ML20079N533

Licensee Contractor and Vendor Inspection Status Report. Quarterly Report,July-September 1991.(White Book)

ML20079N533
Person / Time
Issue date:	10/31/1991
From:	Office of Nuclear Reactor Regulation
To:
References
NUREG-0040, NUREG-0040-V15-N03, NUREG-40, NUREG-40-V15-N3, NUDOCS 9111110275
Download: ML20079N533 (143)

Text

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NUREG-0040 Vol.15, No. 3 Licensee Contrac:or anc. Venc or Inspection Status Report Quarterly Report July-September 1991 U.S. Nuclear Regulatory Commission p+' "%,,

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Available from Superintendent of Documents U.S. Govemment Printing Office Post Office Sex 37082 Washington, D.C. 20013 7062 A year's subscription consists of 4 issues for

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Single' copies of this publication ero evallable from National Technical Information Service, Springfield, VA 22161 P

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t NUREG-0040 Vol.15, No. 3 Licensee Contractor and Vendor Insaection Status Report

-Quarterly Report July-September 1991 Menuscript Completed: October 1991 Date Published: October 1991 Division of Reactor Inspection and Safeguards Omce of Nuclear Reactor Regulation-U.S. Nuclear Regulatory Commission Washington, DC 20555 p= ~. 9,,

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ABSTRACT 3

l This periodical covers the results of inspections performed by the NRC's Vendor inspection Branch that have been distributed to the inspected organization during the period from July 1991 throu9h September 1991.

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TABLE OF CONTENTS PAGE Abstract ill Preface vii Index......................................................

ix Inspection Reports 1

Selected Bulletins and Information Notices Concerning Adequacy of Vendor Audits and Quality of Vendor Products 109 Correspondence Related To Vendor Issues....................

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PREFACE A fundamental premise of the Nuclear Regulatory Commission (NRC) licensing and inspection program is that licensees are responsible for the proper construc-tion and safe and efficient operation of their nuclear power plants. The total government-industry system for the inspection of commercial nuclear facilities has been designed to provide for' multiple levels of inspection and verifica-tion.

Licensees, contractors, and vendors each participate in a quality verification process in compliance with requirements prescribed by the NRC's rules and regulations (Title 10 Code of Federal Regulations). The NRC performs an overview of the commercial nuclear industry by inspection to determine whether its requirements are being met by licensees and their contractors, while the major inspection effort is performed b framework of ongoing quality verification programs. y the industry within the The licensee is responsible for developing and maintaining a detailed quality assurance (QA) plan-with implementing procedures pursuant to 10 CFR 50.

Through a system of planned and periodic audits and inspections, the licensee is responsible for assuring that suppliers, contractors and vendors also have suitable and appropriate quality programs that meet NRC requirements, guides, codes and standards.

The Vendor Irspection Branch (VIB) reviews and inspects nuclear stean system suppliers (NSSSs), architect engineering (AE) firms, suppliers of products and'

services, independent testing laboratories performing cquipment qualification tests, and holders of NRC licenses (construction permit holders and operating licenses) in vendor-related areas.

These inspections are performed to assure that the root causes of reported vendor-related prcblems are determined and appropriate corrective actions are developed.

The inspections also review the vendors' conformance with applicable NRC and industry quality requirements, the adequacy of licensces' oversight of their vendors, and that adequate interfaces exist between licensees and vendors.

The VIB inspection emphasis is placed on the quality 'and suitability of vendor products,- licensee-vendor interface, environmental qualification of equipment, and review of equipment problems found during operation and their corrective action.

When nonconformances with NRC requirements and regulations are found, the inspected organization is required to take appropriate corrective action and to institute preventive measures to preclude recurrence.

When generic implications are identified, NRC assures that affected licensees are informed through vendor reporting or by. NRC generic correspondence such as information notices and bulletins.

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This periodical (White Book) is published quarterly and contains copies of all vendor inspection reports issued during the calendar quarter for which it is published.

Each vendor inspection report lists the nuclear facilities to which the results are applicable thereby informing licensees and vendors of potential problems.

In addition, the affected Regional Offices are notified of any significant problem areas that may require special attention.

The. White Bool: also contains a list of selected bulletins and information notices involving vendor issues.

Copies of other pertinent correspondence irvolving vendor issues are also included in this White Book issue.

Correspondence with contractors and vendors relative to inspection data contained in the White Book is placed in the USilRC Public Document Roora, located in Washington, D.C.

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I INDEX FACILITY REPORT NUMBER PAGE Energy Steel & Supply Company 99901106/91-01 1

Auburn Hills, Michigan Flanders Filters, Incorporated 99901233/01-01 11 Washington, North Carolina Pacific Gas and Electric Company 05000275/91-201 20 San Francisco, Cal.ifornia 05000323/91-201 Southern Testing Services, 99901223/91-01 42 Incorporated-Knoxville, Tennessee Tioga Pipe Supply Company, 99900879/91-01 59 Incorporated Philadelphia, Pennsylvania

- Westinghouse Electric Corporation 99901142/88-01 69 Spartanburg Distribution Center

- Duncan, South Carolina Wisconsin Public Service Corporation 05000305/91-201 73 Green Bay, Wisconsin ix

IKSPECTION REPORTS s

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i UNITED STATES i

NUCLEAR REGULATORY COMMISSION

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WASHINGTON D C 20666 AUG 0 81991 Docket No. 99901106 Mr. Michael R. Mitchell, President Energy Steel & Supply Company 2715 Paldan Drive Auburn Hills, Michigan 48057

SUBJECT:

NOTICE OF NONCONFORMANCE (NRC INSPECTION REPORT NO. 99901106/91-01)

This letter addresses the inspection of your facility at Auburn Hills, Michigan conducted by Mr. R.

L.

Cilimberg and Mr. R.

K. Frahm, Jr. of this office on May 13-17, 1991 and the discussions of their findings with you and Mr. R. J.

Paton at the conclusion of the inspection.

The purpoce of the inspecti.on was to determine if the supply of material by the Energy Steel &

Supply Company (ESSC) is in accordance with nuclear utility specifications and the ESSC quality assurance (QA) progrsm.

The inspectors were especially interested in whether ESSC had obtained safety-related material from Piping Supplies Incorporated (PSI) for supply to the nuclear industry.

PSI was the subject of NRC Bulletin 88-05 which identified that PSI had provided false information about material supplied to the nuclear industry.

Areas examined during the NRC inspection and our findings are discussed in the erclosed report.

This inspection consisted of an examination of procedures and representative records, interviews with personnel, and observations by the inspectors.

During this inspection it was found that the implementation of your QA program f ailed to meet certain NRC requireme:tts which are summarized as follows:

(1) all activities affecting quality were not prescribed in documented procedures; (2) plate material was improperly marked with two different serial numbers; (3) two vendors were found on the Approved Vendors List (AVL) whose basis for approval had expired; (4) carbon steel bands were observed to be in contact with stainless steel and a nonferrous alloy; and (5) nine nonconformances were identified as not being resolved promptly.

Additionally, from discussions with your QA staff, it was determined that ESSC does not require mill test reports for all material supplied by its vendors and subsequently furnished as safety-related material subfact to the requirelants of 10 CFR Part 50, Appendix B.

Pending further review of specific procure-ment actions, this issue was identified as an unresolved item.

1

Mr. Michael Mitchell The specific findings and references to the pertinent i

requirements for the above nonconformances are identified in the enclosed Notice of Nonconformance.

The responses requested by this letter and the encloswd Notice are not cubject to the clearance procedures of the Office of Management and Budget as required by the Paperwork Reduction Act of 1980, Pub.

L. No.06-511.

In accordance witn 10 CFR Part 2.790 of the NRC's " Rules of Practice," a copy of this letter and its enclosuren vill be placed in the NRC's Public Document Room.

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/' Le i f Horrholm, Chief i

Sndor Inspection Branch y

w v!.sion of Reactor Inspection and Safeguards Office of Nuclear Reactor Regulation Enclosures Notice of Nonconformance Inspection Report 99901106/91-01 2

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ENCLOSURE 1 NOTICE OF NONCONFORMANCE Energy Steel & Supply Company Docket No.: 99901306/91-01 Auburn Hills, Michigan During an inspection conducted at the Energy Steel & Supply Company (ESSC) facility in Auburn Hills, Michigan, on May 13-17, 1991, the inspection team from the U.S. Nucicar Regulatory Commission (NRC) determined that certain activities were not conducted in accordance with NRC requirements, which are contractually imposed on ESSC by purchase orders (Pos) from NRC licensees.

The NRC has classified these items, as set forth below, as nonconformances to the requirements of Title 10 of the Code of Fedgral Reculationst Part 50 (10 CFR Part 50) Appendix B, imposed on ESSC by contract and the supplen. ental requirements of its nuclear utility customers.

A.

Criterion V of Appendix B to 10 CPR Part 50 requires that activities affecting quality be prescribed by docuraented procedures and be accomplished in accordance with those procedures.

Contrary to the above, Ecction 5.0 of the ESSC Quality Assurance Manual (QAM), Revision 9, dated March 15, 1991, does not require that all activities affecting quality be prescribed by documented procedures.

A procedure was not available for the E1cometer 245 instrument which was used by ESSC to measure coating thickness (91-01-01).

B.-

Criterion V of Appendix B to 10 CFR Part 50 requires that activities affecting quality be prescribed by documented procedures and be accomplished in accordance with these procedures.

1.

Section 8.4.10 of the ESSC QAM, Revision 9, states that

" Material to be shipped is marked in accordance with applicable material specifications, ASME Section III and/or customer purchase order requiretaents.

Markings are verified by qualified inspectors."

-Contrary to the above, a stock plate found in the warehouse had two different' serial numbers marked on the material (91-01-02).

2.

Section 7.4.1 of-the ESSC QAM, Revision 9, requires that selection of vendors for the ESSC Approved Vendors List (AVL) be bhaed on annual audits or an ASME Quality System certificate (QSC).

Contrary to the above, two vendors were found on the AVL whose basis for approval had expired (91-01-02).

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Section 13.4.5.2 of the ESSC QAM, Revision 9 states that "non-ferrous, stainions and high alloy matorial bhall bo stored in such a manner as to prevent contact with carbon stool."

Contrary to the abovo, carbon stool bands were found in direct contact with soveral bundles of stainless stool and noniorrous alloy tubing (91-01-02).

Critorion XVI of Appendix B to 10 CFR Part 50 requires that C.

conditions advorne to quality, such as nonconformances, shall be promptly identified and corrected.

Section 16.1.1 of the ESSC QAM, Revision 9, requires that conditions adverse to quality be prom;,tly identified and corrected to preclude repetition.

Contrary to the above, nino (9) nonconformances worn found which remained open at least two months since their initiation (91-01-03).

Please provido a written statement or explanation to the U.S.

Nuclear Regulatory Commission, ATTH Document Control Desk, Washington, D.C. 20555 with a copy to the Chief, Vendor Inspection Branch, Division of Reactor Inspection and Safeguards, office of Nuclear Reactor Regulation, within 30 days of the date of the letter transmitting this Notice of Nonconformance.

This reply should be clearly marked as a "Roply to a Notico of Nonconformance" and should include for each nonconformance: (1) a description of steps that have been or will be taken to correct those items; (2) a description of stops that havo been or will be taken to prevent recurrorce; and (3) the dates your correctivo actions and preventive measures were or will be completed.

Dated at Rockville, Maryland this day of 1991. 4

ORGANIZATION:

ENERGY STEEL AND SUPPLY COMPANY AUBURN NILLS, MICHIGAN REPORT NO.

99901106/91-01 CORRESPONDENCE Address:

Mr. Michael R. Mitcho31, Prooldont Energy Stoci & Supply Company 2715 Paldan Drive Auburn Hills, Michigan 48057 i

ORGANIZATIONAL CONTACT:

Mr. Robert J. Paton, V.P. Quality Assurance NUCLEAR INDUSTRY ACTIVITY:

Materials supplier for nuclear, military, and commercial application.

INSPECTION CONDUCTED:

May 13-17, 1991

f. (' k rkki R.

L. Cilimberg, Tear (Londor 15ht'a Beactive Inspection Section Nci. 1 Vendor Inspection Branch (VIB)

Ronald K.

Frahm, Jr., VIB Jonatha Jr..,

OI Region IV

. u; K 2w t-2-m Uldis Potapovs,' Chi 7f Dato Reactivo Inspection Section No. 1 Vendor Inspection Branch INSPECTION DASEs1:

10 CFR Part 21 and Part 50, Appendix B and ASME Boiler.and Pressure Vessel Code,Section III INSPECTION SCOPE:

To review Energy Stool and Supply Company's (ESSC) QA program relativo to the supply of material to the nuclear industry.

PLANT SITE APPLICABILITY:

Numerous.

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1 INSPECTION

SUMMARY

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1 Contr4ry to Criter. ion V of Appendix b to 10 CFR Part 50, Sr ction 5.0 of the USSC Quality Assurance Manual (QAM), Revis-s

'.on 9, dated March 15, 1991, does not require that all activities affecting quality be prescribed by documented procedures.

A procedute was not availatic for the Elcometer 245 instrument which was used by ESSC to incasure coating thickness (91-01-01).

1.1.2 Contrary to Critorion V of Appendix B to 10 CFR Part 50, ESSC did not follow documersted procedures in threc, instances (91-01-02):

1.

Contrary to Section 8.4.10 of the ESEC QAM, Reviolon 9, a plato was discovered with two different serial numbers marked on the material.

2.

Contrary to Section 7.4.1 of the E'3SC QAM, Revision 9, two vendors were found on the Appr oved Vendor List

( AVL) whose basis for approval hr.d expired.

3.

Contrary

,S Section 13.4.5.2 of the ESSC QAM, Revision 9, carbon steel bandr. were found in contact with several bundles of stainless stool and nonferrous alloy tubing.

1.1.3 Contrary to Criterion XVI of Appendix B to 10 CFR Part 50, and Section 16.1.1 of the ESSC QAM, Revision 9, the corrective action for nine nonconformances/ corrective action reports (NCR) was not performed promptly (91-01-03).

1.2 Unres olved_J_t_qm 1.2.1 The NRC inspectors determined that ESSC does not require copies of mill test reports for all material supplied by its vendors as discussed in section 3.7 below.

Pending further review of documents actually supplied by ESSC to their safety-

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related customers, this issue is identified as an unresolved item (91-01-04).

2 STATUS OF PREVIOUS INSPECTION FINDINGS:

There were no open findings to address as this was the first NRC inspection of ESSC.

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3 INSPECTION FINDINGS AND OTHER COMMENTSt j

3.1 Entrance and Exit Meet {ngg The Nuclear Regulatory Commission (NRC) inspectors informed ESSC

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staff of the scope of the inspection, outlined areas of concern, and established working interfaces during the entrance mooting on May 13, 1991.

On May 17, 1991, the NRC inspectors summarized the inspection findings, observations, and concerns to ESSC management during the exit meeting.

3.2 Bapkaround The NRC received information which indicated that ESSC may have l

purchased safety-related material from Piping Supplies, Incorporated (PSI) at Folsom, New Jersey and supplied this material to the nuclear industry.

PSI material was a concern to

.the NRC because documents on material supplied by PSI to the nuclear industry were found to contain falso information.

The NRC issued Bulletin 88-05, dated May 6, 1988, Supplement 1, dated June 15, 1988, hnd Supplement 2, dated August 3, 1988, to require that licensees take action to assure that materials supplied by PSI comply with ASME Code and design specification requirements or are suitable for their intended service, or replace such materials.

NRC issued NUREG-1402 in February, 1990, which concluded that even though the materials supplied by PSI did not meet the ASME Code, their use in the applichtions reviewed was acceptable in accordance with Section 50.55a(a) (3)(ii) of Title 10 of the Code of Federal Regulations and that activities in response to Bulletin 88-05 regarding fittings and flanges could be closed for all operating nuclear plants.

The NRC does not condone the use of material in nuclear plants that does not meet regulatory requirements, and the NUREG-1402 closcout does-not

-relieve licensees of their responsibilities in mooting those requirements with regard to material suppljers.

This inspection was also conducted to determine the suitability of material being supplied by ESSC which was purchased from its suppliers and to ovaluate the ESSC QA program for compli,ance with NRC requirements.

3.3 PSI Supolled Material The NRC inspectors determined by discussion with Mossrs. Mitchell and Paton and Ms. Fabbri that ESSC had purchased commercial grado material from PSI on three separate occasions.

The material was subsequently supplied to the Zion nuclear plant, the Target Rock Company, and the Comision Federal De Electricidad in Mexico.

In each case thn ESSC customers had purchased commercial grade material and no nucluar requirements were imposed on ESSC or PSI.

The inspectors also determined, by reviewing the ESSC AVL, that PSI was approved for supplying commercial grado material only.

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3.4 Rocument Reviey, The inspectors reviewed numerous data packages including material supplied to Byron, Turkey Point, Clinton, Cooper, Fermi 2, and Layne & Bowle'..

The material was purchased from approved suppliers on the applicable AVL.

ESSC's AVL was detailed and comprehensive, but the latest AVL included two vendors whose basis for approval had expired.

Their original basis for inclusion on the AVL wao either the existence of a current ASME Quality System Certificate (QSC) or an ESSC source survey and audit. VITCO Nuclear Products had a QSC which had expired and NUCOR Steel was past the required audit due date, yet both remained on the AVL as suppliers of nuclear and safety related material.

ESSC indicated that the problem was caused by VITCO claiming that it had renewed the QSC but had not yet provided a copy to ESSC.

NUCOR had not been reaudited because ESSC's auditor did not have time in his schedule to meet the due date.

Both vendors were removed from the AVL pending receipt of VITCO's rennwed QSC and a reaudit of NUCOR which was scheduled for May, 1991.

This corrective action solves the present problem but a method hr a not been provided to preclude repetition in the future.

(See Nonconformance 91-01-02)

Review of ESSC procedures on measuring and test equipment revealed that an Elcomotor 245 instrument was being used to measure the thickness of coatings on material being supplied to nuclear customers without an approved procedure in the QA program.

The inspectors were provided a copy of a draft procedure and were advised that the manufacturer's instructions were being used until the procedure was approved.

(Sco Nonconformance 91-01-01)

The inspectors reviewed several NCRs and determined that adequate corrective actions had been develcped and implemented.

The elapsed time to close the NCRs, however, was often quite lengthy.

Nine NCRs were found which remained open at least two months since their initiation with no corrective action being taken to prevent recurrence.

The inspectors concluded that exceeding two months is not indicative of a prompt response time for corrective action.

(See Nonconformance 91-01-03) 3.5 Qkservations of_ Work In Proccan The inspectors observed work in process throughout the warehouse and the receiving and inspection area.

The plant was clean and well organized, with material in good condition and properly stored.

The material was properly identified and marked with the exception of a steel plate which was marked with two different plate numbers.

ESSC issued NCR No. 0355, dated May 16, 1991, in response to this finding; however, the corrective action does not.

provide a method to prevent repetition in the future.

(See Nonconformance 91-01-02) 4 l

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one bundle of stainless stool tubos and one bundle of copper j

nickel tubes woro observed to have carbon stool bands in contact with those materia.ls which is a nonconformance with the ESSC QA program.

The ESSC correctivo action to this finding discovered five edditional bundlos with carbon steel bands in contact with stainless steel, and ESSC installed nuclear tapo or cardboard under the banding during the inspection.

(Sco Nonconformance 91-01-02) 3.6 10 CFR Part 21 The inspectors determined that ESSC has maintained the required postings in three locations, imposed 10 CFR part 21 on purchase orders, and implemented proceduro Q15.1, " Reporting of Defects",

Revision 1, dated July 15, 1988.

No violations woro found during this inspection.

3.7 Traceability Discussions with Mossrs. Mitchell cr.d Paton datormined that ESSC does not require copies cf mill test reports for all material supplied by its v'undorc, because they establish traceability when they uotermino that a supplier's program is found to moot the requirements of Appendix B to 10 CFR Part 50 through periodic audits.

ESSC confirma during audits that mill tost reports are

-in their supplier's files _for material that is being supplied to ESSC.

The inspectors emphasized the importance of mill test reports in establishing heat traceability to the mill where the metal is melted and the heat number is assigned.

Criterion VIII of Appendix B to 10 CFR Part 50 states, in part, that " measures shall assure that identification of the item is maintained by heat number... on the item or on records traceable to the item as required throughout fabrication, erection, installation, and use of the item... to provent the use of incorrect material."

The mill test report is the document in which the manufacturer assigns the heat number to a material at the time the molten metal is poured from tho ladle into molds to form the solidified ingots or slabs.

The inspectors are not aware of any document other than the mill tost _ report which verifies the history of the heat number associated with the chemical composition, melting practico, and applicable mill heat treatment of a material.

A copy of the mill test report should be included in the records of material to verify the traceability of that material in accordance with Appendix B to 10 CFR Part 50.

Paragraph NCA-3867.5 of Section III of the ASME Codo requires material suppliers such as ESSC to-transmit Cortified Material Test Reports (CMTRs) from all material manufacturers to the purchaser at the time of shipment.

The ASME Codo defines CMTR as "a document attesting that-the material is in accordance with 5

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i specified requirements, including the actual results of all required chemical analyses, tests and examinations."

Some of these requirements, as defined in ASME materials specifications include a description of the molting process and heat treatment performed on the stock material.

The only entity that can 1

reasonably attest to these operations is the stool mill.

Therefore it is cNpected that the mill tost report should bo included in the set of CMTRs which are required to be submittod to the purchaser at the time of shipment.

Pending further review of documents actually supplied by ESSC to their safety-related nuclear customers, this issuo is identified I

as an unresolved item (91-01-04).

4 PERSONNEL CONTACTED i

D.

Boltz, QC Inspector i

D.:Dubey, Operations Manager

+

T. Fabbri, QA Manager R.

Freeman, QC Inspector

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M. Mitchell, President J.

O' dell, QA Specialist

+

R. Paton, Vice Prooident, QA

+

Attended entrance meeting on May 13, 1991 Attended exit nocting on May 17, 1991 6

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UNITED STATES I' '

i NUCLEAR REGULATORY COMMISSION

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August 20, 1991 DutLtt flo. 99901133 t'r, Robert R. Anerson, President flanders f ilters, Incorporated fi,nders Road t

Post Offia I,ox 1:'00 Washington, North Carolina 77889-1700

Dear l'r. /.ncrson:

SLTJECT:

NOTitt Of V10LATICf (NRC lil50f CT!0fi REPORT 99901233/91-01)

Tl.is refers tc the inspection conducted by Mr. t;. runyan and t'r. J. Petrosir.o of my sta'f on August !4,1991.

The inspection included a review of your activities regarding nuclear grade high efficiency particulatt tir (HCPA) filters at your Washingt0r., Forth Caroliha f acility.

At the conclusion of the ir'spectier, the findir.gs were discu:, sed with 11r. Randy Smith and other nenbers ci your sta'f.

The Lt.5.1:utlear Reguletory Conr',ssion (hfic' staff conducted the inspection te review tbt circunstar,u s surrourdirq a Part Il of Title 10 0' the Code of rederal h lations (10 CFR Part 01, issue identified to us Ly a July 2,1091, letter f rom Leonard Iesigns/Ahrr0G (LD/A), Los Alamitos, California.

Tht Ittter indicated that flerders filters, incorporated (ff!) may have incorrectly certified compliance with 'tilitary Specification, filter (MIL-f)-51068, even though ff! knew that it did rtt appear on the M]L f-510f8 qualified products list (QPt. Areas en nined durirs the inspection are identified in the report.

Fithin these areas, the inspection cor!isted of ulective tuminations of prccedures and represent 6tive records, interviews with personnel, and observetions by tht inspectnrs.

Eased on the results of the inspection, certain of your activitier appeared to be in violttien of HRC requirements, os specified in the enclosed Notice of Violation (Notice).

The F landers certificates of confornence (CoCs' that you l

suff ied with scne orders af ter May 4,1900, certifit.d that your nuclear grade HEPA filters were ir, full cornpliar,ce with !!!!-f-51008, even though flanders had let its illL-F-51008 qualified status lapse after Me) 4, 1990.

The violation is of concern beccuse NRC lit (rsees utilize Cots to document and substantictc. in part, that nuclear safety-related cortponents are processed ar.c control 1< d it, accordance with pecific requirernents. Of additional concern is the f act that, when Flanders subrnitted HEPA filters for OPL testing at the L'nited $tates Departnent of the Arny Edgewood Testing f acility on June 21, 1991, all 10 filters tested feiled te neet the testing require.nents of fill-F-510f f. These f ailures resulted f rom tears in the filter nedia af ter a rougt handlint test.

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_ _ _ _ _ _ - _ _ _ _ _ _ _ _ - _ _ _ _ - _ _ _ _ _ - _ _ - _ _ _ _ _ _ _ _ =

_.. _.. _. ~ ____.

fir. Rottrt R. Amerson 2

tou are required to respond to this letter and should follow the instructions specified in the enclosed Notice of Violation when preparing your response.

In your response, you should document the specific actions taken and any addditior,al actions you plan to prevent recurrence.

Af',er reviewing your respcrie to this fictice, including your proposed corrective actions and the i

results of future inspections, the NPC will deterinitie whethcr further NRC enforcerrent actiori is necessary to ensure cornpliance with NRC regulatory requirerner.ts.

You are also reouested to respond wbtn you have coropleted your evaluation regarding the HEPA filter test specirnen f ailures discussed above.

i

6ccordarice with 10 CFR 2.790 of the I:PC's " Rules cf Practice, a copy o' this letter and its triclosurts will be plcced in the NRC Public Docuraent Roora.

1 The responses directed by this letter arid the enclosed Notice are not subject to the clearance procedures of the ' Office of Management end Budget as required l

by the Paperwork reduction Act of 1980 Public Law No. 96 511.

Sincerely,,

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QA.

leif

. Norrholri, Chief Vendor lospection Branch Division of Reactor inspectior, and Safeguards Of f ice of 14uclear Reactor Regulatior.

Ercloture-hotice of Violatiori Ir.spectior, keport No. 99901E33/91-01 l

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NOTICE Of VIOLATION Flanders filters, Incorporated Docket 110. 9990lP33 Washington, North Carolina Report No. 91-01 During an NRC inspection conducted on August 5-7, 1991, a violation of NRC requirenents was identified.

In accordance with the " General Statement of Policy and Procedure for NRC Enforccncnt Actions," 10 CFR Pat t 2, Appendix C (1991), the violatior is as follows:

Section 21.21, " Notification of failure to comply or existence of a defect,"

of 10 CFR Part 21 states, in part, that "Each individual, corporation, partnership or other entity subject to the regulations in this part shall adopt appropriate procedures to (1) provide for (i) evaluating deviations or (ii) informing the licensee or purchaser of the deviation in order that the 'icensee or purchaser may ccuse the deviation to be evaluated...."

Contrary to the above requirenents, flanders Filters, Incorporated (FFI) fciled to adopt procedures that were adequate to ensure that identified deviations to purchase orders for safety-related HEPA filters a

• either evaluated to determine whether a particular deviation could create a substantial safety hazard, or that the NRC licensee or purchaser is informed of the deviation in order that the licensee or purcheser may cause the deviation to be evaluated.

Four examples wert identified in which a safety-related purchase order required the FFI HEPA filters to bc certified or qualified to Military Specification, Filter (Mll-F)-51068.

In each case FFI provided a certificate of compliance (CoC) attesting to that requirement; however, FFI was not on the qualified products list (QPL) for li1L-F-51068 after May 4, 1990. Certification to MIL-F-51068 implies and requires inclusion on the QPL. The examples are as follows(91-01-01):

Carolina Power and Light Cumpany purchase order (PO) number 692759CJ, dated April 10, 1990, required that "HEPA filters shall be designed, constructed and tested in accordance with ANSI N509-1980, Section 5.1, and MIL-F-51068." Flandars' CoC, dated August 29, 1990, certified that ' the items for this order have been fabricated, tested and inspected in accordance with the specified standards, codes, draw',, specifications and purchase order requirements..."

Georgia Power Company PO number 0004322, dated August 13, 1990, for its Hatch Unit 1 fluelear Plant, required that the filters "Shall neet all the requirements of USAEC Health and Safety Bulletin 306, dated 11 arch 31, 1971, plus requirements of HIL-SPEC 1111-F 510680." Flanders' CoC, dated September 13, 1990,"... certified that the items for this order have been fabricated, tested and inspected in accordance with the specified standards, codes, drawing specification and purchase order requirements...."

M00 Engineers Products Group, Incorporated [ ncw Leonard Designs /AllPROG (LD/A)} P0 number LDA-2041, dated August 2?, 1990, required that,

"... Certificate of Compliance required to: 1.

111L-F-51068 latest revision...."

Flanders' CoC, dated October 3, 1990, certified compliance to this requirement.

The filters supplied pursuant to this PO were subsequently shipped to the Fitzpatrick Nuclear Plant.

13

Nebraska Public Power District P0 number 333711, dated May 1, 1991, for its i

Cooper Nuclear Station, required that, "... certification and test reports per HIL standard F-51008 (latest revision)...." flanders' CoC, dated May 29, 1991, certified compliance to this requirement.

This is a Severity Level IV Violation (Supplenent Vl!).

Pursuant to the provisions of 10 CFR 2.E01, Flanders filters, incorporated is hereby required to submit a written statement of explanation to the U.S.

Nuclear Regulatory Connission, ATTN: Document Control Desk, Washington, D.C.

20555 with a copy to the Chief, Vendor Inspection Branch, Division of Reactor Inspection and Safeguards. Office of Nuclear Reactor Regulation, within 30 days of the date of the letter transmitting this Notice of Violation.

This reply should be ::learly marked as a " Reply to a Notice of Violation" and should include for each violation:

(1) the reason for the violation, or, if contested, the basis for disputing the violation, (2) the corrective steps that have been taken and the results achieved, (3) the corrective steps that have been taken to avoid further violations, and (4) the cate when full compliance will be achieved.

Where good cause is shown, consideration will be given to extending the response deadline.

c k

Dated at Rockville,)l'aryland this,20h of } pp f-, 1991 14

ORGANIZATION:

Flanders filters, Incorporated Washington, North Carolina REPORT NO.:

99901233/91-01 CORRESPONDENCE ADDRESS:

Flanders filters, Incorporated Flanders Road Post Office 00x 1708 Washington, North Carolina 27889-1708 ORGANIZATIONAL CONTACT:

l'r. Sherwood Randall Smith, QA fianager (919)946-8081 NUCLEAR INDUSTRY ACTIVITY:

flanders filters, Incor) orated (ff!) supplies high efficiency filters and ligh efficiency particulate air (HEPA) filters in a nuclear grade for military and connercial nuclear facilities.

ff! manufactures the fiber glass media naterial as well as the f abrication and testing of the HEPA and high efficiency nuclear grade filters.

INSPECTION CONDUCTED:

August 5-7, 1991 4r II -)I LEAD INSPECTOR:

etros to Team.eader, Rcactive Insaection Section No.1 (RIS-1), Vendor Inspection 3 ranch (VIB)

OTHER INSPECTORS:

11.F. Runyan, Division of Reactor Safety, Region IV:NRC APPROVED BY:

2-trc.c ce a

8 //

/

Gregor f.,ywalina, Scction Chief, Spect61 Projects, VIB, D firdon of Reactor Inspection and Safeguards INSPECTION BASES:

10 CFR Part 21 and Appendix B to 10 CFR Part 50 INSPECTION SCOPE:

To review the circumstances surrounding a concern identified to the U.S. Nuclear Regulatory Comission (NRC) staff in a 10 CFR Part 21 report submitted July 2,1991, from Leonard Designs /ANPROG. The concern indicatcJ that FFI may have incorrectly certified compliance to 11111tary Specification filter s

(NIL-F)-51068 even though FFI had been removed from theMIL-F-51068QualifiedProductsList(QPL).

PLAflTS AFFECTED:

Pultiple facilities 15

1.0 INSPECTION SUFFARY:

1.1 Violation Contrary to Section 21.21, "Potification of f ailure to comply or existence of a defect," of 10 CrR Part 21. flanders Filters, Incorporated (ffl) feiled to adopt procedures that were adequate to ensure that deviations to purchase orders for safety-related nuclear grade liEPA filters are evaluated or the licensee or purchaser is informed in order that the licensee or purchaser may cause the deviation to be evaluated.

Examples where fil incorrectly asserted compliance with 111L-f-510f;8 were identified.

(91-01-01) 1.2 Unresolved item Twelve ff! HEPA filter test specimens subrcitted in June, 1991, failed to pass the testing requirements of HIL-F-510f>8.

Although ff! has enhanced its manufacturing processes to preclude additional failures, there is a concern that some filters previously shipped to nuclear fecilities may be vulnerable to failure when subjected to high arnplitude vibration.

Pending NRC review of ffl's ongoing en incering evaluation, this issue is identified as an unresolved item.

(91-01-02 2.0 STATUS Of PREVIOUS If4SPECT10H flNDINGS:

There were no open findings to address as this was the first NRC inspection of ffl.

3.0 INSPECTION flNDINGS AND OTHER COIEENTS:

3.1 Entrance end Jxit iteetings The NRC inspectors discussed the scope of the inspection with the ff! Quality Assurance (QA) manager and engineering manager during the entrance meeting on August 5, 1951.

Following this meeting, the NRC inspectors toured the ffl fccility. During the exit necting on August 7, 1991, the NRC inspectors sumarized the cenclusions, findings, and concerns identified during the inspection to the ff! staff mcmbers.

3.2 Background

Leonard Designs /ANPROG (LD/A) of Los Alamitos, California transmitted a 10 CFR Part 21 report to the NRC on July 2,1991, regarding high efficiency particulate air (HEPA) filters procured from ffl.

