ML20006D685
| ML20006D685 | |
| Person / Time | |
|---|---|
| Issue date: | 08/01/1988 |
| From: | Grimes B Office of Nuclear Reactor Regulation |
| To: | TREASURY, DEPT. OF, U.S. CUSTOMS SERVICE |
| Shared Package | |
| ML20005D541 | List: |
| References | |
| FOIA-89-404 IEIN-88-046, IEIN-88-46, NUDOCS 9002140243 | |
| Download: ML20006D685 (2) | |
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i [ 's k /,,pekicg , UNITED sT ATEs P [ f '; ' NUCLEAR REGULATORY COMMISSION W ASHINGT oN. D. C. 20555 2 J } f. 4 %g'f... f - AUG 01 1988 . Procurement Offiu r Bureau of; Engraving and Printing "D" Street Between 13th- & 14th Street, S.W. g l
- Washington D.C.
20228
Dear Sir:
SUBJECT:
POTENTIALLY DEFECTIVE REFURBISHED CIRCUlT BREAKERS The enclosed Nuclear Regulatory Comission (NRC) Informatio'n Notice (IN) 88-46 describes the circumstances under which defective refurbished electrical equip. ment ruay have been supplieo to nuclear power plants. Our continuing investiga-tion'of -the' five circuit breaker companies ~ identified in the IN shows that the - companies have:shippec. breakers to a number of government facilities.and agencies. Our: review of a sannple of invoices indicates that generally the breakers are ~ sold to a: distributor, and it was only'the occasional shipment direct to:the end -user that permitted us'to identify the final government destination. .a .l.have enclosed a copy of.on. invoice;that identifies your agency as the These cocuments represent our review of a selection of records
- customer.
spanning the last two-or three years from all of.the companies..As other: records are reviewed, we will provide any additional information that_ comes to light. However, since some ointhe companies have been in business: for'as many as-30 years a full historical records search will not.be possible. The five California companies appear to sell surplus:new as'well as refurbished . breakers..However, their refurbished equipment.may be shipped iri containers resembling original manufacturer containers. 'If there is.any adcitional information you require, please call me or Mr. Walter Haass at (301) 492-3219. Sincerely, ) [
- v. A rian K. Grimes, Director Division of Reactor inspection and Safeguards Office of Nuclear Reactor Regulation
Enclosures:
1. NRC Bulletin (lh) 88-46 -2. Invoices / Orders 9002140243 900209 1 g" JPDR FOIA l L .PEPPERH89-404 PDR w
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h L; ikt16l BRIEFING ON PROPOSED RULEMAKING -;q 1 ON SUBSTANDARD COMPONENTS-l.- I, I, .Locat10Dl ROCKVILLE, MARYLAND ] ~ -D8te:. FEBRUARY 2, 1989' s Pages: 48 PAGES L. r i EAL R. GROSS AND CO., INC. COURT BEPORTERS AND TRANSCRISEBS 1323 Rhode Island Avenue, Northwest Washington, D.C. 20005 (202).234-4433 O (( n~.. ,a % s. Js A rospo GU U i \\ x. , m.. c, .n. ~.
. +... - -, . ~. - -.x...~s ~ ~^~i ~ ~ ' ~ ' ' ' ' ' ' ' ' - ' S, j I ~a -DISCLAIMER [ =. r L This is an unotficial transcript of a meeting =of. n4 1 p the United States Nuclear Regulatory Commission held on j FEBRUARY"2, 1989 1 in the Commission 's ' ' of fice at one White Flint North, Rockville, Maryland. The meetirig.was open to-public-attendance and observation. This transcript has not been reviewed, corrected -or edited, and -it may contain~ inaccuracies, i The transcript is intended solely for general f 1 informational purposes. As provided by 10 CFR 9.103, it is not part of the formal or informal - record of decision of the matters discussed. Expressions of opinion in this transcript do not neces'sarily: reflect final determination L N or ' belief s.' No pleading or other paper may be filed with the - Commission in any proceeding as the result of, or addressed to, any statement or' argument contained herein, except as the Commission may authorize. r 1 a' 9 q NEAL R. GROSS CoWRT RepoRTIRS AND TRAN$CRillR$ 1323 RMo0E ISLAND AVINUf, N.W. (202) 234 4433, WASHINGTON. 0.C. 20005 (202) 232 6600 4k I l-1 [*- f gr )' k g ,,.,6
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i '.: :n; H.,0 -.c bNi 1 -UNITED" STATES OF AMERICA ,e. 2 NUOLEAR REGULATORY COMMISSIoll p 3 . s. 4 BRIEFIllG O!! PROPOSED RULEMARI!1G O!! y 5 SUBSTA11DARD CO!!POHE!!TS g s s e i PUBLIC HEETI!!3 g , s s. 7 !!ucle ar Re gula tory Cor r.issior. - 10 .One Unite Flint !!crth 11 Rockville. Maryland i 12 13 Thursday, February 2, 19S9 14 l l 15 The Commission met in open session, pursuant .-] 16 te netice, at 2:00 p.r... ' the, Honorable LAUDO W. SECH. j 17 JR., Chairr.an of-the Cc:nn.ission, presiding. l 1S l ~19 COMMISSIO!!ERS PRESEUT: 20 LA!!DO U.
- ZECH, JR.. Chairman of the Cor.. mission l
l_ . 2 '. TFOMAS M. ROBET.TS. Member cf the Cer:r.ission i l 22 EEN!!ETH M. CARR, Herber of the Comr.ission i:1 21 FEMMETH C. POGERS. Herber of the Corrission w 24 JAMES R. CURTISS. Herber of the Comrissien
- s NEAL R. GROSS court RepoRTIR$ AND TRAN$CRl8ER$
1323 RHoDE 15 LAND AYINUI. N W. I (202) 234 4 433 WASHINGTON. 0.C. 20005 (202) 232 6600 t '[ T.t ; u -*t' ,3 ,. ~ ,t -.*
u.. t. ... - ~..,.., , - =.. - y.., ..a 3,; .. sp...,.... .i. h 3, _ a g-L 8) 1 STAFT AffD PRESEllTERS SEATED AT THE COMMISSIO!! TABLE: w t, ' -: 2 JOHit HOYLE. Assistant Secretary W .3 l'ILLI AH C. PARLER, General Counsel 4 JAMES TAYLOR, Deputy Executive Director, 5 Operations 6 JAMES S11IE EE, Deputy Of fice Directer. !!RR 7- !!ILLI Ali BRACH, Chief, Vender Branch B F.I Al! G F, M E S. Director, Division of Reactor 9 Inspection and Safeguards 10 BE!! HAYES. Office of Investigations 11 12 13 l' 15 16 .17 IS 19 20 21 22 0.' 24 ?5 NEAL R. GROSS court REPORTERS AND TRANSCRillRS 1323 RHoDI 15 LAND AVINUf. N.W. (202) 234-4433 WASHINGTON. D.C. 20005 (202) 232-6600 l i,; y,'
.<C.: '"NL+- 1-pqw, :.% W 9W... 7 '...; ~,, v. t L L.. l' ' t.. '4 u - i. l' -1 PEQC E E p I l! G S -2 .(2:00 p.m.) m 3 CMAIRMA!! IECH : Good-af teincon, ladies and 4 4 gentlen.en. 5: The purpere 'of the meeting this afternoon is E fer the !*?C staff to brief the Commission en-the Advance 7 1!otice of Proposed P.ulemaking concerning Acceptance ~ef I F: t d.: : t t, P u r e!.as ed fer Use in 11u :l e a r Pcwer Plant S Strutt;res. Syrtems and Corpenents, which the liEC staff 4 ~ 10 re:ently f orva: ded to the Comrission for approval, in 11 its paper. SECY-89-10. 12 This Advance !!o ti c e of Proposed P.ul e making 8. i.: 13 would solicit public comment addressing whether 14 regulatory actions ' may be necessary and appropriate to l 15 assure that products purchased for use in nuclear power 4 16 plants will perforr. the f unctions ' necessary to protect 1" the public health and safety'. I' IS 2 would ask that the Commissioners wh: have 19 not already voted to do so, on this staff paper, after 20 yeu.have reflected frem this afternoon's meeting. 21 The staff last briefed the Commission on 22 Decerber 20th, 1985. concerning the current status of 21 ite actione te addre== the peerible use of substanderd 24 or counterfeit compenents in nuclear power plants, p 25 A2theuch the Cerrission har been inferred the-NEAL R. GROSS court REPORTERS AND TRANSCRittR$ l 1323 RNoDI l& LAND AVINVI. N.W. (202) 234 4433 WASHINGTON, D.C. 20005 (202) 232 6600 t l' l l 1
m... - ,.+ r ~ ,n - f) ,, c + 4 u m 1 there. have : been n'o indications of ' any specif$e safety 2 problem, the !!RC will remain prepared to take whatever-t a ~ 3-action is necessary to assure the safety,of nuclear 4 power plants. 5 This issue of substandard components is a very 6 serious one, and one that this Commission has given high. 7 pricrity. The !!u el e ar Regulatory Commission technical i s t r.' f in close cooperation with the Office cf 9' Investigations, is aggressively pursuing this matter. 10-In addition, I understand that the staff is j 0 i 11 centinuing to cooperate and coordinate. with the Office' 12 of Management and Budget, to assure that information the 13 liRC develeps is disseminated throughout the-government 14-agencies. 15 Tnis meeting is an information briefing this 16 afternoon, I understand that copies ef the slides are 17 available as you enter the room. 18 De any of my fellow Commissioners have any 19 opening comments to make before we begin? 20 (!!c response. ) 21 If not, tir. Taylor, you may proceed. 22 11R. TAYLOR: Thank you, lir. Chairran. Ecf ere. i 2' be,innino the detaile of the briefino. T would lika to 24 note that in parallel with this proposed rulemaking, the 2F eteff i=-enecurecina industry iteelf te take initiatives NEAL R. GROSS COURT RtpoRTER$ AND TRANSCRit(R$ 1323 RHoDI l$ LAND AYENU[, N.W. (202) 234-4433 WASHlNGToN, D.C. 2000$ (202) 232 4600 W. . is j
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- t o: - pr e clud e the -introduction of
,s ubstandard or 2 counterfeit material into the'. plants. 1 . Of. cours e. the industry people have the= ) 4 4 experience in purchasing, receiving and testing 5 products:. and they. have a pool of expertise, which we l 6 weuld hope and are encouraging the industry to take the*. j 7 type of ~ expertis e to review the bread areas ef. .i p r e c u r e n.= :.: ar.d help to ider.tify : c r p e r. u r. *..'. :. : 16:ts tf 4 1 ? the. plan. vhich may have a p o t e r. t i a l, el a higher
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10 potential, for introduction of counterfeit .c r i 11 substandard parts. 12 We.are working with industry also, te examine f i '13 other means, such as using. national standards i i 14 organizations, which might be the basis for helping to 15 develop standards which may,
- indeed, contribute to 16
. precluding the' introduction cf counterfeie materials, by 3 q. 17 better standards. And 'there 's quite a bit of long-term j i i 12 industry experience in the cerponent area, in so e of 19 the standards organizations. .20 So,-we're trying to get this type'Of effort i 21. poing by working with the industry representatives, in l 22 addition to our layout that's in the proposed rule. In i 23 parallel. the staff is continuing to pursue its ewn 24 initiatives, it's work in the field where we have 2* inferratien which may lead us to believe tha* rerhapr NEAL R. GROSS court REPoRTIR$ AND TRANSCRittR$ l 1323 rho 0E 15 LAND AVINUI, N W. (202) 234 4433 WA561NGToN. D.C. 20005 (202) 232 6000 ~L _ l 2
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6. 4 l' 'counterf eit or subs tandard material may have' been n:' 2 introduced. : 3 I'm pleased that OI is with us -- Mr. Hayes-- 4 this afternoon. He will -- as we talk about it, there j 5' may be one or two circumstances.in which we get-c1cse to 6' . investigatory raterial which we - should not discuss' i t. open meetings, and he's here te advise us on that P T. ! t. c l. 9 'I should e..phasize that the staff is gratified - 10 at the close cooperation that OI has provided with the n 11 technical staf f in this entire area. It's a model of 12-cooperation in a difficult area, and I think it's been 13 running very well to this point. . 14 .CHAIRMA11 7ECH: I'm glad'to hear that. 15 MR. TAYLOR: With tho'se few remarks, I'll turn 16 the details of the briefing over to Mr. Grimes, who hat 17 some remarks alsc. a 1. CH AIRM A!I ' 7.ECH : !!r. Grimes, you may proceed. 19 MR. GRIMES: The principal briefing will be ..= l 20, ' d o n c, by !!r. Brach, who is. Chief of the Vender Branch, i l 21 but I just wanted to make -- note a couple of things. 2
- First, that, as you know, this Advance Ilotice of 2
Prernsed Pu?arakinc care cut cf a number cf ser-ific t 24 c o n c e r n e-on specific component types over the pest 2 ccuple cf years and. cver -he;3ast year. c u:- conce rn has NEAL R. GROSS COURT REPORTERS AND TRANSCRlRER$ 1323 RNoDE 11 LAND AYINUI, N.W. (202) 234-4433 WASHINGTON D.C. 20005 (202) 232 6600 i n' s' ,t
