreement"

! 12147 23 Delete first "to" 12147 24 Delete the comma after "1981"; insert a comma after " project" 12147 25 Delete the comma after "1982" 12149 10 Delete "as" 12149 13 " focused" to " focusing" 12151 10 Insert "in" after " testified" 12160 18 " knew" to "new" f

12160 20 " knew" to "new" 12160 22 " knew" to "new" 12161 16 "EI" to "EEI" 12163 5 " marked" to " mark" 12165 7 "15th--and" to "14th" 12167 5 " evaluate" to " indicated" 12177 7 Insert "not" after "are" 12181 10 "Rintz" to " Reinsch" 12181 13 "Rintz" to " Reinsch" 12182 17 Delete " row" 12183 5 Insert "of" after " grasp" 12185 1 "own" to "on" C-19

I P_a age, Line Change 12185 2 "adgenda" to " agenda" 12185 9 , which that" to ". That" 12185 16 " Henry" to "Hendrie"; Delete "old" 12185 19 Insert "a member" after "from" 12185 20 " Henry" to "Hendrie" 12185 24 "is" to "are" 12186 2 "by" to "but" 12188 20 " CROSS" to " RECROSS" 12189 6 " permanent" to " permit" 12190 18 Insert "by" after " raised" 12191 15 " judge" to " Judge" 12194 5 "." to "?"

12194 7 "than actually been" to "actually had been" 12194 8 "." to "?"

12197 4 Delete "to do it" 12197 5 " test" to " task" 12198 12 " record" to " report" 12205 19 " knowledged" to " knowledgeable" 12212 7 "I" to "he" 12226 2 "1908" to "1980" 12226 6 "show show" to "to show" 12228 6 "You" to "Your" 12230 4 "Goldger G" to "Goldberg" 12231 13 " Criteria" to " criterion" 12234 10 "our" to "a" C-20 1

Page Line Change 12234 11 " source" to " soils" 12237 15-16 "second page from what was previously the first page" to " typewritten second page so that the previous second page is now the third page" 12260 7 " find" to " final" 12262 4 " principals" to " principles" 12270 4 " qualified" to " unqualified"; " lieu" to " view" 12275 6 Delete second comma 12275 7 Delete "or" 12276 2 " statement" to " standard" 12277 1 "4" to "84" 12279 -- two pages with same number; change second to i

"12279A" 12298 4 "whatever" to "whether what" 12298 6 " setting out" to " review by" 12329 13 "their" to "there" 12330 12 "my" to "by" 12338 13 "INE" to "I&E" July 17, 1985 -- Pages 12358-12590 12370 21 " development" to " develop" 12378 1 " secretary's and" to " secretary's,"

12385 7 "Pirfo" to "Perhaps" 12385 10 Insert a comma after " minutes" 12385 11 " meetings" to " members"; insert a comma after

" committee" 12416 8 "did you" to "you did" C-21

f Page, Line Change l 12418 5 "acquanted" to " acquainted"

! ~ 12418 8 "obviously" to "previously" t i

, 12419 14 "you are" to "your" 12422 16 "they" to "he" i

i 12430 15 "to have" to "to happen"

. 12435 9 "SINKIN:" to "AXELRAD:"

12435 21 " matters" to " merits" o

i 12437 16 Delete first "have" 12438 4 "were" to "where" 1 12438 5 "as" to "was that" 1

12438 11 "in" to "from" 12467 17 Insert "ago" after " days" 2

12467 18 Delete first "is"; " ten" to "then" I 12507 6 " directive" to " corrective" l 12515 6 "MR. REIS:" to "THE WITNESS:"

12520 24 " Power did" to " Power and we did have" 12520 25 " Root and we" to " Root. We" l

I 12525 12 Insert "not" after "would" 12528 15 "Mr. Pool's" to "Mr. Powell's" 12528 16 Insert "was" after "certainly" 12529 15 Delete " magazine" 12530 11 "has" to "was" 12530 13 Insert "a" after "was" 12530 14 " gentlemen" to " gentleman" 12533 23 "their" to "there" C-22 4

,r- r , .e m n.- ,- - - - - , - - - - ,gs. ,.,ee-,n,,.e,,._ ~ . a. - , , , --n_a_-,,,, --w- _ , -- e

Page Line Change 12537 7 Delete " trade" 12537 10 " knowing the" to " knowing--the" 12566 4 "do" to "ask" 12566 8 "INE" to "I&E" 12566 10 "INE" to "I&E" 12568 23 " potential" to "potentially" 12568 25 Delete first "what's" 12570 4 "in it" to "it in" 12570 6 "tre" to "the" 12572 14 Delete "not" 12574 11 " compare." to " comparison."

f 12576 7 " hear" to "here" .

July 18, 1985 -- Pages 12591-12815 12606 22 "where" to "which" 12607 2 " inappropriate." to " appropriate."

