ML20147H900
| ML20147H900 | |
| Person / Time | |
|---|---|
| Site: | Millstone  |
| Issue date: | 04/07/1997 |
| From: | Travers W NRC (Affiliation Not Assigned) |
| To: | Kenyon B NORTHEAST NUCLEAR ENERGY CO. |
| References | |
| NUDOCS 9704100016 | |
| Download: ML20147H900 (18) | |
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- NUCLEAR REGULATORY COMMISSION WASHINGTON D.C. 30MHSM
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April 7, 1997 i
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Mr. Bruce D. H nnyon President and Chief Executive Officer -
Northeast Nuclear Energy Company:
P.O.' Box 128 Waterford, CT 06385-0128
Dear Mr. Kenyon:
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- This letter provides conditional approval of your proposed contractor, Sargent & Lundy (S&L),
for the conduct of the Millstone Units 1 and 3 Independent Corrective Action Verification Program (iCAVP), pending completlon and submittal of the enclosed certifications of financial
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- independence by is&L and the Licensee's corporate offic!als. On the basis of the information i
provided in your submittals of December 18,1996, January 15, February 21, and March 26,
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1997, and the discussions at the meetings of February 5 and W:a 18,1997, we have ' _
concluded that S&L has the technical expertise and nuclear design experience necessary to I
conduct the ICAVP review at Millstone Units 1 and 3. We have also concluded that S&L is J
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'sufficiently independent of the Licensee and its design contractors for the conduct of the ICAVP.
Concems were raised by the Nuclear Energy Advisory Council ('NEAC) for the State of Connecticut and by members of the public on the independence of the contractor. The NRC has chosen to adopt a practical standard of independence between the ICAVP contractor and l.
the Licensee. In making our determination, we balanced the need to ensure adequate financial 4
ir> dependence with the need to ensure that the contractor had the necessary skills and experience to effectively conduct the ICAVP. We found that S&L was sufficiently independent j
l from the design and operation of Millstone Units 1 and 3 in that it has not been involved in f
design activities that would affect its ability to perform the ICAVP, with the following exceptions:
(1) seismic qualifications, specifications, standards, and procedures for Millstone Unit 1 and (2) i interactions between nonseismic Category 2 systems and seismic Category 1 safety systems at Millstone Unit 3. On the basis of our review of the information submitted, we find that these two L
areas represent a conflict of interest and shall not be reviewed by S&L during the ICAVP. If review of these areas is necessary during performance of the ICAVP, it shall be handled by a party other than S&L.
Regartling S&L's financial independence from the Licensee, we found sufficient independence ~
in that, nrganizationally, S&L, its subsidiaries, its Retirement Plan, and its Savings investment
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Plan do not directly own any Licensee stock, bonds, or other financial instruments issued by l
' Northeast Utilities (NU), Northeast Nuclear Energy Company (NNECO), or other entities named l
g on the Millstone Units 1 and 3 operating licenses. In addition, each of the proposed ICAVP L
team members will be required to fovide a written statement regarding conflict of interests that includes financialinterests, p
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Mr. Bruce D. K:nyon 2
As previously described, we have concluded that S&L has sufficient technical and financial independence to conduct an objective review. However, this approval is conditioned upon the submittal of the enclosed certifications of financialindependence by the corporate officials of the NNECO and S&L (Enclosure 1). A detailed discussion of the basis for our approvalis provided in Enclosure 2.
To ensure the continued independence of the ICAVP team, a communication protocol will be established as part of the contractor's audit plan. This protocol shallinclude the reporting procedures discussed in the Confirmatory Order of August 14,1996. The staff will approve the protocol after discussions with the contractor during the staffs review of the audit plan.
As we discusse ; in our letter of January 13,1997, and subsequent meeting on February 5, 1997, we will withhold final approval of individual team members until completion of our interviews in conjunction with our review of the proposed audit plan. The staff will conduct interviews with each team member to verify that he or she is technically and financially independent and to determine whether the member's technical qualifications and experience are consistent with his or her assigned role as defined in the audit plan. In addition, we request that all team members complete the enclosed Conflict-of-Interest Statement to document their financial and technical independence (Enclosure 3). These statements will be collected from S&L when the NRC staff conducts the interviews.
Please contact Eugene Imbro at (301) 415-1490 if you need any additional information or clarification of the enclosures.
Sincerely,
. riginal Signed q.
