ML20049J292
| ML20049J292 | |
| Person / Time | |
|---|---|
| Issue date: | 10/26/1981 |
| From: | Campbell W, Russell W, Sniezek J NRC OFFICE OF INSPECTION & ENFORCEMENT (IE), Office of Nuclear Reactor Regulation, NRC OFFICE OF NUCLEAR REGULATORY RESEARCH (RES) |
| To: | |
| Shared Package | |
| ML20049J290 | List: |
| References | |
| NUDOCS 8203120403 | |
| Download: ML20049J292 (16) | |
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October 26, 1981 Review Group Report Regarding Differing Professional Opinion Submitted by D. E. Whitesell dated September 1,1981 dam J.H.Sniezekj Mb.T ll<&nal-W. T. Russell
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After study of Mr. Whitesell's Differing Professional Opinion dated September 1, 1981; amplifying memorandum (undated) received on October 2,1981; and telephone discussions with Mr. Whitesell on October 6,1981, the Review Group identified the following issues as the basis for Mr. Whitesell's Differing Professional Opinion:
1.
That the basic intent, scope and program of the Vendor Program have been changed by MC-2700 (July 1,1981) from that initially envisioned and espoused in MC-2700 (February 18,1976) (September 1,1981 memorandum, second paragraph and Enclosure to that memorandum, item 1.b.).
2.
That the vendor program was never intended to be nor could be a part of the regulatory (enforcement) process (September 1,.1981 memorandum, second paragraph).
3.
That revised MC-2700 (July 1,1981), through our vendor inspections, extends the enforcement process to non-licensees (September 1,1981 memorandum, last paragraph).
4.
That IE has arbitrarily expanded its authority to non-licensees through revision of MC-2700 (July 1,1981) (Enclosure to September 1,1981 memorandum, item 1.b.).
5.
That IE through its vendor inspectons assumes the licensee's responsi-bilities (Enclosure to September 1,1981 memorandum, item 1.c.).
6.
That the vendor program does not improve safety because the IE vendor inspector is limited in his knowledge regarding the adequacy of inputs to procurement (Enclosure to September 1,1981 memorandum, item 1.c.).
7.
That MC-2700 (July 1,1981) results in non-licensees having to demonstrate compliance without proper authority (Enclosure to September 1,1981 memorandum, item 2.a.).
8.
That MC-2700 (July 1,1981) shifts responsibility for compliance from the licensee to the non-licensee (Enclosure to September 1,1981 memorandum,-
item 2.a and 2.b).
9.
That the Part 21 requirements directed to non-licensed corporations to:
a) identify and evaluate significant (substantial) safety hazards and, b) post certain information, are not in accordance with Section 206 of the Reorganization Act of 1974 (September 1,1981 memorandum, first paragraph).
- 10. That the enforcement authority assumed by IE over non-licensees (Part 21) is greater than intended by Congress (September 1,1981 memorandum, first paragraph and enclosure to that memorindum, item 2.c.).
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Review Group Analysis of Issues Identified as Basis for Mr. Whitesell's Differing Professional Opinion Dated September 1,1981 Issue.
1.
That the basic intent, scope and program of the Vendor Program have been changed by. MC-2700 (July 1,1981) fram tha't initially'envisionsd and espoused'in MC-2700 (February 18c
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Review Group Analysis Mr. Whitesell is correct in that the scope, practices, and overall program of vendor inspection has changed over the years. These changes have been prompted by inspection findings, evaluations of the program, and the changing nature of the nuclear industry.
Effective utilization of IE resources resulted in a shift in emphasis from a program that was primarily Quality ' Assurance (QA) effectiveness oriented. The program, in addition to QA effectiveness evaluation, now includes assessment of the technical adequacy of vendor performance and followup of problems under a vendor's scope of work which are identified during inspections not only at vendor facilities but also at;.one or more react 6r sites. The vendor inspection techniques,
now closely parallel reactor inspection techniques. This includes a spot-check review of procedures, work in progress, and records.
The basis intent and purpose of the vendor inspection program - to provide an i6put into the NRC basis for assuring that reactors are constructed and operated safely - has not beer. changed by the new MC-2700,
Licensee Contractor and Vendor Inspection Program dated July 1, 1981. When MC-2700 was issued originally (2/18/76),
the NRC possessed enforcement authority only on a licensee.
