ML20199F393

Insp Rept 99901324/97-01 for Astro Nuclear Dynamics,Inc on 970826-29 & 1030.Nonconformance Noted.Major Areas Inspected: Implementation of Licensee QA Program

ML20199F393
Person / Time
Issue date:	11/19/1997
From:	NRC (Affiliation Not Assigned)
To:
Shared Package
ML20199F358	List: ML20199F352 ML20199F371 ML20199F393
References
REF-QA-99901324 99901324-97-01, 99901324-97-1, NUDOCS 9711240198
Download: ML20199F393 (11)

Text

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l . j U.S. NUCLEAR REGULATORY COMMISSION l t

OFFICE OF NUCLEAR REACTOR REGULATION i.

Report No: 99901324/97-01 i 4

i Organization: Astro Nuclear Dyn1mics Inc.

Bethel Park, Pennsylvania {

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Contact:

Paul Heffeman, President t 412/851 5500 Nuclear Industry >

Activity: Resale of components, mschining of mechanical components,  !

and seismic testing Dates: August 26-29,1997, and October 30,1997 '

Inspectors: Gregory C, Cwalina, Senior Operations Engineer Anil S. Gautam, Senior Reactor Engineer Approved by: Robert A. Gramm, Chief Quality Assurance and Safety Assessment Section Quality Assurance, Vendor Inspection and Maintenance Branch Division of Reactor Controls and Human Factors

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Enclosure 2 -

9711240198 9711'9 1 PDA GA999 EMVe**** ,

99901334 PDR w i i

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1 INSPECTION

SUMMARY

Astro Nuclear Dynamics, Inc. (ANDI) holds ASME N and NPT certificates to provide .

components to the nuclearindustry. ANDi's Engineering Laboratories provide safety related l engineering and test services to the nuclear and other industries. In addition, ANDI supplies surplus parts, purchased by ANDI and resold (brokered), to the nuclear industry. Brokered items can be sold as nonsafety- related bought and resold as saf ee

. ty r lat de , or bought as

. commercial grade, dedicated and sold as safety related.

During this inspection, the inspectors assessed specific attributes and implementation of the ANDI quality assurance (QA) program, specifically a,it applies to the supply of sacty related brokered and commercial grade dedication items to ascertain whether it conformed to NRC requirements. The inspector also assessed licensee monitoring of ANDl's control of quality. )

The inspection bases were as follows:

• Appendix B, " Quality Assurance Criteria for Nuclear Power Plants and Fuel Reprocessing Plants," to Part 50 of Title 10 of the Code of Federal Reoulations (10 CFR Part 50),

• 10 CFR Part 21, " Reporting of Defects and Noncompliance," and

• ANDl's Nuclear Quality Assurance Precedures Manual, Revision 6, dated July 1,1996.

During this inspection, the inspectors noted that ANDl's Part 21 procedure did not contain the reporting and timeliness requirements specified in Part 21.21. This has been identified an a non-cited violation and is discussed in Section 3.1 of this report. In addition, ANDI did not conform to certain NRC requirements imposed upon it by NRC licensees. These nonconfortnances are discussed in Section 3.2.

The inspectore observed that licensees did not identify the noncorformances noted in this ,

report. Licensees' monitoring of ANDi's control of quality is discussed in Section 3.3.

2 STATUS OF PREVIOUS INSPECTION FINDINGS I

This was the first NRC inspection of ANDI.

