ML20206H794
| ML20206H794 | |
| Person / Time | |
|---|---|
| Issue date: | 11/17/1988 |
| From: | Advisory Committee on Reactor Safeguards |
| To: | |
| References | |
| ACRS-T-1699, NUDOCS 8811230332 | |
| Download: ML20206H794 (60) | |
Text
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UNITED STATES O
NUCLEAR REGULATORY COnDKISSION ADVISORY CO!stITTEE ON REACTOR SAFEGUARDS In the matter of: )
)
343RD GENERAL MEETING )
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Pages: 1 through 42 Place: BET!!ESDA, MARYLAND Date November 17, 1988 m.m...mmmmmmmmmmmmummmmmmmme==mmmm"""""""""""""""""""""""
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~1 PUBLIC NOTICE DY THE 2 UNITED STATES NUCLEAR REGULATORY cob 9(ISSION'S !
3 ADVISORY COWITTEE ON REACTOR SAFEGUARDS ,
4 September 17, 1988 l 5 !
J j 6 The contents of this stenographic transcript of j 7 the United States Nuclear Regulatory Conumission's Advisory I i
8 Committtee on Reactor Safeguards (ACRS), as reported hereit., [
i 9 is an uncorrected record of the discussions recorded at the !
i 10 meeting held on the above date.
J 11 No member of the ACRS Staff and no participant at ,
l [
l 12 this meeting accepts any responsibility for errors or j
. {
l 13 inaccuracies of statement or data contained in this !
14 transcript.
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() 1 UNITED STATES NUCLEAR REGULATORY COMMISSION 2 ADVISORY COMMITTEE ON REACTOR SAFEGUARDS 3
)
4 In the Matter of: )
)
5 )
343RD GENERAL MEETING )
6 )
7 Thursday, November 17, 1988 8
Room P-118 9 7920 Norfolk Avenue Bethesda, Maryland 10 The above-entitled matter came on for hearing, 11 pursuant to notice, at 11:00 a.m.
12 BEFORE: DR. FORREST J. REMICK 13 Vice-Chairman Associate Vice-President for Rescatch
() 14 Professor of Nuclear Engineering The Pennsylvania State Universicy 15 University Park, Pennsylvania 16 ACRS HEMBER_S PRESENT:
17 HR. DAVID A. WARD Research Manager on Special Assignment 18 E. I. DuPont de Nemours & Company Savannah River Laboratory 19 Aiken, South Carolina 20 DR. HAROLD W. LEWIS Prof es'or of Physics 21 Department of Physics University of California 22 San
- Barbara, California 23 24 25 O
HERITAGE REPORTING CORPORATION -- (202)628-4888
2
() 1 HR. CARLYLE HICHELSON Retired Principal Nuclear Engineer 2 Tennessee Valley Authority Knoxville, Tennessee, and 3 Retired Director, Office for Analysis and Evaluation of Operational Data 4 U.S. Nuclear Regulatory Commission Washington, D.C.
5 DR. CHESTER P. SIESS 6 Professor Emeritus of Civil Engineering University of Illinois 1 Urbana, Illinois 8 HR. CHARLES J. WYLIE Retired Chief Engineer 9 Electrical Division Duke Power Company 10 Charlotte, North Cerolina 11 DR. PAUL G. SHEWHON Profecsor, Metallurgical Engineering Department 12 Ohio State University Urbana, Illinois 13 ACRS COGNIZANT STAFF MEMBER:
O 14 Raymond F. Fraley 15 URC STAFF PRESENTERS:
16 B. Grimes 17 B. Brach 18 19 20 21 22 23 24 25 O
HERITAGE REPORTING CORPORATION -- (202)628-4888
3 i
1 E&OCEEDINGS
{} 2 VICE-CHAIRMAN REMICK: We shall reconvene. The next 3 item on the agenda is a discussion of misrepresented
- 4 equipment. Mr. Lewis is the Subcommittee Chairman, so Hal, I i 5 turn the meeting over to you. I l
6 DR. LEWIS: I am going to turn it over to the NRC '
7 staff. I believe you guys are from NRR7 j 8 HR. BRACH: Yes.
9 DR. LEWIS: Okay. Let me just as a point of 10 information, or introduction say that the problems that are 11 going to be discussed will be discussed in the nuclear 12 context, but in fact, it is a problem throughout American 1 l
{ 13 industry. It applies to many more cases, NASA and other 1 i
t 14 places, that have had problems with equipment which has been ;
l 15 mislabeled and sort of put into normal commercial channels, so
- 16 we are going to hear the nuclear end of it, but it is well to i
, 17 bear in mind it is really a national problem, and with that d
l I 18 introduction--
l 19 HR. GRIMES: I am Brian Grimes, Director of the 7
i i 20 Divisicn of Reactor Inspection and Safeguards in Nuclear (
a l 21 Reactor Regulation. I have Bill Brach with me who will be !
I i i 22 making the main presentation today. He is Chief of the Vender !
I 23 Inspection Branch.
]
24 What we want to tell you about today are some l
. t
[
() 25 specific safety concerns on substandard and fraudulent h
liERITAGE REPORTING CORPORATION -- (202)628-4888 l
4 1 components. We are concerned about these specific items, but .
{) 2 overall, wt are also concerned with the implications for the 3 integrity of the process, and what should be done in the
! i 4 longer term to, to try to tighten this up to where we get a i
5 higher degree of assurance.
6 We will discuss with you what we have in the l
\
7 publicly available form. There are a number of inspections i
8 and investigations ongoing that may in the next few months i 9 prove to lead to some additional items which require action in j 10 the safety realm, but today we will share with you what we l
11 have determined to be of safety significance, and I will ask ;
i 12 Bill to go through the slides.
! 13 HR. BRACH: As Brian nentioned, this is an ongoing
)
] 14 activity. We have many inspections and NRC investigations ;
2 i 15 underway involving the various aspects of topics I will be l
l I 16 discussing, so during the presentation, if you have questions, I 17 I will try to answer them as fully as I can, but recognizing l 18 that some of the information involves ongoing NRC l 19 investigations and inspections, s i
) 20 (Slide) j
\ '
21 HR. BRACH: I want to start first with just an f
- t 22 overview of what NRC's overall plan is for addressing this !
l l i 23 issue involving venders supplying misrepresented equipment !
I l
! 24 which may have as well counterfeit and fraudulent activities. )
l I
Our principal objective and our first one listed on
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l l
HERITAGE REPORTING CORPORATION -- (202)628-4888
5 1 the slide is that we want to identify and I will say develop, j 2 and that means for us to develop, to develop an understanding
, 3 and characterization of the issues so that we can inform the 1
i 4 nuclear industry, nuclear power plants, or other users, as i
l 5 quickly as possible so they can take effective, appropriate i
1 6 corrective actions.
7 As Mr. Lewis had mentioned in the opening remarks,
]
8 as these issues are unfolding, we are more and more learning i 9 that this is not solely a nuclear industry issue. It is a
} 10 national issue, and I will touch on the programs that NRC has i
l 11 underway to coordinate with the other federal agencies so that 12 information we identify and develop can be passed along to 13 other perhaps users as well.
l 14 The third objective is that in the cases involving 1
l 15 wrongdoing or cases involving inappropriate actions by
)
S 16 licensees or venders, NRC will be pursuing appropriate civil 17 enforcement authorities that the NRC has authorization for, as I
l 18 well as through other channels, including referral to 19 Department of Justice if such activity warrants.
20 The last bullet, of course, addresses with all the i
21 foregoing identification of issues and problems and activities
! 22 we are working on, it is well to sit back and take a look at i
23 NRC programs, regulations and licensing program as well to 24 determine what needs fixing, equlations for licensee l
O 2s vregrams in need of some r, HERITAGE REPORTING CORtv, 1202)628-4888
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6 1 DR. LEWIS: I admire your vugraph, but you can use ,
2 it for many briefings because it says develop information, 3 notify the relevant licensees, cooperate, and make sure it [
4 doesn't happen again. That must serve a lot of purposes. f i
5 HR. BRACH: I will take that as a compliment, but I j l
6 must add that it was prepared for this presentation on this
]
7 issue.
