Text

Limited Appearance Statement of Bp Garde Re Lack of Third Party Independent Review of Actual Plant Condition
	ML20072S588
Person / Time
Site:	Midland
Issue date:	03/30/1983
From:	Garde B; GOVERNMENT ACCOUNTABILITY PROJECT
To:	;
References
	78-389-03-OL, 78-389-3-OL, 80-429-02-SP, 80-429-2-SP, ISSUANCES-OL, ISSUANCES-OM, ISSUANCES-SP, NUDOCS 8304070251
	Download: ML20072S588 (59)
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a3 f.F. -5 P 2 :13 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Atomic Safety and Licensing Board In the Matter of

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ASLBP Nos. 78-389-03 OL

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80-429-02 SP CONSUMERS POWER COMPANY

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Docket Nos. 50-329 OL

'(Midland Plant, Units 1 and 2)

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50-330 OL

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50-329 OM 50-330 OM LIMITED APPEARANCE STATEMENT Billie Pirner Garde of the Government Accountability Project (GAP) of the Institute for Policy Studies requests permission to make the following limited appearance statement pursuant to the provisions of 10 CFR S 2.715(a).

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I appreciate the opportunity to make the following statement to the Atomic Safety and Licensing Board concerning the Midland Nuclear Power Plant.

As members of the Board and the parties know, the Government Accountability Project is a project of the Institute for Policy Studies.

It is a national public interest organization that assists l

individuals, often called "whistleblowers," who expose waste, fraud or abuse in the federal workplace; or safety and health hazards within communities through GAP's Citizens Clinic for Accountable Government.

As an organization dedicated to protecting individuals 8304070251 830330 PDR ADOCK 05000329 w

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.. who have the courage to bring information forward on behalf of their fellow citizens, GAP has had a close working relationship with vari-ous Congressional and Senatorial committees, government agencies and other public interest organizations.

GAP has been actively involved in an investigation of the Midland Nuclear Power Plant since March 1982.

To date we have in-terviewed numerous workers and concerned citizens.

Workers' affi-davits have been submitted to the Region III Inspection and Enforce-ment Office.

At this time.the investigations into the allegations we submitted to the NRC are not yet completed.

We understand, from talking to our witnesses that the NRC Staff has recently begun con-tact and is proceeding with their inspections and investigations.

We anxiously await the results of those efforts.

We have also been actively involved in the review and analysis of the third party proposals that Consumers Power Company has made to the NRC Staff, which were offered in response to the July 1982 Advisory Committee on Reactor Safeguards (ACRS) letter f

to Chairman Palladino.

In that letter the ACRS withheld its final approval until after there had been a third party audit.

Since September 1982 we have submitted numerous letters, attended public meetings between the Staff and Consumers, and performed a detailed 1

comparative analysis of the plans proposed by Consumers to resolve the numerous questions that remain unanswered about the "as built" condition of the Midland plant.

l I have attached for inclusion in the record copies of the following GAP submittals:

(1)

An October 22, 1983 letter to Mr. James Keppler and

, Mr. Harold Denton, subject: " Midland Nuclear Power Plant, Units I

& II, Consumers Power Company Quality Assurance Program Implementa-tion for Soils Remedial Work; Consumers Power Company Midland Plant Independent Review Program" (Attachment 1);

(2)

The November 11, 1983 letter to Mr. James G.

Keppler and Mr. Harold P.

Denton, subject:

same as above (Attachment 2) ;

(3)

A February 8, 1983 " Analysis of Consumers Power Company's Proposed Construction Completion Plan" submitted in January 1983 by the Government Accountability Project to the NRC Staff for their review (Attachment 3) ;

(4)

A March 7, 1983 letter to Mr. Darrell Eisenhut detailing a number of concerns about the Construction Completion Plan (CCP),

the Independent Design and Construction Verification (IDCV), and the implementation of those plans (Attachment 4); and (5)

A March 10, 1983 letter to Mr. James Keppler outlining six specific questions, as yet unanswered, about the implementation of the CCP (Attachment 5).

These letters detail GAP's principal concerns and questions with the various proposals submitted by Consumers.

Some of these concerns have been addressed.

For example, we requested that the l

l IDCV include two systems, instead of one, and that one of the systems be a " troubled system":

specifically, the heating, venti-lation and air conditioning (HVAC) system be incorporated as one of the systems that the TERA Corporation included in the Independent Design Verification Program (IDVP).

Although the HVAC was not included as one of the major systems, in a March 18, 1983 letter from Mr. Darrell Eisenhut, the HVAC components that affect the

i

, control room was added as part of the IDVP.

We commend the efforts taken by the TERA Corporation and Stone & Webster personnel to detail their personal and corporate financial independence.

Finally, we appreciate the utility's efforts to date to honor our request that site visitation privileges be extended to one of our sources under conditions that scrupulously ensure protection of the source's identity and presence on site to identify con-struction defects.

A serious immediate concern remains, however, that we consider appropriate to raise to this Board through this limited appearance statement.

In light of Mr. Keppler's recent retraction of his

" reasonable assurance" about the Midland plant needs:

I am not prepared to place confidence in that program alone to provide reasonable assurance that CPC can complete the plant consistent with regulatory require-ments.

As a result, the NRC believes the following actions need to be taken to provide reasonable assu-rance that the Midland plant can be completed con-sistent with regulatory requirements:

1 An independent overview by a qualified outside organization of safety related work, as CPC comnits in its Construction Completion Program.

This overview should continue until such time as CPC's implementation of its quality assurance program has been demonstrated to the NRC Staff -

by sustained good performance - to be adequate....

(March 25, 1983 " Supplemental Testimony of James G. Keppler With Respect to Quality Assurance," Consumers Power Company (Midland Plant, Units 1 and 2), Docket Nos. 50-329 OM&OL and 50-330 OM&OL).)

Our question holds even more significance now:

Who is going to determine the extent of the problems at the Midland facility in order to determine the scope and adequacy of any remedial actions taken by Consumers, Bechtel and/or any third party?

D 8 In this regard, we reiterate the concerns as stated in our " Analysis of Consumers Power Company's Construction Completion Plan" (Attach-ment 3):

The CCP states:

"This section describes third party evaluations that have been pe-formed and are planned to assess the effectiveness of design and construction activity implementation. "

Yet, closer scrutiny of the proposal shows that it fails to in-clude even the most basic information about the promised third-party review.

In fact, although the CCP states that an INPO evaluation has been completed, there is no indication of what that report revealed.

Most significant, the entire CCP is premature until all the third parties eventually chosen have completed their evaluations.

The point of the third-party reviews is to define the QA violations and de-ficiencies at Midland.

By rushing into the CCP before that process has begun in some areas, the utility is putting the cart before the horse.

In effect, the utility's CCP is competing with the third-party pro-gram.

At best, the two " reforms" will be operating simultaneously, stumbling over each other.

Depending on the results of the outside reviews, CCP work may have to be redone -- consistent with the costly tradi-tion at Midland of doing the same work over and over.

I It is imperative that this Board recognize the reality of the weaknesses and delay related to the independent third party review l

that is supposed to guarantee the Midland facility is being built in accordance with the regulations that govern the construction of l

nuclear power facilities.

The reality includes:

(1)

There is no third party identified to date.

(2)

There is no plan or proposal offered as to the j

methodology which will be the basis for both the l

NRC's and the public's determination of the safety of the Midland facility.

(3)

Although the CCP (see figure 1-1 of the CCP) indi-cates that the third party review is an integral l

, part of the plan -- thereby giving it legitimacy --

in fact the third party is still only another promise.

No legitimate third party has or is overviewing the crucial steps now underway by the licensee to re-structure the Quality Assurance Program.

Apparently there will be no thorough independent review of the actual condition of the plant before work resumes.

The public is again left with only one option -- trust the licensee and the NRC.

We simply cannot do that.

As a result, we are today entering our appearance as counsel for Citizen Intervenor Barbara Stamiris.

Respectfully submitted,

$00S h BILLIE PIRNER GARDE Director, Citizens Clinic for Accountable Government of the Government Accountability Project of the Institute for Policy Studies 1901 Q Street, N. W.

Washington, D. C.

20009 202/234-9382 Date:

March 30, 1983 i

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GOVERNMENT ACCOUNTABILITY PROJECT ATTACHMENT 1 Institute for Policy Studies 1901 Que Street. N.W. Washington D.C. 20009 (202)234-9382 October 22, 1982 Mr. Harold R. Denton, Director Office of Nuclear Reactor Regulation Division of Licensing U.S. Nuclear Regulatory Commission Washington, D.C.

20555 Mr. J.G. Keppler Administrator, Region III U.S. Nuclear Regulatory Commission 799 Roosevelt Road Glen Ellyn, IL 60137 RE:

Midland Nuclear Power Plant, Units I & II

-Consumers Power Company Quality Assurance Program Implementation for Soils Remedial Work

-Consumers Power Company Midland Plant Independent Review Program This letter provides additiunal comments to the current negotiations between the Nuclear-Regulatory Commission ("NRC") and Consumers Power Company ("CPCo") regarding two major areas of concern to local citizens and our own staff:

1) soils remedial construction; and 2)

Independent Review Program.

On behalf of those former employees, local citizens.and the Lone Tree Council, the Government Accountability Proj ect (" GAP") reviewed the various proposals submitted by the licensee of an independent re-view program as well as their description of the independent soils assessment program.

Our questions and comments about both programs are outlined below.

We appreciate the opportunity to provide this information.

Based on our review of the licensee proposals, we are asking the NRC to not approve the independent audit proposal in its present form.

Further, we request on behalf of the local residents that' live and work around the plant that the details of the' independent contract be finalized in a series of public meetings--one in Jackson, Michigan (the corporate home of CPCo) and one in Midland, Michigan (the plant site).

Further, we ask that the public comment offered at these two maetings, as well as this letter, be included in the analysis of CPCo's proposal.

Harold R. Denton October 22, 1982 J.G. Keppler This request is consistent with Mr. Keppler's stated intention to invite public comment surrounding Midland's problems; and also in line with Region III. policy surrounding the Zack controversy at LaSalle, which allowed several public participants to comment and suggest improvements in the independent audit of the Heating, Ven-tillating and Air Conditioning ("HVAC") equipment imposed on Common-wealth Edison by the NRC.