3 INSPECTION FINDINGS AND OTHER COMMENTS l

, , 3.1 10 CFR Part 21 Prooram

a. insoection Scope The inspector reviewed ANDI procedure CP 906, *ldentification and Reporting of Cond;tions Potentially Adverse to Nuclear Safety." The requirements of the procedure apply to

• the identification, review and reporting of nuclear safety related t'oncompliances, deficiencies and defects" as defined in 10 CFR. The ANDI procedure 2-wy.,-r-.- y e- -

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1 specifies 10 CFR Part 21.3 and other regulations, including Parts 50.55, and 50.59 as included in the scope,

b. Qbervations and Findinas The inspector noted that the procedure did not contain the evaluation and reperting requirements specified in Part 21.21, nor did it contain the timeliness requirements. The inspector noted other concerns to ANDi, such as the res: vnsibihty of Procurement to (1) forward vendor notifications to the president, (2) discuss reported conditionr with the employee, (3) assess the condition's significance, and (4) document action and inform the employee, responsibilities typically associated with engineering or QA. Further, the procedure requires employees to repart conditions ' adverse, or potentially adverse." The inspector pointed out that if that requirement relates to conditions adverse to nuclear safety, typical employees would not be able to make that determination and, thus, some conditions may go unreported. ANDI agreed to revise the procedure to address the requirements of Part 21 and the inspector's other concems.

c. Conclusions The inspectors concluded that ANDI failed to include the evaluation and reporting timeliness requirements of Part 21 in procedure CP 906. In accordance with the NRC Enforcement Policy as promulgated in NUREG-1600, this was considered a minor violation of NRC requirements and no Notice of Violation is being issued.

3.2 .Ouality Assurance Proaram

a. Inspection Scope The inspector examined the adequacy and implementation of ANDl's QA program and 10 CFR Part 21 applicability, and assessed ANDi's conformance to customer procurement require',1ents,

b. Qbervations and Findings The inspector observed that ANDl's QA program was based on the requirements and criteria of 10 CFR Par 150, Appendix B. At the time of the October 30,1997, insgection, the QA program staff consisted of the Quality Assurance Manager and tw other staff.

The QA manager reported directly to the president of ANDI, and was authorized to stop production of a nonconfortring item until the nonconforrning conditions were corrected.

Specific items examined and findings are provided in the following sections.

b.1 Training of Personnel During the August 26-29,1997, part of the inspection, the inspector noted tSat the president of ANDI was responsible for the control and administration of the sale of l brokerage items. The president's responsibility included assuring that the brokerage

items met applicable QA, technical, maintenance, and storage requirements.

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At that time, the sale of brokered items was accomplished according to ANDI Procedure CP-110,

• Control and Administration of Brokered items Purchased for Resale." The procedure states that a ' commercial" certificate of conformance (CoC) is issued for brokered items, it was ANDi's contention that only commercial grade items were processed under CP-110, and that all safety-related items were povided under ANDl's Appendix B QA program.

The inspectors review ol CP-110 indicated that the procedure was intended for the resale of commercial gmde items. However, the procedure does allow for additional procedures and controls if required by customer contract. The inspectors were concemed that ANDI may inadvertently allow safety related items to be processed under CP 110. For e ample, the inspectors reviewod several brokerage packages (sw Section 3.4) and their associated documentation. The inspecters +~tt,J inat, in at least two instances, a CoC was provided, signed by the president, which stated that Appendix B was applicable, ANDI was able to provide evidence that the CoCs in question related to commercial grado purchases (ANDI processed the orders in a:. mrdance with their Appendix B program merely to assure an adequate control of quality). Although the inspectors did not identify any CoCs for safety related items processed in accordance with CP 110, the inspectors concluded that the potential existed for the use of CP-110 to process safety related orders. Therefore, the potential existed for the president to sign CoCs for safety related orders.

Although the president was responsible for assuring that the quality of brokerage items sold conformed to procurement documents in accordance with CP-110, he was not trained for the task if those orders were to be safety-related. The inspector concluded that ANDl's failure to establish the qualification of personnel, as required by Criterion 11

" Quality Acsurance Program," of Appendix B to 10 CFR Part 50, constitutes Nonconformance 99900824/97 0101.

