ML20210A898
| ML20210A898 | |
| Person / Time | |
|---|---|
| Site: | Diablo Canyon  |
| Issue date: | 02/12/1982 |
| From: | Skjei S Office of Nuclear Reactor Regulation |
| To: | Vollmer R Office of Nuclear Reactor Regulation |
| Shared Package | |
| ML16340C148 | List:
|
| References | |
| FOIA-86-151 NUDOCS 8609170382 | |
| Download: ML20210A898 (3) | |
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FEB 1 2 1982 I
MD10RANDUM FOR:
P. H. Vollmer. Director Division of Engineering FR0ti:
Stephen S. Skjei Chief Antitrust and Economic Analysis Branch t
SUBJECT:
INDEPENDENCE OF PG&E'S PROPOSED CONTRACT 0P.S FOR l
DIABLO CANYON VERIFICATI0H PROGRN1
Background
i (a)
Independence Criteria. The Commission criterion for Judging the independence of the proposed PG&E contractors is no direct previous involvement with the activities at Diablo i
Canyon being reviewed.
(b) Additional Factors. In addition to this criterion, the Commission will consider the following factors in making its 4
l decision:
3 (1) previous seismic design work for PG&E (2) previous emplopent with PG&E (3) ownership or control of significant amounts of PG&E stock (4) imediate family members employed by PG&E (5) relatives employed by PG&E i
I Infomation at Hand l
(a) The Criterion.
I cannot tell whether the previous involvement of
- the proposed contractors (Robert Cloud Associates, and Teledyne Eng#neering systems) with PG&E would now put them in tite position t
of reviewing their own work. Both companies have done previous i
I seismic design work for PG&E.
Roger F. Reedy has not previously worked for PG&E.
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1 (b) The Additional Factors, Factor 1.
This factor may or may not be of concern. Py opinion is stated in the Suenary section.
Cloud was previously retained by PG&E for work on Diablo Canyon, l
including a minor project on whip restraints in 1979 and a major project on Seismic Systa Interaction that began in 1979.
He also has a project on stops research which is near completion.
His annual billings to PG&E in the past approximate $300,000 and represent about 20-30% of his total billings. He will provide better information on the proportion of his past business with PG&E.
Teledyne Engineering Services was retained by PG&E for a $1.2 million project on pipe support systems and other consulting work.
Roger Reedy has not previously worked for PG&E.
Factor 2.
With one exception, this factor is not of concern.
Neither Cloud nor Reedy nor any of their employees have been employed by PG&E. Cooper has not been previously employed by PG&E but he did not provide any assurance that any Teledyne Engineering Systems (TES) emp]oyees who might be involved in the verification work had not previously worked for PG&E.
PG&E will provide the needed TES infomation on this factor.
Factor 3.
With two exceptions, stock ownership or control is not of concern.
Cloud Reedy, and Cooper do not own any PG&E stock. Neither Robert Cloud Associates nor any of its employees owns any PG&E stock. One of the people working with Reedy owns 500 l
shares of PG&E stock (worth approximately $10,000).
I Cooper did not provide any infomation as to stock ownership or control by Teledyne itself or by TES employeec. PG&E will provide the needed TES infomation on this factor.
i Factors 4 & 5.
With one exception, employment with PG&E by family members is not of concern.
Cloud and Reedy and their employees on the verification program do not have (a) family rnembers employed by PG&E or (b) relatives (defined as siblings and their children) employed by PG&E in a management capacity.
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The same is true of Cooper's family and relatives. Cooper did not provide infomation about the family manbers and relatives of TES employees. PG&E will provide the needed TES infomation on this factor.
Smraary In judging the independence of PG&E's proposed contractors for tne Diablo Canyon verification program, three questions must be answered.
First, will the contractors be reviewing their own work? Second, is the
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level of business done by Robert Cloud Associates with PG&E prejudicial-to involvement in the verification project? Third, does Teledyne own or control PG&E stock and will TES put together a team of individuals who own no PG&E stock, who control no PG&E stock, and whose family members and relatives are not employed by PG&E7 I cannot answer the first question. With respect to the second. I do not believe that the level of Cloud's past business with PG&E should prevent his involvement on the verification project. Cloud's finn is young and growing. The work it is now doing for PG&E will provide it with valuable, marketable skills. Cloud's future business will depend less on his past relationship with PG&E than it does on how well he is judged, by his peers and the industry to have completed this present task. The pressure is on him to do the best job that be and his team can.
While I cannot answer the third question. I would be surprised if TES could not put together an acceptable team. We know that Teledyne does not own 5% or more of PG&E's total outstanding shares. But we don't know if it owns less. PG&E's data will answer this question.
Netes. Reedy's employee, who owm500 shares of PG&E stock, should be replaced. He may already have been. The transcript is not clear.
I am sure Cloud said he thought that his previous business with PG&E was 20 to 30% of his gross. This is not in the transcript. however. He did promise to provide us with better data. I would stand by my conclusion as to his continued involvement up to a ratio of 50% of his total business with PG&E. Above that I would want another contractor.
Maurice Messier of my staff has been aware of these issues from the beginning and remains available for further consultation if necessary.
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Stephen S. Skjel. Chief Antitrust and Economic Analysis Branch Division of Engineering Office of Nuclear Reactor Regulation
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