ML19326D278

Responds to 731203 Order to Show Cause.Correspondence Re Compliance W/Qa Regulations,Affidavit & Certificate of Svc Encl

ML19326D278
Person / Time
Site:	Midland
Issue date:	12/24/1973
From:	Bacon J, Reis H CONSUMERS ENERGY CO. (FORMERLY CONSUMERS POWER CO.), LOWENSTEIN, NEWMAN, REIS, AXELRAD & TOLL
To:	US ATOMIC ENERGY COMMISSION (AEC)
Shared Package
ML19326D275	List: ML19326D274 ML19326D278
References
NUDOCS 8006090712
Download: ML19326D278 (77)

Text

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UNITED STATES OF AMERICA ATOMIC ENERGY COMMISSION In the Matter of Construction Permits CONSUMERS POWER COMPANY )

) Nos. 81 and 82 (Midland Plant, Units 1 and 2) )

)

4 ANSWER TO ORDER TO SHOW CAUSE December 24, 1973 0

6090 }

h Consumers Power Company (hereinafter " Consumers Power" or the " Licensee"), the holder of AEC Construction Permits Nos. 81 and 82 for Units 1 and 2 of the Midland Plant, states in answer to the Order to Show Cause issued by the AEC Director of Regulation on December 3,1973 with respect to such Pemits that all discrepancies or violations of AEC quality assurance (hereinafter sometimes "QA")

regulations recited as the bases for such Order have been resolved; that the Licensee is presently implementing its QA program in com-pliance with the AEC quality assurance regulations; and that by reason of improvements in the QA organizations, practices and procedures of the Licensee and its architect-engineer, Bechtel, there is reasonable assurance that such compliance will continue throughout the construc-tion process. More specifically, the Licensee states in answer to the Order to Show Cause as follows:

I. Background

1. Construction Permits Nos. 81 and 82 were granted to Consumers Power by the Atomic Safety and Licensing Board (hereirafter the "ASLB")

on December 14, 1972, after a comprehensive hearing which, among other things, covered Consumers Power's Quality Assurance (QA) Program.

2. The ASLB held in its Initial Decision authorizing issuance of the construction pemits that:

" Applicant is committed to a comprehensive docu-mented quality assurance program for which it will have final responsibility. The application contains a description of the program including a discussion of _how applicable requirements of Appendix B of 10 CFR Part 50 will be satisfied. The Board has reviewed this information and concluded that if the program is implemented in accordance with the representations in the application the requirements ofAppendixBwillbesatisfied."l/

1/InitialDecisionASLB, December 14, 1972, p 24.

- _ = -

2 The ASLB also concluded that the question of enforcement of the Licensee's Quality Assurance Program was the responsibility of the Conmission, which had delegated this enforcement function to the Director of Regulation. For this reason, the ASLB expressly did not consider the questions of whether there were deficiencies in the Licen-see's implementation of its QA Program or the likelihood of the Licensee's implementing the QA Program which the ASLB found acceptable.

3 on March 26, 1973, the Atomic Safety and Licensing Appeal Board (hereinafter the " Appeal Board") entered a Memorandum and Order (ALAB-lO6) stating in Paragraph III:

" * *

• To begin with, we have found nothing which would cause us to overturn the Licensing Board's findings as to the consistency of the QA program with the requirements of Appendix B.

We have reviewed the QA manuals for both the applicant and its architect-engineer. Both of these manuals, as presently revised, appear to present a satisfactory overall progrca to meetp the quality assurance criteria of Appendix B."

4. Despite the Appeal Board's conclusion in AIAB-lO6 that the Licensee and its architect-engineer, Bechtel, had a satisfactory QA Pro-gram, the Appeal Board modified the ASLB decision with respect to the issue of the likelihood that the Licensee vould properly implement its QA Program. The Appeal Board stated that the ASLB should have examined the track record of the Licensee to decide this issue. Instead of re-manding the matter to the ASLB for further action, the Appeal Board re-viewed the record itself and imposed four conditions on the Licensee, 2/Id.at23-24 g AIAB-lO6, RAI-73-3, p 182, at 184 (March 26,1973) .

o ,

i s as a result of its conclusion that the record disclosed certain deficien-cies and discrepancies relating to implementation of the Licensee's QA Program. The deficiencies relied upon related to ecxtcrete work under-taken prior to the issuance of the construction pemits pursuant to an exception, and had been discovered during inspections by the Directorate I of Regulatory Operations, Region III (hereinafter "DRO-III") on September 29-October 1, 1970. On the basis of these deficiencies, the Appeal Board found that

" * *

• Neither the applicant nor the architect-engineer has provided reason-able assurance that the QA program will be implemented properly, even though both organizations have experience in building reactors. They have in this project not demonstrated their concern with maintaining QA programs in synchronization with their construction programs, nor have they demon-strated that they will have properly traine I people on site to implement the QA program."