12623 20-21 " perfect version" to " perversion" 12626 5 Delete " add" 12628 23 " conversing" to " conversant" 12629 4 " visited" to " revisited" 12643 18 "14 day- " to "14 day rule."; " excuse me" to "MR. SINKIN: Excuse me"; begin new line with "MR.SINj(IN:"

12643 21 " reportable on" to "reportability of" 12676 19 "Newmans'" to "Newman's" 12676 20 " principle" to " principal" t

C-23

Page Line Change 12683 18 "know" to " receive one" 12705 15 "than" to "then be" 12710 2 " heals" to " heels" 12712 25 "the" to "I & C" 12713 19 "if" to "the" 12713 24 Insert "A." before "Those" and move entire sentence to next line.

12716 15 Insert "the matter." after "on" 12725 9 " Guide 175," to " Guide 1.75,"

12726 2 " Guide No. 175" to " Guide No. 1.75" 12739 25 " automatic" to "at" 12759 18 " letter as he willed a" to " letter, if you will, as a" i

July 19, 1985 -- Pages 12816-13024 12829 16 first "to" to "the" 12844 10 "Almost I think" to "On almost, I think,"

12844 11 Insert "it" after "PWR" 12847 25 "this" to "these" 12848 1 " arrangements" to " requirements" 12855 2 "I" to "they"

12855 8 First "they" to "there" 12856 2 " hear" to "here" 12860 21 "there" to "their" 12860 22 "made all" to "may

C-24

95 Line Change 12861 10 " auto" to "a" 12867 5 "either" to "where" 12881 17 Insert "or" before "sometime" 12890 22 " rear" to " refer" 12892 8 Delete "the" 12894 15 "him" to "them" 12896 14 Insert " longer" after "no" 12896 19 Insert "to" after "want" 12897 3 "from" to "for" 12898 12 Delete "that's" j 12903 5 "her" to "here" 12943 8 " reserved" to'" reviewed" 12946 9 " Metal" to " Meadow" 12953 5 Insert "what" after "of" 12955 13 Delete second " proceed with" 12955 14 First "of" to "I"; delete "6789" 12956 2 Insert "Sinkin" after "Mr."

12977 6 "in" to "and" 12983 12 Delete "that we" 12994 5 "26C3" to "26(c)(3)"

12994 8 "32A32" to "32(a)(3)'

12994 9 "33B" to "33(b)"

12995 8 " Fort" to " fourth" 12995 9 " Logging" to " Morgan" 12995 13 Insert " opinion" after "on" C-25

i i

Pm Line Change 12995 17 " Henry Frank" to "In re Franklin" 12995 18 " litigation" to " Litigation"; "478" to "417" July 29, 1985 -- Pages 13025-13225 13046 16 "23 page" to "three-page" 13068 13 " code" to " codes" i 13074 13 "did" to "the" 13074 21 Delete coma after "HVAC" 13078 13 " discover" to " cover" 13079 19 " Applicant" to " Applicants'"

13080 10 " forever" to "for" 13083 25 "N-44.2.11" to "N.45.2.11" 13084 23 Insert "and" after " completed" 13084 24 "with respect" to "were" 13094 19 "was" to "were" 13096 4 "rereview" to "re-review" 13096 16 "rereview" to "re-review" 13079 2 "rereview" to "re-review" i 13109 5 Insert "on" before "both" 13111 15 "Monson" to "Munson" 13111 23 "Monson" to "Munson" 13112 1 "Monson" to "Munson" 13113 5 "contridicton" to " contradiction" 13113 18 "inconstistency" to " inconsistency"

13113 20 "Monson" to "Munson" C-26

Page Line Change 13114 9 "edditions" to " editions" 13120 12 "through out" to "throughout" 13120 15 Delete " design- "

13124 12 " facts" to " fact" .

1 13133 18 "datas" to " data" l I

13139 11 Delete the first "many" 13141 18 "to" to "in the" 13141 20 Delete " report or" 13141 21 Delete "if I completed it"; add a comma after "A-2" 13142 3 "A-1-1," to "A-1,1,"

13148 1 "know" to "no" 13148 4 "reask" to "re-ask" 13151 9 " heard for" to " received" 13153 4 "344" to "384" 13154 20 "48384" to "384-1974" 13158 13 "in in" to "in and" 13158 20 "you're" to "your"; " confirm" to " conform" 13158 22 " involved" to "when" 13158 24 Add commas after "here" and "me"; "that I said hard" to "is that it is hard" 13162 10 Delete the first "was" 13164 5 Delete "with" 13166 15 "refinment" to " refinement" 13166 23 "dicsipline" to " discipline" C-27

Page Line Change 13169 12 "412 A," to "4.1.2(a),"

13191 10 "have" to "have had" 13193 5 " Ray" to "Wray" 13196 11 " reparable" to " repairable"; "correctible" to