O William D. Travers, Director Special Projects Office Office of Nuclear Reactor Regulation
Enclosures:
- 1. Certification of Financialindependence
- 2. Results of the Staffs Review of the Proposed ICAVP Contractor for Millstone Units 1 and 3
- 3. Conflict-of-interest Statement Distribution:
Doc ~ket File /PUBLIC PMcKee SDembek SPO R/F WLanning DMcDonald SCollins JAnderson DOCUMENT N.AME:A:Kenyon (6.1)(see previous concurrence)
To receive a copy of this document, Indicate in the box "C" copy w/o attach /enci"E" copy wlattach/enci"N" no copy OFFICE SPO:
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NAME JNakoskilsr LBerry BCalure CMarco Elmbro @ WTravers DATE 4 / 2 197*
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OFFICIAL RECORD COPY
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o Mr.' Bruce D. Kenyon 2
As previously described, we have concluded that S&L has sufficient technical and financial independence to conduct an objective review. However, this approval is conditioned upon the
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submittal of the enclosed certifications of financialindependence by fhe corporate officials of the j
NNECO and S&L (Enclosure 1). A detailed discussion of the basis for our approval is provided in
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1 To ensure the continued independence of the ICAVP team, a c/
ommunication protocolwill be established as part of the contractors audit plan. This protoc61 shall include the reporting i
procedures discussed in the Confirmatory Order of August 14,1996. The staff will approve the l
protocol after discussions with the contractor during the st a review of the audit plan.
As we discussed in our letter of January 13,1997, and s. bsequent meeting on February 5,1997, we will withhold final approval of I..dividual team membaIrs until completion of our interviews in i
conjunction with our reviet;of the proposed audit pla / The staff will conduct. interviews with each team member to verify that they are technically nd financially independent and to determine whether the member's technical qualifi ions and experience are consistent with their i
i assigned role as defined in the audit plan in addi on, we request that each team member complete the enclosed Conflict-of-Interest State ont to document their financial and technical independence (Enclosure 3). These statement will be collected from S&L when the staff i
conducts the interviews.
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Please contact Eugene Imbro at (301) 415-490 if you need any additional information or f
clarification of the enclosures.
i Sincerely, William D. Travers, Director i
Special Projects Office j
Office of Nuclear Reactor Regulation
Enclosures:
1 Certification of FinancialIr
- 2. Results of the Staff's Rev'} ependence of the Proposed j
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ICAVP Contractor for Mi stone Units 1 and 3 t
3.- Conflict-of-Interest Stat ment l
Distribution-Docket File /PUBLIC PMcKee SDembek SPO R/F WLanning DMcDonald SCollins JAnderson i
DOCUMENT NAME:A:Kenyon (6.1) (see previous concurrence)
To receive a copy of this document, indicate in the box "C" copy w/o attachtenci "E" copy wlattachtenct "N" no
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OFFICE SPO:
N LA C
Tech Ed N
OG DD:lCAVP D:SPO D:NRR ICAVP-Ai clLA l
NAME JNakoskilar LBorry BCalure C
b0 Elmbro WTravers SCollins l
DATE 4 / 2197*
4 / 219P 4 / 219P Ylh/97
/ 19 7
/ 19 7
/ /97 OFFICIAL RECORD COPY l
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Mr. Bruce D. Ktnyon 2
As previously described, we have concluded that S&L has sufficient technical and financial l
independence to conduct an objective review. However, this approval is conditioned upon the submittal of the enclosed certifications of financialindependence by the corporate officials of the NNECO and S&L (Enclosure 1). A detailed discussion of the basis for our approvalis provided in Enclosure 2.-
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I To ensure the continued independence of the ICAVP team, a commun' ~ tion protocol will be established as part of the contractor's audit plan. This protocol shall clude the reporting procedures discussed in the Confirmatory Order of August 14,1996. The staff will approve the 1
j protocol after discussions with the contractor during the staff's re Aw of the audit plan.
l As we discussed in our letter of January 13,1997, and subse90ent meeting on February 5,.
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1997, we will withhold final approval of individual team members until completion of our j
interviews in conjunction with our review of the proposed addit plan. The staff will conduct interviews with each team member to verify that they are,t'echnically and financially independent and to determine whether the member's technical qualifications and experience are consistent with their assigned role as defined in the audit plan. In' addition, we request that each team l
member complete the enclosed Conflict-of-InterestJStatement to document their financia! and technical independence (Enclosure 3). These statements will be collected from S&L when the i
staff conducts the interviews.
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i Please contact Eugene Imbro at (301) 415-1 90 i' you need any additional information or i
i clarification of the enclosures.
