ML20028G678

Discusses Concerns Re NRC Oversight of third-party Nomination & Util Nomination of Bechtel to Audit & Propose Solutions for QA Breakdown at Facility

ML20028G678
Person / Time
Site:	Zimmer
Issue date:	02/11/1983
From:	Bernabei L, Devine T GOVERNMENT ACCOUNTABILITY PROJECT
To:	Dircks W NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO)
References
NUDOCS 8302170294
Download: ML20028G678 (7)

Text

3. . . . ..

TIL e,

. GOVERNMENT ACCOUNTABILITY PROJECT Institute for Policy Studies 00LKETED 1901 Que Street. N.W., Washington, D.C. 20009 NC (202)234-0382

'83 FER 16 A11:13 February 11, 1983 l J t?

,. 4 & 3EF.

3O(d g Mr. William Dircks Executive Director for Operations U.S. Nuclear Regulatory Commission Washington, D. C. 20555

Dear Mr. Dircks:

On Wednesday, February 8, three events occurred which are of major significance for the Cincinnati Gas & Electric (CG&E) Company's nomination of the Bechtel Corporation to conduct the third party program at the William H. Zimmer nuclear power station: (1) Region II1 Administrator James Keppler informed me that approximately two weeks earlier he had submitted staff recommendations to you on the Bechtel nomination; (2) at a public meeting, Consumers Power Company-(Consumers) discussed the details of a proposed Construction Com-pletion Plan (CCP) for the Midland nuclear power plant; (3) the NRC proposed a $120,000 fine of Consumers for violations of 9 out of 18 quality assurance criteria in 10 CFR 50, Appendix B, on the basis of a recently completed inspection of the Diesel Generator Room at Midland.

l These developments raised significant questions about Nuclear Regulatory Commission (NRC) oversight of the third party nomination, and shattered any remaining legitimacy for CG&E's nomination of Bechtel to audit and propose solutions for the quality assurance breakdown at Zimmer. On behalf of the Miami Valley Power Project l

(MVPP), the Government Accountability Project (GAP) of the Institute for Policy Studies presents the following concerns.

l I. NRC OVERSIGHT OF THE THIRD PARTY NOMINATION l

Mr. Keppler's admission that he submittt d recommendations several weeks ago on the Bechtel nomination was a severe blow to the NRC's credibility. As you know, on January 20 GAP submitted evidence and called for an investigation of material false statements by CG&E and Bechtel in connection with the nomination. We charged that the l

utility's January 4, 1983 assertion of no contacts with Bechtel l prior to November 2, 1982 was not credible, in light of witnesses who saw a team of employees on-site with Bechtel-identifying insignia.

The witnesses described conversations with at least one team member last August, who said that Bechtel had some 200 employees on call to come in for a full management audit of Zimmer and tentatively identified Bechtel esecutive Richard Soderholm to head the project.

8302170294 830211

{DRADOCK05000 l

^

February 11, 1983 Mr. William Dircks We since have learned through communications with the witnesses that all five confirmed the specifics in GAP's January 20 allegations both with the NRC Office of Investigations and the Federal Bureau of Investigation. We have learned that on November 8 Bechtel sub-mitted two contracts to CG&E covering both immediate and long-term services at Zimmer. At the time, Bechtel announced it was coming to Zimmer because completion of the plant is " vital to your company as well as the future of the U.S. nuclear utility industry." Addi-tionally, Bechtel in fact has proposed Mr. Soderhom for a major role at Zimmer as the official responsible for " Project Controls."

The focus of the false statement investigation should be upon any relationship between CG&E and Bechtel -- formal or informal, direct or indirect -- prior to November 2, 1982, or any communications between CG&E and Bechtel relating to a third party review of Zimmer, occurring before November 2, 1982. Beyond eliminating any pretense of objectivity, these developments cast doubt on CG&E's assertion that the utility had no telephone communications with Bechtel until November 2; no meetings until November 5; and no site visits until November 15, a week af ter it had already offered its long-term services in two contracts. It seems implausible that any sensible organization would offer to solve massive problems it had not yet looked into at all. The mysterious team's knowledge of Bechtel's resource commit-ments in August, and the generally accurate predictions about Mr. Soderholm's key role also support this conclusion. Even if team i l

menbers were not on the Bechtel pa 11, they either were in contact with the firm, in contact with CG&E about firm, or blessed with extrasensory perception.

