ML20117P513

Ack Receipt of 850412 Response to Ltr Disputing Billed Amounts by NRC for OL Reviews.Requests That Due Date for Any Final Payment Be Extended for Reasonable Period of Time to Allow Issues to Be Resolved.Fee Paid

ML20117P513
Person / Time
Site:	Marble Hill
Issue date:	05/31/1985
From:	Shields S PSI ENERGY, INC. A/K/A PUBLIC SERVICE CO. OF INDIANA
To:	Miller W NRC OFFICE OF ADMINISTRATION (ADM)
References
NUDOCS 8506060475
Download: ML20117P513 (6)

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PUBLIC SERVICE f '. . . . ~b- )

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'Li S. W. Shields cS .e 6 ,

Senior Vice Presdent - C .

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Mr. William O. Miller, Chief $

License Fee Management Branch Q g, Office of Administration c.

U. S. Nuclear Regulatory Comission Washington, D.C. 20555

Dear Mr. Miller:

We are in receipt of your response dated April 12, 1985 to my letter dis-puting the billed amounts by the NRC for the operating license reviews of Marble Hill, Units 1 and 2.

With reference to our proposal that certain errors and questionable items noted during the Conpany's limited review be resolved in accordance with generally accepted auditing standards (e.g. a review of time reports to support payroll charges and a review of invoices to substantiate contractu-al costs), it should be noted such request is consistent with Ccmpany poli-cy practiced for verifying amounts billed under other cost reimbursable arrangements and it is our understanding, the audit approach is similar to that which the federal government requires of private businesses under sim-Ilar contractual arrangements. Through discussion with the Defense Con-tract Audit Agency'of the federal government, we have learned they require, at a minimum:

l. Contractual costs be fully supported by invoices (equivalent to your laboratory business letters) or otherwise disallow claim, and

2. Payroll charges be fully substantiated by time reports or supported by

.an effective system of internal controls to assure the accuracy beyond a reasonable doubt in transferring such records to sumary reports.

Surely, you must agree if a federal audit agency requires substantive doc-umentation prior to payment of an amount due in order to protect the gov-ernment's and taxpayers' interests, we should likewise expect to be r provided similar support from a government agency billing for services ren-dered, to provide reasonable assurance to our ratepayers the Ccmpany is l conscientiously protecting their interests. Your assertion that NRC i

8506060475 850531 PDR ADOCK 05000546 PDR g(

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records are not subject to audit is of little comfort to our over half a million:ratepayers and certainly suggests a double standard at a time when

- the Defense Department is actively seeking and securing various contrac-tors' records through the court system.

As such, we are herewith enclosing a check in the amount of $932,607 sub-

. ject to final resolution (pursuant to 10 CPR Section 15.31) of the follow-ing exceptions: l I. NOCEFAR REAC'!OR IEGUIATIONS (NRR)

A. Company auditors noted an inspector (P. O' Conner) charged 1691 and 80 hours9.259259e-4 days <br />0.0222 hours <br />1.322751e-4 weeks <br />3.044e-5 months <br /> to Marble Hill Units 1 and .2, respectively in 1983. . As past. experience indicates that inspectors normally work on 1-4 plants per year, such hours (approximately 98% of annual available hours) appear excessive. Amount withheld $35,000.' Additional adjustments to any final payment to be made unless reasonable explanation is provided.

B. During the review of NRR professional staff hours expended, our auditors noted the NRC had included 254 hours0.00294 days <br />0.0706 hours <br />4.199735e-4 weeks <br />9.6647e-5 months <br /> for " evaluation and Ol's (operating license) inspection work" performed after January 31, 1984. Per my letter dated January 18, 1984 to H. Denton, Director of NRR, PSI gave notice to the NBC it had suspended con-struction on Marble Hill and requested the NRC inspect only quality assurance programs applicable to retention of records and mainte-nance of material and equipment. Therefore, no operating license ins.pection was to be continued. Amount withheld $9,906.

