ML20056E059
| ML20056E059 | |
| Person / Time | |
|---|---|
| Issue date: | 10/03/1990 |
| From: | Cwalina G, Haass W NRC OFFICE OF ENFORCEMENT (OE) |
| To: | |
| Shared Package | |
| ML20056E017 | List: |
| References | |
| REF-QA-99901174 99901174-90-01, 99901174-90-1, NUDOCS 9308190276 | |
| Download: ML20056E059 (13) | |
Text
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REPORT NO.
99901174/90-01 COMPANY:
Shur-Kut Supply Corporation 241 Woodland Avenue Post Office Box 119 Morton, Pennsylvania 19070 PRINCIPAL Shur-Kut is a distributor of fasteners, tools and metal PRODUCT:
cutting devices. The company also manufactures fasteners in-house.
NUCLEAR The company is qualified to provide safety-relhted fasteners INDUSTRY to the nuclear industry. Approximately 10 percent of its ACTIVITY:
business is nuclear related.
INSPECTION CONDUCTED:
June 18-20, 1990
/Oh80 ECTOR:
v C*
Av a.w Walter P. Haass, Special Projects
' Date Section(SPS) Vendor Inspection Branch (VIB OTHER Harvey M. Wescott, SPS INSPECTORS:
Stewart Magruder, SPS APPROVED BY:
/
o c,y
/<
///k[9c Giregory,G'. Chalina, Section Chief Date SPS, VfB #
SUMMARY
i Areas Inspected:
Reactive announced inspection to review procedures and policies used to control the quality of safety-related fasteners supplied to the nuclear industry. The inspection was prompted by the rejection of certain batches of stainless steel machine screws by the Philadelphia Electric Company in September 1989.
Results:
Within the areas inspected, one nonconformance involving several examples, was identified. The nonconformance involved unsupported statements on Certificates of Conformance issued by Shur-Kut.
PLANTS AFFECTED:
Peach Bottom, Units 2 & 3 t
1 9308190276 931003 PDR GA999 EMV*****
i 99901174 PDR l
1.
PERSONS CONTACTED R. L. Ferrell, QA/QC Manager J. A. Saddic, President J. P. Saddic, General Manager 2.
INSPECTIONS RESULTS
2.1 Background
On July 5,1989, the Philadelphia Electric Company (PEco) issued Purchase Orders (P0s) BW611364 and BW611365 for the procurement of 49 batches of stainless steel machine screws, washers and nuts from the Shur-Kut Supply Corporation (5-K). The P0s required that the materials for the items conform to ASTM A-276, Type 302 Condition A or Type 305 Condition A, which requires that the items be manufactured from bar stock. The P0s also required that the items be qualified for safety-related service utilizing the vendor's quality assurance program which had been previously approved by a PECo audit as meeting the requirements of 10 CFR Part 50, Appendix B.
PEco also imposed the provisions of 10 CFR Part 21 for identifying any defects or noncompliances to customers and the NRC.
Subsequent to their delivery to PECo, the batches of items were subjected to testing under PECo's Fastener Testing Program.
This program is intended to provide added assurance that substandard and/or fraudulent fasteners are not used in PECo's nuclear power plants. The results of the testing indicated that some of the l
batches of items did not meet chemical and dimensional requirements.
The nonconforming batches were rejected by PEco and returned to the vendor.
2.2 Original Quality Assurance (QA) Program S-K's original quality assurance program was described in its
" Quality Assurance Control Manual" issued on July 16, 1986, with changes through Revision 5, dated June 12, 1987.
The manual addressed the 18 criteria of 10 CFR Part 50, Appendix B to the extent applicable to the procurement and manufacturing activities of the vendor. The manual was originally prepared for the processing of commercial-grade type orders and was modified in June 1987 to expand its applicability to nuclear safety-related orders.
The program had been approved by PEco which qualified S-K for placement on PECo's Evaluated Vendors List for Nuclear Power Plants.
4 Review of the original QA manual with respect to the control of the quality of procurements and manufacturing for nuclear safety-related products indicated the following: i
~m All suppliers of stock material, finished products, and i
services were required to be reviewed and surveyed for conformance to Appendix B requirements.