" correctable" 13198 13 "Wrat" to "Wray" 13204 22 "annalysis" to " analysis" July 30, 1985 -- Pages 13226-13409 13231 9 " references in" to " reference" 13249 9 "MAV" to "MAB" 13249 25 " lodging" to " logic" 13254 24 "possibly" to "possible" 13257 19 "alotted" to " allotted" 13262 16 "Chairma" to " Chairman" 13266 20 "itenttified" to " identified" 13267 23 "Standley's" to " Stanley's" 13268 18 "Standley's" to " Stanley's" 13270 3 "Will" to "Well" ;

13270 8 "out puts" to " outputs" 13280 22 "projectwide" to " project-wide" 13280 23 "projectwide" to " project-wide" 13283 6 "in service" to "in-service" 13283 10 "in service" to "in-service" i l

13292 24 Delete "the" before " written" C-28 s

Page Line Change 13294 16 "M.49" to M-49" 13295 1 "over lose" to " overlooks" 13297 9 Delete "a" f

13297 11 "used" to " confused" 13297 13 " care" to "believe" 13301 2 "do you thewrong" to "you do the wrong" 13301 18 "were" to "where" 13305 5 "analysist" to " analyst" 13306 3 "alot" to "a lot" 13307 9 Insert a comma after " employees" 13309 6 "JKUDGE" to " JUDGE" 13332 25 Delete "some" 13333 23 "inconsistancy" to " inconsistency" 13340 3 Insert "NRC" after "for" 13341 23 "55.55" to "50.55" 13341 24 "E" to "(e)"

13346 5 "to has" to "who has" 13346 14 "later" to "latter" 13346 19 "of" to "along" 13347 5 "8202" to "82-02" 13348 10 "inconstistency" to " inconsistency" 13348 18 Insert "next" after "My" 13349 2 " meeting of that," to "end of the meeting,"

13356 20 " John" to "Jon" 13357 14 " John" to "Jon" 1 C-29

Page Line Change 13357 18 " John" to "Jon" 13358 9 " John" to "Jon" July 31, 1985 -- Page 13410-13630 1341? 12 Under "IN EVD," column, insert "(rejected) 13470" 13414 9 Insert "be" after "will"; insert comma after

" exhibit" 13418 18 " Receipt" to "Let" 13418 25 "be" to "been" 13430 8 " guide answer" to " guidance" 13434 14 Delete "to me" 13474 7 "investigationmin" to " investigation, is" 13474 11 Insert " include" after "not" 13475 12 " delayed" to " degraded" 13477 14 Insert "the" after "related" 13477 17 " breakage" to " leakage" 13477 24 "M&ID's" to "P& ids" 13477 25 Insert "the" after "as" 13478 7 Delete "was" after " Root" 13487 24 " massive energy of that steam" to " mass and energy release from the steam" 13508 11 "IVCOR" to "IDCOR" 13512 5 "that- " to "that are" 13512 6 Delete " continued" 13518 9 "of" to "or" C-30

Page Line Change 13554 23 " TSAR." to "FSAR."

13569 13 "were" to "will" 13576 12 Insert a coma before "that" 13576 13 Insert a coma after " performed" 13578 7 "to" to "to - "

136,~0 8 " people--well," to " people, well,"

13578 9 "to the" to "to -- the" 13579 20 " break postulated" to " break, r e;tu1= tad" 13583 22 "what perspective ?" to "one perspective,"

13585 6 Insert "who" after " drawings" 13596 5 "be -- it" to "be, but it" 13596 6 "isn't -- within" to "isn't. Within" 13601 23 " roughage" to " referenced" 13622 8 "can't" to "can" 13624 13 "were" to "we are" August 1, 1985 -- Pages 13631-13861 13640 11 "off" to "of" 13643 8 Delete "the tank has" 13647 6 "and" to "in" 13647 14 " original" to " supplemental" 13647 21 Insert a coma after " backfill" 13647 22 Insert a coma after " backfill" 13648 3 Delete "of" C-31

Page Line Change 13649 17 "a" to "an"; insert " adequate margin for" before " liquefaction" 13651 9 " expanding" to " spanning" 13660 6 "were" to "whether" 13664 7 "were" to "weren't" 13666 3 Insert "were" after " findings" 13666 19 "my" to "by" 13666 23 Delete "he" 13667 2 Insert "as" after "them" 13668 8 " error" to " arrow" 13668 9 " slowing" to " showing" 13668 12 "here" to "were" 13669 3 "weree" to "were" 13670 1 "dynamnic" to " dynamic" 13671 2 "liquifaction" to " liquefaction"; " time" to

" type of" 13671 18 "if" to "the" 13673 1 " liquid" to " liquefaction" 13675 16 "and the strain" to "as the strain" 13675 17 "psuedo-elastic properties" to "a pseudo-elastic property" 13677 5 " performed" to " determined" 13679 7 "this" to "his" 13689 5 "even" to " relative" 13693 22 " Johnson" to " Jordan" 13696 5 " foot" (first word) to " feet"; " cubic because it was" to " cubic foot because it is" C-32