LD/A stated in its letter that materials supplied by LD/A to various commercial nuclear power plants did not comply with the original dt. sign specifications and purchase orders. LD/A purchased safety-related HEPA filters from ffl and imposed compliance to 10 CFP, Part 21 and till-f-510f 8, " Military Specification, filters, Particulate (High-Efficiency fire Resistant)." LD/A stated that the materials that they procured from ff!

did not conform to purchase requirements and design drawing specifications 2

16

which required compliance to MIL-f 5106B.

The Nf,C inspector noted that revision f (June 20,19ff) of HIL f-51068 states "This specification is approved for use by all Departments and Agencies of the Department of Defense.*

According to LD/A, the cognizant U.S. Arpy Chemical Research, Develo3 ment and Engineering MIL-r-51068 specification administrator expressed that fF1 was not listed on the May 4, 1990, qualified products list (QPL) and that "a vendor is not, under any circumstances, in compliance with HIL-r-51068 without having their products listed on the QPL."

i During discussions with U.S. Arnty and ff! personnel, the inspectors confirmed that ff! was listed on the September 15, 1981 MIL r-51068 QPL for HEPA filters.

However, in 1989, when ff! should have submitted HfPA filter test specimens to the U.S. Arny testing facility, fil chose not to submit test specimens because of a misunderstanding regarding the cost of the QPL effort.

Consequently, Frl's name did not appear on the Hay 4,1990, MIL-F-51068 QPL. Af ter this date ff! would not ao correct in certifying that its filter products were in compliance with HIL-r 51000.

However, the ff!

-staff stated that they comply with the testing requirements of HIL T-51068 in their manufacturing activities.

In conjuction with its decision to drop QPL status, ffl constructed an onsite MIL-F 51068 testing facility.

Therefore, when purchasers specified that filters be tested )er MIL-f-51068 but added no l

other stipulations regarding this specification, 71 was correct in cortifying compliance to this purchase specification (assuming ff!'s in-house testing was incompliancewithHil-F-51068). The NRC ins sectors observed some penetration testing being conducted and discussed the met 1odology employed with the ff!

manufacturing technician, ffl also stated that an Underwriters Laboratories (UL) inspector comes in o the ff! facility weekly for surveillance testing.

II; summary, the NRC inspectors determined that ff! cannot certify compliance with MIL-F-51068 until ff! filter test specimens successfully pass the MIL-T-51068 tests at the U.S. Arny testing facility, ff! can certify that its filters have been tested in accordance with HIL-F-51068..taliT69 credit for its in-house testing activities.

3.3. Purchase Order Package Review The NRC inspectors conducted discussions with ff! personnel, reviewed nuclear grade' HEPA filter purchase order (PO) packages for nuclear power plar.ts, ff!

customer lists, and other relevant records.

The inspectors selected nuinerous PO packages for review from the ffl customer lists.

As a result of the review, the inspectors identified 10 PO packages where the ff! customer'specified compliance with H!t.-F-5106a on P0 documents, and ff! certified conformance with the.P0 requirements on the associated certificate of compliance. Only four of

.the ten PO packages were determined to have been sent to NRC licensed facilities

'for possible safety-related applications, specifically:

Georgia Power Company (Hatch Unit 1), PO number 6004322, dated August 13,

-1990, for 16 nuclear grade HEPA filters, pLrt number (P/N) 007-C-02-03-NL.

3 1

17

ANCO rngineers Products Group, Incorporated now Leonard Designs /ANPROG (LD/A) P0 nun 6er LDA 2041, dated August 22,1990, for 6 nuclear grade HEPA filters, P/N 007 C 02-03-NU, ordered by New York Power Authority (fitzpatrick)

PO number 90 0018, dated August 17, 1990.

Nebraska Public Power District (Cooper Nuclear Station), PO nunber 333711, dated May 1,1991, for 4 nuclear grade HLPA filters, P/N 007 C-02-03-NL-12 00-GG F-US.

Carolina Power and Light Company (Drunswick Plant), PO number 692759CJ, dated April 10, 1990, for 21 nuclear grade HEPA filters, P/N 007-C-02 03 NL.

The inspectors concluded that ff! erroneously certified to the above custoners that it complied with the Jurchase order specifications.

The inspectors noted that'in early July 1991, tic Leonard Designs /ANPROG staff informed ff! that it was not in compliance with the PO recuirements.

However, ff! failed to recognize that this was a deviation as cefined in 10 CFR Part 21, and failed to

{

determine if other NRC licensee customers were affected by this deviation.

Violation 91-01-01 was identified in this area I

3.4 10 CFR Part 21 Procedure The NPC inspectors interviewed the ff! staff, observed three of the four posting locations of the ff! procedure that was established to implement 10 CTR Part 21, and reviewed a copy of the documents that were selected to be posted.

These documents included ff! Procedure QA Ad.QA-Pro-012. " Nonconforming Deficiency Procedure," dated November 7,1905 a copy of Section 206 of the Energy Reorganization Act of 1974, an fil explanation of 10 CFR Part 21, an August 1,1900, revision of 10 CFR Part 21, and an ff! January 3,1991, internal nemorandum to all employees.

The inspectors determined that the procedure that FFI adopted pursuant to Part 21 failed to adequately address Section 21.21(a)(1), " Notification of failure to comply or existence of a defect," of 10 CFR Part 21. Scction 4.0 of the ff! Part 21 procedure does not ensure that deviations other than 1

manufacturing component problems will be evaluated in accordance with Part 21.

Design, engineering, test, service, and administrative c'eviations are not addressed in the fit Part 21 procedure.

The inadaquate ff! procedure was directly related to ff!'s f ailure to identify, evaluate, or inform its custoners of a deviation regardiny its certificates of compliance (discussed in $cction 3.3above).

3.5 _ failed ff! filters

.As discussed in Section 3.2 above, in 1989 ff! chose to not submit HEPA filter

. test specimens for testing and inclusion on the most recent (May 4, 1990)

MIL-F-51068 QPl. After reconsideration, ffl decided to scbmit HEPA filter test specimens to the U.S. Arnty test facility in Edgewood, Maryland on June 21, 1991.

The 12 fri filters all passed the initial penetration testing. During the rough handling test, the fiber glass media degraded on all tested filters.

Consequently, the filters failed the subsequent penetration test (which is 4

18

performed both before and af ter the rough handling tt st to verify the integrity ofthefilters). Since these failures involved nuclear grade HEPA filters that were being tested for certification to MIL-F-51068, the inspectors viewed this as a probbm that should be dispositioned under FFI's QA )rogram regarding Criterion XVI, " Corrective Action," of Appendix B to 10 C rR Part 50.

The NRC inspectors queried the FFI staff concerning how the problem was identifled and dispositioned. The FFI staff provided a copy of a " Product Engineering Action Report' (PEAR), which is their mechanism for tracking the Cisposition of nonconformances.

The PEAR was dated July 8,1991 and proposed as corrective action to return thetettfilterstoFFIforevaluationandcomparisontestingatFFl. The PEAR was still in-process and had not been formally evaluated.

Engineers at FFI discovered that there was a significant abnormality in the filter specimens which had been sent to the U.S. Ary test facility.

Specifically, the test filters exhibited less tensile strength ar.d stiffness than normal.

These unfavorable characteristics were at icest partly the result of the filter media thickness being only 15 mils, which is on the low end of thu 15 to 20 mil target rat.ge. All filters produced from this " bad batch" were downgradtd for industrial or connercial use only. As a result of this incident, FFI implemented a revision to its specifications for all nuclear grade filtera as documented in a memorandum dated August 1, 1991.

The target range for media thickness is now 20-25 mils. Additionally, this FFI memorandum requires that mtdia produced from each lot be tested for tensile strength and stiffnest.

Previously, tests for tensile strength and stiffness were performed only on a periodic basis.

FFI engineers have determined that filters produced from the thicker media easily pass the rough handling tests required by HIL-F-51068. The NRC inspectors determined that FFl had taken acceptable corrective actions to address the evident deficiencies in its filter manufacturing processes.

A remaining questinn is whether some filters previously shi9 ped to nuclear facilities may possess the same unfavorable properties whic1 caused the test filters to fail. This period of uncertainty may extend as far back as 1984, the last date TF1 submitted filters which successfully passed QPL testing.

In discussions with the NRC, FFI officials connitted to perform an engineering evaluation to determine whether previeusly produced nuclear grade filters may be defective with respt:ct to resistance to rough handling or vibration and thus whether other nuclear licensees in addition to those specified in Section 3.3 need to be inf ormed under the requirements of 10 CFR Part 21.

FFI expressed a willingness to submit this evaluation, when completed, for NRC review.

Pending NRC review of the FFI engineering evaluation, this issue is identified asanunresolveditem(91-01-02).

4.0 FFI PERSOUNEL CONTACTED:

4*

5. Klocke Director of Engineering T. Kujawski Aftermarket Sales Manager H. O'Neal Technical Sales Representative

+*

5. Smith Quality Assurance Manager

+ Attended entrance meeting on August 5.1991

• Attended exit meeting on August 7,1991.

5 19

• *' C g o,

UNITED STATES

' sf

,,r %

fi NUCLEAR REGULATORY COMMISSION 2

-'%ff waswisotow. o c mus m22 e Docket Nos. 50-276 and 50-323 Mr. J. D. Shiffer Senior Vice Presicent Nuclear Power Generation Pacific Gas and Electric Company 77 Beale Street, Room 1451 San Francisco, California 94106

SUBJECT:

ASSESSMENT OF THE PROCURIMENT AND COMPERCIAL-CPADE DEDICATION PROGRAMS AT THE DIABLO CANYON NUCLEAR POWER PLANT, UNITS 1 AND 2, REPORT N05. 50-275/91-201 AND 50-323/91-201 This letter transmits the rep 0rt of the assessment conducted March 25 through March 29, 1991, at the San Francisco, California office of Pacific,as and r

Electric Company (PG&E), and at the Diablo Canyon Nuclear Power Plant, Units 1 and 2, by R. L. Pettis, K. R. Naidu,(L. L. 'empbell, and M. R. Snodderly of tht: Nuclear Regulatory Comission's NRC's) Vendor inspection Branch, A. M. Fitzgerald of the Division of Reactor Projects, nr.d W. J. Wagner of HRC Region V.

At the conclusion of the assessment, the assessment team discussed its findings with Mr. J. Townsend, Vice President and Plant Manager, and the members of your staff identified in the appendix to the enclosed report.

The atsessment was performed to review PG&E's program for the procurement and dedication of comnercial-grade items used in safety-related applications in accordance with the requirements of Appendix B to Part 50 of Title 10 of the Code of federal Regulations (10 CFR Part 50) and to determine the extent of implementation of the Nuclear Management and Resources Council (NUMARC) initiatives ir. this area.

The NRC assessment team concluded that PG&E had made a significant effort to upgrade its comercial-grade dedication program since its inception in July 1986.

Specifically, PGLE has developed er. tensive mechanical and metallurgical testing capabilities onsite to perform Electric Power Research Institute (EPRI)

Method 1 acceptance activities which are heavily relied upon by PG&E.

Additionally, PG&E management has provided extensive resources to irnprove its commercial-grade dedication program. PG&E's overall program description was e,enerally consistent with the dedication philosophy described in EPRI Report

P-5652, " Guideline for the Utilization of Comercial Grade Items in Nuclear Satety Related Applications (NCIG-07)." However, the program description, including most of the pertinent implementinq procedures, did not completely address the issues contained in NRC Generic Letter 89-02, " Actions to improve the Detection of Counterfeit and Fraudulently Marketed Produ

ts," dated March which specified certain' restrictions or conditions concerning the use 21, 1989, of EPR1 NP-5652 dedication methods to achieve compliance with Appendix B to 10 CFR Part 50, 20

1 Pacific Gas and Electric Company J. D. Shiffer With appropriate modifications to address these issues, the program, if properly implemented, should provide adequate control over the commercial-grade procure-ment process. Specific strengths and weaknesses are discussed in detail in the enclosed report.

PG&E has completed its review and assessment of the comprehensive procurement initiatives suggested in NUMARC 90-13, " Nuclear Procurement Program improve-ments," dated October 1990. NUMARC suggested that licensees complete their reviews by July 1,1991, and complete implementation by July 1,1992.

Progress observed in this area indicates that PG&E should be able to meet these goals.

In accordance with 10 CFR 2.790(a), a copy of this letter and the enclosure will be placed in the NRC Public Document Room.

Although no response is required to this report, we expect you to consider the concerns raised herein and to take appropriate measures.

Should you have any questions concerning this assessment, we will be pleased to discuss them with you.

Thank you for your cooperation in this assessment process.

Since rely,

Bruce A. Boger, Director Division of Reactor Projects !!!/lV/V Office of Nuclear Reactor Regulation

Enclosure:

Assessment Report 50-275/91-201, and 50-323/91-201 cc:

See next page 21

Pacific Gas and Electric Company Diablo Canyon Nuclear Power Plant, J. D. shiffer Units 1 and 2 cc:

NRC Resident inspector Mr. John Hickman Diablo Canyon Nut. lear Power Plant Senior Health Physicist c/o U.S. Nuclear Regulatory Comission Environmental Radioactive Mgmt. Unit P.O. Box 369 Environmental Management Branch Avila Beach, California 93424 State Department of Health Services 714 P Street, Room 616 Sacramento, California 95814 Dr. Richard FergJson, Energy Chair Sierra Club California Regional Administrator, Region V 6715 Rocky Canyon U.S. Nuclear Regulatory Comission Creston, California 93432 1450 Maria Lane, Suite 210 Ms. Sandra A. Silver Mothers for Peace Mr. Peter H. Kaufman 660 Granite Creek Road Deputy Attorney General Santa Cruz, California 95055 State of California 110 West A Street, Suite 700 Ms. Jacquelyn C.-Wheeler San Diego, California 92101 3303 Barranca Court San Luis Obispo, California 93401 Ms. Nancy Culver 192 Luneta Street Managing Editor San Luis Obispo, California 93401 The County Telecram Tribune 1321 Johnson Avenue Michael M. Strumasser, Esq.

P. O. Box 112 Special Assistant Attorney General

$6n Luis Obispo, California 93406 State of California Department of Justice Chairman 3580 Wilshire Boulevard, Room 800 San Luis Obispo County Board of Los Angeles, California 90010 Supervisors Room 370 County Government Center San Luis Obispo, California 93408 Richard F. Locke, Esq.

Pacific Gas & Electric Company Post Office Box 7442 San Francisco, California 94120 l

22

U.S. NUCLEAR REGULATORY COMMISSION OFFICE OF NUCLEAR REACTOR REGULATION DIVISION OF REACTOR INSPECTION AND SAFEGUARDS Report Nos.:

50-275/91-201 and 50-323/91-201 Docket Nos.:

50-275 and 50-323 License Nos.:

DPR-80 and DPR-82 Licensee:

Pacific Gas and Electric Company 77 Beale Street, Room 1451 San francisco, California 94106 racility Name:

Diablo Canyon Nuclear Power Plant, Units 1 and 2 Assessment at:

Avila Beach and San Francisco, California Assessment Conducted: March 25 through 29, 1991

/?g/c&L.ArmA; 7//r/!!

Robert L. Fett15, Jr.,

P.L.,

leam Leader Date VendorinspectionBranch(VIB)

Other inspectors:

K. Naidu, Senior Reactor Engineer, Y10 L. Campbell, Reactor Engineer, VfD M. Snodderly, Reactor Engineer, VIB W. Wagner, Peactor Engineer, RV A. Fitzgerald, Reacter Engineer Intern, NRR

('

/

Approved by:

4b C

5

/

s Leif J.INorr4 Date Vendor Inspec)olm, Chief tion Branch Division of Reactor inspection and Safeguards Office of Nuclear Reactor Regulation t.

i

-23

TABLE OF CONTENTS

.PJL9S EXECUTIVE SUMHARY.....................................................

i 1

INTRODUCTION.....................................................

1 2

C0tNERCIAL. GRADE DEDICATION PROGRAM REVIEW.......................

1 2.1 Procurement Program Development.............................

1 2.2 Procedures Review...........................................

3 2.3 Program Interfaces..........................................

4 2.4 Replacenent Part Evaluation Process.........................

4 2.5 Receipt inspection..........................................

7 2.6 Pa r t s C l a s s i f i ca t i o n Sy s tem.................................

8 2.7 Procurement Package Review..................................

9 2.8 Commercial-Grade Survey Process.............................

11 2.9 Fraud Detection.............................................

12 3

PROCUREMENT TRAINING REVIEW......................................

12 4

NUMARC COMPREHENSIVE PROCUREMENT INITIATIVE IMPLEMENTATION.......

13 4.1 Performance-Based Supplier Audits...........................

13 4.2 Te s t s a nd I n s pe cti on s.......................................

13 4.3 Obsolete items and Information Exchange.....................

14 5

CONCLU310NS......................................................

14 6

EXIT MEETING.....................................................

14 APPENDIX - PERSONS C0NTACTED........................................

A-1 24

EXECUTIVE

SUMMARY

from March 25 through 29, 1991, the Nuclear Regulatory Connission's (NRC's)

Vendor inspection Branch conducted an assessment of Pacific Gas and Electric Company's (PG&E's) activities related to the pr]turement and dedication of commercial-grade items (CGis) used in safety-related applications at the Diablo Canyon Nuclear Power Plent (DCNPP), Units 1 and 2.

The assessment team reviewed PG&E's procurerent program to assess its compliance with the quality assurance (QA) requirements of Appendix B to Part 50 of Title 10 of the Code of federal Regulations (10 CTR Part 50) and to assess the status of PG&E's implementation of the Nuclear Managenent and Resources Council (NUMARC) initiatives on procurement and conmercial-grade deuication.

The NUMARC Board of Directors has approved procurement initiatives as described in NUMARC 90-13 " Nuclear Procurement Program Improvements," which conmit licen-sees to assess their procurement programs and take specific action to strengthen inadequate programs.

The first phare of these initiatives addresses dedication of CGis and was scheduled to be implemented by January 1,1990.

Licensees are to meet the intent of the guidance provided in Electric Power Research Institute (EPRI) Report NP-5652, " Guideline for the Utilization of Conmercial Grade items in Nuclear Safety Related Applications (NCIG-07)," June 1988.

The NRC has condi-tionally endorsed this EPRI guideline in Generic Letter (GL) 89-02, " Actions to improve the Detec+1on of Counterf eit and fraudulently Marketed Productt," d:ted March 21, 19EM. The second phase of the initiatives provides a comprehensive procurement review rnd addretses vendor audits, tests and/or inspections, obsole-scence, information exchange, and general procurement.

Licensees are to review their programs by July 1, 1991, to determine, on the tsis of guidance in NUMARC 90-13, if improvements are needed i these are, and to complete such improvements by July 1, 1992.

The NRC perforned its assessment to determine the current status of the activi-ties to improve the procurement program related to the industry initiatives dis-cussed above and NRC requirements. The assessment focused on a review of proce-dures and representative records, interviews with PG&E's staff, including senior management and DCNPP site personnel; and observations.

The NRC assessment team also held meetings with PG&E's corporate and plant management to discuss relevant aspects of commercial-grade dedication and to identify areas requiring additional information. The assessment team's observations were discussed with PG&E repre-sentatives and senior management at the exit meeting held March 29, 1991.

The dssessment team's specific conclusions are summarized below.

PG&E had made a significant effort to strengthen the commercial-grade de-o dication program and the overall program description was generally consis-tent with the dedication philosophy described in EPRI NP-5652. However, the program, including most of the pertinent implementing procedures, did not completely address the issues contained in NRC GL 89-02, which specified cer-tain restrictions or conditions 1r. Using EPRI hP-5652 dedication methods to achieve compliance with Appendix B to 10 CFR Part 50.

Specifically, PG&E procedures did nct address the restrictions in using EPRI Methods 2 and 4.

With appropriate modifications to address this issue, the existing program, if properly implenented, should provide adequate controls over the comercial-grade procurement process.

PG&E's program for commercial-grade i

25

dedication began in July 1986 and was further revised in August 1988 to incorporate the guidance contained in EPRI NP-5652, 16 months earlier than the comitment date of January 1,1990.

lhe assessment team considered it a weakness that PG&E used replacement o

part evaluations (RPEs) generated before August 1988 (the date when the guidelines contained in EPRI NP-5652 were incorporated into PG&E's program) to support the basis for dedication ',f the item.

Procedures did

)

not exist to require a review of these RPEs to reflect currtnt industry standards and prac'.io s and over 100 RPEs were available for use in safety-mht:d :ppikett as.

Recoros lutcated that opproximately 36 RPEs were und during tbc period January 1,1990 to March 25, 1991.

The continued use of RPEs developed before August 1988 without revi?w for compliance with the dedi etion methodology contained in the EPRI guidelines appeared incorsistent with PGAE's conrnitmcnts to implement these guidelines.

PG&E's implementation of the NUMARC comprehensive procurement initiative o

should enable it to meet the July 1, 1991 review date established in NUMARC 90-13. PG&E had completed its review and had developed a draft report containing its reconnendations.

The final report was scheduled to be issued to PG&E senior management by May 1991, o

PG&E's n;echanical and metallurgical testing facilities at San Ramon and the DCNPP site were well equipped and staffed and appeared to be ahead of most licensees. These capabilities provided in-depth, complete, and accurate testing for EPRI Method 1 acceptance activities (special tests dnd inspections), which PG&E heavily relied on for its commercial-grade dedication program. These capabilities should help to detect and screen the receipt of fraudulent or misrepresented items, P6&E provided management support and sufficient resources tu improve its o

comnercial-grade dedicatior, program. The PG&E staff displayed a great deal of interest in the team's assessment effort, and senior-level site and corporate managenent were available for consultation during the assessment.

PG&E management also participates in the Region V Utilities Engineering Managers Subcommittee on Procurement Engineering and the Joint Utility Tesk Group, ii 26

1 INTRODUCTION The NRC's Vendor inspection Branch assessed PG?r's efforts to improve programs for procuring and dedicating CGis used in safety-related cpplications.

The PG&E program was reviewed to assess its compliance with Appendix B to 10 CTR Part 50 and to assess the status of implementation of the NUMARC procurement initiatives for the DCNPP, Units 1 and 2.

The assessment was performed between March 25 and 29, 1991, at the San francisco, California office of PG&E and the DCNPP site, located at Avila Beach, California.

The assessment methodology included observa-tions, discussions with licensee managers and corpcrate and site personnel and a review of records and procedures anociatea witn the hcensee's procureme,nt and dedication program.

The NRC staff is presently conducting assessments at selected licensees' facil-ities to review their implementation of improved programs for the dedication of CGls and to assess the improvements made in the areas covered by the NUMARC comprehensive procurement initiative program.

This initiative, approved on June 28, 1990, by the NUMARC 00ard of Directors, directed licensees to meet the guidance provided in EPRI NP-5650 and to review and strengthen their procure-ment programs in accordance with specific guidance provided in NUMARC 90-13.

The specific areas reviewed and the team's observations are described in Sec-tions 2 through 4 of this report. The conclusiens, strengths and weaknesses are summarized in Section 5 and Section 6 describes the exit meeting.

Persons contacted during the assessment are listed in the appendix.

2 COMMERCIAL-GRADE DEDICATION PROGRAM REVIEW The assessment team reviewed PG5E's programs.and related conrnitments associated with the implementation of the NUMARC initiatives, including the program for procurement and dedication of CGis used in safety-related applications at the DCNPP.

" Dedication" is generally understood to mean the process by which an item, not manufactured and supplied under an approved 10 CTR Part 50 Appendix B QA program, is verified to be suitable for use in a nuclear safety-related application.

Becausa a conunercial-grade dedication program consists of activi-ties affecting quality, it must bn conducted under an Appendix B QA program.

Theref ore, PGLE's -commercial-grade dedication programs were assessed against Appendix B critiera.

C.1 Procurement Program Development In July 1986, PG&E's commercial-grade dedic'M n program was initiated with the issuance of Nuclear Engineering Manua, r.% edure (NEMP) 3.12.

This proce-dure was based on the Atomic Industrial Forum paper entitled " Recommended Prac-tices for Procurement of Replacement / Spare Parts for Nuclear Power Plants,"

which.was issued in March 1986. This procedure outlines the preparation and handling of RPEs which are prepared by t'G&E's Nuclear Engineering and Construc-tion Services (NECS) group located in San Francisco, California.- NECS also has design responsibllity and performs parts classification.

The first revision of HEMP 3.12 was issued in March 1987 and added a requirement to evaluate the safety function of the item as well as specifying the critical characteristics for the item to perform its safety function.

The RPE forms were also revised to include 1

27

1 more detail in the evaluation process. Revision 2 to PG&E's program was initiated af ter the issuance in June 1988 of EPRI 14P-5652.

Other enhancements included an expanded N'E form and thirteen pages of proce-dural guidance.

PG&f's incorporation of the EPR1 guideline occurred over 10 months earlier than the industry commitment date of January 1,1990.

In September 1989, the third revision to NEMP 3.12 was issued which added the requirement that the original equipment manufacturer concur with changes made by PG&E to the original design, and also added more guidance fron, lessons learned.

Also in September, S6rgent & Lundy (S&L), under contract to PG&E, issued a report summarizing its independent review of PG&E's convercial-grade dedication program.

The S&L evaluation assessed current parts classification and commercial-grade cecication practices in light of the latest regulatory requirements and industry standards; verified that the program procures items with e high degree of reli-ability; investigated the cost effectiveness of the program; reviewed program-N, matic ef fectiveness; investigated ways to streamline the procurenent process; Rf A,.

and provided reconmendations to improve the technical 6nd economic aspects of the program.

S&L proposed various enhancements to the program including sim-plification of the RPE process, reduction in interface problems between the various grocpn, and improved the overall reliability of the process.

S&L con-cluded that PG&E's program was P Anically adequate and appeared to result in the procurement of high-qulity,eplacement items.

In December 1990, PG&E incorporoted certain of the S&L recormenJations into Revision 4 of NEMP 3.12, including RPE coordinators to improve the interface between NECS and the site and the formation of the RPE Continuous improvement Task Force. This change should provide a method of interface that may alleviate the difficulties in program im lementation that were primarily attributed to a lack of ownership of th2 connercial-grade dedication program.

The program for dedication of CGls, as described by Revision 4 of NEMP 3.12, consisted primarily of using EPRI Method 1 ',erification activities (special tests and inspections) to verify critical characteristics.

PG&E had extensive ensite testing capability for dedication of CGls using Method I and had additioncl test-ing available at its San Ramon facility and through qualified contractors such as Wyle Laboratories, in addition, PG&E occasionally used EPRI Method 3 (source verification), primarily for the dedication of major components, and Method 2 (commercial grade survey) only for a few qualified suppliers.

The RPE prcgram is used to evaluate all changes to CGis, safety-related it s s, graded QA programs, and critical balance-of-plant items.

NECS performed the Ri'Es at the request of the Procurement Specialist Group (PSG) located onsite.

Since Revision 4 of NEMP 3.12, pG&E incorporated further enhancements into its program, in February 1991, the RPE Training Manual was issued and by late April 1991, computer generated RPE forms were issued, from the period January 7 through February 27, 1991, PG&E perforned an internal audit of the procurenent program, using both PG&E staff ant' consultants. The audit resulted in 66 findings hnd identified a lack of responsibility for the overall procurement program es the 'najor problem.

228

l 2.2 [roceduresReview Thefollowingnuclearplantadministrativeprocedures(NPAPs)andnuclear engineering maintenance procedures (NEMPs) represent the licensee's current program for procurement and dedication of CGis:

o NPAP D-530/NPG-5.2, "NPG Procurernent Program Overvier," provthd an over-view and the res)onsibilities of the Nuclear Power Generation (NPG) procure-ment program.

T,e Vice President NPG was responsible for establishing the 4

procedures that govern the development, implementation, and management re-view of the procurernent program. The program overview includes conmercial-grade dedication in NPAP D-640/NPG-5.14 o

NPAP D 532/NPG-5.4, " Initiating Procurement of Material and Job Estimate Program," addressed procurernen' activities by initiating a material request (MR) through the plant information management system (PIMS) or manually.

NECS-Engineering initiated procurement of material by issuing an engineering j

material memorandum that included engineering and QC reouirements to the PSG for incorporation into the sita procurement program, o

NPAP D-533/NPG 3.5, " Processing of Procutement Documents " described the requirementsforprocessing, reviewing,andapprovingallPIMS-generated hrs.

C

. o NPAP D-534/NPG-5.0, " Classification of items and Services for Procurement,"

establist.ed the requirements arid guidance for evaluations and safety classification,,f the items, including spare' parts.

o NPAP D-535/NPG-5.7, "PrC;urement Document Requirements," provided the t

requirements and guidance to ensure that appropriate technical and quality requirements are included in the procurctnent specifications. Section 4.6 required that CGis be dedicated for safety-related applications in accor-dance with the requirements of 10 CFR Part 21 and NPAP D-540/NPG-5.14, which included completion of PG&E Fonn 09-10666 which provided the receipt inspection instructions for coninercial-grade procurenent.

o-NPAP D-540/NPG-5.14. "Coninercial-Grade Dedication Activities," provided the instructions and responsibilities for ensuring that CGis meet the procure-

-ment requirements specified by NECS-Engineering. This procedure was appli-cable to the site dedication activities conducted through the implementa-tion of EPRI NP-5652 Method 1, during or after receipt of a CGI, to verify selected critical characteristics.

o NEMP 3.12, " Spare and Replacement Parts Evaluation," described the process for NECS-Engineering to-evaluate spare and replacement sarts for safety-related use, including identification of the critical claracteristics and a partial list of potential critical characteristics and'their application as' referenced in the EPRI guideline.

4 h9

0.3 Program Interfact.

Coninercial-grade dedication performed at the DCNPP is the responsibility of the PSG. Whenever a new or replacement part (not an identical item) is required to be dedicated as a CGI, PSG will initiate a request to NECS for an RPE.

The RPE is an engineering evaluation package which identifies the critical characteris-tics that must be verified by PS( for determining the acceptance of a new or replacemer part. PSG creates s h dard clauses (SCs), a module within the PIMS purchadng system, b, sed on the crt.el characteristics specified in the RPE.

PIMS is a computerized systen/ program cantaining numerous modules such as pur-chasing and also contains a rodule on the inventory parts catalog (IPC) which is a database of parts records uniquely identified by a stock code. The IPC contains the normal SCs for procurement receipt inspection such as SC 4500

" Receipt inspection Instructions - General."

For commercial-grada dedication, PSG creates 4 dditional SCs as necessary to verify the critical characteristic:. specified in the RPE. These SCs are not printed out until a proper prefix is assigned to the SC number.

For example, when the prefix "Q" is assigned to SC 4500 the ccmputer will print out the tech-nical requirementt of the SC on the inspection report for QC inspection.

Likewise, a prefix of "B" will cause the SC to be prir.ted out on the MR.

The SCs and the associated prefix'are iisted under the " Classification Data" of the iPC which PIMS is programmed to transfer onto the MR.

This data is also transferred onto the curchase order (P0).

The MPs and P0s are processed in accordance with NPAP D-533 " Processing of Procurement Pccuments."

If critical characteristics are required to be verified during installation, the prefix "W" is assigned to the SC and PIMS will print out the technical requirements on the maintenance work order which is processed in accordance with APC-4053 "Use of the PIMS Cor-

=

rectivc Maintenance Work Order Module." The CGI when dedicated by QA Receivine goes to inventory or, when d?dicated through the work order process, is 11 stalled in the plant.

2.4 Replacement g Evaluation Process The NRC assessment team reviewed PG&E's program for the preparatior, of RPC paclages.

Such nackages consist of various forms and documerration used for determining the acceptance of a CGI. An RPE is also reqsired for any item whiu is used in a saf ety-related application and purchased from a s ipplier who will not accept 10 CFR art 21.

NECS has the overall design respons:Sility for the DCNPP including the reclassification of an item should it differ from the classification of its parent component, and responsibility for prepiration cf the RPE. The procedure that controls part classification and preparation of the RPE is NECS 3.12, " Spare and Replacement Part Evaluation," Revision 4, dated December 14, 1990. An RPE may be requested by various groups at the plant, but most are requested by the PSG. The requestor initiaties a request and forwards it to the appropriate NECS discipline which assigns an evaluator who is respon-sible for completing all technical evaluations and coordinating any additional evaluations such as environmental qualification (EQ), seismic, and those required under 10 CFR 50.59. Once the evaluation is completed, it is reviewed by the project quality engineer, the NECS group supervisor, the RPE crordinator and the project engineer.

Following completion of the reviews and placement in the correspondence control system, distr;buticn of the RPE package is trade and a copy of the approved RPE is sent to the site for processing.

The principal elements of the RPE process are as follows:

4 30

(1) General information and carent omponent information such as item descrip-tion, system and parent QA classification, and EQ and seismic categories.

(2) Original and new or replacement item data such as manufacturer, supplier, part number, technical and quality requirements, applicable specifications, drawings, and 10 CFR Part 21 reportability information.

(3) New or replacement item safety classification such as the item s parent i

compnent safety function and it*, safety function including failure modes and effects.

(4)- New or replacement item technical evaluation to compare the differences and similarities between the replaced item and its replacement, including determining if the replacenent item is identical, like-for-like, or equiva-lent to the item being replaced.

Equivalent replacewnt items are processed in accordance with design control measures consistent with the requirements of Criterion III, " Design Control," of Appendix B to 10 CFR part 50.

NECS used the following definitions to determine if an item is identical, like-for-like, or equivalent.

o identical' Item - An exact duplicate of the original item with identi-cal quality assurance and quality control, technical, and documentation requirements, purchased from the original supplier, except NUREG-0588, Category Il qualified EQ equipment.

Items which have part/model number differences due only to administrative changes, or items purchased from the original-supplier or manufacturer, whose comparty name has changed (e.g., due to purchase by another company) may be considered as identical items.

o like-for-Like '+em - An item which would qualify as an identical item (as detined hereiii), except for minor administrative differences such as the following:

1.

Identical items purchased from an alt :rnate supplier.

2.

Identical items purchased from the original supplier who no longer accepts 10 CFR 21 or 10 CFR 50 Appendix B responsibilities (e.g.,

the item is no longer advertised as a basic component, and must now be dedicated as a commercial-grade item).