In his September 2,1997, letter to the NRC, the president stated that he planned to remove himself and any other untrained personnel from performing activities related to implementing the ANDI QA program. During the October 30,1997, inspection, the inspector observed that ANDI had abolished CP 110. All purchase orders are now l

processed through the same ANDI QA program. All CoCs, whether commercial grade or safety related are signed by the QA manager. Therefore, since corrective action has been completed, no response to the nonconformance is necessary, b.2 Equipment Handling and Storage The inspector observed that ANDI certified items to be protected in Class B storage (e.g.,

items for ANDI job number M 1051). During the August 26 29,1997, inspection, the inspector determined that ANDl's storage facility did not have uniform heating and temperature control to protect applicable safety-related items from condensation and corrosion, as defined in ANSI /ASME N45.2.21978, " Packaging, Shipping, Receiving, Storage, and Handling of items for Nuclear Plants." The ;nspector concluded that ANDi's failure to establish special protective environments, such as moisture and temperature l

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levels, as required by Criterion Xill, " Handling, Storage, and Shipping," of Appendix B to 10 CFR Part 50 constitutes Nonconformance 99900824/97-0102.

In a letter dated September 2,1997, to the NRC ANDI stated that it plans to " conduct a Storage Evaluation Program to determine temperature and environmental conditions of the ANDI storage facility in order to comply with the requirements of ANSl/ASME N45.2.21978 for Level B storage. This evaluation would be performed for a period of 60 days and will generate data which will be utilized for any corrective actions to be taken, if necessery.' On October 6,1997, the president confirmed by telephone that ANDI will also evaluate the impact on potentially inadequately controlled components, if necessary, that had been certified and shipped as protected in Class 8 storage.

During the October 30,1997, inspection, the inspector noted that the evaluation program was ongoing.

b.3 Control of g iterials, Paris, and Equipment The inspector observed that ANDI maintained both safety related and non safety rotated raw materials, parts, and equipment in its QA-controlled storage area. Although the storage area is locked and controlled by QA, the inspectors were concerned regarding the possibility uf integrating safety and nonsafety components, in its letter dated September 2, '.397, to the NRC. ANDI stated that "in t')e future, ANDI will ensure proper separation and segregation of raw materials, parts and equipment based on its safety-related and non safety status." In addition, ANDI plans to revise procedure CP-112,

" Identification and Control of Materials and items," dated September 9,1997, to require physical segregation. No further concems were identified.

b.4 Receipt inspections The inspector observed that on the basis of Paragraph 5.5 of Section 7-1, " Procurement Control," ANDI QAP, dated July 1,1996, receipt inspections to assure materials met the procurement documents were performed by QA personnel. The inspector was concemed that an independent assessment was not being conducted by personnel other than those who perform the receipt inspection. ANDi's QA manager stated that receipt inspections were audited annually by individuals independent of the QA group to fulfill the QA requirements. No further concems were identified,

c. Conclungn3 In general, ANDl's QA program was in compliance with the requirements of Appendix B to 10 CFR Part 50. However, the inspectors identified deficiencies in ANDi's implementation of its program. ANDi's program for processing brokerage items had the potential for including safety-related items which could be certified by a unqualified individual. Further, the storage of potentially environmentally sensitive materials had not been adequately evaluated.

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3.3 Commercial Grade Dedication Prooram

a. Insoection Scogg The inspectors revie.ved ANDI Manufacturing / Inspection Procedure (MIP) No. 95A021,

" Utilization of Commercial Grade items Through Commercial Dedication," Revision 2, March 20,1996. MIP 95A021 specifies the process for developing instructions to dedicate commercial grade items, parforming dedication activitics, and accepting the items for use in safety related applicetions.

b. Observations and Findinal The inspectors noted that ANDI requires technically knoMedgeable individuals to establish the technical and quality requirements for the commercial grade dedication.

Among those duties are the technical evaluation, ptrts classification, identification of safety function and critical characteristics, developing the commercial dedication instruction (CDl), including inspection and test guidance and acceptance criteria. QA is responsible for independently verifying information and actions used to dedicate items.

