ML20210R807

Insp Rept 99900601/97-01 on 970714-18.Nonconformance Noted. Major Areas Inspected:Implementation of Selected Portions of Hartford Steam Boiler Insp & Insurance Co QA Program for Providing Third Party Insp Svcs to NRC Licensees

ML20210R807
Person / Time
Issue date:	08/29/1997
From:	NRC (Affiliation Not Assigned)
To:
Shared Package
ML20210R796	List: ML20210R792 ML20210R802 ML20210R807
References
REF-QA-99900601 NUDOCS 9709030391
Download: ML20210R807 (15)

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. ,r U.S. NUCLEAR REGULATORY COMMISSION OFFICE OF NUCLEAR REACTOR REGULATION Report No: 99900601/97-01 Organization: Hartford Steam Boller inspection and Insurance Company One State Street Hartford, CT 06103-3102

Contact:

Wilfred C. LaRochelle, Manager  !

Corporate Quality Assurance Nuclear Industry Activity: Authorized Nuclear inspection Agency Dates: July 14 - 18,1997 Inspectors: Uldis Potapovs, Senior Reactor Engineer Richard P. McIntyre, Senior Reactor Engineer Larry L. Campbell, Reactor Engineer Approved by: Gregory C. Cwalina, Chief -

-Vendor inspection Section Special Inspection Branch Division of Inspection and Support Programs Enclosure 2 9709030391 970829 PDR OA999 EECHART 99900601 PDR

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1 INSPECTION

SUMMARY

During this inspection, the NRC inspectors reviewed the implementation of selected portions of Hartford Steam Boiler inspection and Insurance Company's (HSB) quality assurance (QA) program for providing third party inspection services to NRC licensees.

The first part of the inspection was conducted at HSB home offices (HO) in Hartford, CT and included a review of the corporate organization structure,10 CFR Part 21 implementation program, and HO responsibilities for audits, training and qualification, and nonconformity control. The second part of the inspection was conducted at the HSB regional office in Atlanta, GA and focused on the control and oversight of plant site activities related to the implementation of American Society of Mechanical Engineers (ASME) inspection responsibilities.

The inspection bases were:

• Appendix B, " Quality Assurance Criteria for Nuclear Power Plants and Fuel Processing Plants," to Part 50 of Title 10 of the Code of Federal Reoulations (10 CFR Part 50) 10 CFR Part 21, " Report.'ng of Defects and Noncompliance" Section Ill, " Rules for Construction cf Nuclear Power Plant Components" of the ASME Boiler and Pressure Vessel Code (Code)

ASME QAl-1-1995, " Qualifications for Authorized Inspection" During this inspection, two minor violations of NRC requirements were identified and are discussed in Section 3.2 of this report. The inspection also identified 5 instances where HSB failed to conform to NRC requirements imposed upon them by NRC licensees. These nonconformances are discussed in Sections 3.3.2 and 3.3.3 of this report.

2 STATUS OF PREVIOUS INSPECTION FINDINGS This was the first NRC inspection of HSB activities performed under an ASME Certificate of Authorization.

3 INSPECTION FINDINGS AND OTHER COMMENTS 3.1 Description of Facilities and Activities HSB is an Authorized Inspection Agency (AIA) for performance of AIA activities controlled from One State Street, Hartford, CT for the following ASME Codes:

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.. :l ASME Section 111, Divisions 1 and 2, ASME Section XI, and ASME Sections I, IV, Vill, Divisions 1 and 2, and X. All inspection services provided to NRC licensees, including contract administration, are conducted through five regional of5ces. At the nresent time, HSB has services contracts with 27 nuclear utilities, at 44 plant sits 3.2 10 CFR Part 21 Prooram and its lmolementation HSB's procedures for implementing 10 CFR Part 21 regulatbns are described in Appendix D, "NRC 10 CFR 50 Part 21," of the Engineering Services Manual (ESM). The current revision dates of the ESM and of Appendix D were December 20,1995, and October 27,1995, respectively.