Like-for-like. items involve no physical change in weight, configuration, or material from the original item.

o Eouivalent item - A replacement item not identical to the original that must te evaluated for equivalency to assure that the original function will be maintained.

o Equivalency Evaluation - A technical evaluation performed to confirm that an alternative item, not identical to the original item, will satisfactcrily perform its intended function once in service.

(6)

Identification of critical characteristics which are critical for satisfac-tory performance and include considerations such as performance, design basis, EQ, and seismic requirements for the parent component.

(7) Determination and selection of EPRI acceptance methods 1 through 4.

5 31

The RPE process also included documented reviews for seismic and EQ, desigr, i

reviews, safety evaluation screening, configuration codrol and lim 1totions, and supplier required documentation.

The RPE process also provides a uinistra-tive controls for revisions or making minor changes (MCs) which are oct-technical to a completed RPE. The RPE program is weil defined an<f contain thc epential elements for controlling the safety classification of a part and for identifying critical characteristics and the method used to verify those characterist ecs.

The assessment team concluded that if properly implemented, NEMP 3.12, Revision 4 should provide adequate controls to ensure that CGis will perform their w-tended safety function.

Although indirectly related to the RPE process, the assessment team noted that PG&E's engineering participation in EPRI and Joint Utility Tatk and Working Groups, such as the Region V Engineering Manager Subcommittee on Procurement Engineering, and formalized engineering participation in supplier performance based audits, were program strengths.

However, certain areas within the RFE process require improvement as discussed belos.

(1) Attachment C to NEMP 3.12, Revision 4, did not address the issue of performing commercial-grade surveys for both the distributor of the item as well as the manufacturer when procuring a CGI from a distributor.

Also, Section 4.1.4 of NECS Nocedure NE 7.1 did not address the issue that a supplier must have a documented program for controlling a CGl's critical characteristic if EPRI Method 2 is selected.

(2) Presently there are no requirementi for NECS to perform periodic reviews of existing RPEs (both generic and specific) that were prepared prior to Revision 4 of NEMP 3.12 and prior to NECS incorporating detailed guidance from EPRI NP-5652 for identification and verification of critical characteristics.

(3) As written, Section 4.4.10 of NEMP 3.12, Revision 4, does not define the purpose of the RPE Reviewer's signature.

Discussions with engineering per-sonnel noted that this signature was that of the independent design verifier as required by Criterion 111, " Design Control," of Appendix B to 10 CFR Part 50, and by American National Standards Institute ( ANSI) N45.2.ll-1974,

" Quality Assurance Requirements for the Design of Nuclear Power Plants,"

as endorsed by NRC Regulatory Guide (RG),1.64, " Quality Assurance Require-ments for the Design of Nuclear Power Plants," Revision 2, dated June 1976.

ANSI N45.2.11, Section 6.3, requires that the method used to perform the independent design verification needs to be identificd and documented.

However, NEMP 3.12, Revision 4, does not require that the methods used by the RPE reviewer to perform the independent design verification be identi-fied and documented when no design change notice (DCN) is issued with the RPE.

Also, Section 3.7 was unclear with respect to identifying when a field change transmittal can be used rather than a DCN for controlling changes to engineering documents such as drawings, specifications, and vendor manuals.

(4) NEMP 3.12, Revision 4, permits the use of MCs to the RPE to correct obvi-ously inaccurate information such as typographical errors or to provide clarification. N scussion with DCNPP site and NECS personnel indicates 6

32

n.

~

Y that this nethod also was being used to permit one-time deviations from the RPE-identified acceptance criteria for verifying a critical character-istic. As written, NEC5 3.12 did not address the use of MCs and did not provide proper ccatrols and requirements for MCs to the RPE when used to authorize minor deviations to the acceptance criteria specified for s critical characteristic.

NEMP 3 12 does not permit MCs to be used to suthorize any deviations or changes to technical requirements.

The assessment team observed that although the RPE failure modes and effects analysis specified in NECS 3.12 sre consistent with the cuidance provided in EPRI NP-5652, in that the item's failure effects are appI1ed to the parent component and related parent system components, the team questioned whether the effects on non-parent surrounding items due to the failure of the replacement ittin should also be considered when the part being evaluated is not an EQ item under the receirements of 10 CFR 50.49.

This is further discussed in Section 2.6 of the asnssment report.

2.5 Receipt Inspection NPAP D-540, " Commercial Grade Dedication Acthities," provided instructions for the odication of CGIs used in safety-related applications.

It stated that receipt inspection shall be performed in accordance with NPAP D-537, " Receipt of Materials," which appeared to adequately address the applicable sections of ANSI N45.2.2, " Packaging, Shipping, Receiving, Storage and Handling of Items for Nuclear Power Plants."

The PSG is responsible for incorporating detailed verification activities to be performed at receipt or at installation in the receiving inspection instruction (RII), receiving document review (RDR) and/or PIMS genereted standard clauses.

PG&E management stated that a concerted effort was being made to hvoid verifica-tion activities at installation which are based on NECS-Engineering requirements, The QC department performs these verification activites in accordance with Droce-dure 10.1, " Receipt Inspection Activities," which directs receipt inspection personnel to the PO file which contains the RII, RDR, and PIMS generated standard clauses. The QC department uses the materials facility testing laboratory to perform many types of receipt testing and failure analyses as prescribed in the RII. Some of the capabilities of the materials facility include optical emission spectrometry, X-ray fluorescence, chemical spot testing, infrored analysis, equotip and type A and D durometer testing.

DCNPP clso had access to PG&E's testing facility in San Ramon, California, which had the added capabilities of a 55,000-pound servo hydraulic testing machine, a 3000-pound impact testing machine, a scanning electron microscope, and carbon and sulfur analyzers. Material that was nonconforming to the receipt inspection requirements was immediately placed on hold and registered in the inspection data base via the vendor performance tracking mechariism of PIMS. This informa-tion was used by procurement QA auditors in preparation for annual evaluations ano audits of vendors.

It was noted that QC receipt inspection personnel did not have the ability to perform electrical verification activities t.nd relied on the electrical maintenance department to perform testing on circuit breakers, resistors, and fuses. QC performed receipt inspection for all requirements except testing and then notified the materials facility supervisor to initiate an action request to track the item and establish details for testing.

l 733

The item was tested and returned to QC along with the test results. The QC manager stated that the department was developing an electrical test laborat y that will be staffed by QC personnel and governed by OC procedures. This capability would strengthen the receipt inspection process for electrical items by increas-ing QC oversight and making the department responsible for all receipt inspec-tion activihes.

2.6 Parts Classification System The NRC assessment team reviewed PG&E's program used to identify the safety classification for new and replacement items at the DCNPP. The two primary pro-cedures used to support the replacement item safety classification process were NEMP 3.1, " Classification of Structures, Systems, and Components," Revi-sion 6, dated January 31, 1990, and NEMP 3.12 " Spare and Replacement Part Eval-uation," Revision 4, dated December 14, 1990.

Attachment A "New or Replacement item Safety Classification," of NEMP 3.12, was the form included in the RPE to document the basis for an item being classified as either safety-relsted or not safety-related. The NECS discipline engineer, assigned the responsibility for completing the RPE, first identifies the safety function of the parent component by reviewing the approved DCNPP Component, System, and Structure Classification List (referred to as the "Q-List"). Then, the parent component's active or pas-sive function is determined using engineering and design criteria, drawings, vendor documents, EPRI NP-6406, " Guidelines for the Technical Evaluation of Replacement items in Nuclear Power Plants (NCIG-11)," the updated safety analysis report, and Plant Technical Specifications.

After determining the function of the parent component, the specific function of the item, including the failure modes and effects, is evaluated. The failure effects analysis is based on data obtained from contacting the vendor, reviewing vendor documents, published litereture, plant equipment history data, nuclear power reliability data system (NF.DS) data, and system engineering inputs. The postulated credible failure modes of the item were evaluated to determine if these failures would prevent the parent, or associated system components, from performing their safety-related function.

If the answer was no, the justification was documented and included in the RPE. On the basis of the evaluations and analysis performed, the engi-neer classifies the item as safety-related or not safety-related. The assess-

.nent team noted that the parts classification process was well defined and contained the essential elements for determining the safety classification of an item. The requirements for documenting the analysis and evaluation and, especially, the basis for not classifying an item as safety-related was procedurally well defined.

Procedure NEMP 3.12, Revision 4, required that the engineer determine if any of the postulated credible failure modes of the item would prevent the parent com-ponent or associated components from performing their safety-related function.

NEMP 3.12 incorporated the guidance specified in EPRI NP-5652, however it did not consider the effects on the surrounding components, nor did it identify the failure effects that surrounding components may have on the parent component if the replacement item fails. The failure of other components may not cause the parent component to malfunction, but it may introduce failure modes resulting from failure of the surrounding components.

For the most part, these items and their failure effects were of a mechanical nature and not subject to the envi?on-mental requirements of 10 CFR 50.49.

8 34

The NRC assessment team reviewed generic RPE M-1133, " Lubricants for EQ Equip-ment," Revision 1, including MC-1.

The safety classification determined that the effects of postulated failures of the lubricants could prevent the parent component or associated components from performing their intended safety-related functions; however, PG&E had not classified the lubricants as safety-related due to the fact that their endurance in harsh environments assured proper lubrication of the parent component.

As a result, the critical characteristics were not verified to the same extent had the lubricants been classified safety-related.

The assessment team expressed cuncern over PG&E's basis for the classification of FQ lubricants.

2.7 Procurement Package Review The NRC assessment team reviewed the following RPEs to determine program imple-nentation adequacy:

(1) RPE P-6971 evaluated valve parts for FCV-1510, FCV-1250 and FCV-1540 associated with a 6-inch feedwater bypass control valve manufactured by Fisher Controls International (Fisher).

Fisher is on PG&F's Quality Sup-pliers List (QSL) for supplying safety-related butterfly and control valves to the requirements of the American Society of Mechanical Engineers code.

Licensee personnel stated that Fisher bought valve parts under their (Fisher's) commercial-grade procurement program which PG&E audited and found to be satisfactory.

However, PG&E was not satisfied with the criti-cal characteristics specified by Fisher's program for verification of CGIs dedicated for safety-related applications. Since Fisher refused to supply valve parts as safety-related with 10 CFR Part 21 requirements imposed, PG&E procured the valve parts as commercial-grade and performed the dedication on site. Two critical characteristics specified for verification were material chemistry using an alloy analyzer, and material hardness using a specified minimum Rockwell-C hardness value. A valve seat retainer '" led the X-ray and hardness acceptance test and PG&E rejected the iter" 6 receipt inspection.

This was indicative of a successful dedication program and also supported PG&E's-decision not to accept parts under Fisher's commercial-grade program.

However, no upper acceptance limit was specified for the material hardness value for the valve plug or seat ring.

Establishment of an upper acceptance limit would be prudent.

(2) RPE N-6878 for a Union Pump Cylinder Head Extension for Positive Displace-ment Pump.

The RPE identified critical characteristics to be verified by QC during receipt inspection as contained in Standard Clause 8894 N-6878.

(3)

RPE E-6690 for various size fuses and fuse holders manufactured by(Bussm Fuse Incorporated for use in the sixth emergency diesel generator EDG).

(4) RPE E-6487, Revision 2, for multipole control relays and spare contacts manufactured by the Cutler-Hammer Company for use in the sixth EDG.

(5) RPE E-6800 for various items related to the sixth EDG excitation system purchased from the Woodward Governor Co.npany which included a 0.5 ohm resistor (Part #9903-004-A); an EG-A-type control asseubly suitable for 120 volts ac power supply (WGC Part #9903-003-B); and a motor-operated potentiometer (Part #99C3-106-C).

9 35

(6) RPE J-6917 evaluated 1151-type level transmitters (LTs) manufactured by Rosen.ount incorporated that were required to replace existing Drexelbrook LTs that monitored the level of the boric acid tank in the chemical and volume control system. The LTs were qualified by analysis.

(7) RPE P-6471 evaluated a disc nut pin and washer for an 8-inch swing check valve installed in the residual heat removal system.

The evaluation stated that the washer was not safety-related because its only function was to prevent premature wear at the arm / nut joint.

The pin was classified as safety-related because it was a locking device to keep the nut in place that attaches the disc to the swing arm. The RPE identified part number, configuration and material as the critical characteristics.

The part num-ber was verified at receipt inspection and the material was verified by an X-ray fluorescence test. Cc,nfiguration was to be verified by visually com-paring the replacement pin with the existing pin, which was held in place by a tack-weld.

It was noted that the pin had never been installed.

All items in the RPEs reviewed satisfied the definition of a CGI as stated in EPRI NP-5652 and each package was prepared in accordance with NPAP D-540. The RPEs, including their revisinns, were prepared in accordance with the require-ments of NEMP 3.12, Revision 4.

All necessary engineering approvals had been obtained for the revisions and MCs to the RPEs, and some of the components were requisitioned in response to DCNs. Additionally, all applicable line items were checked off to provide relevant information; the safety classification of each item was discussed; the technical evaluations provided in the RPEs appeared acceptable, and the critical characteristics identified were verified either by inspections, tests, or both. Seismic tests were required to be performed on a sample of representative size to determine if the components were acceptable.

After determining that all the other components in the lot were homogeneous, by comparing tnem for similarity, the other components it the lot were considered qualified.

The assessment team concluded that the MRs for these RPEs had been prepared in compliance with NPAP D-533, Revision 4, May 12,1989, and that the P0s reflected the requirements specified in the MRs. The inspection reports contained in the RPE packages verified that the vendor complied with the documentation require-ments and that the components met the physical properties established and the electrical maintenance personnel performed electrical tests when specified. Work orders documented instructions for the maintenance personnel to install the com-ponents and, where appropriate, the maintenance personnel verified the critical characteristics during post-installation testing. The RPEs demonstrated that the engineering staff participated in the procurement and product acceptance process; adequate criteria were specified to perform effective receipt inspection or to perform testing during installation; and activities were conducted to dedicate CGIs through engineering-based programs. The PG&E receipt inspection program to detect, report, and disposition fraudulent products apaeared adequate. Receiving and procurement personnel were adequately trained on tie detection of fradulent products per NRC GL 89-02, NRC Information Notice (IN) 89-70, and the relevant EPRI documents.

10 36

i 2.8 Commercial-Grade Survey Process The Procurement Quality Assurance (PQA) senior QA supervisors were responsible for approving the methods for comercial-grade surveys of ' suppliers and for assigning PQA lead cuditors to perform the surveys.

Procedure PQA-WI-18.9

" Commercial-Grada Supplier Surveys," dated March 22, 1991, controls this process.

Requests for comercial-grade surveys were submitted, typically by NECS to PQA, via an evaluation request form which provides information about the critical characteristics, parts, and scope of the survey. The designated survey team leader (STL) coordinated with the requesting organization to determine the composition of the team and appropriate timeframe for performing the survey and obtained applicable P0 orsupplier contract documents to determine the basis for planning the survey. A survey plan and checklist matrix was developed for each item to be surveyed, including the identification of critical character-istics and the applicable 10 CFR Part 50 Appendix B criteria. The survey check-list, according to Procedure PQA-WI-18.9, was based primarily on identifying quality elements from a standard supplier quality program checklist.

These quality elements were programmatic elements and were not item / characteristic specific as required by EPRI NP-5652. Conducting a commercial-grade survey includes a pra-survey conference, facility walkthrough, a survey of the quality el ments chosen, documenting the survey results, engineering interface, and the survey exit meeting. The STL prepared a survey report consisting of the survey plan, checklist matrix, and a summary of strengths and weaknesses.

Although not specific at this time to the comercial-grade survey process, P0A has a very good program for screening and using third-party audits, such as joint licensee audits and other audits conducted on behalf of PG&E. According to PQA management, approximately 85 to 90 percent of third-party audits reviewed were rejected in their entirety or in part. Weaknesses were identified in the review of the following procedures:

Procedure PQA-WI-18.9, Section 7.0, and Attachment C, " Commercial Grade o

Survey Checklist Matrix," did not provide requirements for identifying the method that the w rvey team should use to confirm that the selected criti-l Cdl characteristics are Controlled and properly documented.- Section 7 of the procedure implied that the survey team will review the quality elements chosen to determine if the nethods and controls employed by the supplier are adequate. The only_ requirement in the procedure that implied that critical characteristics of an item must be confirmed was on Page 5 of 7 which stated, "As in an audit, objective evidence shall be reviewed and in-process acti-

-vities witnessed." Quality assurance program implementation audits performed to meet Criterion XVIII, " Audits," of Appendix B to 10 CFR Part 50 an( the

. guidance provided in NRC RG 1.144, Revision 1, including ANSI Standard N45.2.12-1977, are generally not a substitute for using EPRI Method 2.

EPRI NP-5652 addresses commercial-grade surveys of a distributor, however, NRC GL 89-02 takes exception and specifies a survey of not only-the distributor but also the manufacturer of a CGI.

' Procedure QAP-7.C, " Control of Purchased Material, Equipment, and Services,"

o dated January 2,1990, identified the applicability of EPRI NP-5652, but did-not address completely the issues contained in NRC GL 89-02, nor did NEMP 3.12 and NEMP 7.1 address these issues.

1137

o Section 2.2.3 and Attachment C of NEMP 3.12, Revision 4, addressed the use of Addendum 2 to the QSL for identifying and controlling conunercial-grade surveys that can be utilized for EPRI Method 2.

However, Procedure PQA-WI-6.1, " Qualified Supplier List," dated November 10, 1990, did not provide prescriptive requirements for the identification and controls applicable for placing coninercial-grade suppliers on Addendum 2 of the QSL.

2.9 Fraui Detection Rece;,'t intpection Procedure QCP-10.1 Section 5.6, addressed the identification of subsMn'.ard/ fraudulent items and provided guidelines to the QC materials inspector emphasizing the detection of substandard, fraudulent, or misrepresented items. The guidelines provided the QC inspector with numerous examples of common characteristics of misrepresented vendor products that might be cause for further investigation and also provided a list of components and products in Appendix 7.3 that may be vulnerable to misrepresentation.

Suspected fraudulent items were placed on hold until an investigation or evaluation was completed.

If there was evidence of fraud, the matter was turned over to the Director of Procurement for further action. Materials Services Department Policy No. 9, dated March 20, 1990, addressed misrepresented vendor products and the need to reduce the likelihood of using counterfeit or fraudulent products as referenced in NRC IN 89-70 and GL 89-02. The policy called for PSG to be irunediately con-tacted to confirm and subsequer.tly issue an action request.

Records on the

" Misrepresented Vendor Products" training session showed that approximately 73 individuals involved in procurement and receiving activities took the course.

The training session handouts included NRC IN 89-70, GL 89-02, and various EPRI guidelines that provided useful information to help identify items that may be substandard, misrepresented, or supplied with fradulent documentation.

3 PROCUREMENT TRAINING REVIEW MSU and NECS personnel were involved in the review, evaluation, and implemen-tation of the RPEs. MSD consisted of several onsite groups, including the PSG, PSG/QC, Computer Maintenance (for IPC and PIMS), expediting personnel, warehouse personnel, and buyers who participated in processing and implementing the RPEs.

A typical training record listed the date and subject of the training, the names of individuals who attended, their social security numoers, and the instructor.

Subjects included guidance to identify and prevent the use of fraudulent items; implementation of NEMP 3.12, Revision 4; and various plant administrative procedures. MSD was establishing a formal training program similar to the one developed by NECS. MSD expected the program to indicate the minimum training requirements of each individual and include a status list to indicate the sub-jects completed. This list should aid management in scheduling individuals to receive training in a timely manner to complete the established requirements.

NECS had prepared a " Spare and Replacement Parts Evaluation Training Manual" to describe the process necessary to evaluate spare and replecement parts, new items used for modifications, and new designs for the DCNPP, as described in NEMP 3.12.

The assessment team selected the names of several engineers who had either prepared or approved RPEs and verified through computer training records available nnsite that these individuals had received training in NEMP 3.12, 12 38

l Revision 4 Training recurds for NECS personnel were located at PG&E's corpo-rate office in San Francisco. A NECS representative stated that the engineers also were trained to use the NPRDS to obtain relevant information on previous equipment failures and to use NPAP D-ll, " Equipment Restricted From Nuclear Safety Application," to select reliable components and prevent the inadvertent use of components with a history of problems.

The t*aining program encompassed additional subjects including implementing other NEMPs that reflected the DCNPP QA program outlined in Chapter 17 of the final Safety Analysis Report and PG&E's corporate policies.

PG&E also contracted with Bechtel Power Corporation to prepare certain RPEs; however, only unoer NECS' review and approval.

4 NUMARC COMPREHENSIVE PROCUREMENT INITIATIVE IMPLEMENTATION NUMARC 90-13, " Nuclear Procurement Program Improvements," approved by the NUMARC Board of Di*ertors on June 28, 1990 requested licensees to assess their procure-ment programs and take specific action to strengthen inadequate programs.

The comprehensive procurement initiative called for licensees to complete their review by July 1, 1991, and to complete implementaticn by July 1, 1992. These guidelines were summarized in the enclosure to a Commission Paper, "NUMARC Initia-tives on Procurement' (SECY 90-304), dated August 24, 1990.

As of the assess-ment, PG&E had completed its review and assessment of the initiative and a draft report sumarizing the results and reconnendations for improvements was scheduled to be submitted to PG&E senior management by May 15, 1991.

In September 1990, PG&E established a task force to assess the practices used to qualify items to 10 CFR Part 50, Appendix B criteria and compare them with those of the comprehensive procurement initiative requirements and to identify resources, equipment, and procedures to achieve implementation.

PG&E's significant progress in this area should enable it to meet the July 1,1991, re"iew date.

An overview of the results contained in the task force's draft report follows.

4.1 Performance-Based Supplier Audits The task force identified a major strength in that DCNPP was generally in conpli-ance with the guidelines contained in EPRI NP-6630, " Guidelines for Performance-Based Supplier Audits (NCIG-16)," which had been used at DCNPP since 1990 and will be increased in the future. However, the task force identifed a need to revise procedures to require formal upfront coordination and decision on accept-ante methods for each procurement; formal approval and transmittal of NECS engineering input for performance-based supplier audit (PBSA) planning; enhanced documentation of material classification by the materials department; and the incorporation of performance-based techniques into the supplier audit and training program.

Revised procedures would increase the number of RPEs, source verifications, and receipt inspections using testing.

4.2 Tests and Inspections The task force identified a strength in that DCNPP's practices in this area were in compliance with EPRI NP-6629 " Guideline for the Procurement and Receipt of items'forNuclearPowerPlantsfNCIG-15),"butrecommendedthattheplant's receipt inspection and testing capability be enhanced to minimize the need for post-installation testing, especially the testing of electrical items.

13 39

= -.

4.3 Obsolete Items and Information Exchange The task force noted that practices employed at the plant were in compliance with recommendations contained in NUMARC 90-13 ano that a technical evaluation to justify an alternative replacement would be the first choice over purchasing the item from the surplus market, also referenced in NEMP 3.12.

However, better utilization of QA information under the Institute for Nuclear Power Operations nuclear network program was needed and shared and joint utility member audit participation should be improved.

5 CONCLUSIONS The licensee had made a significant effort to upgrade its commercial-grade dedication program since initial incorporation of the EPRI guidelines in August 1988; however, needs for improvement were identified in a number of areas.

Of most significance were the present use of RPEs generated prior to August 1988, the date on which PG&Es program incorporated the guidance contained in EPPI NP-5652. PG&E had no formal documented system in place to require a review of

'the RPEs to reflect current industry standards and practice and their use today may not be consistent with PG&E's commitment to implement the EPRI guidelines.

The assessment team found strengths in areas such as training and industry in.~

volvement; overall program consistency with the dedication philosophy described in EPRI NP-5652; employing an independent consultant in 1989 to review and make recommendations within PG&E's procurement and commercial-grade dedication program; PG&E's establishment in May 1990 of a formal task force to review the RPE process, and PG&E's extensive mechanical and metallurgical onsite testing capabilities to perform EPRI Method 1 acceptance activities. Also PG&E's achievements in the area of the_ review and implementation of the NUMARC comprehensive procurement initiatives was excellent, and the quality, experience level, attitude and dedication of its personnel was evident.

6 EXIT MEETING On March 29, 1991, the assessment team conducted on exit meeting with members of the PG&E staff and management at the DCNPP site. A brief ex.c meeting also-was conducted on March 27, 1991, at PG&E's office in San Fran:Isco, California.

Persons contacted during the assessment are listed in the appendix to this report.

During the exit meeting, the team sunwarized the scope of the assessment and the observations. Throughout the assessment, the team met with PG&E manage-ment and their staff to discuss concerns.. The licensee did not identify any information as proprietary.

l l

14 40

APPENDIX PERSONS CONTACTED Pacific % s and Electric Company

• J. Towniend, Vice President and Plant Manager, DCNPP

• W. Fujimoto, Vice President, Nuclear Technical Services

• M. Tresler, Project Engineer, Nuclear Engineering and Construction Services (NECS)

• D. Taggart, Director, Quality Procuremert and Audit

• J. Young, Director, Quality Assurance (QA)

• B. Griffin, Manager, Maintenance Services

• M. O'Connell, Engineer, Regulatory Compliance

• T. Grebel, Superviror, Regulatory Compliance

• G. Tidrick. Engineering Group Supe visor, NECS

• D. Aaron, Director Procurement Support

• R. Harris, Supervisor, Materials Services

• S. Ortore, Manager, Materials Services

• E. Kahler, Spare Parts Coordinator, NECS

• W. Barkhoff, Manager, Quality Control (QC)

• J. Sopp, QC Specialist

• P. Lang, Senior QC Engineer

• J. Griffin, Senior Engineer, Regulatory Complience J. Sexton, Manager, QA

• C. Hartz, QA Eng.neer J. Shoulders, Project Engineer, NECS R. Anderson, Manager, NECS H. Thailer, Engineering Group Sepervisor, NECS W. Hayes, Engineer, NECS C. Cotton, Engineer, NECS M. Chan, QA Engineer P. Chan, Senior QA Supervisor M. Freund, Senior QA Supervisur K. Daval, Piping Group Leader, NECS M. Jacobson, Project Quality Engineer, NECS T. Fetterman, Engineer, NECS D. T3teosian, Supervising Engineer, NECS M. 90brzensky, Senior QA Supervisor Nuclear Reaulatory Commission

• V. Potapovs, Acting Chiet, Vendor Inspection Branch, NRR

• R. Wilson, Reactor Engineer, NRR

• D. Kirsch, Chief, Reactor Safety Branch, RV

• K. Johnston, Resioent Inspector, DCNPP

• R. Pettis, Team Leader, NRR

• L. Campbell, Reactor Engineer, NRR

• W. Wagner, Reactor Engineer, RV

• A. Fitzgerald, Reactor Engineer Intern, NRR

• K. Naidu, Senior Reactor Engineer, NRR

• M. Snodderly, Reactor Engineer, NRR NUMARC

• A. ITdrion Winston & Strawn

• P. Robinson

• Attended Exit Meeting at the DCNPP Site A-1 41

f* * %g%

t UNITED STATES i

NUCLEAR REGULATORY COMMISSION

?,k k

[5

.f W ASHINGToN. D C 20E66

%'e...#

September 4, 1991 Docket No. 99901223/91-01 Mr. Frederick J. Slagle, President Soethern Testing Services, Inc.

P.O. Box 22010 knoxville, Tennessee 37933

Subject:

NOTICE OF NONCONFORMANCE (NRC INSPECTION REPORT N0. 99901223/91-01)

Dear Mr. Slagle:

This letter addresses the inspection of your f acility in Knoxville, Tennessee, led by Mr. Stephen Alexo * ' of this office on April 15-19, 1991, and the discussion of the inspet-indings with you and other members of your staff at the conclusion of 11 c t i c r..

The U.S. Nuclear Regulatory Comission (NRC) staff conducted the inspection to review your activities in the areas of dedication of comercial-grade items, environmental and seismic qualification, and pre :urement and supply of safety-related plant equipnent. We also reviewed selected portions of your quality assurance program as it related to those activities and your program for reporting of defects and noncompliance pursuant to Part 21 of Title 10 of the Code o# Federal Regulations. The enclosed inspection report describes the areas eFauined during the inspection and our findings. This inspection consisted of an examination of procedures and representative records, interviews with personnel, and observations by the inspectors.

The inspection team found that the implementation of your quality assurance program f ailed tb meet certain NRC requirements. The most significant inspection finding involved the failure of Southern Testing Services, Inc.,

(STS) to adopt and adequately implement appropriate procedures to satisfy the quality assurance requirements of Appendix B to 10 CFR Part 50 as they applied to the dedication of comercial-grade items for safety-related applications and the cccelerated thermal aging of equipment in support of environmental qualification.

The specific inspection findings and references to the pertinent requirements are identified in the enclosures to thi, letter.

In response to the enclosed Notice of Nonconformance, please provide us, within 30 days from the date of this letter, a written statement containing:

(1) a description of the steps that have been or will be taken to correct these items, (2) a description of the steps that have been or will be taken to crevent recurrence, and (3) the dates that your corrective action and preventive measures were or will be completed. We will consider extending the respor.se time if you can show good cause for us to do so.

42

l',r Frederick J, Slagle The responses requested by this letter are not subject to the clearance procedures of the Office of Management and Budget as required by the Paperwork Reductier Act of 1980, Public Law 96-511, In accordance with 10 CFR 2.790 o' the Commissier's regulations, a copy of this letter and its appendices will be placed in the NRC's Public Document Room, Should you have any questions concerning this inspection, we will be pleased to discuss them with you.

Sincerely,

)., ~

kg i

Leif

. Norrholm, Chief j

Vendor Inspection Branch Division of Reactor Inspection and Safeguards Office of Nuclear Reactor Regulatior.

Enclosures:

1.

Notice cf Nonconformance 2.

Inspection Report 99901223/91-01 43

ENCLOSURE 1 NOTICE OF NONCONFORMANCE Southern Testing Services, Inc.

Docket No.: 99901223 Knoxville, Tennessee Report No.: 91-01 The Vendor Inspection Branch of the U.S. Nuclear Regulatory Comission (NRC) conducted an inspection at the Knoxville, Tennessee, facility of Southern Testing Services, Incorporated (STS), on April 15-19, 1991, and rev',ewed the implementation of the STS program for dedication of comercial-grade items (CGis), qutlification of items for use in safety-related nuclear plant applications, and selected portions of the STS quality assurance (QA) program.

The inspection identified that certain activities were not conducted in accordance with NRC requirements. These it m s are set forth below and have beer classified as nonconformances with the requirements of Appendix B to Part 50 of Title 10 of the Code of Federal Regulations (10 CFR Part 50),

imposed on STS by contract, and the STS Quality Assurance Policy and Procedures Manual.

1.

Criterion 111 of Appendix B to 10 CFR Part 50, " Design Control," requires that measures be established for the selection and review for suitability of application of materials, parts, equipment, and processes that are essential to the safety-related functions of the structures, systems and components.

Criterion III also requires that design control measures shall provide for verifying or checking the adequacy of design, and one of the methods of design verification given is performance of a suitable testing program.

Criterion VII of Appendix B to 10 CFR Part 50, " Control of Purchased

'iaterial Equipment, and Services," requires that measures shall be established to assure that purchased material, equipment and services, whether purchased directly or through contractors and subcontractors, conform to the procurement documents. These measures shall include provisions for objective evidence of quality furnished by the contractor or subcontractor.

Contrary to the above, STS f ailed to perform an adequate review for suitat,ility of CGls used in safety-related applications and failed to ensure that they conformed to procurement documents. Specifically, STS dedication was based primarily on seismic and/or environmental qualification testing of specimen CGls which were supposed to be representative of othcr CGIs of the same type and manufacture. However, the CGIs were not manufactured under the controls of a 10 CFR Part 50, Appendix B, QA program. This was a significant failure because, in addition to comercial quality concerns, comercial-grade suppliers may not control and/or document changes in design, material and manufacturing process. Therefore, STS dedication was inadequate to assure (a) that the CGis that did not undergo qualification type testing would be similcr in terms of seismic and/or environmental perfomance to the qualification test specimen (s) and (b) that the components' critical characteristics had been adequately verified to assure the fundamental suitability of the CGIs for their intended safety-related applications.

(91-01-01) i l

44

4 11.

Criterion XI, " Test Control," of Appendix B to'10 CFR Part 50, requires that'a test program be established to assure that all testing required to demonstrate that' structures, systems, and components will' perform

~

satisfactorily in. service is identified and performed in-accstdance with written test procedures which incorporate the requirements and acceptance limits contained in applicable design documents.

lt also requires that-test results be documented and evaluated to assure that tt't requirements have been satisfied.

Contrary to the above, STS did not have an adequate procedure for determining the accuracy of calibrated instruments so that test data-would be of sufficient accuracy Also, STS did not have an adequate l

L method of ensuring that suitably accurate equipment was selected for i

acquiring test data. _(91-01-04) 111. Criterion V, " Instructions, Procedures, and Drawings," of Appendix B to 10 CFR Part 50 requires'that. activities affecting quality be prescribed by documented instructions, procedures and drawings of a type appropriate to the circumstances, and.that:such. activities be conducted in accordance with these instructions, procedures,-and drawings.

Paragraph 4.4, "Oualification. Test ~ Program," of Revision 0 of STS procedure QAPP-20-1, " Procedure for Dedication of Commercial Grade Components," dated February 28, 1991, in the STS Quality Assurance Policies and Procedures Manual, STS-QA-01, indicated that STS qualification and reporting were to be conducted in accordance with the Institute-of Electrical ~ and Electronic Engineers Standard "323-19""

[the asterisks indicating IEEE'323-74, -83, orasspecified).

Section8.3(4)ofIEEE323-74.requiresthatqualification'dataincludea report of test results and that the report is.to include a description of testfacility[testsetup]andinstrumentationusedincludingcalibration records reference,. and test data.and accuracy.

