ML20058K860
| ML20058K860 | |
| Person / Time | |
|---|---|
| Site: | Crystal River  |
| Issue date: | 07/23/1990 |
| From: | Taylor J NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO) |
| To: | |
| References | |
| TASK-PII, TASK-SE IEIN-87-066, IEIN-87-66, SECY-90-261, NUDOCS 9007250048 | |
| Download: ML20058K860 (7) | |
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POLICY ISSUEi July 23, 1990 (Information)
SECY-90-261 For:
The Comissioners L
From:
James M. Taylor Executive Director for Operations
Subject:
INSPECTION AND ENFORCEMENT INITIATIVES FOR COMMERCIAL-GRADE PROCUREMENT AND DEDICATION PROGRAMS
Purpose:
To respond to the Comission's request for additional information on the staff proposal to withdraw proposed escalated enforcement action for Washington Public-Power Supply System Nuclear-Project Two (WNP-2) and Crystal River Nuclear Plant, Unit 3,- (Crystal River 3) on comercial-grade procurement and dedication issues and on the clarity and detail of tea NRC's rules and guidance-in this program area.
Backaround:
On March 7,1990, the staff forwarded-to the Comission a paper,
" Inspection And Enforcement Initiatives. For Commercial-Grade ProcurementAnd'DedicationPrograms"(SECY-90-076),which informed the Comission of staff actions to defer programatic ir.spections of comercial-grade procurement.and dedication programs while monitoring. industry developments, improvements, and initiatives in this program area. The SECY paper also requested Comission approval for terminatlon of current enforcement actions for programatic procurement and dedication findings not related to an event or defective equipment.
By memorandum dated-April 11, 1990,. the Office of the Secretary informed the E00 that the Commission approved the staff proposal to withdraw proposed escalated 'nforcement actions and to defer future enforcement actions for,..ogramatic deficiencies in this program area for one year. On April 27, 1990,-the staff issued letters to WNP-2 and Crystal River 3 withdrawing the proposed escalated enforcement actions.
The April 11, 1990, memorandum from the Office of the Secretary also identified four areas where the Comission requested additional informat ha.
NOTE:
TO BE MADE PUBLICLY AVAILABLE IN 10 WORKING DAYS FROM THE
Contact:
DATE OF THIS PAPER S. Magruder, NRR 492-3216
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Discussion:
The staff response to the Comission's-request for additional-information is provided as follows:
L 1.
A description of the violations for which WNP-2 and Crystal River were cited.
Washington Public Power Supply Nuclear Project Two i
The licensee was cited for inadequate determination of the i
suitability of comercial-grade components for safety-related 1
l applications (comonly called " dedication").
The citation involved the failure to meet 10 CFR Part 50, Appendix B, t
i Criterion III,.which requires, in part, that measures be established for the selection and review for suitability of 4 slication of materials, parts, equipment, and processes tMt are essential to the safety-related function of the systems and components.
Specifically, on numerous
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occasions in 1987 and 1988, comercial-grade items were purchased and either installed or made available for installation in safety-related systems without adequately E
l being evaluated for suitability of the items for such use.
Suitability can be established by various combinations of (1) audits of suppliers to verify that appropriate quality assurance measures were implemented during the manufacturing process, hrd (2) identification of the critical charac-teristics of the component in its particular application I
and performance of suitable examinations and, as applicable, tests to affirm the suitability of the. items for their intended application.
The items cited in-the violation included control circuit relays, valve replacement parts, fuses, pressure switches, 0-rings, and pump shafts.
Crystal River Nuclear Plant. Unit 3 t
The licensee was cited under 10 CFR Part 50, Appendix B, Cr Merion III, for inadequate dedication of wuercial-grade items installed in safety-related
.pplications. The comercial-grade dedication process was determined to be deficient in that it was often limited to some combinations of a visual inspection, dimensional check, part number comparison, check of name plate data, and on occasion, an electrical continuity check.
For some of the visual checks performed,'the licensee did not establish appropriate acceptance criteria. The components cited as examples included solenoid valtes, electrical relays, and circuit breakers.
Some of the relays were of the same model which was the subject of a 1987 Information Notice (87-66) that' alerted licensees to concerns about the quality of commercial-grade relays. These relays were accepted and used without acequate determination of suitability.
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2.
A description of the' licensee's responses to the proposed 4
violations, j
Washington Public Power System Nuclear Project Two t
The licencee for WNP-2 responded to.the citation by asserting that NRC guidance on commercial-grade procurement has been an evolving-standard; that its programs have met the guidance available.at'any specific time; and that, on certain occasions, the NRC had approved its activities.