Appendix D provided definitions of basic components, defects, and deviations, and required any person involved in nuclear inspection or supervision of such work, who notes a potentially reportable condition, to bring this condition to the attention of a responsible authority at the shop or plant site. Tne individual observing the potentially reportable condition was also required to document it in his bound diary and provide details to the Regional Manager of Engineering Services (RMES) who, in turn, was required to forward the information to the 2nd Vice President, Engineering Services (2nd VPES). From that point on, HSB's reporting obligations were to be handled by the 2nd VPES. The employee originally reporting the condition was also required to send a written report, describing the corrective action to his supervisor, who was required to forward this information to the 2nd VPES.

Appendix D noted that the provisions of the 10 CFR Part 21 also apply to the company's authorized nuclear inspectors (ANls), and any defects or deviations in their work which may lead to a substantial safety hazard should be considered reportable. Appendix D also stated that, except in those cases which are clear and evident, it is not the Company's intent to require the inspectors to evaluate

<, when a deviation may restf t in a substantial safety hazard, implying that all o potentially reportatle conditions are evaluated by the 2nd VPES. The following concerns were identified as a result the inspector's review of Appendix D.

(a) Appendix D was based on, and referenced a superseded revision of 10 CFR Part 21 (October 21,1991). Consequently, certain definitions quoted in the procedure were not consistent with the current revision of the regulation.

(b) Although Appendix D defined a deviation as a departure from the technical requirements, and required such conditions to be reported to the 2nd VPES, it did not require that nonconformity reports be considered for 3

potential reportability. Since ESM Chapter 4300, " Control of Nonconformities," defined nonconformance as a deficiency in documentation, procedure, or instruction that renders an activity unacceptable or indeterminate, to comply with the requirements of 10 CFR 21.21, such conditions would need to be evaluated for reportability.

(c) Although the orocedure stated that the 2nd VPES will handle the Company's reporting obligations, it did not specify time limits associated with these obligations (evaluation, initial notification, interim and final reports, etc.)

Based on a record review and discussion with HSB management, the inspectors determined that no potentially reportable conditions had ever been identified and forwarded to the 2nd VPES, and that nonconformity repocts, generaNd as a result of regional office or home office operations, had not been considered as potentially reportable conditions (ESM Chapter 4300 does not require that nonconformances be evaluated for potential 10 CFR Part 21 reportability).

The inspectors also determined that neither the HSB Home Office nor the Atlanta Regional Office had complied with the posting requirements specified in 10 CFR 21.6, " Posting Requirements," which state that each orCanization subject to the regulations in this Part shall post current copies of the regulation, Section 206 of the Energy Reorganization Act of 1974, and procedures adopted pursuant to the regulations in this Part in a conspicuous position on any premises within the United States where the activities subject to this part are conducted. None of the documents cited above were posted in HSB's offices.

The inspectors advised HSB management that failure to comply with the posting requirements as discussed above and failure to require that nonconformances are evaluated for potential reportability would be identified as violations of 10 CFR Part 21. However, these failures constitute violations of minor significance

, and are treated as Non-Cited Wiations, consistent with the NRC Enforcement Policy. During the inspection, HSB management revised Appendix D in response to the concerns identified in 3.2(a), (b), and (c), above, and committed to provide the required pastings at their Home Office and all regional offices.

3.3 Quality Assurance Proaram and its Implementation a

The program used by HSB to control inspection services provided to NRC licensees is described in their ESM. The ESM commits to providing inspection services consistent with the requirements of the ASME Code and ASME QAl-1 series standards. Although the requirements of 10 CFR Part 50, Appendix B, are invoked through purchase orders (PO) of several licensees, the ESM does 4

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not specifically commit to compliance with this regulation. While a detailed review of programmatic compliance with 10 CFR Part 50, Appendix B, was not made during this inspection, HSB's control of the implementation of selected safety related services was reviewed against the requirements of the ESM as well as the criteria of 10 CFR 50, Appendix B.