As you know, it is the position of our project that the only avenue to restore public confidence in a nuclear power plant that has suffered from extreme loss of credibility is to offer the public the opportunity to participate in the decision-making process.

This is particularly applicable to the situation at the Midland plant.

Clearly the utility and the regulators are aware of the substantial problems that have occurred in building the Midland plant.

Indeed, it is the history' of these problems that have led to.this meeting in the first place.

Yet, apparently there has been little desire to tackle the real issue of corporate negligence in the construction of this plant.

Background

The Government Accountability Proj ect is a project of the Institute for Policy Studies.

It is a national public interest organization that assists individuals, often called "whistleblowers," who expose waste, fraud or abuse in the federal workplace; or safety and health hazards within communities through GAP's Citizen's Clinic for Accountable Government.

As an organization dedicated to pro-tecting individuals who have the courage to bring information forward on behalf of their fellow citizens GAP has had a close work-ing relation with various Congressional and Senatorial committees, government agencies and other public interest organizations.

In recent years GAP has been approached by a growing number of g

nuclear witnesses from various nuclear power plants under construction.

In keeping with its objectives the GAP Whistleblower Review Panel and the Citizens Clinic Review Panel have directed the staff to pursue aggressively the complaints and problems that nuclear workers bring forward.

Our first case involving a nuclear witness began when we were approached by a Mr. Thomas Applegate about serious problems at the William H.

Zimmer. Nuclear Power Station near Cincinnati Ohio.

As you are aware Mr. Applegate's allegations and the subsequent investigations, reinvestigations, Congressional inquiries, and intense public scrutiny have revealed the Mr. Applegate exposed only the tip -of the iceberg of problems.

Zimmer was recently described in the Cleveland Plain Dealer as "the worst nuclear construction project in the midwest, possibly the country...." (October 3,1982. ) *

This article also referred to the Midland Plant.

Mr. John Sinclair, an NRC inspector, responded to the question of whether there are other "Zimmers" around the country by stating that Zimmer's problems

'kere similar to those found at [ Midland]."

Harold R. Denton October 22, 1982 J.G. Keppler Following the GAP staff work at Zimmer we received a request from the. Lone Tree Council of the Tri-City Michigan area to pursue worker allegations of maj or problems at the Midland Nuclear Power Plant in. Midland, Michigan.

Our preliminary investigation resulted in six affidavits being filed with the Nuclear Regulatory Commission on June 29, 1982.

Since then we have filed an additional four affidavits resulting from the HVAC quality assurance breakdown revelations.

We are also preparing an expanded affidavit of one of our original witnesses, Mr. E. Earl Kent, of serious welding.

construction problems at the Midland site.

Other worker allegations-ranging from security system breakdowns to worker safety problems have'come to our attention at an alarming rate.

The Citizens Clinic Review Panel a panel of seven respected individuals, met recently to review the status of Clinic cases.

It was their unanimous recommendation to begin a thorough and aggressive probe of Midland's problems.

We look forward to beginning that probe shortly.

Unfortunately our previous experience at Zimmer and LaSalle has given us a good idea of what to look for and what we will find.

I.

SOILS REMEDIAL WORK The 1980/81 SALP Report, issued April 20, 1982 gave CPCo a Category 3 rating in soils and foundations.

A Category 3 rating, according to the SALP criteria states:

Both NRC and. licensee attention should be-increased...

weaknesses are evident; licensee resources appear to be strained or not effectively used such that minimally satisfactory performance with respect to operational safety or construction is being achieved.

Clearly this rating, the lowest rating that can be given was deserved by the licensee.

Although the soils settlement problems have l

resulted in the most serious construction problems that CPCo has faced, the SALP report points out in its analysis:

In spite of this attention, every inspection involving I

regional based inspectors and addressing soils settle-I ment issues has resulted in at least one significant item of non-compliance. (p. 9)

This trend continues to the present date.

As recently as May 20, 1982, Mr. R.B. Landsman the soils specialist of the Region III Midland Special Team discovered significant differences between the

-as-built condition of the plant in relation to the soils remedial work

- and the approved April 30, 1982 ASLB order.

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-Harold R. Danton -

October 22, 1982 J.G._~Keppler Although Mr. Landsman had no quarrel with the technical aspects of the excavation in question he had a significant disagreement with the licensee's failure to notify NRR of their plans.

He aptly captured the' essence of the problem in his August 24, 1982 memo to Mr. W.D. Shafer, Chief of the-Midland Section:

Since the licensee usually does not know what is in the ground or-where-it is, as usual the 22 foot duct bank was found at approximately 35 feet.

It

.also was not in the right location.

. in addition, they inadvertently drilled into the duct bank.

On August 20, 1982 Mr. Keppler requested the Office of Investigations to investigate two instances of apparent violation of the April 30, 1982 ASLB Order.

This latest experience with the licensee's failure to comply with NRC requirements is indicative of the reasons that the Advisory Committee on Reactor Safeguards, in a letter to NRC Chairman Nunzio

-Palladino, deferred its approval of full power operation of the Midland plant until an audit of the plant's quality.

This QA pro-gram audit is to include electrical, control, and mecha'nical

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systems as well as underground piping and foundations.

Now CPCo is again.asking for "another chance" to get its corporate act together.. They offer Lto institute a series of steps to " enhance the implementation of the quality program with regard to the soils remedial work " (Letter to Mr. Harold Denton from Mr. James Cook, September 17, 1982, p. 2.)

Unfortunately, as pointed out below, the program on' soils remedial work leaves much to be desired if public confidence is to be restored in the-ultimate safety of the Midland plant.

A.

Consumers Power Company Retention of Stone & Webster as a Third Party to Independently Assess the Imple-mentation of the Aux 111ary Building Underpinning Work Based on a careful investigation of Stone & Webster's ("S&W")

performance in the nuclear power industry.this decision, already made, may unfortunately for the licensee prove to be as disasterous as the pre-load operation of several years ago.

Our assessment is based on information obtained from the NRC Public Documents Room, private audits of S&W's performance on nuclear projects, legal briefs from intervenors, NRC " Notice of Violation" reports, public source information, and interviews with intervenors, engineers, as well as current and former employees of the NRC familiar with S&W's work.

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r Harold-R. Denton October 22, 1982 J.G Keppler 1.

' History S&W has been the chief contractor and architect / engineer at eight plants now operating, and for six plants presently under construc-tion.

In reviewing numerous documents concerning two nuclear plants now under construction at which S&W was, or still is, the Project' Manager and chief architect / engineer, this investigation has~ documented S&W's reputation for massive cost overruns at its nuclear construction sites, major problems with Quality Control and contruction management, and significant design errors at a number of these plants.

The Shoreham plant on Long Island, N.Y.,

and the Nine Mile 2 plant near Syracuse, N.Y., are both infamous nuclear boondoggles constructed by S&W..

a) Nine Mile 2

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The Nine Mile 2 ' plant has been described as a " disaster area."

Cost overruns have gone from an original 360 million to 3.7 billion dollars, and the NRC has cited the plant for numerous violations.

According to an article in the Syracuse. Post-Standard newspaper (May 17, 1982), "Nearly averything that can go wrong with a major construction project has beset Nine Mile 2."

In 1980 Niagara Mohawk,-the utility which is building the plant, hired the firm of_ Black and Veatch Consulting Engineers to conduct and " independent assessment" of the management systems, costs, and work accomplished at the Nine Mile 2 plant.

The final Project Evaluation Report (September 1980) was extremely critical of S&W's performance, describing their work as " poor," " lacking" and

" confused."

The evaluation found 127 problem areas at the plant.

Below is a list of some of the problems S&W were explicitly cited for:

Failure to effectively implement the Quality Control program.

Significant overruns against budget.

Ineffective Proj ect Management Reports.

Inadequate mamagement control of engineering work.

Engineering Management System was "never properly imple-mented on the Unit 2 proj ect."

" Key components of good cost control are not present.

Inadequate " problem identification, impact analysis, and descriptions of corrective action plans."

Failure to keep abreast of regulatory changes.

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o Harold R. Denton October 22, 1982 J.G. Keppler Drawings used for construction based on unapproved documents.

Inadequate construction pro-planning /constructability review.

Inaccuracies in the engineering and. procurement status which have diminished user confidence.in existing reports.

Many.of the conditions cited in this audit have not been improved.

According to a-May 17, 1982 inspection letter from the NRC, S&W has failed to remedy these identified problems:

There is a significant problem in the timeliness of 4

corrective action resulting from S&W responses to Niagara Mohawk audit findings.

Determination of corrective action to be taken is repeatedly delayed due to either belated answers by S&W and/or inadequate responses by S&W.

NMPC Quality Assurance Management has been unable to' correct the problem.

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On top of these problems, the NRC cited S&W, in the May 17, 1982 letter,Lfor "significant" nonconformances with NRC regulations.

One major-problem was found in S&W's philosophy on QC.

Instead of analyzing problems to find their causes, S&W would just put the identified mistake into " technical acceptability."

According to the NRC, this. caused a repetition of problems:

The lack of identification and correction of the root cause of the nonconformance has led to numerous noncon-

.formances being written in a short period of time involving the same-functional area.

The QC program was also cited for its lack of training and its high personnel turnover.

S&W also failed to properly oversee subcontractors at Nine Mile 2.

For example,~over 300 bad welds were identified as made by one sub-contractor.

These faulty welds were discovered after S&W l-inspectors had certified that they met construction standards.

(Post-Standard, May 19, 1982.)

b)

Shoreham S&W was the Project Manager and chief architect / engineer at Snoreham.

In September.1977 the Long Island Lighting Company ("LILCo"), the utility which is building the Shoreham plant, removed S&W as Project Manager.

Although initially denied, LILCo reports obtained by intervenors in discovery, have documented LILCo's dissatisfaction with S&W--dissatisfaction which led to their termination.

Harold R. Danton October 22, 1982 J.G. Keppler In an April 1977 report-(Shoreham Nuclear Power Station Schedule and Construction Management Evaluation), prepared by LILCo's Project Manager and other LILCo engineers, S&W was criticized and the utility was urged to terminate their services.

Examples of S&W's unsatisfactory performance outline in this report were:

Design problems.

Inaccurate monitoring and controlling systems.