8 VICE-CHAIRMAN REMICK: I think he was asking for a i l
9 copy of it!
1 i 10 MR. WARD: He wants it on a disc! ;
11 MR. BRACH: Okay. This is an outline of the overall i 1 l l 12 presentation I want to discuss with you during the hour we ;
i i 13 have on your agenda.
(
l ( 14 I want to discuss our understanding of what we think ,
i I
! 15 the problem is, the scope of the problem, why some existing !
! t 1 16 programs are the Appendix B programs, quality assurance l
! 17 programs, some aspects of ASME programs, why we think some of i l
l 18 the current structure and operations of these programs are L
- 19 maybe opening the door or leading the way to introduce some of l l
20 the problems and difficulties we have seen in the past, in the }
I I 21 recent past involving suspect or misrepresented vender l 22 products, services or equipment. i s ,
1 4
23 1 have a chart as well listing some exampics of l I :
I 24 issues in the past six months to year we have been following. ,
1
) 25 I mentioned four, coordination with other agencies, and later
({) f l
1 HERITAGE REPORTING CORPORATION -- (2021628-4888
7 1 on in the briefing we will have discussion of some
{} 2 considerations we have on where we go from there.
3 Here are some considerations within the staff as far 4 as regulatory changes or encouragements to the industry to 5 encourage the industry to take actions as well.
6 (Slide) 7 MR. BRACH: On the scope of the problem, let me say 8 there is a truism that essentially all materials, equipment, 9 components are subject to counterfeiting, substitution or 10 misrepresentation. Some earlier discussions--we will get to a 11 point in the slides that will list a number of examples--there 12 have been comments there have been some components or pieces 13 of equipment which are not yet seen or detected as perhaps 14 being subject to counterfeit or have been misrepresented, but 15 the point I am trying to stress is that in looking at these 16 efforts, whether it be involving electrical equipment or 17 fastenern, it appears based on some inspection findings from 18 NRC, as well as some reports from licensees and other venders, 19 that it covers the waterfront potentially of equipment 20 components and services that our reactors employ.
21 As far as the scope of the problem, as I mentioned 22 before, Appendix B and some considerations of other programs 23 we rely on for certification of quality, many of these 24 programs are structured and built on faith and trust as far
() 25 the vender providing the equipment. We conduct or we are HERITAGF, REPORTING CORPORATION -- (202)628-4888
8 1 using that in a very loose or general term. The nuclear 2 industry relies very heavily on certification provided by our 3 venders to the nuclear licensees as far as we represent the 4 quality and conformance of the equipment to stated 5 specifications.
6 Our audits are, tests and inspections are generally 7 based on confirmation of quality. What we are seeing is 8 difficulty as far as these programs always being structured to 9 identify or detect intent to deceive or fraud where perhaps 10 certifications may be correct on paper but lacking a basis.
11 Recently we have seen many more instances--I will 12 say recently, over the last 6, 12, 18 months, many more 13 instances of what appear to be misrepresented vender products.
I 14 It may be that we are more attuned to be looking for it and we l 15 are finding examples today that have been there for many 16 years, but it is just that in the last six to eight months a 17 number of more examples have been identified involving many l
18 pieces of equipment.
l i 19 You might ask yourself why, why is that? There are 20 three possible reasons I will just mention for consideration.
21 One is fairly obvious. There is a shrinking nuclear market, 22 that is, there are fewer manufacturers of what I will call l
i l 23 safety grade or safety-related or 1E equipment, and so many of
! 24 the nuclear power plants are turning to middlemen to be O 25 suorivine the e2uipmemt. and those midd1 men in man, cases are I
HERITAGE REPORTIllG CORPORATIO!! -- (202)628-4888 l
9 1 the ones that up grr!! .9 tce equipment for safety grade or 1E 2 application.
}
3 The secor.c point involves--
4 DR. SHEWHON: They are upgrading the paperwork?
5 They aren't upgrading the equipment?
6 MR. BRACH: Requiremen's would be both upgrading of 7 equipment to meet stated specification. The question involves 8 their negrading techniques appropriate and complete for all 9 required critical or critical characteristics of performance
, 10 for the equipment they are upgrading.
11 DR. SHEWHON: So a legitimate process is to say that 12 though this wasn't manufactured with an N stamp on it, it 13 indeed met these specifications and we demonstrate this by the 14 following procedures?
15 HR. BRACH: In reference to N stamp, that brings us 16 into the ASME arena which limits the types of companies that a
17 are authorized and certified to make that type of statement, 18 but if we are dropping the N stamp, make that general 19 proclamation of the middleman or intermediate supplier that 20 might take a piece of commercial grade equipment, and then 21 market that piece of equipment as a 1E or a safety grade 22 available item--
23 DR. SHEWHON: Legitimate with the right procedures?
24 HR. BRACH: Yes, to assure that the tests and all
() 25 are carried out as required, yes.
l l
HERz m E REroRTINo CoReoRATroN-_7_y202(s28-48ss
l 10 1 The second point I want to mention, mentioned there, 2 is exactly, just discusses the role of the intermediate 3 suppliers that are not necessarily the original equipment 4 manufacturers, that might be upgrading to safety grade 5 application individual pieces of equipment or components for i 1
6 safety grade application, and the difficulties involved there 7 as far as the middleman or the intermediate supplier having i
8 all the requisite design specifications material specification ,
j 9 on the equipment as originally manufactured to assure that the
- 10 safety grade item conforms to the rejected specifications.
a i 11 The third point is one that is fairly obvious as 12 well, that there is incentive in many regards to purchase on t
a
! 13 the commercial market an item, and if you will do your own 14 dedication and your own upgrade, there is in many cases a 1
l 15 financial incentive to try upgrading or dedicating safety i 16 grade use equipment yourself, and as was mentioned before. the 1
17 problem is not limited to the nuclear industry.
J l 18 DR. SHEWHON: Are there procedures that the NRC lays y 19 out for this upgrading process?
s j 20 HR. BRACH: There are and there aren't. Ten CFR ;
k I
j 21 Part 21 makes reference to dedication of equipment for safety [
1 i
l 22 grade applications. One of the issues I want to discuss in j i
- 23 more detail furthe~ on is an examples involving slectrical !
i 24 equipment and motor case circuit breakers. NRC is in the
()
25 process of developing a more structured base for identifying I HERITAGE REPORTING CORPORATION -- (202)628-4888 j
r 11
- 1 what might be required tests for such dedication.
. i 2 DR. SHEWHON: Fine, but my experience is more with 3 bulbs, and they are one of the things that the industry ;
4 established nuclear grade specs are inadequate in their ;
I
- 5 sampling, yet the test is likely to be destructive, so you i
) 6 have to do some kind of a sampling and certify a batch, and l i i 7 there is, is there any reference to what ASTH is expecting on l i
8 that or does the system, does the NRC have any defined 9 procedures for certifying a batch or whatever people have?
1 ;
i 10 HR. BRACH: Let me take that in reverse order. The i
11 certification of a batch to meet ASME or SAE g rade i i
- 12 specification, those, the requirement for the tests analysis (
13 are contained in the various ASTH, A S H E ,- SAE specifications,
( 14 so that those specifications for number of samples taken and 1 I i 15 such are specified there, i O i
) 16 DR. SHEWHON: That was going to be upgraded, then l I !
i 17 you would have to go back and see that the paperwork that had !
l 18 been used would have been the same for the nuclear ]
1
! 19 application? (
- t l 20 HR. BRACH
- That the required tests per that I
- 21 specification, ASTM specification, those required !
22 specifications would be matched or would be satisfied, and j l
i j 23 those results would be matched to a control to assure the lot i j 24 of material that was sent would, in fact is representative of j i
() 25 the samples, i )
HERITAGE REPORTING CORPORATION -- (202)628-4888 )
12 1 I want to discuss as well existing programs we have I have mentioned
(} 2 hitting on a few of the examples right now.