Previously approved suppliers were grandfathered for a maximum of 18 months.
The audit checklist utilized to qualify a supplier consisted only of a brief list of QA criteria.
Dimensional checking of finished products was accomplished i
in accordance with a sampling plan for batches in excess of i
100 items; for batches of 100 or less items,100 percent i
checking was used.
All measuring and test instrumentation was calibrated using j
standards traceable to the National Bureau of Standards (now l
National Institute of Standards and Technology) in accordance with Military Standard MIL-C-45662A.
l The inspectors noted that there were no provisions to require verification that the chemical and physical properties of stock material or finished products conform to P0 specifications. There
.I were requirements to label materials and products for traceability l
purposes, but these were not applied to nuclear safety-related I
activities.
Based upon-this lack of conformance provisions, the inspectors concluded that the original QA program utilized by S-K for safety-related activities was deficient.
1 2.2 New Quality Assurance Program
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Following the rejection of stainless steel machine screws by PEco in September 1989, S-K hired a consulting firm to revise its QA manual to improve its conformance with 10 CFR Part 50, Appendix B.
The new manual, dated April 11, 1990, addresses each of the 18 criteria to the extent consistent with S-K's scope of activities.
It was approved for implementation by S-K on June 1,1990.
The new QA manual includes the following provisions for the procurement of stock material and finished products, and for the in-house manufacture of products:
i All stock materials and finished products procured from a N-qualified (supplier qualified by S-K audit to provide a nuclear safety-related product) or non-N-qualified supplier are subjected to chemical and physical testing to verify conformance to the P0 specifications. The test results are
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required to accompany the delivery.
Each piece of stock material is identified with a unique code that is traceable to each piece of finished product derived from the stock material.
All safety-related products that are large enough.are stamped with the unique code, and those that are too small ere packaged in a coded sealable bag to assure identification. -...
The new approved suppliers list consists of three distinct categories:
(1)
Approved suppliers: includes all acceptable commercial-grade suppliers based on historical performance on which no special or extra requirements are imposed.
(2)
Qualified suppliers: those with QA programs that do not meet the requirements of 10 CFR Part 50, Appendix B, but will provide material test results if requested.
(3)
N-qualified suppliers: those that have QA programs satisfying the requirements of 10 CFR Part 50, Appendix B.
All suppliers that are N-qualified are audited prior to the placement of a P0 with subsequent l
audits performed on a periodic basis.
An improved checklist has been developed for the conduct of l
audits.
Based on the review of the revised QA manual, the inspectors concluded that improved controls have been included in the program such that, if properly implemented, it should provide assurance of the necessary quality for nuclear safety-related fasteners.
2.4 Quality Assurance Procedures The inspectors reviewed the QA procedures for implementation of the new QA program. The vendor has developed a total of 15 i
procedures which at the time of the inspection were in draft form awaiting final review and approval. Among others, the procedures include procurement document control, commercial item dedication, l
material identification and control, sampling plans, control of measuring and test instrumentation (including calibration), 10 CFR J
Part 21 reporting, and conduct of QA audits.
i 2.5 PECo Purchase Orders That Prompted the Inspection l
l l
The circumstances surrounding S-K's filling of PEco P0s BW611364 l
and BW611365, for stainless steel machine screws which were rejected by PEco in September 1989, were reviewed by the i
inspectors to determine the specifics of how the procurement of these screws was accomplished.
The P0s called for procurement of i
various sizes of stainless steel screws, nuts and washers. The items were to be manufactured to the requirements of ANSI /ASME 618.6.3-1972 using material conforming to ASTM A-276, Type 302 Condition A or Type 305 Condition A.
The P0s identified the procurement as "QS Nuclear Safety Related" and required the provisions of the S-K Program / Manual, Revision 5 dated June 12, i
1987 (determined by PECo to meet 10 CFR Part 50, Appendix B by 1
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audit) and 10 CFR 21 to be met.
The P0s also required the submittal of a Certificate of Conformance to attest to satisfaction of the P0 requirements.