Unnecessary and redundant procedures.

Responsibility for cost overruns.

Dear Sirs:

This letter provides a comprehensive review of the written materials and presentations from the October 24 and November 5, 1982 meetings between Consumers Power Company (CPCo) and the NRC at the Bethesda offices. We are submitting these comments on behalf of those former employees, local citizens and the Lone Tree Council of the tri-city area surrounding the plant.

We are pleased with a number of results to c5 ate; specifically the inclusion of the Tera Corporation's vertical slice review, the expertise of Parsons and Brinkerhoff, and the impressive qualifications of certain personnel selected to perform the independent assessment. Further, we are pleased with the consensus for the independent auditors to submit their reports simultaneously to CPCo and the Nuclear Regulatory Commission.

In general, however, we remain skeptical of the plan being provided by CPCo to allay legitimate NRC and public concerns over the safety of the Midland project.

Although we are operating at a handicap due to the generalized nature of CPCo's presentations, the following specific concerns and observations may be helpful as you review the final CPCo proposal.

I.

Summary of October 22, 1982 Recommendations On October' 22, 1982 GAP provided an extensive review of the three Consumers Power Ccunpany letters outlining the utility's proposed relief. The review

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Mr. Harold P. Centon Mr. James G. Keppler November 11, 1982 included a number of specific concerns which remain unresolved, as well as pertinent recommendations.

Based on our review of the licensee proposals (and subsequent presentations) we are asking the NRC:

1.

To withhold approval of the independent audit proposal in its present form.

To require two further public meetings, in Michigan, that finalize 2.

the details of the independent contracts, a.

At least one of these meetings should be in Midland, so that local residents can be informed;' and one of these meetings should fully explain the proposed single-point accountability (SPA) proposal, including having the individuals who are to perform this function explain their personal understanding of their respective responsibilities.

b.

Further, GAP recommends that:

1 1.

Final approval of the SPA individuals rest with the NRC; 2.

SPA officials should commit to at least one meeting and site tour with public nuclear employee witnesses to re-solve their allegations; 3.

SPA officials should be accessible to the public on a regularly scheduled basis to discuss the status of the work.

c.

The second meeting should provide an opportunity for all the contracted independent auditors to meet directly with the NRC staff, in public, and review the terms and requirements of their contracts.

3.

To require the expansion of the proposed training sessions, including NRC review of the training materials relating to NRC regulations and requirements.

4.

To increase direct contact between NRC regicna?. management officials and QA/QC personnel performing work on the soll remedial project, including written materials for each employee, a site visit by Mr. Keppler, and an "open door" policy with resident inspectors.

5.

To reject the INPO evaluation by Management Analysis Company as the i

independent assessment.

(Although GAP believes the INPO evaluation may be beneficial to CPCo management, it does not meet the minimum requirements for either independence or a comprehensive evaluation.)

6.

To reject the selecticn of Stone & Webster for tha independent-assessment of QA implementation.

7.

To request that the entire record, including all relevant, material raw data,be provided to the MRC with the weekly and monthly reports.

[

b Mr. Harold P. Denton Mr. James G. Keppler

-3, November 11, 1982 8.

To require a mandated percentage of field verification of the systems being reviewed.

Finally, GAP provided a series of specific reconmendations for the charters of the independent contractors and subcontractors. These are noted below:

1.

The independent contractor should be responsible directly to the NRC, submitting all interim and final product simultaneously with CPCo and the NRC.

2 The independant contractor should do a historical assessment of CPCo's prior work,* including a frank report of the causes of the soils settlement problem.

3.

The charter should ensure that, once hired, CPCo cannot dismiss the independent contractor from the project without prior notice to the NRC and an NRC-sponsored public meeting to justify the decision.

4.

The charter should require that each auditor, at least five already identified, subcontract any services for which its direct personnel are not qualified.

5.

The charter should require that the proposed methodology be dis-closed: specifically selection criteria and size of the samples for inspections and testing.

6.

The charter should require the auditors to provide calculations demonstrating that it is possible to adequately complete its work during the proposed timeframe.

7.

The charter should require the auditor to support its proposed methodology through references to established professional codes (ASIM, ASME, ANSI, AWS, etc. ).

8.

The charter's should require all auditors to report all safety-related information directly to the NRC.

9.

The empl'oyees and auditors should demonstrate that the personnel assigned to the project are free from conflicts of interest.

10.

The auditors must recommend corrective action, and then control its implementation.

Our further comments can be categorized into priority items and methodology.

A..

Priority Items 1.

No soils work should be allowed to go forward until all cuestions on implementation review process are resolved.

Mr. Harry P. Denton Mr. James G. Keppler November 11, 1982 a.

Lack of independence.

At the November 5,1982 meeting it was obvious that the most basic questions about Stone & Webster's (S&W) work had not been resolved. The disclosure that S&W in fact had done previous work for CPCo was particularly disturbing.

This places S&W in the same position as MAC.

According to the "Independency Criteria" outlined in the February 1,1982 letter from Chairman Palladino to Congressman John Dengell, as well as the previous independence criteria used in Region III, S&W must be rejected.

b.

Conflict of interest. Further, the conflict-of-interest clause pertaining to "significant amounts" of stock has not been ade-quately explained, nor has the specific stockholding been ade-quately disclosed for the members of S&W's management review team and the S&W corporation itself.

Insignificant conflicts should be fully disclosed and explained, subject to NRC approval, c.

Lines of authority. Additionally, S&W and Consumers representatives could not provide adequate answers to explain who has final deci-sionmaking authority within and between S&W, Bechtel and Consumers.

It was quite clear that Consumers "does not anticipate" any prob-lems between the numerous involved parties. This optimistic attitude belies a sense of security that is inconsistent with both the potential and the historic problems between Bechtel and Stone & Webster.

(Specifically, GAP recommends the use of the-NRC dissenting professional opinion procedure throughout this process.

2.

The CPCo option to provide QA implementation for only a 90-day period must be dropped.

As proposed, the 90-day initial assessment period will cover only the trial period of construction. This limited scope cannot realistically present any assurance that CPCo and Bechtel have reversed a decade-long l

history of failures and bungling. Anything less than 100% review will I

fall short of accomplishing the goal of the proposed remedy.

3.

Until the specific methodology of how S&W is coing to evaluate the adequacy of technical, construction and cuality procedures is dis-closed, no approval should be issued.

Although the evaluation will be cumulative, it is critical that NRC staff and the public are aware of the methodology for S&W's review.

Otherwise, faulty fact-finding techniques will be faits accompli when the public has an opportunity to review them.

4.

Release and Review of the Project Quality Plan for soils QA review is essential.

l l

This document evidently holds the key to S&W review.

It is through this Plan that the actual implementation will be reviewed and l

Mr. Harry P. Denton Mr. James G. Keppler November 11, 1982 monitored.

It is critical that this document be released for public review and analysis before any NRC approval is given.

5.

It is critical that CPCo commission an independent assessment team as quickly as possible.

1.

As indicated previously, GAP cannot accept MAC and the INPO evaluation as a substitute for an independent review.

(See October 22, 1982 letter, pp. 17-18.)

As a result we have re-frained from providing specific comment on the MAC proposals.

However, some of the major programmatic weaknesses are listed below--

- lack of historical analysis of problems to get to the " root cause," leaving unanswered questions with regards to the causes (contradicting the ACRS's June 9,1982 request to the NRC staff);

- lack of trending of systems or nonconformances to identify specifically weak areas of construction or QA/QC functions;

- time guidelines dictated by the utility, hampering the independence of any company to define the scope of necessary evaluations;

- lack of specified criteria to identify the qualifications of the key factfinders and inspectors;

- reporting procedures that exclude independent contact with the NRC;

- evaluation / contact report that provides a weak substitute for Nonconformance Reports without verification of corrective actions

- lack of recommendations for resolutf at identified weak-nesses; and

- lack of recognition for the gravity of Midland's problens, evidenced by attempting to substitute INPO for aggressive independent assessment.

6.

Expansion of the role performed by Tera Corporation is appropriate.

a.

The Tera Corporation proposed to look at the Auxiliary Feedwater System for its independent safety system. This system has been reviewed several times in previous audits. GAP recommends that this system be rejected in favor cf a combination of two systems:

one system under controversy -- the VAC system specifically*/ --

and another system yet unidentified. for major review or auditing.

/

-- In an October 12, 1982 letter from Mr. J. G. Keppler to Ms. Billie Carde, it was suggested that the independent assessment would resolve the questions of the

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Mr. Harry P. Denton Mr. James G. Keppler 6-November 11, 1982 b.

Tera's work, although admirable, failed to provide an acceptable or even identifiable level of field verification of the as-built condition and failed to explain the disclosed inconsistencies in the scope of its proposed field verification effort.

It is our recommendation that Tera provide additional qualified personnel to conduct comprehensive field review of the system (s) under scrutiny.

c.

Tera should be removed from any reporting line through MAC, answering directly (and simultaneously) to the NRC and the licensee with reports and

findings.

(This was already reflected in Tera written presentation, but was not clear in the MAC/CPCo ccaments at the October 24 meeting.)

B.

Methodology Generally, the specific methodology for assessments / audits was non-existent.

Without the information on such issues as the size of samples, specific system criteria for examination, evaluation criteria, forms used for evaluations and reporting procedures, it is impossible to accept any re-view as adequate.

The Tera's presentation was a refreshing deviation from the otherwise public relations-style presentations.

It is our request that any further meetings be delayed until after CPCo provides adequate comprehensive metbo-dologies for analysis.

(Perhaps the NRC could provide examples of parti-cularly noteworthy independent reviews to CPCo in an effort to demonstrate a truly broad scope assessment.)

It is our earnest hope that this methodology, once provided, will provide l

a basis to begin restoration of public confidence in the plant. Anything short of an "open book" at this point will fall short of the goals of this expensive effort.

We have attempted to provide a thorough review of the massive independent assessment efforts at the Midland site.

But a comprehensive effort is impos-sible based on the minimal public disclosure to date. As a result, we request j

the following specific plans or documents from the NRC in order to finish our evaluation.

1.

The details of the Quality Improvement Plan (QIP) (September 17 i

letter to Denton).

2.

The Project Quality Plan (S&W presentation, November 5,1982) 3.