., 3 that Appendix B is in many regards structured to assure or i 4 confirm or verify the existing quality of provided servict, '
] 5 equipment, material. It is not necessarily structured to j 6 detect someone or a company or vender that perhaps has an :
7 intent to deceive their customer. It would depend upon the i
8 falsification of records along the lines porhaps we were 9 talking a minute ago. !
I 10 I will say it is not meant to be construed as f I
11 reflection that Appendix B is not adequate. Many of tLe 12 examples that we are looking at today involving identification !
) 13 of what I will call misrepresented equipment have been j
() 14 identified through implementation of our Appendix B program. :
15 It is just that in looking further downstream, Appendix B may !
) 16 not necessarily be structured to detect those venders or l 1
17 suppliers that with if you will a mind set or intent to f i
18 deceive or are misrepresenting the products, and fully aware !
l '
i 19 of how quality assurance programs are implemented, how to if l
]
! l j 20 you will assure the paperwork is all consistent. .
- i t
i 21 I will mention as veil in the ASME system, and we t
l 22 will have an example just in a few minutes concerning recent l
\
23 NRC issuance of a bulletin involving fittings and flanges, !
i !
j 24 that the issue of misrepresentation of material is not limited
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() 25 solely to suppliers outside of the or you might say commercial f
' 8
13 1 grade suppliers or suppb ers outside of the ASME arena. ,
(} 2 The next two bullets, commercial grade equipment 3 dedication process, we touched briefly, but those are the two (
4 areas where in our review of cases where misrepresented
. material has been procured and in other cases where material ;
6 may have been installed in operating plants, it is through 7 oftentimes the commercial grade procurement arena and the i f
8 subsequent dedication process by our utilities where we have l
9 seen that this misrepresented material can become installed in
! I j 10 our operating plants. Let me just touch on briefly the .
11 dedication process.
l 12 (Slide) i L i 13 HR. BRACH: The dedication process that is required :
t
)' / 14 for licensees to follow in dedicating equipment Lor safety l l
15 grade safety-related application requires that the utility, ;
. l l 16 the licensee first determine the critical characteristics that I 1 !
t 17 are necessary for that piece of equipment or component to i
- r
- 18 fulfill the required or fulfill the safety function of the ;
' l
- 19 required operability functionality type requirements, and then i 20 having done so, to develop the requisite tests and accep; nce i
l 21 program to assure that those critical characteristics are met. !
l I
! 22 In many of the programs that we have been reviewing j t >
- 23 involving industry, we have seen many cases where there is an
- i j 24 overreliance on the paper certift:ation. In many cases the l
() 25 certification is relied on by the licensee to assure material b i HERITAGE REPORTING CORPORATION -- (202)628-4888 [
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1 characteristics, operabiliti characteristics of a stated .
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2 specification have in fact been met when in some cases the-3' basis of that certification has not been audited or audited !
4 thoroughly by the licensee or the supplier to assure the 5 conformance if you will of those statements to fact.
! 6 There are as well other cases involving the second 4
7 bullet under dedication process that in many cares we have I 8 seen there have been failures to fully identify all the 9 critical characteristics and then match a performance test to i 10 assure those critical characteristics have been satisfied i
11 based on their procurement. . '
12 (Slide) i 13 MR. BRACH: This is a list of some examples of
() 14 equipment over the last year that involve one, a firm, 1 15 significant effort on the part of NRC and the nuclear induscry
- s 16 to try to get our hands around it. Go to the generic 17 vugraph--develop the information to help us better understand I 18 the issues. You can see in looking at the list that involves 1
I 19 everything from nuts, bolts and screws to pumps, valves, 20 electrical equipment These are examples, and many of these 4
j 21 were mentioned before. There are a number of ongoing NRC 22 review, investigation, inspection activities, but there are a 23 number of examples under each of these to heighten to NRC the i 24 need for both attention and action to get on top of this 4
() 25 issue.
4 WERITAGE kEPORTING CORPORATION -- (202)628-4888
15 1 Three of the issues, one involving fasteners, ASME
(} 2 materials--let me explain the acronym. WJM and PSI stands for 3 the two companies in New Jersey that were the stoject of 4 bulletin 88-05. That was West Jersey Manufacturing and Piping A Supplies, Incorporated, that were identified as compania= that 6 had been perhaps fraudulently or misrepresenting their 7 products, and the one company was at one time an ASME 8 certificate holder.
9 There are also additional charts. I want to go in i
10 more detail on the bottom, the electrical equipmen; example. l t
12 MR. BRACH: ASME was principalle fittings and 13 flanges, a few examples of e couple other typls of items. ,
( 14 (Slide) [
15 MR. BRACH: The r.ubject of counterfeit or 16 misrepresented fasteners is one that is not solely NRC's 17 problem or issue. X am sure many of you are aware of many i
18 Congressal hearings have been held by Congressman Dingell's 19 subcommittee over the past year, year and a half, involving i
20 Department of Defense as well as NRC ?* sues involving suspect l
21 or counterfeit or misrepresented fs.'1p*ts. {
22 In 1986, the Industrial Fasteners Institute issued a 23 notice of alert or note that there was in fact, appeared to be t 4
24 in fact a counterfeit market for fasteners in the United
() 25 States. The NRC issued an information not'.:e that year HERITAGE R3 PORTING CORPORATION -- (202)628-4888
- ~ ,, __ _ ._._ _ __----..-_.._._ .,____ .
16 1 passing tast information along to the licensees, and 2 subsequently as well, within the NRC Vender 2nspection Branch 3 we began taking samples of fasteners on inspections of 4 licensees to try to determine if in fact we deve the problem 5 within the nuclear industry as well.
6 The NRC actions, the information notice and the 7 inspection findings, resulted in issuance of Bulletin 87-02 in 4
8 November of last year. That bulletin required licensees to ,
9 take 40 tests, fasteners 20 safety, 20 non-safety related i
l 10 fasteners, and subject them to various tests on, involving 11 chemical and mechanical properties. Over 3400 tests; the 12 tests all have been completed, reported to the NRC during this 13 past summer. There are over 3400 tests conducted by
) 14 licensees, and I note 8 percent of the fasteners, 15 safety-related fasteners that were tested were non-conforming.
16 Ten percent of the non-safety were non-conforming, j 17 Let me point out that we tried to be very 18 conservative in our testing--excuse me ~in our acceptance and ;
19 review of testing, and that we determined any or we counted as 20 a reject any test result that was not within the specified l
l 21 range. For example, if a fastener had a specification of
! i 22 carbon content of 0.27 and the test results were 0.26, we i 23 counted that as a non-conforming fastener test. Many 24 statisticians might argue differently, but we--so cur tests,
() 25 our 8 percent, 10 percent numbers some might argue are high, -
i HERITAGE REPORTING CORPORATION -- (202)628-4888
p 17 1 but we drew the line with the specification levels.
2 DR. SHEWMON: Carbon content can never be specified
-( }
3 as .27 alone. That was the lower limit of the range?
4 MR. BRACH: Yes, sir. That was the lower limit on 5 that particular excmple. I believe it was .4 or .38, 6 something like that. That was the lower limit, yes, sir. And 7 that would be jast one of the characterictics on a fastener 8 examination test that would have been subjected to testing, 9 and I also should mention that if, just using that same 10 example, if all the other tests were within the acceptable 11 range, we still counted that es a rejection or a 12 non-conforming test, so when our examples show 8, 10 percent 13 respectively, they may be slightly some might argue an 14 overestimate.
15 Out of all the safety-related fasteners that were 16 tested, .08 percent or 15 of the fasteners were what we would 17 determine to be significantly out of spec, that is, not a .2 18 or versus .27 issue on using carbon. Again as an example, it 19 may have been say .15 carbon content versus a specified .27.
20 In all 15 of these cases, the licensees reported to 21 us that they had done a justification for continued operation 22 or continued use if you will of that fastener to determine 23 that continued use of that fastener based on its actual 24 implementation or application was acceptable for continued
() 25 use.