,,. ~ ~.... x. 7 1-expanded f rom f asteners, to include molded-case circuit t 2 breakers ASME flanges and fittings and some other types 3 cf components. ( 4 The Commission, as you noted.. Mr. Chairman. 5 has been briefed on these matt ersi bef ore, and has 6 strengly suppcrted the inspection - and investigative 7 efforts in this area. and has' also - kept our oversight r I-Co r.itte== infermed of the !!RC 's intent te vigtrously i 9 pursue these areas. 10 This Advance !! otic e of Proposed Rulemaking is 11 intended to explore the need f or.f urther specific 12 regulatory requirements -- specifically, regulations-in 13 this area -- and it's also intended to let industry know 14 in some detail exactly what.our concerns are in these i 15 various areas. t 16 !!ow, with that. I'll turn it over te Mr..-Brach-s 17 to go throuch the content of the briefing. 23 CHAIR!!A!! ZECH: Thank you very much. You .ay 19 proceed. 20 MR. BRACH: If I could have slide number 2, 21 please. 22 (Slide) 1= tha corirsion may recall at staff 24 briefinge te the Commission on the status of our M inspee+iene and investigations involving counterfeit and NEAL R. GROSS COURT REPoRTIR$ AND TRANSCRISER$ 1323 RHoDE ISLAND AYINUI. H.W. (202) 234-4433 WASHINGTON, D.C. 20005 (202) 232-6600
m{, - ,,,+..a w. n.. ..r. 3 q .E L1. ffraudulent vender products, we identified te the~ t .2 Comission both in July and'most recently in December, p 3 concerns.that the staff were identifying in the I'll, '4 .say deficiencies'or inability-of the Appendix B quality 5 assurance program, to assure detection of instances of 6 apparent counterfeit and fraudulently marketed products.- 7 As noted on the briefing charts, Appendix B B has principally been designed to' detect substandard and 9 peer qdality er out-of-specification products. It has
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not necessarily been designed to detect the intentional 11 falsification er counterf eit'. or fraudulent marketing of 12. vendor products. 1 13 The basis of the-A!!PR that's befere the 14 Commission right now is focusing on me.thods that.are-- 15 addressing questions which would focus on methods that 16 the !!P." may pursue, te put in place to assist in the 1" ability te detect = instances of counterfeit and 15 fraudulent materials. 19 Slide number three, please. 1 ll L 20 (Slide) r i 21 The. focus of the Advance !!otice of Propcsed l 22 P.uleu king is principally in the area of procurement p l. m op d - g p.r-.;rp .n. e. 7, n g p,. er \\, N-tvc particular areas, the precurement of safety-related l. prcdue*= f r -- approved venders venders who are NEAL R. GROSS l-Count astonnas ANo raANscaisins 1323 aHoDt ISLAND AVINUs, N.W. (202) 234 4433 WASHINGTON. D.C. 20005 (202) 232 6600 = ' > w.
y w..., .. a. 3 n., Lc:; ,s 13 currently implementing. quality assurance I-irplerenting, 4 0; . pr gr a s - in confernance with'10 CFP. - Appendix 5. and a t. 3' secend option licensee procurerent of cer ercial
- 4 grade items f r cr. the open market, and the lice.nsee l,
5 subiecting those products to their own dedication and '6 acceptane+ *esting fer qualificatien fer safety-related i i ~ applica:ien. I Those are 'he t.> rrincipal areas tha: are 1. i ? !ocus of the AUPP., And there have been earlier .c 10 qu e s t i e r.s that have been raised. to us with regard to 11
- the, if y o u.
- will, the percentages of licensee 4
1 12 procurements of safety-related items versus commercisi
- 3 grade iters fer dedication purposes.
1 14 As we mentioned to the Commission at the i
- l 15 December briefing that,. based on inspectiens, we are 16 steeing rere end ecre instances of licensee procurere...
.j 17 cf commercial crade iters where the licensees have i 1 i <thic ted these ite~s to th-dedicatien pregrars and { 19 safety-relate?. application therselves, as centrasted te 20 wh r. : w a's previously say, fivo er ten years age -- a 1 .21 higher percentage of safety-related precurerents f r e.- 22 vendors who were manufseturing under appreved quality N escurance t recrare. 24
- There, cf course, are a couple of obvious Tc raesent fer - h e. -
O r. ' cf em m v~:I d be est HEAL R. GROSS court RtPORTERS AND TRAN5CRl8tR$ 13* 3 RHeDE l$tAND AVINUI, N.W. (202) 234 4433 WASHINGTON. D.C. 2000$ (202) 232 6600
3., ., m =.. w.1 - L. - -. r.. t . j -o; 30 =j .3-Si would. assume but, secondly; more -there are. fewer and: 2. f ewer - vendors available today - to the nuclear-1;rade er 3 safety-related-application. market, and the licensees, in .4 s o:ne regards, have been forced, to some extent, to the 5 . buying of commercial grade products and subjecting those -E to their--- for their own dedication prograr.s. 7-As I noted, the AMPR.is f ocusing on 'the two I' aspi:ts ' cf precurement' involving safsty-rs't id and-9- thes-cor r e r cial grade procurenents for dedication 10 purposes. 11 If I could have slide numbter 4, please. 12-(Slide) - 13 The ' current issues and problems we have 14 discussed and. the. Chairman summarized as - well. in his L 15 opening remarks. We have-seen.nore and more ' instances 16 of apparent counterfeit and fraudulent practices by the: 17 part of~ venders, in providing equipment to nuclear power 1 28-plants, and this, of course, has. heightened the concern 4 19 on the part of both the Commission and staff management. 1:'. l 20 as to the.pessibi'_ity of the counterfeit equipment' 21 being entered into safety-related applica tion s and, 22
- thus, causing concerns with regard to centinued safe l>
' 23 operation. l 24-As noted, we have identified 3cre and rore l l 25 instarres. Mr. Grimes had rentioned, these run the NEAL R. GROSS court RIPORTERS AND TRANSCtetR5 1323 RHoDE ISLAND AVINUI, H W (202) 234 4 433 WA5HINGTON D.c. 20005 (202) 232 6 i. ,s + .c, ..s c s t
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-w p;..,, n-- 7 a.+. -. .v.' ~ x. .r. fg 's 1 *. t 1 g eut f rom - the instiances that initiated with fasteners, 2 Einvolving " nuts, ~ bolts and screws, to piping raterial, 3 fit' tings and flanges, molded-case circuit breakers, 4 which have been a fairly extensive effort on the part of 5 11RC in, reviewing the market for molded-case circuit-6 breakers to nuclear power plants. Other issues - involve f 7 valves, valve replacement parts and, in other examples, E pi pi ng - r..a t e ri al s. 9 Based on 11R C inspections and reviews of 10 licensees -and vendor facilities, we've identified a. ~ 11 number of problems in both the procurement programs and 12 the dedication programs. And so,-again, the focus of 13 the A!!PR is an attempt on our part to address public 14 comment to those areas involving procurement and 15 dedication programs that may be an assist to the' !!RC in 16 having a - tighter regulatory control over these two 17 aspects. 18 CMAIRMA17 ZECH: And focuses on counterfeit and 19 substandard corponents, is that right? In other words, 20 you said :,u r current regulations, on your slide I., are 21 not designed to detect counterfeit and fraudulently 22 marketed products. Is this A11PR designed te address t 23 that 4=="*? 24 !!E. ERACH: That is correct. I'll address it 15 a lit *1e bi-further as we oc along. but the answer is NEAL R. GROSS COURT REPORTIR$ AND TRANSCRillR$ 1323 RHoDI 11 LAND AVENUE, N W. (202) 234 4433 WASHINGTON, D.C. 2000$ (202) 232 6600 v) : 9.x.. .~ ~,' e s -
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.; n. .c ~* e, 9; y t 12 p. + c1 .yes. g3 2 CHAIRMAli ZECH: All right, Thank you. s .3 HR. BRACH:. It is addressed to detect those 4 types'and pieces of equipment. 5 CHAIRMA!! ZECH: Fine. You may proceed. .6 MR. BRACH: Slide-number 5, please.. y 7' (Slide) I, The geal of the A1!FF., There are a nurber cf S questions-in the AllPR, and they are structured around a 10 . basic set of premises. One involves the increased l 11 engineering involvement in the procurement programs,.in ~ 12 identif ying the critical characteristics of. equipment 13 and material that's.being procured that is, those s 14 critical - characteristics that are necessary. f or the intended application at the facility. 16 The-questions also involve enhanced receipt L 17 inspection ar.d testing to verify, verify on the part of 18 the licensee, that these critical ~ characteristics that
- 19 have been identified have, in fact, been satisfied in 20 t h -E
- r e c u r e r..e n t and receipt inspection and testing 21
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22 A third area involves the topic of 23' traceability, traceability of the equipment through l '24 intermediate suppliers, back to the original equipment 25 manufacturer. It right be summarized in a simplistic NEAL R. GROSS court RIPoRTER5 AND TPAN5CRlRERS 1323 RHoDt 15 LAND AVfHUI, N.W. (202) 234-4433 WA5HINGToH. 0.C. 20005 (202) 232 6600 l [* j,- u D. ' O'. ' (., s, +
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c- .o n n ~ .n a-L, t: .c p,.. n - o.. I sense of knowing.what you are' buying ' and who '~ you are 2 buying' it
- from, from the standpoint as far_' as i:
t 3 traceability of equipment with regard - to. material e '4-conposition, engineering design and specifications.. 5 .A fourth premise, fourth and fifth premise, 6 involve the concept of improved audits.and improved 7 vendor: oversight, as well as considerations of joint 8 industry programs in beth aud t and approved vender list i 9 Corposition. 10 These basic premises are structured to fit the 11 tnree' questions that are posed on this briefing slide-- l -12 that is, to the public, asking their input and comment 13 -- are new regulatory requirements necessary in this 14 area and, if so, wh'at should be included in any such new q i 15 requirements, aszwell as asking the public for any ideas i i I 16 or options of their own that they may effer to us es i 17 alternative methods for helping us or helping. the 1 1E nuclear
- industry,
!!RC, have a better handle on, l 1 19 ' controlling the concerns involving counterfeit and 20-fraudulent materials. j 21 We'll note as well that our questions to the 22 public are phrased in asking for their input as well as j 03 +o vb a
- N-tP - requireren*e d'
e r.y in th3= a"* 24 should be of a performance-base nature or prescriptive, 25 ms far as b9ing very specific in the deta13 = ; f vs ric.:s NEAL R. GROSS l COURT RIPoRTER$ AND TRAN$CRIBER$ 1323 RNoDE l$ LAND AVINUE, N.W. (202) 234-4433 WASHINGTON. D.C. 20005 (202) 232-6600 , H gj.. c q .m-- =* m 4.,
e..- v ...c .w, .3 y;, q..g V g,q W p; t,. l-s 14: 1 material compositions or types of testina and-- s arpling ' e Y 2 that might be needed. 1 J 3c 3 I would note that in the SECY paper c that was 1 4 forwarded to the Commission, the. staf f had initially . S' proposed a comment period of 60 days.. As noted, after 6 further censideration, feel that 120 ~ days is a more 7 apprcpriate time period for consideration, to include P C the ti: e n6cessary for standards organi:ations as well' j i .c 9 as r,r. deliberative processes, to give a mere valued j 1 10 input to-tha liRC in this area. So, the staff is 1 11 recomrending the 120-day com:t,ent per iod. I 12 CHAIRMA!! 7,ECH: Before you go on to the next u N 13
- slide, since our December 20, 1988 meeting, have' you 14 encountered any safety problems at all in this area, 15 regarding substandard or counterfeit components, that 16-weuld indd ate any reed for immediate regulatery action?