Page Line Change 13697 1 "be" to "been" 13697 12 Delete "an" 13697 13 Delete "a" 13699 8 "significant" to " significance" 13701 14 Delete "or" 13702 3 "with" to "was" 13702 4 "the" to "that" 13702 5 "with" to "was" 13702 6 "with" to "was" 13702 7 "with" to "was" 13703 2 Delete "a" 7 " exactness" to " compactness" I 13705 13706 5 " sizes" to " points" 13706 6 "askewed" to "a skewed" 13706 9 "and" to "in" 13706 10 Delete "he doesn't,"

13706 22 "minir.un" to " meat 13707 14 "relavent" to " relative" 13709 4 "having disposition" to "being dispositioned" 13712 3 Delete "40,"

13712 22 "coton" to " cotton" 13713 2 "you're" to Wyour" 13713 4 "were" to "are" 13713 5 Delete "is" 13713 23 Delete "me say" C-33

Page Line Change 13716 6 "he" to "the" 13716 25 Delete first " indicated" 13716 15 "You undoubtedly or" to "This undoubtedly is set forth" 13717 3 "liquifaction" to " liquefaction" 13717 5 "liquifaction" to " liquefaction" 13717 5-6 Delete "as that" 13717 16 "liquifaction" to " liquefaction" 13717 19 "liquifaction" to " liquefaction" 13717 24 "liquifaction" to " liquefaction" 13718 2 "tt's" to "it's" 13718 12 "liquifaction" to " liquefaction" 13719 16 "does" to "about" 13720 6 "dimenstions" to " dimensions" 13721 1 " tests" to " test" 13721 17 "a cord dance" to "accordance" 13722 6 " pound" to " count" 13723 21 " control drawing" to " controlled drawing" 13725 2 Insert " record" before "of" 13734 22 " representations" to " representative information" 13738 17 " Fit" to "If it" 13741 13 Delete second "they" 13741 18 " point" to " points" l 13746 25 " qualities" to " quality" 13747 18 " Alfred" to "Alfredo" C-34

Page Line Change 13748 6 "Alfrd" to "Alfredo" 13748 11 "and" to "on" 13749 9 " indirect" to "in direct" 13762 11 "Mr." to "Dr."

13762 13 "whatever" to " matter" 13762 19 "isn't or" to "should be"; insert dash after

" concerned" 13766 15 "Hendry" to "Hendrie" 13767 21 "24" to "May 25, 1894" 13775 13 " settling" to " settlement" 13792 3 "repative" to " representative" 13801 12 "only" to "ever" 13833 1 "in" to "and" 13842 24 Insert "only" after " problems" 13843 2 " adequate" to " inadequate" 13843 3 "incorperated" to " incorporated" 13843 9 " specific," to " specifics - "

13843 10 "we can," to "we can - "

13843 13 "where" to "were" ,,

13849 1 " sinc" to " sink" l 13850 3 "section" to " specific" 13850 9 first "if" to "is" 13851 16 Delete "do" 13852 21 " shuting" to " shutting" 13852 22 " planned" to " plant" C-35

l Page Line Change 13853 4 Delete "now" 13853 15 " sinc" to " sink" 13855 9 "that that's" to "that that" 13856 10 "has" to "is" 13856 11 Insert "believe it is" before " worthwhile" 13856 12 " sinc" to " sink" 13857 18 "127 conservative" to "1.27 conservative" 13858 24 " difference" to " basis" 13858 25 "he" to "they" 13859 1 "used was" to "used were" 13860 14 "do" to "to" August 2, 1985 -- Pages 13862-14089 13865 7 "Mr. Lopez" to "Mr. Alfredo Lopez" 13871 15 " differential." to " differential settlement" 13871 17 " elements" to " settlement" 13874 17 Delete " JUDGE BECHH0EFER" 13875 7 "wth" to "with" 13876 3 " received" to " reviewed"; "was just wanting" to "just wanted" 13876 18 Insert a period after " procedure"; "as to effectiveness. I" to "As to effectiveness, I" 13878 21 " nozzles" to " nozzle" 13881 16 " instilled" to " recognizes that" 13881 18 "and" to "himself or" 13882 7 "effect" to " affect" C-36

Page Line Change 13882 8 "effect" to " affect" 13916 6 Replace both commas with dashes 13916 7 " conditions," to " conditions;"

13916 8 "these result" to "this results"; "its" to "it has" 13916 10 "at bases" to "on that basis" 13916 16 " heats" to " heat" 13923 4 " session that" to " session, that" 13927 2 " casual" to " casualty" 13930 12 "and" to "that" 13932 16-17 Delete "that they -- or not" 13939 22 Insert " clear" after " entirely"; "-- as I" tc

. As I" 13946 3 " assumption" to " program" 13946 17 "It's not." to "It is."

