ML22168A148

NRC Presentations for the 30th Annual NUPIC Vendor Conference

ML22168A148
Person / Time
Issue date:	06/23/2022
From:	Andrea Keim NRC/NRR/DRO/IQVB
To:
KEIM, A 301-415-1671
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ml22168A146	List: ML22168A148
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Download: ML22168A148 (17)

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Requirements and Guidance to Prevent the Intrusion of CFSI into the Nuclear Supply Chain June 22-23, 2022 30th Annual NUPIC Vendor Conference Andrea Keim, NRR/DRO/IQVB 301-415-1671 Andrea.Keim@nrc.gov

Objectives Overview of the Nuclear Regulatory Commissions (NRC)s regulatory requirements and guidance for Counterfeit, Fraudulent or Suspect Items (CFSI)

Identify available CFSI training Raise awareness of CFSI and discuss means to prevent or mitigate CFSI in the nuclear supply chain 2

Background

Continued concerns related to CFSI affecting NRC regulated entities prompted several NRC initiatives to support addressing CFSI concerns CFSI events both domestically and overseas resulted in:

- Issuance of guidance to heighten awareness of the existing NRC regulations and how they apply to CFSI

- Issuance of information notices on pertinent CFSI events

- Creation of internal CFSI Technical Review Group to evaluate events to determine whether they involve CFSI and their applicability to NRC regulated facilities.

NRC advocates a proactive approach to detect and prevent the intrusion of CFSI into structures, systems or components 3 intended for use as a basic component.

CFSI is encompassed in NRC regulations:

quality assurance and defect reporting Appendix B to 10 CFR Part 50 areas: 10 CFR Part 21 and 10 CFR

1) Design control 50.55(e)

2) Procurement document control

3) Control of purchased

1) Evaluation of deviations and materials, equipment, and failures to comply to identify services defects and failures to comply

4) Identification and control of associated with substantial material, parts, and safety hazard components

5) Disposition of nonconforming

2) Notification to the NRC when materials, parts, or there is information indicating components a failure to comply or a defect

6) Corrective action and program effectiveness reviews 4

NRC Generic Communications Regulatory Issue Summary (RIS)-15-08, Oversight of Counterfeit, Fraudulent, and Suspect Items in Nuclear Industry heightens awareness of the existing NRC regulations and how they apply to CFSI within the scope of NRCs regulatory jurisdiction. (ADAMS Accession No. ML15008A191)

Generic Letter (GL) 89-02, Actions to Improve the Detection of Counterfeit and Fraudulently Marketed Products shares information regarding elements of programs that appear to be effective in providing the capability to detect counterfeit or fraudulently marked products. (ML031140060)

Information Notice (IN) 2018-11 Supplement 1: Kobe Steel Quality Assurance Record of Falsification (ML19357A138)

IN 2013-15 Willful Misconduct/Record Falsification and Nuclear Safety Culture (ML13142A437)

IN 2013-02 Issues Potentially Affecting Nuclear Facility Fire Safety (ML122840031)

IN 2008-04 Counterfeit Parts Supplied to Nuclear Power Plants (ML093620098)

NRC Bulletin 1988-10 Nonconforming Molded-Case Circuit Breakers (ML031220261) and Supplement 1 (ML031220271) 5

Other Sources of Guidance Nuclear Industry Guidance

• Electric Power Research Institute (EPRI) Technical Report 3002002276, Plant Support Engineering: Counterfeit and Fraudulent Items - Mitigating the Increasing Risk (www.epri.com Free)

• Nuclear Energy Institute (NEI) 14-09, Guidelines for Implementation of 10 CFR Part 21 Reporting of Defects and Noncompliance, Rev 1 (ML16054A825) as endorsed in NRC Regulatory Guide (RG) 1.234 (ML17338A072)

International Guidance

• International Atomic Energy Agency (IAEA) Publication on Managing Counterfeit and Fraudulent Items in the Nuclear Industry (www.iaea.org Fee)

• Nuclear Energy Agency Multi-National Design Evaluation Program CP-VICWG-04, Common Position on Mitigating the Risks of Counterfeit, Fraudulent, and Suspect Items from the Vendor Inspection Co-operation Working Group (VICWG)

Resources from other Federal Agencies

• Department of Homeland Security National Intellectual Property Rights Coordination Center https://www.iprcenter.gov