A reevaluaticq of past comercial-grade' procurements by the licensee indicated that installed items could perform their intended function.
The licensee also requested that the=
NRC review the citation as a backfit pursuant to 10 CFR 7
50.109 before imposing.a civil penalty, as existing require;aents do not explicitly address commercial-grade items. Additionally, the licensee asserted that, at the time of licensing, the NRC reviewed and, through the Safety EvaluationReport(SER),approvedthe rocurement controls in this area. The SER stated that "[b ecause the staff does not consider these controls [ controls for
. commercial-grade items) to be of: such importance as to require their implementation for WNP-2, adequate quality i
assurance program controls exist without these additional items."
U The licensee argued that NRC inspection activities contributed to the belief that those controls were I
satisfactory in that (1). a 1984 inspection identified no concerns with the commercial-grade program even before the licenseemadeasignificantupgradein1986,(2)NRCreview 1
of the licensee's response to-Bulletin 87-02, which involved commercial-grade fasteners, identified no violations or-deviations, and (3) a 1987 NRC Region Y team inspection reviewed'one of-the packages cited in the violation (Evaluation 668 for Potter-Brumfield control circuit relays) for comercial-grade dedication and'found no deficiencies with the process.
The licensee also noted that the NRC first published detailed guidance on comercial-grade items in Generic Letter 89-02, " Actions to Improve the Detection of Counterfeit and Fraudulently Marketed Products," on March 21, 1989. The generic letter conditionally endorsed the indutry initiatives documented in "EPRI Guidelines For The Utilization Of Comercial-Grade Items In Nuclear Safety-Related Applications" (NCIG-07).
The licensee believes that the NCIG-07 document was written to enable licensees to conduct future upgrades to procurement programs that the NRC would accept as legitimate, not to
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I The Comissioners ~
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provide an enforcement basis for past procurements.
(Note that the NRC's proposed escalated enforcement action was based'on the licensee's failure-to comply with require-ments of 10 CFR Part 50, Appendix B,-and not on;an industry I
standardorguideline.)
Crystal River Nuclear Plant. Unit 3:
F The licensee for Crystal River 3 responded to the citation; and denied parts of the violation. -The licensee made three i=
arguments which are similar to those provided by the licensee for WNP-2. -The arguments are based on the following premises:
(1):the regulations lacked explicit-standards and requirements for commercial-grade procurement-and dedication, (2) explicit criteria concerning which
_ specifications are to be' included in procurement documents or the scope of receipt inspections and examinations were-not provided, and (3) the violation cited involved a backfit as defined in 10 CFR 50.109.
The licensee also argues that, in part, the results of past NRC inspections led it to believe that the procurement I
program met the current standards:that were in force at any specific time. Additionally, the licensee contended that.
the NClG-07-document cannot be used to provide an enforcement basis for past procurements as it was not issued until March 1989..(However, the NRC's proposed
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escalated enforcement action was based on the licensee's failure to comply with requirements of 10 CFR Part 50, Appendix B, and not on an. industry' standard or guideline.)
Because the NRC decided to withdraw these two actions, the staff has not expended the resources to determine whether these case-specific arguments have adequate merit to warrant withdrawal of the proposed civil penalty.
3.
An assessment as to whether such programmatic violations could have resulted from a lack'of clarity and detail in 10 CFR Part 50, Appendix B, and NRC's implementing guidance.
The requirenants of 10 CFR Part 50, Appendix B, are sufficiently clear in specifying the responsibility of licensees to ensure the suitability of materials, parts, l-equipment, and processes for use in safety-related applications (Criterion III of Appendix B). The failure to meet these requirements was the basis for the. staff-initially proposing the escalated enforcement action for WNP-2 and Crystal River 3.
However, the specific manner in which licensees are to implement their responsibility under 10 CFR Part 50, Appendix B, when procuring commercial-grade items and dedicating them for safety-related purposes has not been well-defined beyond l
the basic requirements contained in 10 CFR Part'50, Appendix B.
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Tfe Commissioners.
The_ licensees' QA programs and the NRC's SERs~ accepting licensee programs were based on the. status of'the equipment, parts, and supply industry at the time plants-were being constructed ~and-licensed. A fairly.large number of suppliers were willing to implement the QA program specified in Appendix B.
In addition, licensees were,
buying whole systems or components, and to a large extent were depending on the procurement expertise:of the AE,.
NSSS, and the constructors.
Since that time, the procurement process, items purchased, and the number of.
suppliers have changed considerably. Licensees now do most of their own purchasing, and.the items purchased are now generally individual parts rather than whole components or i
, systems.