IT l'R. BRACHt 'The answer is no, but let. me 18 answer the question in this manner, and I'll use some of-19 our past actions to maybe typify my or give an +. 20 exarple with y answer. 21 In case.s vhere we have identified that if it N t 22 vss a pipi;.3 ra a t e ri al issue, such as fittings and f l e ~w s -M '#-cased cire"'* Fr+=1are. ar 3-e casa 24 cf valve replacement parts, we en the part of the staff ' - " > a t t e..r t e d cur best te take as irrediat' -ti-- as l NEAL R. GROSS court REPORTIRS AND TRANSCRISIR$ 1323 RNoDE ISLAND AVINUE. H.W. (202) 234 4433 WASHINGTON. 0.C. 20005 (202) 232 6600 4 'a. 3s m -
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_[~ - l,. 4 - -,3 'I we. felt appropriate. In sore cases, that' involved the- =2-issuance o f. an information notice to be sure ;the. c_ 3 lin_dustry is-aware at the same time we are.- of 4 information that we've identified or developed through 5 our regulatory process, or the issuance of bulletins to 6 ask licensees to take specific corrective actions 'in 7 these_repards. R ~ l*. GPI!!EF: Bu* since.the.Cer-ission reeting. 't 9 w,. ba.s net-icentified anymore substantial ite:s. such 10 as n.cided-case circuit breakers. - 11 CHAIRl:AN .',ECH : That was what I really wanted-t ' 12 to_make'sure'that the Commission was aware of. You may. 13 proceed. 14~ MR.--BRACH: _ Slide number 6, please. - 15 (Slide) 16 on -- the structure of the AMPR. a very obviouc 17 question when you first look at the ANFR is, why ' are 1S there sn rany questions? And let me mention that at.the 19 outset of our development of the ANPR, we had both 20 envicicned and started with a set cf questions in the _ 21 _ neighborhood =of 12 or'15 quastions but, as we started to 22 pursue those-quer': ions from the standpoint of taking a 23 basic. premise for example, such as the concept of 24 testing and started to try to relate that to actual 25 if we were roving in a regulatory environment to a 7 NEAL R. GROSS court REPORTERS AND TRANSCRlt!RS 1323 RHoDI l$ LAND AVENUI. H W. (202) 234-4433 WA5HINGTON. D.C. 20005 (202) 232 6600 a /, 4 f.,.. - - - d,. n . g,,.
- 7 ,4 r .,..., 7 -16 1. rulemaking. how youjd we proceed, just using the example 2 of testing.- -3 Obvious questions first start coming to__ mind is the ' testing involved destructive or non-4 5-destructive. testing 7-Does the-testing' involve sampling 1 6 en e hundred percent basis or on so:-e' statistical basis?- 7' And then as you start to work your way through those E. quistie' ns. f urther questiens come up with regard to *he l types :f :r.aterials l 9 that might be subjected tc a te. sting f 1 C-program. 1 11 If it 's involving fasteners, nuts and-bolts, I i 12 those are fairly arenable and are low-ecst items i i 13 amenable to testing? But if the item setting on the 14 loading dock might be a completed valve or ;. pump, your-15 limitations on testing based on receipt are somewhat 1 16 constrained. h 17 So, the questions-'as you go through the AUPR, t 18 while appearing rather detailed, - as we were locking at 1 1 19 soliciting input fror the public'as far as how best to 2 *; prc:eed in these various areas, we felt that it was very '21 necessary to go to the level of detail in the questions. 22 and the number of questions we have, to be sure that as 2 g 23 the public was going through their deliberative process 24 and previding us comments. that issues that we sac er .M ite s that '.' e e m '* might be issees in a regulatory NEAL R. GROSS COURT RfroRTit$ AND TRAN$CRltlR$ 1323 RHODE l$ LAND AVINU(, N W. (202) 234-4433 WASHINGTON. D.C. 2000$ (202) 232 6600 ,n x '3j .s-v.
- z. r,
g n.....,.,.,,, ,.= ~ ,q g.. - ou l x g t 1- . development process, would hopefully be addressed in the i 2 comments we received. The structure of the A!!P R, as I've mentioned. 4 has two basic parts: one part that de~als with safety-5 related procurements, a second part that deals with 6 procurement of commercial grade items for dedication.to 7 safety-related applications. E Ea:h ef the two parts has fcur subparts. A 9 set of general questions that address testing for 10 e:< a mpl e, sampling traceability issues; a second item 11-invc1ving metallic products and parts procurements, such '12 as piping. material, fasteners, nuts and bolt s and 13 screws;. non-metallic products and. parts, such as ~ 14 lubricants,
- seals, filters;- and the. fourth part, 15 components -- the. example I used a minute ago, as far as 16 a purp a whole or completed pump or valve, or other 17-piece of equipment.
18 Sc. our questions are structured ' to try to 19-address.in a' fairly significant level of detail, aspects 20 involving if !!?. C were to move out with regulatcry 21 involvement in this area, what types of consideration 22 should be brought in there. 23 Slide number 7, please. 24 (Slide) M As well in the AMPR to the questions I've iust HEAL R. GROSS court REPORTER $ AND TRANSCRIstR$ 1323 RHoDE 15 LAND AVENUE. N.W. (202) 234-4433 WASHINGTON, D.C. 20005 (202) 232 6600 ~, 7:c:, '
y w- ,_,,.~.,.:.-...- 3 43 18 c... 1 summarized, we 'have asked for comment-in some more 4 2 general areas. There's been much discussion within the 3 . industry and between 11RC and licensees and flUMARC anel -4 other industry : groups, with regard to an existint EPRI 5 standard that addresses alternatives and methods for E ce.mercial grade procurerent and-dedication prograr.s. 7 The staff is aware of that document, but we're 5 askir.g the public as.well, if there are other standards. 9 or guides, other industry programs that might be used.as 10-an example er as a model, for us to review and consider 11 as-we go down this rulenaking process. 12 As I've r.entioned earlier as well, we're 13 asking the public for any alternative. ideas or means or 14 methods they might wish to identify. P 15 The third-point, and this is a very important- ~ 16-peint and as the Cormission had mentioned -to the 17 staff at the December 20th briefing _-- that it's very 1S .irportant to not look at the issue of procurement with 19 blinders on, limiting yourself solely to safety-related 20 applications-or procurements, and that we're asking the 21 public to provide comment with regard to the extension 22 of these questions and issues that we.'re raising, with vanard ta balanew cf p? ant er nonsafety-related 24 eqaiprent as well. 25 F]ide r mber E. please. HEAL R. GROSS CoVRT REPORTER $ AND TRANSCRittR$ 1323 RHoDI 15 LAND AVINUI. N W, (202) 234 4433 WA$NINGToN. D.C. 2000$ (202) 232 6600 /' E ,[ 4
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-19 -1 (Slide) =2 During. the ' process of developing the A !PR,' 3 staff has had a number of related _ activities ong o i r.g. E .4 We've'had, as mentioned earlier, numerous meetings with ~ 5 N Ul!A R C, licensees, and industry groups -discussing 6 results of inspections and investigatory typ findings 7 with regard te inadequacies and licensee procurement and dedication prograr..s. 9 _Ue've issued, as sun niarized here, a number.of -10~ b u l l'e t i n s - a n d information notices during the past 11 caleniiar year and, as mentioned, these cover the topics 12 such as fasteners and fittings, flanges, melded-case 13 circuit breake.rs, and valves and valve ~ replacement 14 parts. '15 As well, realizing that an AUPR rulernaking 16 proer== is a Inn? process of itself, and that the AMPR 17 is the initial step, the staff has_also been developing '1B a generic letter to address near-term considerations-and 19 actions that we feel are appropriate in the near-term, 20 to address some of the deficiencies that w'e've noted in 21. the area,of procurament and comn:ercial grade dedication. 22 The staff sent to the Co:rri t t e e for Review.of 2? Genaric Requirerente e proposed nanaria letter. which 24 vill be the subject of a meeting next week. 25 CH AIR!' A'! 7.ECH: LM re,iust ake a cerrert e. NEAL R. GROSS COURT REPORTERS AND TRANSCRittR$ 1323 RHoDE ISLAND AVINUE, N.W. (202) 234 4433 WASHINGTON. D.C. 20005 (202) 232 6600 ? ?;
- y.,,
.o. 00 1 that. I think that's a very responsible action. I 2 agree that Advance 12oti c e of Proposed Rulemaking is a 3 lengthy precess. I think it is a responsible action, ~4 too. because it's a new field for us, and I think it's g 5 appropriate that we ask Icr public comments, t>u t your 6 generie letter. as I understand it, will address our i i c t.r r e n t !!E C requirements and make sure that they are 8 cc plying vith ti.e r te the e x t e r,t thkt t h r. y can, an' y 9 ea s o, prhaps it s'ill cer tainly be mere tirtiy as fat 10 as any action on the part of licensees. t
- 1 So, I
think the, generic - letter is very 12 irportant to get out, and promptly, now, as a follow-13 up, too, to your bulletins and inf orination notices so r 14 that the utilities and the industry is well alerted to 15 this problem, but could you describe the generie letter 36 just-a little bit more in detail, so we kne.,w what your 17 next approach is as for as current actions are taking 12 1, lace. l 19 Mr. FRACHt There are three basic elements of 20 the ger.eric letter. One is a request of the industry to 21 include engineering. mers heavily in their procurement 20 involverent engineering,
- f. om the standpeint of at 23 the outset of procurement, to identify not only the 24 piece of equipment that's needed, but those critical 25 characteristics of that piece ef equipment, so that aF HELL R. GROSS COURT RIPoRTIR$ AND TRAN$CRi$lk$
1333 RNODI ISLAND AvlNUI. N W. (202) 734-4413 V'A$HINGToN, D.C. 20005 (202) 232 6600 i 's
pv." ; s.,- c ;, s,. n - o, - 9, )k { 1 the precurement and the vender are identified, it will 2 be quite clear at the outset, what the critical t t 3 characteristics of the piece of equiprent from a-- 4 m.aybe it's a material composition, if it involves some t 5 environmental qualification aspects: design its intended 6 functionality, as far as the system te include engineering more heavily at the functicn ~ c u t s.: ' - that these critical chsrecterirties in that 9 ite:. te be procured, can be identified at the outs.=t. 10 Also involve engineering in the receipt 11 inspection and testing, so that as that item has been 12 precured from an approved vender and is received by the 13
- licensee, that engineering input as far as having 14 initially identified.what those critical characteristics 15 are, can also be brought into play in the inspection 26 receipt and testing program at the licensee's facility.