ANDl's procedure is intended to provide reasonable assurance that the commercial grade dedication activities assure that the item received is the item specified and that the item is suitable fct its intended safety related application.

The inspectors reviewed ANDl's procedure and found the procedure will provide for a properly dedicated commercial grade item if implemented correctly.

In order to assess ANDl's implementation of the procedure, the it,spector reviewed two examples of dedicated items, one completed and one currently in process. ANDI job number M-1277-1, is for the supply of a 3/4" orifice to the Carolina Power and Light Company (CP&L). In a letter of October 24,1997, ANDI informed CP&L that they were unable to purchase a safety related component and would therefore, dedicate a commercial grade orifice. ANDI provided the CDl, a typical CoC (stating the methodology ANDI would be using), and a CoC attachment (specifying the part name, and drawing number, including part number and revision). The CDI includes a description of the part's safety related function and a list of critical characteristics to be verified. The critical characteristics are identified as being related to either the product identification or the items' physical performance. It also contains a description of the verification method. The CDI is sent to the customer for their review and approval before the dedication activity begins. CP&L had not yet responded to ANDl's letter.

The inspector also reviewed ANDI job M 1314, for the dedication of a customer supplied needle valve supplied for the Duquesne Light Company. ANDI completed the dedication and provided a CoC to the licensee certifying compliance with the PO with the exception of one noncoriformance. The nonconformance report was included in the package sent to the licensee, as was all other documentation, including the CDI. The shipping package also included a note identifying that the item was provided as a commercial grade dedication item.

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c. Conclusions  !

i The inspectors were satisfied that ANDI property implemented their commercial grade I dedication activity, in addition, the requirement to supply the customer the CDI for review and approval was regarded as a strength.

3.4 Haje of Brokered items

a. In5Anction Scoce During the August 20-29,1997, inspection, the inspectors reviewed /,NDl's process for providing brokered items. The process was described in ANDI procedure CP-110,

• Control and Administration of Brokered items Purchased for Resale." During the October 30,1997, inspection, the inspector noted that CP-110 was no longer in effect,

b. Observations and Findinas The inspectors reviewed approximately 30 files relating to the resale of brokered items.

In most case, the inspector noted that the item was supplied as a commercial grade item in accordance with the customer PO. Procedure CP 110 provides for the resale of commercial grade items and notes that a commercial CoC will be issued. ANDI stated that all resale items sold as safety related would be processed in accordance with ANDl's Appendix B program and not according to CP 110. The inspectors review, in general, supported ANDl's contention, however, the inspectors noted some anomalies and discussed those items further with ANDI representatives.

The inspector observed that on August 19,1996 American Nutech Company (ANC) placed purchase order (PO) #0H962YA65610 with ANDI for various instrumentation items, including Westinghouse 7300 instrumentation cards,0-rings, and lock wire.

. Although the PO did not invoke 10 CFR Part 50 Appendix B or 10 CFR Part 21, cer1ain line items included a parenthetical statement that the items were " Class Q" or " Class R."

The inspector noted that ANDI purchased the W 7300 cards from a subvendor, SERTEC, Inc., who had purchased them from Texas Utilities Electric Company (TIJEC) as surplus material. ANDI shipped the items as commercial-grade (non-safety-related) to ANC along with a certificate of compliance (COC) dated August 30,1996, certifying that "the items are in compliance with the procurement documents and all required tests and inspections have beon performed." The inspector asked ANDI for documentation that described Class Q and Class R requirements, The president stated that he contacted ANC several times but could not get an adequate response regarding Class O and Class R requirernents. He certified the items met Class Q and Class R requirements because the customer" desired"its COC to rnatch the associated purchase order. He informed ANC that the items were not safety reltued by indicating on the COC that 10 CFR Part 21 was not applicable.