Contrary to the above, certain portions of the STS procedures governing qualification-test reporting, an activity affecting quality,_were not

-fully appropriate to the circumstances. Specifically, Paragraph 4.8 of

.QAPP-20-1 did not_ require inclusion of a description of the test instrumentation used including calibration records reference and test:

idata and accuracy.- _ In addition Paragraph _6.1 of QAPP-5-1,

" Instructions Procedures,-and _ Drawings," dated February 28, 1991,.which specified the minimem contents of-STS technical reports, did not require theLinclusibn of: calibration records refert.nce and accuracy of test data..

As a result, STS Qualification Test Reports 5129-RP-01 and $147-RP-07, which certified that the testing was performed in accordance with.IEEE 323-74, did not' include the accuracies of equipment used for-testing or

~

accuracy of test data.- (91-01-03)

IV. Criterion XVill, "Acdits" of Appendix B-to 10 CFR Part 50 requires that a comprehensive system of planned and periodic audits.be carried out te verify compliance with all aspects of-the quality assurance. program and to determine the effectiveness of the program._ The audits are required to be performed by appioprictely trained personnel.

2 45 1

.. J..

A.

Section 5.3, " Audit P6rticipation," of the STS Quality Assurance Policy and Procedures Manual STS-QA-1, Procedure No, QAPP-18-2, Pevision 5, dated Pebruary 28, 1991, stated: 'The prospective Qualified Auditor shall have participated in a minimum of one quality assurance audit within a period of time not to exceed five years prior to the date of qualification."

Contrary to the above, the STS president certified himself as a qualified auditor on Se)tember 15, 1966, even though there was no documented evidence of 11s having participated in the conduct of any audits prior to that time. (91-01-02)

B.

Section 5.4, " Examination," of STS QA Procedure QAPP-18-2, Revision 5, dated February 28, 1991, stated. "The prospective qualified audit / auditor shall pass an examination which shall evaluate his comprehension of, and ability to apply, the body of knowledge identi-fied in Paragraph 5.2.7.

The test may be oral, written, practical, or any combination of the three types. Development and administra-tinn of this examination shall be performed by a qualified auditor."

Contrary to the above, the STS president certified the STS QA manager as an auditor on August 24, 1987, based on an oral certification examination which the STS president developed and administered.. However, because the STS president was not a properly qualified auditor at that time (see IV.A), he did not have the authority to develop and administe; the examination.

(91-01-02)

P Dated in Rockville, Maryland this-day of

, 1991 46

a Enclosure ?

ORCANIZATION:

Southern Testing Services, Inc.

10627 Lexington Drive Knoxville, Tennessee 37932 REPORT NO.

99901223/91-01 CORRESPONDENCE Post Office Box 22010 ADDRESS:

Knoxville, Tennessee 37933 ORGANIZATIONAL Frederick J. Slagle, President CONTACT:

TELEPHONE:

(615)966-5330 NUCLEAR INDUSTRY Provides environmental and seismic qualification ACTIVITY:

testing services and dedication of comercial-grade items to various nuclear utilities, nuclear engineering firms, major nuclear plant equipment vendors, and other test facilities INSPECTION CONDUCTED:

April 15-19,1991 INSPECTORS:

/

M

/h/N

5. D ' Alexander, Lead Inspector

'Dath Reactive Inspection Section No. 2 Vendor Inspection Branch J. J. Petrosino Reactive Inspection Section No. 1 Vendor Inspection Branch H. J. Jacobus, Consultant Sandia National Laboratories V. E. Balod s, Ccrisul ant APPROVED BY:

N'W C.A. VanDenburgTi, ghief Date Reactive Inspection Section No. 2 Vendor Inspection Branch INSPECTION BASES:

10 CFR Parts 21 and 50 INSPECTION SCOPE: Routine, announced inspection to review (1) the Southern Testirg Services (STS) quality assurance program for dedicating comercial-grade items for safety-related ap'lications, (2) STS environmental and seismic qualification activities, and (3) the implementation of thc STS 10 CFR Part 21

. prog ram.

PLANT SITE APPLICABILITY:

Various 47

1 INSPECTION SUMW RY 1.1 Nonconformances 1.1.1 Contrary to the requirements of Criteria III and VII of 10 CFR Part 50, Appendix B, STS failed to adequately review for suitability certain cmercial-grade items (CGis) to be used in safety-related nuclear plant applications and adequately verify their suitability for use. The STS dedication of :Gls was based prinarily upon seismic and/or environmental qualifications WMch were inadequate to assure that the remaining untested commercial-grade items were similar to the item selected for dedication and suitable for their intended applications.

(91-01-01) 1,.1. 2 Contrary to the requirements of Criterion XVIII, of 10 CFR Part 50, Appendix B, and the requirements of the STS Quality Assurance Policy and Procedures Minual, (1) the STS oresident certified himself as a qualified auditor on September 15, 1986, without documented evidence of his participation in the conduct of any audits prior to that time, and (2) the STS president certified the STS QA manager as an auditor on August 24, 1987, based on an oral certification examination developed and administered by the STS president who, without being properly qualified as an auditor himself, was not authorized to develop and administer such an examination.

(91-01-02) 1.1.3 Contrary to the requirements of Criterion V of 1G CFR Part 50, Appendix B, STS procedures did not require that test documentation contain a description of the test instrumentation used including calibration records reference, test data and accuracy. As a result, certain STS qualification test reports did not include the accuracies of equipment used for testing or accuracy of test data.

(91-01-03) 1.1.4 Contrary to the requirements of Criterion XI of 10 CFR Part 50, Appendix B, STS did not have adequate procedures for determining instrument a ccuracy. Also, STS did not have an adequate method of ensuring that equipment of suitable accuracy was selected for acquiring used for testing or accuracy of test data. (91-01-04) 2 INSPECTION FINDINGS AND OTHER COMMENTS 2.1 Program and Procedural Review In the course of reviewing the STS program for qualification and dedication of CGis, the NRC inspectors reviewed the following procecures contained in the STS Quality Assurance Policie and Procedures Manual, STS-QA-1, Revision 5, dated February 28, 1991:

QAPP-3-1, " Design Control" QAPP-5-1, " Instructions, Procedures, and Drawings" QAPP-8-1, " Identification and Control of Materials, Parts, and Components" QAPP-11-1, " Test Control" QAPP-12-1, " Control of Measuring and Test Equipment" QAPP-17-1, " Quality Assurance Record Control" QAPP-18-1, " Audits" QAPP-18-2, " Training and Qualification of Auditors" 2

48

QAPP-19-1, " Reporting of Defects and Noncompliance Per 10 CFR 21" QAPP-20-1, " Procedure for Dedication of Commercial-Grade Components" 2.2 Component-Specific Dedication Reviews The NRC inspectors reviewed selected STS job file packages and interviewed the cognizant STS staff engineer: and technicians to assess the effectiveness of STS CGI dedication procedures and their implementation.

STS collected records from various files and compiled a package pertaining to each of the selected CGI dedications. The dedication packages included (1) customer purchase orders (P0s), (2) customer technical specifications (or reference thereto), (3) seismic test reports, (4) environmental test reports (as applicable), and (5) receipt inspection records. During this review, the NRC inspectors also examined the STS approved suppliers list, STS certificates of compliance (C0Cs), STS P0s to vendors, vendor invoices and packing slips, and raw test data.

The inspector's review of the oedication packages identified sevcral 1eficiencies regarding the dedication of the following job files:

1)

Job File S-214, " Nuclear Environmental and Seismic Qualification Test Report For Bussman Glass Body Fuse, Part Number AGC-3 and Bussman Solid Base Fuse Block, Part Number 4522," was prepared for Florida Power Corporation's (FPC's) Crystbl River Plant, Unit 3.

In P0 F670232D, dated February 22, 1990, FPC ordered from STS'six 250-volt Bussman, glass body, fast acting, type AGC-3 fuses and six 250-volt Bussman, 30A, screw terminal, solid base fuse blocks to be dedicated by STS for Class 1E service.

The STS receipt inspection procedure required verifying the critical characteristics of current rating, voltage rating, interrupt rating and dimensions of the fuses.

It also specified verifying current rating, voltage rating, and dielectric strength of the inse blocks. However, wit 1 the exception of measuring the fuse dimensions, STS only visually checked the fusr and fuse block markings. STS did not measure fuse block dimensions. The inspection team was concerned that not all of the fuses' critical characteristics were identified, and that all but one of the critical characteristics that were identified were not verified by direct test or measurement, but by reliance on vendor-supplied information that was not validated by audit or commercial-grade survey.

I'1 addition, in view of the reliance on vendor-supplied information, the team was concerned that STS had not established traceability of the fuses and blocks to the original cauipment manufacturer (OEM), such as by means of OEM invoices and packing slips to the supplier or to STS.

to Graybar Electric (Knoxville) ple, STS For exam P0 00296, dated February 22, 1990, required that all components be from the same lot /date code; however, no STS verification that all components were from the same lot /date code was documented in the records presented for review.

2)

Job File S-147, " Nuclear Environmental and Seismic Qualification of an Agastat Electropneumatic Timing Relay (TVA's), Browns Ferry Nuclear Plant.

Part Number 7022AC," was prepared for the Tennessee Valley Authority's TVA issued PO 89 NLB-75307A on March 3, 1989, to STS for miscellaneous 3

l 49

l electrical parts for a hydrogen analyzer.

Change Order No. 9 to this P0, dated September 29, 1989, required 30 Agastat series 7000 or E7000 timing relays to be qualified by STS for 2-year and 10-year life. The P0 defined the relays' application as a time delay function in the reactor protection system in a mild environment. STS issued P0 00220, dated September 28, 1989, to Relay Specialities, Incorporated, of Oakland, New Jersey (a distributor for Amerace Corporation, the OEM), for 32 type 7022AC Agastat relays, 2 type 700137 ralay sockets, and a C00 to be provided by Amerace.

The P0 also specified that the relays be from the same lot /date code. To document traceability from Relay Specialities to the OEM, the job file contained only an Amerace C0C which listed Relay Specialitics as the customer and identified the items purchased sinply as "32-7022AC" and "2-700137" with no P0 reference, serial numbers or other unique identifiers listed. There was no documentation of verification of the validity of the C0C and the job file contained no OEM invoices or packing slips to Relay Specialities.

Although the STS receipt inspection records indicated that the relays received had sequential serial numbers (which could indicate the relays came from the same lot /date code), STS did not specifically dccument verification of this P0 requirement. Also, the documentation did not specifically identify the relays' critical characteristics, and one acceptance test, the time delay repeatability test, was not performed as required by the receipt inspect %n procedure.

3)

Job File S-299, " Qualification of Rochester Instrument Systems (RIS) Model ET-1215, Duplex Alarm Switches," was prepared for Carolina Power & Light Company (CP&L) under CP&L PO 6F3570BD, Revision 0, on December 11, 1990.

The P0 specified that STS dedicate and seismically qualify three switches for mild environment service to provide alarm indication in Class 1E control circuits at the H. B. Robinson Nuclear Plant. STS issued P0 S-299-00424 to Rochester Instrument Systems on December 12, 1990, for four ET-1215 duplex alarm switches. One of these four units was successfully tested and seismically qualified.

The remaining three units were shipped to H. B. Robinson with an STS C0C on December 18, 1990.

During the seismic testing, one normally open and one normally closed contact of the energized HI alarm were monitored for chatter and loss of continuity Although the tests and documentation were in accordance with STS procedure QAPP-20-1, the documentation did not clearly demonstrate that the switches' critical characteristics for dedicction (particularly for seismic performance similarity to the test specimen) were verified.

Criterion III of 10 CFR Part 50, Appendix B, requires that measures be established for the selection and review for suitability of application of materials, parts, equipment, and processes that are essential to the safety-related functions 6f the structures, systems and components.

In addition, Criterion VII of Appendix B requires that measures be established to assure that purchased material, equipment and services, conform to the procurement documents.

Based upon the deficiencies identified in these job packages, the inspectors concluded that STS failed to perform an adequate review for suitability of commercial-grade items (CGIs) to be used in safety-related applications and failed to ensure that the CGIs conformed to the procurement documents. These failures were citad as Nonconformance 91-01-01, 4

I 50

l a

f u

2.3 Internal Audits The NRC inspectors reviewed STS records pertaining to internal audits to evaluate STS implementation of Criterion XVIII, " Audits," of 10 CFR Part 50, Appendix B.

Included in this review were STS Procedure QAPP 18-1, " Audits,"

Revision 4, STS internal audit reports and associated documents, and the STS, internal audit schedule.

The NRC inspectors found that Procedure QAPP.18-1 addressed both internal STS audits as well as external STS subtier vendor audits. The internal audit requirements were delineated in Section 5.0 of QAPP 18-1 and appeared to satisfactorily address the provisions of Criterion XVIII. The NRC inspector reviewed the 1988, 1989, and 1930, internal audit reports of the STS facility, f

The inspectors also reviewed the STS internal audit schedule / plan.

No concerns were identified in this area.

2.4 Auditor Certification and Qualification The t!RC inspector reviewed STS QA auditor certification and qualification to evaluate STS implementation of Criterion XVIII of 10 CFR Part 50, Appendix B, as well as compliance with STS Procedure QAPP-18-1, " Audits," and STS Procedure QAPP-18-2, " Auditor Training And Qualification." Section 5.3, " Audit Participation," of QAPP-18-2 required that the prospective qualified auditor have participated in a minimum of one QA audit within five years prior to t'ne date of qualification.

However, during review of the STS president's " Record of Lead Auditor / Auditor Qualification," dated September 15, 1986, the inspectors found that the entries in the auditor candidate's audit participation section of the form did not represent actual participation in the conduct of audits.

Instead, the September 8, 1986, September 11, 1986, and July 7, 1987, audit participation credit entries represented dates when STS had been audited by outside organizations. The STS president certified himself as an auditor based upon his participation in these audits. The STS ouality assurance manager explained that STS believed that the party being audited could take credit for participation in an audit.

American Natienal Standards Institute (ANSI)/American Society of Mechanical Engineers (ASME) Standard N45.2.23-1978, " Qualification of Quality Assurance Audit Personnel for Nuclear Power Plants," which was endorsed by NRC Regulatory Guide (RG) 1.146, in August 1980, as meeting the requirements of Criterion XVIII of 10 CFR Part 50, Appendix B, requires that audit personnel be appro-priately trained.

Paragraph 2.2, " Qualification of Auditors," of ANSI N45.2.23 requires that the competence of audit personnel be developed by one or more of three methods given in Paragraphs 2.2.1, 2.2.2, and 2.2.3.

The method given in Paragraph 2.2.3 is "On-the-job training, guidance, and counselling under the direct supervision of a Lead Auditor." Paragraph 2.2.3 also equires participation in the planning, performing, reporting, and followup action involved in conducting audits. Although STS considered that being audited was an acceptable alternative to participating in the conduct of an audit, this type of participation was clearly inconsistent with the industry QA standard (as endorsed by Regulatory Guide 1.146) which reflects the NRC interpretation of the 10 CFR Part 50, Appendix B, requirement that audit personnel be " appropriately trained."

5 I

51

Although the STS QAPPs were represented as being consistent with ANS!/AS!1E Standard N45.2-1977 and its daughter standards, the inspector noted that the QA Requirements Cross Reference Index in the QAM, STS-QA-01, showed that Section 18 (containing QAPP-18-1 and QAPP-18-2) corresponded to ANSI M45.2.19 (which is pertinent to QAPP-18-1). However, ANSI NMS.2.23 (which is pertinent to QAPP-18-2) was omitted.

The inspection team concluded thct the STS president's self-certification as an auditor on the besis of having been audited was improper because it was contrary to the accepted definition of audit participation, which is an active involvement in the conduct of the audit as either an auditor, auditor-in-training, lead auditor, lead auditor-in-training, or technical specialist, and that involvement only as the party being audited would be inadequate.

Accordingly, the dceumented basis of the STS president's auditor certification was considered invalid and contrary to Section S.3 of QAPP-18-2.

The NRC inspectors also reviewed the STS QA manager's auditor certification, particularly since the initial auditor qualification of the STS president was in question. The QA manager's " Record of Lead Auditor / Auditor Qualification,"

dated August 24, 1897, indicated that the STS president had developed and administered the examination upon which the QA manager's qualification was based. However, because the STS president was not properly qualified as an auditor, he deseloped and administered the examination without proper authority.

This was contrary to Section 5.4, " Examination," of QAPP-18-2 which require,i + t a prospective auditor pass an examination that is developed and administ ed by a qualified auditor.

Hence, the August 24, 1987, auditor qualification exam formed an inadequate basis for the QA manager's qualification. The improper auditor qualification of the STS president and QA manager was cited as Nonconformance 91-01-02.

2.5 Technical Evaluation of Equipment Qualification 1)

STS Job File S-129 included Test Report 5129-RP-01, " Nuclear Environmental and Seismic Qualification Test Report for Eagle signal Controls Timer Model HP5 Series 10, Part Number HP52S283A107 for lowa Electric Light and Power Company," Revision 1, dated November 28, 1988. The test program consisted of thermal aging and seismic testing, and functional test.

before and after each phase of testing. The seismic testing was successful, but the accuracies of the test instrumentation and the test data were not addressed in the test report (nor were they included in Test Report S147-RP-07). The inspectors noted that this was not in accordance with Section 8.3(4) of the Institute of Electrical and Electronic Engineers Standard 323-1974 (IEEE 323-74), "lEEE Standard for Qualifying Class 1E Equipment for Nuclear Power Generating Stations." This section requires that qualification data include a report of test results and that the report is to include a description of test facility (test setup) and the instcumentation used, including calibration records reference, and test data and accuracy.

Accordingly, the NRC inspectors reviewed the STS procedures relevant to this question and found that Paragraph 4.4, " Qualification Test Prograt,"

of Revision 0 of STS procedure QAPP-20-1, " Procedure for Dedication of Comercial Grade Components," dated February 28, 1991, in the STS Quality 6

l 52

Assurance Policies and Procedures Manual, STS-QA-01, indicated that STS qualification and reporting were to be conducted in accordance with IEEE 323-74, -83, or as specified. However, in reviewing the STS procedures s)ecifically governing qualification test reporting, the inspectors found t1at they were not consistent with the IEEE 323-74 requirements cited above.

Paragraph 4.8 of QAPF-20-1 did not require inclusion of a description of the test instrumentation used including calibration records reference and test data and accuracy.

In addition Paragraph 6.1 of QAPP-5-1, " Instructions, Procedures, and Drawings," dated February 28, 1991, which specified the minimum contents of STS technical reports, did not require the inclusion of calibration records reference and accuracy of test data.

Therefore, the NRC inspectors concluded that the STS procedures governing qualification test reporting, an er tivity affecting quality, were not appropriate to the circumstances. A a result, STS Qualification Test Reports $129-RP-01 and S147-RP-07, which certified that the qualification

,as performed in accordance with IEEE 323-74, did not include the accuracies of equipment used for testing or accuracy of test data. This deficiency constituted a nonconformance with respect to Criterion V,

" Instructions, Procedures, and Drawings," of Appendix B to 10 CFR Part 50 which requires that activities affecting quality be prescribed by docu-mented instructions, procedures and drawingt of a type appropriate to the circumstances, and that such activities be caducted in accordance with these instructions, procedures, and drawings.

Nonconformance 90-01-03 was cited in this area.

2)

STS Job File S-147 included Test Report S147-RP-07, " Nuclear Environmental and Seismic Qualification Test Report for Various General Electric Company Electrical Components and an Eagle Signal Controls Timer for the Hydrogen Analyzer at the Brown's Ferry Nuclear Plant," Revision 0, dated liarch 2, 1990 and associated documentation. The tested equipment included two of each of the following: GE relays type CR120B02202, GE push button switch gasket 5758816P003, Eag)le Signal Control Timer Relay MP2A625, GE control switch 16SBl (10 stages, GE terminal block CR151B2, and GE terminal block CR15106.

The testing consisted of radiation and thermal aging, seismic testing, and design basis accident (DBA) testing. The peak DBA temperature ranged from 1206F to 141*F with atmospheric pressure and 80 to 100-percent relative humidity, depending on individual components.

Total radiation dose ranged from 53,700 rads to 13.7 million rads.

Thermal aging requirements were defined for each component based on the material with the lowest activation energy and with a target qualified life of 10 years.

The only anomaly during the seismic testing was contact chatter on one GE relay during two of four tests. The contact chatter occurred only when the specimen was deenergized and was 2-20 miliseconds in duration. The customer was notified of the anomaly and the anomaly is documented in the test report. DBA testing was accelerated to 425 hours0.00492 days <br />0.118 hours <br />7.027116e-4 weeks <br />1.617125e-4 months <br /> or 564 hours0.00653 days <br />0.157 hours <br />9.325397e-4 weeks <br />2.14602e-4 months <br />, depending on the component. However, the inspectors noted that supporting test data in the report was somewhat limited, finding several instances in the test report showing a lack of adequate supporting data.

For example, 7

53

the verification of proper timer operability was indicated as "YES" for proper operation, but the actual time for operation of the timer was not given for comparison to the specification.

During review of this qualification job file, the NRC inspectors identified certain concerns with respect to accelerated thermal aging and qualified life calculation methodology involving the treatment of continuously energized solenoid operated devices such as relays. These concerns were also found to have potential generic implications because STS reported that the practices in question were widespread in the qualification testing industry.

In defining the requirements for thermal aging, STS considered the heat rise of the S-147 specimen relays due to continuous energi:ation. A test at ambient temperature determined that the coil heat rise was 91*F.

This 91'F was appropriately added to the normal com)onent ambient operational temperature.

Citing Paragraph 1-109.10.1 of tie National Electrical ManufacturersAssociation(NEliA)StandardICS1-1983,"GeneralStandards for Industrial Control and Systems," STS had adopted the convention that coil heat rise can be assumed relatively constant and had added the sama

i. eat rise of 91*F (50 C) directly to the aging temperature.

However, ICS 1 states that coil heat rise can be assumed constant between ambient temperatures of 10*C and 40 C, yet STS had extrapolated well beyond this range to a thermal aging temperature of nearly 100*C. The problem with this practice is that in testing by national and independent laboratories and by manufacturers of solenoid operated devices, direct measurement of coil heat rise in ovens at elevated temperatures has shown that the heat rise is reduced as the oven (aging; temperature is increased. Therefore, taking credit in thermal aging Arrhenius calculations for the energized coil heat rise being as high at aging temperatures (well above 40 C) as it is at normal ambient temperatures, would result in enderaging of test specimens and erroneously high qualified life determinations.

The lower heat rise at higher temperatures can be explained by equating the heat transfer from the relay coil to the power input to the coil at steady-state conditions. At an elevated ambient temperature, the resistanceofthecoilwireishigherthanatamgienttemperature. Thus, the power input to the coil, which is given by V /R, where V is the constant input voltage and R is the coil resistance, is reduced at the elevated temperature. Heat transfer from the relay coil is given to a first approximation by hA(delta-T), where h is the effective teat transfer coefficient, A is the effective surface area, and (delta-T)=(T coil-T ambient)whichistheeffectivecoilheatrige. To a first approximation, h and A may be assumed constant. Equating V /R to hA(delta-T) then shows that the increased R due to increased temperature implies decreased delta-T.

Actual test data that supports the above analysis for one relay type is contained in NUREG/CR-4596, " Screening Test of Representative Nuclear Power plant Components Exposed to Secondary Environments Created by Fires," prepared by Sandia National Laboratories.

Sandia directly 8

N S4

i monitored both coil and ambient temperatures over a range of ambient temperatures in this testing.

In addition, a certain solenoid-operated device manufacturer's heat rise data as well as sone other NRC-sponsored data also tends to confirm this conclusion.

Therefore, the inspectors concluded that STS incorrectly er.trapolated the constant heat rise assump Hon beyond the range of embient temperatures between 10 C and 40'C for which the assumption was stated in ICS 1 to be valid.

Because this practice may be common among some major qualification laboratories, and has potential generic implications, this issue will be reviewed further in future NRC inspections and possibly addressed in generic communications.

3)

Job File S-050 covered environmental and seismic qualification testing of motorized valve actuator thermal overload monitors under P0 508050, (ESI)

Revision 0, dated December 8,1989, from Er.gineered Solutions, Inc.

STS Qualification Plan 5050-QP-01, was approved by ESI on December 12, 1989 l

for checks, inspections and tests in accordance with IEEE 323-74, IEEE 344-75, " Seismic Qualification of Electrical Equipment for Nuclear Plants," and IEEE 381-77, " Type Tests of Class IE Modules for Nuclear Plants."

Section 6.1 of Qualification Plan 5050-QP-01 defined the required environmental conditions, listing loss-of-coolant accident (LOCA) and high energy line break (HELB) maximum temperature as 130*F.

However, confusion was generated by a later addition of Section 7.8, "LOCA/HELB Accident Test," that raised the accident temperature to 16515*F under Revision 1, dated June 1, 1990, because the revision numbers were not included on the pages of the test plan.

Although the inspector noted that these tests had not been completed as of the date of this inspection, further action is needed to resolve this discrepancy.

4)

Job 41e S-171 covered STS seismic and environmental testing of eight control relays under PO 51831-S, Revision 1, dated August 22, 1989, from Morrison-Knudsen Company, Inc., MKW Power Systems Division (MKW).

Two of the eight items included in the lot failed to meet the test's acceptance criteria during seismic testing. The f611ures were recorded in a notice of anomaly in the report and the records indicated that MKW was notified by telephone in accordance with STS Procedure QAPP-20-1 and as requested by MXW in their procurement specifications.

Hevertheless, Job Filt S-171 contained sufficient documentation to support the mild environment and seismic qualification of the six specimens that passed all of the seismic and thermal extreme functional tests.

No deficiencies were identified in this package.

2.6 Calibration of Test Equipment The calibration records of selected test equipment were reviewed by the inspection team to determine whether the equipment had sufficient accuracy for the testing discussed in this inspection report. The inspectors noted that STS used redundant means of temperature monitoring during thermal aging of the Eagle Signal timer, including a Marshell Instrumnts bimetal thermometer and a thermocouple (T/C), T/C transmitter, and strip chart recorder. During the test, STS recorded daily readings of the thermometer, with the strip chart 9

O 55

giving a continuous reading. About halfway through the test, the strip chart recorder failed end was removed from the test.

STS only recorded the daily thermometer readings after that point.

However, the thermometer calibration records in effect at the time of the test did not indicate the accuracy of the thermometer.

Subsequent thermometer calibrations indicated both a 22-percent accuracy or a 11-percent accuracy. No basis for the selected accuracy was provided in the file, but STS personnel indicated that the 1-percent accuracy was based on similar equiprant procured by STS. During this inspection, STS contacted the thermometer manufacturer who stated that a 1-percent tolerance was characteristic of this instrument. However, the test procedures and documentation lacked clear accuracy specifications for calibration and use of this thermometer en6 the test program procedures did not require such specifications.

In the timer test, STS used the thermcmeter to verify tnat the test net the 185. 45, -0'F specification.

A 2-percent-of-span tolerance translates to WF, which would clearly not be sufficient.

The 11-percent tolerance ( 3*F) might be considered acceptable for the given specification, but would be marginal.

Similar calibration records were reviewed for the thermocouple (T/C), T/C transmitter, and strip chart recorder.

The T/C accuracy was specified in the calibration file as being 2 percent. For a T/C with a range of -100'F to

+1600 F, 2 percent of span translates to 34 F.

This would be sufficient error to render the T/C useless for monitoring a temperature specified as 185,

+5, -0*F.

The T/C manufacturer's catalog indicated an accuracy of 12.2*C,

( 4 F), which the calibrations indicated that the T/C was meeting. The T/C transmitter calibration, performed by the Technology for Energy Corporation price to the timer test, indicated a 5-percent tolerance. The test data were not included for this calibration, but the next calibration did include the data. For the 0 to 400"F range of the transmitter, 5-percent tolerance translates to 120 F, which was, again, beyond the allowable tolerance for monitoring a temperature specified as 185, +5, -0 F.

The inspector determined that these deficiencies did not result from failures to follow procedures, but rather from a programmatic deficiency.

STS did not have an adequate procedure or process for determining and documenting the accuracy requirements of calibrated instrucents so that instruments could be suitably selected and properly calibrated to a sufficient accuracy (and precision) to enable collection of test data of the required accuracy and degree of precision. This also contributed to STS's failure to adequately evaluate the test results to ensure that data accuracy requirements were met.

Criterion XI, " Test Control," of Appendiy C to 10 CFR Part 50 requires that (1) a test program be established to assure that all testing required to demon-strate that structures, systems, and components will aerform satisfactorily in service is identified and performed in accordance wit 1 written test procedures which incorporate the requirements and acceptance limits contained in appli-cable design documents, and that (2) test results be documented and evaluated to ensure that test requirements have been satisfied.

The inspectors concluded that STS failed (1) to develop and implement adequate procedures to ensure the selection of test instrumentation of adequate accuracy and precision and to 10 I

1 56

L ensure that such instrumentation was properly calibrated and documented, and (2) to adequately evaluate the test results to ensure data accuracy require-ments were met. These failures were cited as Nonconformance 91-01-04.

2.7 Review of the STS 10 CFR Part 21 Program The NRC inspectors reviewed records and conducted discussions with STS staff to determine if STS was operating in compliance with-10 CFR Part 21. The NRC inspec W s reviewed STS Procedure No. QAPP-19-1, Revision 0, " Reporting Of Title 10, Part 21,p' reviewed the contents and location of the 10 CFR Part 21 Defects Ard posting, and reviewed other documents associated with the STS 10 CFR Part El procedure.

The review of STS Procedure No. QAPP-19-1 identified that STS had adequately established procedures to implement the provisions of 1.0 CFR Part 21. The NRC ins 3ectors identified one area within.QAPP-19-1 which required STS to notify bot 1 the NPC and STS customers of potential defects, when STS "...cannot definitively determine whether [a deviation] could or could not create a substantial safety hazard." However, 10 CFR Part 21 does not require the NRC to be informed of a deviation until after an individual, corporation or other entity subject to 10 CFR Part 21 perfo'as an evaluation and reasonably concludes that a substantial safety hazard could be created. The NRC inspec-tors discussed this area of QAPP-19-1 with the STS president and concluded that STS was in compliance with 10 CFR Part 21. The STS president committed to review his procedure to determine whether STS may wish to revise that portion of QAPP-19-1 for clarification of the distinction between deviations ard-

> defects and to-reflect mnre clearly the requirements of notifying the NRC only of defects while' informing, as a minimum, affected customers of deviations.

A second area reviewed by the NRC inspectors concernef STS's compliance with the posting requirements of Section 21.6 of 10 CFR Part 21. The inspectors observed that STS had posted the required documents on a bulietin board at the

_ junction of the manufac+1 ring and office area passageways. No concerns were identified in either of,hese arcas by the NRC inspectors.

-The third area reviewed by the NRC inspectors concerned the identification, documentation, and disposition of devia.tions and nonconformances that may require evaluation pursuant to 10 CFR Part 21.

The NRC inspectors noted that QAPP-19-1 required STS personnel who identify deviations to initiate a corrective action request (CAR) in accordance with STS Procedure QAPP-16-1,

" Corrective Action." Revision 2 of QAPP-16-1 required the STS QA manager to review and evaluate all CARS. STS Procedure QAPP-15-1, " Notice of Anomaly,"

_(NOA) described the STS methodology for documenting deviations from contractual obligations and STS testing activities. With the exception of non-critical NOAs (such as intermittent relay chatter), Rcvision 2 of QAPP-15-1 required 3

that STS inbrm its customers of all anomalies f( nd within 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> of their occurrence. However, QAPP-15-1 also required that-all NOAs be provided to customers in the qualification report so that the customer :ould evaluate the problem with respect to his specific application. The NRC. inspectors observed several examples of t!0A inclusion in qualification reports among the STS job file packages reviewed. Each cf the NOAs reviewed clearly identified (1) the applicable licensee /end user, (2) contract information, (3) the component (s) 11 57

~

tested, (4) requirements / specifications, (u) dMtt iptions of the ancmalies, (f) disposition, comments, and recomendations, and (7) STS personnel signatures.

No concerns were identified in this crea.

The NPC inspectors also reviewed recnrds to determine STS compliance with the requirement of Section 21.31 of 10 CFR Part 21 to ensure that procurement documents for basic components state that the provisions of 10 CFR Part 21 apply. The inspectors reviewed STS P0s for items that STS had determined were basic components 3s de" ned.n 10 CFR Part 21. The inspectors reviewed STS P0s

it.

.t i one exception, all STS 00s for basic compo-f rom 1989,1990, cN nca.s th61 were res wed met tne requirement of 10 CFP 21.31.

The one exception was STR TO Ho. 00?.38, dated Febiuary 19, 1991, to the Amerate Corporation for several Agastat E-70T series safety-rtiated relays.

Attached to P0 00430 was a typical STS " purchase order checklist," as required by SIS Procedtre OAPP-4-1. This checklist was taed by STS on each P0 to designate whether an order was saf ety-related or comercial-grade. The particular checklist attached to PO 00438 indicateo that the order was saf ety-related ar,d that the stardord STS terus i.nd cenditions (.vhich actually citt 10 CfR Part 21) were included.

Mcwever, it ap; eared that STS had inadvertently feiled to attach the referenced standard terms and conditions sheet to the P0.

The failure to explicitly state the spplicability of 10 CFR Part 21 to this PO was not cited 65 a violation because the other documents referenced and attached to the P0 indicated that 10 CfR Part 21 would have been invoked.

In eddition, the inspectce noted that the applicable invoice from Amerace Corporatio indicated that it had accepted 10 CFR Part 21 regardiess of the administrative oversight.