When 10 CFR 21 became effective (8/10/77), the NRC implemented new statutory authority that expanded the enforcement authority beyond licensees.
The new authority regarding 10 CFR 21 is included in the revised MC-2700 (7/1/81).
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That the Vendor Program was never intended to be nor could be a part of the regulatory (enforcement) process.
3.
That the revised MC-2700 (July 1,1981), through our vendor inspections, extends the enforcement process to non-licensees.
4.
That IE has arbitrarily expanded its authority to non-licensees through revision of MC-2700 (July 1,1981).
7.
That MC-2700 (July 1,1981) results in non-licensees having to demonstrate compliance without proper authority.
8.
That MC-2700 (July 1,1981) shifts responsibility for compliance from the licensee to the non-licensee.
Review Group Analysis A basic premise of the NRC nuclear licensing and inspection program is that the licensee is responsible for the proper
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construction and safe operation of nuclear power plants.
Licensees and their agents (contractors and vendors) each participate in a quality verification process in accordance with requirements prescribed by the NRC. The NRC conducts 1
an inspection program to determine whether'its requirements are being met by a licensee and his agents.
The licensee is responsibile for developing a detailed QA plan as part of its license application. This plan inclunes the QA pro' grams of the licenseeds contractors and i
vendois. The NRC reviews the licensee's application to determine that implementafion of the proposed QA, program would be satisfactory and responsive to NRC requiremements.
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During periodic inspections, the NRC ascertains through direct observation of selected activities (including review of processes and selected hardware, discussions with employees and selected record review) whether a licensee. and/or its agent is satisfacto,rily implemesting the prescribed QA program.
If defects or malfunctions in safety-related components or systems occur, the NRC requires that corrective steps be taken.
The NRC encourages principal licensee agents, such as architect engineering firms, to submit a d'escription of corporate QA programs (Topical Report) for review and acceptance by the Office of Nuclear Reactor Regulation (NRR).
Once approved by NRR, a corporate QA program of a licensee's agent will be acceptable for all license applications that incorporate the program by reference in a Safety Analysis Report.
IE inspects the implementation of such QA programs-which have been approved by NRR in the form of Topical Reports or other standardization programs.
The NRR approval of the licensee agent's QA program i
(Topical Report) and IE inspection of its implementation e
does not relieve the licensee from the requirements of t-I
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Appendix B to 10 CFR 50, Criterion VII, which requires that the licensee assure purchased materials, equipment or services meet the specifications contained in its procurement documents.
Except as indicated in the discussions addressing issues 9 and 10, IE does not take enforcement action directly against licensee agents; however, in the interest of expeditiously correcting generic deficiencies and safety problems noted during inspections at vendor facilities, the vendor is requested, in writing, to describe the corrective action taken, or planned, to correct the problem.
If the vendor were to refuse to correct the problem, enforcement action could be taken against the licensee (s).
In the event the vendor has an NRR approved QA program, the approval could be rescinded if the deficiencies are not corrected.
In addition, if the problems identified during inspections at vendor facilities indicate that the licensee did not perfdrm adequately in implementing its responsibilities under 10 CFR 50, Appendix B, enforcement action would be taken against the licensee.
This approach and practice has been in effect for many years and has not been changed by the issuance of MC-2700
(July 1,1981). Licensee agents have for a long time been expected to correct identified deficiencies and respond in writing to the NRC. The first revision of MC-2700 that addressed the subject of the applicability of the enforcement process beyond licensees was 7/1/81.
Such expansion beyond licensees was not arbitrary but' was based upon appropriate statutory authority.
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Issue 5.
That IE through its vendor inspections assumes the licensee's responsib iities.
i 6.
That the vendor program does not improve safety -
because,the IE vendor inspector is limited in his knowledge regarding the adequacy of inputs to procurement.
Review Group Analysis One of the purposes of the vendor program is to assess whether licensees are carrying out their responsibilities to determine whether their agents are complying with the specifications in the procurement documents.
In, addition, the vendor program provides a means for independent NRC verification of information supplied by licensees and used in the licensing process. The NRC does not assume the licensee's responsibility for the ac:ivities of :ts agent or surveillance ~ of the activities of its agent.
