ML20246N480

Insp Rept 99900403/88-02 on 890906-09.Noncompliance Noted. Major Areas Inspected:Licensee Activities to Determine If Refurbished Circuit Breakers & Other Electrical Equipment Purchased from Sources Identified in NRC Info Notice 88-46

ML20246N480
Person / Time
Issue date:	01/10/1989
From:	Robert Pettis Office of Nuclear Reactor Regulation
To:
Shared Package
ML20246N467	List: ML20246N463 ML20246N472 ML20246N480
References
REF-QA-99900403 IEIN-88-046, IEIN-88-46, NUDOCS 8907190380
Download: ML20246N480 (10)

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ORGANIZATION: GENUCLEARENERGY SAN JOSE, CALIFORNIA

' REPORT INSPECTION INSPECTION NO.: 99900403/88-02 DATE: September 6-9, 1988 . ON-SITE HOURS: 68 CORRESPONDENCE ADDRESS: Dr. Bertram Wolfe,- Vice President dnd General Manager GE Nuclear Energy 175 Curtner Avenue San Jose, California 95125 ORGANIZATIONAL CONTACT: Mr. J. J. Fox, Senior Program Manager TELEPHONE NUMBER: (408) 925-6195 NUCLEAR INDUSTRY ACTIVITY: GE Nuclear Energy (GE NE) is engaged in furnishing engineering services, replacement parts, and dedication services for upgrading commercial grade electrical equipment.

ASSIGNED INSPECTOR: [.h. M '> d. /~/d-/f R. L. Pettis, Special Projects Inspecticn Section Date (SPIS)VendorInspectionBranch OTHERINSPECTOR(S): S. D. Alexander, SPIS APPROVED BY: Mk '

uP U. Potapovs, Chief, SPIS Vendor Inspection Branch NN Date lhSPECTION BASES AND SCOPE:

A. BASES: Follow-up to determine the extent of surplus or refurbished molded case circuit breakers (CB's) and other electrical equipment supplied to nuclear power plants.

B. SCOPE: Review GE Nuclear Energy's activities to cetermine if refurbished Wand other electrical equipment were purchased from sources identified in NRC Information Notice 88-46 and subsequently resold to nuclear power plants. Additionally, information was obtained on GE NE's dedication process applied to upgrading. commercial grade electrical equipment for safety-reldted applications. '

PLANT SITE APPLICABILITY: Potentially all.

f.$71bDIh 99900403

, ORGANIZATION: GE NUCLEAR ENERGY SAN JOSE, CALIFORNIA

REPORT INSPECTION HO.

99900403/88-02 RESULTS: PAGE 2 of 10 A. VIOLATIONS:

There were no violations identified.

B. NONCONFORMANCES:

Contrary to GE Nuclear Services Procedure NSP 50-01, Revision 2. dated September 15, 1987, " Procurement Initiation and Control," GE Nuclear Energy purchased commercial grade electrical components, including molded case CB's from the GE Supply Company, Santa Clara, California without the supplier being a p roved and listed on GE NE's Approved

• SupplierList(88-02-01).

C. UNRESOLVED ITEMS:

Additional information is required in order to determine the adequacy of GE NE's dedication program applied to upgrading commercially procured molded case CB's for safety-related applications (88-02-02).

D. STATUS OF PREVIOUS INSPECT.0N FINDINGS:

Previous inspection findings were not reviewed during this inspection.

E. INSPECTION FINDINGS AND COMMENTS:

Backaround The Nuclear Regulatory Commission (NRC) issued Information Notice (If0 88-46, including Supplement No.1, to alert owners of nuclear power pl8nts that surplus or refurbished molded case circuit breakers (CB's)

• and other electrical equipment have been supplied to several nu0 lear power plants. The information in the IN was bdsed on the results of inspections conducted at six companies located in the Los Angeles area. During these inspections, hRC personnel observed sales invoices that indicated that electrical material was being supplied either directly or through distributors to nuclear power plants.