Further, it is not reasonable to assume that Bechtel and CG&E would have communicated only with an organization that was laying the groundwork for the former's arrival at Zimmer, without any com-munications between the two principal organizations.

< Unfortunately, Region III finished its work beforeIndeed, FBI or NRC the probes personnel could complete their investigations.

were barely underway. Certainly the public cannot have any confi-dence in a third party whose nomination is tainted by false or misleading statements. Even more significant, however, can the public have any confidence in an NRC staff which makes decisions l

before learning the facts on an issue which it told the public "would be treated as a serious matter" just a few weeks earlier?

l In a January 31 letter to Chairman Palladino, GAP warned that Region III was prepared to make its third party decision without examining the CG&E-Bechtel contracts and We before the results were in were right. Unless i

from the false statements investigaticn.

Mr. Keppler recommended rejection of Bechtel on other grounds, Region III's rush to judgment casts doubt on the integrity of NRC public commitments.

We are also confused that you appear to be the decisionmaker for the Bechtel proposal. The Commission's November 12 Order delegated

Mr. William Dircks February ll, 1983 that task to Mr. Keppler. On January 31 we asked the Commission to assume the responsibility. Yet somehow the proposal is sitting on your desk. Would you please explain who is in charge?

GAP believes it is imperative the NRC fully investigate the following issues prior to making any decision on Bechtel:

(1) What communications were made between CG&E and Bechtel regarding a third party review of Zimer prior to the Bechtel November 5, 1982 site visit?

(2) What were the activities of all review teams and con-

~

sultants to CG&E present at the Zimmer site since August 1, 19827 (3) To whom were the findings of these review teams and consultants reported?

(4) Were there any communications between any of these review teams or CG&E consultants and Bechtel prior to November 2, 1982?

(5) Did CG&E communicate in any way with Bechtel about the findings of these review teams and CG&E consultants prior to November 2, 1982?

(6) Prior to August 1, 1982, did any employee of any of these review teams or CG&E consultants work for Bechtel?

If so, explain, including stating the last date on which they received any payment from Bechtel.

(7) Has any employee of any of these review teams or CG&E i

consultants worked for Bechtel after their employment with these review teams or CG&E consultants? If so, explain.

(8) Have any employees of any of these review teams or CG&E consultants worked at the Zimmer site after these review team or consultant activities were finished?

If so, explain for whom they worked and their jobs.

(9) Prior to November 2, 1980, what communications did the NRC Staff, in particular Region III, have with CG&E or Bechtel relating in any way to a third party review or audit of Zimmer?

(10) What are the precise terms of all contracts, agrements, or understandings, oral or written, either proposed, accepted or currently in effect, between CG&E and Bechtel concerning the Zimner plant?

II. QUALITY ASSURANCE VIOIATIONS AND MISMANAGEMNT BY BE0fIEL AT TIE MTnrAND NIDPAR POWER PIANP On February 8 the NRC proposed a $120,000 fine of Consumers Ibwer Cmpany

, for quality assurance (OA) violations, by its contractor, the Bechtel Corporation. ('Ibe Notice of Violation is attached as Exhibit 1.)

Mr. William Dircks February 11, 1983 At a public meeting the same day, Consumers announced that it had found additional violations and was instituting a Construction Com-pletion Plan (CCP) in part to correct the abuses. (The proposed CC? is attached as Exhibit 2.) Two of the key elements to the CCP are:

(1) to integrate the Bechtel quality control (QC) function into the Midland Project Quality Assurance Department (MPQAD) under Consumers management, and (2) to recertify all Bechtel QC inspectors.

A February 9, 1983 Midland Daily News article (attached as Exhibit 3) reported that the QA breakdown is also leading to an unprecedented third party review program:

! Keppler told reporters after the meetJng that due to past " lapses" in quality assurance programs, more audits are being required of the Midland plant's de-sign and construction than for any other nuclear plant in the nation.