The Single Point Accountability System. (September 17, 1982 CPCo letter to Denton)

(footnote continued)

HVAC systems adequacy.. It does not appear to be the case in any of the l

presentations thus far.

J Mr. Harry P. Denton Mr. James G. Keppler November 11, 1982 4.

The criteria for selection of the independent auditors 5.

The criteria for choosing the specific safety system 6.

A reporting (communication line) chart, from the worker up and the NRC down 7.

The conflict-of-interest disclosures for all independent assessment corporations, individuals and management 8.

The training materials to be used as part of the QIP 9.

The criteria for selection of field verification inspections by Tera personnel 10.

The breakdown of S&W personnel with nuclear experience by plant site.

II.

Conclusion Finally, we wish to thank you for your inclusion of public comment into this procedure.

It is a positive step forward on behalf of public safety issues.

We look forward to notification of the next meetings on the independent assess-ment of the Midland plant, as well as notification of any other pertinent meetings on the Midland project. As the role of the Government Accountability Project in the Midland investigation grows, it seems appropriate to repeat an oft-used phrase of Mr. James G. Keppler about the William H. Zimmer Nuclear Power Station. The "real sin" at Zimmer is that the plant is in the ground at 974 complete.

Since Midland is far from complete, there remains an opportunity to avoid the sins of Zimmer -- but it will take concerted effort by all parties at this critical juncture.

Sincerely, O

?m

4 a"a BILLIE P. GARDE Director Citizens Clinic for Accountable Government BG/my

ATTACHMENT 3 ANALYSIS of CONSUMERS POWER COMPANY'S PROPOSED CONSTRUCTION COMPLETION PLAN By the GOVERNMENT ACCOUNTABILITY PROJECT CITIZENS CLINIC On behalf of the LONE TREE COUNCIL Presented to the NUCLEAR REGULATORY COMhBSSION AT MIDLAND, MICHIGAN February 8,1983 Prepared by:

Billie Pirner Garde, Director, Citizens Clinic Thomas Devine, Legal Director Marya C. Young, Investigative Staff Government Accountability Project of the Institute for Policy Studies 1901 Que Street, N. W.

Washington, D. C. 20009 L

On behalf of the Lone Tree Council and concerned Michigan citizens and nuclear workers, the Government Accountability Project (GAP) recommends that the Nuclear I

Regulatory Commission (NRC or Commission):

1) withhold approval of the Construction Completion Plan (CCP) proposed by Consumers Power Company (Consumers) for the Midland Nuclear Power Plant until the Commission discloses the quality assurance (QA) violations that made the CCP necessary;

2) restructure the multiple proposed audits / third-party reviews into one comprehensive independent third-party review;

3) require a separate public meeting to deal specifically with the specific metho-dology and procedures to be used in the third-party review;

4) modify the Construction Permit to maintain suspension of all safety-related work until the entire third-party review program, including but not limited to third-party selection, scope, procedures and other methodological considerations, is approved and incorporated into the Construction Permit;

5) request Consumers to release the new cost and projected completion date estimates; and

6) immediately halt the ongoing soils work until the quality assurance implemen-tation auditor is approved.

I. BACKGROUND The Government Accountability Project is a project of the Institute for Policy Studies (IPS), Washington, D.C.

The purpose of GAP's three clinics -- Federal Government Clinic, Citizens Clinic and Nuclear Clinic --is to broaden the understanding of the vital role of the public employee, private citizen and nuclear worker, respectively, in preventing waste, corruption or health and safety concerns. GAP also offers legal and strategic counsel to whistleblowers, provides a unique legal education for law student

. interns, brings meaningful and significant reform to the government workplace, and

exposes government actions that are repressive, wasteful or illegal, or that pose a threat to the health and safety of the American public. Presently, GAP provides a

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. program of multi-lev (, assistance for government employees, citizens and corporate employees who report illegal, wasteful or improper actions. GAP also regularly monitors governmental reforms, offers expertise to Executive Branch offices and agencies, and state and local governmental bodies, and responds to requests by Congress and state legislatures for analysis of legislation to make government more accountable to the public.

In March 1982, GAP's Citizens Clinic became actively involved with the Midland Nuclear Power Plant. The Lone Tree Council asked GAP to pursue allegations from workers of major problems at the Midland plant. After our preliminary investigation, we compiled six affidavits which we filed with the NRC on June 29, 1982 Since then we have filed four additional affidavits resulting from the heating / ventilation / air conditioning (HVAC) systemt quality assurance breakdown revelations. We are also preparing an expanded 4

affidavit from one of our original witnesses, Mr. E. Earl Kent, who has alleged serious welding construction problems at the Midland site. Other alarming allegations, ranging from security system breakdowns to worker safety problems, have come to our attention recently. As a result, we have expanded our investigation of the Midland plant.

In October and November 1982, GAP participated in two other public meetings at NRC offices in Bethesda, Maryland. These meetings dealt with Consumers' proposals to the NRC Staff on a soils remedial construction implementation audit and an independent review program that was to assure the Staff of construction quality and the "as-built" condition of the facility. GAP submitted its analysis of the September 17 and October 5 proposals in October 27 and November 11 letters, respectively. The GAP comments re-vealed substantial weaknesses in the programs, inadequate information to judge program adequacy, and basic lack of independence of the proposed main independent review con-tractors.

Following those meetings, the NBC Staff-- (1) rejected the Management Analysis Corporation (MAC) due to lack of independence; (2) requested that the Terra Corporation review a seco id safety system in its " vertical slice" plan; (3) requested expansion of the i

review of the "as-built" condition of the plant; and (4) failed to take a position on the Stone ll

& Webster audit of soll underpinning work.

l l

In late November the NRC Region III Special Section on the Midland plant completed an extensive inspection of the hardware and materials in the nuclear plant's diesel gene-l rator building. According to NRC public statements,.this inspection revealed major l

I

. problems related to the quality assurance of the plant and included an extensive backlog of quality assurance / quality control documentation, inability to provide materials trace-ability, unqualified and/or uncertified welders, and other serious problems.

Yet, in spite of the major revelations of inadequate construction practices, in late December the NRC Staff permitted soils remedial work to begin. It is GAP's position, well known to the Staff, that this premature approval violates the June 1982 request of the Advisory Committee on Reactor Safeguards (ACRS) to NRC Chairman Nunzio Palladino.

The June 8 letter further states that ACRS would defer its own " recommendation regarding operation at full power until we have had the opportunity to review the plan for an audit of plant quality...." This assessment, acccrding to the letter, should include "... Midland's design adequacy and construction quality with emphasis on installed electrical, control, and mechanical equipment as well as piping and foundation... design and construction problems, their disposition, and the overall effectiveness of the effort to assure appropriate

. quality. "

Finally, in the past two months GAP has continued its attempt to determine the seriousness of the situation and the adequacy of proposed solutions for the Midland plant.

Our efforts at working with the Office of Inspection and Enforcement (IE) and Office of Investigation (OI) staffs have been frustrating. For example, although NBC letters and i

public presentations responding to GAP's October 22 and November 11 requests were informative, they failed to provide the key methodology necessary to assess the adequacy l

of the program. When GAP investigators attempted to pursue the questions at the public l

meeting, they were told "to allow the NRC time to ask for those documents." (NRC Public Meeting, Bethesda, Maryland, November 5,1982.) Subsequently, GAP repeated the request in its November 11 letter. Over two-and-one-half months after the original request, GAP j

finally received the NRC's response: "You may wish to request access to the documents 1

l-from Consumers Power." (December 14,1982 letter from James G. Keppler to Billie Garde.)

It is clear that the NBC Staff plans to evade or ignore public requests for the minimum information necessary to complete a responsible review of the proposed independent audit.

Our experiences at the William H. Zimmer plant in Ohio and at the LaSalle plant in Illinois have led us to be extremely skeptical of the NRC Staff's conclusions about the safety of nuclear power plants. In those cases the Staff either deliberately covered up or i

, missed major QA violations at plants 97% and 100% complete, respectively. To illustrate, after the Staff virtually ignored GAP analysis and granted approval for full power operations at LaSalle, the plant was able to operate for less than 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> before being shutdown due to a hardware breakdown. At Zimmer, the Staff-epproved Quality Confirmation Plan was so ineffective that on November 12,1982 the Commission suspended all safety-related i

construction.

As a result, there is no basis for confidence in an NRC-approved CCP on faith.

The basis for this extraordinary remedy must be full disclosed, as well as the methodology for an independent review. In order to accomplish this goal, the Regional Administrator should be suspending all construction until the above recommendations (infra, at 1) are incorporated into the Construction Permit.

II. GROUNDS FOR SUSPENSION OF A CONSTRUCTION PERMIT i

i A. Legal Requirements The law gives the Commission broad discretion to revoke, suspend or modify the I

construction permit of an NRC licensee. 42 U.S.C. 82236 states >. hat:

A license or construction permit may be revoked, suspended or modified in whole or in part, for any material false statement in the j

application for license or in the supplemental or other statement of fact required by the applicant; or because of conditions revealed by 1

the application for license or statement of fact or any report, record, inspection, or other means which would warrant the Commission to refuse to grant a license on an original application; or for failure to construct or operate a facility in accordance with the terms of the i

construction permit or license or the technical specifications in the application; or for the violation of or failure to observe any of the l

terms and provisions of this chapter or of any regulation of the l

Commission.

Part 50.100 of Title 10 of the Code of Federal Regulations states the same criteria for the revocation, suspension or modification of a construction permit.

The NBChhas a mandatory duty to exercise this authority when necessary. According -

to the decision in Natural Resources Defense Council v. U.S. Nuclear Regulatory Commis-sion, 582 F.2d 166 (2nd Cir.1978), under the Atomic Energy Act of 1954, the NRC is required to determine that there will be adequate protection of the health and safety of the public. The issue of safety must be resolved before the Commission issues a construction permit. (Porter Cty. Ch. of Izaak Walton League v. Atomic Energy Commission, 515 F.2d

. 513, 524 (7th Cir.1975).).

B. Criteria to Exercise Discretion According to 10 C.F.R. 52.202, the NRC "may institute a proceeding to modify, suspend, or revoke a license or for such other action as may be proper by serving on the licensee an order to show cause which will: (1) allege the violations with which the licensee is charged, or the potentially hazardous conditions or other facts deemed to be sufficient ground for the proposed action." As interpreted by the Proposed General Statement of Policy and Procedure for Enforcement Actions, published in the Federal Register, 44 Fed.