This inspection was conducted to determine if GE Nuclear Energy (GE NE) purchased molded case CB's and other electrical equipment from any  ;

of the companies listed in IN 88-46, including Supplement 1, and '

subsequently resold them to nuclear power plants. Also, GE NE's dedication program for upgrading commercial grade CB's was reviewed.

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a ORGANIZATION: GE NUCLEAR ENERGY SAN JOSE, CALIFORNIA

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1 REPORT INSPECTION ho.: 99900403/88-02 RESULTS: PAGE 3 of 10 l l

1. Review of GE NE Purchases from the GE Supply Company i

Tne NRC inspectors reviewed ccmputer generated records titled, {

" Purchase Activity By Supplier," for the period 1986 - July 1988, )

to identify purchases made by GE NE from any of the GE Supply 1 Company offices nationwide. Several GE Supply locations .f purchased molded case CB's from sources identified in NRC IN 88-46, and may have subsequently resold such equipment to GE NE for dedication as a basic component. This review focused on I purchases made from GE Supply by GE NE buyer No. 18 since he ,

primarily purchased molced case CB's and other related electrical i

equipment. The review identified approximately 65 purchase -l orders placed en GE Supply, Santa Clara, California (GE NE Vendor-  !

No. 043722826) which comprised over 75 individual molded case i CB's that GE NE subsequently dedicated and resold to I approximately 10 nuclear power plants on the following GE NE 1 purchase orders: 1988(J506,J632,J648,J700,J701,J748,J795, j M014,M031);1987(Z196,Z279,Z397);1986(J946,J952,J954, J968,J973). In all cases observed, purchase orders were originally placed by GE NE on Santa Clara with several orders 3 filled from the Emeryville, California and Charlotte, North j Carolina branch offices of GE Supply. It should be noted that only the Emeryville location was identified in NRC IN 88-46;  !

however, only a preliminary listing of customers was available at

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the time the IN was issued. The other locations of GE Supply '

identified in the IN were Baltimore, Maryland; Houston, Texas; Chantilly, Virginia; and Elmhurst, Illinois. The 17 purchase orders placed on Santa Clara were all destinea for GE NE dedication for use in safety-related applications as evidenced by code "3" typed in the box labelled " Inspection," which is located '

i on each purchase order. In some instances, the purchase order I states " Dedicate later on D88242," which identifies the GE NE work order number authorizing such dedication to be performed.

In addition, each purchase order contained the following j requirement imposed on GE Supply by GE NE: " Seller shall 1 certify, in writing, that material supplied to GE on P.O. xxx, )

Revision xxx, item xxx, is supplied undamaged in the "as i receiveo" conoition from the original manufacturer and has not  !

been altered, tampered or modified from its original config- )

uration." In each instance where this requ'.rcment was imposed, i documentation existed in the file supporting Santa Clara's '

complianct. Each certification was in the form of a Certificate l

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, ORGANIZATION: GE NUCLEAR ENERGY SAN JOSE, CALIFORNIA REPORT INSPECTION NO.: 99900403/88-02 RESULTS: PAGE 4 of 10 of Conformance and signed by Mr. Armando Del Rio of GE Supply.

Santa Clara.

A review of GE NE's Approved Suppliers List (ASL) identified thht Santa Clara had never been audited and approved by GE NE Quality Assurance (QA) personnel. Therefore GE NE, for several years, has been purchasing commercial grade electrical components from Sa.1ta Clara without auditing the supplier. Also, the basis supporting GE Supply's certification, relied upon by Gd NE as part of the dedication process, has never been verified by GE NE. The .

Emeryville location was .'irst audited by GE NE on December 9, 1987 and placed on the ASL on January 18, 1988. The Charlotte location has not been audited by GE Santa r' ara or GE NE.

Nonconformance 88-02-01 was identified during this part of the inspection.