• Department of Energy (DOE) Operating Experience Committee https://www.energy.gov/ehss/doe-corporate-operating-experience-program 6

Reporting Requirements 10 CFR 50.72, Immediate Notification Requirements for Operating Nuclear Power Reactors 10 CFR 50.73, Licensee Event Report System 10 CFR Part 21, Reporting of Defects and Noncompliance 7

Reporting Guidance NUREG-1022, Event Report Guidelines: 10 CFR 50.72 and 50.73, Rev 3 - contains guidance for making voluntary reports (ML13032A220)

Regulatory Guide 1.234, Evaluating Deviations and Reporting Defects and Noncompliance under 10 CFR Part 21 Rev 0 (ML17338A072)

NEI 14-09, Guidelines for Implementing 10 CFR Part 21 Reporting of Defects and Noncompliance, Rev 1 (ML16054A825) 8

Additional Requirements Completeness and Accuracy of Information

- 10 CFR 50.9

- 10 CFR 52.6

- 10 CFR 70.9 Deliberate Misconduct

- 10 CFR 50.5

- 10 CFR 52.4

- 10 CFR 70.10 9

NUREG/BR-0500 Safety Culture Policy Statement May 2018 (ML18137A389)

This policy statement applies to holders of quality assurance program approvals, vendors and suppliers of safety-related components Problem Identification and Resolution Issues potentially impacting safety are promptly identified, fully evaluated, and promptly addressed and corrected commensurate with their significance.

Questioning Attitude Individuals avoid complacency and continuously challenge existing conditions and activities in order to identify discrepancies that might result in error or inappropriate action.

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CFSI Training IN 2012-22, Counterfeit, Fraudulent, Suspect Item Training Offerings, Rev 1, November 20, 2019 (ML19017A118 and ML19017A117)

NRC continues to engage stakeholders to enhance awareness on CFSI and disseminate information on CFSI-related events in the nuclear industry 11

OIG Audit and Special Inquiry February 2022 - OIG issued report OIG-22-A-06 documenting its audit findings and recommendations on the NRCs oversight of CFSI at nuclear plants

- NRC should improve its oversight CFSI Clarify and communicate how the NRC collects, assesses, and disseminates information regarding CFSI Improve staff awareness of CFSI February 2022 - OIG issued Special Inquiry Case No.20-022 12

Staff Responses to OIG Audit and Special Inquiry In response to these reports, the staff conducted a risk-informed review of the OIGs findings and determined that there were no immediate safety concerns to nuclear power facilities and other nuclear facilities regulated by the NRC The staff proposed actions to address the recommendations within the 2022 OIG audit report.

The staff assessed the NRCs overall approach for oversight related to CFSI at NRC regulated entities and proposed additional recommendations aimed at strengthening knowledge and awareness of the risks posed by CFSI.

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Improvements to NRCs Oversight Process based on Office of the Inspector General (OIG) Audit and Special Inquiry Strengthen awareness of reporting requirements withing the agency and external stakeholders Perform outreach during industry meetings with vendors of nuclear power plants, spent fuel storage systems, and radioactive material transportation packages to enhance supplier awareness of risks posed by CFSI and available guidance Engage with other Federal agencies that perform regulatory oversight of safety critical industries and international regulatory counterparts 14

Prevent the Introduction of CFSI into the Nuclear Supply Chain Incorporate processes to verify that products are authentic using receipt inspection, procurement controls, and vendor authentication tools Maintain traceability of products within the supply chain and reduce risk of counterfeit products by procuring from authorized distributers or sellers Increase awareness of CFSI through training and coordination with industry and government organizations involved in preventing and mitigating CFSI 15

Key Points The NRC oversight of CFSI is addressed CFSI-related guidance, development of processes to evaluate potential CFSI events and performance of outreach activities OIG recent audit and special inquiry reports on the NRCs oversight of CFSI at nuclear power plants and recommended the NRC improve its oversight The NRC recognizes the opportunity to make improvements to the current process for oversight of risks related to CFSI and identified actions to implement improvements The NRC reviewed the OIG reports and concluded - no evidence to substantiate that NRC regulated facilities have been adversely impacted by CFSI The NRC staff performed an assessment of its oversight of risks posed by CFSI to its regulated facilities - determined that the current regulatory framework adequately mitigates the risk posed by CFSI 16

QUESTIONS Th 17