R_eg. 66754, Oct. 7,1980 (10 C.F.R.Il2.202, 2.204), suspending orders can be used to remove a threat to the public health and safety, the common defense and securityor the environment. More specifically, suspension orders can be issued to stop facility con-struction when further work would preclude or significantly hinder the identification and correction of an improperly constructed safety-related system or component; or if the licensee's quality assurance program implementation is not adequate and effective to provide confidence that construction activities are being properly c~arried out. Moreover, orders can be issued when the licensee has not responded adequately to other enforcement action or when the licensee interferes with the conduct of an inspection or investigation or for any reason not mentioned above for which license revocation is legally authorized. In order to help determine the significance of violations within this list, the Commission established

" severity categories" ranging from the most fundamental structural flaws (Sevnity I), to minor technicalities (Severity VI). 44 Fed.R_eg. at 66758-59.

Region III's enforcement criteria are consistent with these guidelines. For example, in a February 26, 1981 meeting on the Zimmer plant, Regional Administrator Keppler explained that if there is faulty construction and the program to control the problem is inadequate, there is no choice but to stop the project. This criterion was illustrated through the example of an across-the-board breakdown in a quality assurance program.

(February 26,1981 Transcript of Taped Meeting Between Members of the Region III Staff and Representative of the Government Accountability Project and Mr. Thomas Applegate, at 127,129.)

7 I

l C.

Specific Bases for Suspension l

The Region III Staff has characterized the problems at Midland as both extremely l

l serious and_directly relating to a quality assurance breakdown.

(Detroit Free Press, i

. December 5,1982.)

In light of two previous amendments to Mr. Keppler's testimony before the Atomic Safety and Licensing Board and a pending third revision, it is apparent that the only course of action available to the NRC is to modify the construction permit now, before construction 3

resumes.

1. Safety-related defects GAP's review of inspection reports, interviews with nuclear workers, and review of the ASLB hearing testimony reveals an historical pattern ofincreasingly significant safety-I related problems at Midland, including failures to comply with the law and NRC regulations, as well as to correct past non-compliances.

Although the GAP investigation and analysis of NRC records is far from complete, significant threats to the safety of the Midland plant include the following:

a. Welder qualification 10 C.F.R. 50, Appendix B, Criterion IX requires--

Measures shall be established to assure that special processes, including welding, heat treating, and nondestructive testing, are controlled and accomplished by qualified personnel using qualified procedures in accordance with applicable codes, standards, speci-fications, criteria, and other special requirements.

At Midland welder qualification problems are well known to the public. On December 2, 1982 Consumers laid off all of the welders of the Zack Company. They were trained by a vendor, Photon Testing, that was not NRC-approved. Although Consumers has publicly characterized this as "only a paper work problem" (Norman Saari to local NBC Channel 5 television, January 1982), it remains a serious unanswered question about the Midland plant. Until the public knows the extent of " uncertified / unqualified welders, it is virtually impossible to determine the adequacy of any plan -- short of a 100% reinspection of all unquallfled welds perfccmed by welders whose qualifications have not been verified.

2. Documentation and care of welding equipment As seen above, Criterion IX requires careful verified maintenance of welding equipment. For example, portable ovens, or " caddies," must be plugged in at all times, except during transport to and from the rod shack. Affidavits submitted by GAP in June

- reveal serious problems with welding equipment, welding rods, and a failure t.o comply

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with either professional codes or NRC requirements.

In fact, the NRC's own report into the initial Zack allegations conarmOJ that the welding rods had not been adequately controlled by attendants. Attendants did not even know that the weld rods were to be heated.

At least one caddy was slightly warm and another "relatively cold." The ovens apparently had been unplugged for "quite a while."

The QC inspector also found welding equipment that was uncalibrated. /

3. Inadequate corrective action for welding violations Of course, once violations are identified, the utility is legally obligated to correct them. 10 C.F.R. 50, Appendix B, Criterion XVI, requires, in part--

Measures shall be established to assure that conditions adverse to quality such as failures, malfunctions, deficiencies, deviations, defective material and equipment, and nonconformances are promptly identified and corrected. In the case of significant conditions adverse to quality, the measures shall assure that the cause of the condition is i

determined and corrective action taken to preclude repetition.

It is all too clear that Consumers did not take seriously the $88,000 fine for identified Zack deficiencies or the order to ensure compliance with the law. The December 1982 Zack welder lay-off may be prophetic of what the public can expect if Consumers is put in charge of the plant's completion.

4 Electrical cables 10 C.F.R. 50, Appendix B, Criterion XV requires--

Measures shall be established to control materials, parts, or components which do not conform to requirements in order to pre-vent their inadvertent use or installation. These measures shall include, as appropriate, procedures for identification, documen-tation, segregation, disposition, and notification to affected or-ganizations. Nonconforming items shall be reviewed and accepted, rejected, repaired or reworked in accordance with documented procedures.

GAP witnesses revealed widespread inaccuracies in the use of electrical cables critical to safe operation of the plant, and shutdown in case of an accident. In September 1982 the NRC ordered 100% reinspection of all cables on site. Currently, the public has no idea how many nonconforming cables are being found on site. Witnesses inside the plant have reported to GAP that only a small percentage of those discovered are being

/

- NRC Region III investigation into allegations of Mr. Dean Darty March 1979.

4 l reported. In one affidavit, a witnessereported that others have been replaced without documentation.

The violations summarized above provide only a few examples of the suspect safety components at Midland. Other whistleblowing disclosures to Region III referred to welding standards below ASME specifications; undersized welds; anchor bolts improperly installed; excessive weight on electrical conduits: hollow walls; corrosion in the small bore piping; i

unapproved design modificatione; and other safety defects.

Even if management systems and security measures were sound, the physical j

deficiencies already documented at Midland justify a suspension of construction. Before permitting work to continue, the Commission should thoroughly assess the damage through independent tests; monitor the results of a comprehensive, independent audits; and modify the construction permit to include the changes.

D.

Quality Assurance A licensee's quality assurance program is its internal structure of checks and balances to guarantee safe operations. Every applicant for a construction permit is re-i quired by the provisions of10 C.F.R. 850.34 to include in its preliminary safety analysis report a description of the quality assurance program to be applied to the design, fabri-l cation, construction and testing of the structures, systems and components of the facility.

Quality assurance comprises all those planned and systematic actions necessary to provide adequate confidence that a st ructure, system or component will perform satisfactorily 1.1 service. Each structure, system or component must be documented, inspected and periodically audited to verify compliance with all aspects of the auality assurance program.

The cause of the safety defects described above is an inadequate quality assurance l

program, which has been in shambles for a decade. In fact, in 1973 the original Midland licensing appeal board members felt so strongly about QA violations that the Director of Regulations pointed out that even though the Appeals Board could not take action on the IE findings--

(H]ad the construction permit proceeding still been before our Board at the time that the results of the November 6-8 inspection were an-nounced, it is a virtual certainty that we would have ordered forth-with a cessation of all construction activities....

(November 26,1973 Letter from L. Manning Muntzing, Director of Regulations, re:

l Quality Assurance Deficiencies Encountered at Midland Facility, p. 2.)

~.

4 The 1973 warning should have served as notice to both Bechtel and Consumers Power to resolve their QA problems. Quite the contrary, however, they ignored the notice. So did the NRC Staff' The OA problems at Midland continued unabated.

Both the 1979 and 1980 Systematic Assessment of Licensee Performance (SALP) reports give notice of further and expanded problems at Midland. The problems identified then (lack of qualifications of QC inspectors, continuation of work prior to corrective action) are similar to those cited as causes in the recent stop-work order. The reports also included acknowledgements of excessive QA backlogs and lack of timeliness. (SALP Report 1980.) Consumers' failure to learn from its mistakes passed the stage of accidental oversight long ago.

The lack of quality assurance at Midland has been a continuous concern to Region III.

In the spring of 1982 at the release of the 1981 SALP rating, Mr. Keppler publicly reported that it was necessary to change previous testimony before the ASLB which had provided a

" reasonable assurance" that the plant would be constructed in accordance with nuclear construction regulations. The revised testimony was submitted October 27,1982 Although the original testimony was not modified substantially, it is clear that QA problems at Midland are unresolved.

Unfortunately, the Region III Staff seems satisfied with the basis upon which the Construction Completion Plan is developed: put Consumers in charge of the program.

The public already has had an opportunity to preview the results of Consumers' internal policy with the Zack debacle over the past three years. Its performance has been disappointing, at most.

Although the NRC fined Consumers $38,000 for Zack's non-compliance with federal regulations and forced a major QA reorganization, further actions by the utility revealed a determination to hide problems -- regardless of the consequences. In fact, a Decem-ber 22,1982 NRC report about the revelations of a quality assurance breakdown at Zack I

headquarters acknowledges the role that Consumers played in the response to the 1979 citation:

On September 2,1981, the services of a Senior Quality Assurance Engineer from Project Assistance Corporation (consultants) were retained by Consumers Power Company for assignment at Zack for the purposes of establishing a formal document control system and performing an indepth review of the conditions described by Zack in their September letter (Zack notified Consumers of (a]

l 10 CFR 50.55(e) on August 28, 1981).

Consumers Power Company, unlike the two other utilities receiving materials from Zack, did not notify the NRC about the major problems in QA documentations. Those problems included falsified and altered documentation.

This example of the utility's response to the discovery of any major problems com-pletely undermines the assumption upon which the Construction Completion Plan is based --

voluntary disclosure of QA violations. This assumption is both historically inaccurate and structurally flawed.

D.

Maximizing Human Errors

" Human error" recently has been recognized as the Achilles Heel of even the most well-constructed plants. At Midland the phrase " comedy of human errors" would be more appropriate if the potential consequences were not so disastrous.

A key cause of human error is intoxication, which the NRC recognized last summer in proposed fitness-for-duty regulations. Our disclosures have reported widespread drunkenness on the job. Witness after witness has confirmed the routine of red-eyed employees who did their work under the handicap of an alcoholic stupor. Witnesses have also confirmed the frequent use of marijuana and stronger drugs. Intoxication weakens the capacity to install safety components,just as it debilitates the ability to drive or to engage in almost any other activity. At a minimum, the widespread use of drugs and liquor on-the-job increases the significance of a superficial quality control program.