3.3.1 ASME Insoection Responsibilities

a. Inspection Scoce The NRC inspectors reviewed ESM Chapter 4500, "ASME Inspection Responsibilities" and the authorized nuclear inservice inspector (ANil) bound diaries, inspection logs, and records of QA monitoring activities for selected -

nuclear plants to assess the program controls and their implementation,

b. Qhservations and Findinas Chapter 4500 of the ESM describes HSB policies and responsibilities for regional managers, supervisors, and inspectors involved in ASME inspections.

Each RMES is assigned the responsibility for assuring that the inspection services meet all specified standards of performance and quality. The RMES is also responsible for the administration of service contracts with the licensees within his jurisdiction.

The direct supervision of Anils and audits of their performance is the responsibility of the authorized nuclear inservice inspector supervisors (anils).

Chapter 4500 also describes the duties and responsibilities of various categories of authorized inspectors consistent with the provisions of-ASME -QAl-1.

The implementation of ASME inspection activities was evaluated by reviewing relevant documentation (ANil bound diaries, monitoring schedules and reports, qualification records, etc.) for selected nuclear plants and, in some cases, '

discussing specific issues with the assigned ANil by telephone. The NRC '

inspectors reviewed the ANil bound diaries for Comanche Peak, covering the period from April 10,1995, to March 21,1997; Browns Ferry, Unit 3 (November 22, .1995, to April 21,1997); and Hatch (August 16,1995 to October 21,1995). Also reviewed were selected monitoring schedules and reports, records of inspection verifications, and identification and disposition of nonconforming conditions.

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.. :l The ANil bound diaries, in general, were found to contain appropriate entries, consistent with the applicable ASME QAl-1 requirements. Records of monitoring activities indicated that these activities were performed in accordance with the schedules established by the Anils, using supplementary checklists (developed by the ANil), to identify specific program areas to be monitored and to provide for recording of objective evidence to support their findings for each area monitored. Program deficiencies identified as a result of the monitoring activity were recorded in the ANil's bound diary and documented on HSB Form 939, "ES Record for Monitoring QA/QC Programs." Form 939 is used to identify specific program areas reviewed, and, in cases of identified deficiencies, to request a response from the NRC licensee. Review of several monitoring records indicated that these activities were properly documented, and that identified concerns and their resolution were documented in the ANil's diary.

A general observation was that activities described above were performed and documented using different methods at the selected plant sites reviewed, apparently because there were no standard implementing procedures available to perform several of these activities. Similarly, it was also noted that tracking and resolution of identified concerns was being addressed by different methods.

In some cases, HSB Form 939, "ES Record for Monitoring QA/QC Programs" was used for all identified concerns, while, at another plant site, the ANil had apparently developed and was using an "ASME XI Discrepancy Notice" for tracking and dispositioning of isolated (non-programmatic) deficiencies. These forms were being issued to the licensee and dispositioned after achieving resolution of the issue.

c. Conclusions Review of the records of ASME activities performed at selected plant sites indicated that these activities were conducted and documented in accordance with the applicable ASME QAl-1 requirements and that the ANil records of these activities were generally well documented and complete. One observation in this area was discussed with HSB management as a program weakness. This related to the lack of controlled procedures for performing and documenting monitoring activities and dispositioning of isolated (non-programmatic) deficiencies.

3.3.2 Audits

a. Scope The inspectors reviewed Chapter 4400, " Audits," of the ESM, which described the audit and survey requirements for internal audits, external audits, pre-review /

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survey audits, and ASME Code required audits, and also described the accompanying requirements for audit report documentation. The following Sections of Chapter 4400 of the ESM were reviewed:

• Section 4420 " Internal Audits"

• Section 4430, " External Audits"

• Section 4470, " Nuclear Audits'

b. Observations and Findinas b.1 Internal Audits - Home Office Enaineerina Services The Internal Audit Department (IAD) is responsible for conducting annual audits of HO Engineering Services (ES) department's ASME activities. The Quality Assurance Manager (QAM) is responsible for conducting annual audits of the various RMES activities to verify compliance with the ESM, supporting procedures, instructions, and the ASME QAl-1 standards, as applicable, The inspectors reviewed implementation of the above internal audit processes for compliance to the ESM. - While attempting to review LAD's audits of HO ES activities, the inspectors determined that only one audit (November 1995) had been performed and documented by LAD and was available for review. This IAD audit identified six findings and recommendations for compliance to the ESM.