A. Basis for the NRC Action The proposed fine, third party program, and CCP are the result of nine serious violations of 10 CFR 50, Appendix B:

1. Suspension of quality control inspections As summarized by Region III, QC inspectors who found an excessive number of deficiencies were prevented from completing their work:

...QC supervisors instructed QC inspectors to suspend an inspection if an excessive number of deficiencies was observed. Consequently, there was no assurance that a complete inspection was being performed after the reported deficiencies were corrected and we have found several in-stances in which final QC inspections were based on only the limited deficiencies reported during the initial inspection. In addition, this fai-lure to report all identified deficiencies re-sulted in incorrect data being ' fed into your l

' Trend Analysis Program, inhibiting your ability to determine the root cause of deficiencies and prevent their recurrence.

f (Notice of Violation, at 1.) ,

1

Mr. William Dircks February 11, 1983 e .

2. Failure to follow instructions, procedures, specifications and drawinge affecting quality evidenced by 17 instancos where the as-built condition of the plant did not match the ap-proved design requirements.

3. Inadequato design control evidenced by six instances in which the design omitted instructions about regu-latory requirements, or unapproved design changes occurred.

4. Inadequate control of vendor purchases evidenced by superficial source inspections that failed to detect broken or missing strands.

5. Failure to establish an inspection program to prevent overpacked electrical cable trays and to detect 15 examples of nonconformances in the HVAC fan support steel.

6. Failure to protect from the environment vendor pur-chases, evidenced by five out of 16 Diesel Generator muffler plates which were exposed.

7. Failure to verify preheating for welding of safety-related structural steel.

8. Failure to process field changes to drawings through the Site Document Control Center.

9. Failure to control materials restricted by Noncon-formance Reports from use in ASME Class I systems, and to write Nonconformance Reports or other disclosures ~

on hangers and monorails not matching quality or seismic commitments in the Final Safety Analysis Report.

These violations all came from one building at Midland. They mirror the QA deficiencies at the Zimmer plant.

B. Causes of the QA Breakdown The causes of the QA breakdown also mirror the NRC's November 1981 description of the Zimmer violations-- a utility which failed to insist that its contractor (Bechtel, in this case) honor legal QA minimum requirements, and a contractor that on its own f ailed to obey the law and observe NRC requests.

Consumers Power and Bechtel employees have offered more specific causes for the breakdown in Bechtel's performance--

4 Mr. William Dircks February 11, 1983

1. Poor instructions to and communications with craft employees, who did not know what was expected. This was Consumers' primary explanation at tie February 8 public meeting.

2. Questionable qualifications of Bechtel engineers.

According to one witness, the Engineering Department made basic errors, such as installing grossly inade-quate support plates, and defending the validity of blueprints instructing workers to install piping through a doorway. As a result, craft employees lost confidence in the engineering program and work had to be repeatedly redone. As one craft foreman

stated, " Design and installation essentially were

! done on a trial-and-error basis." (The February 8, 1983 affidavit of Richard Letherer is attached as Exhibit 4.) This practice again reflects the Zimmer experience, as described by Region III Inspector Isa Yin at an October 1982 public meetirq.

3. Questionable qualifications of inspectors. In some instances they were hired "from the secretarial pools, or off the streets." (Id.) At the February 8 public meeting Consumers announced that to date 24 of 235 QC inspectors failed one of the two recertification tests, and 30 of 500 inspectors failed one of two closed-book

tests on quality control inspection plans. ,

i

4. I!arassment and arbitrary assignments, which confused and demoralized the construction work force. (A Feb-ruary 9,1983 Saginaw News article summarizing three Bechtel whistleblower interviews is attached as Exhibit 5.)

At the February 8 public meeting Bechtel Vice President William Henry was in the uncomfortable position of representing his company at the front table as Consumers and the NRC discussed the CCP and third party programs necessitated by his company's failure. As Mr. Keppler explained after the meeting, The need for these is all based on past performance.

...We're going to assure, throagh other organizations, that the work will be done right.

(Exhibit 3.)

If the Bechtel nomination is approved, his participation at the meeting will be one of Mr. Henry's last functions at Midland.

Ironically, Bechtel has appointed him as head of Project Management to evaluate and propose a solution to Zimmer's problems. It is

a February 11, 1983

• Mr. William Dircks hard to believe that the NRC is seriously considering bringing the Midland nightmare to Cincinnati. Such a step will do little to restore public confidence in Zimmer, CG&E or the NRC.

Sincerely,

+

a Thomas Devine n<~

L

/

1 We Bernabei G 'er .ent Accountability Project

,the Institute for Policy Studies 1 Que Street, N. W.

Washington, D. C. 20009 202/234-9382 Counsel for Intervenors TD/LB/my Exhibits o

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