! 5 The four conditions imposed upon the Licensee by the Ap-peal Board in ALAB-106 required the Licensee to file a report with the Appeal Board describing quality assurance action being undertaken to assure the satisfactory condition of work theretofom perfomed at.a the materials then on site, in order to provide assurance that construction could safely continue following a prolonged shutdown. The order stated that the Appeal Board would " appreciate receiving staff coments on" the Licensee's report, "and these coments should include the results of any ataff inspection." In its report, filed on May 25, 1973, the Licensee suhaitted procedures for inspection, evaluation and remedial M The record disclosed that the actual structural work performed at Midland appeared to be satisfactory. ALAB-lO6, RAI-73-3, p 182, at 186.

p/Id.at185 I

e 4

action to be undertaken in preparation for resumption of constructicn and simunarized the results of the initial inspections under these procedures. The Staff on the basis of its review of the Licensee's May 25, 1973 report, saw no substantial basis for asserting that Consumers Power had failed to ccuply with the reporting condition.

No additional Staff inspection had been performed, however.

e

e. InAIAB-132,l the Appeal Board found that it could not derive from the Licensee's May 25, 1973 report alone the assurance it anticipated as a result of ALAB-106. Accordingly, it directed the Staff to file a report of a full-field inspection, and cccnents on the Licen-see's report in the light of that inspection. The Staff did so on July 20,1973, reporting the results of a June 26-28, 1973 inspection, and the other parties filed coments on the Staff's subnittal, at the Appeal Board's invitation.

7 In reviewing the various submittals, the Appeal Board noted that its action in AIAB-106 was intended to be remedial, not punitive, and to assure that prior QA shortccmings were being recti-fled. The Appedl Board held in AIAB-147 that reasonable assurance had been provided that appropriate QA action was being taken, with one exception respecting Bechtel's Field QC organization, which was

6) Applicant's Report on Quality Assurance Action Being Undertaken to Anoure Satisfactory Condition of Work Already Performed and Mnterinto Now on SLte, May 25, 19'(3 g AEC Hegulatory Staff's Answer to Saginaw Intervenors ' Motion to Enforce ALAB-106, June 19, 1973 8/ALAB-132,RAI-73-6,p431(June 28,1973).

pf AIAB-147, RAI-73-9, p 636 at 637 (September 18, IcIT3) .

N 5

subsequently resolved between the Licensee and the AEC Staff pursuant toALAB-152.10/

8. On November 6-8, 1973, DRO-III personnel made an inspec-tion of the Midland site. Among the items inspected were cadweld splices, as to which the inspectors found a number of deficiencies:

A. Cadweld procedures and implementation (1) An Erico (the cadweld manufacturer) bulletin was being utilized as a specific cadveld procedure, and was deemed inadequate for the purpose, being inconsistent with the PSAR with respect to preheat temperature requirements, and being principally a sales promotion document.

(ii) A specific procedure providing detailed instructions regarding the field QA inspector's activities and responsibilities during cadwelding was not available for review. Moreover, a field engineer performing cadweld inspections did not have a copy of the Master 10/AIAB-152,RAI-73-lo,p816(October 5,1973). See letters from Mr. A. Giambusso of AEC-DOL to the Licensee dated November 20, 1973, and from Mr. S. H. Howell of the Licensee to Mr. Giambusso dated December 5, 1973 This matter could hardly be cited as evidence of incorrigible disregard of QA requirements, as even the AEC Staff, in petitioning for reconsideration of ALAB-147, requested certifica-tion of the matter to the Comrission "as a major and novel question of law" as to which the Staff disagreed with the Appeal Board. That this area is one which is rapidly evolving is reflected in the recent Appeal Board decision, In the Matter of Pennsylvania Power and Light Company (Susquehanna Units 1 and 2), Dkt Nos 50-367-366, AIAB-163 (December 11,1973), referencing the Commission memorandum and order of December 7,1973, RAI-73-12_, in the LaSalle case.

l_1/ Splices which join reinforcing bars by means of a joint which, at the end of the mechanical procedure (not a weldment) followed, pro-duces a joint with basically the same mechanical properties as an unspliced reinforcing bar.

6 Inspection Plan, which defines (althou6h deter-mined to be lacking in content) his activities.

(iii) Existing instructions and procedures relating to veri-fication of mini == preheat temperature vem not being implemented, and one cadweld assembly was at approxi-mately ambient temperature minutes before firing.

(iv) Observation of one Bechtel field engineer's inspec-tion activities indicated that his method of measuring the area of voids in the cadwelds to determine whether the mni== 3 0 square inch criterion has been met was not in agreement with the method required by the Bechtel QC inspection specification. Two previously accepted cadwelds were rejected after the AEC inspector requested that the void areas be remeasured by the Project Field Quality Control Engineer.