17 to assure that those critical characteristics have, in 18 fact. been met in the procurement process. 19 Sc. the first eierent involves a stronger or 20 more heavy involvement of engineering in the procurement 21 process. The second element is to the industry, te 22 pay more attention to the oversight of audits excuse 23 me -- oversight of vendors in their audit process. i i 24 We issued this past year, an inferration .5 not3e9 invelvino deficiencier that t h e !!P.C sev in audit HEAL R. GROSS Count RIPoRTER$ AND TRANSCRllit$ 1323 kNoDI l$L AND AVINUI N W. (202) 234 4433 WASHINGTON. D.C. 20005 (202) 702 6600 l
1.,~ j c o, [,. 30 f 1 prorrens of certain vendors, based on !!RC inspections. L 2 as co:tpa r e d to inspections or audits by licensees when 3 they had been there previously, and we had noted that in 4 some casas, we were of the impression that the 5 licensees' audits of their vendors had not gone to the E depth nee **sary to assure the quality and captbility of ~ sete cf the venders, their prograns and their people, f I T. F: the sucend c l e ::4 :, t is a charge t: ths industry to improve their overall audit programs. 10 The third e l e rne n t involves the commercial il grade dedicacion, or the dedication of commercial grade 12 products to safety-related application. I had mentioned 13 previously, an EPRI document that's just recently been 14 issued. [ 15 The NRC staff has reviewed the EPRI document. 16 The decumen; lays out four methods for procuring li commercial grade items and subjecting those to IS ded! cation and testing and acceptance testing, fer 19 eventual use in a safety-related application. ) 20 The third element is an !!RC endorsement with 21 minor -- or with limited considerations or reservations, 22 on the use by licensees of the EPRI document fer use in 23 the co~~a*ela3 crede dedication process, l 24 Those are the three basic elements of the 2" ceneric letter. HEAL R. GROSS court RiponTIh1 AND TRAN$CRI$1R$ 1323 RHoDI ISLAND AYl nut. N W. (202) 2M 4433 wASHlwofoN, D.C. 20005 (202) 232 6600 u. .u
p., ; ~~~ E. .1 i 03 L. 3 CHA!RMA1T ZECH: Thank you very much. Again. I l 2 think that's the responsible action because it's 3 torething that has more near-term possibilities. The 4 other is responsible, toc. but I think you are doing it i 5 right by poing both ways. 6 MR. BRACH: Thank you. 7 CHAIRMA!! OECH: Let's proceed. Thank you, e L UR. ERACH: Slide nun.ber 9, please, t 9 (Slide) 10 This is the last slide of the presentation, 11 and I ouess both points the first point is, on our 12 part, fairly straightforward. We are recomrending to 13 the Commission that in consideration of the AllPR, the 14 Commission approve publication of the ANPR for public 15 comment and, as noted, that we have, after further 16 censideratier.. deterrined that 120 days for public 17 corrent and consideration is a more appropriate period 18 than tha previously recommended 60-day period. 19 That's the completion of the briefing. Do you 20 have any questions? 21 CHAIRMAN ZECH: All right. Thank you very 22 much. Questions from my fellow corr.issioners? mi e---fer a--.* *-bart*? 24 COMMISSIONER ROBERTS: No. ?B CHAIPMA1' OECH: Corristiener Carr? HEAL R. GROSS court REPoRTits AND TRAN$CRlllR$ 1323 RMoDI 15 LAND AYINUI. N.W. (902) 234 4433 WASMtNGTON. D.C. 2000$ (202) 232 6600 L i_g ..A. a ,c
e, y ,,g. .j,,.3 24 1 COMMI S SIO!!E R CARR: Yes. When I read the 2 Appendix B that controls this area, and see what's been I 3 dene to go out and find out about the problem, I'm not 4 sure that the problem is that we haven't been requiring l 5 ther to conply with Appendix B in enough detail. That's 6 really our beef. The words are all in there that cover the item. t And w h e. t you're saying is, we have bee:. 9 scr*what lax in accepting programs that they've done, 10 and wv need to tighten that up, but we don't need to 11 rewrite I don't I can't the words are there, 12 what we I would think if we amplified that in a 13 generic letter, that would solve'the problem. e 14 HR. TAYLOR:
- Well, a lot of the problems, 15
- though, have come up through the commercial grade 16 procurement dedi'ention process, which has always been a 17 difficult area to review, to and that's one of the t
18 purposes of this generic letter, is to really focus in I 19 on that. That's been a route that Mr. Brach has 20 indicated has expanded as original suppliers go out of I 21 ' business and they get commercial grade,.and they are not 1 1 l 22 really doing an adequate job in many cases, and soms of 23
- hat 7 don't know that v'
havr found something richt 24 new where we'd say Appendix B and its requirements ought 1 25 te be changed. richt? l l NEAL R. GROSS I COURT stPORTER$ AND TRANSCRIStt$ 1333 RNoDI 15 LAND AYlMUI, N.W. l (202) 234 4433 WASHINGTON, D.C. 20005 (202) 232-6600 l. t J, l ./, ..s
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L 'v l 25 c. J [ 1 MR. S!!IEZEK: Let me mention, as we stated 2 early on, Appendix B was not designed to detect fraud. 3 Willful deceit was not the purpose of Appendix B. 4 COMMISSIOllER CARR: But I don't think this 5 will detect it either. 6 MR. StiIEZE!* : I think we'll be taking a step 7 in that. direction. That's why we're asking the 3 questions i r, the A1:P R. Appendix 5 was teant te da:cet i 9 honest ristakes that were made. We knew people would 10 make mistakes, and that's what it was designed for. 11 Also, all the guidance that was associated 12 with Appendix B was designed around that. Years ago, we 13 even said that certificates of conformance were fine-- 14 back in 1971, the' staf f.
- And, so, I think what you 15 said, Commissioner Carr, is right.
We haven't been 16 forceful enough, but I don't think we should build on a 17 vague rule to correct a specific problem that we see 18 today, which is fraudulent material -- 19 Col!MISSIO!iER CARR: But the way you detect 20 that is, you got to go look, you got to go check, you 21 know, and that's.what we require.them to do anyway, and -22 I get the impression they haven't been doing it in a 23 thoroue eauch -- for instance, $t bothered re that one 24 utility did find out about, I think, the breaker ?5 probler. and said "We. don ' t want to buy ther frer that NEAL R. GROSS COURT RIPotflR$ AND TRANSCRlBIR$ 1323 RNoDI ISLAND AVINUE, N W. (202) 234 4433 WASHINGfoN. D.C. 2000$ (202) 232-6600 . q. +3 s p
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4-7.r 9,. 36 L. I' guy. he looks crazy". Other guys bought ther. The only 2 difference was, he went and locked. L 3 MR. TAYLOR: Yes. That's -- the introductory 4 rerarks indicated the attempt to get industry itself to 5 look at the procuring organizations across the 6 industry have a good idea where much of the procurement 7 taken place, and they can help identify cutfits that .S O C!"!I S S I ONE T. C A F F. : Eut y pre;; sal
- . 4,
.c ? though, if we hold the industry responsible for having 10 good parts, then it's incumbent on the.m to go make sure 11 they have peed parts. 12 MR. S!!IEZEE: Right. But -- 13 MR. GRIMES: I don't think there's any 14 disagreement, Commissioner Carr, with that. 15 COMMISSIo!!ER CARR: And that's what we require 16 them te do already. We've been -- I would guess we've i 17 been a little less than -- 12 MR. TAYLOR: Some of the introduction of l 19 additional receipt inspection, as an example, is a way 20 -- you know,.you get certificates of confer ance, yet i 21 you run additional receipt inspection. It may be 22 simple, non-destructive tests on :t a t e ri a l s, and if yov 23 -- it -av deteat -- you know. that's another way. 24 COMMISSIo!IER CARR: But, I mean, there's no 75 r e a s e.n fer us to buy receipt inspectiens if we want to NEAL R. GROSS I CoWRT kiPoRTERS AND TRAN$CRlklR$ 1323 RMoDE 1$ LAND AYINUE. N.W. (202)ru.4 m w.a.smwofoN. 0.C. 2000$ (202) 232 6600 1 3.,, m. 1
_~=w -e i.., 1. l 27 c 1 po further than that. 2 MR. TAYLOR: I mean -- 3 COMMISSIO11ER CARR: What we're interested in 4 is 11 they have good parts. 5 MR. TAYLOR: Yes, indeed. 6 COMMISSIO!!ER CARP : And when we find out they i don't have good parts, then we tag the. And, you knew, f r E they e'r s h e'- yw all the paper
- d. n the werld, M:t the
? part is nc good. 10 MR. TAYLOR: Lut additional testing at receipt 11 will help -- at a utility, will help to detect 12 COMMISSIONER CARR: But nothing keeps the.- 13 from doing that now. r + 14 MR. TAYLOR: No, nothing does. It does not, 15 but they met most of them go on certificates of 16 conferrar.e+. 17 COMMISSIO!'ER CARP: Which is wrong.
- F MP. TAYLOR:
We're finding that out. 19 COMMISSIO11ER CARR: But I say, if we accepted l 2; it, but it doesn't say in here that that's what we 21 accept 22 MR. S!!IE EK: I understand. 23 Col!!!IS SIONER CARR: so, all we have to do 24 is say. hey. we're going to get tougher I think you 25 de *hn* in here. but I still have so.u prebler vith it. HEAT. R. GROS $ CoVRT RipoRTIR$ AND TRAN$CRipfk$ 1333 RNoDI ISL AND AVINU[, H W (P02) 2H 4433 WA$NING7oN. D.C. 2000$ (202) 232 6600 i w
...m g r-ae ~- t 1 I don ' t ' think you're going to detect the guy who is itx j 2 fraudulent. It's -- i 3 MR. TAYLOR: We're going to put out .?.o r e s. 4 defenses. 5 C OMMIS SIO!!ER CARR: Fraud is the toughest f thing in the verid to prove. L ~ MR.. GRI::E S : But I think you could -- you can 'f*
- $s eternti <-rirenrent if ycu. ft: c::ar p;.