HERITAGE REPORTING CORPORATION -- (202)628-4888
l 18 1 1 We are in the process within the Vender Inspection 2 Branch right now of preparing a NUREG to go to industry to
()
f'm 3 provide to all the licensees as well as other interested 4 members the information on the test results, 'o t show the 5 results based en manufacturing supplier'J and licensee testing 6 and analysis, as well as we are working on instruction for ont 7 regional staff to follow up at those licenseet that reported, 8 for example, high non-conformance rates with particular typis 9 of fasteners procured.
10 And further, within the Vender Inspection Brcnch we 11 are carrying out a number or '.nspections of collected fastener 12 suppliers and manufacturers that based on the test data made 13 us question the high rate of non-conformance, the recorded or
() 14 experience based on materials they supplied.
15 (Slide) 16 HR. BRACH: Hoving now to a second example, this one 17 involves ASHE or fittings and flanges of that were provided to 18 to be in conformance with ASHE specification, involves the two 19 companies--Piping Supplies. Incorporated, and West Jersey 20 Hanufacturing located in the State of New Jersey, that have 21 been providing material to the nuclear industry for a good 22 number of years. ;
23 Based on NRC review and inspection of the records, a 14 bulletin was issued in May of this year alertir.g the industry
() 25 to the fact that based on NRC review of the records, in fact HERITAGE REPORTING CORPORATION -- (202)628-4888
19 1 some of this material may not be correctly represented based 2 on lacking basis for some of the certification provided by the
}
3 two companies.
4 Within roughly a month after the bulletin was 5 issued--that was in the May timeframe--in early June, Carolint 6 Power and Light, Sharon Harris site reported to the NRC that 7 they had, or.e, had procured material from PSI and WJM, 8 subjected this material, one of the flanges to--I guess two of 9 the flanges actually, to tests, and found the material to be 10 markedly low in mechanical and material properties, roughly I 11 think about 60 percent of the minimum specifications.
12 Based on those test results, a supplement to 13 Bulletin 88-05 was issued in June of this year directing 14 licenseeu to initiate testing of installed flanges and, well, 15 flanges in the warehouse, and that this information now tended 16 to collaborate that not only perhaps was the material 17 misrepresented when it was marketed, but in fact may be 18 substantially substandard in quality.
19 During the summer, licensees were proceeding with a 20 number of tests on PSI and WJM provided material, and NUMARC, ,
21 the industry Group, was working with the industry to 22 coordinate the testing and results and analysis, and came back 23 to the NRC in the August timeframe with an interim report that i
24 based on sample tests taken to date, that while the material l
i
() 25 may not be, based on testing, may not be what it was HERITAGE REPORTING CORPORATION -- (202)628-4888
20 1 represented to be on the certification, the certified material
(^) 2 test reports, that in many of the cases, the material was QJ 3 within ASME specifications, and otherwise suitable for use.
4 In August of this year, we, NRC suspended the 1 5 bulletin pending further review of this information. I need 6 to note the fourth or fifth bullet down, the tense is 7 incorrect. NUMARC did present to NRC in October I think it 8 was, October 27th of this year, the results of their analysis.
9 That analysis and testing data presently is being reviewed by 10 NRC.
11 Decisions that are to be made by NRC are one, to 12 suspend the bulletin completely based on the tests to date, 13 require some further sampling or testing based on where the
( 14 data might go, or go back to where we were in June and 15 resurrect the testing. Those decisions are in the procens of 16 being developed right now.
17 MR. GRIMES: Before you proceed to the next item, I i
18 would like to comment that the NUMARC effort in this area was l 19 really a very good effort, and that the coordinated testing 20 and independent testing performed through samples from various 21 utilities did a good analysis of the results, and we have that
- 22 voluminous analysis right now for review. I think it confirms 23 the initial thought that the safety significance is not really l 24 high, but that there is a lot of material out there that is l
() 25 not what it was recommended to be.
l HERITAGE REPORTING CORPORATION -- (202)628-4888
21 1 Originally NUMARC also made some recommendations for 2 where we go from here in terms of how we handle stores and
(
3 material in stores and other things, and we may have some 4 slightly different bottom lines, but overall, t..ey were put on c
5 the record. I .,as a very. excellent testing analysis.
6 MR. WYLIE: You said that the subsequent testing had 7 shown that it was within ASME requirements?
8 MR. BRACH: In many of the cases--not in all cases, 9 but many of the tests that were conducted over the summer in 4
10 response to the supplement one of the bulletin indicated that 11 the material, much of the material was within ASME l 12 specifications. That's a, it's a difference between being in 13 conformance with ASME specifications, and being consistent 14 with how the material was represented by the supplier.
15 MR. WYLIE: Let me ask a question. Am I right or a
16 wrong that a holder of an ASME license should produce material 4
17 like what is the ASME for venders?
18 MR. BRACH: That is correct, yes.
19 MR. WYLIE: Is there my reason why ASME didn't pick 20 these things up?
21 MR. BRACH: It turns out this company was a 22 certificate holder for a fairly short window, short period of 23 time. These companies I will mention as well were audited by 24 numerous licensees as well as other major venders, and to my
() 25 understanding, that these previous audits did not detect that HERITAGE REPORTING CORPORATION -- (202)628-4888
4 22 1 fact. Some of the material that was being provided ASME'in f
{ 2 fact was suspect.
3 MR. WYLIE: They had N stamps on them? l 4 MR. BRACH: They were a quality certificate holder.
5 MR. WYLIE: I mean the material itself? Certified i 6 to be ASME N stamp?
7 MR. GRIMES: Not N stamp.
8 MR. BRACH: But they were certifying the material to l 9 be in conformance with ASME specifications, yes.
10 DR. SIESS: Do the audits that you are talking about i 11 involve looking at the material or just looking at papers?
12 MR. BRACH: That's, you have hit one of the points I ;
13 want to stress later, but many of the problems we have seen, C:) 14 be it been licensee audit of venders or be it venders' audits 15 of other venders, is that distinction between doing a 16 programmatic audit in that they are looking to see if a I i
17 licensee or vender has a quality assurance program contrasted I 1
18 to they not only have that program, but are they implementing ,
19 that program? And that takes you out on the floor to look at f 20 material, to look at the quality of the work actually being ;
21 done, and that's--you have hit a very significant point and l
4 22 that's where in some cases, I will say in some of our reviews i
,' 23 of licensee audits we have seen some difficulties re far as 24 how far they go in their audit program of assur2'eg that the 4
() 25 vender has an appropriate quality assurance program in I HERITAGE REPORTING CORPORATION -- (202)628-4888
23 1 conformance with Appendix B, but in testing, that in fact the 2 program is being implemented, material is being tested, 3 controlled, inspected as required.
i 4 DR. SIESS: Even if they have a program and if 5 material is being tested and detected, they could test it and i 6 inspect and find it to be sub-quality and then simply falsify
[
7 the results.
8 MR. BRACH: Yes, sir.
4 9 DR. SIESS: Just knowing that the program includes 10 testing and inspection doesn't tell you anything about the 11 quality of the product, does it?
12 MR. BRACH: No. Let me, if we could use that i 13 example--
( 14 DR. SIESS: Somebody is dishonest.
f 15 MR. BRACH: Using your example. if during an audit, !
16 the auditors wanted to be out looking at and reviewing actual j 17 implementation and reviewing test results on a say procurement 18 of material, and you can carry falsification to various ,
19 degrees. Assur) the test data had in fact been true and ,
20 factual and maintained, and the certifications, the certified f 21 macerial test reports that would be required to say go along !