Sincerely, i
William D. Travers, Director l
Special Projects Office i
Office of Nuclear Reactor Regulation i
Enclosures:
J
- 1. Certification of FinancialIndependence l
- 2. Results of the Staff's Review of the Proposed j
ICAVP Contractor for Millstone Units 1 and 3
- 3. Conflict-of-interest Statement 1
Distribution-i Docket File /PUBLIC PMcKee SDembek SPO R/F WLanning DMcDonald SCollins JAnderson DOCUMENT NAME:A:Kenyon (6.1)(see previous concurrence)
To receive a copy of this document, indicate in the box "C" copy Wo attach /enct "E" copy Wattachtenci "N" no l
copy OFFICE SPO:
N LA Q Tech Ed DD:lCAVP D:SPO D:NRR l
lCAVPAM k
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m NAME JNakoskilar J. Berry BCalure Elmbro WTravers SCollins DATE M/97
/97 4 / 2197*
//97
/197
/ /97 OFFICIAL RECORD COPY
Mr. Bruce D. KGnyon 3
William D. Travers, Director Special Projects Office Office of Nuclear Reactor Regulation e
Enclosures:
- 1. Certification of FinancialIndependence
- 2. Results of Staff Review of Proposed
-p lCAVP Contractor for Millstone Units 1 and 3
- 3. Conflict of Interest Statement
/
/
/
Distribution:
Docket File /PUBLIC P Kee SDembek SPO R/F WLan ng DMcDonald SCollins J derson DOCUMENT NAME:A: Ken n04.wS1 To receive a copy o,1 is document indicate in the box "C" copy w/o attach /enci "E" copy w/ attach / encl "N" no copy 0FFICE SP0:ICAVP N
LA Te,ch Ed M
DD:ICAVP D:SP0 D:NRR NAME JNakoski/sr LBerry
[habiN EImbro Wiravers SCollins DATE
/ /97
/ /97 Y // /97
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/ /97 0FFICIAL RECORD COPY Cs, fv I
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Certification of Financial Independence I,
. being first duly swom, depose and state:
That I am Presdont, Sargent & Lundy (the Contractor).
That I am authorized to provide the following certification on behalf of the Contractor to the U. S. Nuclear Regulatory Commission.
l That the Contractor does not own stock, bonds, or other financial instruments issued by Northeast Utilities or its subsidiaries, the organizations that performed the original design for Millstone Units 1 and 3, the suppliers of the nuclear steam supply systems for the Units 1 and 3 and other entities named on the operating licenses for Units 1 and 3.
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i Certification of Financialindependence 1, Bruce D. Kenyon, being first duly swom, depose and state:
That I am President and Chief Executive Officer, Northeast Nuclear Energy Company (the Licensee).
That I am authorized to provide the following certification on behalf of the Licensee to the U. S.
Nuclear Regulatory Commission.
That the Northeast Nuclear Energy Company and the other co-license holders for Millstone Units 1 and 3 do not own stock, bonds, or other financial instruments issued by Sargent &
Lundy or its subsidiaries.
Bruce D. Kenyon President and Chief Executive Officer J
Date 4
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RESULTS OF THE STAFF'S REVIEW OF THE PROPOSED l'
ICAVP CONTRACTOR FOR MILLSTONE UNITS 1 AND 3 '
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INTRODUCTION l
On August 14,1996, the U. S. Nuclear Regulatory Commission (NRC) issued a Confirmatory Order to Northeast Nuclear Energy Company (NNECO, or Licensee) requiring completion of an independent Corrective Action Verification Program (ICAVP) before the restart of any Millstone 1
unit. The order directs the Licensee to obtain the services of an organization independent of the Licensee and its design contractors to conduct a multidisciplinary review of Millstone l
- Units 1,2, and 3.
l The purpose of the ICAVP, as stated in the Confirmatory Order, is to confirm that the plant's physical and functional characteristics are in conformance with its licensing and design bases.
The ICAVP audit required by the NRC is expected to provide independent verification, beyond l
the Licensee's quality assurance and management oversight, that the Licensee has identified l
and satisfactorily resolved existing nonconformances with the design and licensing bases; documented and utilized the licensing and design bases to resolve nonconformances; and established programs, processes, and procedures for effective configuration management in e
the future.
j BACKGROUND i
l The Licensee submitted information regarding the proposed selection of Sargent & Lundy (S&L) as the contractor for the Unit 3 ICAVP on December 18,1996. The submittalincluded the principal criteria used in evaluating the contractor bids, a discussion of the methodology used in the bid selection process, program elements to be covered by the ICAVP scope, and guidelines for the communication protocol. The submittal also included resumes of the proposed ICAVP team members. In its submittal, the Licensee stated that S&L is financially and organizationally e
independent of Northeast Utilities (NU) and its co-license holders, and its subsidiaries, and the
' design contractors for the Millstone unitt. Additions and corrections to the proposal were subm'itted on January 8, February 21, and March 26,1997.
The Licensee submitted the proposed selection of S&L as the contractor for the Unit 1 ICAVP on January 15,1997. This submittal included additional resumes for proposed team member substitutes.
On February 5,1997, the staff held a public meeting with the Licensee to discuss the contractor 4
selection process and to respond to staff questions that were provided to the Licensee by letter on January 13,1997. The staff also held an evening meeting with the public on February 5, 1997, to obtain comments regarding the proposed contractor.
