ML20151W087

Insp Rept 50-312/88-02 on 880104-0309.Weaknesses Noted. Major Areas Inspected:Past & Present Procurement,Matls Control & Warehouse Activities Before Restart

ML20151W087
Person / Time
Site:	Rancho Seco
Issue date:	07/25/1988
From:	Brach E, Jeffrey Jacobson, Mcintyre R, Wagner W NRC OFFICE OF INSPECTION & ENFORCEMENT (IE REGION V), Office of Nuclear Reactor Regulation
To:
Shared Package
ML20151W083	List: ML20151W080 ML20151W087
References
50-312-88-02, 50-312-88-2, NUDOCS 8808230278
Download: ML20151W087 (20)

See also: IR 05000312/1988002

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, , ENCLOSURE 2

UNITED STATES

NUCLEAR REGULATORY COMMISSION

OFFICE OF NUCLEAR REACTOR REGULATI0ii

DIVISION OF REACTOR INSPECTION AND SAFEGUARDS

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Report No.: 50-312/88-02

Docket No.: 50-312

Licensee No.: DPR-54

Licensee: Sacramento Municipal Utility District

Post Office Box 15830

Sacramento, California 95852

Facility Name: Rancho Seco Nuclear Generating Station

Inspection Conducted: January 4-14, February 10-12, and March 7-9, 1988

Inspectors: .

R. P. McIntyre, Team Leader, NRR V

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Date

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J.BfJfo5sp6,ElectricalEngineer,NRR Date

SP WrWL

h W. J. Wagner, Project E7Fgineer, fV

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Consultants: T. Tinkel, Sonalysts, Inc.

Accompanying Personnel: U. Potapovs, NRR

Approved by: / n eb

E.killiani Brach/,4 ranch Chief

7hf[f

Aat4

Vendor Inspection Branch

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8808230278 880818

PDR ADOCK 05000312

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SCOPE

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An announced team inspection at the Rancho Seco Nuclear Generating Station was

conducted by the NRC Headquarters Vendor Inspection Branch (VIB) to review

the licensee's past and present procurement, materials control, and warehoust

activities before the restart of Rancho Seco.

RESULTS:

The inspection indicated considerable weakness in the procurenent prpcess,

specifically the dedication of commercial grade items for use in safety-related

dppliCations, and the auditing and placement of vendors un the approved supplier

list (ASL). The inspection findings include: (1) failure to properly dedicate

and provide documentation for several coninercial grace items procured for use

in safety-related applications (these items were accepted on the basis of a

like-for-like" comparison of part number without adequately evaluating their

suitability for use in safety-related applications); (2) failure to impose the

requirements of 10 CFR Part 21 on several vendors where certifications to

nuclear specifications were required; and (3) failure to acequately evaluate

the vendor's quality assurance (QA) programs before placing the vendor on the

approved supplier list (ASL). Also, the licensee accepted certificates of

conformance (C of Cs) for commercial grade procurements from vendors not on

the ASL without verifying their validity.

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, , REPORT DETAILS'

1. PROCUREMENT OF MATERIALS

A. Procedure Review

As part of the inspection, a review was conducted of the SMUD

procedures that delineate requirements applicable to the 9,rocurement

of items and services at Rancho Seco.

dancho Seco Administrative Procedure, RSAP-401, "Preparation and

Processing of Purchase Requisitions," provities instructions for the

preparation, review, and processing of purchase requisitions. This

procedure only opplies to the initial purchase of items and services,

including spare and replacement parts. Standard stock items nonnally

carried in the warehouse are recorded in accordance with Materials

Management Procedure, MMP-0027. RSAP-0401 defines three types of

procurenents : Type 1 is the procurement of items associated with

the maintenance and minor modification of existing plant systems and

equipment, Type 2 is the procurement of items associated with major

modifications of plant systems and equipment, and Type 3 is nuclear

fuel purchases. After all of the information is entered on the

purchase requisition, plant procurement issues a purchase order in

accordance with procedure MMP-0022, "Procurement." MMP-0022 directs

Procurement Engineering to review the purchase requisition in

accordance with MMP-0021, "Technical and Quality Determination for

Procurement Documents."

MMP-0021 outlines the methods used by Procurement Engineering for

establishing technical and quality requirements for inclusion in

procurement documents. Three classes of materials are defined by

this procedure: QA Class 1 is for all items or services for

safety-related applications, QA Class 11 is used for non-safety-

related items or 'ervices in which additional quality assurance is I

required; and QA Class 111 is used for the procurement of all other

items and services. Procurement Engineering determines the quality

class of the item to be ordered by referencing the master equipment  !

list (MEL) and by reviewing ap

specifications, as necessary. plicable drawings,

A procurement levelcodes,

is thenand material

selected

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in accordance with MMP-0026, "Four Level Procurement System" on the  !

specification requirements that must be applied, the qualification

of the supplier being considered, and the acceptance methods used to

verify the item's quality characteristics.