r ? al., it h:,c.':. th s t you are g-ing te test products, there 1 is im like:ihood that s er.t bod y will try te ge about fraud. S:. I t) ink there are things that you can do ::
- I 13 COMMISSIOTIER CAER:
It's a deterrent. 14 MR. S!!IE::EE : Right, it's more a defense. 15 MP., GRIl c.: to deter this type of t hin g', 16 and there's ether these things can aise detect these 1~ things. 18 I would remark that this is en Advance 1:otice 19 ef Proposed Rulemaking, so we have not made a final I deterrination to go forward with a rule. And this lays 21 out the steff's concerns in some detail and says, what. I2 is the best way to approach this? Should we go furtha d n cremd t 4 ve rule aH no, or do we have encoch and. if ?' r I4 we have enough, why is not the implementation of what we ?5 hava verkine? Are there sore other is there s ew NEAL R. GROSS COURT RIPottlR$ AND TRAN$CRIBik$ 1323 RHoDI ISLAND AVINU[. N W. (202) 234 4433 WASHINGTON. D.C. 2000$ (702) 232 6600 1 ,s ~ u- , s. .s fy
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I ether fer ef guidance. er inspectien -- i. 2 COMMISSIO!!ER CARR: Well, my concern is if you 3 90 ith a rule. you're going to have a hard time 4 prescribing everything. Somebcdy will -- i. 5 MR. GRIl!E S : That's correct. 1 i l 6 COMMI S SIOlIER CARE: find a way eut of it. 7 and I think ycu've got it well covered in Appendi:: I, y-. M* hav. '. : lo:h a '. the results. Th. ; ;y either has ge:d parts er he doesn't: if he desst.'t. then 10 h.'s get e problen.. 11 HR. S1:IEEEE: Yes. I think, Corrissioner 10. Carr. we agree to the basic premise, no question there. 13 Th. industry does have a group that's working on this. 14 They have already done some good work in the EPRI 15 docu ent. which we basically endorse, with very r.iner if exceptien. which and that really goes a long vayr l '1 tevards solving the dedicatien process, if the indurtry if all agreer they are peing to de it that way, 19 And if they pick up in ths other areas with the anginei. ring involve ent and that, a r.d a:ress the 21 industry cor.it tc de it, that would rinimize the naed f:r ar.y further regulatory action on our part. I think O 't vmi-co--ent i= veil teen. 24 GR!!!F S : I think it's important te put eut ?" em thu table i r. sere detaf' our concerns. en' te get HEAL R. GROSS CoVRT BIPoRTfkl AND TRANSCRillR$ 1323 RHoDI 15L AND AVINUI, N W (202) 234 d433 WASHINGTON. D.C. 20005 (202) 232 6600 (DJ, :i s 4
Q :.. Z %C ' [ * ' :... 'c T i L. , ?. ' ' w: ,i I public and industry response to how those concerns ought 2 to be dealt with, and we think it's important to also 3 reserve the ri6t to the option to move further in 4 the recu ttery arena if other avenues don't work. 5 C OMMI S S I OllE R CARR:
- Well, what's the 6
responsibility of the other agencies. like Underwriters' 7 Lab, _or whatever? If I go to the store and I buy ryself i e.tre and it's got = little tc.; t r. it that re s y s "~hir e f has. been L;essed" if that's a phony tag, whose 10 respe.nsibility is it to go pxosecute the guy who put the. 11 phony tag oni 10 MR. GRI!!ES : Well, whoever finds it can bring 13 it to the authorities at Just'ce. 14 COMMI S SIollER CARR: !!o, no. I mean what 15 agency -- 16 MR. S!!I EO,ER : I'd rather refer that to OGC as l' a -- 1? COMliIS SIC 1!ER CARP.: I mean, what agency has 19 that responsibility? Is there an enforcement part of 20 Underwriter Lab peop167 21-MR. BRA *H: With regard to the. exar:ples thiF 22 past fall involving molded-case circuit breakers where 23-UL lehe39 and other manufacturers' labels were brought ~ 24 into question, we are aware, through contact with UL and l ) 05 other groups. that they are pursuing through the Justice NEAT. R. GROSS court alPoRTits AND TRANSCRftlk$ 1333 kHoDI llLAND AVINVt N.W. (202) 734 4433 WASHINGTON. D.C. 20005 (202) 232 4600
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. + .c. /.. l~ 21 y ;. 1 syste~, the appropriate enforcement actien. O C0!!MI S SIC:!EP. CARE: They have taken them te 3 ceurt? 4 MR. BRACH: Yes well, they are geing in 5 that process. Uhere they are. I'm not sure, but they f are taking legal they are folleving their legal 7 epti er.s. ? TAY1 S : f*at, thee. cy:1 t:-f.i<r v1. < : s a s;;.s has ceunterfeitud thet the y wot.id..or: 4. *. ; ) 1 ;- h. and t h.. they s '. a p a UL label on it. ...s
- .ajct 1:.
supp1'iers their health is impugn =d by it, and 12 damagtd, and -- 13 C OMl!I S S IOllER CARR: I wasn't particularly 14 thinking of a power plant, I ' rt just thinking of rny. 15 extension eerd I go in and buy and it's got a tag on it. I f. MF. TAY!9P: Us hope it't good. 1" (Lau7hter.) It cot! MIS SIO!!!R CARR: If it isn't goed, though. 19 wh:st responsibility is it that that tag is n t a 11ei !!?. TAYLCF, Us11. that's sheuld p12; 21 atterneyi 00 M*. P;FLEF: Y0u're looking at.~ e, but -23 whenever you ansver any questien like that, you have to 4 have the facts. It depende en, for exsmple, what's on 05 the tea. Have you ever 1c% $ at the tag when y-. ge NEAL R. GROSS COURT RipoRTERS AND TRAN$CRillR$ 1323 RNoDI ISL AND AVINVI, N W, (202) 234-4433 WASHINGTON. D C. 20005 (202) 232 4 600 t ,a t.,.}'
m, , s,.. ..,s. .- m c j. .l 3' [ 1 into a parking lot? The tag, in effect, says that l 2 "we're responsible for nothing". 3 (Laughter.) 4 HR. PARLER: So, you have to look at tha 5 facts. And I'll be delighted to look at the facts. I 4 I 6 r.i gh t add that it is my understanding that in the last j coupit of y ars, a federal 3aw has been enacted in this et.a. app:(:ehle to count rf it ra':-rial. is :: y i ? f understanding that the matters that you were involved in l 10 in California, involving Square D the. Square D 11 cc:rpany, and that perhaps the Square D Conpany decided 12 to pursue their legal remedies under this law. 13 So, in part, that would be an answer to your 14 question, but when you get beyond the coverage of a law 15 like that, you start looking at what a label means and 16 what the legal responsibilities ere, that's another 17 question that involves facts. You f i r.d out whoever 18 p r n ! r.b l y the manufacturer is and who has the most 19 resources so that if you are successful in your suit, 20 ycu could get s on.tr recovery rath r than jbst a r.or ci 21 victory, but I'll be glad to look into it for you. 22 COMMISSIO!!ER CARR: !!o, no, thet's I ~ ?? urdarstard ve've been buyino the labe? re thir 24 Comnission, insteed of looking behind it, I think. t ?" MP. PARLFP: Uell, Mr. Comrissiener, I think i l NEAL R. GROSS Coupt 9ttoRTit$ AND TRAN$ChillR$ 1323 rho 08 ill AND AYlMUI. M.W. (202) 234 4433 WASHINGfoN. O C. 2000$ (202) 232 4600 4 s.
y n e., m- + 5 F' il r. -e. L :,-. 33 e i I that your basic point is that the words. the basie 2-words, are there if they were fleshed out in Appendix B 3 to Part 50, is correct, and also that for the commercial 4 grade products which may be dedicated as basic 5 components in nuclear power plants, that general problem 6 aybe it's net specific enough to cover the details 7 ebvieusly, it isn't is covered in section 206 of the Energy Festpai.12ation Act, which is irple: enting 9 regulat.4ons in Part 21. So, it's the combination of the 10 Part 21 and the Appendix B to Part 50, 11 How, that's the point of departure. Whether 12 or not something beyond that needs to be done, I l 13 certainly defer to these gentlemen corpletely. [ 14 COMMISSIO!!ER CARR: That's all I have. 15 CHAIRMAN ZECH: Thank you. Commissioner If Rogers? 17 COMMISSIO!ER ROG EP.S : Well, just a thought, IE you know, after having looked at this for sometire now, "p 19 . that is your belief as to whether this is an old probler. q 00 that's been around for a long tire and we're just L 21 discovering it, or whether it's there's a flurry of 12 I me at. there's always been fraud, I'm sure, since +s . p3. 4.--.,-v4 3.. M t hather tka genera) 3*vai af wha +
- / 4 n:i s t s out then has increased in recent years, or
$5 ti h s t M r ve'ra 4ust dimeovering so-athing that's been NEAL R. GROSS i CoVRT alPORTIRS AND TRANICateltF 1333 RHODI ISLAND AVINWI, N W, (202) N 4433 WASHINGTON. D.C. 20005 (202) 232 6600 ,.a
4 .. a m x y p 3 o p_, 34 2 abnut at this level for the last couple of decades? 2 fir. TAYbOR: Well, maybe Mr. Hayes would be in y 3 the best position to answer that, from hio perspective. 4 MR. HAYES: Comrissioner, I can give you a 5 view fror the documents that we have looked at in the 6 nurarous investigations we have conducted. [. i Ue. s omewh:it arbitrarily, decided to lock at five yeart' verth of d o eun.en t s. Tc go bark further 9 would just be so burdensen.e. and we didn't think it 10 would add to identifying safety concerns. 11 In the past five y e a r's, we have been able to 12 find in those years, false documents or indications that 13 we've had problems at least over the last five ' years, 14 but I agree with you, I'm of the opinion, having been in 15 this business for a few years, that it has probably been 16 ebar, but ey =ense is not to the degree that we see 17 today because of the various supply houses shutting down IF 19 COMMISSIONER ROGERS: Well, that's -- IC !!R. HAYES: and expenses are getting-- 21 when there's money to be made, people are going to 22 design a way to get the money, and it's more oppertune 21 new. T ouass. de whera we're at. 24 COMMISSIONER ROGERS: Well, of course, you knes. rnnrecte! with that enneern i= wha' mMut thera NEAL R. GROSS court RIPokfit$ AND TRANSChillk$ 1333 kNoDI ISLAND AVINut. H.W (702) FM4433 WASHINGTON. D.C. ?%0$ (?02) 232 4 600 c.., i .c
j 3., n.. <c. c .y it ~~ l 1 parts that are out there that have not been detected. either through eur re:Ords or anything else, and we're l 2 feeusing here :n procurement. but that's there's 4 already some bad materials out there in the field. in 5 s teckroer s and warehouses. To what extent do you think 6 that neede to be cleaned up? s 'i 11 x. TAYL>E: if e l l, there's elvays f ar (::. * ' : ;-. r t i:.y '4 i:? ir e r.c ef iht prat br *:- up to t% pr o c ur e r.e:.t concept, and that is one r, f th. Assuranews of function. and that's or. cf the key safety 11 backupt to any introduction of raterials that won't 10 operate properly. 13 'W. S!!IE".EE : I think to add on that a little 14 bit, Jir, is that although we said Appendix B was not 15 designed to detect fri.delent materials, that does help 16 te datect f r audul e r.t rateriais. That is a stop-gap. 1 *7 I think if you looked at the construction 18 testing that pces on, the pre-operational testing 19 progrars, the start-up testing programs. and the day-to-day rurveillance in the pover plants, plus locking at
- 1 the 41.:ilm e r.: perfor ance ovtr any years. it shews us 2:
there rey be something. lie design for defense in-depth 23 and so for it's workinn. 24 1:e ' re looking to prevent if, in feet, as te '.' r. F a y e r: indi ated. it has pe* ten worse hev de ve NEAL R. GROSS Coutt tiPotftts AND TRANSCRittR5 l 1323 RMoDI 15 LAND AVINUI, H %( l (302) p34 4433 W ASHINGTON. D.C. 30005 (202) 232 6 00 l l 3.;<ti,.'.i A,r.,a 4 ___j ys ,t., g_ ,s.