13947 5 Delete "first far - "

13947 19 " caution" to " cautionary" 13947 20 Delete " area" 13949 14 " completely, where" to " completely. Where" 13962 11 " aspects" to " aspect" 13962 12 "whether" to "whenever" 13964 19 " apply" to " applied" 13964 21 "minimun" to " minimum" 13967 2 " problems" to " programs" 13967 14 Insert "when" after "whether" 13967 17 " element" to " answer" C-37

Page Line Change 13967 22 "effect" to " affect" 13968 17 " reporting" to " reported" 13972 12 " inadequate" to " adequate" 13977 6 Insert commas after "where" and " reliability" 14001 2 "in" to "and" 14001 5 Delete first "of" 14002 7 "cause problem" to "cause of the problem."

14022 20 Insert "and" after " identified" 14040 1 " correct active" to " corrective" 14046 3 " components by them " to " components, buy them,"

14047 23 "at least" to "these" 14048 1 " threw" to "through" 14048 12 "Judsge" to " Judge" 14050 13 "could form" to " conformed to" 14050 16 "there" to "their" 14050 22 " spot speaking" to " spot checking" 14051 7-9 Join "And that....you were buying." with previous paragraph. Start new paragraph with "We've learned..."

14051 12 " analysis more" to " analysis, more" 14051 14 Insert commas after "was" and "said"; "that" to "quite" 14051 16 Delete first "but" 14053 15-16 "two items, examinations and recommendations, tests" to "to items--examinations, observations, measurements or tests" 14053 22 Insert " Criterion" before "10" C-38

Page Line Change 14055 10 Insert a colon after " result" 14055 17 Insert a comma after " engineers" 14055 18 Insert a comma after " process" 14055 20 Insert "not" after "were" .

14062 4 "be a weight" to " weigh" August 3, 1985 -- Pages 14090-14189 14100 5 Insert "is" after " assessment" 14100 6 Insert a comma before "we" 14100 7 Delete "the"; insert commas after " thought",

" Root" and " consultant"; insert "our" before

" consultant" 14100 16 Insert "and" after " engineering" .

14100 4 Insert "on Quadrex" after " meetings" 14120 8 Delete comma after " recording" 14120 12 Delete "And was obvious"; "from" to "From" 14121 2 Insert "the" after "into" 14121 24 " weigh" to "way" 14123 1 " apprized" to " apprised" 14123 12 "various" to " varies" 14123 14 "would" to "of the list could" 14124 10 Delete "an" before "or" 14124 25 First "109" to "108" 14126 21 Insert "is" after " indicate" 14127 18 Insert a comma after " asked"; "is" to "as" 14127 20 "contstituencies" to " constituencies" C-39 i

Page Line Change 14131 22 " exact lay" to " exactly" 14134 4 'in" to "and" 14134 15 Delete " interest on" 14134 17 Insert "the" after "then" 14135 6 Delete "either as" 14135 11 Insert " position" before comma 14135 16 Insert "as" after "was" -

14135 17 "tn" to "in" 14135 25 "would" to "could"; insert "a" before " worse" 14136 2 Delete second "in" 14136 3 Delete "all probability" 14136 11 "was first the" to "was first" 14136 16 " entities A/E contractor constructor" to

" entities,A/E, contractor, construction" 14136 17 Delete "a" 14138 5 "CEO assigned me" to "CEO that I was assigned" 14138 6 " point" to " time" 14138 9 Delete "then" before "we" 14152 17 Delete "of the study" 14154 13 " field" to " feel" 14159 8 Insert "when" after "'81" 14164 21 "tade" to "made" 14165 4 the second "in" to "about" 14165 15 "it to" to "to it" 14166 23 " apprized" to " apprised" C-40

Page Line Change 14167 19 "or" to "of" 14167 20 "giving" to "to" 14170 18 " narrow" to " great" 14171 3 "own" to "on" 14171 18 Insert "have" before "been" 14172 22 Insert "to" after "was" 14173 3 Delete "that" and "they" 14173 4 Insert "been" after "even" 14174 1 Delete "if" 14178 6 "know" to " knew" 14180 4 Delete "whether" 14180 8 Delete comma after "were"; "whether there was" to "at" 14180 9 "their" to "there" 14180 12 "said that should we" to " asked if we should" 14180 14 " review is" to " review, in" 14180 16 Delete first "our" 14181 20 "to" to "that" 14182 18 Delete "he" 14182 22 " quiet Frank" to "quite frank" 14182 24 Delete "my" August 5, 1985 -- Pages 14190-14407 14197 11 " weld" to "we'd" 14197 12 "in it" to "it in" C-41 l

Page Line Change 14198 20 " calling" to " call" 14198 21 " Jess P0ston" to " Jesse Poston" 14200 24 " sense" to "since" 14202 14-15 Insert "Q" after "Yes."; drop "Q" and remainder of line down one line 14230 25 "Shown" to "Shon" 14244 9 "Q" to "A" 14247 20 Delete comma after "they"; "in" to "had" 14247 21 Insert "it's" between " Power," and "my" 14250 1 "have not" to "not have" 14250 18 " basis" to " bases" 14253 3 "objecter" to " objective" 14259 13 " substitute" to " substituted" 14260 10 "the disposal" to "to dispose" 14261 8 "are" to "were being" 14261 23 Delete "the" 14261 24 Delete first "the" and quotation marks after "NRC."; insert quotation marks after "down."