According to the S-K personnel, PECo personnel had been discussing the fastener needs for their Peach Bottom Atomic Power Station with S-K approximately one month prior to issuance of the official P0. During this period cf time, the impending P0 was discussed in terms of a commercial-grade procurement with no need for material test reports, no need for an N-qualified supplier, and no special material requirements (i.e., an ASTM specification was not indicated and, therefore, manufacture from wire stock material was acceptable). Believing that the official P0 documentation was on its way and would reflect the above understanding, S-K proceeded to take the necessary actions to fulfill the impending order since a further understanding was that time was of the essence.
The total order (both P0s) consisted of 23,500 screws, 8000 nuts and 14,000 flat and spring-lock type washers subdivided into 49 batches.
The finished items were shipped to PEco on June 29,1989, along with a CoC; the official P0 documents, dated July 5,1989, were received later.
The items were actually supplied from stock as manufactured originally by the Stainless Steel Screw Company of Totowa, New Jersey from wire stock material. The S-K personnel believed that the items shipped would fully meet the PECo requirements based on the discussions held prior to receipt of the official P0 douments. However, official P0 requirements more stringent than those met by the delivered items. The shipped i
items, therefore, did not meet the P0 requirements (i.e., did not meet the cited codes and standards, were not manufactured under an Appendix B QA program, and were not subjected to 10 CFR Part 21),
although a CoC was issued to PEco that made that claim (1174/90-01-01).
When the fasteners were received by PEco, they were subjected to testing to determine their conformance to the P0 requirements.
The PECo Fastener Testing Program, by sample testing of the machine screws by a PECo approved vendor (Laboratory Testing, i
Inc.), determined that the screws in 4 batches (a total of 3500 screws) did not satisfy the dimensional and chemical requirements of the specifications cited in the P0s. As a result, the nonconforming screws were rejected and returned to the vendor.
l Subsequently, S-K submitted a Vendor Deviation Request form (No. 35) to PEco dated December 15, 1989 requesting acceptance of the rejected screws based on the fact that the screws were manufactured from Type 302 HQ stainless steel which is equal to ASTM XM7 stainless steel (conforms to the mechanical and chemical properties of ASTM A-276, Type XM7). On this basis, the rejected screws were found acceptable by PEco.
t E
l s
Based on the above sequence of events, the inspectors concluded that the machine screws supplied by S-X were in conformance with the oral understandings conveyed by PECo personnel during the i
period prior to issuance of the official P0 documents. The 1
inspectors were concerned, however, about the issuance of a CoC which reflected the more stringent requirements of the official P0 l
rather than the actual situation. The failure of S-K to adhere to i
its QA manual with respect to issuing a correct and accurate CoC is considered to be a nonconformance-(1174/90-01-01).
2.6 Previous Purchase Orders The inspectors reviewed several P0 files that had been processed by the vendor prior to those that prompted the inspection. The QA Manual issued on July 15, 1986, with changes to Revision 5, dated i
June 12, 1987, was utilized to process these P0s.
The following P0s were reviewed 1
P0 No. BW-345278, dated January 3,1989, requested 25 hex i
head bolts %" x It"-13 to ASTM A193, Grade B7; 25 hex nuts
%"-13 to ASTM A194, Grade 2H; and 25 flat washers
" to ASTM i
F436 for safety-related service at the Peach Bottom Atomic Power Station. The PO required implementation of the vendor's previously approved QA program and 10 CFR Part 21.
A CoC was also required to assurance conformance to the P0 3
requirements.
The items were fabricated by B & G Manufacturing Company, and chemical and physical testing were performed for S-K by Laboratory Testing, Inc. No record of. dimensional checking
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was noted. The items were delivered on January 11, 1989, i
the CoC was dated January 13, 1989, and the material test j
- certificate was dated January 31, 1989.
I P0 No. BW-610902, dated May 22, 1989, requested 350 stainless steel slotted flat head machine screws 5/16" x 1"-18 UNC-2AX to. ASTM A193, Grade B8 for safety-related service at the Peach Bottom Atomic Power Station.
The P0 required implementation of the vendor's approved QA l
program and 10 CFR Part 21. A CoC was required to assure conformance to the P0 requirements.
l The machine screws were. manufactured for S-K by Accurate Tool Company who obtained the stock material' and the chemical and physical properties from Green-Bay Supply j
Company, Inc. The screws were 100%-dimensionally checked by S-K prior to delivery and all were found to be 0.014" oversized in length; a corrective action report was written on June-19, 1989 and a Vendor Division Request, dated ~
June 14, 1989, was sent to PEco.