The inspectors were told by the QAM that IAD no longer conducts the audits of HO ES activities even though ESM Section 4421 still requires this activity. ' The failure to audit HC ES activities as required by the ESM was identified as an example of Nonconformance 99900601/97-01-01. /

The inspectors also identified that nonconformance reports had not been written by the QAM to document, disposition, and correct the findings that were identified during the IAD audit conducted in November 1995. Section 4320 of y, Chapter 4300 of the ESM," Control of Nonconformities," defines a a nonconformance e s a deficiency in documentation, procedure or instruction that renders an activity unacceptable or indeterminate. Section 4340 states that the RMESlQAM shall prepare a nonconformity whenever a nonconformance is identified. The failure to issue Nonconformance Reports for documented failures to implement the requirements of the ESM was identified as-Nonconformance 99900601/97-01-02.

b.2 Internal Audits - Reaional Manaaer. Enaineerina Services Allinternal audits of the RMES activities are conducted by the QAM. Currently there are four regional offices that conduct ASME Section 111 and Section XI 7

,e nuclear inspection activities. The inspectors reviewed the schedule for audits of RMES activities for the last four years to select a sample of audit reports to review. When reviewing the regional office audit schedules, the inspectors noted that many of the scheduled audits had slipped beyond the!r scheduled date, including the 1996 audit of the San Francisco RMES and the 1995 audit of the Atlanta RMES, which were never performed. While attempting to review a sample of audit reports from each region, the inspectors were told that several of the documented audit reports and the RMES responses to audit report findings requested could not be located in the MSB HO or Regional files for Atlanta, Northeast / Philadelphia, and San Francisco in the 1993 to 1995 time frame.

During the inspection the OAM committed to issue a Nonconformance Report to address this issue. The failure to audit all RMES activities on an annual basis as required by the ESM was identified as another example of Nonconformance 99900601/97-01-01.

The audit reports reviewed by the inspectors documented what appeared to be a thorough review of the RMES activities and included pertinent findings against program implementation, when applicable. However, as was the case with the audit findings identified during the IAD audit of the Home Office Engineering Services ASME activities, no nonconformance reports or appropriate tracking and completion of corrective actions were documented by either the OAM or by the RMES. The inspectors determined there was only one instance (1996 Atlanta regional office audit) where the RMES documented and dispositioned the audit findings on nonconformance reports. This issue was identified as another example of Nonconformance 99900601/97-01-02.

When reviewing the audit reports that were available the inspectors determined that the Enginearing Services Audit Checklist used by the OAM for RMES audits was not an approved and controlled quality document and was not referenced in ESM Section 4420 or in Appendix H, " Forms." During the

, inspection HSB committed to approve and control the checklist under the ESM program requirements. This issue was identified as an example of Nonconformance 99900601/97-01-03.

The inspectors also noted that Section 4420 of the ESM does not include in-depth guidance and detail for conducting and documenting internal audits and accompanying audit findings and that there was limited documented QA program requirements for accomplishing this quality activity No implementing procedure existed that addressed the internal audit process. This issue was identified as another example of Nonconformance 99900601/97-01-03.

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The inspectors also determined that none of the audit reports reviewed contained documentation of any follow-up review for corrective actions and disposition to previous audit findir.gs, and that neither the ESM nor the checklist used for the OAM audits of the RMES included provisions that required evaluation and review of the closure of audit findings identified during previous audits. During the inspection and in follow-up documentation submitted to the NRC on July 25,1997, HSB committed to implement Regional Office Aud!!