The inspector observed that ANDI could not provide documentary evidence of any communication between ANDI and ANC regarding whether the Class Q and Class R 7-

.o Items were safety related or non safety 1 elated. During the inspection, the inspector asked the president to contact ANC to confirm whether Class Q items were safety-related. The president contacted ANC and was told by Mr. Peter Choo (president of ANC), that he had "always told ANDI that the items were being purchased as nuclear.

grade." On September 8,1997, the inspector contacted Mr. Choc to confin,1 his understanding regarding ANDl's supply of tht, material. The inspector informed Mr. Choo that the instrumentation cards and other items supplied to him by ANDI for PO

1. 0H962YA65610 were commercial grade and not qualified to Class O and Class R requirements. Mr. Choo indicated that he thought ANDI hsd supplied him with " nuclear.

grade items" which he believed were equivalent to safety related items.

The inspector determined that in July 1996, an ANDI staff member contacted Texas Utilities Electric Company (TUEC) for documentation that would certify that the cards were safety related. TUEC refused to provide any documentation because the (3rds were no longer qualified to safety related requirements. During the inspection, tr,e inspector asked the president of ANDI why his staff contacted TUEC for safety related documents if he had believed the items were purchased t:y ANC es commercial grade.

The president was not aware that an ANDI staff member ht d contacted TUEC. He stated that ANDI had not authorized any staff member to contact TUEC and thrat the staff member in question no longer worked at ANDI.

The inspector noted that on October 7,1996, ANC informed ANDI that ANC's customer was considering not accepting the instrument cards because "the zoods were damaged and broken on joint parts and still had tags from their use in a nuclear plant." ANDI responded to ANC by letter dated October 7,1996, informing ANC that, according to SERTEC, the items were safety related. were functional, and had been stored in an environment that met Class B storage requirements.

The inspector's review of this issue determined that ANC had purchased commercial grade items from ANDI, based upon the following. The PO sent to ANDI did not specify Append!x B. Part 21, or any other nuclear unique requirements. Further, ANC had not done any audits or surveys of ANDI and did not indicate by any method that ANDI was an approved supplier. Further, the items in question were being provided to a foreign nuclear plant, not subject to NRC regulation.

However, the inspector also concluded that ANDI had no basis for certifying that the items shipped to ANC met the PO requirements since ANDI was unaware of Class Q and Class R procurement requirements. Since the items purchased were commercial grade, no notice of nonconformance will be issued. However, because the inspectors were concemed that this issue had the potential to affect safety related olders, it was identified as a weakness.

On the basis of ANDl's September 2 and September 15,1997, letters to the NRC, and a September 24,1997, telephone conversation between ANDI and an inspector regarding the NRC concems described above, ANDI stated that it plans to revise its procedure CP 106, " Quality Assurance Program," Revision D, dated September 4,1997, to require identifying the safety designation of items sold. ANDI stated that it plans to improve its 8

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QA program to enhance communication and coordination with its customers. During the October 30,1997. intpection, ANDI stated that it would review previous Pos and CoCs l ro deterrrdne if cther instances existed whereby ANDI may have certified meeting PO requirements without fully understanding what they were. ANDI further committed to inforrn customers (including ANC) by letter if any further instances are identified.1he president plans to hire an outside auditing service to perform an independent annual audit of ANDl's QA program and its implementation.

The inspector observed that certain CoCs issued by ANDI for customer purchase orders (o g., CoCs for ANDI job numbers S 1219 and M-0984) Identified 10 CFR Part SO Appendix B requ!remer.ts as applicable but 10 CFR Par 121 requirements as not applicable, it war. not clear from the CoCs whether 10 CFR Part 21 was or was not being applied to the snie of safety related items. ANDI reviewed its documents and reported that 10 CFF. Part 21 applied to allitems it sold as safety related, and that job numbers S 1219 and M 0894 were sold as non safety related items. ANDI also indicated thet it applied 10 CFR 50 Appendix B on certain items even though these items were sold as non-safety related items. ANDI reportedly did this to assure that the items received an adequate quality review, During the October 30,1997, mspection, AMDi informed the inspectors that CP-110 had been abolished. All brokerage items were to be procest*d scing tha current QA program. Those items sold as commerrial grade will be noted on the CoC. ANDI l provided the inspector with a recent example which stated:

10CFR21 - This is a non safety related order.