-- On February 21,1997, the Licensee submitted additional information regarding the proposed selection to respond to questions'and comments from the meeting on February 5,1997. The submittal included responses to NRC questions regarding the financial independence of S&L, previous work performed by S&L for the Licensee, restrictions on future work for the Licensee, 1
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ICAVP team member substitution, S&L's differing professional opinion process, quality assurance program requirements, the ICAVP organization, and ICAVP staffing and experience levels.
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During the staff's evaluation of the submitted information, the staff raised additional questions regarding the financialindependence of S&L. On March 12,1997, the NRC requected that the Licensee provide additional information regarding the financial holdings of S&L's retirement plan j
and restrictions on S&L from performing future work for the Licensee. On March 26,1997, the Licensee submitted additional information regarding these issues.
STAFF EVALUATION The staff conducted a review of the information submitted by the Licensee regarding the i
proposed contractor, S&L, to ensure that the contractor selected to perform the ICAVP is j
technically and financially independent of the Licensee and its design contractors, and l
technically capable of effectively performing the ICAVP.
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To complete this task, the NRC's ICAVP oversight staff performed the following activities:
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Evaluated whether the proposed contractor has any financial interest or had any l
technicalinvolvement with the design or construction of the subject Millstone units.
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Evaluated whether the proposed contractor has adequate technical and managerial qualifications to conduct the ICAVP.
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Evaluated whether the proposed specialists have the appropriate technical background to participate in the ICAVP. The evaluation included a preliminary review of individual team member resumes, i
1 The staff will conduct interviews with each team member during review of the audit plan. This
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effort will also confirm that the individual specialists have no financial interests in NU or other entities named on the operating license, the nuclear steam supply system (NSSS) vendor, or l
the architect-engineer (AE) for the subject Millstone unit by means of a Conflict-of-interest 1
Statement. In addition, the statement will require the team members to confirm that they have l
had no prior technical involvement with the subject Millstone unit.
i DISCUSSION l
- 1. Company's Technical Experience As stated in the Confirmatory Order of August 14,1996, the Licensee was directed to obtain
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j' the services of an organization, independent of the Licensee and its design contractors, to conduct a multidisciplinary review of the Millstone units. The purpose of the ICAVP is to verify the adequacy of the Licensee's efforts to establish adequate design bases and design controls, including translation of the design bases into operating procedures, maintenance procedures and testing practices; verification of system performance; and implementation of modifications j
since issuance of the initial f d!ity operating licenses. The review must be comprehens?ve and 2
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I incorporate appropriate engineering disciplines so that the NRC can be confident that the Licensee has been thorough in identifying and resolving problems. Therefore, the contractor must have sufficient breadth and depth of technical experience in nuclear power plant design requirements to perform an adequate review.
l The Licensee's submittal states that proposed contractor S&L has corporate experience that includes the design of 13 boiling-water reactors (BWR) and 14 pressurized-water reactors (PWR). For example, S&L was the AE for Braidwood (PWR), Byron (PWR), Clinton (BWR),
l Dresden (BWR), Fermi (BWR), LaSalle (BWR), Quad Cities (BWR), and Zion (PWR).
l On the basis of the staffs review of the resumes in the proposal, it appears that, in general, the l
engineering disciplines needed for the review are being provided by the contractor. Some of the proposed team members have expertise in several areas. The 37 proposed team members possess adequate expertise in the areas of mechanical engineering, electrical engineering, l
civil / structural engineering, nuclear engineering, instrumentation and control engineering or design, reactor plant operations, and probabilistic risk assessment. The NRC will give its final approval of the S&L proposed team members following interviews conducted in conjunction with NRC review of the ICAVP audit plan.
The staff has previously reviewed a similar independent design review conducted by S&L. A S&L vertical slice review (VSR) was performed in 1988 and 1989 at Watts Bar Nuclear Plant.
The VSR provided an independent, systematic, structured, and comprehensive evaluation of the adequacy of the design and construction of Watts Bar structures, systems, and components. The VSR reviewed the component cooling and emergency auxiliary power systems. The VSR also compared licensing requirements and design-basis documents with design output documents (e.g., drawings and construction specifications) and with installed hardware and associated quality records. The VSR was conducted in accordance with a formal plan that the NRC had reviewed. The VSR identified approximately 500 discrepancies. An NRC team inspected the VSR effort and the results were documented in Inspection Reports 50-390/88-09 (February 27,1989) and 50-390/89-02 (May 2,1989). The team inspections found that the VSR review performed by S&L was thorough and adequate. A summary of the NRC inspection of the VSR is provided in NUREG-0847, Supplement No.17, " Safety Evaluation Report related to the operation of Watts Bar Nuclear Plant, Units 1 and 2," dated October 1995.