Procedure, ES OP 03, Revision 0, to address these concerns.

b.3 ASME Nuclear Audits Section 4470 of the ESM documents HSB requirements for the conduct of audits to comply with ASME QAl 1,1995, ASME Section Ill, Division 1, and ASME Section XI. This included ANI and ANil audits of nuclear Section lll and Section XI work activities, and ANI and ANil performance audits conducted by the authorized nuclear inspector and inservice inspector supervisors (ANIS and anils). Chapter 4500 of the ESM, "ASME Inspection Responsibilities,"

documents the inspection responsibilities (including audits) for the RMES, ANIS, and the anils.

The inspectors reviewed the current ANI" Nuclear Shop Assignments" and

" National ANll Assignments" listing for ASME Section ill shops in the Atlanta 4

region and Section XI plant sites (including Atlanta region). The ASME Section Ill shop and Section XI site performance audits were reviewed for ASME Code compliance and for the implementation of the various sections of the shop's and site's applicable QA manuals. The nuclear shop ANI and ANil performance audits are required to be performed twice a year and are conducted using the ES Inservice Report checklist (Form 2163). National Board forms NB-71 and NB-178, " Audit Verification Record," forms are referenced in Sections 4471 and 4475 of the ESM and are used by HSB as the method to notify the National Board of completion of these required audits of ANI and the ANil by the ANIS and the anils. These forms are not included in Section H, 'Forrns," of the ESM.

This issue was identified as another example of Nonconformance 99900601/97-01-03.

The inspectors reviewed a sample of semiannual inspector's performance audits conducted by the ANIS at Section ill nuclear shops and by the anils at Section XI sites. The audit reports included the appropriate review and documentation as required by the HSB ESM with the exception of an issue pertaining to audit

, requirements included in Sections 0-2.2.7 and 1-2.2.7 of QAl-1,1995. These paragraphs require the audits to be recorded in writing and to contain a written comment regarding the status of each item audited. The audits reviewed by the inspectors were accomplished using the Form 2163 checklist described above, 9

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but did not contain a written coinment regarding the status of each item audited

or any real documented objective evidence of what was reviewed. This issue was identified as Nonconformance 99900601/97-01-04.

During the above review, the inspectors also identified that the ESM does not include any requirement fo.' the ANIS and the anils to document and implement an audit schedule for their applicable sites on an annual basis. This issue is identified as another example of Nonconformance 99900601/97-01-04.

c. Conclusions Based on the above, the inspectors concluded that Hartford had failed to implement an adequate audit program.

3,3,3 Qualification of Lead Auditors

a. Scope The NRC inspectors reviewed five HSB lead auditor qualification files to determine if the provisions contained in ESM Appendix C,"Qua'ification of Lead Auditors" were being met.

b. Observations and Findinas HSB uses lead auditors, qualified in accordance v. 1 ESM Appendix C, to perform internal audits of the implementation of its quality assurance program.

HSB also uses these lead auditors to perform safety-related, non-ASME Code activities, such as independent reviews, assessments, and audits.

The lead auditor qualification provisions contained in Appendix C of the ESM are based primarily on the adoption of ANSI N45.2.23-1978, " Qualification of Quality Assurance Program AFlit Personnel for Nuclear Power Plants," and NOA 1989, " Quality Assurance Program Requirements for Nuclear Power Plants."

The inspector's review revealed that Appendix C contained a provision that was not fully consistent with Section 3.2, " Maintenance of Proficiency," ci ANSI N45.2.23. ANSI N45.2.23 permits lead auditors to maintain their proficiency by several methods including the review and study of codes, standards, procedures, instructions, and other documents related to quality assurance programs and auditing. However, Section C-13. " Annual Recertification," of ,

Appendix C to the ESM states, in part, that in lieu of audit participation, the lead auditor may demonstrate that his proficiency has been maintained by having actively participated as a member in an ASME Code Committee that reports to 10 l

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. l the Board on Nuclear Codes and Standards. Trc NRC inspectors and HSB '

discussed the fact that even though a lead auditor participater on a committee that reports to the Bocrd on Nuclear Codes and Standards, this does not ensure that tha lead auditor's participation in the committee process requires a review and study of quality assurance prugrams and the auditing process. It was also discussed that depending on the committee or subcommittee, the lead auditor may not be involved in committee activities associated with the auditing process.