3 PERSONS CONTAf.ifD Name Title Frederick J. Slagie President, STS, 'nc.

John Idashburn Quality Assurance fianager Dan fiart Engineer Joseph A. Kect Senie Jiectronics Technician 12 58

lgecing'%

t

/

e l/ -

' i NUCLEAR REOULATORY COMMISSION UNITED STATES e$.

of WABHIN010N. D C. EEE43 9 * *% -,5 August 29, 1991 Docket No. 99900879 Mr. Morton Keiser, president

'ia oga Pipe supply company, Incorporated 24?0 Wheatsheaf Lane Philadelphja, Pennsylvania 19137

Dear Mr. Keiser:

SUBJECT NRC INSPECTION REPORT No. 99a00879/91-01 This lotter addresses the inspection of your facility at Philadelphia, Pennsylvania conducted by Mr. R. L. C111mberg and Mr. R. K. Frahm, Jr. of this office on August $-9, 1991 and the discussions of their findings with Mr. David Keiser, and other members of your staff at the conclusion of the inspection.

The purpose of the inspection was to determine if the supply of material by the Tioga Pipe Supply Company, Incorpcrated (Tioga) is in accordance with nuclear utility specifications and the Tioga quality assurance (QA) program.

The inspectors were especially interested in whether Tioga had supplied a five foot piece of A-312 type 304 stainless steel commercial-grade material to the Kowaunce nucioar plant which way have boon improperly marked as 304L and with the wrong heat namber.

Areas examined during the NRC jaspection and our findings are discussed in the enclosed repart.

This inspection consisted of an exanination of procedures and representacive records, interviews with personnel, and observations by the inspectors.

Within the scope of this inspectiun, we found no instance in which you failed to arat NRC reqv.irements.

However, from discussions with your CA staff, it was determined that Tioga does not require mill test rtperts for material supplied by its vendors and subcequently furnished as safety-related material subject to the requirements of 10 CFR Part 50 Appendix B.

Pending fur 4her review of s}.ecific procur~ int actions, this issue van identified as an unresrived item.

l 59

Mr. Morton Keiser 2

In accordance with 10 CPR Part 2.790 of the NRC's " Rules of Practice," a copy of this letter and its enclosures will be placed in the NRC's Public Document Room.

a I/ 1 i Norrholm, Chief Vendor Inspection Branch Division of Reactor Inspection and Safoguards Office of Nuclear Reactor Regulation Enclosures Inspection Report 99k00879/91-01 60

c ORGANIZATION:

TIOGA PIPE SUPPLY COMPANY, INCORPORATED PHILADELPHIA, PENNSYLVANIA REPORT NO.

99900879/91-01 CORRESPONDENCE ADDRESS:

Mr. Morton Keiser, President Tioga Pipo Supply Company, Incorporated 2450 Wheatsheaf Lano Philadelphia, Pennsylvania 19137 ORGAN 17ATIONAL CONTACf Mr. Douglas M. Vickery, Quality Assurance Manager NUCLEAR INDUSTRY

?.CTIVITY:

Materials supplier for nuclear, military, and commercial application.

INSPECTION CONDUCTED:

August 5-9, 1991 D74 ~7/

R. L. Cilimberlyf Toad Loador Date Reactivo Inspection Section No. 1 Vendor Inspection Branch (VIB)

Ronald K. Frahr Jr., VIB f

bAok h.

.2-2 e-m Uldis Potapovs, Chibf Date Reactive Inspection Section No. 1 Vendor Inspection Branch INSPECTION BASES:

10 CFR Part 21 and Part 50, Appendix B and ASME Boiler and Pressure-Vessel Code,Section III P

INSPECTION SCOPE:

To review the Tioga Pipe Supply Company,

- Incorporated (Tioga) QA program relativo to the supply of material to the nuclear industry.

PLANT SITE APPLICABILITY:

Numerous.

61

--n

,a,

.g,,

,_.v..,

1 INSPECTION CUMMARY 1.1 ilnrsE21191_Iliun The NRC inspectors determined that Tioga does not require copies of mill test reports for material supplied by its vendors as discussed in Section 3.7 below.

Pending further review of documents actually supplied by Tioga to their safety-related customere this issue is identified as an unresolved item (91-01-01),

2 STATUS OF PREVIOUS INSPECTION FINDINGS 2.1

,(Closed). Violation f 8 4 - Q1-Q11 o

Contrary to Section 21.31 of 10 CFR Part 21, a review of 51 documentation packages for Section III material revealed that 39 customer purchase orders (Pon) to Tioga specified 10 CFR Part 21 as an applicable requirement, but seven Tioga POs to material manufacturers and service vendors (A 6765 to Telodyne Columbia, A 5573 and A 6471 to Combustion Engineering, A 8619 and A 8629 to Carson Non-Dostructive Testing, A B624 to Ramball Test Laboratories, and A 7231 to Kobo Steel) did not specify that 10 CFR Part 21 would apply.

Tioga issued specific Ictters on January 21, 1985, to the respective sources cited in the Notice of Violation advising them of the invocation of 10 CFR Part 21 for the applicable orders.

Tioga also issued letters on January 21, 1985 to all approved vendors of nuclear grade materials or services requesting invocation of 10 CFR Part 21 on all past esfety-related or ASME Section III Pos.

The NRC inspectors determined by reviewing subsequent data packages on safety-related material that Tioga had invoked 10 CFR Part 21 on POs to their suppliers.

Violation 84-01-01 is considered closed.

2.2 f ClossdL_R;tnC2DffrInance f84-01-021 Contrary to Criterion V of Appendix B to 10 CFR Part 50 and Section 4.3.1 of the Quality System Manual (QSM), a review of Tioga POs for nuclear material revealed that PO A 8856-RL to United States Steel for 18 inch, SA-333 pipe was not reviewed by the QA Department.

Review of subsequent POs by the NRC inspectors determitied that QA review and approval had been performed in accordance with Section 4 of the QSM.

Nonconformance 84-01-02 is considered closed.

2 62

0 t

2.3 IQ.lngnd) NonGDDf ormance _ LE4-01-03)

Contrary to Criterion V of Appondix B to 10 CFR Part 50, Section 9.6.1 of the QSM, and Section 9.5 of SNT-TC-1A, a review of nondestructive examination (NDE) records revealed that Tioga had not reviewed and accepted the written practice (i.e. "NDT Procedures Manual" dated March 18, 1984 for Carson Nondestructive Testing (Carson) and " General Procedure Manual," GP-UTTL-2 submitted to Tioga in August 1982 by Universal-Testing Laboratorier. (UTTL)) for two NDE laboratories.

UTTL is no longer used by Tioga, and Carson has been renamcd Laboratory Testing, Incorporated (LTI).

Tioga uses LTI exclusively for NDE and has reviewed and approved all LTI written I

practicos and procedures, copies of which are on file at Tioga.

Nonconformance 84-01-03 is considerod closed.

2.4 (Closed) Nonconforman.cc (84-01-011 Contrary to Criterion V of Appendix B to 10 CFR Part 50, Section 0.6.2 of the OSM, and Section 9.6.1 of SNT-TC-1A, a review of NDE records revealed that two Level II examiners from Carson had performed ultrasonic (UT) and magnetic particle (MT) testing in June 1984 and May 1984_, respectively, for Tioga but their qualification records were not maintained by Tioga.

Tioga maintains a complate file of the qualification records for NDE personnel.

The NRC ir

)ectors determined by reviewing current data packagou tha NDE testing had boon performed by qualified personnel whose qualification records were in Tiogn files.

Nonconformance 84-01-04 is cofisidered closed.

2.5 1 Closed) Nonconformance (84-01-05) i Contr1ry to Criterion V of Appendix B to 10 CFR Part 50 and Section 9.5.1.1 of the QSM, a review of NDE records revealed that Tioga did not have the documentation on file to demonstrate the capability of NDE procedures for Carson (UT-001, Addendum No. 1 and HT-1) and UTTL (QC Manual Revision D).

The inspectors determined that Tioga files contain documentation that demonstrates the availability of LTI (colo source NDE contractor) procedures which have been reviewed and approved by Tioga before specifying their use-on Pos for NDE services.

Nonconformance 84-01-05 is considered closed.

2.6

.LQlppedl Nonconformance (84-01-061 Contrary to Criterion V of Appendix B to 10 CFR Part 50 and Sections 4.3.1, 5.1.2,_and 5.2.1 of the QSM, a review of Approved Vendors Lists (AVL) and Pos issued by Tioga for nuclear items revealed the following:

3 63

--.. -=

-.,:=.-.

a.

Tioga issued a PO (#14595N) to the Ideal Forging Company in March 1984 for flanges, but Ideal Forging was not on the AVL.

b.

Carson performed HT and UT during May and June 1984 for Tioga.

However, Carson was not placed on the AVL until June 29, 1904.

This AVL was not issued until August 13, 1984.

c.

Tioga issued a PO (#A12404) to Pennsylvania Machine Works in March 1983.

Pennsylvania Machine Works had not been surveyed or audited by Tioga since March 1981 and was not listed on the appropriate AVL.

d.

The Gago Block Corporation had calibrated equipment for Tioga as recently as July 1984.

However, Gage Block Corporation had not been surveyed or audited by Tioga since an initial audit performed in November 1977, nor were they listed on the AVL.

The NRC inspectors determined that these AVL discrepancies were due to poor control of the AVL and its distribution, 10 CFR Part 50 Appendix B suppliers not being included on the AVL, and calibration services not being included on the AVL.

Tioga has i

updated the QSM to reflect a single master AVL which is compiled and maintained by the QA Department to be used by all personnel procuring materials and services.

Tioga has changed the QCM to require annual audits of 10 CFR Part 50, Appendix B suppliers and calibration service vendors.

Review of the current AVL and data packages determined that Tioga purchases materials and services from vendors who are on the AVL in accordance with the QSM and applicable procedures.

Nonconformance 84-02-06 is considered closed.

2.7 (Closed) Nonconformance (84-01-07)

Contrary to Criterion V of Appendix B to 10 CFR Part 50, and Sections 11.1.1 and 11.1.3 of the QSM, a multistep gage (Control

1. 1243027) was calibrated in September 1982 and was not recalibrated until fourteen months later in November 1983.

Review of calibration records revealed that this gage block has been calibrated annually since the NRC inspection in 1984.

Nonconformance 84-01-07 is considered closed.

3 INSPECTION FINDINGS AND C; 7 COMMENTS:

3.1 Entrance and Exit McQ11H9h The Nuclear Regulatory Commission (NRC) inspectors informed Tioga staff of the scope of the inspection, outlined areas of concern, and established working interfaces during the entrance meeting on 4

64

August 5, 1991.

On August 9, 1991, the NRC inspectorn summarized the inspection findings, observations, and concerns to Tioga management during the exit reeting.

3.2 DAchgtoJand The NRC obtained information which indicated that Tioga may have improperly marked a five foot length of 6-inch diameter, schedule 10, A-312 type 304 commercial grade stainless steel pipe which was supplied to the Kowaunce nuclear plant by Tioga to fill PO SD1364 dated December 16, 1986 from the Chicago Tube & 1ron Company (CTI).

Wisconsin Public Service Corporatior (WPSC) specified that CTI use a domestic supplier, but CTI did not pass this requirement on to Tioga.

The pipe was marked 304L stainless steel from heat AoA2403, and the certified material test report (CMTR) supported this identification while identifying the Tioga vendor as Kuze Stainless Company, Limited (Kuze) in Japan, and the order date as June 11, 1981.

When the pipe was tested by Taussig Associates, Incorporated for Kewaunce, the test results determined that the material was 304 stainless steel with a carbon content of.07% and not 304L stainless steel which has a lower carbon' content (.014% shown on the Kure certification).

The purpose of this inspection was to determine if 304 stainless steel was supplied instead of 304L for safety-related application from heat AOA2403.

This inspection was also conducted to determine the suitability of material being supplied by Tioga which was purchased from its suppliers end to evaluate the Tioga QA progran for compliance with NRC requirements.

3.3 Eyre haterial The NRC inspectors determined by discussions with Messrs.

Vickery, Wite.ig, and Dress that Tioga had purchased only commercial-grade asterial from Kuze, consisting of 5-inch and 6-inch schedule 10 pipe from heat A0A2403 which Kuze reported as 304L stainless steel.

Tioga searched for pipe from Kuze heat AoA2403 and located one 5-inch diameter piece.

Tioga performed a chemical analysis of this piece which determined the chemical composition to be that of 304L stainless steel with values similar to the values reported by Kuze.

Tioga reviewed documents for all nuclear material and some commercial material supplied by Tioga between 1982 and the present.

This search did not identify any material from Kuze heat A0A2403 except for 42 feet of 6-inch diameter that went to Radnor Alloys, Incorporated in September 1981.

This material passed through Guyon Alloys, Dravo (nos Connex Pipe), and finally Stone & Webster for application in an Amoco oil refinery.

Durinn the document review a Kuze CMTR wns located for 517 feet of 6-inch schedule 10 pipe, A-312 type 304

tainless steel from heat TTU3209 with chemical composition values similar to the values reported by Taussig on the Kewaunee sample.

It is possible that the 5 foot length of pipe that was supplied to Kewaunee by Tioga was from heat TTU3209 and was 5

65

improperly marked 304L from Kuze heat AOA2403.

Line marking on a 5 foot end piece of pipe would not contain the heat number so the worker making up this commercial order could have used the wrong heat number from another piece of pipe when marking thib material.

The Kuze CMTR for heat TTU3209 does not provide any information cor.cerning solution annealing or corrosion testing which could mean that the Kewaunee material exhibits carbide precipitation and may be subject to intergranular corrosion.

However, the nectanical properties reported for this material by Taussig are more 59presentative of a solution annealed material than unannealed material.

Region III of the NRC is addressing the acceptability of the application of this material in the Kewaunee nuclear plant.

3.4 Document Review The inspectors reviewed 31 data packages for material supplied to nuclear utilities.

The material was purchased from approved suppliers on the applicable AVL.

Tioga's AVL was detailed and comprehensive.

The basis for inclusion on the AVL was either the existence of a current ASME Quality System Certificate (QSC) or a Tioga source survey and audit.

3.5 Qh.servations of Work In Process The inspectors observed work in process throughout the warehouse, open storage areas, and the receiving and inspection area occupying 42 acres.

The plant was clean and well organized, with material in good condition and properly stored.

The material was properly identified and marked and stainless steel was separated frem carbon steel by stainless steel strips welded on the bearing surfaces of the storage racks.

The inspectors did not observe any carbon steel in contact with stainless steel.

The inspectors did not see any improperly identified material nor was any material found from Kuze heat AOA2403, 3.6 12_gFR Part 21 The inspectors determined that Tioga has maintained the required postings, imposed 10 CFR Part 21 on purchase orders, and implemented procedure QSP-20, "10 CFR Part 21',

Revision 1, dated September 1, 1988.

No violations were found during this inspection.

3.7 Innsgahility Discussions with Messrs. Vickery, Wittig, and Dress determined that Tioga does not require copies of mill test reports for all material supplied by its vendors which is subsequently provided to customers as safety related material.

Tioga establishes traceability when they determine that a supplier's program is 6

66

l found to meet the requirements of Appendix B to 10 CFR Part 50 through periodic audits.

Tioga confirma during audits that mill test reports are in their supplier's files for material that is being supplied to Tioga.

The inspectors emphasized the importance of mill test reports in establishing heat traceability to the mill where the uetal is melted and the heat number is assigned.

Criterion VIII of Appendix B to 10 CFR Part 50 states, in part, that " measures shall assure that identification of the item is maintained by heat number... on the item or on records traceable to the item as required throughout fabrication, erection, installation, and use of the item... to prevent the use of incorrect material."

The mill test report is the document in which the manufacturer assigns the heat number to a material at the time the molten metal is poured from the ladle into molds to form the solidified ingots or slabs.

The inspectors are not aware of any document other than the mill test report which verifies the history of the heat number asaociated with the chemical composition, molting practice, and applicable mill heat treatment of a material.

A copy of the mill test report should be included in the records of material to verify the traceability of that material in accordance with Appendix B to 10 CFR Part 50.

Paragraph NCA-3867.5 of Section III of the ASME Code requires material suppliers such as Tioga to transmit CMTRs from all material manufacturers to the purchaser at the time of shipment.

The ASME Code defines CMTR as "a document attesting that the material is in accordance with specified requirements, including the actual results of all required chemical analyses, tests and examinations."

Some of these requirements, as defined in ASME materials specifications include a description of the molting process and heat treatment performed on the stock material.

The only entity that can reasonably attest to these operations is the steel mill.

Therefore it is expected that the mill test report should be included in the set of CMTRs which are required to be submitted to the purchaser at the time of shipment.

Pending further review of documents actually supplied by Tioga to their safety-related nuclear cuo'comcrs, this issue is identified as an unresolved item (91-01-01).

3.8 Material Testing Tioga has a Tinius Olsen tensile testing machine and an emission spectrograph for performing tensile tests and chemical analyses whenever needed to verify the properties of materials relative to test reports received from their suppliers.

The inspectors determined that certified material reference standards are being used for the spectrograph and the machines are calibrated annually.

The frequency of calibration may be increaced if test results should become erratic.

Of special note is the 7

l 67

availability of equipment which permits the analysis of lengths of pipe rather than samples cut from the pipe.

3.9 Ncndestructive Examination Tioga currently uses LT1 exclusively as its NDE contractor.

The inspectors reviewed the sections of Tioga's QSM and procedures, as well as LTI's procedures and acceptance criteria for ultrasonic (UT), liquid penetrant (PT), and magnetic particle (MT) testing.

LTI was last audited by Tioga on April 25, 1991, which satisfies the annual requirement when combined with previous audits.

10 CFR Part 21 invocation, QA review, and procedure number and revision were verified on Tioga and LTI documentation.

Testing was performed by qualified examiners as determined by review of their certificates in the Tioga files.

3.10 Test and Measurina EauiDment Calibration Review of QSP-11 " Measurement Equipment Control", Revision 4, and QSP-28 "Celibration of Test Equipment", Revision 1, both dated September 1, 1988, and the applicable records determined that the equipment was controlled and calibrated according to procedural requirements.

3.11 Iraininn/04Dli fiCJit1Qua The inspectors reviewed QSP-13, " Training and Qualification of Inspection and Test Personnel", Revision 2; QSP-21, " Auditor Training and Qualification", Revision 1; and QSP-31, " General Training Procedure", Revision 0; all dated September 1, 1988.

Training / qualification records for six QA and management personnel indicated that training was in accordance with procedural requirements.

4 PERSONNEL CONTACTED

+

M. Dress, QA Representative G. Gruver, Laboratory Technician 4

A. Keiser, Principal D. Keiser, Principal D.

Lare, Inspector D. Vickery, QA Manager

+

R. Wittig, General Sales Manager

+

+

Attended entranco meeting on August 5, 1991 Attended exit meeting on August 9, 1991 8

68

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UNITE D sT ATis NUCLE AR REGULATORY COMM$SION i

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se n m Docitt No. 9990114?/88 01 l

Hr. D. Whitaker, Mana er Spartanburg Distribut on Center Westinghouse Electric Corporation Post Office tem 766 Duncan, South Carclina 29334

Dear Hr. Whitaker:

J

,UDJECT: NRC INSP[CTION REPORT NO. 99902142/88 01 i

This letter addresses the NRC inspection of your facility at Duncan, South Carolina, conducted by J. Knox and T. Foley of this office on Septen6er 27-28, 19PC, and the discussions of their findings with you and other members of your staff at the conclusion of the inspection. The inspection was conducted to review your activities relative to your supply of ac1ded-case circuit breakers to customers or other Westinghouse busine n 'anits. The release of thi:;

inspection report was delayed due to the HA;'s onaoing review and investigation of nonconforming and. substandard vendor products.

In accordance with 10 CFR 2.790 of the Comission's regulations, a copy of this letter-and the enclosed inspection report will be placed in the NRC's Public Docunent Room.

Should you have questions concerning this inspection, we will be pleased to discuss them with you.-

Sincerely,

\\

Leif J. Norrholm, Chief Vendor Inspection Branch-Division of Reactor Inspection and Safeguards-0ffice of Nuclear Reactor Regulation

Enclosure:

Inspection Report Nc. 99901142/88-01 69 s...L.

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ORGANIZATION:

SPARTANBURG DISTRIBUTION CENTER DUNCAN, SOUTH CA 0 LINA REPORT INSPECTION INSPECTION NO.:

999001142/88-01 DATE: 9/27-28/88 ON-SITE HOURS: 4 CORRESPONDENCE ADDRESS:

Mr. D. Whitaker, Manager Spartanburg Distributien Cecter Westinghouse Electric Corporation Post Office Box 766 Duncan, South Carolina 29334 ORGANIZATIONAL CONTACT:

D. Whitaker TELEPHONE NUMBER:

(803) 439-0221 NUCLEAR INDUSTRY ACTIVITY:

The Spartanburg Distribution Center has supplied molded case circuit breakers for comercial dedications and subsequent use by the nuclear industry.

ASSIGNED INSPECTOR:

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to 97 J. L. Anox, Special Projects Inspection Section ate (SP 5)

OTHER INSPECTOR (5):

1. Foley, Program Devel.pment and Reactive Inspection Secti APPROVED BY:

d S bM9 Jt-4T U. Potapovs. Section Chief, SPIS Jate INSPECTION BASES AND SCOPE:

A.

3ASES:

Follow-up inspection to determine the extent of the use of surplus or refuroished molded case circuit breakers supplied to nuclear power plants.

E.

SCOPE: The inspection was conducted to review activities related to the supply of molded case circuit breakers to assure breakers which have left Westinghouse control do not reenter the supply system such that thy can be resolo by Westinghouse for use in nuclear safety-related application.

PLANT SITE APPLICABILITY:

Potentially all nuclear plants.

70

ORGANIZATION: SPARTANBURG DISTRIBUTION CENTER DUFCAN, SOUTH CAROLINA REPORT INSPECTION NO.: 99900114?/fC-01 RESULTS:

9 AGE 2 of 3 A.

V10L AT 1,0N:

Norie B.

NONCONFOR".ANCE:

None C.

STATUSOFPRH10VSINSPECTIONFINDINGS None D.

OTHEj FINDINGS AND COMMENTS:

The Spartanburg Distribution Center is a large warehouse facility located in Dur.cen, South Carolina. The center receives, stores, and distributes breakers as well as other electrical components to numerous Westinghouse facilities within the Westinghouse Corporatiori.

Components arrive at the distribution center by truck.

All circuit breakers received by the Spartanburg Distribution Center originate frora the Westinght.use manufacturers in either Beaver, Pennsylvania, Puerto Rico, or the Dominican Republic. Ne other breakers are purchased or stored at Spartanburg (except for retu r r.5 ). After receipt, each component is moved to its preassigned l

storage locat.or. within the warehouse. These storage locations and the quantity of components being stored at any given location are electronically controlled.

Purchase orders for components are received electronically at the distribution center.

Each purchase order includes the component's assigned storage location and pre-printed customer address labels.

To f til an order, the individual components which make up the order are renoved from thfeir storage location, assembled, checked, packaged and shipped.

This process has been automated and is elet.tronically controlled to the extent practical.

Located within the sarne building as the Spartanburg Distribution Center is the Distribution and Control Modification Center. The modification center, as the nare inplies, makes modifications to breakers in accordance with procedures to eeet specific purchase order requirements.

For exempie, if the purchase order requires a breaker with auxiliary contacts to be shipped, the modification center would purchase the breaker and auxiliary contract separately from the distribution center, install the auxiliary contacts in the breaker, perform required thderwriters Laboratories (UL) tests in accordance with procedures, attach Westinghouse and UL seals, package, and ship the asser61ed breakers.

J 71

~0RGANIZATION:

SPARTANBURG DISTRIBUTION CENTER DUNCAN, SOUTH CAROLINA REPORT INSPECTION NO.: 999001142/88-01 RESULTS:

> AGE 3 of 3 The modification center also recovers and processes about 20 return orders per month.

Of these about 75 percent are returned for additions 1 modification and about 25 percent are returned due to overorder or wrong shipment. Overorder or wrong shipment items are inspected to assure that they have been returned in their original sealed boxes or that the Westinghouse seal on the items remains unbroken. After inspection, those items are returned to the distribution center for resale.

! Additional modification returns (about-50 percent) are rejected and shipped _back to the customer, because ~ they were not what-was-orig-

-inally purchased.

Of the remaining modification returns, about 75 percent are modified (repaired for the most part) and reshipped to the

-customer and about 25 percent are scrapped with a replacement shipped to_the customer.

No unacceptable conditions were identified.

I E. --

g1YMEETING:

-At the conclusion of the inspection an exit meeting was held. The following-people were in attendance.

NAyES TITLE John L. Knox Lead Inspector, NRC Thorr.as' Foley _

Reactor Inspector, hRC Don Whitaker Manager, Spartanburg Distribution Center Randy K.=Troxell Manager, Modification Center Spartanburg Distribution Center _

Ed_ Colt-Manger, Operations and Personnel Spartanburg Distribution Center Sam Cunningham Principal Engineer PSD Monroeville t

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JUL 0 51991 Docket No.

50-305 Hr. Ken H. Evers Hanager - Nuclear Power Wimconsin Public Service Corporation P. O. Box 19002 l

Green Bay, Wisconsin 54037-9002 L

SUBJECT:

ASSESSMENT OF THE PROCUREMENT AND COMMERCIAL-GRADE DEDICATION PROGRAMS AT THE KEWAUNEE NUCLEAR POWER PLANT, REPORT No. 50-305/91-201 This letter transmits the report of the assessment conducted April 15-19, 1991, at the Kewaunee Nuclear Power plant (KNPP) and the Green Bay offices of the Wisconsin Public Service Corporation (WPSC) by R.

C. Wilson, L. L. Campbell, R. L. Cilimberg, and K. R. Naidu of the Nuclear Regulatory Commission's (NRC's) Vendor Inspection Branch and k. A. Langstaff of the NRC Region III office.

At the conclusion of the assesisment we diocussed our findings with you and the members of your staff identified in Appendix A of the enclosed report.

The assessment was performed to review WPSC's program for the procurement and dedication of commercial-grade items used in safety-related applicati'ons in accordance with the requirements of Appendix B to Part 50 of Title 10 of the Code of Federal Regulations (10 CTR Part 50) and also to determine the extent of implementation of the Nuclear Management and Resources Council (HUMARC) initiatives in this area.

The NRC assessment team concluded that WPSC has made a significant effort to strengthen its commercial-grada dedication program; however, the program was in a relatively early stage of implementation and improvements were needed in several areas.

The most significant weakness was lack of detailed procedures or training.for preparing dedication evaluations and for using supplier audits and surveillances, especially to verify critical characteristics.

The team review of sample dedication packages confirmed that audits and surveillances were not specific to the critical characteristics relied on for dedication.

Other weaknesses included the failure to address the position in NRC Generic Letter GL 89-02 that, when audits are relied on, both the distributor and manufacturer must be audited when a distributor is used; the failure to require designation of the applicable version of the supplier's quality assurance programs in the purchase order or certificate of conformance; inadequate 73

-- _ _ _ _. ~. _ _ _ _. _. _ _ _ _. _ _ _ _ _. - _

Mr. Ken Evers 2

documentation of technical reviews for parts downgraded by the Quality Assurance Typing Committee; and inadequate control of changes to dedication documentation.

Tha team also observed a need for more attention to detail to ensure that material is properly tagged and that documents represent the specified material.

The assessment team also noted several strengths in WPSC's cornercial-grade dedication program, including the strategy of dedicating items by selecting methods appropriate to speeltic critical characteristics rather than by predominantly using a single method.

Strong annagement support and involvement in the procurement improvenents, the preparation of an improvement plan that frankly assessed necessary changes, and aanvy reliance on in-house personnel for defining and implementing the plan are considered major strengths.

The licensee's use of computer data bases for dedication activities appeared to be a useful method for fraudulent product detection.

The team also noted that the licensee had initiated a tagging system to identi*y item status and promote corrective action, and employed upgrade testing to ensure that the proper material was used.

The team concluded that WPSC personnel understood their assignments and had positive attitudes toward improving the procurement process.

Although no response is required to this report, we expect you to evaluatt the concerns raised herein and to take appropriate measures.

Your actions may be reviewed during future NRC inspections, specifically, certain dedication examples cited in the report appear to require further action on your part.

In accordance with 10 CFR 2.790(a), a copy of this letter and the enclosure will be placed in the NRC public document room.

Should you have any questions concerning this assessment, we will be pleased to discuss them with you.

Sin erel,

Bruce A. Boger, Director-Division of Reactor Projects III, IV, V office of Nuclear Reactor Regulation

Enclosure:

Assessment Report 50-305/91-201 cc:

See next page 74

.. a

l i

3 Mr. Ken H. Evers Kewaunce Nuclear Power Plant Wisconsin Public Service Corporation cct Davi, Jaker, Esquire roley and Lardner P. O. Box 2193 Orlando, Florida 32082 Glen Kunesh, Chairman

• own of Carlton Route 1 Kewaunce, Wisconsin 54216 Mr. Harold Rockelberg, Chairman Kawaunce County Board Kewaunee County coorthouse Kewauneo, Wisconsin 54216 Chairman Public Service Commission of Wisconsin Hill Tarms State Office Building Madison, Wisconsin 53702 Attorney General 114 East, State Capitol Madison, Wisconsin 53702 U.S. Nuclear Regulatory Commission Resident Inspector's Office Route #1, Box 999 Kewauneo, Wisconsin 54216 Regional Administrator - Region III U.S. Nuclear Regulatory Commission 799 Roosevelt Road Glen Ellyn, Illinois 60137 Mr, Robert S.

Cullen Chief Engineer Wisconsin Public Service commission P. O. Box 7854 Madison, Wisconsin 53707

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July 16,1991 i

Docket No. 50-305 i

Mr. Ken H. Evers ManarJer - Nuclear Power Wisconsin Public Service Corporation P. O. Box 19002 Green Bay, Wisconsin 54037-9002

Dear Mr. Evers:

SUlkTECT t CORRECTIONS TO REPORT NO. 50-305/91-201 - NRC ASSESSMENT OF THE PROCUREMENT AND COMMERCIAL-GRADE DEDICATION PROGRAMS AT'THE KEWAUNEE NUCLEAR POWER PLANT I am forwarding a corrected copy of Report No. 50-305/91-201 of the assessment conducted on April _15-19, 1991, by the Nuclear Regulatory Commission's_ Vendor Inspection Branch-at the Kewaunee Nuclear Power Plant and the Green Bay offices of the Wisconsin Public Servico corporation.

Due to an adminjatrative error the original report, transmitted'by Mr. B. Boger on July 5,

1991, contained several typographical errors.

Please replace the original report with the corrected copy attached.

In accordance with 10 CFR 2.790(a):, a-copy of this letter and the enclosure will be placed in the NRC public document room.

Should you have any questions we will be-pleased to discuss them with you.

Sincerely, 4L

[A.

A r

Leif N rrh61z, Chief Vendor Inspection Branch l

l:

Office of Nuclear Reactor Regulation

Enclosure:

NRC Report 50-305/91-201 cc See next page i

p l-5 L-76 l

F t

d Mr. Ken H.

Evers 2

cc l

David Daker, Esquiru Foley and Lardner P.

O.

Box 2193 Orlando, Florida 32002 Glen Kunowh, Chairman Town of Carlton l

Route 1 Kewaunce, Wisconsin 54216 i

Mr. Harold Hockelberg, Chairman Kewaunee County Board Kewaunee County Courthouse Kewaunee, Wisconsin 54216 Chairman Public Service Commission of Wicconsin Hill Farms State office Building Madison, Wisconsin 53702 Attorney General 114 East, State Capitol Madison, Wisconsin 53702 U.S. Nuclear Regulatory Commission Resident Inspector's Office Route #1, Box 999 Kewaunee, Wisconsin 54216 Regional Administrator - Region III U.S. Nuclear Regulatory Commission 799 Roosevelt Road Glen Ellyn, Illinois 60137 Mr. Robert S. Cullen Chief Engineer

-Wisconsin Public Service Commission P.

O. Box 7054 Madison, Wisconsin 53707 77

U.S. NUC1. EAR REGULATORY COMMISSICH OFFICE OF NUCLEAR REACTOR REGULATION DIVISICH OF REACTOR INSPECTION AND SATEGUARDS Report No.:

50-305/91-201 Docket No.:

50-305 License to.:

DPR-43 Licensee:

Wisconsin Public Service Corporation P.O. Box 19002 Green Bay, Wisconsin 54037-9002 Facility Name:

Kewaunee Nuclear Power Plant Assessment Att Kewaunee Plant and Green Bay offices Assessment conducted:

April 15 through 19, 1991 M 1.1 L 1h/9 R.

C. Wilson, Team Leader, Date Reactive Inspection Section 2, Vendor Inspection Branch (VIB)

Other Inspectors L. L. Campbell, Reactor Engineer, VIB R. L. Cilimberg, Metallurg. Engr., vie X. R. Haidu, Sr. Reactor Engineer, VIB Reactor Inspector, RIII R. A. Langsta Approved By:

64 A^ A-T/

Leif J. Norrholm, Chief date Vendor Inspection Branch Division of Reactor Inspection and Safeguards Office of Nuclear Reactor RSgnlation Reissued Jyfy 16, 1991 Revision 1

TABLE @F CONTENTS PAGE EXECUTIVE SUF4ARY..........................................

i 1

INTRODUCTION..........................................

1 2

REVIEW OF THE COMMERCIAL-GRADE DEDICATION PROGRAM.....

1 2.1 History and Background...........................

1 2.1.1 Component and Parts Classification........

1 2.1.2 Commercial-Grade Dedication Chronology....

2 l

2.2 Programmatic Controls for Commercial-Grade Dedication.......................................

4 2.2.1 The Commercial-Grade Dedication Process...

4 2.2.2 Procedure for Preparing Dedication Packages..................................

5 2.2.3 Emergency Procurement of Commercial-Grade Items.....................................

7 2.3 Selection, Qualification, and Surveys of Commercial-Grade Suppliers.......................

4 2.3.1 Supplier Selection........................

8 2.3.2 Supplier Qualification and Survey.........