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s 1 .c c .,w .-3 6 1 cut it eff now. te prevent or deter fraudulent raterials 2 from getting into the plants? 3 MR. GRIMES: I would also add that we are j. 4 thinking along those same lines. In other words, we 5 found the molded-case circuit breakers to be a high-6 volume, corron component, but what other components in 7 the plant should we be sampling and testing? We were I. E thinkint of that, 63 Ilr. T eiy l or said in his cpenin, 9
- rerarks, we hope the
- industry, with their greater.
i 10 expertise in these areas, might be focusing on sone of 11 the areas which they think might be vulnerable. 12 MR. TAYLOR: That's where we're looking, and 13 where are the logical places because, when you buy sore 14 big castings and that type of thinig, you usually buy 15 them fror a normally long-established supplier, supplies 16 the Code, under the Code, the Code stamp. Yet, there 17 are a lot of items out there that have -- wear out, that 18- -have to be replaced. They can be as nundane as purp 19 rings. wear rings and, so, there's a whole and what i 20 types of outfits are supplying those? How confident are 21 you, the industry, in those suppliers? Uhat do you have 22 to bach up? 1 pn c u 1 T P M A11 ZEcW: Mr. H a y e r,. ymt hva a r. e t k a - 24 co: ment? !. VYES: Let
- e dve you ar. exarple ef the NEAL R. GROS $
Covet atPotf tt$ AND TRANSChillR$ 133) RHoDI l& LAND AVIN Jt, N.W. (P02) 234 4433 WASHINGTON O C. 20005 (202) 232 4 600 p s-.., e s. v
w..- ec - -v ..... ;c + -.n. - [ e.- F 37 e 1 ' corplexity' of trying to even back-step and back-trace 2 the product. 3 We have a valve, a fairly large valve. with 4 counterfeit parts inside stems and what have you. 5 It's at one particular utility now. They didn't install 6-the outs of the valve, as it were. They get it fron l another utility. E ite go there. and they said. " e'.1. we d i d t. ' +. 9 de it either". As you follow the paperwork, it just 10 kind of it just kind of goes out into nothing. And + 11 I'm uncertain at this point that we'll ever determine l l 12 who actually refurbished or originally manufactured that 13 particular valve, the point being, it's my view that you s 14 cannot rely upon the paper with a hundred percent 15 certainty, without really looking inside the con.ponen t 16 itself. to insure that those c orpor.en t s are, in fact, 17 the proper standards. 18 COMMISS70!!EF ROGEFS: We13, that's the kind cf 19 thing I was thinking about. 20 COMMISSIO!1ER CARR: We're kind of raised in 21 that society. I mean, you can go buy your auto parts 22 frcr. the manufacturer, or you can get then f rom !!APA, or M ym een nat +Fa- 'ror tha junkyard and recr?
- do *12 24 the above, l-2" CH A!T.MA1! "ECE:
Corrissiener Curt #e=? HEAL R. GROSS l. COURT RipoRTER$ AND TR AN$ChillR$ l 1333 RHoDL l$ LAND AVINV( H.W. (202) 234 4433 W A&HINGTON. O C. 2000$ (202) 232 4 600
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'O. ' <. - (-rn. w...y w e ... - +. - [' JG c 3E 1 COMMISSIO!!ER CURTISS: Just a couple of quick i 2 questions. It wasn't clear to me what the relationship 3 of the generic letter was to the A11F F. Is the generic 4 letter just an amplification of requirements that we 5 have today? It simply restates and reiterates and says 6 "T ell et* these re qui refr e n t s "? p 7 M '.. BRACH: That's correct ~. F 1 *t. F.!*IICEP : I t hir.*. i t 's a:. e-::t - n t i c... It's 9 a new steff pcsitien on what's necessary to cot. ply with i t existing r e q ui r e rie n t s. So, it is n:cre than -- it's to 11 insure compliance with existing requirements, but it's a 12 new staff position to give adequate assurance that there 13 is compliance. 14 C OMMI S S I o!!ER CARR: Almost complying to 15' receipt inspection. 16 MR. S!!IEZEK: Right. 27 COMllISSIO!iER CURTISS: Just one further quick IF questien on that. It looks to n,e like that approach is 39 poing to relay to a greater degree on the engineering 20 resources, get. ting ther involved in the receipt 21 inspectic. process. Have we icoked at the extent to 22 which that will require a commitrent of additional 'f' 23 resources by the utilitien. or stretch their current i 24 engineering capabilities thinner than we would like? Do 25 yr-have m faal fer that? NEAl P. GROSS COURT tipokit2s 00 TRANSChillk$ O23 RHoDi llL AND AVINUl. N.W. (702) FM-4433 WASHINGTON. D.C. 2000$ (702) 232 6600 l {. .v4 1, .*gg 4 e -. t e .i e
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n.,; ~. 4 m. 39-1 MR. BRACH: No. we have not. as far as they s 2 have resource impact but, on the other hand, the 3 engineering involverent on the part of procurement, 4 either is going to come in at the outset which, to me, 5 would be the more effective time to bring engineering in 6 and identifying critical charneteristics and receir*. 7 inspection testing en that piece of equipment when it E cor es in, than af*.er the
- fact, when the pie e :f 9
e q ui pt. e n t has already been procured and there might be 30 some difficulties with regard to its application or 11 operation er put into service. 12 So. the engineering is going to be invelved-in 13 resolution of the issue, either resolution at the outset s 14 in assuring that proper characteristics are identified 15 and verified on receipt,. or perhaps after the fact, in 10 going through equipment rodification or alteration or i 17 maybe subsequent modification, 1 IE COMMISSIONER CURTISS: You see it as a wash, I i 19 on the whole? 20 MR. BRACH: I see it as being a more efficient 21 use of engineering resources at the outset. 22 MR. GRIMES: It's not, I would say -- and M ve've not t a 'l H n m ahop tha engineer actua13y doing the 24 measurement, but being involved in specifying what 78 securerenta a*a to be made. NEAL R. GROSS COUkT Ripotitt5 AND TRAN5CklBERS 1323 RNoDI 15 LAND AVINUI N W, (202) 734-d433 WASHINGTON. D.C. 20005 (202) 232 6600 4 4 g
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7.J. N *.. ';** . +..... 3 i 40 t 1 COMMISSIO!!ER CURTISS : Just one quick question [ t i 2 then, on the A!!PR. Could you expand a little bit on the I r e t i c t, a l e for including the balance of plant in the r 4 questions that are asked? 5 Mk. BRACH:
- Yes, If you recall, we discussed 6
on a couple of occasions concerns we've seen in f 7 comercial grade procurements by nuclear power plants. i E vhure these ccrrercial prede precurerents, in m a r.y 9
- cases, are dedicated are subjected to testing and 10 subsequently dedicated for safety-related application.
11 A number of the i n si t a n c e s we've seen of 12 apparent counterfeit and fraudulent vender products have 13 involved chose in the commercial grade market. A reason 14 for, in the At!P R, asking for public comment with regard 15 to what requirements, if any, should be on the part of IA !!P C. extrapolated further from safety-related arena to 17 the balance of plant arena, is to address I'll say 18 the recognition on our part that in the commercial 19 grade product arena, there are, I'll say, more apparent 20 questions et issues involving suspect er counterfeit 21 vender products. 22 MR. GRIMES: Perhaps we could put it in tha ?3 perspective of the safety-related components being a-- 24 perhaps an island of equipment that you want to be 25 absolutely sure is there te resped to challenges that HEAL R. GROSS Coutf atPonfla$ AND TRANSCRIBER $ 1323 RHoDI 11 LAND AYINUt N W (P02) 234 4433 WASHINGTON. 0 C. 2000$ (202) 232 6600
m. '.-.... W - a n-e, w ,x,- .c, p e l 41 1 the plant -ay see, but things eeming inte other parts of 2 the plant outside that island can cause those 3 challenges. Se. we v vid like to -- or corpli: ate th, i 4 recevery frer sore event. So, we veuld~1ike to minimi:e 5 -- and we fully expect that good engineering practicee 6 used throughout the plant would rinirize --.and, i specifically, Appendix B only speaks to safety-related h - ' v v.; ;
- r ;c ra
- si d - e i ;r. =ri t u is a r.d t h i r.g r
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i r e a r. t to assure that pecd engineertng practice e 1. thrc'.pheut the plant. So -- and I think the industry is 11 coming te believe that they must whether it's r 12 maintenance or procurement, they must treat all the 13. t hi r.g s that ge into the plant with some care, to make 14 sure they have a safe and efficient operation, j 15 C OMl!I S SIO!!ER CURTISS: We're really looking 16 f:r here. the balonce of plant areas where we see 1" vulnerabilities, er potentia) for vulnerabilities, not it 4ust a bread overview cf the entire balance of plant. -19 We're Iceking fer sensitivity of individual areas, t 20 MR. GRI!!E!: Yes. Certainly, the restrooms 1 den't n(ed as much atter.tien as the feedwater system. 22 COMMISSIol!ER CARR: Well, the balance cf pler.t 2.' lir a persarra) atefety ite. 04 MR. GRIMES: In addition, that's true, tec. 1 2* C ol!!!I S S!O"ET CORT!SS: Maybe it vm. * * -mke l NEAL R. GROSS COURT RIPoRTER$ AND TRANSCRI$tR$ l 1333 RHoDI l$ LAND AVINUI. N W, (202) 234 4433 WASHINGTON, D.C. 2000$ (202) 232 6600 l l l [., J.,.,, 3
t.c,i v 7 -L c. ... N 2 7, x..,, 40 and I'd like to think about this, but in 1-sense 2 response to Cemrissioner Carr's question, maybe it would 3 nake sense at some point in the list of questions, if we 4 asked -- and it might be appropriate right at the first 5-where we ask is the criteria adequate, maybe we ought to I 6 ask.if the framework in Appendix B of Part $0 and Part 7 21 provides a sufficient frarework without additional 0 regulat:ry criteria, and g.et stro res;;r.r.: en that. a: 9 rc e t h i r.h about that and see about sciiciting ser e 10 dise assien on that point, from the licensees. 11 MR. GRIMES: Yes. I think perhaps we've asked 12 about general regulations, but we could specifically 13 identify, I suppose, Appendix B and Part 21 as an area 14 of inquiry. 15 C OMMI S S IO!!ER CARR: Can I make one more 36 corrent' 17 CHAIRMA!! "ECH: Yes, please. 18 COMMISSIO!!ER CARR: The problem that I see is 19 how you are going to tie the responsibility through the 2* seven tiers of s u b c o r. t r a c t o r s. I mean, it's the 21 probler, if a r.y c ne is trying to follow the paperwerk. 22 and when you get down to the guy whc made the nut er the ?1 lete, and ha'F taven tiars down from the guy that 24 assembled the
- valve, you're depending on every i
2" centreeter te go dow*. to hit sub. and
- ba+
sub to.ge NEAL R. GROSS court AlpoRTIR$ AND TRAN$CRIBER$ 1323 RHoDI t$L AND AYINU[. N.W. (702) 734 4433 WASHINGTON. D.C. 2000$ (202) 232-6600 { j-8 f -6
. r., 7cir 'f cy..i, ,R.. '~ m .e ~ ] '43 L 1 down to his sub. and I'm not sure we've set that syst3m l l 2 up at all. 3 MR. GRIMES: Well, the Appendix B is meant to 4 be passed on, and Part 21 requirements are meant to be 5 passed on to the point where somebody may buy sorething 6 comrercial grade and dedicate it in that series of 'T muppliers. So, at s or:.e peint, you're faced, usually,
- ! t h that d e d i c a t i er. process, whsther it's d e r.t by the 9
rersen that builds the pump, and he buys the rings and 10 determines that they're okay -- 11 COMMISSIOllER CARR: On each layer, that's 12 depending on the layer that gave it to him -- 13 MR. GRIMES: Yes. 14 COMMISSIO!!ER CARR: and without necessarily 15 the required amount of follow-up. 16 HR. GRIMES: I mean, I think it emphasizes the 17 importance of long-tern relationships with reliable 18 venders. rather than procurenent departr.ents optirizing 19 en the lowest available price, and I think utilities 20 would be well-scrved to think about building those 1 21 relationships with key suppliers. 22 COMMISSIO!!ER CARR: That will happen with 23 l standardization. 24 MR. HAYES: It seems like the ultimate end 25 ueer bacirm'ly, bearr the burden to justify the NEAL R. GROSS CoVAT kiPokflR$ AND TRANSCRlllR$ 1323 kHODE l$ LAND AVINUI, N W. (202)2 H 4433 WA$HINGToN. D.C. 2000$ (?07) 232 6600
< ;; to n;.;P 4 l 1 w., N o 44-1 p*oduct. 2 COMMIS SIOllER CARR: Sure, but that's a long 3 chain. i 4 MR. HAYES: !!o question. Let me add one other l 5 thing. I'm not sure it's been highlighted in previous 6 Cornission briefings. At least from our perspective, we j 7 are finding that some licensees are purchasing e E c r.- e r c i ei g ad-equipn ent ir oin a rejet r nr.u f t. : t u r e r. cr 9 at least it bears a rnador manuf acturer label -- it bears 10 a UL syrbol en it, affixed to that particular component, 11 and one has to then go to the, catalog of that particular 12 supplier and look up, and they can see the specs on that 13 component, and there's a lot of reliability then, by the 14 end user, that they have the right product because, in i 15 the catalog, it says it will bear these standards. 1E The probler, I think, is that, you know, we've 17 beer. able to point out that that still doesn't give you 18 the assurance that I think staff is suggesting that 19 we're peing to start requiring-because everything jus'. 20 can't be relied upon, and that's where we are. 21' COMMISSIO!!ER CARR:- Just like some stolen car. 20 MR. HOYLE: That's about it, Commissioner. ?3 C01M " ' C T Of f FP Pl*P? P4va you
- 1' t h e p a r a *'"*1-24 you want.