The NRC inspectors considered the alternative to audit participation (having participated on a committee reporting to the Board on Nuclear Codes and Standards) to be a potential area of deviation from ANSI N45.2.23 and a weakness in the HSB lead auditor qualification program.

The NRC inspectors' review of the five HSB lead auditor qualification files identified that 3 of the qualification packages did not appear to meet the provisions of Appendix C. Specifically, Section C-3," Qualification of Leod Auditors," requires that the lead auditor shall have verifiable evidence that a

- minimum of 10 points under the score system provided in Appendix C have been accumulated. The maximum number of points permitted for various categories are: a) Education,4 points, b) Experience,9 points, c) Professional Accomplishments,2 points, and d) Management,2 points.

Section C-5," Experience," of Appendix C to the ESM, permits 9 points maximum for related experience and states that time spent in various activities will be awarded points on a reasonable basis in line with ANSI N45.2.23 and NOA-1, Appendix 2A-3. Furthar, Section C-5 contains a provision to score one (1) point maximum for each full year's experience with other companies in other capacities classified as " Industry"if it meets the requirements of Paragraph 2.3.1.2 of ANSI N45.2.23 and Paragraph 2.2 of Appendix 2A-3 of NOA-1.

Section 2.3.1.2 of ANSI N45.2.23 states:

Experience (9 points Maximum). Technical experience in engineering, manufacturing, construction, operation, or maintenance, score one (1) .

credit for es, h full y6ar with a maximum of five (5) credits for this aspect of experience.

Section 2.3.1.2 continues by providing guidance on scoring additional points for specific nuclear, quality assurance, and auditing experience.

The review indicated that HSB had credited each of three lead auditors with 5 points for work experience, based on two of the lead auditors having 5 years experience in the US Navy and one having 5 years experience with another company. The NRC intpectors questioned whether any of the 5 years experience was technical, or was in the nuclear or in the quality assurance or 11 i

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auditing disciplines. HSB presented a resume of one of the three lead auditors, HSB Identification Number 02562, which indicated for the period 1972-1977, the individual had 4 years experience as a radiographer and welder and 1 year experience as a quality control manager. No records or resumes were presented for the other lead auditors (identification Numbers 02026 and 02664).

c. Conclusions The NRC inspectors determined that the lead auditor files for HSB employees identification Numbers 02026 and 02664, initially qualified as lead auditors on June 28,1991, and January 31,1996, respectively, were inadequately processed by crediting the maximum of points for work experience without any objective evidence that the provisions contained in Section 2.3.1.2 of ANSI N45.2.23 or Appendix 2A-3 of NOA-1 had been met. This issue was identified as Nonconformance 99900601/97-01-05.

3.4 Service Contract Provisions and Acolicability of 10 CFR Part 21 to HSB

. Activities

a. Scope The NRC inspectors reviewed several licensee purchase orders (POs) issued to HSB for Authorized Inspection Agency inspection services to assess licensee control of subcontracted inspection activities and the extent to which applicable NRC requirements are passed down to the providers of these activities.

b. Observations and Findinas The review identified that certain NRC requirements were not consistently invoked by licensees using HSB to perform third party inspections required by the ASME Section XI Code. Specifically:

(a) Virginia Power PO BKil83582, dated November 11,1995, stated that the HSB inspection services were nuclear safety related and required HSB to implement quality control and quality assurance programs that comply with the requirements of Appendix B to 10 CFR Part 50 and ANSI N45.2.

The Virginia Power PO also invoked the requirements of 10 CFR Part 21 for this contract.

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(b) Section 26, " Quality Assurance Requirements" of Carolina Power & Light Company (CP&L) Document UFl No. PTC00004, " Contract No.