MMP-0026 describes the four-level procurement system for procurement

of items and services, that are QA Class 1 or are subject to SMUD QA

program requiren.ents. Level I is applicable to items for safety-

related applications in which procurement must meet procurement i

specifications. This method requires current qualification of the l

supplier's QA program. Items may be accepted on the basis of this

approved QA progrem, a C of C, a source inspection, and/or a receiving

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, , inspection. Level II is applicable to items for safety-related

applications in which procurement must nwet a previous (original)

procurement specification. This method also requires current

qualification of the supplier's QA program and also allows acceptonce

of the items on the basis of a combination of C of C, a source inspec-

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tion, and/or a receiving inspection. Level III is applicable to items

for safety-related applications in which procurement is made by the

supplier's part number, drawing, specification, or other associated

documentation. This method does not require qualification of a

supplier's QA program as acceptance is based on a combinatJon of

source inspections, receiving inspections, and/or specific inspections

or tests. Level IV is applicable to items manufactured to industry

or comercial standards that satisfy the definition of "commercial

grade" per 10 CFR Part 21. This method does not require quhlificat on

of the supplier s QA program as acceptance is based on receipt

inspection or test to verify that characteristics important to the

item performance have been met. Level IV procurements require that

a quality-related item evaluation in accordance with SSAP-0005 be

completed for items designated as comercial grade. The irspectors

found that SSAP-0005 had been deleted and replaced with RSAP-0405,

"Quality Related Item Evaluation." This outdated SSAP was also

referenced in two other current procedures, MMP-0026 and MMDI-C010

"Stock Material Reverification Program."

RSAP-0405 defines the methods used to determine if items requested

for purchase can be procured comercial grade and applies to Levei IV

procurements only. The procedure requires the completion of form

MTL-004, "Verification of Comercial Grade Status Checklist," and <

form MTL-002, "Quality Related item Evaluation." RSAP-0405 then I

requires evaluation of the safety-related functions the items

perform or support and the specific characteristics necessary to

ensure that the functions are accomplished. l

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Procurement Engineering is required to document on a receipt inspec- i

tion cata report (RIDR) the method of inspection necessary to ensure l

the proper functioning of the item. Critical characteristics,

applicable codes and standards, restrictions on suppliers, and item

applications are listed on the MTL-002. Nuclear Engineering then

reviews the information documented to verify that the item will

perform its intended function. Before a Level IV item can be issued

for use in the plant, a comercial grade item dedication in accordance

with RSAP-0706, "Dedication of Commercial Grade Items," is required.

RSAP-0706 defines the requirements for performing the dedication of

comercial grade items. A work request for the use of a comercial

grade item in a safety-related system is routed to Procurement

Engineering, which issues a Comercial Grace Item Dedication (CGID).

Procurement Engineering lists on the CGID the application where the

requested item will be used, the component description, the seismic

classification, the environmental qualification (EQ) classification,

and the Comodity Evaluation (CME No.) completed durin A

copy of the Quality Related item Evaluation (MTL-002) gisprocurcment.

also

attached to the CGID. The CGID is then routed to Nuclear Engineering,

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. . which evaluates. it for acceptability in accordance with NEAP-4205,

"Commercial Grade Item Dedication Evaluation" (CGIDE). Nuclear

Engineering then performs a CGIDE on the basis of the CGID, the CME,.

the MTL-002, and design baseline documents. Nuclear Engineering l

also decides d. ether a separate EQ or seismic review is requirea. l

Once the CGIDE is approved, it is sent with the COW back to Procure- i

ment Engineering. The comercial grade part has ;ov been dedicated i

and can be issued for use.

In this procedure review, the inspectors noted a number of,. problems.

The first problem concerns the overall complexity and discontinuities

in the commercial grade procurement process. So many procedures,

forms, and evaluations are required that it is unclear who has what i

responsibility in determining part acceptability. It was apparent I

during the inspection that not only was the NRC inspector confused, i

but that many of the SMUD personnel did not understand their responsi- i

bilities in the process. l

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Another problem concerns the fact that items procured under Level III l

of MMP-0026 do not undergo a formal dedication process. Although l

these items are not designated as comercial grade by this procedure, j

they are purchased from unqualified suppliers and are, in essence,

commercial grade items that require dedication.

The most serious problem with the procurement procedures is the fact

that both procedures RSAP-0405 (PP.5.2.3.3) and NEAP-4205 (PP.5.2.5.1.)

allow verification of critical characteristics by the use of a

"like-for-like" methodology. Specifically, once a part is found to

have the same part number as the one being replaced, no further

verification is requireo. This is an unacceptable practice because

many material and manufacturing changes are made without changing l

part numbers. If it is not verified that material and manuf acturing  ;

changes have not occurred, a component's qualification (both seismic l

and EQ) and its overall suitability for use in safety-related l

applications are in question. Many of the items procured at Rancho

Seco and accepted on the basis of a "like-for-like" methodology are

in this a tegory.

Procedure RSAP-0700, Rev. O, and Changes PCN 1, 2, 3, and 4 identify l

certain comercial 9Me items for safety-related applications that

SMUD exempts from the 10 CFR Part 21 requirement for dedication.

These items include bolts, nuts, screws, washers, cotter pins, and

fasteners less than 1/4-inch nominal size that are exempt from

dedication when they are used in safety-related applications.

(Note: Other items, such as certain gaskets, packings, etc., are

also included in the exemption list in this procedure.) This blanket

exemption is of concern because the technical basis is not clear for

ensuring that safety-related functions will not be affected when

items such as fasteners are used in safety-related applications.

SMUD stated at the exit meeting that they were going to review this

comercial grade item exemption list and take corrective action to

implement some form of generic dedication.

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The NRC inspectors found one instance in which SMUD personnel failed

to comply with their documented procedural requirements. Discussion

with procurement and material control personnel revealed an instance

in which a comercial grade item was issued from Warehouse A without

the required CGID. Stores Issue / Reservation Request (SIRR) No. 87024129,

dated November 27, 1987, issued 14 in-line comercial grade filters

(Material Stock Code 109700) for use'in a QA Class 1 component.