In addition, S&L performed a review similar to the proposed ICAVP on the Hope Creek facility i
as part of the independent Design Verification Program (IDVP) requested by the NRC prior to the issuance of the facility's initial operating license. A summary of this effort, which was t
performed with direct NRC inspection oversight, is contained in NUREG-1048, Supplement 5, i
" Safety Evaluation Report related to the Operation of Hope Creek Generating Station," dated April 1986.
S&L has recently been selected as an NRC contractor to conduct similar design-related inspections at nuclear power facilities. This competitive selection provides additional justification to conclude that this organization has the technical experience to conduct the ICAVP, (Details of the contract between NRC and S&L are provided in Section 6 below.)
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l On the basis of the inSrmation in the Licensee's submittals and the staffs previous experience with S&L, the staff concluded that the proposed contractor has the technical expertise and experience to conduct this complex, multidisciplinary review.
- 2. Company's TechnicalIndependence During the selection process, the Licensee established an essential criterion that the supplier must be independent of NU and its design contractors. The Licensee's submittal states that i
S&L was not involved in the original design of any of the Millstone units. The staffs review of 1
NRC records indicates that S&L was not the AE for any Millstone unit. The AEs for the Millstone units were as follows:
i Millstone Unit 1 Ebasco i
Millstone Unit 2 Bechtel l
Millstone Unit 3 Stone & Webster The Licensee's submittal also states that S&L has received approximately $707,000 in revenues from the Licensee in the past 10 years. The staff requested additional details regarding the work performed by S&L to determine whether a potential conflict exists.
The Licensee provided additional details at the meeting of February 5,1997, regarding the contractor's work activities at Millstone as a primary contractor or as a subcontractor. The staff reviewed the summary of the work performed by S&L and found several areas of potential conflict. In 1986, S&L assisted the Licensee in developing seismic qualifications, specifications,
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standards, and procedures for Millstone Unit 1. In addition, in 1985, S&L conducted an analytical study regarding interaction between nonseismic Category 2 systems and seismic Category 1 safety systems at Millstone Unit 3. S&L has also performed work pertaining to a i
standardized fuse control process and life cycle management. To address these potential areas of conflict, the staff requested that the Licensee provide the specific actions that would be taken if ICAVP audit plan activities resulted in the need to review the adequacy of previous S&L work. In the Licensee's submittal of February 21,1997, the Licensee stated that prior involvement of S&L would be handled on a case-by-case basis, and that the NRC's ICAVP oversight team would be notified of the circumstances of the involvement and how each case would be handled before proceeding with the work.
The staff concluded that, in general, the case-by-case approach would be acceptable. The staff found that S&L's work pertaining to the standardized fuse control process and life cycle management does not affect its ability to perform the ICAVP. However, because of the involvement of S&L in the development of the seismic qualifications, specifications, standards, and procedures for Millstone Unit 1, and its involvement in an analytical study regarding interaction between nonseismic Category 2 systems and seismic Category 1 safety systems at i
Millstone Unit 3, S&L shall be excluded from conducting reviews of these two areas during its
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performance of the ICAVP at the respective Millstone units.
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- 3. Company's FinancialIndependence 4
To effectively balance the need to have an organization that has the required technical capabilities to perform the ICAVP with the need for that organization to have adequate financial and technical independence, the NRC has chosen to adopt a practical standard of i
independence between the ICAVP contractor and the Licensee. This standard recognized that relatively few organizations have the necessary technical capabilities to perform the ICAVP, and allowed NNECO sufficient latitude to propose for NRC approval, a contractor that has the requisite experience and capabilities to conduct a credible technical review as set forth in the Confirmatory Order issued by the NRC on August 14,1996. The financialindependence criteria discussed by the NRC staff with NNECO at a publicly held meeting on September 24, 1996, stated that (1) the proposed contractor should have no ownership interest in NU, and (2) the proposed contractor should have no current involvement with the unit being reviewed.
4 The Confirmatory Order of August 14,1996, directs the Licensee to obtain the services of an i
organization independent of the Licensee and design contractors. The Licensee stated in its submittal that S&L did not own or control Lice,nsee stock and had no financial interest in the 2
Licensee, any of its subsidiaries, or its design contractors. The Licensee's submittal on 1
February 21,.1997, included a " Certification of Ownership Interests" in which S&L affirmed that it and its subsidiaries did not hold, directly or indirectly, stock or other ownership interests in any l
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of the entities listed on the Units 1 and 3 operating licenses, the respective NSSS vendors j
(General Electric and Westinghouse) or the respective original AE organizations (Ebasco, now owned by Raytheon, and Stone & Webster). The " Certification of Ownership Interests" also stated that although S&L had no ownership interest as indicated above, its Retirement Plan and Savings investment Plan (including its 401(k) plan) may have direct or indirect ownership interests in one or more of the entities previously discussed. However, the investments made by the Retirement Plan were made through a Trust Fund and S&L did not participate directly in the selection of individual securities in which the Trust Fund invests. The staff requested further information on both the Retirement Plan and the Savings investment Plan. A summary of holdings of the Retirement Plan dated February 28,1997, indicated no ownership interest in l
any of the above-mentioned entities. The investment options from which employees participating in the Savings investment Plan can select were provided, along with prospectuses, i
The staff reviewed these items and concluded that the investment options are managed independent of S&L and each individual investment option is widely diversified. Therefore, the staff finds S&L to be sufficiently financially independent of the Licensee and design contractors l
to conduct the ICAVP required by the Confirmatory Order.