Based on acceptance by-PEco, the CoC was issued, dated June 13, 1989, and-the screws were delivered on June 19, 1989. :
i P0 No. BW-611211, dated June 16, 1989, requested 300 full thread hex head cap screws k" x 2"-20 UNC-2A to ASTM A193, Grade B7; 300 full thread hex head cap screws %" x 1)"-20 UNC-28 to ASTM A194, Frade 2H;'and 100 fu'i thread hex head cap screws 3/8" x 2"-L UNC-2A to ASTM A193, Grade B7 for safety-related service at the Peach Bottom Atomic Power i
Station. The P0 required implementation of the vendor's previously approved QA program, 10 CFR Part 21, and a CoC attesting to conformance with the P0 requirements.
1 The items were marc:factured by B & G Manufacturing Company and delivered to PECo on July 18, 1989 with certificates of conformance for' chemical and physical properties, dated j
July 6, 1989. All delivered items were rejected based on unsatisfactory dimensions and product marking; the items l
were returned to S-K.
Since the items were urgently needed, i
PECo reportedly reordered.them from another vendor.
j P0 No. BW-610310, dated March 14, 1989, requested 188 slotted flat head machine screws 5/16" x 1"-18 UNC-2A made from AISI Type 304 stainless steel for safety-related service at the Peach Bottom Atomic Power Station. The P0 required implementation of the vendor's previously approved i
QA program, 10 CFR Part 21, and a CoC attesting to conformance with the P0 requirements.
These items were manufactured by B & G Manufacturing 2
Company; however, no chemical and physical properties were determined for the material, nor was there a record of dimensional checking. A CoC, dated March 8, 1989, was provided to PECo and the items were delivered on March 9, 1989. The deficiencies in executing this P0 bore a resemblance to those identified in the P0s that prompted this inspection.
Based upon the review of these P0s, the inspectors concluded that the CoCs issued for P0s BW-345278, BW-611211, and BW-610310 represented additional examples of S-K's failure to provide correct and accurate CoCs as required by their QA manual.
These discrepancies are considered to be further examples of the nonconformance identified in Section 2.5 of this report (1174/90-01-01).
2.7 Recent Purchase Orders In addition to the P0s discussed in Sections 2.5 and 2.6, several recently executed P0s for safety-related fasteners, also delivered to PECo, were reviewed by the inspectors to determine the extent to which the requirements of the vendor's new quality assurance program had been implemented. The following' P0s were reviewed:.
W PO BW-6414147, dated January 22, 1990, requested 40 bolts, 5/16" diameter by 14" long to ASTM A193, Grade B7, and 40 a
flat washers, 5/16" diameter to ASTM F436 for safety-related service at the Peach Bottom Atomic Power Station.
The P0 required implementation of the vendor's previously approved l
QA program (Revision 5, dated June 12, 1987) and 10 CFR i
Part 21. A CoC was required to assure conformance to the P0 requirements.
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The items were manufactured by S-K using bar stock material procured as commercial-grade from Cooperweld Steel Company through a distributor. The chemical analysis and physical j
testing of the stock material were performed by Laboratory i
Testing, Inc. and dimensional checking of the finished items l
was performed by S-K to verify conformance to the P0 specifications; this testing served as a dedication process to qualify the items for safety-related service.
An Inspection Form indicating all the quality control checks performed was attached to the procurement package.
PO BW-620778, dated January 22, 1990, requested 127 bolts, k" diameter by 1" long to ASTM A193, Grade 87, and 145 bolts, 5/16" diameter by 1" long to ASTM A193, Grade B7 for the Peach Bottom Atomic Power Station. The P0 required implementation of the vendor's previously approved QA program (Revision 5, dated June 12, 1987), 10 CFR Part 21, appropriate test reports,.and a CoC attesting to conformance with the P0 requirements.
The items were manufactured by S-K using bar stock material procured as commercial-grade from Copperweld Steel Company.