RSAP-0706, Section 4.2, states, in part, that "Dedication at Rancho

Seco occurs after receiving inspection ano prior to is6suance of the

item for installation," and specifically in Section 5.4.3 %"Items

purchased as Comercial Grade (Procurement Level IV) shall'not be

issued on a SIRR that references a QA Class I or an EQ work request

without an approved CGID." The inspectors found that warehouse

personnel were aware of this requirement, and they issued the item

without the CGID only after verbal instruction from licensee manage-

ment. The inspection team found no other instances of verbal

authorization to violate a program requirement.

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In the PEAP interim report, SMUD outlined and described the enhancements

and clarifications made to strengthen the procurement and material

control procedures. The changes stated by SMUD address the concern.i

and weaknesses identified by the NRC inspectors and, if properly

implementeo, should resolve the past procedural procurement deficiencies.

SMUD also initiated a comprehensive training program to train all I

appropriate personnel on the requirements of the new and expanded

procedures for procurement and material control.

B. Review of Procurement Packages

To review the implementation of the Rancho Seco procurement program

and the effect of past procurement practices on installed equipment,

the inspection team requested 67 procurement packages. The procure-

ment packages were selected after review of safety-related serializec

work requests involving replacement parts from the past several years.

The packages selected were slanted towards those that were likely to

contain parts that might have been purchased comercial grade. The

requested packages cuntained the work request, the bill of materials,

the receipt inspection documentation, and the applicable purchase

order or requisition of material. Of the packages requested, the

inspectors found that most of the parts were comercial grade and

procured from unqualified suppliers. Most of these parts were ordered

by part numbers that were verified before installation in the plant.

These part numbers were found to be the same as the original part

numbers and this "like-for-like" mothedology served as the primary

basis for the parts' suitability for application. No documentation

existed that showed that an evaluation was ever performed of material

and design changes that might have been made by the manufacturer

since the original parts were procured.

The following comercial grade parts were procured and installed a'

without verification that material or design changes did not occur:

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1. Work Request 88694 - a catalyst assembly for the hydrogen monitor

was replaced with a comercial grade part from COMSIP. The

hydrogen monitor is an EQ device, and no qualification documen-

tation was received with the catalyst assembly. SMUD did not

verify that no material or manufacturing changes were made.

2. Work Request 43196 - an Agastat relay was ordered comercial

grade. No seismic qualification was received. SMUD did not

verify that no material or manufacturing changes ceere made.

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3. Work Request 88291 - a comercial grade K3 relay was ' ordered.

No seismic qualification was received. SMUD did not verify that

no material or manufacturing changes were made.

4. Work Request 45631 - comercial grade circuit breakers for

use in the "A" inverter in a vital bus were ordered. Functional

testing was performed upon receipt without acceptance criteria

being established (i.e., trip times were unknown). SMUD did not

verify that no material or manufacturing changes were made.

5. Work Request 68932 - a comercial grade GE relay for the control

logic to liquid sample valve SFV-7001 in the reactor sampling

system was ordered. No seismic qualification documentation was

received. SMUD did not verify that no material or manufacturing

changes were made.

6. Work Request 82120 - comercial grade reactor coolant pump

underpower protection Wilmar relays were ordered. No seismic

qualification documentation was received. SMUD did not verify

that no material or manufacturing changes were made.

7. Work Request 97391 - comercial grade Ohmite relays for the B

normal bettery charger were ordered. No seismic qualification

documentation was received. SMUD did not verify that no material

or manufacturing changes were made.

8. The inspectors reviewed the recent procurement of 5000 feet of

5 kV cable for the safety-related nuclear raw water pump. This

cable was purchased from an unqualified supplier, NSSS/Divesco,

Inc., under the level 111 method of procurement. No quality

assurance program or 10 CFR Part 21 requirements were imposed

on this vendor; however, generic test data performed to IEEE

standards 383 and 323/324 was requested. The quality of the

cable was to be verified under the licensee's quality program

by performance of independent testing by an outside laboratory.

Upan receipt of the cable by the licensee, NCR 7220 was generated

because no generic test data was submitted as required by the

purchase order. The cable was conditionally released even though

the independent laboratory testing specified on the RIDR had not

been performed. Two days later, Revision 1 to NCR 7220 was

written when the licensee discovered that one of the three

reels of cable received was 15 kV and not 5 kV cable and that

all three reels had been shipped on their sides. One week

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, , later on October 21, 1987, Revision 2 to NCR 7220 was written.

At this time the licensee determined that the cable had never

been independently tested and that this testing would be needed

before the cable could be accepted on.a long-term basis.

Revision 3 to the NCR was written on the same day, and it

deleted the testing requirements and accepted the cable on the

basis of an analysis performed by Nuclear Engineering.

Revision 4 was written the following day, and it deleted the

barsh environment requirements from the analysis Upon

questioning the licensee about the basis for the analysis, the

licensee determined that the independent testing should not

have been deleted because the analysis was based on test data

received with a previous procurement that could not be used for

the cable in question.

This procurement violated two NRC requirements. First, requesting

test data to IEEE 383 and 323/324, no longer qualifies the

cable as a comercial grade item as defined by 10 CFR Part 21.

The provisions of 10 CFR Part 21 should have been imposed on

the vendor. Secondly, cable procured from an unqualified

supplier was accepted, installed, and declared operable without

ensuring its suitability for use in the installed application.

Qualification to the requirements of IEEE 383 could not be

ensured as no traceability existed documenting the similarity

of the purchased cable to any used in a previously performed

test.