Further, the CoCs will no l >nger state that Appendix B applies for nonsafety related items. The inspector a;.ded this change would result in a clearer CoC. No further concerns were identified.

c. Conclusions CP 110 was designed and utilized for providing commercial grade brokerage items.

Although no instances were found whereby safety-related materials were supplied under l

CP 110, the inspectors felt the existence of the procedure, as written, could lead to its use for safety related items. CoCs provided under CP 110 were not always clear in that some stated Appendix B was applicable, despite the order not being safety related. The procedure has been abolished. ANDI certified that customer PO requirements had been met, despite not knowing what the PO requirement entai!ed. That practice was identified as a weakness.

3.5 Review of Licenste Monitorina of ANDI

a. Inspiction Scoo.g The inspector evaluated licensee monitoring of ANDl's control of quality for safety-related items purchased by licensees.

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b. Observations and Findinas in February 1996 TUEC audited ANDl's QA program with representatives from Houston Lighting & Power Company and Virginia Power Company. Part of the scope of the audit was to verify whether ANDI had established and effectively implemented a QA program in compliance with the requirements of 10 CFR Par 150, Appendix B and other industry -

standards. Among program attributes audited were ANDl's training / certification, design control, material control / handling, storage, and shipping. The audit team identified two ANDI deficiencies regarding (1) failure to submit a commercial-grade item dedication plan to TUEC for approval in accordance with TUEC's procurement requirements, and (2) failure to identify the safety function and critical characteristics of severalitems requiring commercial-grade item dedication. The audit team also observed that ANDI had no provisions for the classification of parts for safety-related components or equipment. The audit team did not consider its findings to have an adverse impact on the quality of ANDl's completed products. TUEC accepted ANDl's corrective actions for the find'ngs described above and closed the findings on May 10,1996, concluding that ANDl's QA program was adequate and that implementation was satisfactory.

In April 1997 Duque ,ne Light Company (DLC) inspected the equipment they purchased r from ANDI. The r spe of the inspection included verifying certain attributes of the implementation ' ANDl's QA program. No deficiench were found.

The inspector observed that the licensees did not identify ANDl's inadequate storage protection for applicable safety-related items.

c. Conclusions in general, licensees' monitoring of ANDl's quality was in accordance with proper criteria, procedures, and checklists. Licensees' monitoring of ANDi's control of quality was not satisfauory because it did not identify deficiencies in ANDl's storage of equipment.

3.6 Entrance and Exit Meetinas l

At the encance meeting on August 26,1997, the NRC inspector discussed the scope of the inspet, tion, outlined the areas to be inspected, and established interactions with ANDI management. In the exit meetings on August 29 and October 30,1997, the inspectors discussed their findings and observations. i 10-

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4 PARTIAL LIST OF PERSONNEL CONTACTED AND1 Paul HeNernan, President Dennis R. Swalin, QA Manager l Donald Gray, QA Engineer  :

Sheryl Damico, QA Inspector (Former Employee)

Tarun Basu, Manager of Testing Laboratory ,

John Antenucci, Supervisor of Testing Laboratory t

Licensees icontacted by telephone)

Danny Leigh, Plant Overview Supervisor, TUEC James Johns, Supervisor Quality Services, DLC Fred Stobaugh, Procurement Engineer, TUEC t Dan Poneman, Counsel, Hogan and Hartson ITEMS OPENED, CLOSED, AND DISCUSSED Opened 99901324/97-01-01 Para, 3.1b NON inadequate training of personnel 99901324/97-01 02 Para. 3.1b NON inadequate storage f

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