22 with the material indicated test results that were not I
l 23 consistent with the test data, that should to any auditor be a 24 signal that something is amiss. {
l
() 25 MR. GRIMES: I think we can just jump ahead a little i i
HERITAGE REPORTING CORPORATION -- (202)628-4888 l
34 1 bit, give an example. Some utilities are now instituting
{} 2 receipt testing where they actually take samples of the 3 material coming in, do hardness tests, maybe even a sar.ple of 4 the bullets, and do the destructive test or take a shaving, do 5 the chemistry analysis, and in the Dingell hearings, DOD 6 testimony stated that this is a fairly effecu'v9 means of 7 deterrence. There are 400 I believe fasteners, current 8 contracts to supply fasteners to the Department of Defense, 9 and when they announced the intent to do receipt testing, 68 10 of the 400 contracts withdrew from supplying, so--
11 DR. SIESS: All they announced was they were going 12 to go do an audit of 400 of them.
13 MR. GRIMES: That is correct, so we are looking, 14 seriously looking at what we should be doing in the receipt 15 testing area.
16 (Slide) 17 MR. BRACH: The last of the three examples involves 18 electrical equipment. Maybe members of the Committee are 19 aware during the summer, NRC technical staff and investigatory 20 staff obtained criminal search warrants to visit electrical 21 supply companies in the Los Angeles area. The activities were 22 based on suspicion on NRC's part that these companies may be I l
23 misrepresenting their product to the nuclear _ndustry and l 24 refurbishing equipment, providing it as new equipment.
() 25 Following our activities in the Los Angeles area, in 1
i HERITAGE REPORTING CORPORATION -- (202)'s28-4888 i
._ . . . .. ~-
i' 25 1 July NRC issued informat'.on notices to alert the nuclear 2 industry of the existenc e of these companies, as well as I 3 during our record review of I will say numerous--I don't have :
4 'the number off the top of my mind, but it was about a 5 three-page listing, of utility procurements of equipment from !
6 these companies, of all commercial grade procurements. In 7 subsequent following up with'coth NUMARC and following up with 8 the industry and NRC 4a vell, some of this equipment did in 1
9 fact get dedicated by utilities for safety-related use, but it r
10 appears the majority of matarial or equipment remained as 11 commercial grade items.
12 Following the activity in July, the technical 13 investigatory staff had concentrated efforts in reviewing
(} 14 listed here original equipment manufacturers, venders selling
- 15 1E equipment, venders dedicated commercial grade equipment as 16 well as licensee programs themselves. They were trying to l 17 obtain a better understanding of both the market for this type 18 of material, as well as nuclear power plants, how this ,
19 material once procured may be put into a safety system.
l ,
20 If you recall our earlier discussion on commercial ',
i 21 grade and dedication, our concern is that it is getting to be 22 a more and more prevalent practice *"a+ many utilities are i 23 doing their own dedication of commercial grade equipment for i :'
j 24 safety-related application, and that some of the information I
() 25 we identified in July at the supply companies in the Los ,
i HERITAGE REPORTING CORPORATION -- (202)628-4888
26 1 Angeles area heightens that concern, if the material is being
~x 2 procured on'the commercial market, and procured for purposes (G
3 of dedicating or for use in dedication for safety-related use 4 at the operating plants.
5 NRC over the past few months has been working on a 6 bulletin to issue to the industry to try to address this 7 issue, and as I mentioned before, the question about 8 dedication as well as layout tests that would be deemed 9 appropriate by NRC for whether it be a licensee, an 10 intermediate supplier, or original equipment manufacturer, to 11 assure that when safety grade equipment is provided, that it 12 conform with a set of specified tests. A copy of that 13 bulletin was put in the public document roon a couple of weeks s_/ 14 ago for comment, and we received a number of comments, 15 including from the NUMARC UL--Underwriters Laboratory and an 16 organization NEMA, which is National Electrical Manufacturers 17 Association, coupled with comments from the industry. We are 18 right now in the process of reconciling those comments to 19 moved forward with the bulletin. That would specify some 20 requirements for licensees to do both testing of procured and i
21 installed and in some case perhaps replacement of that 22 material as well, if the testing is not acceptable or 23 adequate. ,
- f DR. SHEWHON: Would that sort of a rule also apply
() 25 to new reactors in some way if somebody were buildings HERITAGE REPORTING CORPORATION -- (202)628-4888
_ _ . _ _ _ _ , _ - _ _ . - _ _ - ~ _ _ _ _ _ _ _ _ _ _ _ . -
27 1 another--
(} 2 MR. BRACH: As far as this, the bulletin as it is 3 structured right now applies to all plants, both operating and 4 those under construction.
5 One of the points I will get to in a slide or two is 6 looking downstream, we are considering an advanced notice of 7 proposed rulemaking of some aspects that are required for 8 dedication testing as well as Mr. Grimes mentioned receipt 9 test are elements that we are presently considering within the 10 staff.
11 DR. SHEWMON: That would help avoid a couple of 12 problems in the past in new plants unfolding.
13 HR. BRACH: Yes, sir.
14 (Slide) 15 HR. BRACH: I want to touch briefly on--but it is 16 not, not important enough--one thing that became very apparent 17 to us I will say following the July activAty in California is 18 the need for interagency cooperation on cases where say the 19 NRC or the Department of Defense or NASA or other agency 20 identified, that there are venders that perhaps may be 21 fraudulently misrepresenting their products to their 22 customers.
23 During our activities in July involving the 24 electrical supply company, we identified a number of other
() 25 federal and state agencies that have been procurers of HERITAGE REPORTING CORPORATION -- (202)628-4888
28 .
1 equipment from the, from the compsnies, and I might say the
(} 2 concerns there that we have as far as what was the intended 3 even limited use of that equipment procured, we did proceed-to !
4 notify all other federal agencies ol' the information we !
5 developed during that activity, and as a result of.that 6 activity as well, it heightened our~ attention. l l
7 In some of the earlier examples I have mentioned we L L
8 had seen cases where perhaps the Department of Energy or some l
1 9 of the nuclear facilities, Department of Energy may have been .
10 procured from some of these selected venders as well, and we l l 11 took initiative to notify DOE or other agencies as (
t l
12 appropriate.
2 13 The July activitias I will say kind of crystalized .
14 to us the importance that there needs to be a mechanism within j 1
15 the federal government to have a sharing of this type ,
( 16 information.
17 The NRC, in July of this year, Chairman Zech sent a 18 letter to Mr. Hiller, Director of OMB, requesting that OMB
- t i
i 19 take the charge to arrange or facilitate this type of I r i
20 interchange of information. A preliminary or organizational l
l 21 meeting occurred in early August which resulted in OMB's ;
! t 22 identification to the NRC as well as all other federal i 23 agencies--I don't have an exact count. There were roughly 25 ,
i 24 to 30 other federal agencies at the early August i
() 25 meeting--identify through NRC that this issue has been 7 1
1 E . _ _ . _ _""*'""^"""
" " ' ' " ^ * " - - 2)'-4888 '
29 1 remanded to the President's Council on Integrity and
{} 2 Efficiency, and second, President's Council on Management 3 Improvements, so we are all optimistic that the ball is 4 moving, and this vehicle for interchanging information between 5 federal agencies will occur.
6 VICE-CHAIRMAN REMICK: Would you restrict it just to 7 federal agencies?
8 HR. BRACH: At the meeting with OMB, we were looking 9 principally within the federal agency context. I will mention 10 in July our notifications were to other federal or state 11 agencies as that information may be indicated, they may have 12 procured equipment. I guess what we were trying to do was 13 first scope the federal agency's involvement, and then the 14 next tier down would be the informing the states. That's a 15 good question.
16 VICE-CHAIRMAN REMICK: But wouldn't purchasers in 17 general like to know if somebody has been found to be 18 providing this type of equipment in a completely another 19 arena? The federal government is compiling a list of people 20 who have been debarred or suspended from contracting with the 21 government, and so far it seems to loosen up a great i
22 extension, but the idea is that in awarding of such grants and 23 contracts, they can be aware of that has happened with other 24 subcontractors and so forth so that it might not associate
() 25 them with any contractor grant.
HERITAGE REPORTING CORPORATION -- (202)628-4888
30 1 MR. BRACH: You mentioned, make reference to the GSA 2 document that lists companies that have been barred for 3 various reasons from doing business with the government. That 4 is a publicly available document. >
t 5 VICE-CHAIRMAN REMICK: Yes. Seems like this would 6 just be an extension of that.
