Information Notice 1989-70, Possible Indications of Misrepresented Vendor Products

Possible Indications of Misrepresented Vendor Products
	ML031190077
Person / Time
Site:	Beaver Valley, Millstone, Hatch, Monticello, Calvert Cliffs, Dresden, Davis Besse, Peach Bottom, Browns Ferry, Salem, Oconee, Mcguire, Nine Mile Point, Palisades, Palo Verde, Perry, Indian Point, Fermi, Kewaunee, Catawba, Harris, Wolf Creek, Saint Lucie, Point Beach, Oyster Creek, Watts Bar, Hope Creek, Grand Gulf, Cooper, Sequoyah, Byron, Pilgrim, Arkansas Nuclear, Three Mile Island, Braidwood, Susquehanna, Summer, Prairie Island, Columbia, Seabrook, Brunswick, Surry, Limerick, North Anna, Turkey Point, River Bend, Vermont Yankee, Crystal River, Haddam Neck, Ginna, Diablo Canyon, Callaway, Vogtle, Waterford, Duane Arnold, Farley, Robinson, Clinton, South Texas, San Onofre, Cook, Comanche Peak, Yankee Rowe, Maine Yankee, Quad Cities, Humboldt Bay, La Crosse, Big Rock Point, Rancho Seco, Zion, Midland, Bellefonte, Fort Calhoun, FitzPatrick, McGuire, LaSalle, 05000000, Zimmer, Fort Saint Vrain, Shoreham, Satsop, Trojan, Atlantic Nuclear Power Plant
Issue date:	10/11/1989
From:	Rossi C; Office of Nuclear Reactor Regulation
To:	;
References
	IN-89-070, NUDOCS 8910040381
	Download: ML031190077 (12)
	v • d • e

UNITED STATES

NUCLEAR REGULATORY COMMISSION

OFFICE OF NUCLEAR REACTOR REGULATION

WASHINGTON, D.C. 20555 October 11, 1989 NRC INFORMATION NOTICE NO. 89-70: POSSIBLE INDICATIONS OF MISREPRESENTED

VENDOR PRODUCTS

Addressees

All holders of operating licenses or construction permits for nuclear power

reactors.

Purpose

This information notice is intended to alert addressees to possible indications

of misrepresented vendor products and to provide information related to detection

of such products. It is expected that recipients will review the information for

applicability to their facilities and consider actions, as appropriate, to avoid

similar problems. Suggestions contained in this information notice do not con- stitute NRC requirements; therefore, no specific action or written response is

required.

Description of Circumstances

The NRC is concerned about what appears to be an increased number of instances of

misrepresented vendor products being supplied to the nuclear industry. Equipment

procured as new is assumed to meet all procurement documentation requirements, ap- plicable plant design requirements, and original manufacturer's specifications.

However, on many occasions such equipment has not conformed to these requirements

and specifications. The NRC has published numerous bulletins and information

notices regarding specific instances of misrepresented products in the last two

years. These are listed for reference in Attachment 1.

Detecting misrepresented products is difficult because most quality assurance

programs are not designed for detecting counterfeit or fraudulent practices.

The criteria used to confirm the quality of products during receipt inspection

and testing generally have assumed vendor integrity and are not focused on

identifying an intent to deceive. This information notice summarizes possible

indications of counterfeit or fraudulent material that have been discovered by

licensees during inspection and testing and by the NRC staff during inspections, along with information provided by concerned vendors. The NRC staff believes

this information will be helpful to licensees in detecting misrepresented vendor

products.

Attachment 2 lists some common characteristics of misrepresented products.