2. Review of External Audits Performed By GE NE for Molded Case Circuit Breakers The NRC inspectors reviewed several external audit reports performed by GE NE QA Engineering. These reports were performed over the past two years and covered the following GE organizations:

GE Electrical Distribution and Control Division (ED&C), Plainvi'. e, Connecticut; GE Supply, Emeryville, California; and two GE ED&C manufacturing facilities located in Arecibo and Humacao, Puerto Rico. A review of each audit report is as follows:

a. GE E ED&C (Plainville) July 7, 1987 '

This audit reviewed GE ED&C's control of the zeder entry process and engineering changes for the E, F, and K line industrial molded case CB's. These items are purchased by GE NE as commercial grade and subsequently dedicated for use I

as a basic component in a safety-related application.

Molded case CB's purchased by GE NE from GE ED&C are manufactured exclusively in Arecibo and Humacao, Puerto e

Rico, which were last audited by GE NE in March 1988.

Engineering changes applicable to the molded case CB line are verified by GE NE Qualification Engineering located in Valley Forge, Pennsylvania. All original qualification records and related documentation are on file at Valley l

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. ORGANIZATION: GE NUCLEAR ENERGY SAN JOSE, CALIFORNIA REPORT INSPECTION NO.: 99900403/88-02 RESULTS: PAGE 5 of 10 Forge. This audit identified that engineering changes associated with a particular product line were being received and evaluated by Valley Forge with one exception noted by GE NE during the audit.

b. GE Supply (Emeryville) December 9, 1987 This audit reviewed GE Supply's QA program for the production of commercial grade CB's that are subsequently dedicated by GE NE. CB modifications include such options .

as bell alarms, undcevoltage and shunt trip accessories for the F225. E150, and Q lines of CB's. All accessor are provided by GE ED&C (Plainville, Connecticut)and y packages are checked and tested after installation.

Emeryville is one of.15 authorized GE modification facilities located throughout the United States authorized by Underwriters Laboratories (UL) to perform CB modifications. Although these modifications require opening of the CB casing, UL certification is maintained. In order to identify that modifications have been made by UL authorized facilities, a unique code has been established for each facility and must be placed on or near the accessory marking label after installation. For example, GE 4 Supply (Emeryville) modified CB's exhibit the designation "GES-N" encoded on the CB using a white waterproof ink. GE personnel authorized to perform such modifications receive training from GE ED&C (Plainville), and follow written instructions prepared by GE as appropriate to install a particular accessory. Post-installation testing at the Emeryville location was stated by GE NE to be limited to full voltage, simple functional operation, and high potential testing on a go-no-go basis. Current trip testing ,

is not performed since it was stated that factory settings are not changed. ,

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c. GE ED&C (Puerto Rico) March 25-31, 1988 This audit reviewed GE's Arecibo and Humacao facilities l which manufactures the industrial line of molded case CB's used in GE NE's dedication process. These facilities are under GE ED&C which is headquartered in Plainville, Connecticut.

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, ORGANIZATION: GE NUCLEAR ENERGY SAN JOSE, CALIFORNIA REPORT INSPECTION

• NO.: 99900403/88-02 RESULTS: PAGE 6 of 10

, ARECIB0 This facility manufacturers the F, J, ano K line molded case CB. Testing consists of 100 percent dielectric and continuity testing for the frames, and thermal and magnetic tests for the trip units in accordance with UL Standard 489 on a lot sampling basis.

HUMACAO This facility produ'::s all molded case E frame CB's: TED, ' *-

TEB, TEC, TEY, and THED models. Thermal calibration is performed at 300 percent- for every unit during the.

manufacturing process. At final test, thermal calibration audit is performed at 200 percent. Dielectric tests are performed on all CB's and endurance testing is performed at final audit test. GE ME QA personnel reviewed test procedures for all CB lines manufactured and performance was verified.

It was noted in each audit that all CB's are date coded to provide traceability. Each code has an alpha designation for the facility and a numeric designation for the fiscal week and year the CB was manufactured. For example, a molded cased CB encoded with "J138+" indicates a CB manufactured at Arecibo on the 38th week of 1981. The plant code designation for Humacao is "D." The UL inspectors visit both plants at least once per week. Random sampling of products from the production line are chosen for UL testing.