7 MR. BRACH: Our information identifies a company.
8 The GSA document lists solely companies that have had past 9 government contracts or financial arrangements.
5 10 Your point is a good one. We have been working--
11 MR. CLAUSSEN: Let me--I am Max Claussen, but in 12 attending the OMB meeting, one of the points that was raised 13 at the meeting and in preparation for it was the fact that at ,
( 14 this point in time, a significant number of the issues that we t
l 15 are pursuing and investigating may include criminal 16 proceedings to follow. l 17 At this point in time, it would be inappropriate for i 18 either the General Counsel to get into a discussion of whether r 19 or nc t these things bear on issues that can be released 20 publicly to protect people in the other arena. It is one of i l
21 those situations where the lawyers are sort of in the way l
22 because what they are doing is protecting rights of people who [
! 23 have not yet been informed that they may be prosecuted.
! I 24 The intent of putting out the bulletin and the l
() 25 information notices is to disseminate the stuff to people who ;
1 t
- HERITAGE REPORTING CORPORATION -- (202)628-4888
1 31 1 are licensed, and of course those become public documents, but
(} 2 don't get the distribution that we may wish or responsibly 3 choose in the future to take, i 4 VICE-CHAIRMAN REMICK: Thank you, f 5 MR. BRACH: The next chart is noting what I had I 6 previously covered. We have notified a number of other I
7 federal agencies. It has been mentioned Chairman Zech is 8 following our activity. We sent letters to DOE, NASA and the t
9 U.S. Navy notifying them as well of the information. We had 10 identified that those were three other federal agencies that l 4
11 were frequent procurers of equipment from the California 4
12 companies.
13 I want to address a little bit of where we go from Basic concept to all, the underlying concept to all the 14 here. l 15 problems that we have seen is an over-reliance in the 16 industry, had it been suppliers, or licensees, on paper 17 certifications, certificates of conformance, certified ;
18 material test report. In many cases where we have seen that !
19 the misrepresented material has made its way into a nuclear ,
i l
- 20 facility, the basis for certification provided by the supplier [
21 had not been adequately audited by the vender. Earlier ,
i !>
22 samples we had mentioned as far as the programmatic type of l
! 23 audit that a company might or licensee might employ to assure ,
i 24 that a company has a quality assurance program, Appendix B
() 25 type program, haven't been carrying that to the next step to !
HERITAGE REPORTING CORPORATION -- (202)628-4888 l
32 1 assure implementation.
2 Mr. Grimes mentioned questions about adequacy of (a~]
3 receipt inspection--testing that was carried out by licensees 4 to assure that the material they are receiving in procurement 5 matches with and is in fact as it is represented to be, and 6 also an overdependence of what I will call prototype tests, 7 that is, an overdependence--material has, somewhere a piece of 8 equipment has somewhere already been certified to be a certain 9 caliber or specification, and you now have a piece of 10 equipment that has the same model number or the model number 11 is matched, that if you will you are home free, that there is 12 oftentimes maybe an over-reliance on this, on the previous 13 certification that may have been provided, and of course that 14 leaves you the problem as we have discussed involving what 15 might be termed operability, performance characteristics.
16 (Slide) 17 HR. BRACH: Some ideas we have had on where we go 18 from here. As you all skim this list, I will mention some of i
19 these are quite obviously activities that NRC through 20 regulation, could promulgate. Others are ones that the NRC i
21 has in the past and is in the process of encouraging the 22 industry as well to consider.
23 I had mentioned a little bit earlier that NRC has 24 been, has underway an effort to develop an advanced Notice of
() 25 Proposed Rulemaking to be put out to the public for comment HERITAGE REPORTING CORPORATION -- (202)628-4888
33 1 on selected issues as far as taking into account some of the 2 problems that have been identified ove the past year or so
)
3 involving licenses procurement progr and licensee 4 dedication programs, asking for industry comment on selected 5 issues. Some of those issues are listed here on the page.
6 We mentioned, we have discussed audit a couple of 7 times, although t'o aspects that are mentioned here we haven't 8 discussed beforehand that are mentioned here involve more 9 technical participation.
10 In many of our reviews, we found that the audits 11 that are performed by licensees are in many cases performed by 12 very, very well-trained accountants but the accountants may 13 not necessity have the technical expertise to assess all the 14 critical characteristics and operability characteristics that, 15 material characteristics necessary to assure the quality of l 16 the products, as well as more comprehensive audits we 17 mentioned beforehand of both looking programmatically, but 18 also looking at doing a thorough review and implementation l
19 mode in the sampling mode.
20 The third bullet is the consideration that if audits I
s 21 are going to be perhaps expanded from both a time basis as
! 22 well as a number of participant bases, it may be that audits, l 23 utilities might want to join their effort to collectively i
! 24 audit various venders as a single team rather, as opposed to a
() 25 multiple team, r
HERITAGE REPORTING CORPORATION -- (202)628-4888
O' 34 ,
7, 1 We have mentioned earlier as well the improved 0
{}
' An example, in the 2 material receipt inspection tests. ;
3 Department of Defense, they have where DOD had noted that ;
i
)
i 4 what, the possibility of implementing audit testing of t
l 5 receipt, a number of venders had indicated that they were no ;
I 6 longer interested in being a supplier, not knowing for sure I a ;
l 7 what result that might have within the nuclear industry.
a 8 There is the benefit achieved in testing to assure the buyers I i
that if they are buying nuts, bolts and screws and selectively
[ 10 taking a few examples of those for chemical material test, 11 that they are getting what they had initially gone out to l 12 procure, that same example can carry over to other types of ,
l l 13 equipment, although different limitation of the testing of {
j !
14 various types of procured material.
15 The next two items involve sharing of audit results j e 16 by licensees, and sharing, which includes receipt--excuse 4
17 me--sharing of vender audit as well as sharing of receipt
! 18 rejection information. This first raises questions of i
- 19 liability on the part of a company that is a licensee that !
I 20 perhaps visited a vender and reports back to the world that ;
i 21 based on their vender audit, this company looked at by them is
(
22 not approved for supplying safety-related equipment, and ;
23 secondly, you might say they are informing the other industry ;
. i 6
i 24 as well they might be suspect of this company. It introduces l 1
l 4
t
() 25 some obvious liability questions, but those are isaues that we i
i i
HERITAGE REPORTING CORPORATION -- (202)628-4888 l
35 1 are looking to pursue.
2 There have been some examples in the past where a
~}
3 utility maybe had audited a vender and determined that that 4 vender was not, based on their standards, acceptable for 5 providing equipment to them, but other utilities maybe with 6 different information or maybe without as complete information 7 were already buying equipment from that respective vender, so 8 we are looking at a way to see if there is a way for utilities 9 sharing that type of audit result information.
t 10 The next situation as far as sharing receipt 11 rejection information would be say, for example, based on 12 testing, licensees identify that a supplier provided material 13 that is not in conformance with a certificate of conformance
( 14 or its certified material test report--is there a vehicle for 15 sharing that information among the industry? That quite i
16 generally we see a vender who is a supplier of equipment to 17 one facility quite often is a supplier to a number of other 18 utilities, nuclear utilities as well.
l 19 We have mentioned in the previous slide the l 20 improvements needed in dedication programs to assure that i
21 licensees who are either intermediate suppliers or j
j 22 manufacturers in dedicating equipment for safety grade use our i 23 first fully identifying all the critical characteristics that I
i j 24 are necessary for that piece of equipment to be used in a l
() 25 safety-related application, with secondly assuring that they I l
36 1 have adequate testing to show conformance of those critical
(} 2 characteristics with conformance.
3 I mentioned a minute ago the consideration of joint 4 utility procurements. Joint utility audits, also there is, an 5 alternative as well is having joint utility procurements 6 where I mentioned, if you recall I mentioned before there is a 7 shrinking nuclear market, and perhaps if utilities might in 8 some common types of procurements join together, some of the 9 companies that are no longer maintaining their Appendix B 10 quality assurance programs for manufacturer might, based on 11 market pressures er market requests, might be interested in 12 fulfilling larger orders that might be the result of joint 13 utility activities.