Samples were sent to Laboratory Testing, Inc. to confirm chemical and physical property conformance to the ASTM-
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specification. An Inspection Form was attached to the procurement package that identified all the quality control checks performed including dimensional verification.
d PO BW-721562, dated February 21, 1990, requested 33 heavy hexhead bolts, 3/4" diameter by 10x2" long, all to ASTM A235, Type 1 for.the Peach Bottom Atomic Power Station. The P0 required implementation of the vendor's previously approved QA program (Revision 5, dated June 12, 1989),
utilization of 10 CFR Part 21, appropriate test reports, and a CoC attesting to conformance with the P0 requirements.
1 S-K purchased heavj hexhead bolt blanks,1" diameter by 6" long, as commercial-grade.from Chaparral Steel through a distributor. Samples were sent to Laboratory Testing, Inc.
to verify that the chemical and physical properties were consistent with the ASTM requirements. The bolts were manufactured by S-K and an Inspection Form attested to the i
QC checks performed.
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PO BW-623512, dated March 26, 1990, requested 150 nuts, 7/8" diameter by UNC 9-2B to ASTM A194, Grade 2H for the l
Peach Bottom Atomic Power Station. The P0 required implementation of the vendor's previously approved QA l
program (Revision 5, dated June 12,1987), utilization of i
10 CFR Part 21, appropriate test reports, and a CoC attesting to conformance with the P0 requirements.
S-K purchased the final products from Nuts, Inc., which was not a N-qualified supplier. Nuts, Inc. provided chemical, hardness, and proof load test results for the material, and S-K also obtained chemical test results from. Laboratory Testing, Inc. to serve as the dedication process to qualify the nuts for safety-related service. An Inspection Form attested to the QC checks performed.
PO BW-624165; dated May 10, 1990, requested 14 heavy hex-I nuts \\" diameter by 13 UNC to ASTM A276, Type 304 for the Peach Bottom Atomic Power Station.
The P0 required implementation of the vendor's previously approved QA program (Revision 5, dated June 12, 1987), utilization of 10 CFR Part 21, appropriate test reports, and a CoC attesting to conformance with the P0 requirements.
S-K procured the nuts from Nuts, Inc. as a safety-related i
product since Nuts, Inc. had now been audited and approved by S-K as a N-qualified supplier.
Nuts, Inc. performed the chemical and physical (hardness and proof load) testing of the material, and performed the manufacturing activities in accordance with 10 CFR Part 50, Appendix B and 10 CFR i
Part 21. An Inspection Form attested to the QC checks
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performed.
Based on the above P0 reviews, the inspectors concluded that S-K had already implemented appropriate provisions from the new QA program by taking the necessary steps to verify that the stock materials used to manufacture the fasteners conformed to the specification requirements,- and that the dimensions of the finished fasteners were correct. The situations included procurement of stock materials and finished products from j
commercial-grade suppliers and in-house manufacturing and testing by a subcontractor to produce dedicated fasteners for safety-related service.
2.8 Audits of Suppliers The inspectors reviewed S-K's implementation of the program for the conduct of external audits of its suppliers. As stated above, the new procedure for auditing has not been finalized and, 3
therefore, the audits conducted utilized the old procedure. _ - -
i
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j S-K currently uses six suppliers to provide materials, finished products, and services in support of nuclear safety-related P0s.
The audit reports for each of these suppliers were reviewed; in addition, an audit report for a seventh supplier, recently removed l
4 from the list, was also reviewed.
The audit checklists were rather perfunctory ir, scope, did not address all the criteria of Appendix B, and were not always filled out completely. Although the audit reports and checklists were not, by themselves, adequate to approve these suppliers, discussions with the auditor indicated that he is very familiar with the requirements of Appendix B and applied these requirements during the audits.
Considering also that the scope of work performed by each supplier is limited, there is reasonable assurance that adequate measures were established to assure the quality of material received from these suppliers. A comparison of the old and new audit checklists indicated that using the new checklist should result in more effective audits and a more comprehensive documentation of the results.
2.9 S-K Internal Audits The inspectors performed a review of S-K's internal audit program I
and its implementation. The inspectors reviewed records of annual internal audits that were retained by the vendor since 1985.