This specific procurement also highlighted the fact that Level

111 procurements performed at Rancho Seco do not require a

documented dedication process. Additionally, because of the

complexity of the procurement process, it appeared that Procure-

ment Engineering and Nuclear Engineering were not informed of

each other's decision on this matter.

9. Work Request 97071 - replacement parts for Bergen-Patterson

hydraulic snubbers were procured from 1980 through 1985 via

several purchase orcers. The licensee requested a C of C to

nuclear specification (ANSI B31.7, "Nucl u r Power Piping")

without imposing 10 CFR Part 21 on Bergen-Patterson in the

purchase oroer. The purchase order stated that these parts

were comercial grade items, yet they did not meet the definition

of commercial grade as delineated in 10 CFR Part 21.

10. EASRTP RI - 329 - four purchase oroers were submitted to

different venoors for replacement parts for the instrument air l

system. The material was ordered comercial grade and was l

accepted on the basis of C of Cs to the manufacturers' specifica-

tions without verification of their validity. The licensee did

not perform any vendor audits, and none of the four vendors were

on the ASL.

11. EASRTP RI - 058 - replacement lube oil coolers for high-pressure

injection and makeup pumps for the nuclear raw water system were

ordered comercial grade from Basco. A C of C to design

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, , specifications and testing requirements was used as the basis

1 for acceptance without verification of its validity. , Basco was

not on the SMUD ASL, nor had the licensee perfonned any audit of

Basco.

C. Vendor Audit Program l

The inspectors .found that the former SMUD progrom for auditing. vendors

was extremely weak. Vendors who supplied safety-related and

commercial grade items were placeo on the ASL solely on the basis of

a desk audit of the vendors' QA manuals. There were no procedural

requirements for implementation audits to be perfomed at the vendors'

facilities. SMUD recognized this' as a problem in 1987 as evidenced by

Finding 87-20-22 of the QA vertical audit. SMUD's corrective action

for this finding was to perform implementation audits of all vendors

on the ASL by the end of 1988.

The NRC inspectors pointed out that SMUD procedures for approving

suppliers still allowed procurements to be made with no established

time limit for perfonning some form of verification or implementation

audit before placing the safety-related. items in service.

In the PEAP interim report, SMUD consnitted to revise their program

and procedures to require that a QA program implementation evaluation

be made before or during the "first significant" procurement activity.

Also, a requirement has been added for a formal source inspection of

each procurement for any listed suppliers where no current objective

evidence of satisfactory program implementation evaluation exists.

In summary, SMUD has stated that they have strengthened and clarified

the process for supplier approval.

II. MATERIAL CONTROL AND WAREHOUSING l

A. Review of the SMUD Material Control Process

1. Reverification of Technical and Quality Documentation for

Previously Procured and Currently Stocked Safety-Relateu

Material

As part of a response to LER 85-14. Revision 3, SMUD committed

to perform a 100 percent reverification of all safety-related

material in stock that was not procured using current procurement

procedures. SMUD stated that the reverification program objective

is to confirm that, on the basis of a documentation review,

previously procured and currently stocked safety-related items

meet all current SMUD procurement requirements. According to

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the Material Control Manager, any items that do not meet current l

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SMUD procurement requirements will be designated for non-safety I

applications, scrapped, or submitted for engineering review to

determine adequacy for a safety-related application.

At the time of this inspection, SMUD was ensuring that reverifica- I

tion was completed for previously procured coninercial grade items

coded for safety-related applications before issuing any of

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these items from the warehouse. However, items previously

procured and coded Quality Class I (safety-related) that were

not identified as procurement Level IV or CG (commercial grade)

were being issued for installation regardless of whether the

item had been reverified or .not. This prar.tice was discussed

with the SMUD Material Control Manager who stated that SMUD

considered reverification of Quality Class I (safety-related)

material was not a prerequisite for issuing from stock because

SMUD had confidence in the past procurement program used for

this niaterial . (Note: During the course of the inspection,

SMUD developed a prcyram to reverify a sample of previously

procured and currently stocked safety-related items to confirm

SMUD's contention that reverification of Class I items before

issue from stock was not required.)

During discussions with the NRC inspector, the Material Control

Manager stated that to date about 200 commercial grade items in

stock had been. reverified for safety-related applications and

about 1000 Class I (safety-related) items in stock had been

reverified. SMUD is scheduled to complete the reverification of

all safety-related material in stock by September 30, 1988, as

part of their LER commitment.

2. Green Tag Program

One of the principal controls used by SMUD to identify Class I

items (material coded for safety-related application) is the use

of a green tag. The requirement for using green tags (i.e.,

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SMUD accept tags) to identify material issued from stock for

safety-related applications was instituted by a SMUD memorandum l

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of June 2, 1986. Some time elapsed until the requirement was l

implemented by procedure in QAP-6. The current procedure

governing the use of green tags is cuntained in RSAP 0701,

Revision 0, dateo June 1, 1987. In the course of the inspection, i

at least 3 physically different green tags were observed. l

Furthermore, green tags were found on stored items identifying

the following quality class and procurement level situations:

' Class I, Procurement Level I (computer-generated tag)

' Class I, Procurement Level II (computer-generated tag)

' Class I, Procurement Level III (computer-generated tag)

• Class I, Procurement Leypl IV (computer-generated tag)

' Class I, Procurement Level 0 (cosputer-generated tag)

Class I, CG (handwritten' tag)

• Class I, no procurement level specified (handwritten tag)

• Class II, Procurement Level 0 (computer-generated tag)*

• The SMUD Material Control Manager stated that this tag is used

for Appendix n items that are not Quality Class I (safety-

related) but are important to safety.