• As a result of GE NE's audits, these facilities were considered satisfactory by GE NE to supply commercial. grade products for dedication as a basic component.

3. Replacement Parts Program Early this year GE NE established the Parts Continuance Program (PCP). The objective of this program is to assure that Boiling Water Reactor replacement parts needs are met now and in the future, and focuses on finding effective solutions to parts obsolescence and unavailability issues.

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. .,1 T ORGANIZATION: GE NUCLEAR ENERGY J l SAN JOSE, CALIFORNIA l

REPORT INSPECTION NO.: 99900403/88-02 RESULTS: PAGE 7 of 10 l

Under the PCP, GE NE has developed.a system to deal with issues which cause parts unavailability. The order process starts with engineering and safety class verification which often finds customers ordering hardware which has been superseded by a new design. In this case, GE NE advises the customer accordingly which may result in GE NE furnishing the updated part or system.

GE NE stated that if the obsolete part has a high usage, alterna tive supply channels initiate which may require qualifying new replacement vendors or the design of a totally new replacement j part. Alternatively, GE NE may purchase the part from a vendor c q commercial grade and dec*cate it for safety-related use or offer {

to repair the old part and upgrade it to tne latest engineering 1 revision level. For low-usage obsolete parts, GE NE utilizes the "Earlynet" approach under the PCP, which is an electronic bulletin board for all low-usage parts which arise in the course of the GE NE replacement parts supply process. GE NE provides network access to customers enabling them to post internally identified obsolete parts which is then evaluated by GE NE.

Parts identified as critical to plant availability will be reposted in Ear 13 net as " Endangered Parts" to the affected plants. Plant enmmodity cost and lead-time data will be shown in the system to promote negotiations among affected customers on the best means to source the obsolete part's replacement and to facilitate cost sharing among the users. The GE Qualification Program (GEQUAL) is a special program offered under the PCP to ensure a continued supply of safety-related environmentally qualified electrical products from non-nuclear GE product departments.

GE NE Materials Services Engineering (MSE), located in San Jose, '

provides the engineering support for replacement parts and related services which includes Apparatus Requisition (AR) review and approval for spare parts; recommends equivalent replacements for obsolete or unavailable spare parts; and provides technical support for customer questions or problems. The AR contains such information as safety classification (provided by each customer and evaluated by GE NE); valid part numbers and Master Parts List application; shelf life estimate; and applicable IEEE and ASME requirements. The NRC inspectors did not review GE NE's implementation of the PCP during the inspection.

4. Review of GE NE's Dedication Program for Commercially Procured Molded Case Circuit Breakers

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. ORGANIZATION: GE NUCLEAR-ENERGY SAN JOSE, CALIFORNIA l

l REPORT INSPECTION 1 NO.: 99900403/88-02 RESULTS: PAGE 8 of 10 One of-the principal purposes of this inspection was to determine to what extent, if any, refurbished and/or fraudulent molded case CB's have infiltrated or could infiltrate the supply network serving GE NE's program for dedicating commercial graoe electrical equipment to render it suitable for nuclear safety-related applications.

The foundation of this program, implemented under GE NE's nuclear quality assurance controls, is GE NE's confidence in the quality of GE commercial grade products, and 'their assurance that all such products come direcMy from the GE product departments' own

• factories or warehouses. The inspectors' aim in reviewing GE NE's dedication program then was to evaluate not only its effectiveness overall, but, in particular, its effectiveness in detecting and screening out any materials (molded case CB's in 2 particular) that did not originate from the GE product departments.