9 2.3.3 Use of Appendix B Audits as Commercial-Grade Surveys.............................

9 2.3.4 Use of Third-Party Audits.................

11 Ra'eipt Inspection...............................

11 2.4 c

2.5 Procurement Package Reviews..............

12 2.6 Parts Classification.....................

16 2.6.1 Safety Classification Changes.............

16 2.6.2 Intaria Guidance for Parts Classification............................

18 2.6.3 Development of Additional Procedures......

18 2.6.4 Classification of General Maintenance Items......................................

19 2.7 Design Change Control and Corrective Action......

19 2.8 Training and Industry Activity...................

20 2.9 Management Involvement...........................

21 3

NUMARC COMPREHENSIVE PROCUREMENT INITIATIVE

. I MP L EM ENT AT I ON........................................

22 3.1 Status...........................................

'.2 3.2 Fraudulent Products Detection....................

22 3.3 Obsolete Items...................................

24 4

CONCLUSIONS...........................................

25 5

EXIT MEET 1HG....................................

25 APPENDIX A - PERSONS CONTACTED.............................

A-1

• • Vi"i "l 79

EXECUTIVE

SUMMARY

From April 15 to April 19, 1991, the Nuclear Regulatory Commis-sion's (NRC's) Vendor Inspection Branch conducted an assessment of the Wisconsin Public Service Corporation's (WPSC's) activities related to the procurement and dedication of commercial-grade items used in safety-related applications.

Th6 assassment team reviewed WPSC's procurement program in order to assest' the licensee's compliance with the quality assurance requiremen'.s of Appendix 2 to Part 50 of Title 10 of the Code of Federal Re.9uAc-tions, and to assess the status of WPSC's implementation of the Nuclear Management and Resources Counci (NUMARC) initiatives on procurement and co:aarcial-grade dedication.

The NUMARC board of directors has approved the procurement initiatives described in NUMARC 90-13, " Nuclear Procurement Program Improvements," which committed licensees to assess their procurement programs and take specific action to strengthen inadequate programs.

The first phase of these initiatives addressed dedication of commercial-grade items, and was scheduled to be implemented by January 1, 1990.

It required licensees to meet the intent of the guidance provided in Electric Pover Research Institute (EPRI) Report NP-5652, " Guide'4.ne for the Utilization of Commercial Grade Items in Nuclear staty Related Applications (NCIG-07)" dated March 1988.

The NRC conditionally endorsed this EPRI guideline in Generic Letter (GL) 89-02,

" Actions to Improve the Detection of Counterfeit and Fraudulently Marketed Products" dated March 21, 1989.

The second phase of the initiatives was identified as the comprehensive procurement initiative; it addressed vendor audits, tests and/or inspections, obsolescence, information exchange, and general procurement.

The implementation of this phase requires licensees to review their programs by July 1, 1991, to determine, on the basis of guidance in NUMARC 90-13, if improvements are needed in the above areas, and to complete such improvements by July 1, 1992.

This assessm3nt was performed to determine the current status of WPSC's activities to improve its procurement program in relation to the industry commitments discussed above and applicable NRC requirements.

The assessment focused on a review of procedures and representative records, interviews with WPSC's staff, and observations by the assessment team members.

The NRC assessment team also met with WPSC's senior managers to discuss relevant aspects of commercial-grade dedication.

The assessment team discussed its obser;*ations with WPSC representatives including senior management at the exit meeting on April 19, 1991.

The assessment team's specific conclusions are summarized below.

WPSC has made a significant effort to strengthen its commer-cial-grade dedication program; however, the program was in a i

i l

Revision 1 80

relatively early stage of implementation and improvements were needed in several areas.

The team concluded that the program philosophy is consistent hith the guidelines of EPRI NP-5652.

With appropriate modifications to address the concerns noted below, and if properly implemented, WPSC's program should provide adequate controls over the commer-cial-grade dedication process by the NUMARC 90-13 implemen-tation deadline of July 1, 1992.

The most significant weakness was the lack of detailed procedures or training for preparing dedication evaluations and for using supplier audits and surveillances, especially with respect to verifying critical characteristics using Method 2 of EPRI NP-5652.

A review of sample dedication l

packages for a Whitey valve, a Unistrut bracket, and Foxboro transmitters confirmed that audits and surveillances were not specific to the critical charactoristics relied on for dedicati~on.

This concern was not addressed in existing procedures or in the draft procurement directive, and discussions with QA and QC personnel indicated a need for further consideration by WPSC.

WPSC procedures did not addresa the position in NRC Generic Letter GL 89-02 that, when audito are relied on, both the distributor and the manufacturer must be audited when a dAstributor is used.

WPSC did not adequately document technical reviews for parts downgraded by the Quality Assurance Typing Committee.

Specifically, procedure QAD 4.3,

" Changes to-Quality Assurance QA Type and EQ Classification," did not require, and observed examples cited in Section 2.6 of this assess-ment report did not contain adequate documentation, particularly with respect to EPRi' NP-5652 and HP-6406.

WPSC did not adequately control changes to dedication documentation.

Specifically, procedure QCP 04, "Acceptsnce el Commercial-Grade Items for Safety-Related Use," did not require change control in accordance with Criterion III,

" Design Control," of 10 CFR Part 50 Appendix B. The dedica-tion instructions for a service water pump impeller and a Unistrut bracket were observed to contain unsigned, undated, unapproved changes.

WPSC did not provide sufficient attention to detail to ensure that material was properly tagged and that documents represented the specifisd material.

Specifically, the team-observed a stainless steel pipe in the wareheuse marked with two different heat numbers, and the documentation for an installed 6-inch stainless steel pipe included chemical test results for two entirely different materials (one set 11 Revision 1 81

. =_.

accompanied the pipe, and the other was provided by a WPSC contractor as receipt inspection data).

A noteworthy programmatic strength was WPSC's strategy of dedication by selecting methods appropriate to specific critical c nracteristics, rather than predominant reliance e

on a single method.

Other program strengths included:

strong management support and ;,nvolvement in the procurement improvements, the preparation of an improvement plan that frankly assessed necessary programmatic changes, and a heavy reliance on in-house personnel for defining and implementing the plan.

The team concluded that WPSC personnel understood their assignments and had positive attitudes toward improv-ing the procurement process.

1 L

iii

"*VI*I'" 1 82

1 INTRODUCTION The NRC's Vandor Inspection Branch ausessed the Wisconsin Public Service Corporation's (WPSC's) efforts to improve programs for procuring and dedicating commercial-grade items (CGIs) used in safety-related applications.

Tr.e team reviewed the WPSC program to assess its compliance with Appendix B to 10 CTR Part 50, and to determine the status of implementation of the Nuclear Manage-ment and Resources Councal (NUMARC) procurement initiatives for the Kewaunee Nuclear Power Plant.

The assessment was performed from April 15 to 19, 1991, at the plant site and at WPSC's Green Bay offices.

The assessment methodology included observations, discussions with licensee managers and other personnel, and a review of records and procedures for the licensee's procurenent and dedication program.

The NRC staff is presently conducting assessments at selected licensees' facilities to review their implementation of program improvements for dedicating CGIs and to assess the improvements made in the areas covered by the NUMARC comprehensive procurement initiative program.

The initiative, bpproved on June 28, 1990, by the NUMARC board of directors (which included WPSC's chief executive officer), directed licensees to adhere to the guidance provided in Electric Power Research Institute (7PRI) HP-5652,

" Guidelines for the Utilization of Commercial Grade Items in Nuclear Safety Related Applications (NCIG-07)," March, 1988.

The initiative also required licensees to review and strengthen their procurement programs in accordance with specific guidance pro-vided in NUMARC 90-13, " Nuclear Procurament Program Improve -

monts," October, 1990.

Sections 2 and 3 of this assessment reuort describe the specific areas reviewed and the team's observations.

Section 4 provides the team's conclusions.

Section 5 summarizes the exit meeting.

Appendix A lists the persons contacted during the assessment.

2 REVIEW OF THE COMMERCIAL-GRADE DEDICATION PROGRAM 2.1 History and Backaround 2.1.1 Component and Parts Classification During the construction phase at the Kewaunee Nuclear Power Plant (KNPP) the architect / engineer or the nuclesr steam supply system vendor established the classification and procurement of struc-tures, systems, and components.

The classification was identi-fled on drawings and specifications.

The purchase order (PO) and procurement specifications controlled procurement.

Spara parts were purchased similarly, with n WPSC cognizant project engineer ensuring proper classification and documentation.

1 Revision 1 83

During the construction phase WPSC forned a Quality Assurance (QA) Typing Committee to review the classifications of struc-tures, systems, and components.

WPSC engineers reviewed the classification and requirements for apare parts.

Additionally WPSC QA personnel reviewed all QA-1 (safety-related) purchases.

During the operational phase of KNPP, the classification of structures, systems, and components related to design changes is the responsibility of the WPSC Design Change Engineering group, with reviews by the plant Operational Review Committee and multiple departments.

The responsible design change control engincer or quality control (procursment) engineer establishes the classification and identification of technical and quality requirerents for new, spare, and replacement items.

The EQ group reviews all procurement activities for EQ items.

The WPSC QA Typing Committee reviews changes to established classifications and resolves classification issues between review groups, once an item is classified or reclassified, purchase requirements are reviewed by QA and other affected departments.

Where possible, procurement requirements are based on original purchasing requirements and items are procured from the original equipment manufacturers.

If an item is a basic component, WPSC typically procures it from a supplier who has a 10 CFR Part 50, Appendix B, QA Program and who accepts the responsibility for 10 CFR Part 21 reportability.

At the time of the assessment, approximately 15 percent of the QA-1 (safety-related basic components) items procured were purchased commercial-grade and then dedicated for use in safety-related applications.

2.1.2 Commercial-Grade Dedication Chronclogy Before 1987, KNPP engineering, quality control (QC), and QA personnel jointly determined the criteria for the procurement and acceptance of commercial-grade items to be used in safety-related applications.

These requirements were translated into pos and, when appropriate, into receipt inspection instructions.

To accept the commercial-grade items for safety-related use, the responsible discipline usually specified tests to verify that the item could properly perform its intended function.

In 1906, WPSC formed a Task Group to develop new procedures.

By October 1987, the procedures addressed NPC and industry concerns for the use of commercial-grade items in safety-related applications.

These procedures were based on requirements from a draft version of EPRI HP-5652, Appendix B to 10 CFR Part 50, and 10 CFR Part 21.

They required the engineer to consider the fit, form, function, interface, and overall adequacy of the commercial-grade item in the safety-related.*pplication.

On December 10, 1987, directive ACD 9.8, " Commercial-Grade Procurement," and Procedure QCP 04,

" Acceptance of Commercial-Grade items for Safety-Related Use,"

were approved for use.

2 Revision 1 84

WPSC requested Gilbert / Commonwealth, Inc. to review the commer-cial-grade dedication procedures against the EPRI guidelines in February 1988 and June 1989.

WPSC revised the procedures as suggested by Gilbert / commonwealth to describe the dedication process, identify the dedication methods to be used, and describe a tagging system for identifying items requiring post-installa-tion testing as part of the dedication process.

In March 1988, WPSC implemented Revision A of the commercial-grade dedication procedure, which addressed the four dedication methods of EPRI NP-5652.

In September 1989, WPSC revised ACD 9.8 and QCP 04 to incorporate the requirements of NRC Generic Letter (GL) 89-02,

" Actions to Improve the Detection of Counterfeit and Fraudulently Marked Products."

The 1989 revision of QCP 04 added the GL 09-02 restrictions on the use of EPRI Method 4, "Perfdraance history,"

and required specifically identifying critical characteristics and the acceptance methods for verifying the characteristics.

The present revision of the commercial-grade dedication procedure (QCP 04, Revision C, October 2, 1990) added a requirement for familiarity with EPRI tr-5652, and specified considering the safety function of the item when identifying critical charac-teristica.

Before 1987, WPSC pertormed audits to verify that the supplier's QA program met the requirements of Appendix B to 10 CFR Part 50.

The audits were perform 2d by WP3C or by consultants under the direction of WPSC.

All audits were performed using WPSC proca-dures which required some performence-based elements.

Before 1987, audit reports obtained from other utilities were also used to place suppliers on the Qualified Eupplier List and to satisfy the requirement for periodic audits to maintain the supplier on the list.

Since 1987, WPSC has participated in joint utility audits and in the Nuclear Utility Procurement Issues Council (NUPIC).

WPSC selectively includes technical specialists on its audit teams and has expanded the use of performance-based elements in the audit process.

An "on-line" Qualified Suppliers System (QSS) data base has been developed to control the use of suppliers of QA-1 (safety-r61ated) items or commercial-grade items that will use EPRI Method 2,

" Commercial-Grade Surveys of Suppliers," as the basis to verify one or more of the item's critical characteris-tics.

The 0S3 data base contains specific vendor procurement information such as material nonconformances, fraudulent. product information, cautions, operational events information, purchase order history, special instructions, and NRC's information notices, generic letters, and bulletins.

The Vendor Problem IdentJ!ication segment of the QSS tracks, identifies, and flags pertinent information to users of the QSS. The team concluded that WPSC's use of this data base was a program strength.

At the time of the assessment, the procedures used for audits and evaluations of suppliers were also used to control and review 3

N*VI"I " 1 85

audits used in support of EPRI Method 2.

Approximatsly 50 percent of the audito used for Appendix B and commercial-grade suppliers were from third parties such as NUPIC and other utilities.

Because approximately 15 percent of the QA-1 (safety-m3 related) stock inventory was commercial-grade equipment requiring lf"_

dedication, WPSC placed more emphasis on the use of commercial-rade surveys of suppliere, i

2.2 Procrammatic Controla for Commercial-Grade Dedication 2.2.1 The Commercial-Grade Dedication Process The Plant Quality Programa Departaint processes requests for the procurement items to be used in safety-related applications.

The responsible engineer determines the quality and technical re-quirements for the item to be purchLsed by reviewing documents such as drawings, vendor manuals, specifications, original ar;d previous purchase crders, codes, standards, and the updated safety analysis report (USAR).

The Power Plant Facility Informa-tion System (PPFIS) data base la used to identify these documents and to provide additional information for the preparars of various procurement documents.

It provides the preparars and reviewers of the commercial-grade dedication packages a variety of useful information such as PO historical information, the QA type, applicable engineering and vendor documents, classifica-tion, and vendor / supplier history and problems.

Various sorts are available and the system appeared to be user friendly.

Tha team considered the PPPIS data base to be an excellnnt tool.

If the item is a basic ccmpone Seing purchased as a commercial-grade item, the purchase requew; is processed in accordance with procedure QCP 04.

The QSS data base is reviewed fer information on audit and survey results for potential suppliers of the item.

Also during this front-end procurement activity, WPSO reviews the item's classification to determine it it is indeed GA-1 or if it can be reclassified as ncn-safety-related..

The preparar of the commercial-grade dedication package coordinstes with receipt inspection personnel for any special inspection or test require-ments and uf.ca QA personnel for audit, survey, or source verifi-cation support.

WPSC personnel conduce these reviews and discussions to identify and document the item's critical charac-teristics and the methods for verifying the critical characteris-tics on the appropriate QCP 04 forms.

The QA department then reviews the completed package.

If the package is acceptable, WPSC issues a PO to the vendor.

After receipt of the item, WPSC personnel review records to ensure that required source inspections were parformed and that documentation of Metnod 2 verification activities is acceptable.

Receiving inspections, tests by independent laboratories, and post-installation testing are performed as required.

All inspec-tion and test results and other documentation are reviewed for 4

Revie; a 1 86 s

l acceptability by tb2 QC Enginear, the responsible engineer or his supervisor, and the QC inspection supervisor.

2,2.2 Procedures for Preparing Dedication Packages The team reviewed procedures for preparing commercial-grade dedice. tion packages und discussed their use with varl#;s WPSC engineering, QC, and QA personnel.

KNPP QC Procedure QC" 04,

" Acceptance of Commercial-Grade Items for Safety-Rr. lated Use,"

Revision C, established the requirements t 'r dedicating a commer-cial-grade item for use in safety-relate' epp'.ications.

Section 3.14 of procedure QCP 04 defined "like-?:s-?'ae replecament" as the replacement of an item vi'h a"

item A 4 is identical.

" Identical

• was not defined in ene procedure nor tcas the term

" equivalent."

QCP 04 Revision C did not addreso the evaluation or analysis process associated with determining if an item is a like-for-like or an aquivalent replacement.

The actions required if the replacement item is not like-for-liks were also not covered.

The team concluded that QCP 04 should include defini-tions of the terms " identical" and " equivalent" using the guid-anco provided in NRC GL 91-05, " Licensee Commercial-Grade Pro-curement and Dedication Programs," and that the procedurs should require documentation for such replacements, including revising appropriate engineering documents to reflect their installation in the plant.

The inspection team also noted that Section 6.5 of QCP C4 pro-vided the following guidance for determining the t tical cha;1c-teristics for an item:

The evaluator shail list the critical :haracter-istics determince essential for ensuring proper form, fit, and functional performance of the item.

Consideration should be based upon the safety function of the item and design considerations, including sais-mic and environmental, and applicable codes or stan-dards.

References utilized should be listed..."

Paragraph 6.1 of QCP 04 states that personnel preparing packages should be familiar with EPRI NP-5652.

However, the team did not consider that Revision C of QCP 04 contained sufficient guidance to determine the critical characteristics or to identify the acceptance criteria for "crifying that critical characteristics had been satisfied.

AddAcional guidance should be provided in QCP 04 for identifying and verifying critical characteristics as described in EPRI NP-5652.

4 The team reviewed QCP 04 and other procedures for auditing and performing surveys of suppliers of commercial-grade items.

The team held discussions with QC Engineering and QA personnel and concluded that WPSC had not established procedure requirements that addressed the NRC's exception to the use of EPRI NP-5652 5

1 s

Revision 1 l

87

Method 2,

" Commercial-Grade Surveys," as stated in GL 89-02.

The team-recommended that WPSC revice these procedures to address the NRC's position that Acceptance Method 2 should not be employed as the basis for accepting items from distributors unless the survey confirms that both the part manufacturer (s) and the dist*.ibutor have maintained adequate controls over critical characteristics.

In addition, the team concluded that Procedure QCP 04 contained insufficient guidance on the use of Method 2 for verifying an item's critical characteristics.

Improved guidance was also needed for using a supplier's certificate of conformance (COC) in EPRI Method 2.

The team noted that QCP 04 provided only the following guidance for using EPRI Method 2:

" Utility Activities:

Conduct survey of commercial-grade program Require the supplier to invoke controls necessary to verify critical characteristics Accept item based on Supplier certificate of Confor-mance verified by commercial-grade survey Sucolier Activities Implement controls necessary to verify critical charac-teristics" 1

The team recommended that WPSC provide guidance in QCP 04 for determining if a commercial-grade survey or audit did confirm that the commercial-grade item's specific critical characteris-tics were being controlled as required by Section 3.2, "Commer-ical-Grade Survey of Supplier," and applicable exhibits of EPRI NP-5652.

Also the team noted that no WPSC procedure required the supplier's_Coc to confirm that the suppljer's activities were performed in accordance with programmatic controls (such as QA Manuals and procedures) verified as being effectively implemented either during the purchaser's commercial-grade survey or by the purchaser's subsequent evaluation and acceptance of revisions to these programmatic controls.

The assessment team selected and reviewed several dedication packages to evaluate the implementation of the commercial-grade dedication: process at WPSC.

Two mechanical packages supported the team's conclusion that additional procedural guidance was needed concerning the use of EPRI Method 2, " Commercial-Grade Surveys."

Specifically, the commercial-grada dedication package for a 1/2-inch Whitey Valve used Method 2 to verify critical characteristics based or.-the Whitey Company performing hydro-static and seat leakage tests at its facility.

During the 1988 audit that supported WPSC's use of Method 2, neither hydrostatic testing nor seat leakage testing was addressed.

WPSC conducted a broad-based 18-point criteria audit, but did not review or con-firm the adequacy of Whitey's ccntrols for hydrostatic or seat 6

Revision 1 88

leakage testing.

The team also noted that the audit reviewed controls in accordance with Whitey's QA Manual, Revision G, April 1988.

Neither the WPSC PO nor the Whitey COC identified the QA program controlling the manufacture of the 1/2-inch valve.

The team also reviewed a commercial-grade dedication package for a bracket supplied by the Unistrut Corporation.

Both the WPSC Po and the Unistrut COC certified the bracket as being manufactured under the controls of the Unistrut QA Manual, Revision 3, dated September 4, 1990; however, the audit of Unistrut stated that, "Unistrut's QA Manual dated March 1, 1987," applied to the manu-facture, not the 1990 revision.

The WPSC QA department was unable to rePpond to the team's request for the acceptance basis for the Unistrut QA manual which controlled the manufacture of the bracket.

The team also reviewed WPSC procedures QAD 6.1,

" Procurement Document Preparation," Revision 6, September 1, 1986; QAD No.

6.1.2, " Quality Assurance Procurement Document Review,"

Revision 5, March 14, 1990; and ECD No.

6.1, " Procurement Con-trol," Revision 10, June 14, 1990.

The team concluded that WPSC hel no procedural requirement for QA-1 suppliers to provide items in accordance with QA programs approved by QA.

The team recom-mended that WPSC revise the applicable procedures to ensure that all QA-1 (Appendix B and Commercial-Grade Method 2) items be certified as meeting the applicable QA program requirements.

The team also noted that Section 6.6 of QCP 04 suggested that verification of EPRI Method 1, "Special Tests and Inspections,"

may be performed by sampling; however, no guidance was provided or referenced for cases in which sampling can be applied.

Justification for sampling may include batch or lot tr'.eability and homogeneity, and-the supplier's method for maintaining trace-ability and homogeneity.

The team concluded that QCP 04 should provide or reference guidance on when sampling may be appre-priate to verify critical characteristics.

2.2.3 Emergency Procurement of Commercial-Grade Items The team reviewed WPSC procurement procedures and held discus-sions with the WPSC Supetvisor of Plant Quality Programs. The team determined that WPSC had no special provisions for emergency procurements.

WPSC informed the team that the existing proce-dures are used for emergency procurements, but this activity is performed in an expedited manner.

All required procurement reviews and approvals are required before declaring the expedited item to be operable.

7 89 avision 1

2.3 Selection, Qualification, and Surveys of Commercial-GIAdp Sucoliers The team reviewed the processes for selection, qualification, maintenance, and surveys of commercial-grade suppliers used to support WPSC procurements.

Section No. 14, " Audits and Indepen-dent Technical Reviews," and Section No.

6,

" Procurement Con-trol," of the WPSC Operational Quality Assurance Program Manual formed the basis for the use of EPRI Method 2, " Commercial-Grade survey of Supplier," to accept the critical characteristics of commercial-grade items.

The team discussed the use of cotr,r-cial-grade surveys with the Superintendent of QA, the Supe: risor of Plant Quality Programs, the QA Procurement Supervisor, zad plant QC engineers.

The team also reviewed the following procedures in assessing the use of EPRI Method 2:

WPSC Operational Quality Assurance Program Manual, Revision 16, July 31, 1990 e

QAD No.

6.2,

" Evaluation and Qualification of Suppliers,"

Revision 9, April 7, 1989 e

QAD No.

6.2.1,

" Control of Suppliers' QA Manual,"

Revision 4, March 14, 1990 QAD No.

6.2.2, "QA Program Acceptance Criteria," Revision 3, March 14, 1990 QAD No.

6.2.4,

" Supplier Surveillance and Audit,"

Revision 3, March 14, 1990 QAD No.

6.2.6,

" Vendor History Files," Revision 3, March 14, 1990 QAD No.

6.1.4,

" Procurement Document Problem 4esolution,"

Revision 3, September 9, 1989 QAD No. 14.1, " Quality Assurance Audits," Revision 21, February 15, 1991 2.3.1 Supplier Selection Typically, WPSC procured items froc the original equipment manu-facturer or the authorized distributor, whether the replacement item was like-for-like (identical) or equivale ~ t.

If an item was a basic component, WPSC attempted to procure it from a supplier who accepted 10 CFR Part 21 reporting responsibility as well as 10 CFR Part 50, Appendix B, requirements.

If the item met the definition of a commercial-grade item and the supplier would not accept the 10 CFR requirements, the item was purchased 8

90 Revision 1

commercial-grade and dedicated for use in the safety-related application.

If EPRI Method 2 would be used to verify the criti-cal characteristica, then WPSC performed a review to determine if an audit had been performed for the scope of work the supplier would be performing.

2.3.2 supplier Qualification and Survey The team reviewed WPSC's procedures to review a supplier's qual-ifications and to audit its QA program to determine compliance with the requirements of Criterion XVIII, " Audits," of Appendix B to 10 CFR Part 50.

The WPSC audit procedures did not adequately address the specific guidance of EPRI NP-5652 for conducting a commercial-grade survuy of a supplier and evaluating the results of the survey.

The procedures applied the general Appendix B audit criteria and did not confirm that the critict.1 characteris-tics for a specific item were being controlled as required by EPRI NP-5652.

Section 2.5 of this assessment report provides examples in which the preparer of the dedication package inap-propriately used an Appendix B audit to satisfy the EPRI Method 2 requirementa.

The team recommended that WPSC revise its procedures for auditing and evaluating suppliers by EPRI Method 2 to include specific guidance based on EPRI NP-5652.

The following section of this assessment report discusses problems in WPSC's use of Appendix B-type audits in place of EPRI NP-5652 commercial-grade surveys.

2.3.3 Use of Appendix B Audits as Commercial-Grade Surveys The assessment team discussed with WPSC personnel the potential deficiencies that could result from using Appendix B audits for I

the commercial-grade survey of a supplier.

The team concluded that the licensee believed that if an Appendix B-type audit was l

satisfactory for an Appendix B supplier, then it was adequate for a commercial-grade supplier.

To correct this misconception, the team described the fundamental differences between Appendix B (audits, items, and suppliers) and commercial-grada (surveys, items, and suppliers).

The team also pointed out that a commer-cial grade supplier is under no obligation to consistently imple-ment commercial quality controls.

Thus an Appendix B-type audit, based on the foundation of all the applicable Appendix B criteria in an ongoing, comprehensive, contractually-imposed program, lacks the detail and specificity necessary to verify the critical characteristics of a commercial-grade item.

Audits conducted in accordance with Criterion XVIII, " Audits," of Appendix B to 10 CFR Part 50, and the guidar. e provided in NRO Regulatory Guide (RG) 1.144, Revision 1, and ANSI Standard N45.2.12-1977 are not satisfactory substitutes for EPRI NP-5652 Method 2 commercial grade surveys unless, in addition to 9

91 Revision 1

confirming satisfactory implementation of the QA program, the audits also confirm the following:

1)

Tha supplier's procedures for controlling each critical characteristic that is verified by EPRI NP-5652, Method 2 have been determined to be adequate.

2)

The supplier's QA/QC program and procedures controlling each critical characteristic of the item to be purchased have been determined to be adequate by direct observation, in-spection, surveillance, or record review (when appropri-ate) during the performance of the audit.

This confirmation should be consistent with the methods and examples provided in EPRI NP-5652.

3)

The audit scope included all additional requirements of EPRI NP-5652, Method 2, " Commercial-Crade Survey."

4)

The method used by the auditor to confirm that each critical characteristic of a specific item was being properly con-trolled has been documented in the audit report.

These principles apply to any audits used by purchasers (e.g.,

licensee, KUPIC, other group audits) to confirm tnat critical characteristic s are controlled.

These principles also apply to surveys of commercial-grade suppliers.

If the audit report does not encompass these principles for a particular critical charac-teristic, that characteristic cannot be adequately confirmed by Method 2 survey alone.

If an audit or commercial-grade survey only confirmed that, at the time of the audit or survey, a-supplier had implemented a QA/QC program and procedures to provide requirements for con-trolling, reviewing, and auditing a supplier's subsuppliers, then the audit or survey would generally not be an adequate basis for concluding that a subsupplier was adequately controlling an item's critical characteristics.. If, during the survey, the purchaser reviewed audit reports documenting the supplier's review / audits of its subaupplier to verify specific crit'ical characteristics,'and the supplier's report confirmed items 1-4 above for each characteristic for a given item, then the pur-chaser may be able to take some credit for the supplier's audit.

Although EPRI NP-5652 directs the purchaser to confirm that the critical characteristics are being controlled, the team noted that_EPRI NP-5652 is based on meeting the regulatory requirements in Criterion VII, " Control of Purchased haterial, Equipment, and Services" of Appendix B of 10 CFR Part 50 'See Paragraph 1.3.4, HP-5652), and not on Criterion XVIII, " Audits."

Therefore, EPRI NP-5652 only addresses the use of subsuppliers in Exhibit 3 of Appendix H, and does not address verification and control of critical characteristics by subsuppliers.

10 92 Revision 1

\\

Although EPRI NP-5652 does address commercial-grade surveys of distributors, GL 89-02 takes exception to EPRI NP-5652 and calls for surveys of both the distributor and the manufacturer of the CGI.

Therefore, if a subsupplier verifies a critical character-istic and the purchaser takes credit for this verification through the prime supplier for the item, the purchaser should confirm that the critical characteristics are being controlled.

During discussions with the team concerning the use of Appendix B audits for commercial-grade surveys, WPSC QA personnel indicated that they would evaluate the NRC's perspective, and would con-sider whether their procedures required ravision to address this Concern.

2.3.4 Use of Third-Party Audits As previously stated, the team determined that approximately 50 percent of the audits used by WPSC vere third-party audits per-formed by other licensees and by the Nuclear Utility Procurement Issues Council (NUPIC).

Based on review of the audit procedures and discussions with the Supervisor of Procurement QA, the team identified the nkMd to formalize WPSC's review of third-party audits.

Current procedures provided only general guidance for the evaluation and use of third-party audits.

WPSC indicated that it would develop more detailed procedures for reviewing and accepting vendor audit reports obtained from other utilities, contractors, and NUPIC.

WPSC had not yet written procedures for the review of third-party audits, but described the planned process to the team.

If performed as described, the review and acceptance of third-party audits should be sufficient for accept-ing audits of Appendix B suppliers.

2.4 Becelot Insoection WPSC procedure QCP 601, " Receipt Inspection," Revision B, dated October 2, 1990, established the inspection requirements for items received at WPSC from vendors or returned to the warehouse for plant stock.

OCP 601 prescribed instructions for using form 601-3 for inspecting commercial-grade iters for dedication.

Section 6.1.7(d) addressed the impact of fraudulent materials on the inspection process.

This section did not address comparing results of upgrade test reports with the rtsults of manufac-turer's test reports to verify traceability.

This weakness was demonstrated by the pipe support problem discussed in Section 2.5 of this assessment report.

WPSC procedure QCP 603, " Control of QC Receiving Inspection and Hold Areas," dated October 2, 1990, discussac the use of tags to identify the status of items.

A'.though the tsam noted that a green post-installation teat tag vaa required to be attached to the service water pump impeller discussed in Section 2.5 of this assessment report, a visual inspection deterained that the tag 11 93 Rsvision 1

l i

was not on the pump.

WPSC corrected this deficiency and the team later observed that the green tag had been correctly applied to the pump.

The inspectors also observed an SA-312 QA-1 hot-finished stain-less steel p!.pe in the warehouse and requested the applicable document package.

The QC supervisor observed that the documents did not match the material and instructed his staff to investi-gate.

The QC supervisor later advised the team that the pipe was rarked with two different heat numbers, and he initiated correc-tive action to ensure that the material was in conformance to the WPSC program.

Although the team concluded that the missing green tag and dupli-cate heat numbers were weaknesses in the program's implementa-tion, the team concluded that the requirement for the QA controls and the speed with which the WPSC staff discovered and corrected the deviations were program strengths.

The team also noted that the inspection area and warehouse were well lighted, clean, and organized.

The team had easy access to all items and could determine readily the status of the items by observing the color coded tags.

Receipt inspection test instru-ments were stored in cabinets and those requiring calibration were within the due dates.

The QC Supervisor indicated that upgrade testing is performed on 90 percent of the commercial-grade items to be dedicated to ensure that the item received is the item that was ordered.

The mechanical package reviews described in this assessment report did include upgrade tests.

This testing is a strength in the WPSC dedication program.

2.5 Procurement Pachace Reviews The NRC assessment team reviewed several procurement packages to determine if WPSC had properly verified the critical characteris-tics of CGIs and had implemented procedural controls to ensure that critical characteristics identified in the dedication plan were correctly translated into the procurement documents.

The controlling procedure for dedication was QLE 04, " Acceptance of Commercial Grade Items for Safety Related Use,' Revision C, dated October 2, 1990.

Form QCP 04 provided detailed information on the dadication process, listing critical characteristics and EPRI NP-5652 dedication methods 1, 2,

and 3 for verification.

The acceptance process was defined by a preparer and reviewed by a QC engineer.

The form contained five sections which covered various aspects of post-installation testing to ensure that functional tests were performed and the results documented and approved.

acceptance results were documented in Section 4.

Instructions for specific actions were hand-written and initialed 12 I

94 Revision 1

i by various people such as the QC engineer and the QC supervisor.

The final section of the form provided for the review and ap-proval signatures and dates to verify the critical characteris-tics and accept the CGI for dedication as a basic compor.ent for safety-related use.

Section 1 identified the CGI, vendor, PO number, QADC number, stock code number, BOM number, model number, and catalog part number.

Except as noted below, the team concluded that WPSC had identi-fled appropriate critical characteristics; that engineers had prepared, reviewed, and approved verification methods for pur-chase requisitions; that the POc reflected the requirements stated in the purchase requisitions; that the receiving inspec-tion instructions were adequate; and that the receiving inspec-tion records reflected the attributes verified.

Changes in part designations were considered design changes.

In such cases, responsible individuals had prepared, reviewed, and approved design changes and equivalency evaluations in accordance with the relevant procedures.

The team reviewed the following dedication packages:

WPSC PO 74175, datud March 26, 1990, procured an impeller for use in a service water pump.