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3. SMUD Use of Non-Safety Fasteners in Quality Class I (Safety-

Related) Job Applications

A review of the issue histor

control data base (NUCLEIS)fory Stock

contained

Code in the SMUD

Number (SCN)material

8929 <

revealed the following: (a) SCN 8929 is assigned for non-safety '

3/4" - 10 x 1 3/4" cap screws (note: Sch 8929 has now been

superseded by SCN 103118), and (b) 50 of these cap screws

were issueo against Work Request 12601 on February 26, 1987.

The brief description for the job covered by this wonk request

is "CBS Pipe Support to RX Bldg. Spray System." The work

request was ceded Quality Class I (safety-related).

The NRC inspector requested SMUD to provide objective evidence

that these non-safety fasteners were in fact not used for a

safety-related application. Following an investigation, SMUD

presented documents ECN R-0780, dated January 9,1987, and

Scaffold Request 87-657, dated January 28, 1937.- Following a

review of these documents, the NRC inspector agreed with SMUD's

conclusion that the fasteners were used to construct the

scaffolding needed to accomplish the containment pipe support

work.

In general, SMUD's past practice of issuing non-safety material

for use in Class I (safety-related) jobs is a concern. Other

than a possible inspection of material by the QC inspector at

the job site, no past procedure control was evident to explain

how SMUD prevented the use of non-safety items in actual

safety-related applications without some form of technical

review. The SMUD Material Control Manager noted that the

requirements in current Procedure RSAP-0701, Revision 0, now

prohibit non-Class I material from being issued for a job with

a Quality Class I code. This procedure has been in effect

since June 1, 1987.

4. Follow-up on Previously Discovered, Comingled Safety-Related

and Non-Safety Fasteners

During the October 1987 NRC Augumented Systems Review and Test

Program Followup Inspection (50-312/87-29), the NRC inspection

team discovered non-safety (Class II) cap screws (SCN 8928)

comingled in a drawer identified for safety-related (Class I) ,

cap screws (SCN 103118). According to the Material Control ,

Manager, all non-safety cap screws were subsequently removed '

from the SCN 103118 drawer. Information in the NUCLEIS data

base and information on the stock record card indicates SCN

8928 is a 3/4" - 10 x 1 1/2" 304 stainless steel (grade 18-8)

cap screw that was comercially procured. The NRC inspector

was concerned over the possibility that SCN 8928 cap screws may

have been inadvertently issued as SCN 103118 for a safety-related

application before the comingling discovery. SMUD agreed to

review its previous attempt to reconcile the issued quantities

of the affected SCN fasteners. However, the limited inspection

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time did not pennit SMUD to complete this review and provide  !

supporting documentation before the inspection was over. The l

NRC inspector identified two technical concerns related to this l

matter. First, the two SCNs were procured according to l

different material specifications: SCN 8928 is a commercially  !

procured 304 stainless steel (Grade 18-8) cap screw and SCN i

103118 is an ASTM F593-85 304 stainless steel cap screw.

Secondly, the two SCN's are for different length cap screws;

SCN 8928 is a 1 1/2" long cap screw while SCN 103118 is a

1 3/4" long cap screw. Inadvertent use of SCN 8928 for SCN

103118 could unexpectedly result in 1/4" less thread engagement

length for applications requiring a 1 3/4" long fastener. SMUD  !

stated they are evaluating the generic issue of comingling as l

part of the response to IE Bulletin 87-02.

5. SMUD Actions To Improve Material Control. l

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The NRC inspection in October 1987 1dentified commingling of a l

safety-related fastener (SCN 103118) with a non-safety fastener  !

(SCN 8928) as mentioned in item 4. As a result of this inspection, !

as well as other inspection and audit findings, SMUD has estab- l

lished a policy that safety-related material will be located in I

a cesignated safety-related material section of each warehouse.

Non-safety material will not be located in the safety-related

section. This policy is intended to provide additional assurance

that safety and non-safety material will not be inadvertently

commingled. Safety-related fasteners are covered by this policy.

Among other things, this policy will eliminate the situation

found during previous inspections where safety-related and non-

safety fasteners were stored in the same drawer, separated by

dividers.

During discussions with the NRC inspector, the Material Control

Manager outlined additional actions taken by SMUD to improve

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material control:

(a) SMUD recently completed a 100 percent inventory of its

warehouse stock to identify deficiencies in material

identification and storage.  !

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(b) SMUD is starting to place dated stickers on material being

placed into stock. These stickers will be used to

facilitate a first-in/first-out issue policy for the '

material handlers.

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B. Warehouse Inspection

The NRC inspectors conducted an inspection of the SMUD Rancho Seco

warehouse facilities. These facilities consist of three warehouses

(A, B, and GRS) located within the protected area of the site and

the receipt inspection building located outside the protected area.

Generally, n.ost fasteners were found in Warehouse A and the GRS

wdrehouse. Most safety-related fasteners were found in Warehouse A

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in the section being designated for safety-related items. Some

exceptions are that safety-related fasteners such as Hilti Bolts

(Class I, Procurement Level II) and threaded rods (Class I, Procurement

Level II) are stored in the GRS warehouse. The GRS warehouse also

contains a number of fastener stock codes identified with yellow "D0

NOT ISSUE" tags. These stock codes have been placed in a hold status

pending completion of the stock material reverification program.

The NRC inspectiun team toured Warehouse A to observe.how safety-

related materials, components, and equipment were being controlleo.