The vendor program, as an integral part of the overall NRC inspection process, improves reactor safety by independently verifying whether licensees (through their agent) meet NRC'
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i requirements. While the vendor inspector may not have the information necessary to ensure that the licensee established
.the correct technical requirements in procurement documents.
-the NRC Inspection Program applicable to specific sites examines the licensee's processes 'for ensuring the technical requirements in the licensee's procurement documents are
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correct. Accordingly, the vendor inspector's job is not te determine the addquacy of those requirements but to verify that the licensees (through their agents) properly perform.the actions needed to satisfy those requirements.
Therefore, in the aggregate, the'NRC hat assurance of the adequacy of the requirements in licensee procurement documents.
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Issue 9.
That the Part El requirements. directed to non-licensed corporations to: a) identify and evaluate significant (substantial) safety hazards and, b) post certain information, are not in accordance with Section 206 of the Reorganization Act of 1974.
- 10. That the enforcement authority assumed by IE over non-licensees (Part 21) is greater than intended by Congress.
Review Group Analysis Mr. Whitesell's differing opinion that "the authority assumed 1
by OIE to enforce on non licensees, the requirement to identify, and evaluate significant safety hazards, which are not I
i provisions of s'ection 206, and posting requirements not in accordance with paragraph C of 206" is based in part on an August 30, 1977 memorandum issued from the' Executive Legal i
D.irector. The refe'renced. memorandum concluded that.
violations of the' implementing regulations such as failure to evaluate a deviation would not fall within the scope l
of the civil penalty provision in the rule.
I Since the August 30, 1977 memorandum, the question of the enforceability of the implementing provisions of Part 21 1
on non-licensees-h'as been reexamined on a number of occasions. The Commission.itself has determined by -
approving the civil penalty action against the Babcock and Wilcox Company (B&W) that Section 206 of the Energy reorganization Act and Part 21 permit enforcement action
in the form of civil penalties against non-licensed corporations in appropriate cases.
It is noted that B&W i
did not contest the Part 21 penalty imposed against it; i
therefore, uncertainties as to the application of Part 21 have not been litigated. However, particularly in view of the Commission's action in'the matter, the Office of the Executive Legal Director has advised us that reasonable legal grounds may be deemed to exist for enforcing on non-licensees by civil penalty the implementing provisions of 10 CFR Part 21.
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J Conclusions and Recommendations The Review Group has concluded that Mr. Whitesell's Differing Prcfessional
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Opinion ~ and his recommended resolution do not bring to light new matters not previously ' considered by appropri' ate NRC management.
The Review Group believes that the requirements in 10 CFR 21 regarding establishment of implementing procedures, (e.g., evaluation, record requirements, and procurement document content) constitute a reasonable means for NRC implementation of Section 206.
-$' ction' 206 of the EnergyiReorganization ~ Act of'1974,. as amended; s
does not specifically~ address inJplementing' provisions,'and the enforcement of' implementing provisions. 'Likewise,10 CFR '21 does'not address enforcement of implementing provisions.
Iri order to assure' that the regulated industry understands the enforceability of 10 CFR 2'1, as implemented by the NRC, the Review Group recomends:
1.
- 10. CFR 21 be rewritten to clearly indicate that licensed and non-licensed corporations will be subject to enforcement actions if the implementing requirements of 10 CFR 21 are not met. [0ne of the Review Group members -
W. E. Campbell, Jr. - believes the recommendation should be expanded. The -
recommendation he proposed is attached (Attachment 1)].
2.
IE continue to emphasize in its inspection program manual chapters that the licensee is ultimately responsible for the adequacy of construction and operations.
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s BIBLIOGRAPHY In performing its analysis, the Review Group consulted the following pertinent references :
1.
Memorandum, D. E. Whitesell to U. Potapovs dated September 1,1981 -
Differing Professional Opinion 2.
Memorandum, U. Potapovs to V. Stello dated September 4,1981 - Differing Professional Opinion (forwarded Mr. Whitesell's September 1,1981 memorandum).
3.
Memorandum, J. Collins to K. Seyfrit dated September 10,'1981 - Differing Professional Opinion (forwarded Mr. Whitesell's September 1,1981 memorandum).
4.
Memorandum, K. Seyfrit to V. Stello dated September 11, 1981 - Differing Professional Opinion (forwarded Mr. Whitesell's September 1,1981 memorandum).