?? "?. FAYF.*: Yes, sir. l-NEAL R. GROSS l COURT AlpotTIkl AND TRANSChillR$ 1323 RHoDI ISL AND AYlNVI. N W. (702) 234 4433 WASMtWGTON. DA 20005 (207) 232 6600 [... m . u
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1 45 .n a I 1 CHAIRMA11 ZECH: All right. Well, let me just 2 say I think we can see the challenges -- first of all, 3 the challenge from flR C to nake sure that we have i I 4 properly carried out our responsibilities here. 1 5 It looks like the staff's actions regarding I 1 6 notices, bulletins, generic letters, Advance !!oti c e of J l 7 Proposed Rulemaking -- and we have gotten attention from E ctht.r agencies in our govern ent as well as the industry i l ) 9 and utility that we license, as far as the licensees are L 10 concerned, and the industry, it seems to me that we've 11 also discussed today that we already have regulations 12 covering rany of these subjects, but we had them cover i 13 mostly and we had in mind poor quality, as you i 14 pointed out early in the briefing, rather than ~ 15 fraudulent type
- actions, but here we recognize 16 fraudulent is semething that we have to deal with.
17 So, even though -- and I think we should make 18. every effort, as we've pointed out here today, too, to i 19 make sure that our regulations are complied with because 20 lthat's the utility's responsibility, that's the 21 licensee's responsibility, to comply with our 22 regulations. 23 l-The nanerie letter we are peine to put eut. I 24 presume, is an extension to point out, that we have 25 re gu2 e t i~.r. that they need te corply with, and that add HEAL R. GROSS CoWRT RipoRTth$ AND TRANSCRillR$ 1323 RHoDI ISLAND AYINUI N W. (202) 734 4433 WA$HINGTON. D.C. 2000$ (202) 232 6600 i e s. e e .s. 4
c. c, .a. s. 4 46 1 any further guidance that we feel is necessary. I think 2 that's appropriate action to take, but it is the p 3 licensee's responsibility. That means their procurerent 4 process has got to be looked into, and their inspection 5 process, the testing process, and so forth, and we can't 6 just rely on the paperwork check, it would appear as we i h e.ve in the past, with some perhaps f alse confidence. E 1:!. e n we knew that there is going to be 9 fraudulent naturial going in our power planto, it's a 10 very serious situation, and I think it behooves not er.ly 11 us te take a regulatory action, but the licensee also, 12 to not on3y comply with our regulations, perhaps a lot 13 more rigorously than he has in the past, knowing that 14 there's reason for suspicion, but also to take even a 15 step further and to see whether or not his procurement 16 testing inspection techniques are, indeed, satisfactory, 17 and for us to look at that, to see whether we think they 18 are satisfactory. 19 I would imagine this is what we would expect 20 to get from Advance liotice of Propesed Rulen.aking to an 21 extent but, in the meantime, I think we should be i-i 20 concerned about the $ r.r.ediate problem and make sure that D An't hava any safety problems out there. ' ' s-24 So, I think we've got to recognize that we ?" have a r e ?. ? probler., e very real prob 1r It'e a now L NEAL R. GROSS l' CoVRT REPORTIR$ AND TRAN$CRi$lR$ 132 3 RHOD [ l$l AND AVINU(, N W. (202) F34 4433 WASHINGTON. D.C. 20005 (P02) 232 6600 I l 3 t, ,,.i, 4 i*
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- 2, 47 1
probler. not a problem that's going to perhaps ever go l 2 away. So, it is a new way to look at some of the parts F 3 that have been going into our power plants, and 1 think 4 it's realistic but necessary that we l'ook at iri a very 5. tough, real, inquisitive sort of way. 6 So, I think the approaches that we are taking 7 are ccrrect. I do think that we should -- we need to go- [ out vith this Advana Hotice o f ' Pr opos e d Rul e.t.akir.g. i 9 urge n.y colleaigues who haven't voted yet, te address it 10 very promptly. And I would also encourage the staff to. Il continue working, as you pointed out earlier, very 10 closely with the office of Investigations because 13 !another part of the issue, which we didn't discuss'today 14 be c a u s t' I know the investigations are ongoing, it would 15 not be appropriate te discuss the details of that here j 16 today, but that's very rent, and it's irportant that we 17 ferret out those companies and those individuals that it are responsible for bringing forth the substandard 19 equipment into our power plants. It's a public health 20 and safety issue. 21 And I recognize, Mr.
- Hayes, that it's 22 difficult and you have to go a long way down, but I'd 23 l hope ynu'd be diligent in doinn thet because somewhere 24 along the line I think it is possible, myself, that we 1
25' can find cut the ir.dividua3s and the co.mpani e s and who NEAL R. GROSS COURT REPotilk$ AND TRAN$CRillR$ 1323 RHoDI t$ LAND AYINut. N W (202) r34 4433 WA&HiNGToN.0.C. 2000$ (Po?) 232-6600 l 3. ~ u:;, n
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w m: f.,; -48 gq r 1~ is doing this, and. nail ther because it's wrong, and'I r ? Ei f-2 think that we have.to address-it in a very tough manner, v. f# 3: We'rs dealing .t i t h ' the public health and ~ 4 safety, that's our ' responsibility. I think we have 5 every right, responsibility and. obligation to work to 6' find out where'this is-coming fror and to'put a stop to _i 7 it as best we possibly'can. [ 4 F. Sc, ! tMnk the cooperation betweer. the staff i p I. -9 and the' Office of Investigations is very irportant. I'd~ -t ,L - 10 also encourage th' staff to continue the close 11 cooperation with the other government activitie6 so /{- 12-that. they will be aware of, and we will be aware of, i3 'anything th'at might turn up on this matter, with the 14 other governrent agencies. Are -there any other comments from my 16 colleagues before we adjourn? 17 (11o response.) 18 Thank you very much for an excellent briefing. ..m 19 We're right on track. We stand' adjourned. 1.1'q 20 (Whereupon, at 2:57 p.m., .the meeting-was = 21, adjourned.)- 22 ?.'. 24 l -M ? NEAL R. GROSS l' COURT REPORT!R$ AND TRANSCRl01R$ 1323 RHODI l$tAND AVENUE. N.W. i ~ L (202) 234 4433 WA$HINGTON. D.C. 20005 (202) 232 4 600 l> l' l l:JLmW ~. x v ~.. u- - ~
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.. i;.' ' ' ' ' Q. L, 'r., g,.; ; w,. ~L,~r:,n:, f g, ,;,w. l;. j; g, - g,. 1 13 + c m i.. E q b CERTIFICATE OF TRANSCRIBER This is to certify that the attached events of a meeting-l of the United States-Nuclear. Regulatory Commiss2on entitled: t- ' TITLE OF MEETING BRIEFING ON PROPOSED RULEMAKING ON SUBSTANDARD COMPOSENTS 5 PLACE OF MEETING: ROCKVILLE, MARYLAND ~ DATE OF MEETING: -FEBRUARY 2, 1989 q were transcribed by me. I further certify that said transcription I is accurate and complete, to the best of my ability, and that the L transcript is a true and accurate record c,f the foregoing events. i ki _ Y l f =i Reporter's name v (if other than transcriber) 1 L 1 ? i l i l ? L l 4 i I k i l-l [ L NEAL R. GROSS l: covat unmatias ANo raANscaisins l 1333 aH00f istANo AYlMUI, N.W. 1 (202) 2*.,4-4433 WASH!NGTON, D.C. 20005 (202) 232 4 600 ) 4 'Y,(, ' ,#'"A e }F E\\ ' 'I ' '[' 4 M ' gg I. .g .I 4 g
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[.' pp: Se fj ?- hp* *%%j UNITED STATES ' [ [ h i,i NUCLE AR REGULATORY COMMISSION 4 e-wasmotow, o. c rosss - %:...Yf 4 AUG 01 1988 -Drug Enforcement Administration .1725 industrial;Way Sparks, NV 69431:
Dear Sir:
SUBJECT:
POTENTIALLY DEFECTIVE REFURBISHED CIRCUlT BREAKERS-The' enclosed Nuclear! Regulatory Conunission (NRC) Inforination Notice (IN) 88-4C . describes the circumstances'unoer which defective refurbished. electrical' equip-ment may have been supplied to nuclear power plants. Our continuing investiga-tion of the five-circuit breaker companies identifico in the'IN shows that the-companies h6ve shipped breakers-to o number of government' facilities and agencies. Our review of a sample of invoices inoicates that generally the breakers are- , sold to.a distributor, and'it was only the occasional shipment direct to the end -user thut permitted us to identify the-final government destination. 1.have-enclosed a copy of an invoice that icentifies your agency as the c customer, These-documents represent our review of a-selection of records spanning the lastitwo or three years from all of the companies. As other recoros are reviewed, we-will provide any additional information that comes to light. However,?since some of.the companies have been in business for as many as.30 years,Jaffull historical records search will not be possible. .The five California: companies appear to sell surplus new as well as refurbished breakers.; However,- their refurbished equipment may be shipped 'in containers ! resembling original manufacturer containers. If:the-e is any aoditional information you. require, please call me cr lMr. Walter haass at (301) 492-3219. Sincerely, O s h * ~ - rian K. Grimes, Director Division of Reactor Inspection and Safeguara:, Office of huclear Reactor Regulation
Enclosures:
1 '. - NRC' bulletin (IN) 68-46 2. Invoices /Orcers ) ,f pog y sblTT f* m- .s. I
.+ a mu :<. w ; ;.. l } f,'-- p', ~. a [IV _9 {i,() ,,g.-.' 4[. AUG 0-1 1988-I/[ M,.. iig ' ' -
- :Dnug Enforcement Adnnnistration;
-.2-J y b,. ...,j in
- . s.
..i', i: r? t >;; c :s i j=. '. L X-D151klBV110N:w/o Enclosures . y"" JToylcrz- ". u J$niezeL, .TMertin s, c:p -BGrim s 1 J5 tone-n .PDR l Central files F-DR15 Reading ~(w/ Enclosures) -] e ,.1 i ,a lt R 'i, i F i .See previous'page f~ urrences. DR15:NRR s J5 tone:tt*- en 07/22/88~ U )7/c3/SC f/t f l ~ .[L p
, m -- .; w t 4 ,s 9 y [pui g l UNITED STATES - h'ap!.1,: L3 NUCLE AR REGULATORY COMMISSION' c* WASHING T ON, D. C. 70665 : 1 [y o ' f':e. ' /, V l m AUG 01 1988 ,2 1 White House Executive Resident East Gate. Executive bivd. Rear. Gate 81 Washingtun, D.C. 20500- .m 1 I: Den Str: h SUBJECTi POTENTIALLY DEFECTIVE REFURBISHE'D CIRCU1T BREAKEPS i l The enclosed Nuclear kegulatory Comission (NRC) Information Notice (IN) 88-46 described the circumst6nces'under which defective refurbished electrical equip-ment may have:been supplied to_ nuclear power plants. Our continuing investiga-0 o(" M tionJof the1five circuit: breaker tompanies identified in the IN shows that the companies.have shipped breakers to a number of government facilities 6M agencies. -Our review of a:. sample of-invoices indicates that generally the breakers are ' sold to'a distributor, ano 1t was only the occasional shipment direct to the end . user that permitted us to-identify the final government destination.