In making the ch6nge from purchasing major components to individual parts,.some licensees failed to realize that the parts fulfilled a safety function and that Appendix B requirements applied to the parts.
Also, fewer vendors will accept contracts imposing the QA program specified in Appendix B, 10 CFR Part 50,.and the require-ments for evaluation and reporting.specified in 10 CFR Part 21. As reported in SECY-90-76, the; staff inspections of licensee programs for. commercial-grade procurement and' dedication have found that licensees have generally not modified their programs to address these changes-in procurement and supply. The staff believes that the problems in this area are the result of licensees' failing to modify their programs to continue to meet Appendix B requirements as industry conditions changed.: T1ese failures may be attributed to lack of clear and specific guidance in this area and a failure on the part of licensees to vigorously implement 10'CFR Part 50, Appendix B.
In the past three years, the staff has also increased the emphasis put on commercial-grade procurement and dedication activities, based.in part on recognition of the. nature and the extent of the problems associated with counterfeit and substandard parts.
Both the knowledge of.NRC inspectors t
and our recognition of the potential safety significance of these problems have increased during this time, resulting-in proposed enforcement actions that might have been, but l
were not, identified in previous inspections.
These circumstances would confirm that this area was of an evolutionary nature rather than one where firm guidance was in place.
4.
A discussion of measures that might be undertaken to clarify or supplement NRC's regulations and guidance on procurement and commercial-grade procurement.
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l In an Aavance Notice of Proposec Rulemaking, SECY 90-057, I-
" Acceptance of Products Purchased for Use In Nuclear Power l
Plant Structures, Systems,-and Components," the staff commented that;acoltional guidance may be useful to more specificaib describe the hRC's expectations for licensees' programs for concercial-grade procurement ano dedication and to provide additional guidance so that licensees could develop programs to detect counterfeit and substandard products.
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As stated in SECY-90-057, the staff believes that it may l
bs recessary to cevelop a proposed rule to more specif-ically acoress licensee actions necessary to ensure the quality of procured parts, equipn=nt, and material by
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upgracing procurement and.deaication programs.
- However, the staff also believes thtt if the industry implements
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the reconcendatior end initihtives in the action plan of l
the NUMARC huclear Plant,Equipnent Procurerent (NPEP)
Working Grcup, the NRC nay not need to continue the rule-naking process.
The NRC stnif-prefers that the industry upgrade its comercial-grade procurement ane etdication programs without additional rulemaking.
The NPEP Working Group is continuing to develop-in.plementation guidanto to meet the quality requirements cf 10 CFR Part SC, Appencix B.
To-improve its pertorn.ance in this program area, the industry should 1olicw the NPEP guidance, the characteristics of' l
t.fiective programs provioed by the NRC in Generic Letter l
69-02, and adoit1onal staff positions on iniplementation issues. The staff:will continue to develop. positions on the implementation of the regulations as warranted.
On April 27, 1990, the staff forwarced to the Nuclear Managenent anc Resources Council (NUMARC) for convrent~ a draft Generic Letter that described the NRC's expectations and provideo guidance for a licensee's program for commercial-grade procurement and dedication. The draft Generic Letter 6daresses three specific areas:
dedication processes, critical characteristics of procured items, And corrective action (look-back) programs. The draft Generic Letter was also placed in the Public Document Room.
Consnents have been ieceived and are under consideration.
Should the develcpient of a proposed rule become necessary, the staff will ccr.sioer the elements for the rule that are listed ir. Enclosure 4 to SECY-90-057. These elements include explicit requiren,snts for greater engineering invchen,ent in the program, procurement from Appendix B
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j manufacturers when feasible,-improvedireceipt inspection l
programs, establishment of a basis for accepting a vendor's:
1 statement of traceability, and improved vendor audits. The consideration of proposed rulemaking could result in changes to 10 CFR Part 50, Appendix B other regulations in 10-CFR Part 50, or possibly new regulations to address-procurement and dedication programs.
.The staff will continue to monitor industry actions to-determine wh' ar their progress warrants aichange in the staff conside-. ion of proposed rulemaking..
In this regard,.we onderstand that the NUMARC~ Board of-Directors voted favorably on the NUMARC procurement initiatives in late June.
1 Coordination: The Office of the General Counsel has reviewed this paper and has no legal objection.
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s M. W, 4 -
Tay1 a
ecutive Director i
for Operations DISTRIDUTION:
Commissioners OGC OIG CPA REGIONAL OFFICES EDO i
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