There are likely to be more defects ! A nuclear plant constructed by drunken employees is likely to stagger into an accident, l

III. RESTRUCTURE THE MULTIPLE AUDIT / THIRD-PARTY REVIEWS INTO ONE COMPREHENSIVE, INDEPENDENT REVIEW In October and November 1982, two meetings were held to review Consumers proposed resolution for major quality assurance problems. These proposals and subsequent com-ments provided by GAP were made prior to completion of the major NRC inspection in November. Presumably, the audit suggested in the Construction Completion Plan (see CCP, at 16 and Figure 1.1) will incorporate those audits already discussed last fall.

However, the CCP as proposed fails to resolve basic third-party review questions.

. The CCP states: "This section describes third party evaluations that have been performed and are planned to assess the effectiveness of design and construction activity implementation." Yet, closer scrutiny of the proposal shows that it falls to include even the most basic information about the promised third-party review. In fact, although the CCP states that an INPO evaluation has been completed, there is no indication of what that report revealed.

Most significant, the entire CCP is premature until all the third parties eventually chosen have completed their evaluations. The point of the third-party reviews is to define the QA violations and deficiencies at Midland. By rushing into the CCP before that process has begun in some areas, the utility is putting the cart before the horse. In effect, the utility's CCP is competing with the third-party program. At best, the two " reforms" will be operating simultaneously, stumbling over each other. Depending on the results of the outside reviews, CCP work may have to be redone -- consistent with the costly tradition at Midland of doing the same work over and over.

A. The INPO Construction Evaluation This evaluation is limited by definition. It is only a "self-Initiated evaluation."

Neither the NRC nor GAP found the Management Analysis Corporation (MAC) adequately independent to provide a truly independent review of the problems at Midland. In fact, they have been involved in at least two other major audits of the plant -- neither of which crned up any of the significant construction deficiencies now facing Consumers.

A December 14,1982 Region III letter to GAP underscored the NRC position on MAC:

The INPO and biennial QA audit are not an acceptable substitute for the third party review.... Questions were raised concerning whether l

Management Analysis Company was sufficiently independent to ass'ime lead responsibility for the independent review.

Although the MAC analysis may have provided a tool for Consumers to judge the quality of the plant, it simply is not an independent third-party evaluation. Instead, it was a test ofINPO's ability to assess the "as-built" condition of the plant. Its adequacy is completely unknown, because the public does not even know if the INPO evaluation discovered the same flaws that the NRC found in its inspection.

l l

, B. The Independent Construction Overview This is the " meat" of the third-party review plan, yet it remains an ambiguous promise from Consumers to the NBC. Although the schedule (CCP, at 18) indicates that the scope has been defined and the onsultant selected, this information has not yet been shared with the ptblic. Until and unless the scope of the third-party review has been j

defined and the audit contractor selected, it is premature to make any judgments on the role and adequacy of the third-party review. Further, it is clearly inappropriate to indi-cate that a legitimate third-party review has been in place from the beginning of this reform effort, as Figure 1-1 suggests.

At Diablo Canyon the Commission set out very clear criteria by which an independent auditor would be chosen. / At Zimmer GAP and the NRC are currently embroiled in a debate over the application of these guidelines in the selection of Bechtel for that role.

At Midland we again request that the NRC reestablish the fading legitimacy of the Commission's third-party reform efforts by requiring Consumers to provide the details of the selection process, the identification of the third party and the methodology by which it will accomplish its review.

We are alarmed that even in the sketchy details provided in the CCP, the proposed third-party review is only to be conducted for six months, " top management" will deter-mine "what modification, if any, should be made to the consultant's scope of work." At a minimum, the NRCsshould recognize that any Construction Completion Plan must be based on the results of completed third-party findings, as well as an ongoing commitment for the duration of the project. The third-party review program must provide a comprehensive l

view of the as-built condition of the plant, and an independent assessment of all future construction. Nothing less will provide the public with any assurance that the Midland plant can operate safely.

/

- In a letter of February 1,1982, Chairman Palladino explained to Congressmen Dingell and Ottinger the criteria according to which an independent auditor would be chosen at Diablo Canyon:

(1) Competence : Competence must be based on knowledge of and experience with the matters under review.

(2) Independence : " Independence means that the individuals or companies selected must be able to provide an objective, dispassionate technical judgment, provided solely on the basis of technical merit. Independence also means that the design verification program must be conducted by companies or individuals not previously involved with the activities...they will now be reviewing."

(3) Integrity : "Their integrity must be such that they are regarded as respectable companies or individuals."

1 C. The Independent Design Verification (IDV)

The Tera Corporation already is conducting the " vertical slice" of the project.

Because the auxiliary feedwater system selected by Tera has already been the subject of numerous audits, GAP suggested that it is not representative of potential problems at Midland. The NRC agreed and required Tera to review a second system.

Although that system has not yet been selected, we understand that Consumers has nominated three systems for review, of which one will be chosen by the NRC. Since October 22, GAP has recommended that the second system should be a safety system with a history of QA violations. Specifically GAP suggested the HVAC system. Certainly if the CCP's third-party review is to determine the plant's safety, it should be able to account for the most troubled systems.

In Mr. Keppler's October 12,1982 letter to Billie Garde, he agreed with that position:

My decision regarding the independent audit of Zack work at Midland will be based on findings of [NRC inspections] and the licensee's third party independent assessments.

The fragmented and overlapping approach of the NRC, the utility and the " independent" auditors is self-defeating. It must stop, if Midland is to progress from a theoretical design to an operating plant. A truly independent, objective review must first be completed. Only then can a CCP begin to operate legitimately, with ongoing oversight from the outside auditors and the NRC.

IV. REJECT CONSUMERS' CONSTRUCTION COMPLETION PLAN On April 8,1981 Region III management overruled its investigative staff's recom-mendations to suspend construction at the William H. Zimmer Nuclear Power Station near Cincinnati, Ohio. Instead, the NRC issued an Immediate Action Letter which, inter alla,

required the Cincinnati Gas & Electric Company to hvelop a Quality Confirmation Program (QCP). On November 12,1982 the utter failure of the QCP forced the Commissioners to suspend all safety-related construction at Zimmer. Unfortunately, the Construction

. Completion Plan proposed for Midland bears a striking resemblance to the key flaws that doomed the QCP. In some cases, the CCP exacerbates the painful mistakes of Zimmer.

More spectScally, the Construction Completion Plan--(a) is permeated by an inherent conflict-of-interest; (b) institutionalizes a lack of organizational freedom for the quality assurance department; (c) fails to specify inspection procedures and evaluation criteria; and (d) is not comprehensive.

A. Inherent Conniet of Interest The foundation of the CCP is to complete "lttegration of the Bechtel QC function into the Midland Project Quality Assurance Department (MPQAD) under Consumers Power Company management...." (CCP Executive Summary, at 3.)

Since Consumers has always played a significant role in the MPOAD, in effect the

" reform" calls for the utility to second-guess its own previous decisions. This is the equivalent of the fox offering to do a better job of guarding the henhouse. If anything, the CCP intensifies the conGicts of interest in the QCP.

At Zimmer the utility only imposed quality assurance violations clandestinely; at Midland the utility has openly participated in decisions to break the law.

B.

Lack of Organizational Freedom for the Quality Assurance Department

~

The organizational premise of the CCP is a " team" concept that integrates construction, i

engineering and quality assurance personnel. The " team msnbers will be physically located together to the extent practicable...." Although the proposal does not specify the identity l

of Team Supervisors, there is only one MPQAD representative amcng six specined in the plan. (CCP, at 8.)

The CCP supposedly is the reform to compensate for a quality assurance breakdown.

Unfortunately, the plan would violate the criteria of 10 C,F.R. 50, Appendix B, Criterion I even for a healthy nuclear construction organization. The regulations require organizational freedom for QA functions. The QA department is required by law to serve as an independent check and balance on the construction program. The CCP turns that premise on its head by reducing OA representatives to a token minority on construction-dominated " teams."

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C. Failure to Specify Inspection Procedures and Evaluation Criteria The proposal promises to develop and revise the procedures that will be used to conduct the reinspections. (CCP, at 8-9,12.) Neither the procedures nor the evaluation criteria for the inspections are specified, beyond vague references to professional codes.

[

This issue is the heart of the quality verification program. Unfortunately, at present the methodology of the program is a mystery. As a result, it is impossible to judge whether the CCP will represent a thorough reinspection or a superficial skimming. Further, the necessity to establish new QC procedures casts a shadow over all the current inspection procedures.

D.

Lack of Comprehensiveness CCP reinspections will only cover " accessible" completed construction, an undenned term. " Inaccessible" items will be handled by paperwork reviews. (CCP, at 10.) Further, the proposal defines-out from coverage "[t] hose activities that have demonstrated effective-ness in the Quality Program implementation...." (Id., at 20.) Included in this latter category are activities such as "HVAC Installation work being performed by Zack Company,"

and "[r]emedial [s] oils work which is proceeding as authorized by NRC."

This piecemeal approach effectively surrenders any pretentions that the CCP will

. provide a definitive answer to the Midland QA problems, even if the program were other-I -

wise legitimate. To illustrate, the necessity for the reinspections in the first place is the inaccuracy of current quality records. Paperwork reviews will not contribute anything new.

The list of systems that have " demonstrated" quality effectiveness suggests the utility has completely lost touch with reality, or expects that the NRC Staff and the public have taken leave of their senses. Both the Zack HVAC and soils remedial work have been among the most scandal-ridden embarrassments of the Midland project. The crude deficiencies and violations have led to fines, multiple criminal investigations, and public humiliation for Consumers. The utility has only been able to continue soils remedial work by manipulating the public hearing process to circumvent NBC Staff enforcement orders. The list of " proven" systems proves only that Consumers is determined to impose the same nightmare on Midland that the Quality Confirmation Program represented at Zimmer. Hopefully, the NBC Staff will not be fooled again.

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D.