As with their audits of suppliers, the documentation was abbreviated, and by itself, would not be adequate to assess full compliance with 10 CFR Part 50, Appendix B.
The inspectors concluded, however, that the audits were effective as evidenced by the programmatic changes that they precipitated. As with their external audit program, the internal audit scope will be augmented to provide a more effective checklist and a more comprehensive documentation of the audit results.
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2.10 10 CFR Part 21 Program The inspectors reviewed Section 20 of S-K's QA Manual, Revision 0,
)
dated April 11, 1990, that addressed the vendor's policies for implementation of 10 CFR Part 21. The manual section delineates the individuals responsible for evaluating defects and nonconformances for reportability to the NRC and its customers.
The inspectors also reviewed QA Procedure 15,1, Revision 0, dated June 1, 1990, entitled "10 CFR Part 21 Reporting." The procedure was determined to be adequate, but had not as yet been finalized
-1 and approved. The inspectors noted that the posting requirements i
of 10 CFR Part 21 were properly implemented.
3.0 EXIT INTERVIEW An exit interview was conducted at the end of the inspection on June 20, 1990 with the personnel listed in paragraph 1.0 of this report.
During this meeting the results of this inspection, as detailed in this report, were discussed with particular emphasis on the nonconformance.
Information that the vendor identified as proprietary is not included in this report.
f SYNOPSIS In November 1990, the Nuclear Regulatory Commission (NRC) requested an investigation of Shur-Kut Supply Corporation (S-K) to determine if company
- officials knowingly executed false certificates of conformance (C0Cs) to I
represent commercial grade fasteners as nuclear grade fasteners.
The Office of Investigations (01) investigation determined that the central manager _of S-K knowingly and intentionalix_orepared false COCs to certify what he knew to be comercial grade items as nuclear grade items. 5-K issued COCs from approximately September 1987 until September 1989 falsely representing products as meeting American Society of Testing Material (ASTM). American.
Society of Mechanical Engineers (ASME), and/or American Nuclear Standards Institute (ANSI) standards in response to Philadelphia Electric Company (PECO) i purchase orders which had imposed 10 CFR 50, Appendix 8, and 10 CFR 21 requirements. The general manager admitted that he provided commercial grade fasteners to PECO without substantiation that they could meet the technical specifications included in the procurement documents. Further, he failed to i
inform PECO about these deviations as required by 10 CFR Part 21.21.
In approximately June 1989. S-K's general manager met with PECO officials to discuss PECO's rejection of some fasteners provided to them by S-X.
Following this meeting. S-K hired a consultant to revise the company's nuclear sales program. Testing documentation on hand at S-K appears to substantiate appropriate specifications for nuclear grade fasteners provided to PECO, beginning in about November 1989.
In-house testing by PECO since that time has determined that, with the exception of some items on one purchase order, f asteners provided by S-K have met appropriate specifications.
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1 i
j Case No. 4-90-015 1
i IslL8 Deeperatemiseenduet (a) Any licensee or any employee of a i
licensee; and any contractor (including a supplier or consultant), subcontmctor, or any employee of a contractor or suocontractor, of any licensea, who knowingly provides to any licensee, contractor, or subcontractor, components, equipment, materials, or other goods or services, that relate to a licensee's activities subject to this part l may not (1) Engage in deliberate misconduct that causes or, but for detection, would E have caused. a Ucensee to be b 3 violation of any rule, rgalation, or order, or any term, condtton, or limitation of anylicense. Issued by the Commission, or (2) Deliberately submit to the NRC. a licensee, or a licensee's contractor or subcontractor,infonnation that the subadtting the information 4
to be inceaaplete or inaccurate in some respect material to the NRC.
(b) A person who violates paragraph (a)(1) or (a)(2) of this section may be subject to enforcement action in accordance with the procedures in to CFR part 2. subpart 8.
(c) For purposes of paragraph (a)(1) of
] this section, deliberate misconduct by a 4
g person means an intentional'act or g omission that the person knows:
g (1) Would cause a licensee to be in violation of any rule, remtlation, or order, or any term, condtton, or limitation, of any license issued by the Commission, or (2) Constitutes a violation of a requirement procedure, instruction.
contract. purchase order or policy of a licensee, contractor, or subcontractor.
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