891004031r

IN 89-70

October 11, 1989 General indications may be found early in the procurement process, beginning

with the price quote and scheduled delivery time requirements. Some things

that have been found to be present when misrepresented products were identified

and which can be found during the quoting process are:

(1) the name of the vendor - several instances of apparent counterfeit and

fraud involved vendors who were not authorized distributors for the

products they supplied,

(2) the price - quoting of prices by the vendor that are significantly lower

than those of the competition,

(3) delivery schedule - a shorter delivery time than that of the competition, and

(4) the source of the item - drop shipment of items has been noted in several

cases of misrepresentation where the quoted supplier subcontracted the

order to another company and then had the subcontractor ship the product

directly to the purchaser. The quoted supplier never saw or verified

the quality of the product which, in some cases, has been substandard.

The receipt inspection and review process is a key element and important step

in detecting misrepresented products. Some easy items to check that are often

overlooked are the names and indications of routing on the shipping container

and the overall appearance of the products. Some distributors have been bold

enough to ship supposedly new equipment with one vendor's name on it in a

container marked with another vendor's name. Another important check is to

note whether the items in each shipment are uniform and similar in appearance.

Some deviations may occur even in authentic items; however, differences can

signal a problem and indicate the need for additional review. Some distri- butors or suppliers mix misrepresented vendor products with authentic vendor

components. This type of misrepresentation has required close inspection to

detect the differences.

One of the most common indications of misrepresented components, which can be

discovered during receipt inspection, is evidence that the component is not

new but has been used and refurbished. There have been many recent instances

of licensees buying what they thought were new components only to discover

that they actually were given refurbished components that in some cases did

not meet their procurement requirements. Evidence of prior usage includes

scratches that indicate that the component has been taken apart, new paint

that shows evidence of another color underneath or attempted exterior repair, and, for metallic components, pitting or corrosion.

Evidence of repair, especially when parts from another manufacturer are used, is also an indication that the component has been used. Knowledge of compo- nents, even of simple things such as color or distinctive markings, has led

to the discovery of refurbished items. Recent experience with misrepresented

circuit breakers, for example, has shown that close-checking of tags and labels

can identify misrepresented equipment.

IN 89-70

October 11, 1989 In an attempt to market refurbished circuit breakers as new, some vendors

have been making counterfeit tags and labels from copies of authentic ones

and attaching them to the breakers. Such a practice can be detected when

the equipment is examined to see, for example, if the labels are in the wrong

location or appear different, or if the tags were attached with screws rather

than rivets. Another related indication to be aware of is the use by some

vendors of counterfeit Underwriters Laboratory (UL) labels on electrical

products.

There is no substitute for doing appropriate measuring and testing during receipt

inspection. An accurate check of dimensions is often essential in determining if

a part is acceptable, regardless of whether or not it is misrepresented. Testing

to determine the material composition of a product can also be important, as was

discovered during a recent instance of misrepresented fasteners.

It is recognized that testing is not always practical. Thorough programmatic and

implementation audits of the vendors quality assurance programs are, in many cases, necessary to establish and confirm the basis for accepting the vendor products.

Licensees may wish to also consider ongoing industry efforts in this area in

taking actions to avoid problems related to misrepresented vendor products.

This information notice requires no specific action or written response. If you

have any questions about the information in this notice, please contact one of

the technical contacts below or the appropriate NRR project manager.

D @vsion Director

Division of Operational Events Assessment

Office of Nuclear Reactor Regulation

Technical Contacts: H. M. Wescott, NRR

(301) 492-3216 S. L. Magruder, NRR

(301) 492-0985 Attachments:

1. List of Recently Issued NRC Bulletins

and Information Notices Regarding

Misrepresented Material

2. Common Characteristics of Misrepresented

Vendor Products

3. List of Recently Issued NRC Information Notices

VAttachment

"w 1 IN 89-70

October 11, 1989 LIST OF RECENTLY ISSUED NRC BULLETINS AND INFORMATION NOTICES

REGARDING MISREPRESENTED MATERIAL

1. NRC Compliance Bulletin No. 87-02 and Supplements 1 and 2: "Fastener

Testing to Determine Conformance With Applicable Material Specifications."

2. NRC Bulletin No. 88-05 and Supplements 1 and 2: "Nonconforming Materials

Supplied by Piping Supplies, Inc. at Folsom, New Jersey and West Jersey

Manufacturing Company at Williamstown, New Jersey."