The team reviewed the file and found that WPSC personnel had verified the material requirements using methods 2 and 3 to ensure traceability and test results.

Method 3 was used to measure dimensions during source surveillance.

Method 1 was specified to verify balance and opera cility of the impeller af ter it is installed in the pump.

Post-installation testing was con-trolled by procedures PMP 2-8, " Service Water System (SW)

Vibration Test," Revision F, September 18, 1990; SP 02-138,

" Service Water Pump and Valve Test-IST," Revision U, December 18, 1990; and SP 55-177, " Inservice Testing of Pumps Vibratior. Measurements," Revision I, November 28, 1989.

Method 1 was used to verify impeller condition, configuration, markings, and documentation according to QCP 601, " Receipt Inspection," Revision B, October 2, 1990.

The acceptance process was prescriptive and contained a good mix of methods 1, 2,

and 3 for verifying critical characteris-tics.

The instructions were typed execpt for pen and ink additions and changes, which caused confusion in determining what requirementa had been approved.

For example, liquid penetrant testing (PT) was specified in ink and then scratched out with initials and no date.

The PT was ac-tually performed despite the confusing pen and ink change instructions.

WPSC PO 103824, dated January 7, 1991, procured a bracket for use as a QA-1 structural support.

The team reviewed the file and again found the pen and ink change weakness with the substitution of ASTM A-446 Grade A stainless steel for 13 95 Revision 1 l-

ASTM A-570 Grade 33.

WPSC contracted for upgrade testing to be performed by Taussig Associates, Incorporated, in Skokie, Illinois.

Taussig was audited in February 1989, and deter-mined by Gasser Associates, Incorporated, to have an ap-proved 10 CFR Part 50 Appendix B program.

The team noted that upgrade testing was.used frequently as a method 1 verification of the material critical characteristics.

The tean considered this to be a strength in the WPSC program.

WPSC PO 36314, dated December 29, 1986, procured 5 feet of 6-inch diameter Schedule 10 ASTM A-312 type 304 stainless steel pipe, which had been installed in the safety injection system as a pipe saddle support.

The team reviewed the file and found that documentation was not available to confirm that the material met the requirements specified in the PC.

WPSC issued the PO to Chicago Tube and Iron Company for A-312 type 304 stainless accel pipe to be ordered from a domestic producer.

A flattening test and an etching test were to be performed on this material.

The dedication package contained a test report from Stainless Kuze Company, Limited, in Japan for SA-312 type 304L stainless steel from Heat AoA2403 which met the material requirements for type 304L stainless steel, including the flattening and etch tests.

ApparLntly the material had been supplied to Tioga Pipe Supply Company, Incorporated, who filled the Chicago Tube order by shipping the material to WPSC.

The WPSC receiving inspection report accepted the foreign material as type 304L, even though type 304 stainless steel had been ordered and a domestic producer was required by the PO.

The package contained a test report from Taussig to verify the chemical composition and tensile properties of the material.

The Taussig Test Report 91845, dated March 30, 1990, against Receiving Report 39459 and PO 36314 reported chemical test results for type 304 stainless steel, which was a different material than the type 304L material that was manufactured by Kuze.

WPSC accepted the Taussig test report, even though it did not specify a heat number.

The team was concerned that the material was not clearly icentified before it was installed in the safety injection system and, if it was type 304 material, it may not have been solution-annealed to prevent carbide precipitation and stracL-corrosion cracking.

WPSC is investigating this issue and Region III may follow up regarding WPSC's corrective action.

The failure to detect that the test reports contained results for two different materials, and the failure to ensure that the required material had been received before it was installed in a cafety-related system, were obvious weeknesses of WPSC's program.

WPSC PO 87749, dated December 26,1984, procured two mixing valve motor actuators (Hodel No. M80J, Catalog Part 14 96 Revision 1 l

.i No. M80 JEA-1) manufactured by the Penn Corporation and dis-

=tributedLby Johnson controls,, Incorporated-(JCI).

on:

December 4, 1984,cWPSC initiated spara part Design: Change Request (DCR) 1504-451to replace the-existing-obsolete M80 BEA-1-_-type actuators with M80 JEA-1 type. actuators-and to document that JCI=vac not a qualified supplier.

The specified critical' characteristics did not-include-valve stroke or undervoltaae testing, so that operation of the actuator was not verified.

WPSC.PO 95926, Jated March 14, _1991, procured ten type Y65

-AS-1-120/24-V. control transformers manufactured by the:Penn-Corporation.

HPSC issued this PO after revising PO 42970 of August 20, 1984,,which was. issued to parchase two type Y61'AS-1 transformers.

A Spare-Part Discrepancy Notifica--

tion Sheet-of August 28, 1984,-id9ntified that'the part-number-of the transformers received was different from those-

. ordered.

ReceivingiReportLNo. 31132 of August' 28,-1984,.

Ldentified.that~two type Y65 AS-1 type transformers had been

received instead of the type Y61 AS-1 type transfor:mers

-apecified in'the PO.

WPSC issued Nonconformance Report NCR 84-146 of March 20, 1984, to document.this discrepancy, and

!.msued1DCRs1558 to evaluate'it. -To-correct.the problem, p

-WPSC. replaced DCR:1558-with DCR12428-36; which -specified the:

L typelof the transformer to be Y65.AS-1~.

In accordance with k

-QAD 6.1.2, WPSC wrotexa' procurement document problem notifi-

! cati'on :(PDPN) on May 29, 1990,'to request appropriate dedi-cation methods for.the type Y65 AS-1' transformers.

The PDPN did;not specify1 testing to-verify electrical-characteristics

-under degraded voltage conditions.>

W

'WPSC.PO.02806, dated; November 17, 1989,-procured two type (N-823DP-DSISM1. differential = pressure transmitters manuface

turedt by L the : Foxboro~ Corporation.

The transmittars.were new-components 7(not replacements) to!ProvideTflowiindicationJfor s

residual heat' removal; pumps.

The transmitters did not have safety-related instrumentatio'n ^ functions,: but-the housings must maintain the' integrity of the pressure boundary.-

~

. Verification of-pressure boundary? integrity by Method 2 of-EPRI--NP.5652;waslspecified.

Quality. Assurance: Audit Reports

-(QAAR)"90-086 and 90-127Edocument source surveillances per-formed:at Foxboro;by WPSC's agent.-

LHowever,-neither-of:the two-surveillances expressly stated that1the' agent 3 witnessed the hydrostatic pressure. tests en the-transmitters--and.that he verified;thattthe= pressure _ test

_ gages-werelappropriatelyfcalibrated.: Instead, one: surveil '

11ance' report.addressedithel corrective action taken.by Fox-

-bore:on' issues'. raised during.a NUPIC audit.--. During the second surveillance, the agent 1 reviewed and closed the open items identified during the first' surveillance and reviewed-documentation' pertaining to the transmitters and other 15 97 Revision 1 W

w m

e t--

m7 mr

-W-y-

~r 4

4 components.

Post-installation inspection was required for the Foxboro transmitters, but the records indicated that the transmittars have not been installed.

WPSC PO 97623, dated April 20, 1990, procured one Part No.

V 54 DB 2400, 120 V ac solenoid-operated valve manufactured by the Skinner valve Company.

The only concern noted by the team was the failure to perform undarvoltage testing.

2.6 Parts Classification The assessment team reviewed the WPSC program used to change the safety and environmental qualification classifications at Kewaunee.

WPSC had performed safety and environmental qualifi-cation changes in accordance with Quality Assurance Directive QAD 4.3, " Changes to Quality Assurance QA Type and EQ Classifica-tion," revision 4, April 11, 1990, under the charter for the QA Typing Committee.

The boundaries for safety clasrification were stated in Adminis-trative Control Directive ACD 9.4,

" Quality Assurance Boundary,"

dated February 14, 1990, which referenced plant system drawings for the affected systems.

In general, WPSC had not evaluated the classification of individual parts.

The classification for parts was usually the same as the parent component and system.

2.6.1 Safety Clhasification Changes Under QAD 4.3, proposed type classification changes were sub-mitted to the QA Typing Committee for evaluation and approvel.

l The committee membership consisted of middle level managers from both the corporate and site nuclear organizations, with tbs QA Superintendent acting as chair.

WPSC documented approved changes in accordance with OAD 4.?.

Proposals submitted under QAD 4.3 required the submitter to l

identify the proposed change, the affected system, and the L

affected documents, in addition to justifying the change.

The justification for a QA type change required answers to the fol-lowing questions:

Is the device connected to or associated with a safety-related system?

Does the device serve as a process pressure boundary?

e Is the device's physical integrity essential to prevent e

accidents that could affect the public health and safety by releasing substaricial quantities of radioactivity, or is it required for mitigation of the consequences of such acci-dents?

16 Revision 1

Is the device's continued operation essential to prevent accidents that could affect the public health and safety by releasing substantial quantities of radioactivity, or is it raquired to mitigate the consequences of such accidents?

The team noted a significant weakness, in that WPSC had not incorporated much of the guidance of Appendix B of EPRI NP-5652 and Sections 3.2 and 3.3 of EPRI NP-6406 in writing type classi-fication procedures such as QAD 4.3.

Although methods.ther than those outlined in EPRI NP-S652 and EPRI NP-6406 may be ved, the team considered the procedures used by WPSC to be weak in that they did not require a depth of technical evaluation and review comparable to the methods outlined in EPRI NP-5652 and EPRI NP-6406.

The procedures did not require the following informa-tion to be considered and documented as part of the evaluation process:

The safety function of the parent component in which the item was to be installed e

The function of the item The various ways in which the component could fail in actual e

service The bases for determining that particular failure mechanisma e

were not credible The effects of failure on the parent component or system e

The team further noted that changes to an item's classification l

from safety-related to nonsafety-related must be performed in accordance with the requirements of criterion III, " Design Con-trol," of Appendix B to 10 CFR Part 50.

Additionally, the guid-ance of KRC Regulatory Guide 1.64, Revision 2,

" Quality Assurance Requirements for the Design of Nuclear Power Plants," which endorses ANSI N45.2.11-1974, needs to be met to the extent re-quired by the WPSC operational Quality Assurance Program Manual, Revision 16, July 31, 1990.

These requirements apply for classi-fication changes to systems, structures, components, and parts.

Tne team reviewed the documentetion of the bases for downgrading several type classificationc ecl found the documentation to be insufficient.

Many of the type classification changes reviewed did not state the 0..etion of the item, adequately address fail-ure mechanisms such as material incompatibility, or document the basis for determining that certain failure mechanisms were not credible.

The incomplete documentation prevented the assessment team from assessing the validity of the type classification changes without obtaining more information from the originator.

l 17 99 Revision 1

2.6.2 Interim Guidance for Parts Classification Before the assessment, the KNPP plant manager issued a letter to all supervisors dated March 5, 1991, regarding the NUMARC pro-curement initiative.

In the letter the plant manager required performance of documented reviews for nonsafety-related or un-classified parts intended for use in safety-related applica-tions, and for parts that are different from the original parts in the parent component.

The letter was intended to provide interim _ guidance until a full-scale technical evaluation program could be implemented as psrt of the NUMARC initiative.

The review process described in the letter consisted of two stages.

In the first stage, the responsible engineer or super-visor would determine whether the y uns technically suitable for the application.

In the second

.T, QC personnel would determine whether QA measures associt-A with the item were appropriate.

If both groups agreed that the part was properly classified for the application, it could be conditionally re-leased with a documented technical evaluation required later.

The assessnent team noted that a deadline for the evaluation was not specified; the plant manager inoicated that QC personnel would not clear the conditional release until the evaluation was issued.

If either engineering or QC personnel believed that the part must be considered safety-grade, the part could not be i

l issued until the issue was resolved by either management or CC engineering personnel.

The licensee established this program as l

an interim step toward full implementation of the procurement initiative without unduly straining plant resources and com-promising work schedules.

This interim step did not apply to design change requests.

The team considered this interim guid-ance to be satisfactory.

2.6.3 Development of Additional Procedures WPSC was developing several procedures to more fully implement the technical evaluation and part classification process.

The assessment team reviewed drafts of the following procedures:

QAP 9.4.1, " Quality Assurance Type Request," draft version.

WPSC was developing this procedure to allow subcomponents to be reclassified without having to go through the QA Typing Committee under procedure QAD 4.3.

Systems and major com-ponents would still have to be reclassified using procedure QAD 4.3.

ACD 9.10, " Procurement Technical Evaluation Program," draft version.

WPSC was dev't.ioping this document to establish the overall responsibilities and requirements for the technical evaluation program.

18 100 Revision 1

e QAP 9.10.2, " Procurement Technical Evaluation Procedure,"

draft version.

WPSC was developing this procedure to pro-vide guidance for performing procurement technical evalua-tions and to supersede the guidance provided by the March 5, 1991, letter described above in Section 2.6.2.

Although these procedures will address some areas not covered by existing procedures, the new draft procedures still contained some of the weaknesses noted in Section 2.6.1 above for estab-11shed part. classification procedures.

For example, draft proce-dures QAP 9.4.1 and QAP 9.10.2 did not require addressing the effects of part failure modes on parent components or sy0tems.

2.6.4 Classifict'lon of General Maintenance Items The team found no specific guidance regarding QA clasnification of maintenance items used for safety-related components.

The following are examples of nonsafety-related items used in safety-related applications:

e Grease, G-5, Exxon Nebula EP-1, Stock Number 217-6713.

This grease was used for safety-related valv2 operators in ap-plications requiring environmental qualification.

This grease was purchased as non-safety-related.

Lubrication 011 Filter Cartridge, Stock Number 205-6563.

This oil filter was used for the lub'ticating oil in emer-gency diesel generators.

The oil filter was purchased as nonsafety-related but with certificates of conformance from the vendor.

Mobilgard 450 Oil, X-10, Stock Fumber 217-6521.

This oil was used for lubricating oil for the emergency diesel gen-erators.

The oil was purchased. as nonsafety-related.

At the time of the assessment, the team found that the licensee had not performed documented reviews or technical evaluations for these items.

The team noted that the licensee should specifi-cally address and document the classification of parts or items as listed above, particularly where the items are used in en-vironmentally qualified equipment.

2.7 Desian Chance CQDtJ:.gLed Corrective Action The team reviewed the implementation of WPSC's design change control practices by reviewing one design change request (DUR) and three QA typing changes (QATs).

DCR No. 2417 covered the installation and removal of electrical equipment in Battery Rooms 1A and 1B and Motor Control Center 46A.

This DCR included relevant calculatjons, and either in-cluded or cited references.

Safety reviews conducted to satisfy 19 101 Revision 1

1 10 CFR 50.59 (a) (1) were attached.

The team detarmined that WPSC had implemented the applicable provisions of F.ngineering change Directive 4.1 and Engineering Change Procedure 4.4, Revision 3, to prepare, review, and approve DCR 2417.

QAT change 90-13 requested a change of the QA type of the locking pins (217-4569) and connecting pins (217-4581) of the dry and wet nozzle dam assemblies (218-5450 and 218-5452) from QA-1 to QA-2X.

QATs 90-2 and 90-3 requested the reclassification of the receptacles and panel lights on the control and excitation panels for Emergency Diesel Generators DG-1A and DG-1B.

The design change recommended removing the circuits from the safety-related buses and connecting them to nonsafety-related buses.

WPSC implemented QAD 4.3, Revision 4, to prepare, review and approve the QA Typing changes.

All of the line items in the check list including the "QA Decision Tree" attached to the QAD had been completed for the Typing Committee's evaluation.

The design changed had been adequately described.

The team deter-mined that appropriate procedures had been implemented in the preparation, review and approval of the QATs and that approval of the QATs was proper.

When WPSC identified an audit finding or noncompliance resulting from an audit or review of an audit report, it initiated an audit open item or nonconformance report.

Either of these documents, when evaluated and dispositioned, may result in the initiation of a licensee event report, 10 CFR Part 21 reportability action, or additional in-house investigation to determine the extent and safety significance of the identified finding.

2.8 Trainina and Industry Activity Job specific training requirements at WPSC vere determined by the employee's department head.

Most QA and QC personnel involved with procurement had attended seminars conducted by Gilbert /

Commonwealth on the EPRI commercial-grade dedication guideline.

Most QA personnel who perform vendor audits had also attended a Gilbert /Cemmonwealth seminar on the EPRI performance-based vendor audit guideline.

WPSC maintained artive involvem2nt in industry workshops such as NUMARC's, but only one or two people fron WPSC typically attended.

The team recognized that due to the small size of the WPSC QA and QC organizations and their active involvement in the implementation of the procurement initiative, there was little need for formal in-house training on the procurement initiatives for those personnel.

In contrast, the engineers who prepared CGI evaluations received no formal training on how to prepare these evaluations.

These personnel were trained on the job by coworkers, supervisors, and QC engineers.

The procurement initiatives are relatively new and the preparation of CGI evaluations involves numerous people 20 1

1 102 Revision 1

outside of the QA and QC organizations.

Therefore, the team considered the lack of formal training for the preparars to be a significant vaakness.

The team also noted that while the QA and QC organizations were actively involved in the implementation of the procurement ini-tiative, there was a weakness in imparting information to the rest of the WPSC staff.

Supervisors of othtr departments vera typically bricted on the initiatives, and they helped to revise and develop procedures related to procurement.

Hovaver, the affected staff of other departments was not directly trained.

WPSC participates in several industry group and information exchange programs including the NUMARC activities noted above, the EPRI/NCIG Joint Utility Task Group on commercial-grace pro-curement, tTe INPO nuclear network, and the group of owners of two-loop Westinghouse plants.

WPSC also participates in NUPIC and the Joint Utility and Cooperative Audit Group.

All of these activities respond to NUMARC initiatives for sharing information.

2.9 Manacement Involvement The team considered management involvement to be a strength of the WPSC program for meeting the NUMARC comprehensive procurement initiative.

In May 1990 WPSC assigned three QC and QA represen-tatives to review the draft initiative.

The group produced the report "WPSC Review of the NUMARC Comprehensive Procurement Initiative," dated June 20, 1990.

For each section of the initi-ative, the report frankly assessed WPSC's current status and estimated resource impact.

Based on this report and its support by management, WPSC's chief executive officer (CEO) voted in favor of the initiative as a member of NUMARC's Board of Direc-tors.

WPSC then formed an ongoing task group with 20 members from 8 departments to incorporate the requirements of the initi-ntive into directives and procedures.

The task group develops program changes, requests resources, and makes recommendations.

Periodic briefings are presented at department head meetings.

The team interviewed the WPSC Manager of Nuclear Power and the KNPP plant manager to determine their participation in the pro-gram.

Both were knowledgeable and supportive.

The Manager of Nuclear Power had worked with the QA/QC group in June 1990 to appraise the CEO of the need to support the initiative, and both formed the ongoing task group.

Budgnt requests for additional personnel and test equipment were approved for 1991 and 1992, even though there had been little growth in either area in recent years.

The managers encouraged personnel to participate in activities such ac NUMARC meetings, and maintenance supervisors and design change engineers have taken part in source surveil-lances.

WPSC management was also exploring the possibility of sharing common test capabilities with other Westinghouse two-loop plant owners.

21 103 Revision 1

3 NUMARC COMPREHENSIVE PROCUREMENT INITIATIVE IMPLEMENTATION 3.1 Status The assessment team reviewed the wratus of WPSC's implementation of the NUMARC comprehensive procurement initiative described in NUMARC 90-13, " Nuclear Procurement Program Improvements," October 1990, approved by the NUMARC board of directors on June 28, 1990 (as previously noted, WPSC's CEO was a member of the board of directors and voted for the initiative).

The initiative com-mitted licensees to assess their procurement programs snd take specific actions to strengthen inadequate programs.

Reviews are to be completed by July 1, 1991, and implementation by July 1, 1992.

These guidelines are summarized in the enclosure to an NRC Commission paper, "KUMARC Initiatives on Procurement" (SECY 90-304) dated August 24, 1990.

This report section sur.marizes the status of WPSC's program implementation, based on the WPSC February 13, 1991 status report and other information obtained during the assessment.

Eint1tives and Procedures - 15 existing directives, 11 procedures, and 4 policies were affected.

Most were not yet changed, and the rest may require additional change.

Approximately 25 percent of the changes were estimated as completed.

The licensen identified four new required docu-ments:

overall procurement directive (in advanced draft form), technical evaluation procedure (draft), performance based audit procedure (draft), and verification 6ampling procedure (future).

The major procedural chcnges introduced by the time of the assessment were the September 1989 intro-duction of critical characteristics and the October 1990 requirement to use EPRI-5652.

Procram - Appro.'imately 35 WPSC personnel participate di-rectly in dedication activities, and another 15 to 20 per-form related functions such as receipt inspection.

The 1991 and 1992 budgets each call for adding two permanent en-gineers.

The 1991 budget also covers three new contractor engineers and a permanent technician.

Nearly $100,000 is budgeted each year f,I purchase of receipt test equipment and $30,000-50,000 t contracted testing.

The licensee has

~

also increased data case support.

WPSC considered seven sections of the NUMARC initiative to be fully implemented and the other ten partially implemented.

Major program changes included increased engineering involvement and establishment of QC engineering as a distinct procurement engineering group.

3.2 Fraudulant Products Detection The team reviewed the WPSC procurement program for the detection and exclusion of fraudulent products, including changes made in 22 104 Revision 1

the implementing procedures to improve the likelihood of detec-ting-fraudulent products.

WPSC assigned the QC Section of the Plant Quality Programs Department to detect fraudulent products.

In 1987 WPSC developed Procedurc QCP 601, " Receiving Inspection,"

to enhance receiving inspection methodology and addrews detection of fraudulent products.

In 1988 the QC Section began to gather information on product problems including fraud.

This informa-tion was placed in a reference book in the QC receiving inspec-tion area.

The book is known as the " Receipt Inspection and Fraudulent Material List," or the " Fraudulent Issue Book."

It is a fairly comprehensive listing of NRC information notices, bul-letins, and generic letters; information from the Institute of Nuclear Power Operations (INPO) and Nuclear Plant Reliability Data System (NPRDS); KNPP LERs; and information obtained from l

other nuclear industry sources.

This list forms the basis for l

the WPSC fraudulent products detection program.

The team re-viewed several WPSC procedures and discussed the detection of fraudulent products with various plant personnel.

The team found that the detection of fraudulent products was addressed only in one procedure: QCP 601, " Receipt Inspection," Revision B, October 2, 1990, as follows:

"6.1.7.d Fraudulent Material - Inspect items for fraudulent refurbished or used parts per IE Bulletins, OEAs, or other information notices related to each item."

The team discussed this limited guidance on the detection of fraudulent products with the QC Supervisor, who stated that WPSC was updating receiving inspection reports to require QC inspector signoff to confirm that the Fraudulent Issue Book had been checked for any fraudulent material issues.

The team concluded that the use of the Fraudulent Issue Book was a uamful tool in detecting fraudulent products.

However, the team recommended the following improvements in this area.

Provide more guidance in procedure QCP 601 for the use of the Fraudulent Issue Book and describe the meaning of the QC inspector signoff for, "See FRAUDULENT ISSUE BOOK, check for any fraudulent material issues."

Provide instruction for the maintenance of the Fraudulent Issus Book.

The QC Supervisor stated that the Fraudulenn Issue Book needs to be more user friendly.

WPSC may wish to develop a computer program to assist the user in sorting and identifying applicable issues for a given product or item.

Check the issues identified-in the-Fraudulent Tesus Book against other WPSC data bases that identify problems with

-products and suppliers.

The Qualified Supplier System-Vendor Problem Identification segment may also be useful in

. - _ _ -.. the detts-tion-of--f raudulent product..

23 105 Revision 1

The team reviewed actions t,aken by WPSC as the result of Informa-tion Notice (IN) 89-70, "possible Indications of Misrepresented Vendor Products," and IN 89-70, Supplement 1, which WPSC provided to QC and QA personnel for information only.

The generic guid-ance provided in this information notice and its supplement should be incorporated into applicable QC receiving inspection procedures or inspection instructions.

The Fraudulent Issue Book is arranged by subject or supplier, and as presently being used woulo not alert receiving inspectors to the generic guidsnce provided in IN 89-70 and its supplement.

During the assessment the team reviewed the commercial-grade dedication package for a 6-inch, stainless steel pipe as de-scribed in Section 2.5.

As a result of this review it was deter-mined that no WPSC procedure required the QC receiving inspector to review COCs or Certified Material Test Reports (CMTRs) received with a commercial-grade item and to corpare them with the test results from the WPSC independent laboratory when con-firmatory testing is performed.

The team concluded that compar-ing the two sets of test results would provide additional checks for the detection of fraudulent products.

The team also recom-mended that WPSC revise-procedures to require evaluation of deviations and inconsistent test results, and that WPSC take appropriate actions such as additional tests to determine the acceptability of the potentially fraudulent product.

When fully formalized and implemented, the use of the Fraudulent Issue Book, the requirements to check for fraudulent materials as specified by the receiving inspection checklist, and the other items addressed herein should increase WPSC's capabilities to detect fraudulent products.

3.3 Obsolete Items WPSC's draft procurement directive states that alternative re-placements for obsolete items are preferable to procurement from the surplus market.

If the surplus market is used, product performance is required to be established through traceability to the original equipment manufacturer or by appropriate tests and inspections.

The draft directive also requires procurement through the original equipment manufacturer or its authorized distributor where practicable, with traceability or test and inspection required for alternate paths.

WPSC's June 20, 1990, internal review document for the NUMARC comprehensive procurement initiative stated that the technical evaluation aspect of obsolescence was the most significant issue for WPSC.

The necessary documentation of bases for safety clas-sifications and " technical features" was identified as a change in the way that WPSC did business.

WPSC's actions and plans in this regard are addressed throughout this assessment report.

The main WPGC change observed in thir. regard was the establishment of quality control engineering as a distinct procurement engineering group.

Substantial procedural changes are also in progress.

24 Revision 1 106

1 4

CONCLUSIONS WPSC has made a significant effort to strengthen its commercial-grade dedication program.

However, the program was in a rela-tively early stage of implementation and improvements were needed in several areas.

The most significant weakness was the lack of detailed procedures or training for preparing dedication evalua-tions and for using supplier audits and surveillances, especially to verify critical characteristics.

The team's review of sample dedication packages confirmed that audits and surveillances were not specific to the critical characteristics relied on for dedi-cation.

Other weaknesses included the failure to address the position in NRC GL 89-02 that, when audits are relied on, both distributor and manufacturer must be audited when a distributor is used; the failure to require designation of the applicable version of supplier QA programs in the PO or COC; the inadequate documentation of technical reviews for parts downgraded by the QA Typing Committee; and the inadequate control of changes to dedi-cation documentation.

The team also observed a need for more attention to de

.1 to ensure that material is properly tagged and that documents represent the specified material.

The assessment team also noted several strengths in WPSC's com-mercial-grade dedication program, including the strategy of dedication by selecting methods that are appropriate to specific

\\

critical characteristics rather than predominant reliance on a single method.

Strong management support and involvement, prepa-ration of an improvement plan that frankly assessed necessary changes, and heavy reliance on in-house personnel are considered major strengths.

Computer data bases appeared to be useful for dedication activities and fraudulent product detection.

WPSC initiated a tagging system to identify item acatus and promote corrective action, and upgrada testing was prudently used to ensure that the proper material was used.

The team concluded that WPSC personnel understood their assignments and had positive attitudes toward improving the procurement process.

5 EXIT HEETING on April 19, 1991, the assessment team conducted an exit meeting at the Kewaunee Nuclear power Plant.

Persons contacted during the assessment and exit meeting attendees are identified in Appendix A to this report.

During the exit meeting, the team summarized the scope of the assessment and the strengths and weaknesses identified.

Throughout the assessment the team dis-cussed concerns with WPSC management and staff.

The licensee confirmed that no proprietary information was included in the scope of the assessment.

25 l

Revisjon i 107

APPENDIX A PERSONS CONTACTED Wisconsin Public Service Corcoration

'K.

H.

Evers, Manager, Nuclear Power M.

L. Marchi, Manager, Kewaunee Plant M. M. Kwitek, Superintendent, Nuclear Design Change C.

S. Smoker, Supervisor, Plant Quality Programs

-A. J. Ruega, Superintendent, Quality Assurance T. P. Meeuwsen, Supervisor,- QA Procurement D. R. Berg, Superintendent, Plant Information Systems D. J. Molzahn, Assistant Superintendent, Licensing D. J. Will, Asst.-Superintendant, Nuclear Design Change-K.

L.. Hull, Engineering Supervisor, NDC D. Ropson,_ Assistant Manager, Maintenance K. A. Hoops, Supervisor, Nuclear Equipment _ Qualification D. Nalopka, Supervisor, Plant Licensing V.

J. LeGreve, Supervisor, Plant Quality Control i

B. L. Koehler, Engineer,-Quality Control D-Patton, Engineer, Quality Control 5.

T. Diring, Engineer, Quality Control B. J.ELoften,; Supervisor, Plant Warehouse

.J. - Balant, Nucitar Services Engineer i

i ft. Webb, Plant Nuclear Engineer

~

B. Kaufman, Senior Buyer--

B. Mathews, Configuration Management Coordinator S.-Cherveny,-Corporate Licensing P. H. VanDen Heuvel, Quality Assurance Auditor J.

E._Schuettpelz, Contract Buyer D.- E. Auman,-Supplier coordinator W. Armstrong, Vendor Service Coordinator K. Affeldt,-Quality Assurance Procurement C. Gigot, Configuration-Management B. J. McMahon, Nuclear Instructor, Engineering

~ Ngglear Recrulatory Commission U. Potapovs, Acting' Chief, Vendor Inspection Branch G. C.' Wright,_ Chief, Operations' Branch,-Region III P.

I. Castleman,-Senior-Resident Inspector K. G. O'Brien, Resident _ Inspector NUMARC B.

Bradley-

• Attended-exit meeting at Kewaunee Plant on April 19, 1991-A-1 Revision 1 108

... _ _ -.. - _.-~.- -

~. -. _. - _ ~ -. - _.

Selected Bulletins and Information Notices Concerning Adequacy'of Vendor Audits 1

-knd Quality of Vendor-Products ISSUED-TITLE 1.

Information Notice 89-56, Questionable Certification-of supplement 2; Naterial supplied to the Defense Department by Nuclear suppliers 4

-2.

Information Notice 91-45 Possible Malfunction of t

Westinghouse ARD, BFD, and NBFD Relays, and A200-DC and DPC.250 Magnetic Contactors 3.

Information Notice-91-48 False certificates of Conformance Provided by Westinghouse Electric Supply Company for_ Commercial-Grade Circuit Breakers 5

'4. -

Information Notice 91-55 Failures caused by an Improperly-Adjusted Test. Link in 4.16 KV General Electric Switchgear 109

g CORRESPONDENCE RELATED TO VENDOR ISSUES i

11G

g'[,e u,

,\\

UNITE D $T ATE 5 NUCLE AR REGULATORY COMMISSION g

useo7o% o c.nsss

%.'*****.l SEP 27 ER$

Thomas G. Weyenberg Director of Contracts Whiting Corporation 15700 Lathrop Harvey, Illinois 60426-519B

SUBJECT:

REQUEST FOR DETERMINATION OF RESPONSIBILITY This letter is in response to your September 16, 1991 letter in which you requested a determination of responsibility from the Nuclear Regulatory Commission (NRC) regarding reporting requirements under 10 CFR Part 21 (Part 21).

In this letter, and its attachments, you related the history of a Whiting Corporation (Whiting) crane that Uns sold to Baltimore Gas and Electric (BC&E) and which BG&E currently has plans to modify.

You have asked for a " definitive NRC t';atement that Whiting Corporation will no longer be responsible for reporting issues after the modification / repair work begins."

The NRC cannot relieve you of the responsibilities under Part 21 that you committed to when you sold the crane as a safety-related item to BG&E.

Section 21.21 of Part 21 states, in part, that "Each individual, corporation, partnership or other entity subject to the regulations in this part shall adopt appropriate procedures to.

provide for: (i) evaluating deviations or (ii), informing the licensee or purchaser of the deviation in order that the licensee or purchaser may cause the deviation to be evaluated unless the deviction has been corrected."

In additio.4, it states, in part, that "A director or responsible officer subject to the regulations of this part shall notify the Commission when he obtains ;nformation reasonably indicating... a defect affecting a ba62 component that is within his organization's responsial ity."

Since Whiting sold a safety-related item, it is clearly subject to the regulations.

Your responsibilities in this case are to evaluate any deviations (as defined in section 21.3(e) of Part 21) that you may discover relating to the crane that you sold to BGEE to determine whether they could create a defect (as defined in section 21.3(d)).

If you determine that a defect exists, then you are required to report this to the NRC.

However, as a result of the modifications that BG&E intends to perform to the crane, you may not know its current configuration.

You therefore may not be able to make an inforned evaluation.

If j

111

l Mr. Thomas G. Weyenberg so, you are required to report deviations which you may discover to BGEE and let them perform the evaluation.

You should note that the final rule containing the published Part 21 amendments, 56 Fed. Reg. 36081, becomes effective on October 29, 1991.

On that date section 21.21(b) will require that if the deviation is discovered, "and the supplier determines that it does not have the capability to perform the evaluation to determine if a defect exists, then the supplier must inform the purchasers or licensees within five working days of this determination so that the purchasers or affected licensees may evaluate the deviation."

In addition, current section 21.51 records retention requirements have been clarified by the Part 21 amendments.

10 CFR 21.51(a) (2) will require that Whiting retain all records of "any notifications sent to purchasers and affected licensees for a minimum of five years after the date of che notifications."

Under section 21.51(b), Whiting will be required to " afford the commission, at all reasonable times, the opportunity to inspect records pertaining to basic components that relate to the discovery, evaluation, and reporting of deviations, failures to comply and defects, including any advice given to purchasers or licensees on the placement, erection, installation, operation, maintenance, modification, or inspection of a basic component."