14262 14 Insert comma after "those" 14301 11 Insert a comma before " unrestricted" 14312 6 "and executive officer Mr." to " executive officer, Mr."

14315 17 Delete "I guess" 14315 18 Delete "was what" l

14315 71 "to" to "for" 14316 5 "adgenda" to " agenda" C-42

Page Line Change 14316 18 "might" to "of" 14316 19 "have" to "my" 14321 6 Insert " category" after "that" 14321 7 " resolved." to " resolve them." rf ...

14324 10 "any things" to "anything" 14325 1 Delete "is" 14325 4 " rating" to " rate" 14325 16 " Jordan," to " Jordan."

14325 18 "there" to "their" 14326 3 Insert "Yes." after " JUDGE BECHH0EFER";

Thereafter, drop one line and insert "THE WITNESS"; "they" to "he" 14326 10 "if you" to "you if" 14327 1 "would propose" to "appropos" 14327 10 " identification" to " evidence" 14328 3 " meeting" to " meeting - "

14328 4 "that -- to it" to "that"; " called meeting" to

" meeting called"; second "that" to "by" 14328 5 Delete "had"; "We've" to "We'd" 14328 6 "can" to "could" 14330 4 Delete "that" before "we" and "did" before "get" 14337 5 " deficit" to " deficient" 14338 14 " succumb" to " send" 14358 11 "or acknowledge" to "about the" 14360 21 Insert a comma after "that" 14360 25 Insert "of" after " expect" C-43

i Page Line Change 14361 4 " purpose of" to " purposeful" 14361 10 " candor" to " candid" 14362 24 " points" to " point" 14363 1 Insert "with" after "up" 14364 6 "ones" to "once" 14364 18 Both " agreements" to " agreement" 14365 18 Delete "we" after "We" 14365 22 "in" to "and" 14365 23 "within" to "for" 14370 21 "or" to "on" 14371 17 " material" to " materiality" 14379 10 Insert " indicated to us that" after "that" 14385 10 Insert a comma after "now" 14390 10 "way. Because" to "way, because" 14390 11 Delete "that" 14398 3 "were" to "when" 14398 23 Delete "this" 14399 15 Delete "would" 14399 23 " overturns" to " overtones"; insert a comma after "them" 14400 24-25 After "That's fine." insert "MR. AXELRAD:";

"Bo" to "Do" 14402 18 " JUDGE BECHH0EFER:" to "MR. PIRF0:"

14404 4 first "the" to "Mr."

C-44

Page Line Change August 6, 1985 -- Pages 14408-14604 14415 13 "this" to "its" 14415 14 Insert a coma after " member" 14468 7 " audit" to "QA" 14469 10 " records" to "words" -

14472 20 "certainly their" to "cetain of their" 14474 21 Delete " solve" 14476 9 Delete first "of" 14476 10 " audits, '79 and '80," to " audits - '79 and

'80 - "

14479 25 Delete " quality" 14482 1 " pair" to " paragraph" 14492 7 Capitalize first letters of " boiler",

-"pressure", " vessel", and " code" 14492 9 "Section 3" to "Section III" 14492 11 "Section 8" to "Section VIII"; Capitalize first letters of "unfired", " pressure", and " vessels" 14495 5 Insert a coma after "doesn't" 14495 6 Insert a coma after " view" 14502 12 " criterion" to ' riteria" 14508 16 Delete ";en *; -> asis" to " reason" 14508 19 Delete "re" 14512 5 " previous 1" to "previously" 14515 23 "or" to "on" 14519 14 Delete "he" 14520 7 " correct" to " direct" C-45 g- -- - - r - --

Page Line Change 14521 19 Delete "he" 14522 1 " Paul Rader" to " Paul Ratter" 14523 7 "two" to "the" 14526 22 "has." to "had."

14527 1 "has." to "had."

14546 22 "kept" to " department" 14547 18 " hold" to " notes for the" 14554 3 "that eventually" to "the eventual" 14557 7 " mere it" to " merit" 14559 6 DZelete first "not" 14559 -7 " trial" to " trail" 14559 10 "once" to "ones" 14560 3 "be" to "been" 14560 9 "Are those," to "By "those","

14560 13 "GUTTERMAN:" T0 "GUTTERMAN: --

14561 1 " mind, that's" to " mind thought, "that's" 14561 2 " review," to " review,""

14561 8 Delete first "would" 14561 13 "IRC C or" to "IRC or" 14561 22 " drying" to "trying"; delete second "to" 14561 23 "anymore" to "any more" 14562 2 " documents," to " document's" 14562 5 Insert comma after "is" and " deficiency" 14562 17 "their" to "there" 14563 1 "where" to "were"; "has has" to "it has" C-46

Pg Line Change 14563 4 "would" to "should" 14563 21 "where" to "were" 14564 6 "if" to "the" 14566 4 Insert "was" after "one" 14566 5 " subsequent to reporting" to "and subsequently reported" 14570 14 " criterion." to " criteria."