Molded-Case Circuit

3. NRC Bulletin No. 88-10 and Supplement 1: "Nonconforming

Breakers."

4. NRC Information Notice No. 88-19: "Questionable Certification of Class 1E

Components."

5. NRC Information Notice No. 88-35: "Inadequate Licensee Performed Vendor

Audits."

6. NRC Information Notice No. 88-46 and Supplements 1, 2 and 3: 4Licensee

Report of Defective Refurbished Circuit Breakers."

7. NRC Information Notice No. 88-48 and Supplements 1 and 2: "Licensee

Report of Defective Refurbished Valves."

8. NRC Information Notice No. 88-97 and Supplement 1: "Potentially

Substandard Valve Replacement Parts." . ,i ,I .

9. NRC Information Notice No. 89-18: "Criminal Prosecution of Wrongdoing

Couisitted by Suppliers of Nuclear Products or Services."

10. NRC Information Notice No. 89-22: "Questionable Certification of

Fasteners."

11. NRC Information Notice No. 89-39: "List of Parties Excluded From Federal

Procurement or Nonprocurement Programs."

12. NRC Information Notice No. 89-45 and Supplement 1: "Metalclad, Low- Voltage Power Circuit Breakers Refurbished With Substandard Parts."

13. NRC Information Notice No. 89-56: "Questionable Certification of Material

Supplied to the Defense Department by Nuclear Suppliers."

14. NRC Information Notice No. 89-59: "Suppliers of Potentially Misrepresented

Fasteners."

Attachment 2 IN 89-70

October 11, 1989 COMMON CHARACTERISTICS OF MISREPRESENTED VENDOR PRODUCTS

- nonfactory-authorized distributor

- price significantly less than that of competition

- delivery in significantly shorter time than that of competition

- differences in appearance of items in the same shipment

- unusual box and packing of component

- wear marks or scratches on painted surfaces

- pitting or corrosion of metallic components

- exterior evidence of attempted repairs

- missing name plate or new name plate on old component

- unusual location or method of attachment of identification (ID)tag

- missing part number or irregular stamping on ID tag

- improper dimensions

- ground-off casting marks with other markings stamped in the area

Attachment 3 IN 89-70

October 11, 1989 LIST OF RECENTLY ISSUED

NRC INFORMATION NOTICES

Information Date of

Notice No. Subject Issuance Issued to

89-69 Loss of Thermal Margin 9/29/89 All holders of OLs

Caused by Channel Box or CPs for BWRS.

Bow

89-68 Evaluation of Instrument 9/25/89 All holders of OLs

Setpoints During or CPs for nuclear

Modifications power reactors.

89-67 Loss of Residual Heat 9/13/89 All holders of OLs

Removal Caused by or CPs for PWRs.

Accumulator Nitrogen

Injection

89-66 Qualification Life of 9/11/89 All holders of OLs

Solenoid Valves or CPs for nuclear

power reactors.

88-46, Licensee Report of 9/11/89 All holders of OLs

Supp. 4 Defective Refurbished or CPs for nuclear

Circuit Breakers power reactors.

89-65 Potential for Stress 9/8/89 All holders of OLs

Corrosion Cracking in or CPs for PWRs.

Steam Generator Tube

Plugs Supplied by

Babcock and Wilcox

89-64 Electrical Bus Bar Failures 9/7/89 All holders of OLs

or CPs for nuclear

power reactors.

89-63 Possible Submergence of 9/5/89 All holders of OLs

Electrical Circuits Located or CPs for nuclear

Above the Flood Level Because power reactors.

of Water Intrusion and Lack

of Drainage

89-62 Malfunction of Borg-Warner 8/31/89 All holders of OLs

Pressure Seal Bonnet Check or CPs for nuclear

Valves Caused By Vertical power reactors.

Misalignment of Disk

OL = Operating License

CP = Construction Permit