The other criterion for independence discussed by the staff at the meeting of September 24, 1996, was that the proposed ICAVP contractor should have no current involvement with the Licensee at the unit being reviewed. S&L had no current involvement with either Units 1 or 3 before it was proposed by NNECO as the ICAVP contractor. In addition to the NRC criterion, the Licensee further restricted the selection of a contractor to one that had limited past involvement with NNECO. The Licensee's submittal stated that while S&L has annual revenues t-of more than $200 million, it had only received approximately $700,000 in revenues from the
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Licensee over the past 10 years. The Licensee concluded that these small revenues in comparison to the annual revenues of S&L did not comprise a sufficient financial interest on which to question the objectivity of the contractor. The staff agrees with this conclusion.
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The Licensee's submittal stated that S&L did not provide for any restrictions on future work at j
Millstone. To ensure an objective review, the staff requested that the Licensee further discuss restrictions on future work. At the meeting of February 5,1997, the Licensee stated that the contract will preclude any future S&L work within 6 months of completion of the ICAVP to resolve discrepancies identified in the ICAVP review. Although this course of action would I
impose some restrictions, the staff requested that the Licensee review the proposal. The staff was concerned that followup work, even 6 months after completion of the ICAVP, could call into j
question the objectivity of the ICAVP review. During subsequent discussions, the Licensee agreed to a 12-month restriction on future work for S&L at all NU facilities. These discussions were the subject of a followup letter dated March 12,1997. The Licensee's response dated March 26,1997, stated that S&L will be restricted from performing or seeking new work at any
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NU facility for the duration of the ICAVP contract and that S&L will not seek work at any NU facility for 12 months following the completion of the ICAVP project for Millstone Units 1 and 3.
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This restriction is similar to that imposed by the NRC on its contractors. Therefore, the staff l
finds this restriction acceptable.
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- 4. Technical Experience of Team Members As previously stated, the staff's review found that.the appropriate technical disciplines are being l
provided by the contractor. However, the staff intends to review each resume in detail and to i
conduct interviews of each proposed member at a later date. The resume review and i
l interviews will be conducted concurrent with the staffs review of the proposed audit plan and i
team structure. This separate review and approval is necessary so that the NRC staff can evaluate the adequacy of each team member's expertise and experience, with an I
understanding of the specific tasks that the ICAVP team members will perform during the review.
The Licensee's submittal states that S&L's proposal did not discuss a plan for possible substitution of team members. The submittal also states that the need for a stated position l
regarding substitution of project team members will be factored into the contract award so that new members and substitutions will be made using an approved process. The staff requested th::t thl:: !ssue be discussed further at the meeting of February 5,1997. At that meeting, the Licensee stated that the S&L procedure for substituting personne'l would be provided to the NRC for approval. The procedure for substitution of personnel will be reviewed and approved during NRC's review and approval of the audit plan.
- 5. Technical and Financial Independence of Team Members The Confirmatory Order of August 14,1996, states that in evaluating the independence of each team member, the factors the NRC staff will consider include, but are not limited to, whether the 4
i individual has had prior involvement in design reviews for the Licensee and whether the individual has any financial interest in the Licensee. The Licensee's submittal stated that all proposed team members had been screened to ensure that they have no prior involvement with design reviews for the Licensee.
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i The staff reviewed the resumes provided by the Licensee to verify that the proposed team members have not had prior involvement in design reviews at Millstone. On the basis of a -
preliminary review of the resumes, the staff determined that none of the proposed team members had prior involvement in the design, design reviews, operation, testing, or maintenance of Millstone Units 1 and 3.
As discussed at the meeting on February 5,1997, and in an earlier letter of January 13,1997, the staff will withhold final approval of the individual team members until completion of individual interviews and review of the proposed audit plan._ The staff will conduct interviews of all team members to verify that they are technically and financially independent, and to datermine 5
whether the members' technical qualifications and experience are compatible with their assigned roles as defined in the audit plan. In addition, the staff will request tnat all team members complete a Conflict-of-Interest Statement to document their financial and technical independence. These statements will be collected from S&L when the staff conducts the interviews.