C. During the review of NRR contractual costs, the Company's auditors noted the following:

1. $14,055 charge (NRC FIN B 2351) to Marble Hill Unit 1 was not supported by source documentation. After discussion with M.

Kaltman, an NRR representative, he-determined such cost was applicable to Three Mile Island (T.M.I.), not Marble Hill.

Subsequent to our auditors' work in your Bethesda,10, office, M. Kaltman regressed and forwarded to the auditors what was considered support for the charge as Marble Hill related instead of T.M.I.. However, upon review of such it was noted the documentation pertained to NRC FIN B 2357. No A m =nta-tion has been provided to date to substantiate FIN B 2351 as a Marble Hill charge. Amount withheld $14,055.

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2. -No supportingMn=rttation (i.e. laboratory business letters)

'was provided by NRR for contractual work (Marble Hill Unit 1) performed by Lawerence' Livermre National Laboratory (LINL-FIN-A 0413), pertaining to human factors control room audit reviews. Amount withheld $3,600.

-3. Contractual work billed to PSI performed;by Argonne National

' Laboratory -(ANL-FIN A .2309) . for Unit 2 assecaraent of power .

plant noise impact, was found to be applicable to Beaver Valley Unit 2 (per ANL business letter).- Amount withheld $539.

4. Business letters from Idaho' National Engineering Laboratory-(INEL-FIN A 6458) indicated February 1984 charges for Marble -

Hill Unit 1 totaled $102 ," credit". The NRC billed PSI $102 in error. Additionally, the atxlitors noted correspondence from INEL' indicated no charges applicable to Marble Hill Unit 1 for Novencer'1983. The NEC billed PSI $99 in error. (Note: '. Such

• charge das cpplicable to Limerick Unit 2.) Amount withheld

$204and$9j,respectively.

5. Contractual work perforaci by Pacific Northwest Laboratory

~(PNG-FIN B 2541) pertainlag to FSAR (Section 4.2 Fuel) review, replicated contractual, work performed on the Byron plant.

Accordingly, such contractual costs ($1700$ nit 1)' would not be considered necessary.or reasonably-incurred by the NBC on

-behalf of PSI. Amount m thheld $1,700.

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6. No supporting h"=ritatkn '(1.e. laboratory business letters) .

provided by NRR for contractual costs ($148,242) incurred prior s to October 1983. Anount withheld $148,242.

1 II. TNSPECTION AND ENRKDENPAEADQUARPERS (IEAQ)

' A. Detail time reports were unavailable'for our auditors' review due -

to NRC's policy of retaining time reports for only 3 months. We understand no supporting hnnarits exist to substantiate the com-puter report detailing hours charged to Marble Hill. While ori-ginal time reports to support billed hours would provide more definitive support for amounts billed, we do not wish to be unrea-sonable in this matter and are willing to rely.upon the NRC's i- , internal control system over the input / output process of payroll dr m-ts as described in your April 12, 1985 letter.

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III. INSPECTION AND ENE'OROMNP/ REGIONS (REGI0tE)

A. During our auditors' review of Regions' professional staff hours expended,.E. Greher IE M Q representative, provided the auditors-

-with conputer generated labor' schedules to substantiate the 14,257 hours0.00297 days <br />0.0714 hours <br />4.249339e-4 weeks <br />9.77885e-5 months <br /> billed for Marble Hill Units 1 and 2.(10,421.5 hrs. Anit 1, 3,835.5 hrs. A nit 2). Such schedule listed names and the type of

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inspection work performed by the NRC inspectors. Per reasonable .

ness testing of names / hours (on your couputer report) by conparing such to our Marble Hill site documents, the auditors noted the fol-lowing exceptions:

1. 52 hours6.018519e-4 days <br />0.0144 hours <br />8.597884e-5 weeks <br />1.9786e-5 months <br /> (26 hrs.Wnit 1, 26 hrs.Mnit 2) for W. Kropp during 1984. Our staff has no recollection or records of this NRC representative working on or at Marble Hill. Amount withheld-

$1,872.