Flaws in the CCP Program Implementation and Quality Program Review By their terms, Section 5 (Program Implementation) and Section 6 (Quality Program Review) indicate that the CCP simply reflects the " status quo" attitude of Midland's management that propelled Consumers into this particular construction / regulation night-mare in the first place.

t Although the CCP proposal is premature, inadequate, and fatally flawed, the language of the proposal reveals that management believes the Midland plant's QA program is i

" basically sound" (CCP, at 15), even in the face of deliberations by legal and advisory d

bodies on Consumers' ability to adequately implement any QA plan, no matter how sound.

The amount of management influence and interference has already been a subject of NRC concern. (See N14C Memorandum from C. E. Norelius and R. L. Spessard to James E. Keppler, June 21, 1982.) Yet, the CCP proposes as an answer to increase management Involvement at every step of the implementation process (CCP, at 13-15). Further, the implementation fails to refer to how the inevitable conflicts between management officials I

watching the calendar and conscientious QA officials trying to do their jobs will be resolved.

The only clue that GAP has as to how Consumers plans to change the mindset of its 1

demoralized workers is the Quality Improvement Plan (QIP) mentioned extensively in the fall proposals. This plan, referred to as the catalyst for ensuring new commitment and compliance to quality standards on the Midland site, is, according to the NRC officials i

familiar with it, an incentive-bonus concept for construction workers who "do the job right the first time." (NRC-GAP Telephone Conversation, January 27, 1983.) Like the l

Bechtel cost-plus contract, the Quality Improvement Plan is a series of rewards for

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doing the same job a worker was hired to do right in the 3rst place. A quality improvement plan that bases critical construction adequacy on " prizes" given to its workers reveals a serious misunderstanding on the part of Consumers about the ultimate value of its work.

' V.

IMMEDIATELY HALT THE ONGOING SOILS WORK UNTIL THE QUALITY ASSURANCE IMPLEMENTATICN AUDITOR IS APPROVED j

Two significant milestones in the soils work have now been approved to proceed underneath the turbine building. This Staff approvalis entirely inappropriate given the legal and advisory controversy over this operation. It is inexcusable to allow work to

^.

.. proceed without the independent audit upon which Mr. Keppler based his " reasonable assurance" testimony (October 27,1982 Testimony to the Midland ASLB), and upon which the ACRS is depending to complete their own technical assessment before granting a full power license. Further, in light of administrative hearings which cover the adequacy of the soils quality assurance implementation (OM Proceedings), the NRC Staff approval is an insult to the court and to the citizen intervenors struggling to achieve a measure of fairness in the proceeding.

GAP's view on Stone & Webster, the proposed third-party for QA implementation audit, is documented in our October 22,1982 letter. As an update and summary we believe that Stone & Webster meets only one of the three criteria for a legitimate third party.

Yes, Stone & Webster has demonstrated economic independence from Consumers, dis-closing other minor construction contracts with Consumers as well as their financial independence. But, Stone & Webster has not demonstrated its competence. Its long history of nuclear plant construction includes massive cost overruns, major Quality Control problems, significant design errors and poor construction management.

Further, Stone & Webster's corporate integrity remains the subject of much skepticism, particularly in light of its six-month involvement on the Midland site without NRC approval of their work.

However, if the NRC is going to appmve Stone & Webster -- as seems obvious --

and hold it responsible under 10 C.F.R. Part 21 for reporting violations or OA failures, then the Region should do so. Someone other than Consumers must watch the OA imple-mentation of critical soils work, i

VI. ENCOURAGE CONSUMERS TO RELEASE THE NEW COST ESTIMATE AND PROJECTED COMPLETION DATE INFORMATION Although neither cost nor scheduling is an NRC concern, both are critical concerns of the residents of Central Michigan who must constantly balance the risks and costs of this nuclear plant. If public confidence is ever to be restored in the Midland facility, it will come after Consumers demonstrates candor and openness with the public. It would benefit everyone to have the yoke of the December 1984 "on-line target date" removed as

, soon as possible from the necks of the nuclear workers.

Likewise, the new cost projection is unknown by local residents. GAP sources indicate a $4-billion-plus price tag, but that was an estimate which did not include the major stop-work order in December oflast year.

If the plant is ever going to be included in the Michigan rate base, Consumers should begin today to adopt a new and candid approach to all ofits problems. Public trust simply cannot be r,atored on anything less than honest admissions.

VII. CONCLUSION There are too many questions about the Midland Nuclear Power Plant left unanswered at this time. These questions are forming the basis for growing public skepticism about the NRC's ability or willingness to regulate nuclear power. In Central Michigan this uneasiness and distrust have led previously inactive citizens and local government bodies to become involved in their own protection. The citizens' desire to be informed about the ultimate safety of the Midland plant led them to request assistance from the Citizens Clinic of the Government Accountability Project. Our investigation into worker allegations and analysis of the situation confirms the needs for a comprehensive answer.

Midland needs a verification program implemented by a truly independent company 1

with no stake in the outcome of its audit. This independent third party is not serving a client's requirements, but rather the public interest in etsuring the quality of construction at the plant. That third party must be accountable only to the NRC and the public.

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ATTACHMENT 4 GOVERNMENT ACCOUNTABILITY PROJECT Institute for Policy Studies 1901 Que Street. N.W., Washington, D.C. 20009 (202)234 9382 March 7, 1983 i

Mr. Darrell Eisenhut, Director Division of Licensing U. S. Nuclear Regulatory Commission Washington, D. C.

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Dear Mr. Eisenhut:

On February 8,1983, the Government Accountability Project (GAP) attended two public meetings in Midland, Michigan on behalf of the LONE TREE COUNCIL, conce'rned citizens, and several former and current employees working on the Midland Nuclear Power Plant, Units 1 and 2.

As you know, the large public turn-out for toth the daytime meeting between Consumers Power and various Regional and Washington-based offices of the Nuclear Regulatory Commission (NRC) and the evening session between the NRC and the general public included spirited debate and lengthy presentations. These meetings, although highly beneficial to the education of the Michigan public about the nuclear facility being constructed in Midland, did not allow for the type of technical questions and detail about the Construction Completion Plan (CCP) in which GAP is particularly interested.

Therefore, I appreciate this opportunity to address a number of concerns that we have regarding issues presented at the public meeting and contained in the detailed CCP submissions.

In order to complete our own continuing analysis of the Midland project, I would hope that you can provide answers to and/or comments on the enclosed questions.

Pending further public meetings and detailed review of basic elements of the Construction Completion Plan, I assume that your verbal requests to Consumers Power (Consumers) management to " hold off" on making any conunitments will be translated into a firm NBC directive. As you know, Consumers has had a history of misinterpretations and miscommunications in relation to many of the aspects surrounding the Midland plant. The public understood quite clearly what your instructions were; if those have changed I suggest that you continue to express those changes to the public through the appropriate local media representatives.

I.

REQUESTS FOR FURTHER INFORMATION A.

The relationship between the Washington NRC offices (NRR, DOL, etc.)

and the Regional management and on-site Midland Special Team and Inspector.

It is unclear where the authority lines for approval of various elements of the Midland construction project are drawn. GAP investigators, staff and attorneys are continually getting unclear signals from the various regulation divisions as to who is making what decisions and when. Since it has been noted by the NRC staff itself that "[ Consumers] seems to possess the unique ability to search all factions of the NRC until they a

Mr. Darrell Eisenhut -

March 7, 1983 have found one that is sympathetic to their point of view - irregardless of the impact on plant integrity,"l/ it seems critical to establish once and for all the authority lines within the NRC that Consumers must re-spend to.

We are particularly concerned about the apparent transferring of responsibi-lity for the on-site inspectors and the Midland Special Section Team to the Regional Administration and Washington-based NRC officials. Although I am sure that you have read the testimony of Mr. Keppler, submitted to thu Atomic Safety and Licensing Board (ASLB) on October 29, 1983, and attached memorandum from the staff members that are more directly responsible for the Midland project, I have included them with this letter for your renewed attention following the results of the Diesel Generator Building inspection.

(Attachment #1.)

There have been a number of incidents within the last several months where l

Regional personnel (RIII team or on-site) have indicated one answer pertaining to construction work, and then other action was taken after approval from NRR.

Several examples of this that are fairly recent are:

1.

A February 8, 1983 conference call between C'onsumers, Bechtel and the NRC regarding the discussion of loading sequence for pier load test and background settlement readings did not include g Region III per-sonnel, most particularly Ross Landsman. Although I do not know the details of his exclusion, I am concerned that he was not a participant in the call, or in the decisionmaking process.

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2.

At the recent ASLB hearings NRR and RIII personnel were asked about t

the projected timeline for Consumers to approach the Feedwater Isolation l

Valve Pit jacking work. RIII personnel seemed confident that work would not begin on this until at least late March or early April, yet work ac-t tually was begun on the same day as the conversation, February 17, 1983.

3.

The NRC has taken a position that "no major discrepancies" have been found in the soils remedial work to date. Yet:

(a) two cracks, in-cluding one 10 millimeters by 7 inches long, have been discovered in the valve pit.2/

(b)

A February 15, 1983 memorandum from R. B. Landsman to l

R. F. Warnick identifies three specific concerns since the beginning of the underpinning work that -- to GAP -- indicate serious flaws in the perceptian of Consumers about the seriousness of the work they are en-gaged in.

These include craftworkers not receiving the required amount of training, arguments with Consumers about techniques that show a pri-ority to deadlines instead of quality, and a major flaw in the Stone &

Webster independent assessment.

(Attachment #2.)

Given our experiences with the NRC inspection efforts, I am particularly anxious to have the on-site /special section team members have as much direct input into the review / licensing process as possible. Although I do not always agree with their decisions or their actions, I am more comfortable with their version of the facts on the Midland site.

M emorandum from R. J. Cook to R. F. Warnick, July 23, 1982.

M M ccording to the Midland Daily News, February 24, 1983, Construction Technology A

had performed an " independent" analysis of the cracks before the Midland team even had the opportunity to ccuplete its own investigation or review.

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o Mr. Darrell Eisenhut March 7, 1983 i

B.

The guidelines and timetable by which the independent third-party auditor will be chosen.

It is not at all clear what guidelines, if any, your office intends to employ in the review or monitoring of the selection process for the third-party auditor of the Midland facility. We are extremely distressed at the way that both Stone & Webster (S&W) and the TERA Corporation were approved by your office. We feel that the approval was more by default than by aggressive review of the proposals, contracts and criteria as presented to the NRR office. Further, it is very clear to us that the Regional per-sonnel involved in the initial contact with the Stone & Webster organization gave the inpression that S&W's on-site activities were authorized.