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- 6. Public Comments l
The Nuclear Energy Advisory Council (NEAC) and the public have expressed concems, i
regarding the independence and objectivity of S&L, at meetings held by the NRC with the public and at meetings of the NEAC at which the NRC has been asked to participate. These 4
comments can be grouped into several categories: (1) S&L derives a substantial portion of its i
income from the nuclear industry, (2) the ICAVP contractor will be selected and paid by the i
Licensee, (3) S&L has been proposed by the Licensee to conduct the ICAVP at more than one unit, (4) S&L is currently under contract to the NRC to provide technical expertise in the conduct of design-related inspections, and (5) S&L has previously performed work at Millstone. The j
staff has considered and weighed these comments in its evaluation of S&L as the possible ICAVP contractor.
i The NRC staff has responded to these comments in the public forums previously noted and its responses are summarized as follows:
- a. S&L Involvement in the Nuclear Industry i
The review of the design of a commercial nuclear power plant and its operating procedures requires specialized knowledge of NRC regulatory guidance, design standards, and facility operation. This knowledge is held by those individuals and j
organizations that work in the commercial nuclear power generation industry. A review performed by individuals and organizations without this specialized knowledge would not give the NRC and the public a sufficient level of confidence that NNECO programs have been effective in identifying and correcting problems.
- b. S&L Payment by NNECO It is the responsibility of the Licensee to operate its facility in a safe manner, maintain the facility in compliance with its licensing bases, and identify and resolve any problems.
j Therefore, it is appropriate that the Licensee assume any cost associated with the i.
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' lCAVP. Further, the ICAVP process will impose rigid communication protocols to control the NNECO/S&L interaction, and it will be closely overseen by the NRC, with NEAC observing the NRC oversight function. These actions provide substantial assurance of an independent objective review by the contractor.
t
- c. Conduct of an ICAVP at Units 1 and 3 The conduct of an ICAVP by a single contractor at more than one unit does, in the view of some members of the public, create the perception of a biased outcome. However, as previously described, the staff is confident that the ICAVP process, including NRC 4
oversight, will provide substantial assurance that the review of each unit will be 1
thorough and of sufficient scope and depth to provide insights into the effectiveness of the Licensee's corrective action process.
I
- d. Current S&L Work for the NRC 4
The NRC awarded contract NRC-03-96-028 to S&L on October 1,1996. The total estimated cost for full performance of the contract is $1,845,431. The contract is for nuclear AE technical assistance for design inspections. Under this contract, S&L will provide a PWR team of five design specialists. These specialists will perform design inspections to assist the NRC in determining whether operating nuclear power plants meet their original design bases. The period of the contract is 2 years, beginning from l
October 1,1996, with two 1-year renewal options. The fact that S&L was selected by NRC to perform design reviews indicates that, in the staffs judgment, it is a technically i-capable organization.
The NRC contract restricts S&L, during the term of the contract, from entering into consulting or other contractual arrangements with a nuclear power plant to perform any work that results from the inspections. Since S&L has been selected by the Licensee to i
perform the ICAVP at Millstone Units 1 and 3, S&L will be restricted from participating in the NRC's design inspections of these units under NRC's contract NRC-03-96-028.
The ICAVP process was modeled after the IDVP required by the NRC of Licensees in the 1980s before the NRC would grant an initial operating license. The IDVP was not independent of the NRC but relied upon a design review conducted by a contractor j
independent of the original design organization and overseen by the NRC. Similarly, the ICAVP was not intended to establish independence from the NRC.
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- e. Prior Work by S&L at Millstone Proportional to its total annual revenue of $200 million, S&L has had minimal involvement with NNECO ($0.7 million over the preceding 10 years). This represents 0.035 percent of S&L's gross revenue during that 10-year period. Further, the NRC has restricted S&L from directly reviewing prior work or work performed under programs developed by S&L for the Licensee, for example, Unit 1 seismic qualification.
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- 7. Otherissues Differing Professional Opinions Because of the history of employee concerns issues at Millstone, the staff requested that the proposed contractor provide a description of the process used to handle differing professional opinions (DPO) that may arise among the staff performing the ICAVP. In its submittal of
' February 21,1997, the Licensee stated that the DPO process would include a step to notify the j
NRC of the initiation of a DPO and its resolution. In addition, the S&L process instruction covering the DPO process was included in the audit plan submitted for NRC's approval on March 19,1997. The NRC staff's review of the audit plan will include a review of the S&L process instruction covering the DPO process.