This included controlled access, receipt inspection, environmental

conditions, marking and segregation of fasteners, control of

nonconforming items, issuance of items, and housekeeping.

The following observations and concerns were noted by the inspection

team, regarding the Warehouse A environment: (a) the potential

exists for airborne contamination from the Machine Shop .ocated in

the same building; (b) the overhead heaters have to be manually

operated to maintain temperature control; (c) temperature requirements

of 40 to 140 degrees Fahrenheit may be extreme; (d) stored items have

no protection from humi11ty. The licensee had previously identified

the same concerns and was in the process, during this inspection, of

preparing a draft Engineering Assistance Request addressing these

items.

During the course of the inspection, the inspection team held numerous

conversaticns with Material Control personnel regarding warehousing

activities. One concern identified ouring these discussions was that

there appeared to be a lack of a definite understanding or set of

instructions describing what actions are taken when an item is dropped

or damaged. The emphasis for these instructions should be on actions

to be taken by warehouse personnel during the perfonnance of their

daily routine activities. For example, should an item composed of

sensitive electronic components be dropped and no external damages 4

noted, should this item be placed back on the shelf or should the I

item be evaluated for possible internal damage? The licensee l

committed to revise their procedures to address this concern about i

lack of instructions for warehouse personnel. Also, on a related  !

subject, the inspection team questioned the guidance given by QAP-17, '

"Nonconforming Material Control." This procedure states that if an

item is dropped and damaged, the green accept tag shall be removed

(by QC), and an NCR initiated if the item is to be issued for use.

Removal of the green tag prevents the nonconforming item from being

issued; however, disposition of the damaged item is not addressed if

the item is not intended for immediate plant use. Also,QAP-17

states that "All deficiencies have to be documented, either on a WR,

NCR, ODR, or CAR." However, it was i.?t cler to the inspection team

how warehouse deficiencies are documented. The licensee connitted to

clarify the handling of dropped or damaged material, during the exit l

meeting.

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section designated for storage of safety-related items. About 100

stock codes were randomly selected and visually inspected. These

included the following:

1. Inspection of SCN 109034 (Storage Location 04A08A07) and SCN

102958 (storage location 04A08A08).

An opened box of nuts for SCN 109034 was found with a green tag

affixed to the box identifying the nuts as 1" - 8 SA,563GR-A.

The heat code section on the green tag was blank. The nuts

were stamped with heat code identification EXD. An opened box

of nuts for SCN 102958 was found with a green tag affixed to

the box identifying the nuts as 1" - 8 SA194GR-2H. The heat

code section on the green tag was blank. The nuts were stamped

with heat code identification EWJ. Both boxes were similar in

appearance, and the nuts were the same size and similar in

appearance (except for heat code markings). However, the nuts

were made of different materials.

The boxes were on the same shelf in adjacent storage positions,

which presented an opportunity for unintentional commingling

because opened or unsealed packages or containers do not provide

positive identification control of the contents. If commingling

had occurred, different heat code markings on the nuts would

not be easy to notice and they would not necessarily alert

personnel that two different types of nuts were being issued.

The issue proce::s requires the heat code to be documented, but

not verified at issue.

However, the presence of heat code markings _in the nuts would have

provided ultimate traceability since SMUD procedures require

heat codes to be documented in a heat code log. As an additional

item, these nuts should have been individually green tagged

according to the requirements in SMUD procedure RSAP-0808, i

paragraph 5.4.2., dated December 11, 1987. Anong other things, l

this procedure requires nuts 1 inch and larger to be independently '

identified with a green tag. j

The findings noted above were brought to the attention of the

Sturekeeper and the Material Control Manager. The Storekeeper

took irrmediate action to separate the two similar looking boxes

of nuts. Shortly thereafter, the Material Control Manager

initiated a change to RSAP-0701 (per Material Control Manager

memorandum of January 13,1988) to ensure that sealed or closed

storage containers are resealed or closed following issue of

bulk stored items under the control of a single green tag.

2. Inspection of SCN 112126 (Storage Location 04A04L01) I

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A box of cap screws labeled with a green tag (computer

generated) affixed to the box identifying the contents as

safety-related (Class i Procurement Level IV) 1/4" x 1 1/2" cap

screws were procured on purchase order RQ-87-0814356. This sane

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, . , box also contained an unmarked package of cap screws. At the 4

request of the NRC inspector, the cap screws in the package

were measured and found to be 1/4" x 1 1/4" cap screws. Except

for length, the physical appearance of both sizes of 1/4 inch cap l

screws was the same. l

This finding is a concern because identification had been lost

for the package of 1 1/4 inch cap screws, resulting in a comming- i

ling of an unidentified stock code with a safety-related stock I

code. - , i

3. Inspection of SCN 104634 (Storage Location 04A04H01)

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The following material was found in the drawer for this SCN: l

(o) four packages - each package contained one dowel pin, and

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each package was marked with a green tag (new computer generated), l

which incicated the dowel pin was safety-related (Class I,  !

Procurement Level IV); (b) one package containing two dowel l

pins - the package was not marked; (c) one package containing

six dowel pins - the package was marked with a green tag with l

no procurement level (old and hand written), indicating that  !

the dowel pins were safety-related (Class I); and (d) one loose '

white tag - Part Number 105-002 and Purchase Order RQ-87-02-50171

were cited on this tag.

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This finding is a concern since identification had been lost for

the unmarked package of dowel pins. The inspection team noted

that the SMUD reverification policy in effect at the time of

the inspection would have allowed the dowel pins in the package l

marked Class I to be issued for a safety-related application

without any additional review or restriction.