Even if that impression was only technically incorrect, it is a serious breach of public trust by the Regional staff.

We reccamend that your office adopt the prudent position that Consumers follow the nominating process used for Diablo Canyon's independent assessment.

Al-though Midland's problems have not yet reached the stage of major public controversy cuch as Diablo or Zinmer, it is clearly evident that the sensationalism of the prob-lens with the soils settlement and the cost of the Midland facility will move it more into the public eye as it reaches completion.

If there was any doubt as to the active interest of the Midland community in regards to the Midland facility, the February 8,1983 public meeting should have dispelled that misconception. The community surrounding the plant is extremely attentive to the issues and concerns raised by the nuclear facility -- the debate will continue. To choose another, more congenial approach to identifying the firm that will be responsible for the coupletion of the plant would be a grave mistake in our opinion.

C.

The plans that the NRC staff has made to determine the actual "as built" condition of the rest of the buildings and systems on the Midland site in the wake of the findings in the Diesel Generator Building inspection.

The aggressive efforts of the DGB inspection were a solid step forward in determining the extent of the problems at the Midland facility. However, it is unfortunate that the inspection did not expand to other buildings. The public must have confidence that all the problems have been identified, as well as basic factors about how the problems were caused and how they are going to be fixed if there is ever any hope for restoring faith in the safety of the plant.

D.

The methodologies that are to be employed in the technical review of generic problems on the site, such as determining the accuracy of quality control / quality assurance documentation made suspect by the flawed process, and the training and recertification of all the welders who were trained by Photon Testing, Inc.

The two items mentioned above, as well as problems that have resulted from the ZACK corporation, unidentifiable electrical cables, untrained quality control inspectors, material traceability inaccuracies, etc., must be ad-i dressed in any workplan to identify the problems on the site.

It is not clear whether the NRC staff, the NRR staff or the independent auditor is to i

Mr. Darrell Eisenhut March 7,1983 be responsible for identification of all of the problems prior to the start up of construction activities on the site.

E.

The resolution of what is and what is not "Q" work in regards to the soils renedial work should be handled in a public forum.

The "Q" debate between NRC staff members - including Regional management and the on-site inspectors - as well as between the NRR and NRC staff has been a topic of considerable concern to us.

The resolution of these issues has critical implicstions for the rest of the soils work project. Because it has been.a major item of discussion in the hearings currently underway in Midland, as yell as among the staff, we believe that it would ~e beneficial for you to receive 0

the position that concerned citizens have taken. I have suggested that those residents who.have been following this issue very closely prepare a position statcment for your office on the "Q" soils issue.

II.

COMMENTS CONCERNING THE THIRD-PARTY REVIEWS Itisourunderstandingthattherearecurrentlythreeseparateindependeat audits being conducted (or considered) at the Midland facility. These ares (1) The Stone and Webster Corporation's third party independent assessment of the soils remedial work activities. A February 24, 1983 letter from Mr. Keppler i

to Consumers outlines the scope of the S&W asses'sment.

It significantly broadens the original scope of S&W's review. As a result of the expansion of S&W's responsibilities, and apparently a close monitoring of thair work by the RIII j

team, Mr. Keppler approved the release of additional underpinning work for construction. We request the following documents in reference to the S&W approval:

1 a.

The criteria that NRC officials used,'to judge the adequacy of the initial S&W work, b.

The methodologies which the S&W personnel are utilizing to provide l

their QA overview and assessment of the design packages, inspector requalification and certification program, and training programs.

c.

The details of the expanded work contract which will assess the actual underpinning work on safety-related structures. '

I (2) The Independent Design Verification and vertical slice review being performed by the' TERA Corporation.

We have recently received the detailed Engineering Program Plan from5 ERA on the Midland Project. Although extremely impressed with some of TERA's procedures, organization and structure there are a number of areas which raise serious questions.

a.

What specific repo; ting procedures does TERA have[to' follow I

in regards to ' findings, corrective action reports, controversies among their own staff over issues of noncompliance orl questionable l

accuracy, and internal reporting. Figure 1-1 clearly indicates'rhat i

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e Mr. DarrOll Eicenhut M rch 7, 1983 TERA intends to notify the NRC at the same time as Consumers, but at the February 8 meeting there was a very clsar example of that not actually happening because of miscanmunication between TERA and the NBC.

b.

What is the difference between a Corrective Action Report as referenced in the QA Audit Procedures and a Non-Conformance Report as required by 10 CFR Part 21.

( A similiar " informal" nonconformance reporting procedure at the William H. Zimmer plant caused innumerable problems for both the NRC and the licensee.) We would ask that the C.A.R.'s be forwarded to the NRC, or preferably be written up as NCR's immediately upon identification of an item of non-compliance. Any discretion between informal and formal procedures should be limited to the judgement of the NRC.

c.

What is the intent and scope of the " EXCEPTIONS" referred to in Part 1.1 of the plan?

d.

Who controls the Administrative decision making process between Consumers and TERA over specific points of technical controversy?

e.

What documents will be forwarded to the NBC in support of the various findings - whether favorable or unfavorable - during the course of the two vertical slice reviews?

(Further comments and questions about the TERA plan will be forthcoming under separate cover when we are able to finish our review.)

(3)

The overall independent third-party assessment.

Instead of providing

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your office with our detailed ( and lengthy) analysis of the flaws and chortcomings of the CCP as introduced by Consumers in the January 10, 1983 letter and the public meeting we have decided to wait for further detail to be provided by Consumers on their plan. We are somewhat anxious about this, cs we understand that there have been detailed discussions going on between the NRC and Consumers. As you know,

similar events at the Zinner plant led to increased public skepticism and an even greater loss of confidence in the NRC process.

We strongly encourage your office and the Regional Administrator to consider the process of choosing a third-party auditor as important and delicate cs was the process at Zimmer.

If there is to be a " closed door" approach to Midland we request that you articulate that at this time.

If you do not we will assume that the NRC intends to follow a fully public process of nomination cnd selection.

Thank you for your time, we lock forward to answers to our questions in the near future.

1 Sincerely, BILLIE PIRNER GARDE Director, Citizens Clinic l

ATTACHMENT 5 GOVERNMENT ACCOUNTABILITY PROJECT Institute for Policy Studies 1901 Que Street. N.W., Washington. D.C. 20009 (202)234-9382 March 10, 1983 Mr. James E. Keppler Director, Region III Inspections and Enforcement Nuclear Regulatory Commission 799 Roosevelt Road Glen Ellyn, Illinois

Dear Mr. Keppler:

On March 7, 1983 I attended a meeting with Mr. Darrell Eisenhut, Mr. Daryl Hodd, Mr. Tom Novack, Ms. Elinor Adamson of the Office of Nuclear Reactor Regulation (NRR), and Mr. Robert Warnick of your staff.

Mr. Warnick confirmed a number of items of great concern to the Government Accountability Project (GAP) in regards to the Midland Nuclear Power Plant.

More specifically, Mr. Warnick confirmed that you and members of your staff have been meeting with management officials of Consumers Power Company (" Consumers") to iron out the details of the Construction Completion Plan (CCP).

It was our understanding from your public statements at the February 8, 1983 public meeting that you intended to open up the CCP evaluation process for more public overview and comment. Yet it is clear the meetings that you and your staff have been having are on the very. points that most need public input.

l I am personally distressed that you have not responded to the l

overwhelming public concerns about the credibility of Consumers and the Bechtel Corporation.

Surely you cannot expect the public to continue to trust the utility and its contractor to be able to allay public fears about their self-examination.

This is the solution that the CCP is proposing.

l GAP is not prepared to spend the next year haranguing over the methodological details of a third-party review that has not had the basic opportunity to review the condition of the plant.

The inspection of the Diesel Generator Building clearly indicates that Midland is not, and never has been, in the condition that the utility wolliNave us all believe.

It is inconceivable that the NRC could even consider a solution to the problems without first having a legitimate, independent, competent third party identify the actual condition of the plant.

Mr. Warnick identified a number of areas of discussion and debate surrounding the details of the CCP, these included such major items as whether there should be 100% inspection or sampling, t

r...

Mr. James Keppler March 10, 1983 what the reporting structure would be for the Quality Assurance /

Quality Control personnel within the teams, how the teams would be established, etc.

These are items which betray the position that your Regional office has taken in the absence of either public input or analysis, or even the courtesy of a preliminary announcement.

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If you intend to approve the Construction Completion Plan that draws its legitimacy from the third-party reviews (See CCP, Figure 3-1)of the plant --including the identification of the problems on site -- then please do so immediately.

If you intend to close the public input into the process of reviewing the acceptability and adequacy of the plan that Consumers has offered, then please rake such an announcement.

If you have no intention of even considering having a third-party determine the extent of the problems on site, then you have effectively undermined the entire promise that you made to the residents.of Midland.

Please answer the following questions concerning the steps that you have taken since the February 8, 1983 meeting concerning the CCP:

(1)

What meetings ( either personally or by conference call) have you, Mr. Robert Warnick, or members of the Midland Team had with management officials of Consumers Power Company regarding the CCP?

(2)

For every meeting identified, what was the topic of discussions?

l (3)

What directives, policy statements, verbal approvals, tentative approvals, or strong indications have been given to Consumers as to the acceptability of the CCP?

(4)

What approvals have been given by your staff in regards to Jan work on site going forward?

(This excludes, of course,the on-going soils work, and the steam turbine work.)

l (5)

What official holds - if any - have you placed on Consumers Power which would restrict its initiating work on the site when it saw fit?

(6)

What plans does.the staff have for its own determination of the "as-built" condition of the plant, either prior or subsequent.to a third-party / Consumers review?

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+ ee 6 3-March 10, 1983 Mr. James Keppler I look forward to your response within the next few days.

Sincerely, BILLIE PIRNER GARDE Director, Citizens Clinic BPG/bl l

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ML20072S588

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Dear Sirs:

Dear Mr. Eisenhut:

Dear Mr. Keppler:

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ML20072S588

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Background

Dear Sirs:

Dear Mr. Eisenhut:

Dear Mr. Keppler:

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