2. 16 hours1.851852e-4 days <br />0.00444 hours <br />2.645503e-5 weeks <br />6.088e-6 months <br /> (8 hrs.Anit 1, 8 hrs.Anit 2) for J. Norton during 1984. It is our understanding these hours are applicable to investigation work on concrete allegations, and thus, not bill--

.able to PSI. Amount withheld $576.

3. 6 hours6.944444e-5 days <br />0.00167 hours <br />9.920635e-6 weeks <br />2.283e-6 months <br /> (Unit 2) for R. Strasma during 1979. R. Strasma worked in NRC/Public Relations, therefore, it is our position, his hours are not billable to PSI. Amount withheld $216.

4. 6 hours6.944444e-5 days <br />0.00167 hours <br />9.920635e-6 weeks <br />2.283e-6 months <br /> for J. Kepler~in 1979. J. Kepler.is the NBC Regional Administrator. According to NBC regulations and supported by discussions with NRC personnel,-the NRC hourly billing rates include administrative support (e.g. Regional Administrator) or clerical assistance. Amount withheld $216.

~ IV. ADVISORY OOPMrMEE ON REACIDR SAFEGERDS (ACRS)

- A. . Detail time sheets were unavailable for review due to the.NRC's policy as stated in II above. Again, we are willing to rely upon

' the internal control system described in your April 12, 1985 let-ter..

V. NUCLEAR MNIERIAIS SAFEGRRDS AND SECURITY (l@BS)

- A. _ During the review of professional staff ~ hours expended for NBES, the Company's auditors noted hours billed for D. Kasun (week ending

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5/19/84 - 4 hours4.62963e-5 days <br />0.00111 hours <br />6.613757e-6 weeks <br />1.522e-6 months <br />) occurred after the January 1984 cutoff date (per my letter dated January 18, 1984). Amount withheld $152.

Again, we are hopeful the disputed items can be mutually resolved as expe-ditiously as practical. ' We also request that the due date for any final payment be extended for a reasonable period of time to allow these issues to be resolved in accordance with Section 15.31(b).

'Please direct all correspondence or questions with respect to this issue to my attention. If you have any questions, please feel free to call.

Sincerely,

[

S. W. Shields sw Attachment oc: J. U. Bott J. W. Leonard L. A..Nicodemus J. R. Pope -

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MBLIC SERVICE IteIANA *--

AUDIT OF taJCLEAR REGULATORY COP 9tISSION OPERATING LICENSE REVIEN COSTS APRIL 3,197810 JLME 23,1994 --LEAD SCHEDULE FACILITIES: NARSLE HILL 81 f. 82 l 00CKET N0'S.: 50-546 8 50-547 I i

NRC PROPOSAL COSTS PER PROFESSIONAL CHARGES NITH- CHARGES FOR ERRORS PSI AUDIT Pancamt OFFICE PROFESSIONAL STAFF-HOUR STAFF-HORAt CONTRACTUAL TOTAL DUT SUPPORTING REPLICATE Ate PROPOSED REVIEN STAFF-HOUR EXPENDED COSTS . COSTS COSTS DOCUt1ENTATION TYPE NORK EXCEPTIONS ANDUNT

$ $ 4. $ 9 $ $ $

NRR 39 10,389.0 405,172.00 <217,454.00 622,626.00 186,842.00 1,700.00 24,803.00 '409,281.00l, i IE-HG 36 119.0 4,284.00 4,284.00 4,284.00 l

l REEIONS 36 14,257.0 513,252.00 513,252.00 2.880.00 510,372.00 l

ACRS 50 86.0 4,300.00 4,300.00 4,300.00 letSS 38 119.0~ 4,522.00 4,522.00 152.00 4,370.00 TOTAL 24,970.0 931,530.00 217.454.00 1,148,964.00 186,842.00 1,700.00 27.835.00 932,607.00. j samassassass== sessassamass== sassassassamma saamassamass== sssssssssssss== ====sssssssssa ass ==sssssss== ==sssssssssssa

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