14 The last item is the one we mentioned earlier as 15 well as, as far as some of the tests requirements that contain 16 some of the ASTM or SAE specifications. One of the issues 17 that we have identified in looking at fasteners and some of 18 the non-conformance of faster.ers to specification we think may 19 in fact be in part attributed to the sampling schemes that are l
20 in place or required L/ the various standards. I don't have 21 the numbers in my hand, but roughly out of 30,000 in a lot, 22 the required sample size was in the ten or less, so we are, 23 one of the areas we want to look at as well--we are working ,
24 with the industry in this regard--is to take a look at
() 25 sampling and testing requirements as required by the i i
l l
1 HERITAGE REPORTING CORPORATION -- (202)628-4888 I
37 1 specifications to assure adequacy of the testing programs, to 2 assure the overall conformanco of the material or the lot
{~}
3 being tested to those st ated specifications.
4 HR. WYLIE: Let me ask a question. A lot of what 5 you have there applies to joint utility or industry action, 6 address those things.
7 Have you discussed this with INPO or NUMARC? It ,
8 seems like to me those are the organizations in place that 9 could bring a lot to bear on this proolem.
10 HR. BRACH: Yes, sir, we have. NUMARC has formed a I
11 working group to pull together the nuclear utility efforts 12 with regard to say a fresh look at procurement programs that 13 are in place today of the, by nuclear utilities, from the 14 standpoint of are there ways of improving the programs 15 collectively or individually? That effort is underway. It 16 is--and topics we have mentioned here have been discussed with ;
i 17 NUMARC. !
18 If you recall, I mentioned at the outset some of 19 these issues could be put into place by NRC regulation, for 20 example, additional or improved material receipt inspection '
21 tests. Some of the others would be more of an industry or 1
1 22 NUMARC type of initiative as far as joint utility audits, .
1 1
23 joint utility procurement. That would be initiative on the 1 24 industry side to try get on top of the problem and hopefully j l
] () 25 solve it, so yes, we have been sharing our, discusaing this l
)
i l HERITAGE REPORTING CORPORATION -- (202)628-4888
38 1 with NUMARC, and a number of licensees as well, on quite a few
{} 2 occasions. i 3 MR. GRIMES: I would comment that Mr. Cavanaugh is l
4 the, I believe is the chairman of the group. I think they j r
5 have met once themselves, plan to meet with us late this [
t 6 afternoon for the first time to discuss the scope of their i 7 efforts. We will find out more about what their schedule is.
8 We have, so far we are a little disappointed that
[
i 9 they haven't moved any faster in this area, and we would be )
1 10 urging them in that direction this afternoon. ;
i 11 VICE-CHAIRMAN REMICK: I was a little confused (
12 because I thought you said this list of proactive initiatives [
13 were things that you were considering, and I didn't catch !
I O 14 whether you said proposed rule or advanced notice of proposed [
i
! 15 rule, and I guess I had some of the same concern that I think j 4
i 4 16 Mr. Wylie was alluding to. Some of those things I don't know i i !
l 17 if the commission should mandate. [
t i 18 MR. BRACH: Let me apologize. Let me go over again l ,
- l that what are listed here I will call proactive initiatives. !
l 19 l 20 Some of these initiatives are ones that the NRC could consider (
l i
! 21 through the rulemaking process. Other initiatives are ones j l
! 22 that we have discussed and identified to the industry that the f l I
- 23 industry might want to consider as far as an industry
i 24 initiative to address the issue. !
t j
() 25 I mention the utility audits and utility i
i l HERITAGE REPORTING CORPORATION -- (202)628-4888 [
~I 39 1 procurement, joint utility procurement are two very obvious
{} 2 ones that through regulation--I think a very good question is 3 raised as to the appropriateness of those being pursued 4 through regulation versus encouragement to the industry, and 5 those two are just two of the examples on here that are ones 6 that we are pursuing with the industry for the industry to 7 consider.
8 Others that--well, aspect of improved audits you 9 have to look at regulatory terminology, but there is an aspect 10 of audits that NRC could address through rulemaking. Receipt 11 inspection testing, the sharing of information is one we have 12 discuosed with the industry. As I mentioned a minute ago, the 13 principal concern is with regard to the liability of those 14 companies that might come forth and make a statement about the 15 performance or lack of performance of some other vender as far 16 as the product provided not being consistent with stated 17 certifications.
18 As mentioned, the last one is one that we have been 19 working with the standards or those type organir-tiens as far 20 as raising questions with them as far as the ad64uscy.
21 DR. SIESS: I have a question about that. If I want 22 to sell you 30,000 substandard bolts, I don't think it is 23 going to make any difference to me at all whether I test 11 of 24 them or 20 of them or 50 of them. To find out they are
() 25 nubstandard, I am going to falsify the documents. It doesn't HERITAGE REPORTING CORPORATION -- (202)628-4888 1
40 1 make any difference.
~T 2 HR. GRIMES: I think the point was here on (O
3 fasteners, I think the large majority of the substandard cases 4 we saw were not a result of falsification. They were probably 5 a result of the testing scheme that venders used for the--
6 DR. SIESS: Japanese import--
7 HR. GRIMES: Those are part of the problem, but when 8 we did the large number of samples, and sampled 3,000 and 8 9 percent came up substandard, a large number of those slightly 10 substandard bolts are a result of things other than 11 falsification.
12 DR. SIESS: Yes, so I don't quite see how that the--
13 DR. SHEWHOil: There are other examples. Alverdi had !
14 a problem end Midland Bolt did with heat treated high strength f 15 bolts, and some of them were in spec and some of them weren't, 16 and you know, it is what they do on one heat treating batch 17 each, which is a lot smaller than 30,000, and this ASTM spec, 18 it says one in 10,000 or ten in 10,000.
i 19 DR. SIESS: Was it misrepresentation?
20 DR. SHEWHOli lio, it was not misrepresentation.
21 DR. SIESS: I thought we were talking here about !
l i 22 misrepresented--
t 23 HR. GRIHES: Substandard parts; the major concern is i l
24 falsification, but for examplo, in the fastener area, we think l
() 25 a good number of those are not falsification.
l l HERITAGE REPORTI!iG CORPORATIOli -- (202)628-4888
41 ;
r J f 1 DR. SIESS: There are'always going to be some
[
2 substandards.
) .
I 3 VICE-CHAIRMAN REMICK: Other questions or comments? f I
1 4 MR. WYLIE: Well, I think in upgrading the testing :
L 5 provision code and standards, I think also NUM35r,, nuclear
{ 6 utilities have a big stake in that also, that'2c11ectively l 7 bring something to Laar in that area also 26 far as rather 8 than going to the standards writing organization. You have
, 9 got to get, somebody has got to pay the bill, and that's the i
10 utilities. ,
t 11 MR. BRACH: Let me--about paying the bill, earlier .
12 we were talking about Bulletin 88-05 and the testing !
E i 13 requirements for the, to determine that they had procured any ,
i '
f
} 14 of the fittings and flanges fror the two companies PSI and !
l i 15 WJM, if they had in fact, where were they, and conduct tests. l 16 The nuclear industry was reporting to us that they ;
I 17 were spending if I recall a hundred man years. They had !
18 expended a hundred man years of effort in the summer already {
19 in that ene effort, so there is very much of an incentive from
(
l 20 both a quality of equipment, quality procurement perspective (
l l f 21 as well as a fiscal perspec' *.ve to get on top of this issues, i I
l l 22 and get it solved or addressed. {
i l
! 23 VICE-CHAIRMAN REMICR: Mr. Subcommittee Chairnian, I t
i i
! 24 anything further? :
() 25 DR. LEWIS: No. I want to ask if there are other i
l l t
i
(
i HERITAGE REPORTING CORPORATION -- (202)628-4888 ;
L -
42
. 1 questions?
r I
2 If that's the case, then Mr. Chairman, I think we j 3 can--we offer you infinite conJratulations for fin;,hing on 4 time. While it is not actually unprecedented here, it's rare. .