14570 16 Delete the comma 14570 20 " safe team," to "SAFETEAM,"

14570 21 " field" to " fuel" 14580 15 " ten-day, working day" to " ten-day working-day" 14583 14 "an" to "be a" 14583 19 "know" to "no" 14583 20 Insert "not" after the comma 14584 3 Insert "have" after "but" 14588 19 "to" to "two" 14595 22 "No had" to "No, it had" 14596 7 "there" to "their" 14600 4 " beings" to "being" 14603 14 " interpret" to " interpreted" August 7, 1985 -- Pages 14605-14803 14609 25 Insert "in" after "taking" 14610 6 "the" to "at" 14612 1 " object" to " referred" C-47

Page Line Change 14642 24 " detail" to " detailed" 14646 22 " solely" to " slowly" 14646 23 "to" to "two" 14649 3 Delete "of the" before " generic" 14652 12 "deproving" to " depriving" 14656 --

Correct line numbers to read 1-25 14656 24 "whether" to "when" 14658 7 Insert " told" after "Goldberg" 14677 15 Insert "how" before "to" 14686 17 "onw" to "own" 14689 4 "simplist" to " simple" 14701 9 Insert semicolon after " expected" 14711 24 " incorrect" to " indirect" 14712 22 Delete "go"; "was" to "were" 14715 25 "I" to "a" 14716 19 "Nolls" to " Knolls" 14717 10 " Counsel" to " Council" 14728 25 " late" to "later" 14729 1 "." to "but" 14729 13 " case itself" to " cases instead" 14732 2 " sense" to "since" 14740 22 "New York" to "NRC" 14758 2 " knowing" to "nothing"; delete first "than" 14760 22 "tey" to "they" 14761 14 "goes" to " notice" C-48

Page Line Change 14763 9 "then" to "when" 14769 3 Delete "of doing" 14772 14 " particulars" to "particular" 14792 11 " hear" to "here" 14792 12 "EPC" to "ECP" August 8, 1985 -- Page 14804-15020 14835 21 " fairly" to " favorably" 14852 14 "has" to "that" 14852 17 " consider the" to " consider whether any" 14857 7 " include" to " conclude" 14861 7 "A" to "viii" 14861 23 Delete line 23 14884 24 " shoes" to "shows" 14887 25 "may led" to "one which may lead" 14888 15 "N-50.55(e)" to "Section 50.55(e)"

14894 1 "CYC" to "QC" 14894 12 Delete first "the" 14899 10 " regard" to " record" 14901 13 " notices" to " notes" 14949 12 " verifications process" to " verification processes" 14949 13 " considerable" to " comfortable" 14991 17 "with" to "we'll" l

C-49 I

Pg Line Change August 9, 1985 -- Pages 15021-15104 15104 14 Delete "we" August 13, 1985 -- Pages 15105-15281 15145 16 "deficuebt" to " deficient" 1 15147 24 "On occasions." to "On occasions?"

15150 4 " appear 4s" to " appears" 15162 2 "SCR" to "SDR" 15172 23 " hear" to "here"; " actions" to " action" 15173 1 " groups" to " group" 15173 10 " issued" to "I should" 15178 17 Insert " testimony" after " previous"; "what" to i

"how" 15241 5 "Bechtel" to "Bechhoefer" August 14, 1985 -- Pages 15282-15387 15284 6 "14286" to "15286" 15284 21 "15340" to "15330"; " " to "15330" i

15285 13 "information" to " inform"

)

15297 3 Delete second "I" 15299 13 Delete "in"; " grounds" to " ground" 15300 7 "gathereed" to " gathered" 15300 10 Insert "whether" after "to" 15300 11 "No. B" to "Mr. Phillips" 15300 12 "syaa" to "say" C-50 f

, . . - . _ . _ , _y,, _ , , . . - . _ . - - - , , , . _ _ . , . . . . _ _ . . , . , _ . _ . _ _ _ - . . . . - . , , _ , _ , , .--.

Page Line Change ,

15300 16 "&E" to "I&E" 15304 15 " hear" to "here" 15305 3 "in" to "the Board in this" 15306 11 Delete " active" 15306 22 " curing" to "during" 15308 9 Insert "of its own selection" after " witnesses" 15316 7 "" word fully" aware" to " word " fully aware""

15334 25 Delete first "that" 15339 24 Delete "of" 15340 12 Insert "provided" after "be" 15342 10 "suggest" to " suggestion" 15342 18 "Deyoung" to "DeYoung" 15343 2 "Reis'" to "Reis" 15343 16 "Sinkin" to "Axelrad" 15346 6 Insert "it" after "that" 15346 7 Delete "it" 15348 21 Delete first "sent" 15349 7 "particularly" to "particular"

\

" time" to " item" 15350 21 15353 14 Delete first "Mr."