XT00000026 between Carolina Power & Light Company and the Hartford Steam Boiler Inspection and Insurance Co.," hand dated April 5,1990, 4

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7  : :l stated that the work to be performed by HSB had been determined to be non-nuclear safety related. In Section 27, "10CFR21," the CP&L contract stated that the provisions of Part 21 shall apply to any work within the definition of basic component in 10 CFR 21.3 and that CP&L shall be promptly notified of any reports made to the NRC pursuant to 10 CFR 21.21. However, Section 27 of the CP&L contract continued by stating -

that CP&L recognizes that the Contractor will not be required to perform nuclear safety related work.

(c) Georgia Power Co. PO 60120550000 (latest revision dated May 21, 1997) did not invoke the requirements of either 10 CFR Part 50 or 10 CFR Part 21, but required the labor and supervisory personnel to meet the requirements of ANSI N18.1, and the AIA to meet the requirements of ASME 626.1-1982.

(d) Duke Power Co. PO MN 12553, dated March 12,1996 (for McGuire Nuclear Station) stated that the services to be supplied are safety related and that they shall be supplied in accordance with the suppliers quality assurance program, approved by Duke Power Co. It also stated that, if lower tier procurement is required, the applicable QA requirements must

- also be invoked on the lower tier subcontractors / suppliers. 4 The NRC inspectors and HSB discussed the applicability of both Appendix B to 10 CFR Part 50 and 10 CFR Part 21 to the inspection services provided by HSB at nuclear power plants. During these discussions the NRC inspectors identified that Section 21.3(1)(ii)(3) of 10 CFR Part 21 states: "In all cases, basic component includes safety related design, analysis, inspection, testing, fabrication, replacement of parts, or consulting services that are associated with the component hardware whether these services are performed by the component supplier or by others."_ lt was also discussed that Section 50.55a,

" Codes and Standards," of 10 CFR Part 50 identifies the applicable codes for -

. the design, fabrication, erection, construction, testing, and inspection of systems,

- structures, and components and mandates the use of certain editions and addenda of the ASME Section XI Code.-

it was further discussed that because Section IWA 2110, " Duties of the Inspector," of Article IWA 2000, " Examination and Testing," of the ASME Section XI Code identifies the duties of the Authorized Inspection Agency's inspector .

(the Inspector) assigned to perform IWA 2110 activities and these activities are mandatory by the ASME Section XI Code in order to assu:a compliance to the code, they are considered to be safety-related activities. . It was further 13 l

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discussed that because tha Inspector's performance of certain verifications and reviews is a safety-related activity, the services of the Inspector are considered a basic component.

The inspectors also determined, from discussions with HSB management, that no licensee c.udits of HSB ASME authorized inspection activity implementetion had ever been performed at any of the HSB offices.

Conclusions '

c.

The inspectors deterrnined that major inconsistencies existed in licensee safety classification of the services provided by HSB and in the imposition of applicable NRC requirements (10 CFR Part 21 and Appendix B to 10 CFR Part 50) for the performance of these services. The inspectors also determined that licensees were not performing QA program implementation audits on HSB as a provider of safety-related services.

3.J Entrance and exit meetinas-In the Entrance Meeting on July 14,1997, the NRC inspectors discussed the scope of the inspection, outlined the areas to be inspected, and established interfaces with HSB management. In the exit meeting on July 18,1997, the inspectors discussed their findings and concerns.

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l PARTIAL LIST OF PERSONS CONTACTED Wilfred LaRochelle, Corporate Quality Assurance Manager Barry Bobo, National Manager, Engineering Services i-Sidney Montgomery, Regional Supervisor, Engineering Services Harold Robinson, National Safety and Training Manager Lashanta Lewis, Engineering Support Assistant ITEMS OPENED Opened 99900601/97-01-01 NON Failure to perform required audits 99900601/97-01-02 NON Failure to issue nonconformity reports 99900601/97-01-03 NON Inadequate procedures 99900601/97-01-04 NON Inadequate control of audits 99900601/97-01-05 NON Inadequate documentation of auditor qualification w 2 n t

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