! 5 Thank you vt y much.
( d' BRACH: Thank you.
7 VICO-CHAIRMAN REMICK: Thank you. Mr. Ward has
- - i 8 something he would like to raisc before we turn to lunch.
i 9 (Whereupon, at Noon, the recorded portion of the i
10 meeting was adjourned.)
t 11 :
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HERITAGE REPORTING CORPORATION -- (202)628-4888
1 CERTIFICATE 2
- O'" 3 This is to certify that the attached proceedings before the 4 United States Nuclear Regulatory Commission in the matter of:
5 Name Advisory Committee ott Reactor Safeguards--343rd G 11 ral Meetittg 6
7 Docket Number 8 Place: Bethesda, Maryland 9 Date: November 17, 1988 10 were held as herein appears, and that this is the original 11 transcript thereof for the file of the United States Nuclear 12 Regulatory Commission taken stenographically by me and, 13 thereafter reduced to typewriting by me or under the direction 14 of the court reporting company, and that the transcript is a 15 true and accurate record of the foregoing proceedings.
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17 (Signaturer typed): Catherine S. Boyd 18 Official Reporter 19 Heritage Reporting Corporation l
) 20 21 22 23 24 25 Heritage Reporting Corporatior.
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O OVERALL ACTION PLAN 0- DEVELOP INFORMATION TO GIVE LICENSEES (LICENSEES ASSESS AND CORRECT DEFICIENCIES)
O COOPERATE WITH OTHER FEDERAL AND STATE AGENCIES O INVESTIGATE CIRCUMSTANCES AND TAKE
() APPROPRIATE ACTION O ASSESS NRC REGULATORY FRAMEWORK TO PREVENT FUTURE PROBLEMS e
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SUPPLY OF MISREPRESENTED EQUIPMENT O SCOPE OF PROBLEM O EXlSTING PROGRAMS O EXAMPLES OF AFFECTED EQUIPMENT O COORDINATION WITH OTHER FEDERAL
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O ALL EQUIPMENT SUBJECT TO COUNTERFEIT OR SUBSTITUTION O EXISTING QA PROGRAMS AND VENDOR AUDITS:
- CONFIRM PRODUCT QUALITY
- ASSUME INTEGRITY
- NOT FOCUSED ON INTENT TO DECEIVE I
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t TALKING P0thTS ON SCOPE OF PP0BLEM O o ESSEhTIALLY ALL MATERIALS, ECUIPENT, AND C&PONENTS ARE SUEUECT TO COUhTERFEIT OR SUESTITUTION .
o EXISTitE QA PROGRNS AND VENDOR Al'DITS ARE CBERALLY STRUCTURED TO CONFIRM OUAllTY OF PRODUCTS AND TO DETECT SUBSTANDAPD PRODUCTS, BUT NOT TO DETECT FPAUD AND INTEhT TO DECEIVE ,
o PECEhTLY t'DRE IfGTANCES OF COUfffEPFEITING OR SLESTITlITION HAVE BEFN , ,
IDENTIFIED BY BOTil TlE NRC Af0 LICENSEES -
o SHRINKING NUCLEAR MAPET HAS CAUSED LARGER FANI.FACTURERS TO LEAVE !
NUCLEAR PAPET OR REDUCE PRODUCT LINES OFFERED UNDER NUCLEAR QA PRC00CTICtl STANDARDS o A LARGER FRACTION OF SAFET(-RELATED COPPONENTS ARE BEING PROCURED
. C0ftERCI AL GRADE B" INTERWDI ATE SUPPLIERS AND "UPGPADED" TO NUCLEAR ;
- QUALITY-ALLOWABLE LF APPROPRIATE ItGPECTION AND TESTING IS FEFF0PMD FOR EADI LOT i o TliE DIFFEPBiCE BEThEEN NUCLEAR AND CQtERCIAL PRICES OR BETkUN i REFURBISHED AfD fEh' C0FONENT PRICES PROVIES AN INCENTlW TO MIS-REPRESBfiPRODUCT E
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O COMMERClAL GRADE EQUIPMENT O DEDICATION PROCESS FOR SAFETY-RELATED O ^ee'ic^Tio"s I
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- NOT SUBJECT TO DESIGN OR SPECIFICATION REQUIPDENTS LN100E TO NUCLEAR FACILITIES (E.G., SECTION !!! ASFE CODE, IEEE 344 & 323)
AfD CAN BE ORDEPID FROM t'ANUFACTURER'S PUBLISHED PRODUCT DESCRIPT!Ui o CatERCIAL ITEPS l'AY BE DEDICATED FOR USE IN SAFET(-RELATED APPLICATIONS o THE DEDICATION PROCESS REQUIRES:
- 1) A TEGINICAL EVALUATION TO DETERMINE THE CHARACTERISTICS CRITICAL TO FULFILLING THE SAFETY FUNCTION AND
- 2) AN ACCEPTAf4CE PROCESS TO ASSURE Tir>SE CRITICAL CHARACTERISTICS AFE FET O
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O EXAMPLES OF MISREPRESENTED EQUlPMENT O FASTENERS O ASME MATERIALS (WJM/ PSI)
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BULLETIN 87-02 i
i t o LICENSEES REQUESTED TO CONDUCT TESTS OF SAFETY AND 1
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! o TEST RESULTS RECEIVED i
c 8% SAFETY-RELATED NONCONFORMING (168)
I o 10" NON-SAFETY-RELATED NONCONFORMING (159) t o .08% SAFETY-RELATED SIGNIFICANTLY OUT OF j SPECIFICATI0M (15 SAMPLES) 1 o NUREG TO BE ISSUED PUBLISHING TEST RESULTS ;
i o TEMPORARY INSTRUCTION TO BE ISSUED FOR NRC INSPECTION j FOLLOWUP ,
o NRC INSPECTION SELECTED FASTENER SUPPLIERS AND MANUFACTURERS 4
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O O O ASME FITTINGS AND FLANGES BULLETIN 88-05 o LICENSEES RECUESTED TO IDENTIFY AND TEST SUSPECT FITTINGS AND FLANGES o EXCEPT FOR NT0Ls, TESTING AP.D RECORD REVIEW SUSPENDED o NUMARC COMPILING RESULTS ON IN-SITU AND LABORATORY TESTING o NUMARC TO PRESENT DATA TO NRC OCTOBER 1988 o NP,C STAFF TO REVIEW NUN RC SUBMITTAL o NRC TO DECIDE ON NECESSITY FOR ADDITI0flAL ACTIONS I
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O O O SUSPECT REFURBISiiED ELECTRICAL EQUIPEENT INFORMATION NOTICE 88-46 NRC ACTIVITIES o INSPECTING ORIGINAL EQUIPMENT MANL'FACTURERS o INSPECTING VENDORS SELLING IE EQUIPMENT
_o, INSPECTING VENDORS DEDICATING COMMERCIAL GRADE EQUIPMENT FOR IE APPLICATIONS o INSPECTING LICENSEE DEDICATION PROGRAMS I
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COORDINATION WITH FEDERAL AGENCIES REQUESTED OMB TO ORGANIZE INTER-AGENCY ,
MEETING AND OFFERED ASSISTANCE :
- OMB MEETING ON AUGUST 3, 1988
- PRESIDENT'S COUNSEL ON INTEGRITY AND EFFICIENCY AND COUNSEL ON MANAGEMENT IMPROVEMENTS O
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NRC NOTIFIED OTHER GOVERNMENT AGENCIES OF i KNOWN PROBLEMS !
I CHAIRMAN ISSUED LETTES TO NASA, U.S. NAVY, ;
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OVERALL PROBLEMS WHICH NEED TO BE ADDRESSED OVERRELIANCE ON PAPER CERTIFICATION
- BASIS FOR CERTIFICATION NOT VERIFIED BY ADEQUATE VENDOR AUDIT
- ADEQUATE RECEIPT INSPECTION, INCLUDING O Tesri"o. "or etaroanto
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