Thus, Whiting la subject, and will continue to be subject to numerous requirements in Part 21.

You also request that the NRC " determine that Whiting will have no liability of any kind in the event of a failure of the modified equipment or for the consequences of any such failure with regard to physical plant, environment, personal injury, er death."

This request is outside of the NRC's jurisdiction, therefore, no determination can be made by the NRC on this matter.

If you should have any further questions on this subject please feel free to contact me at (301) 492-0961, or Stewart Magruder of my staff at (301) 492-3220.

f WhW

^

Leif J.

Norrholm, Jhlef Vendor Inspection Branch Division of Reactor Inspection and Safeguards Office of Nuclear Reactor Regulation l

112 I

p* 4 G%

d o,

f-t UNITED STATES 2

i NUCLEAR REGULATORY COMMISSION

• h I

?.

WASHINoToN. D C 30866

/

SEP 2 01m Docket No. 99900296 Hr. Joseph Gerard, QA Director

/anerace Corporattori j

530 West Mcunt Pleasant Avenue j

Livingston, New Jersey 07039

SUBJECT:

RESPONSE TO AMERACE'S SEPTEMBER 7, 1991 LETTER REQUESTING AN AUDIT FEE FROM THE U.S. NUCLEAR REGULATORY COMMISSION (NRC)

The purpose of this letter ;s to provide a statement of understanding between the Amerace Corporation and NRC staff concerning your September 7, 1991, letter to me and our subsequent telephone discussion on September 12, 1991.

On September 6,1991, Mr. J. J. Petrosino of ry staff discussed the proposed October 7-11, 1991, hRC inspection of your f at.ility at Livingston, New Jersey.

During that discussion, your policy of as essing a $1,000.00 daily inspection / audit fee was explained to the NRC inspector. At that time Mr. Petrosino explained that under Section 21.41, " Inspections", of 10 CFR Pert 21, the NRC inspectors are allowed rearonable. access into facilities manufacturing

" basic componerts," as defined in 10 CFR Section 21.3. However, your Septerber 7, 1991, letter stated that Amerace's current policy is to charge a $1,000.00 daily fee for "on site audits" of your product line or quality procedures, and l

L your letter requested an NRC acceptance of that charge.

During our September 12, 1991, telephone discussion with you and your staff, we explairied the st6tutory authority which authorized reasonable NRC access into facilities subject to 10 CFR Part 21.

10 CFR Section 21.41 is promulgated urider the authority of Section 206(d) of the Energy Reorganization Act of 1974, 42 U.S.C. 5846(d), and Section 161o of the Atomic Energy Act of 1954, as amended, 42 U.S.C. 2201(o). The regulation authorizes reasonable NRC inspections of facilities supplying " basic components" or parts there~

r connercial nuclear power plants, as defined in 10 CFR Section 21.3. Se Amerace Corporation supplies Class 1E qualified Agastat electrical relays and Class IE qualified Buchanan terminal blocks. Thus, inspection uf the records, premises, activities, and basic components at the Amerace Corporation is autnorized under 10 CFR Part 21. As a result of our explanation of the above, the Amerace Corporation acknowledges the NRC's statutory authority, and therefore recognizes that reasonable NRC inspections at vendor facilities are not subject to monetary fees.

113

Mr, Joseph Cerard

.?-

Therefore, it is our understanding that the Amerece Corperatior. Will allow the NRC inspection team recser.able access to its facilities on October 7 11, 1991, and will rot levy its auditing fee on the NRC.

If o'er understanding of this is ine.orrect, pleate contact me incrediately at (301) 492 09C1.

f S'*C' *11

'g Leif J NOVrholm, Chie Vendor Inspection Brint Division of Re:ctor :' section and Safeguarcs Office of NucleS Ceactor Regulatior.

cc: fir, Richard Havens Cuality Manager Amerace Corporation 530 West P: cunt Pleasant Avenue Livingston, New Jersey 07039 114

g,e ass,

+

UNIT E D LT ATEs

[% <r'.i NUCLE AR REGUL ATr)RY COMMISSION s t ' "'Y :)

uswovo.o e ran i

P g

4

")b APR 101991 LA 91-CI7 Mr. Gary M. Clark Lxecutive Vice President Industries and Corporate Resources hstinghouse Clectric Corporation 41 Stanwix Street Fittsburgh, Pennsylvahi6 15222

Dear Hr. Clark:

This letter addresses the U.S. Nuclear Regult y Coernission's (NRC's) concerns pertaining to the sale by Westinghouse Electric Supply Company (WESCO) of Albany, New York. in April 1988, of 250 molded-case circuit breakers to Spectrur Technologies USA, Inc. (Spectrum), of Schenectady, New York. The NRC has completed a review of the sale of these circuit breakers to Spectrum and the subsequent sale by S Plant (Peach Bottom)pectrum of these breakers to the Peach Bottom Nuclear Power 3

The information reviewed included two Vendor Inspection Branch (YlE) inspection reports, an Office of Investigations report, and information obtained during an enforcement conference with Spectrum. Copies of the inspection reports and a synopsis of the 01 investigation have been enclosed f or your ti. formation.

The VI6 conducted an inspectiore on Septeettr 2,1983, and February 6-7,1989, at Spectrum.

The Office of Investigations also conducted an investigetion in this matter.

These activities related to WESCO's supply through Spectrum of 250 safety-related circuit breakers to Peach Botton,. These efforts identified that the circuit breakers provided to Peach Bottom were reconcitioned and not new equipment as specified in the purchase order. Although the purchase crder frora 5pectrun to WESCO specifically reovired new circuit breakers and certifi-cates of ccnforman.e (C0Cs), WESCO purchased the circuit breakers from a sutvendor which dealt mainly in reconditioned equioment and provided these reconcitioned circuit breakers to ' sectrum with falsified COC's that certified that the circuit breakers were new equipment.

In addition, the investigation identified that k'ESCO ordered West *..ghouse labels from the subvendor in order te label the shipping boxes that acked labels.

As a result of r review of this C.ter, we have cencluded that a WESCO

-salesman, Mr.

, falsely ct tified that the circuit breakers were new equipment, uring investigath. Mr.

admitted to providing 25 f 61se C0Cs to Spectrum for the circuit bi. aker.

ie NRC inspections identi-fied that the C0Cs provided to $pectrum from WESCO were suspect because they hst been photocopied and were titled with a division of Westinghouse Electric 115

1 i

Gary M. Clark Corporation in Ashev111t, North Carolina, that did not unuf acture circuit brea6ers. The investigation determined that the employees whose signatures were on the suspect C005 dio not providt-the C0Cs and knew nothing about the sale of the circuit breakers to 5pectrutn.

The NRC investi ation deternined that WESCO s and r.anagers (Hessrs.

, and

) knew that the c'rcuit be a

u ve i r whi in refurbished equipmes.t that sweretobeprovidedbyWESCO(Mt.

, ar.d that

Nessrs, and kriew that the circuit breaker used at a nuclear power pl wtver these WESCO employees felt no obligation te u

report or act upon this knowlecge. This failure resulted in a serious viola.

tion of Westinghouse corporate standards and policy, Because Westinghouse did not have control, custody, or knowledge of the care and condition cf the circuit breakers obtair.ed frora subvendors, there was no basis to certify that the circuit breakers ccLiplied with

, and kestinghouse sunufacturing stendards, in addition, a WESCO enployee (

) did not question whether the circuit breakers were new even though sorie of the circuit breaker boxes did nct have

. labels on thcn.

In fact, the WESCO salesman ordered Westinghouse labels from the subvendcr in order to label circuit brsaker boxes that were missing lebs!s.

The NRC requires a high standard of Qut.lity for items supplied to licensees, in croer to achieve this high standard, the licensee; and ulttNtely the hRt must ceptr.d to a large degree upon the accuracy of the inforv.etion provided by vtr. dors such as Westinghcuse. Our review and investigatten has cetermined that, as a result of willful actions by your WESCO office, WESCO misled Spectrum, and ultimttly the licenste and the NRC, concerning the quality of the circuit brtckers supplied, based on discussior,s with your staff during recent HRC inspections of the fluclear Services Division of the Energy Systems Business Unit, we have deter-n.itied that Westinghouse has initiated corrective actions to precludt the recur-rence of activities sitiilar to thosc described cbove.

In order that wt pay properly evaluate your cor ectivt actions, p1 tate specifically describe under oath of offirmation the actior,s Westinghouse W taken, such as:

1) a descrip-tics, cf neps that have been or will be taken to correct these items; 2) a description of. ps that have been or wili be te,Len to prever.t recurrence; and

3) the dates your corrective actions and preventive nasures were or will bt comp 1tttd. This response should provide the basis for NRC and licensees to have confidence in Westinghouse providing accurate and complete inforn tion concern-ing cor.ponents supplied direttly to licensees or inoirectly to licensees where thtre is knowledge the compor,ents wi'il L,e provided to a licensee for use in a nucitar power plant. We would like a reply to our concerns within 30 days fror the transmittal cate of this letter. We will consider catending the response tin if ycu can show good caust for us to do 50.

I 116

Gary M. Clark 1 trust that you understand the significance with which we view the manner in which WESCO provided the circuit breakers to Spectrum and that Westinghouse must take comprehensive action to prevent the recurrence of ary such activitit;.

Sincerely, b

Brian K. Grimes, Director Division of Reactor Inspect)un and Saftguards,

~

Office of Nuclear Peactor Regulatier,

Enclosures:

1.

NRC Inspection Report 99901119/88-01 2.

hPC Ir.spettien Report 95901119/69-01 3.

hRC Investigation Synopsis

'cc:

i (c'

names deleted Fr. Fr.91 E. I. ego Mr. George J. Beck Chairrien and Chief Executive Officer Man.:ger-Licensing W(stinghcust Electric Corporatter.

Philadelphia Electric Company 11 Stanwis Street Nuclear Group Headquarters Pittsburgh, PA 15222 Correspondence Control Desk P.O. !!ox 195 Mr. Thectore Stern Wayne, Pennsylvania 19067-0195 Senior Executive Vice Pres'ident Westinghouse Eltetric Cogoration

$pectrum Technologies USA, Inc.

11 Starwis Street ATTh: Mr. Birj Bhartecy, Pre sident Pittsburgh, PA 152?2 133 Wall Street Scher.ectady, New York 12305 Mr. John B. Yasinski Executivt Vice Presidw't Power Systers Westirghouse Electric Corperation 11 Stanwix Street Pittsburgh, PA 15222 d

Mr. Nathanici D. Woodson Vice President & General Manager Energy Systers Eusiness Ur.it Westinghcuse Electric Corporation P.O. box 355 Fittsbargh, Penns)Ivanie 15230 Mr. E. A. Jarre r. Ptretti, President Westinghcuce Electric Supp'y Compar.y 1 F.iver Frv.t Center Pittsburp, PA 15222 cc:

see next page 117

i Gary M. Clark 4-i cc:

Mr.

Wes ouse ectric upp oinpany Teall venue and Arterial Road Syracuse, New i'ork 13201 Mr.

Wt%t

• • • y OEpany T40 Riverside Drive Asheville, North Carolina 28802 Hr.

Representative Westinghcuse Electric Supply Company 25 Warehouse Road Albany, New York 12205 st iy 25 Warehouse Road Albany, hen YurL 12205 f

t 118 r

ORGANIZATION: SPECTRUM TECHNOLOGIES USA, INC.

SCHENECTADY, NEW YORK REPORT INSPECTION INSPECTION h0.:99901119/84 01 DATE 09/n?/gp a a m unne t. 3 CORRESPONDENCE ADDRESS: Mr. Brij M. Bhartey, Presioent Spectrum Technologies USA, Inc.

133 Wall Street Schenectady, New York 12305 ORGANIZATIONAL CONTACT:

Brij M. Bhartey TELEPHONE NUMBER:

f MRi W nnth NUCLEAR INDU$TP.Y ACTIVITY: Spectrum Technologies (STs) has supplied Class 1E spare anc replacement elet trical parts and components to the nuclear in.*ntry.

4/q///

ASSIGNED INSPECTOR:

w n-J.B.facpf(fvl5)pecialProjectsInspection s9#, S Date Sectiort OTHER INSPECTOR (5):

T. Silko. 5P15 APPROVED BY:

d.A Af WI7k6 U. Potap',vs. Section Cntef. 3F15 Date INSPECTION BASES AND SCOPE:

A.

BASES:

Appendix B to 10 CFR Part 50 and 10 CFR Part 21.

B.

SCOPE:

The inspection was conducted to review activities related to Wsupply of 250 safety-related snolded case circuit breakers (CBs) to the Peach Bottom Nuclear Plant.

PLAh1 SITE (JPLICABILITY: PeachBottom(5U-171,50-277). Davis-Besse(50346),

kancho Seco (50-312).

119

. - - _ ~ - _

ORGANIZ.ATION: SP(CTRUMTECHNOLWilESUSA,INC.

SCHENECTODY, NEW YORK REPORT INSPECTION NO.: 99901119/88 01 RESULTS:

PAGE 2 of 5 A.

VIOLATIONS:

None S.

NONCONFORMANCES:

Contrary to Certerion VII of Appendix B to 10 CFR Part 50, Spectrum Technologies, did not verify the validity of Certificates of Conformance received from WEsto, Albany for 250 circuit breakers dedicated by STs and soitto the Peach Bottom Nuclear Plant. The Certificates of Confortnance stated that the supplitd breakers were in conformance with applicable Westinghouse and 11 Standards when, in fact, a large number of breakers were rejected due to perform nce demonstrated to be outside of UL and Westinghouse specificaticos.

Additionally. STs did not verify that the received breakers vere infact new as required by their purchase order to WESCo, Albany.

(88-01-01)

C.

STATUS OF PREVIOUS INSPECTION FINDINrit-None 0,

OTHER FlhDINGS AND C0KMENTS:

This inspection was conducted to review Spectrum Technologies ($1s) supply of safety related parts and components to the nuclear industry.

Of particular interest were activities related to STs rccent supply of 250 molced case CBs to the Peach Bottom Nuclear Plant. During the inspection it was learned that generall;, the safety-related parts and components th t STs sells to nuclear plants are procured nonsafety

-(comercial grace) by STs and then subjectea to a dedication program as aecessary to upgrade for safety related application. STs is not involved in any manufacturing operations and any testing done on the material supplied is performed by independent laboratories as directed by STs. Due to the limited ap unt of business that STs has done to date (STs is a relatively new company, less than two years old) the inspectors were able to review dccumentation pertaining to the mjority of nuclear orders completed to date.

In general STs recods were found to be well organizec and readily auditable. Files were presented to the inspectors for each of the nuclear orders requested.

Each of the files contained the purchase order from the particular utility involved. STs' purchase. order to their supplier. 4 120

ORC.ANIZATION: $PECTRUM TECHNOLOGIES USA, INC.

SCHENECTODY, NEW YORK REPORT-INSPECT 10N NO.:

99901119/88 01 RESULTS:

PAGE 3 of $

4U411tication test-plan, certifications, test data, and other information as applicable. Following is a summary of the orders reviewed during the inspection.

2.

PhiladelphiaElectricCompany(PeachBottom)PurchaseOrder(PO)

Number BW 200893.ND and BW 200894-ND.

This file contained information relative to $Ts supply of 250 type HFA, HFB, and FA Westinghouse molded case CBs to the Peach Bottom Nuclear Plant,- The PECO purchase order stated

• Nuclear Safety Related" and invoked 10 CFR Part 21 Appendix B to 10 CFR E

50, STS QA punual Rev. 2, dated November 2,1987, as well at various seismic and environmental qualification requirements.

Af ter receiving the. subject order, $1s purchased the breakers from a local WESCo (Albany)) office. The breakers were purchased under STs purchase order (PO 4800080, connercial grade. $Ts' PO to WESCo Albany stated ' Absolutely No Substitutions. All New Breakers."

Af ter receipt at STs the breakers were subTected to a delication program described in Test Report No. CTR880050 which had previously been approved by PECO as an acceptable means for showing the breakers woulc be qualified for use-in safety related applicatiuns.

The STs dedication program consisted of an-infrared spectrophoto-metric analysis performed on a cample of c3e of asch of the three types of breakers, a similarity analysis perfonned on four different breakers, and an acceptar.ce ter.t perfonned on numerous samples of each type and size of breaker.

The spectrophotometric analysis was performed by Schenectady Materials and Process Laboratory, Inc., and the results are 4

described in their laboratory report No. 382-0056, dated May 25, 1980.

In this: analysis, three of the breakers procured by $Ts were completely disassembled with the parts then undergoing spectrophotonetric analysis. The results obtained were then compared to the material list taken from the Westinghouse test report for the originally quellfied Peach Bottom breakers. No significant differences were noted in the materials-of the new 4

versus those of the original breakers.

The similarity analysis was perforved by W. R. Andrews Materials-Characterization Laboratory in-Scotia, New York, and is detailed in their test report No, MCL88511 dated May 17, 1988. -The 121

.- s.. m.

. _ _ _ a _ a. _ _ _. _,

..~

mm.

..m_________-

ORGAN!ZATION: '5PECTRUM TECHNOLOGIES USA. INC.

SCHENECTODY. NEW YORX REPOP.T INSPECTION NO.: 99901119/88 01 RESULTS:

PAGE 4 of 5 similarity analysis consisted of a series of five tests and inspections performed on four of the $Ts breakers in addition to four similar original breakers sur;, lied by Peach Bottom.

The tests and inspection included a switching force check, an 1

external examination, a weight check, an outside dimensional check, and an internal examination. No significant differences i

were noted in the results 1,btained from the Atw versus the

-original breakers.-

The acceptance test was conducted by the General Electric Laboratory in Fthenectady. New York, in accordance with $Ts Test Procedure No. AP8800050/1. - During this test all breakers were subjected to en incoming inspection and sample breakers of each

-type and size were subjected to a mechanical check and a full load current temperature rise check. The test plan called for doubling the sample size and then for 100 percent testing if any i

~ failures were noted. Two of the types and sizes failed which necessitated 100 percent testing. A total of 15 of the 250 breakers were rejected by STs. Most of the rejections were dae either to mechanical failures or to failure of the 100 percent current temperature test.

In adcition.to the similarity and acceptance test, credit was taken for the fact-that the subject breakers were affixed with U.L.

labels, thus indicating manufacture to a.U.L. approved program. The inspactor pointed out that credit can only be taken for a manufac.

turing program'(including U.L.) if traceability to that manufacture

can be obtained..For the breakers in question, certifications had been obtained from WESCo Albany to the STs PD and to the fact that the subject breakers comply with the applicable U.L. and Westing-house standards. However..the validity of these certificates of co,npliance had not.been established by STs. Without verifying the validity of the'sa certifications, credit cannot.be taken for the l

U.L. program, honco'formance 88 01 01 15 cited in Se" inn 8 of -

this report as a reselt of STs failure to verify the lity of the WESCo Certificates cf Conformanca.

l In summary.--the STs dedication program for the Peach wottom breakers assumed. but did not include, verification of traceability to the original manuf acturer and therefore credit could not be taken for the manufacturer's U.L. ratings. Without traceability to the cri-ginal manufacturer the testing performed by sis would be considered l-I

~

l 122

l ORGANIZATION:

SPECTRtH TECHNOLOGIES USA, INC.

SCHENECTODY NEW YORK REPORT INSPECTION NO.:

99901119/88-01 RESULTS:

PAGE 5 of 5 inadequate as a basis for dedication. The dedication progran.

would be inadequate due to the limited amount of testing performed (no thenna1, instantaneous, or interrupting tests) on only sample breakers which can not be tied to any specific manufacturing lot.

2.

Other $afety-Related Orders In addition to the Peach Bottom order, several other ordars were briefly reviewed. Purchase Order Q 0198795T from Toledo Edison was for three safe'ti-related micro switches. The switches were procured comercially from E. E. Taylor Company Inc. Albany, New York and then subjecteo to STs dedication program which included seismic testing perfonned by the Ontario Hydro Seismic Test Laboratory (OHSTL).

PO R0-88-03-27839 from Sacramento Municipal Utility District (5 MUD) was for 72 various overload heaters. The heaters were ordered safety-related and dedicated by STs who procured thern from the local WE5to in Albany. One of each type of heaters was seismically tested in addition to a current test that was performed on six of each type.

E.

Eyli MEETING At the conclusion of the inspection an exit meeting was held. The following people were in attendance:

hane Title Jeffrey B. Jacobson Lead Inspector, NRC Mm 511ko Reactor 1r:spector NRC Brij M. Bhartey President STs Dick re11eman Lead Auditor - STs Dr. Docaid J. Anthony Manager Market Developnent - STs Dr. W. R. Booser Manager QA - STs I

1 123

_-_- - = ________ _ -_

=

~

ORGAh!IATION: SPECTRUM TECHNOLOGIES USA, INC.

SCHENECTADY, NEW YORK REPORT IN5?ECT10ti INSPECT 10ti NO.: 99901319/89-01 OATE: 2/6-7/89 OH-51TE HOURS:

?O CORRESP0l4DEhCE ADDRESS: Mr. Brij M. Bhartey, President Spectrum Technologies USA, Inc.

133 Wall Street Schenectady, New York 12305 ORGANIZATIONAL CONTACT: Mr. Brij M. Bhartey, President 1ELEPH0 lit NUMBER *

(018) 382-0050 NUCLEAR INDUSTRY ACTIVITY: Sptetrum Technologies (ST) has supplied Class 1E spare and replacement electrical parts and ccmponents to the nuclear industry.

A551GNED !!iSPECTOP:

A/ /%A /

.M#/ /rp J.

Jf,/

4 Special Projects Inspection Section Date OTHERINSPECTOR(5):

),

k /$_

NCJe:AM U. Potapovs, Section Chiet, %P15

- 3.I t 4$

APPR0kE0 BY:

Date IHSPECTION BASES Ai4D SCOPE:

A.

BASES: Appendix B to 10 CFR Part 50 and 10 CFR Part 21 B.

SCOPE: This inspection was conducted to review activities relative to STS supply of replacement molded case circuit breakers to the Peach Bottom Nuclear Plant.

PLAUT SITE APPLICABILITY: Peach Bottom (50-171, 50 277) 124

l ORMNIZATION:

SPECTRUM TECHNOLOGIES USA, thC.

SCHENECTADY, NEW YORK w

REPORT lHSPECT10H N6.: 99901119f89-01 RE5UI.TS:

PAGE 2 of 3 A.

VIOLATIONS:

None 6.

N0ht0NFOPMNCC5:

Nont-C.

STATUS OF PREVIOUS INSPEITJON FINDINGS:

Not reviewed during this inspection.

D.

OTHER flNDINGS AND CO#ENTS:

This inspection was conducted to review Spectrum Technologies (ST) actions relative to their supply of replacement circuit breakers to the Peach Bottom Nuclear Plant. The circuit breakers beiy supplied were replacements for untraceable breakers areviously supplied to Peach Bottom as detailed in NRC Inspection leport 99901119/88-01.

Althoug'. these breakers were procured from the loc 61 Westinghouse Supply Company (WEsto), it was later determined that WEsto had ot,tained the breakers from suppliers that trade in surplus and refurbished equipment. A reinspection conducted by ST st the Peach Botton site confirmed the fact that several of the breakers indeed appeared to be refurbished equipment. As a result, ST agreed to replace all 254 circuit breakers with breakers whose traceability could be substantiated, liuring this inspection, ST's actions re16tive to their supply of these new purportedly traceable breakers were reviemid. As of the date of this inspection ST had supplied 171 of the 254 replacement breakers to Peach Bottom. Of these, 25 haa been supplied to ST by Westinghouse's Beaver manufacturing plant,138 had been supplied by Westinghouse's Spartanburg distribution center directly to ST, and B had been supplied by Westinghouse's Spartanburg distribution facility through WESCo Albany to ST. ST provided packing slips which demonstrated traceability to the above f acilities, in addition, ST performed an audit of the WESto Albany office as necessary to determine the adequacy of the controls in place at WESCo Albany for maintaining traceability to tne Westinghcase cir,tribution factitty.

ST has also changed their test program from that previously described in NRC Inspection Report 99901119/68-01. The test program norw includes an acceptance test on 100 percent of the breakers including a five cycle open and closing test at 100 percent of rated currert.

In addition, all breakers undergo receipt inspection where 16 specific inspections designed to detect refurbir.hed breakers are performed.

125

ORGANIZA110H: SPECTRUM TECHNOLOGIE5 USA, INC.

SCNENECTADY, NEW YORK REPORT INSPECTION NO.: 99901119/89 01 RESULTS:

PAGE 3 of 3 E.

EX1T MEETING Upon completion of the inspection an exit meeting was held. The following people were in attendance.

J U

NAME AFFILIATION Jeffrey B. Jacobson U.S.N.R.C Brij M. Bhartty President, Spectrum Technologies USA, Inc.

i l

,g 12G

l SYMOP$l$

of DC Investiastion In aid. March 19B8, the Pacific Gas & Electric Company (PEAE) tought thirty Square D ac1ded case circuit breakers for its Diablo ayon huclser Power Plant in Avila Beach, California. Subsequent testing tj Pile and Souare D indicated that the breakers were either used, rebuilt, or ' bogus.* Thereaf ter, litigation was initiated by Square D and other ananufacturers, including the Westinghouse Eltetric Corporation (VELCO), to halt the sale of refurbished breakers by several coe.panies in California.

On April 13, 1988, the Of fice of Inyt.stigations Region V (01:RV), initiated an investigation to identify the persons responsible for supplying deficient breakers tu Diablo Canyon. Part of the 01:PY investigation included the esecution of search warrants at several California bas *1 corporations. During these searches, reconditioned circuit breakers and cov e :rfeit labels bearing the 1cges of such cor.panies as WELCO, square D, and &#ntr 1 Electric were confiscated.

Ir, July 15BB, the NRC issued Infomation kotice kn. 88 46 entitled, ' Licensee Rep;rt cf Defective Refurbished Breakers.' This document addressed WRC's

' concerns about refurbished breakers and identified five west coest corporations, including the HLC Electric Supply Company (HLC), Baldwin Park, Califorr.ia, as involved in the sale of rebuilt brackers to the nuclear industry.

This investigation was initiated on August 3n,1988, by O! Region 1(01:RI),

to deterrine if any teployee of WELCO or the Westinghouse Ilectric Supply Coepany (WESCO) knowingly purchased vtconditioned circuit breakers anc resold then.as new to nuclear facilities. WESCO, which o perates approximately 250 Brar.ches nationside, is a Div*sion of WELCD. The headgaarters for both WELC0 and WESCO is in pittsburgh, Psasylvania. O!:RI was also requested to detertine the authenticity of a Certificate of Compliance (C0C) issued by WESCO. Ein.hurst, Illinoiss to the Dresden Nuclear Power Etation (OhF$),

Forris, Illinois, on Decte.ber 10, 1987. Additionally. 01 was sked to ascertain if WESCO ever furnished a false C0C with thi sale ci breakers to nuclear power plants.

NRC and WELC0 representatives inet in Pittsbergh in Septeder 19B8. WILCO headquarters personnel denied having knowledge that any Westinghouse personnel purchased or sold substandard circuit breakers to nuclest power plants. The errsident of WESCO said he was aware that cor. pates such as HLC purchased surplus breakers from various construction jobs around the cot.ntry. He o

disclosed that WESCO bought breakers from HLC and other California based supply houses but ceased doing so in June 1988. Howeve.r. he said be had no knowledge that WESCO ever supplied reconditioned WELCO breakers to the nuclear industry.

Inquiries et the DNPS, disclosed that one suspect breaker, which care frte HLC, was installed in a safety related part of the plant without ever being tested. When ordering the breakers, DNPS personnel seht along a blank C0C to be cocpleted at WiSCO Elrhurst. The Branch Administration Manager (EAM) at WESCO Elr.hurst, never tested the breakers that were acquired frca HLC in California. Nevertheless, the BAM issued COCs to ONPS on Dec mber 10, 1987.

127

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The SW said that he is else the Ouaitty Assuranci Manaper,Ne si6 tees est which is a te11steral title assiped to post BMs employed by wilco.

i COC: only stated that he tevid trace the breake'rd 14 MLC. The ferestigation,

disclosed that his issvarice of De aforsevntio6ed C0Cs titleted me provistens of 10 CFR Part il and est the deceents tentatMd no false btateevnte.

On September 2,1988. NRC tenducted en int.pectten at Spectrve Technolestes USA. Inc. [5TU). Schenectady. New York. 'the President of STU said nat in May 1988 he sold port than 250 breakers to the peach Botton kuclear Plant. Delta.

Pennsylvants. All of these branners were New York, who had acqvtred them from HLC. purchased by STU from WI5CO. Alban

-The President of 57U seid he requested new breakers fres WESCO. Albany, and asked for acceeponytes C0Cs.

An MC inspector suspected Det the signatures en the C0Cs prevised to STU by WISCO Albany, had been photocopied. The C0Cs carried a letterhead from WELCO Ashyllte. North Careltna. T>e VtLCO employees whose signatures were en

-the nuestioned Cots knew nothing abut uts sale of breakers to STU and testified that a blanke pre.stened C0C had been erested for enether purpose.

I A salesnan at btsCO. Albany, adattted that he pedvided il fabricated CDCs to STU and never tested the breater',. The salesmen said that he hand delivered sett of the fabricateJ C0Cs to !U but also sent several threvgh the mall.

The salest.an received a written <eprimand from WISCO that states in part.

.... you taproperly had prepered and employed a C0C regarding seided case strcutt breakers that were surplied by WESCO to Spectrum Technolestes in April ofthisyear[1968). Teu proceeded to' prepare the Certtf fcate even though the Westinghouse units in~evestion were swaplied by an outside vender, and the actual Certificate eeployet sas from the wrong Westinghouse division. This resulted in a sertout violetten of torporate standards and precedures since, eccording to the Certificateg the breakers in question toeplied with NEMA, UL and Westinghouse standards, when in fact.-Westinghosse no longer had control,.

custody. er knowledge of %etr care anf condition. Accordingly, such action rif ed customer relationf. problems as we11 as potential corporate Itablltty.'

t The foreer Manager at ESCO. Albany, stated est he knew that MLC dealt in reconditioned breakers., He else knew beforehand that the breakers acquired l:

from MLC for resale to $TU were going to a outlear power plant.

L The president of STV,, who worked for Wt1C0 for 14 yeart %new that VILC0 l

breakers are not vansfactured in North Carolina &nd 'a

-sonally acevainted -

edth Oe WELC0 sep1hyees whose stenatutes were on.the 4 CCCs.- In L

addition, the President of STU bought counterfstt wet *"

vaker labels free s

De WI5C0. Albany, salesman who had purchased nas from Lt.

The evidence gathared during this investigation indletates Oat the President of_ $TU Sold breaters to Peach lettom that he knew were reconditioned. He lied

• to WRC personnel in September 198A when he said that he did no bustness with 128

breakers came from HLC.' he Ifet 898tn n he sat ( he Ufd not knav the NLC. In Deember 1988 129

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UNITED STATES J

i NUCLEAR REGULATORY COMMISSION k(,k / f wasmNotoN p c ma

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August 5. 1991 Docket No. 99900404 EA 91-027 Hr. Gary H. Clark Executive Vice President Industries and Corporate Resources Westinghouse Electric Corporation 11 Stanvix Street Pittsburgh, Pennsylvania 15222

Dear Mr. Clark:

I am responding to Westinghouse's May 9, 1991, letter to the U.

S. Nuclear Regulatory Commiosion (NRC) which replied to our concerns related to the sale by Westinghouse Electric Supply Company (WESCO) of 250 commercial-grade molded-case circuit breakers to Spectrum Technologies USA, Incorporated (Spectrum).

In our April 10, 1991, letter we identified a serious concern related to WESCO's supply of commercial-grade equipment to Spectrum.

Although the purchase order from Spectrum to WESCO specifically required new circuit breakers and certificates of conformance (CoCs), WESCO purchased the circuit breakers from a subvendor that dealt main)y in reconditioned equipment and provided these reconditioned breakers to Spectrum with falsified CoCs that certified that the breakers were new equipment.

Our staff reviewed this situation and determined that WESCO willfully misled Spectrum, and, ultimately, the licensee and the NRC, concerning the quality of the circuit breakers supplied.

Your response indicated that Westinghouse has strengthened its corporate policy to require that dedication services be perfurned under the direction and supervision of the Energy Systems Business Unit and to require notices on commercial-grade products to ensure that customers are. mot misled in any way by documenta-tion for commercial-grade products.

In addition, WESCO will include notices in future proposals ano product literature stating that these products may not be suitable for *.me in nuclear plants and that published information should not be relied upon as the basiF fDr dedicating Commercial-grade products for use in nuclear safety-related applications.

In your response, you did not mention any sanctions or correc-tive training for the named individuals.

Please inform me of any actions taken by Westinghouse in regard to the named individuals.

We have reviewed your response and concluded that your program-matic corrective actions, if appropriately implomented, should prevent recurrence of the evnnts described.

Nevertheless, the significance of the circumstances involved in the supply of 130

Mr. Gary Clark 2

these circuit breakers has prompted us to issue an KBC inforna-tion notice to emphasize the importance of verifying traceability of equipment to the original equipment manufacturer and verifying the accuracy of subvendor certifications and to describe the circumstances of this case.

This information notice is also intended to alert licensees to the possibility that MCCBs pre-viously obtained from WESCO or Spectrur: may have been unqual-ified and subsequently dedicated for safety-related service without an adequate basis.

Therefore, the licensee's actions in response to NRC Bulletin 88-10, "Honconferming Holded-Case Circuit Breakers," may have been inadequate if they depsnde6 solely upon unverified vendor certifications to demonstrate the traccability of MCCBs to the circuit breaker manufacturer.

In accordance with 10 CFR 2.790 of the HBC's " Rules of Practice,"

s a copy of this letter will be placed in the NRC's Public bocument Room.

Sincerely, s'

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' brian K. Crimes, Director Division of Reacter Inspect on and Safeguards office of Nuclear Reactor Regulation O

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