15360 5 " lows determined and stress limits," to " valve stress limits determined,"

.15361 5 Delete "in" 15361 6 Insert "to" after " responses" 15372 7 Delete "this is" C-51

Page Line Change 15372 21 "and" to "in" 15373 6 " justify" to "just"; insert commas after

" recall" and "all" 15373 17 Insert "was" after " conversations" ;

15373 18 "when I believe" to ", I believe, after" 15374 14 "the" to "that" 15375 18 Insert "I" before " told" 15378 .23 "2ittle [too/took]" to "little too" 15380 7 "possibe" to "possible" 15380 9 "will that we" to "were" 15380 10 Delete ";"

15380 18 "be" to "been" 15386 6 "I tell what" to "I will tell you what" i

December 5, 1985 -- Pages 15388-15582 15391 5 Insert "on" after CCANP i

f December 6, 1985 -- Pages 15583-15710 15591 7 "of" to "of you" 15591 24 "A" to "In a" March 21, 1986 -- Pages 15711-15911

, (Seventh Prehearing Conference) 15716 3 "just" to "already" 15718 9 " reflected" to " reflect" 15722 22 " Applicant's" to " Applicants'"

C-52

-== _.

= _ _ _ - - _ _ - . _ _ . . . - - - ._. . _ _ .

Page Line Change 15727 23 "5" to "V" 15728 22 "5" to "V" 15741 12 "May 5" to "May 1985" 15742 23 "had" to "have" 15743 6 End quotation mark after " document." rather than after "means."

15750 22 " remembers" to " members" 15756 1 Delete "were" 15757 2 "into" to "by" 15757 16 Delete second "that" 15757 24 " opened" to "open" 15760 18 Insert "of" after " consideration" 15760 20 Delete first "at" 15780 18 Insert "the" after "in" 15783 15-16 " criteria 2" to " Criterion II" 15789 20 "2" to "II" 15793 1 " issued" to " issues" 15793 13 "it's" to "its" 15794 1,7,21 "2" to "II" 15795 1,8,11 "2" to "II" 15796 3,6,9,10 "2" to "II" 15801 8 "it" to "in" 15801 18,22 "2" to "II" 15802 1 "2" to "II" 15805 10 " criteria 2" to " Criterion II" C-53

i Page Line Change 15805 10-11 " criteria 16" to " Criterion XVI" 15807 17 " criteria 2 and criteria 16" to " Criterion II and Criterion XVI" 15812 4 " Applicant" to " Applicants" 15812 23 Insert "as" after " raise" 15820 21 Delete "a" 15827 22 "conformancy" to " conformity" 15828 2 " authorizing" to " operating" 15828 5 "of" to "in" 15834 16 "8aving" to "having" 15842 21 "came" to "did not come" 15846 2 Delete comma after first " step" 15850 10 "16" to "XVI" i

15852 3 " considered" to " consider" 15853 2 " operation" to " organization" 15853 3 " organization" to " operation" 15856 2 " answer see" to " ANSI" 15859 13 " character" to " characterize" 15860 8 Insert end quotation mark after " commitment" 15868 18 " office of investigations" to " Office of Investigations" 15868 21 Insert "to the" after "it" 15869 14 " Region 4" to Region IV" 15869 17 " office of investigations" to " Office of Investigations" 15870 12,17 " office of investigations" to " Office of Investigations" C-54

I Pm Line Change 15872 6,16,20 " Applicant's" to " Applicants'"

15882 3 "has" to " lasts" 15882 22 " Gas" to " case" 15887 1 " Applicant's" to " Applicants'"

'15889 22 "2.714A" to "2.714(a)"

15899 2 "after" to "during" 15899 17 "on" to "in" 15903 10 " Applicant's" to " Applicants" 15903 19 Insert "you" after "think" 15904 10 "1st" to "21st" ,

15904 14 " April as" to " April 2 as" 15909 20 Insert: " JUDGE BECHH0EFER: Having not read the motion, I assume that's correct- ." After that question, insert from line 20 "MR. SINKIN:

That's correct."

NOTE: Throughout transcript, change references to Phases "1", "2" or "3" to Phases "I", "II" or "III". Such references appear on pages 15713, 15714, 15715, 15716, 15717, 15718, 15719, 15721, 15722, 15724, 15725, 15729, 15731, 15732, 15737, 15739, 15770, 15776, 15779, 15780, 15792, 15850, 15851, 15852, 15854, 15864, 15868, 15898, 15901, 15911.

C-55

CLI-80-32, Partial Initial Decision LBP-86-15 Granting Applicant 850312 Motion for Summary Disposition of Concerned Citizens Against Nuclear Power Contention 4 & Resolving CLI-80-32,Issues A,B, C & D.Served on 860613

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CLI-80-32, Partial Initial Decision LBP-86-15 Granting Applicant 850312 Motion for Summary Disposition of Concerned Citizens Against Nuclear Power Contention 4 & Resolving CLI-80-32,Issues A,B, C & D.Served on 860613

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