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. . . APPENDIX A

INSPECTION CHRONOLOGY AND RESOLUTION OF RESTART ISSUES

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A procurement and material control inspection conducted by the Headquarters '

Vendor inspection Branch (VlB) at Rancho Seco on January 4 through 14, 1988,

found several deficiencies in the Sacramento Municipal Utility District's ,

(SMUD's) procurement program and the dedication process for commercial grade I

items useo in safety-related applications.

During the exit meeting on January 14, 1988, certain findings were categorized

as restart issues to be addressed by SMUD before the restart of Rancho Seco.

On February 3,1988, in a letter from G. Carl Andognini to Frank J. Miraglia,

Jr., Associate Director for Projects, SMUD submitted a "Procurement Engineering

Assessment Plan" (PEAP) to address both specific and generic actions relating

to restart and long-range issues. The restart concerns related to five key

issues:

• Commercial grade item dedication - connercial grade spare and replacement

parts were purchased and accepted on the basis of a "like-for-like"

comparison of part number only.

• Piece part replacements in environmentally qualified (EQ) components -

a potential for invalidating qualification exists. I

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Seismic qualification of replacement relays in the reactor protection

system (RPS) and safety features actuation system (SFAS) - a potential

for invalidating qualification exists.

• Acceptability of Class I warehouse stock (green tag program) - the

resolution of concerns were attributed to deficient procedures and

practices. I

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• Enhancements of existing procurement and dedication procedures and I

processes.

Subsequent to receipt and review of the SMUD PEAP the VIB performed an  !

in-process review of the SMUD engineering evaluation of installed connercial I

grade items for EQ and seismically qualified components during February 10  ;

through 12, 1988. The inspectors found that the. methodology employed by SMUD

to perform the engineering evaluation was adequate.

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The inspectors reviewed 10 evaluations completed in accurdance with the enhanced

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procedures for items that required dedication to ensure that the installed '

connercial crade items would perform their intended safety function. Questions

concerninE 4 of the 10 items were raised by the inspectors and were left

unresolved /open at the exit meeting on February 12, 1988. Several conference

calls between SMUD and the NRC VIB took place between February 18 and March 1

to resolve the inspectors' questions. SMUD committed to address the outstanding l

procurement and material management concerns in an interim report.

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The PEAP Interim Report was received by the NRC on March 1, 1988, and provided

the results of the technical engineering evaluations performed on a sample of

selected components and parts installed or available for installation in

Class 1 systems. SMUD stated that the evaluations were conducted in accordance ,

with detailed instructions and ensured that parts procured as comercial grade i

items did not adversely affect the safety function of the components or systems. l

This evaluation methodology was used to address the seismic quaiification of

relays in the SFAS and the RPS and the environmental qualification for piece I

part replacements. Class 1 warehouse stock was evaluated by judging the 4

adequacy of a sample of items with green tags currently available for safety-

related applications. i

The NRC review of the PEAP interim report found that most evaluation areas  ;

still had work to be completed and raised questions concerning the dispositions

of the nonconfonnance reports (NCR's) identified by SMUD during the EQ evalua-

tion, the green tag program review, and the original commercial grade item

evaluations from the January inspection.

The VIB conducted an inspection from March 7 through 9,1988, to follow up

questions and concerns identified in the PEAP interim report review, as well i

as those identified in the previous inspections. This inspection addressed 1

specific hardware issues ano included a generic review of the EQ piece parts

evaluation, dedication of the seismically qualified SFAS and RPS relays and

the acceptability of warehouse stock with Class 1 noncommercial grade green

tags. The issues involving specific hardware concerned EQ accelerometers

located in the acoustic monitors for the main steam system atmospheric dump

valves, the EQ wiring in the hydrogen monitor heater cabinets, a GE relay in

the sampling system, an ASCO coil in the hydrogen monitor solenoid, and an

Agastat relay in the undervoltage protection system. Resolution of the

deficiencies of the wiring, the ASCO coil and the Agastat relay required

replacement of these items with qualified and dedicated equipment. The

deficiencies that caused equipment replacement were evaluated and attributed

to weaknesses in the procurement process or, as in the case of the hydrogen i

monitor wiring, the licensee's deviating from the work authorization. The  !

licensee review of records and inspection of similar equipment determined that

these deficiencies were isolated and did not affect similar items installed in

the plant. The licensee accepted the accelerometers and the GE relay on the

basis of satisfactory resolution of the identified concerns. Many other

specific component concerns were addressed in the interim report and dispositioned

by SMUD as acceptable for service based upon subsequent successful dedication.

The environmental qualification piece part evaluation was applied to all EQ

replacement ports procured as comercial grade and installed since November 30,

1985. The review identified 484 EQ components representing 11 different equip-  ;

ment categories. Approximately 740 work requests were identified that involved l

part replacement or modification. SUMD committed to review 25 percent of '

these work requests before restart. At the time of the inspection, the

licensee reviewed end approved 186 work requests. These work requests

translated into 252 EQ parts, of which 9 were procured as Quality Class 1,

leaving 153 comercial grade replacements parts. These 153 parts required 20

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commercial grade item dedications in accordance with SMUD Instruction l

No. ERT-05, "Engineering Evaluation of Previously Installed Comercial Grade

Items In Safety-Related Systems." These 20 dedications represented the vast

najority of the 153 parts because of duplication of parts. With the exception

of one outstanding certification from ASCO for a solenoid valve SMUD was able .

to dedicate all of the replacement ports to today's standards through the l

various methods described in Instruction ERT-05. '

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To assess the acceptability of comercial grade replacement relays in the RPS I

and the SFAS, the licensee reviewed all relays the licensee reviewed all relays

in these systems to identify those that have been modified or replaced since l

system installation. The work request review identified a total of 1114 i

relays in these systems, but only 21 relays / modules have been replaced by l

either new or replacement parts. The licensee evaluated the 17 relays that I

were procured comercial grace and found that they could be properly dedicated ,

for use in a Class 1 seismic application. The 17 relays were dedicated to the l

requirements of ERT-05 upon receipt of Certification of Compliances (C of Cs) I

from the original vendors. The inspectors reviewed the evaluations of the 17

comercial grade relays ano cetermined that the dedications to the require-

ments of ERT-05 were adequate.