The inspectors did confirm that GE has structured a program to assure controls over incoming CB's and to provide for audits of suppliers and manufacturing distribution networks. Based on records reviewed and information provided by GE, the inspectors concluded that there is reasonable assurance that refurbished CBs were not introduced into the dedication process. However, upon completion of this preliminary review, the inspectors concluded that GE NE's dedication program is unlikely to be capable of detecting and screening out fraudulent or refurbished CB's unless: (1) the packaging, labelling, and markings were obviously counterfeit; (2) they were damaged or missing externally visible parts; or (3) were completely nonfunctional. The inspection and testing performed at GE NE's San Jose, California facility is '

minimal and the program celies heavily on commercial manufacturing factory testing and inverdory controls to assure that Co's only come directly from the GE factories or factory warehouses.

The inspectors further determined that certain deficiencies, in GE NE's dedication program may render it inadequate to assure sufficient quality in molded case CB's of known origin and properly screening them for Class 1E applications. The aspects identified in the NRC's preliminary evaluation that were considered to be deficient were: (1) inadequate detailed receipt inspection; (2) inadequate verification of origin; (3) inadequate testing performed at San Jose; (4) inadequate engineering

, ORGANIZATION: GE NUCLEAR ENERGY SAN JOSE, CALIFORNIA

l. REPORT INSPECTION NO.: 99900403/88-02 RESULTS: PAGE 9 of 10 evaluation of factory testing and/or determination of required testing; (5) inadequate verification that test procedures meet design requirements in the GE NE " selected item drawings" (SID's); and (6) inadequate verification that testing is actually performed in ac.cordance with procedures, that results are correlated to mater!al received, and that unsatisfactory or nonconforming materiel is appropriately dispositioned. GE NE stated that they rective cesign and/or manufacturing change information from the GE product departments whose equipment they dedicate. However, thP. Information 'is received after the fact, and thus requires equiprnnt in the field to be recalled if the

• information is evaluated by GE NE and determined to impact the equipment's suitability for its applications. GE NE does not evaluate and approve such changes before they are implemented in production, and it was not verified during this inspection whether their system ensures that all change information is received and evaluated.

Unresolved item 88-02-02 was identified during this part of the inspection.

During the course of this review, the inspectors reviewed and evaluated GE NE's procedures governing their dedication program including working level detailed instructions and quality aswrance controls. The facilities were inspected, specimens examined, personnel interviewed, and documentation was reviewed, including SID's and other design-related information, tracking records, test procedures and records, GE NE " Product Quality Certificates," and " Certificates of Qualification." During this review, selected samples were traced through the process from

• receipt to final shipment to the customer. No deficiencies were identified in procedural compliance or loss of control of material during this part of the inspection.

F. PERSONS CONTACTED:

J. Larrew - Product Quality Manager

• P. Marriott - Licensing Manager

• R. Artigas - Materials Service Manager J. Gecox - Electrical Engineering Manager

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, 0 ORGANIZATION: GE NUCLEAR ENERGY SAN JOSE, CALIFORNIA REPORT INSPECTION NO.: 99900403/88-02 RESULTS: PAGE 10 of 10 i

• R. Waldman - Principal Engineer

• J. Case - Nuclear QA Manager N. Barclay - Audit Coordinator

• J. Fox - Senior Program Manager

• C. Skov - Senior Program Manager T. Singh - Principal Engineer

• R. Mitchell - Nuclear Licensing Manager C. Solanas - Manager Commercial Programs

• H. Williams - Materials Engineering Manager F. Hatch - Product Management Manager C. Eason - Principal Engineere- '

B. Smith - Principal Engineer J. Murray - QA Audit Manager

• G. Stramback - Safety Evaluation Project Manager

• B. Smith - Counsel Additional Persons Contacted U. Potapovs - NRC, NRR, Vendor Inspection Branch

• R. Marsh - NRC, Region V, Office of Investigations

• W. McNulty - NRC, Region V, Office of Investigations

• Attended both entrance and exit meetings.

G. RELATED NRC INSPECTION REPORTS:

The following NRC Inspection Reports are related to the issue of moldeo case CB's and may benefit in understanding General Electric Company's activities in these areas:

J Inspection Report No. 99901113/88-02 Inspection Report No. 99900786/88-01 Inspection Report No. 99900829/88-01 i

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