5.
Memorandum, D. Whitesell to K. Seyfrit, undated (received October 2,1981) -
Differing Professional Opinion 6.
Memorandum, V. Stello to J. Sniezek dated September 16, 1981 - Differing Professional Opinion (fomarded Whitesell's. September 1,1981 memorandum forevaluation) 7.
NRC Manual Chapter 4125 dated September 19, 1980 - Differing Professional Opinions 8.
MC-2700 - Licensee Contractor and Vendor Inspection Program, dated February 18, 1976, with revisions through January 1,1978 9.
MC-2700 - Licensee Contractor and Vendor Inspection Program, dated July 1,1981 10.
Report on the Evaluation of the Licensee Contractor and Vendor Inspection Program, dated January 28, 1976, G. W. Reinmuth to B. H. Grier
- 11. MC-0800 - Enforcement Actions as revised May 5,1976
- 12. Memorandum, N. Grossman to G. W. Reinmuth, dated October 26, 1962 - Visit t6 Pacific Coast Engineering Company 13.
NUREG-0642, Rev.1. dated May 1981 - A Review of NRC Regulatory Processes and Functions 14.
NUREG-0040, Vol. 5, No.1, dated March 31, 1981 - Licensee Contractor and Vendor Inspection Status Report 15.
Note, Howard K. Shapar to D. F. Knuth, dated November 30, 1973
- 16. Memorandum, D. F. Knuth to Joanna Becker, R0 Reactor Safety Inspection Program - Required Legislative 6 Rule Changes, dated May 17, 1974 D
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- 17. Memorandum, Howard K. Shapar to Ray G. Smith, dated January 22, 1981 -
Authority to Impose Civil Penalties on Non-Licensees
- 18. Memorandum, Howard K. Shapar to E. Volgenau and R. B. Minogue dated August 30, 1977 - Statutory Authority to Impose Civil Penalties on Nonlicensees
- 19. Memorandum, H. K. Shapar to J. G. Davis dated November 30, 1978 -
i Enforceability of 10 CFR 21 Implementing Provisions on Nonlicensees 20.
Letter, V. Stello to the Babcock & Wilcox Company dated April 10, 1980 4
- 21. Memorandum, D. Thompson to G. Reinmuth dated January 5,1981 - Enforcement Practices Applicable to Non-Licensees
- 22. Title 10 Code of Federal Regulations, Parts 2, 21, and 50
- 23. Atomic Energy Act of 1954, as amended, Chapters 10 and 18
- 24. Energy Reorganization Act of 1974, as amended, Section 206
- 25. Memorandum, D. E. Whitesell to J. H. Sniezek, dated October 8,1981 -
Differing Professional Opinion
- 26. NUREG-0302, Rev.1, dated October 1977 - Remarks Presented at Public Regional Meetings to Discuss Regulations for Reporting of Defects and Noncompliance. ~
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&6 Alternative Recommendation 1 1.
Notwithstanding the action taken by the Commission in regard to Babcock and Wilcox (IE letter dated April 10, 1980), the General Counsel should be requested to provide an answer to the following question:
Are there reasonable legal grounds or adequate statutory authority to warrant the preparation by the staff of an amendment to 10 CFR Part 21 that would provide for enforcing, including civil penalties, the " implementing" requirements currently contained in 10 CFR part 21 on corporate entities?
. The implementing requirements; e.g., adopting appropriate procedures to ensure that a responsible officer is informed of specific occurrences, were incorporated into 10 CFR Part 21 by NRC to provide a reasonabl'e
'means for achievi.ng the intent of Section 206 of the Energy Reorganization Act, but were not specifically required by Section 206.
These implementing requirements are different from the " statutory" requirements that were incorporated into 10 CFR Part 21 based on a direct relationship to a portion of Sec. tion'206; e.g., paragraph 21.21(b) requires an individual to notify NRC when that individual becomes aware of certain occurrences. -
Depending on the answer provided, either (a) the General Counsel should request additional statutory authority to enable NRC to reach vendors with a more effective enforcement program (House Report 96-1452, October 2,1980), or (b) 10 CFR Part 21 should be amended to provide specifically for enforcing its " implementing" provisions on corporate entities.
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Attachmen* 1