To provide assurance that Class 1 items (currently available in the warehouse

for installation in Class 1 systems) have the required procurement and

inspection documentation, SMUD comitted to review 6pproximately 75 items in

the warehouse that were procured before implementation of the current procure- i

ment program (1987) and that are green tagged as Class 1 and are available for

issue. The January 1988 VIB review of the green tag reverification program

found that SMUD had not obtained objective evidence to support the placement

of the equipment vendors on SMUD's approved suppliers list (ASL). This fact

is important since SMUD had previously placed vendors on its ASL solely on the

basis of a desk audit of the vendor's QA program. At the exit meeting on

March 9,1988, SMUD committed to obtain evidence indicating that the green-tag

material suppliers' QA program implementation had been verified during the

approximate time period of the purchase of the 75 items reviewed. Any stock

code item not reverified by restart will be placed on hold in the warehouse.

The green tag review showed that three NCRs were identified as well as 11 l

instances in which the requirements of 10 CFR Part 21 were not imposed on the <

Class 1 vendor. For two of the three NCR's, SMUD was able to obtain informa-

tion to qualify the items. The third NCR involved ASME fittings obtained from

a vendor (Ladish) who did not hold an ASME certificate during the time of manu-

facture, and SMUD could not demonstrate with existing documentation that Ladish

was authorized to distribute material certified to Section III of the ASME Code,

nor had they audited the Ladish quality program. However, SMUD showed that

Bechtel hed performed surveys and audits of Ladish for the period in question.

SMUD stated that because the material could be traced tu the original supplier

and the audits performed by Bechtel on the Ladish plant were satisfactory,

reasonable assurance was provided that the material, as received onsite and

installed in the plant, was acceptable for use in Class 1 systems. SMUD also

stated that the only systems required to meet ASME Section III requirements

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were those associated with the emergency diesel generator. SMUD verified that

none of these parts was installed in these systems; however, they had been

available for ASME applications. SMUD committed to take corrective action to

prevent the use of these parts in ASME systems in the future.

In summarizing the total SMUD effort as part of the PEAP restart review for

Class 1 applications, a total of eight NCRs were identified in the vjrioys

review areas. Three parts had to be removed from service and replaced with

either properly dedicated or Class 1 parts. The NCRs were satisfactorily

dispositioned for the remaining parts. Many other parts required various

evaluations and additional documentation in order to be considered adequately

dedicated. The goal of PEAP was to determine if the parts installed or the

parts available for installation in Class 1 safety-related applications would

be able to perform their safety functions when required. It appears, based

upon review of all of the areas before the restart of Rancho Seco, that

adequate assurance exists, even with less than adequate past practices in the

areas of procurenant, material control, and evaluation of vendors, that it is

unlikely that the reliability of safety-related equipment has been significantly

compremised. Long-term corrective actions are continuing with commitments to

complete the EQ piece part review by Juae 30, 1988, and the warehouse stock

reverification by September 30, 1988.

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APPENDIX B

. . .

I. PERSONS CONTACTED

Sacramento Municipal Utility District

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• B. G. Croley, AGM, Technical and Admin. Services

• J. V. Vinguist, Director, Nuclear Quality , l

• J. F. Firlit, AGM, Nuclear Power Production , l

• G. V. Cranston, Manager, Nuclear. Engineering Department (NED) ,. i

• S. L. Crunk, Manager, Nuclear Licensing

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• J. T. Telford, NED, Project Manager '

• G. J. Legner, Licensing

• T. E. Redican, Manager, Material Control i

• R. A. Savoie, NED '

• S. Woca, NED

• J. M. Meyer, QA Manager

• R. Wise, NED - Impell

• P. DiDonoto, NED - Tenera

• R. Desautels, NED - Tenera

• B. Kumar, NED

• S. Sarver, Licensing l

• T. F. Fetterman, NED '

M. Lawrence, NED l

R. Chackal, NED - Impell

S. McCloskey, NED - Tenera

L. Lew, NED - Bechtel

T. Maxey, NED - Tenerd

R. Deguchi, NED

M. Delgado, Material Control

C. Wandell, NED - Impell

M. Kermani, NED

F. Sheehun, NED

J. Walkin, NED

P. Patel, NED

W. Weaver, NED

J. Kelly, hED

• R. J. Overlash, Duke Power .

F. Lopez, Storekeeper, Material Control {

J. Westvold, QA  !

huclear Regulatory Comission

• J. B. Martin, Regional Administrator, RV 1

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• J. L. Crews, RV

• L. Miller, RV

• A. D. Johnson, RV

• J. G. Partlow, Director, Division of Reactor Inspection and Safeguards, NRR

• V. Potapovs, NRR

• A. D'Angelo. Senior Resident Inspector

• C. Meyers, Resident Inspector

• G. Kalman, Project Manager, hRR

• Attended exit meeting.

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