CONCLUSION
[
On the basis of the information provided in the Licensee's submittals of December 18,1996, January 15, February 21, and March 26,1997, and the discussions at the meetings of L
February 5,1997, and March 18,1997, the staff has concluded that S&L has the technical expertise and nuclear design experience necessary to conduct the ICAVP review at Millstone Units 1 and 3. In addition, the staff concluded that C&L has sufficient technical and financial f
independence to conduct an objective review but restricted S&L from performing reviews of (1) l seismic qualifications, specifications, standards, and procedures for Millstone Unit 1, and (2) interactions between nonseismic Category 2 systems and seismic Category 1 safety systems at Millstone Unit 3. However, this approvalis conditioned upon submittal of the certification of financialindependence by both a corporate official of the Licensee and S&L.
As discussed in a letter of January 13,1997, and subsequent meeting on February 5,1997, the staff will withhold final approval of the individual ICAVP team members untilit completes 3
individualinterviews and reviews the proposed audit plan.
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CONFLICT-OF-INTEREST STATEMENT MILLSTONE - Independent Corrective Action Verification Program (ICAVP)
Proposed Consultant Consultant's Employer l
I My participation in the Millstone Unit ICAVP [( ) does ( ) does not) involve situations or relationships in which I had dir:ct previous involvement with activities at the plant that I will be reviewing and I [( ) have ( ) do not have) conflicting roles that might bias my judgment in relation to my work on the ICAVP. In addition
- 1. () I have not been previously employed by Northeast Nuclear Energy Company (NNECO) or any 1
ofits predecessors.
() I have been previously employed by NNECO or some of its predecessors. (State the neture of the employment.)
2.'
() I have not previously provided design or engineering services to NNECO for the subject Millstone unit as a contractor or a subcontractor.
() I have previously provided design or engineering services to NNECO for the subject Millstone I
unit as a contractor or a subcontractor.
- 3. () I have no other business relations (member of NNECO's Board of Directors, member of an Offsite Review Committee, etc.) with NNECO for the subject Millstone unit that may create the appearance of a conflict ofinterest.
() I have other business relations with NNECO for the subject Millstone unit that may create the appearance of a conflict of interest.
- 4. () I have not been previously employed by the subject Millstone unit's architect-engineer (AE)
(
), the nuclear steam supply system (NSSS) vendor (
),
or any of their predecessors associated with design or construction of the subject Millstona unit.
() I have been previously employed by the subject Millstone unit's AE (
),
the NSSS vendor (
- 5. or one or more of their predecessors associated with design or construction of the su%act Millstone unit. (State the nature of the employment.)
- 5. () I, and my immediate family, do not own or control financial interests (stocks, bonds, mutual funds, etc.) in NNECO, the subject Millstone unit's AE (
),orthe NSSS vendor (
).
( ) I, or a member of my immediate family, own or control financial interests (stocks, bonds, mutual funds, etc.) in NNECO, the subject Millstone unit's AE (
), or the NSSS vendor f
).
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Proposed Consultant Consultant's Employer
- 6. () Members of my immediate family are not employed by NNECO, the subject Millstone unit's AE
(
), or the NSSS vendor (
) associated with design or construction of the subject Millstone unit.
() Members of my immediate family are employed by NNECO, the subject Millstone unit's AE
(
), or the NSSS vendor (
) associated with design or construction of the subject Millstone unit. (State the nature of the employment.)
- 7. () My close relatives (aunts, uncles, first cousins) are not employed by NNECO, the subject Millstone unit's AE (
), or the NSSS vendor (
)
in a management capacity.
() My close relatives (aunts, uncles, first cousins) are employed by NNECO, the subject Millstone l
unit's AE (
), or the NSSS vende.r (
)in a management capacity. (State the nature of the employment.)
i
- 8. Have you been promised any additional compensation reward or anything of value, contingent upon the position you take on any issue being consideted by you in connection with the subject Millstone unit ICAVP? If yes, provide a detailed description of the circumstances.
()NO
( ) YES. Explain.
- 9. Do you know of any reason, whether or not inquired about in this questionnaire, that would affect your ability to be completely objective in performing any of the tasks assigned to you in connection with the subject Millstone unit's ICAVP? If yes, provide a detailed description of the circumstances.
()NO
( ) YES. Explain.
10.
Are you aware of anything that might create a perception that you would not act with objectivity in performing any of the tasks assigned to you in connection with the subject Millstone unit's ICAVP? If yes, provide a detailed description of the circumstances.
()NO
( ) Yes. Explain.
I certify that the statements I have made on this form are true, complete, and correct to the best of my knowledge and if the circumstances surrounding the responses change during performance of the ICAVP for the subject Millstone unit, I will inform the NRC of those changes.
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Signature Date in the above statements, the term
- employed" is construed to mean any form of employment, either direct, as a contractor, or as a subcontractor. The term *immediate family
- includes the interviewee's children, stepchildren, spouse, parents, stepparent.3, mother 4rarw, father-in4aw, brothers-in-law, sisters-in-law, or any person living with the interviewee.
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