- l'ha nienclosed a copy of an invoice that identifies your agency as the.
customeC.' These.cocuments. represent our review of-a selection of recorcs: , spanning the last two or three years from all: of the companies. As other records - 'I m L< are reviewed, we will provide any additional. information that comes to light.. d .However, since some of the' companies have'been in business for as'many.as 30 R 3 years ( a: full' historical reccrds search will not'be possible. The five California compar ies appear-to sell surplus new ~as' well as-refurbishec breakers. However, their refurb.ished equipment may'be shipped in containers - - resembling-original manufacturer containers. y P' . lf.there is 'eny additional information you require, please call-me or L lMr. Walter Haass at (301) 492-3219.
- q..g Sincerely, N
i f; / g( N / i R rian K. Grimes. Director Division of Reactor Inspection and Safeguards Office of Nuclear Reactor Regulation 4
Enclosures:
- 1..
NRC Bulletin (th).88-46 ~2. Invoices / Orders p f 62A M P' f f 'I
-- 76,7C>x a. . i .f i 1%.h, ' (/[/3 j (c AUG o j ggg.
- White: House-Executive Resident J..
?D15TRIBU110N:w/o Enclosures. Jiaylor-J5niezet 1 L1Fartin. BGrime s
- J'; tone
's PDRt Central Files }m LRIS Reading (w/ Enclosures) (.p' = oe s .I, m '1 t F L 4 i:
- See previous page f r co urrences.
g DR15:NER.
- DR1 JSt or,e
- tt*
B n 07/22/88 7/23/CE Sf(- S @W . o ;< -
j I p.. 3.g 1 umTro states j - [. 1.Q:) '{ NUCLE AR REGULATORY COMMISSION c-1 3 p . nsmorow v. c. mss 1
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AUG01legg j, i j -Hall of Justice c/o-Rene-850 Bryant Street J San Francisco, CA 94103-De' ar Sir: i
SUBJECT:
. POTEhTIALLY DEFECTIVE REFURBISHED CIRCUlT BREAKERS a, ..The enclosed Nuclear Regulatory Commission (NRC) Information Notice (lh) 88-40 -describes'the circumstances under which defective refurbished electrical equip-ment may have been supplied to nuclear power plants. Our continuing investiga-tion of; the ~ five circuit breaker companies identified in the IN. shows ;that the' l comp 6mes. have shi#ed breakers, to a number of government facilities and-agencies. 'Our, re,ierof a sample of invoices indicates that generally-the breakers are - sold to a distributur, and it was only the occasional shipment-direct to' the end-user lthat permitted us to identify the final government destination, i 11have enclosed a copy' of an. invoice that identifies your agency as the ~ customer. These documents represent our review of.a selection of records , spanning the-last two or three years from all of the companies. As.other records are reviewed,3e will provide any additional information that comes to light, l .However, since some of the companies have been in business for as many as 30 years, a full historical records search will not be possible,= 0 .The'five California companies appear to sell surplus new as well is refurbishec ' breakers. However, their. refurbished equipment may be. shipped in containers resembling original manufacturer containers. If 'there is any additional information you require, please call me or p Mr. Walter Haass' at (301).492-3219. / Sincerely, j ? M-rien K. Grimes, Director Division of Reactor Inspection and Safeguaras L Office of Nuclear Reactor Regulation- Enc losures : .1. - NRC Bulletin (IN) 88-46 2. . Invoices / Orders-D rf n d n G h a $ )ff' 7pnVOV(UVU
pu s-, s9 ..4 ((t;.. -+ ?. ,,; -f, r-L, f'5 I M 01 19H s .- Hall of Justice ?.:
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s DISTRIBUTION:w/o Enclosures J1eylor-JSnie:ek i TMartin-L BGrines-y' ' JStone PDR-f / Central-' Files . DR]S Reading (w/ Enclosures) p. 1 i h o .i ? b A r t
- See r.revious page for concurrences.
DRIS:t;PP AD1R:DEIS JStone:tt BGrimes* 07/22/86 07/23/88 l ( s a - ' I ,u
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. r-usmotow. o. c. rosss l \\;,j /d)G 01 19BB ,p Mr.;Forster Fournier NASA Heaoquarters . Code'llN -i 600 Independence Avenue '( Washington, D.C. 20546 L
Dear Mr. Fournier:
The enclosed huclear Regulatory Comission (NRC) Information Notice (IN) 88-46 [ ' describes the circumstances under which defective refurbished electrical equip-1 L, ment may have been supplieo to nuclear power plants. Our continuing investiga-tion of the five circuit-breaker companies identified in.the:lN.shows that the. . companies have shipped breakers to a number of government facilities and agencies. Our review of a sample of invoices indicates that generally the breakers are ~ sold to' a distributor, and it was only. the occasional shipment direct -to the end user that permittei us'to. identify the' final government destination, j C 1 have enclosed copies of invoices:ano orders that identify your: agency as the. ll customer. These documents represent our review of'a selection of~ records L sp6nningithe lastitwo or.three years from all ;f the companies.~ As other records s L 'are reviewed, we will provide any aaditional information that comes to light. l However, sincelsome of-the companies have been in business for as many as 30 years, a full historical records search will'not'bc possible.- f The five California companies appear to sell' surplus new as well as refurbished . breakers. 'However, their refurbished. equipment may be shipped in containers .? ' resembling original marufacturer containers. If there is any additional information you require, please call me or 1 ~Mr. Walter Haass at (301) 492-3219. D L Sincerely, b: s h Brian K. Grimes, Director Division of Reactor Inspection and Safeguarcs Office of Nuclear Reactor Regulation
Enclosures:
4 11. .NRC Bulletin (lN) 88-46 i 2. Invoices / Orders-f)/pnh n h ? a OO kbh 4 . N'Y _ _ _ _. _ _ _ _. _. _. _ _ _ _. ___-_____---_________._j
5,m p-kf 'l'F p 19
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- i E N 1988'
'Mr'.LForster.Fournier - 1 ( DISTRIEUTION:w/o Enclosures Jlaylor 05nieret TMartin BGrines ' ~JStone s FDR: Central Files. DR15' Reading (w'rEnclosures)- V1B Reading. .s. It ( .j-1 i ~ t
- . 4 U l1 d.
i :,. '.c u rrence s, p; 'See previous'po9e i. DR15:NRE 15 J5 tone:tt' i es* .:07/22/8E 07/23/88 $f/f'b: y sj :. w-- t' : +
1 'k, -) f,,h, f. D'% J-{l I-UNITED STATES i 9(l .t [-- ) : NUCLE AR REGULATORY COMMISSION I ,,1
- i wasmotow o. c.ross5 -
'\\*..[, AUG 01 1988 i m Colonel Brennam-0 Headquarters.U.S. Air Force.(USAF/ LEYS).
- Pentagon-l
-Washirgton,-D.C. 20330-5130 7 . ~,
Dear Colonel Brannam:
SUBJECT:
' POTENTIALLY DEFECTIVE REFURBISHED CIRCUIT BREAKERS .The enclosed Nuclear. Regulatory Comission (NRC) Information Notice (IN) 88-46 7 describes the circumstances:under which cefective refurbished electrical equip-ment may have been tupplied1to nuclear power' plants. Our continuing investiga-j' tion of:the= five circuit breaker companies identified in the IN shows that the companies have' shipped breakers to a number of guvernment facilities and agencies. -Our review of'a sample of invoices-indicates that generally. the breakers are - sold to a cistributor, and it was only the occasional shipment direct to.the= end user that. permitted us to identify the final government destination, ~~1 have' enclosed copies of invoices and orders'that; identify your agency as the-customer. _ -These documents represent our review of a selection of recorcs-c ' spanning the'last two or;three years from all of the companies. As other records . are reviewed, we_ will. provide any additional information =that comes to light. However, since some of-the companies have been in-business for as many as 30 years,na full historical records' search will not be-possible. The five California companies appear to sell surplus new as.well.as refurbished breakers. :However, their refurbisheo equipment may be shipped in containers resembling original manufacturer containers.- -If there is any additional information you require, please call me or Mr. Walter Haass~at (301) 492-3219. Sincerely, i 1 h i Brian K. Grimes, Director Division of Reactor Inspection and Safeguards Office of Nuclear Reactor Regulation x
Enclosures:
1.. NRC Bulletin-(IN) 88-46
- 2..
Invoices / Orders gan ho-yL/O V l.Vg? 'lT.
n ry' i.. j;--f J
- Q-
.j I8EI y[f. Colonel! Brannan.-. . D1STRIBUTION:w/o-Enclosures - dleylor l~ J5niezel.' . TMartin BGrines - 4 F-J5 tone, !L PDR' Centrol Files i:- DRIS' Reading'(w/ Enclosures) '6 x k e 't .) =.. i 'See' previous page f currences. DF.!S:NRR J5 tone:tt*- B res*' 07/22/8E 7/23/8A S/( i N i .:.i; n.,
7 m 4 r g% 1 g .W s' p' n% Lf M h ' UNITED $TATES = gt,. / {: _ NUCLE AR REGULATORY COMMISSION wAsmNotoN, D. C. 20666 h t i %.'.... f u AUG0Ilegg Mr. Robert Barber-U.S.' Department of. Energy l Mail Stop EH-34 1 ~Germentown, MD-1 l
Dear Mr. Barber:
I
SUBJECT:
POTENTIALLY DEFECTIVE REFURBISHED CIRCUIT BREAKERS 1 The enclosed Nuclear' Regulatory Comission (NRC) Information Notice (IN) 88-46 - cescribes the circumstances. under> which defective refurbished electrical equip-l V ment may have been supplieo to nuclear-power plants. Our continuing investiga-L
- tion.of the five circuit breaker companies identified in the -IN shows that the.
companies have shipped breakers to a number of gc,vernment' facilities and agencies. Our, review of a sample of. invoices indicates that generally ~ the breakers are sold to a distributor,. and it was only the: occasional shipment direct to the eno . user that permitted us to identify the final government destination. _5 have enclosed copies of. invoices ~ano orders that identify: DOE facilities as. ' customers. These' documents representiour review ~of.a selection of records
- spanning the'last two or three years from all of the companies.--As other recordt.
L are reviewed. we will provide any additional information that-comes to light. L However, since some of the companies have been in business for as many as 30 1 years, a full'historicel records search 'will not be possible. I t The five California. companies ap' pear to sell surplus new as well as refurbishec l -breakers. However, their refurbished equipment may be' shipped in' containers 1 . resembling original manufacturer containers. r [ If.there isJeny additional information.you require, please call me or D3 Mr. W61ter Haass at -(301) 492-3219, 3 g l L Sincerely, O l Brian K. Grimes. Director Division of Reactur Inspection and Safeguards Office of Nuclear Reactor Regulation
Enclosures:
1. . NRC Bulletin (IN) 88 "2: Invoices /0rders j _.w_.. .. ^ - - )b h 0 o fn j w
a. y :. ',,,, e: + ~'N._ bb4 % W ' I AIi Mr.' Robert. Barber J -2 i i s ) i ' DISTRIBUTION:w/o Enclosures JTaylor-y. a JSnie:ek' f '- TMartin BGrimes JStone PDR. 'l Central' Files DRIS' Reading (w/ Enclosures)' .VIB Reaoing b I I l.- .t I l ;. 4
- See p'revious page for oncurrences.
Ok15:NRR 1R .15 i JStone:tt* s' -07/22/86 ij /86 ?s gffg' .}}