B. Material control procedures and implementation.

l (1) A procedure was unavailable for review (a) to ade-quately define the elements of cadweld material con-trol, (b) to account for cadweld materials issued from and returned to storage, (c) to direct how non- f confoming cadweld materials are to be identified

' and segregated frca confoming materials in storage, and (d) to implement the Bechtel specification re-quirement that splice kits be stored in a clean, dry, temperature-controlled area. Inspection of the cad-weld storage facilities revealed that, while the l

7 facilities were clean, dry and temperature-controlled, (a) access was apparently racon-trolled, (b) cups and an open thermos of coffee were placed on cadweld powder boxes in storage, und (c) a cadweld sleeve which was nonconforming in that it was unwrapped and had oxidized in-terior valls, was stored among conforming ma-terials and not identified as nonconforming.

C. Cadweld records (i) Records were not maintained to furnish evidence that " Splicing In-process Production Control Activities" vere actually performed as required.

(ii) Records to provide evidence that issuance control requirements for cadweld splicing material were properly accomplished were not maintained.

') . On the moming of the day following the inspectd on, November l l

9,1973, Consumers Power's Director of Quality Assurance Services ordered 1

the Consuners Power Quality Assurance Engineer at the Midland site to write a nonconfonnance on Bechtel covering the problem areas found dur-I ing the AEC inspection, and also to issue a stop-vork order with respect  ;

I to placement of any concrete over the cadwelds until corrective action I l

had been completed. The Consumers Power Midland Project Manager was im-mediately notified that chis action would be taken. The Quality Assurance g IRO-III Inspection Report No. 050-329,-330/73-10. This report was not issued until December l!+,1973, and was not received by the Licensee until December 17, 1973 Corrective action taken by the Licensee and noted in reports of later inspections was based on descr$ptions of the discrepancies given in exit interviews at the conclusions of the inspections and on telephone conversations with DRO-III representatives.

8 Engineer issued the nonconformance and the stop-vork order to the Bechtel QA representative at the site at approximately 10:00 AM on November 9 Later that day, following a telephone conversation with the Reactor Con-struction Branch Chief of DRO-III, the Consumers Power Midland Project Manager ordered a suspension of cadwelding operations. In view of the voluntary shutdown of cadwelding operations, no stop-vork order was issued by DRO-III. DRO-III's understanding that the work had been stopped and would not resume prior to reinspection of cadwelds and de-velopnent and implementation of an acceptable cadwelding program was set forth in a November 9,1973 letter frcm Mr. J. o. Keppler of DRO-III to Mr. Stephen H. Howell, Consumers Power's Vice President in charge of Electric Plant Projects. This letter was not received until November 12, and did not discuss any items except cadwelding.

10. On the afternoon of November 9,1973, DRO-III representa-tives (Rohrbacher, Knop) telephoned the Licensee's Director of Quality i

Assurance Services and its Midland Project QA Supervisor to discuss the November 6-8 inspection findings. During the conversation the DRO-III representatives said they intended to reinspect on November 15 or 16, at which time they would expect to see evidence that:

a. All cadwelds had been reexamined on Units 1 and 2.

b. The reexamination had been documented.

c. The inspectors and cadwelders had been retrained ,

or reinstructed.

d. The basis of acceptance or rejection of cadwelds is clearly defined.

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e. Rebar has been cleaned prior to cadwelding, by visual evidence or otherwise.

f. Cadweld sleeves had been properly centered.

g. Asbestos had been removed from cadwelds adequately to permit visual inspection.

Also on November 9, J. G. Keppler of DRO-III called S. H. Howell to indicate that the Licensee should examine the possibility that the cad-welding problems might be symptomatic of more fundamental QA deficiencies.

11. On November 12, 1973, five Consumers Power representatives discussed the November 9 AEC-Consumers Power telephone conversation with thirteen Bechtel engineering, constniction and quality control representa-tives. The substance of new procedures was agreed upon for void measure-ments, rebar cleaning, preheat, material control, and inspection for asbestos removal. The need to write new procedures for cadweld inspec-tions and retraining of cadwelders if their perfomance was substandard was also discussed.

. 12. An internal AEC-IRO memorandum entitled " Notification of an Incident or Occurrence" bearing a date of November 13,1973 and the number "101" was written, describing " serious deficiencies associated with Cadweld splicing of concrete reinforcing bars." The memorandum was given vide distribution within the AEC and was even sent to the staff of the Joint Consnittee on Atcanic Energy, but a copy was not sent to the Licensee. WashiD6 ton counsel for the Licensee obtained a copy from i

the AEC Public Document Rocan on November 21. The memorandum states:

"A Region III inspection on November 6-8, 1973, l at the Midland construction site, identified  !

I serious deficiencies associated with Cadweld splicing of concrete reinforcing bars. These i deficiencies involved inadequate procedures for l

10 installing Cadweld splices, for material con-trol, and for documenting required quality param-etern- In addition, the Regulatory Operations inst -tors detemined that inspection techniques were inadequate and acceptance criteria used for quality requirements were being misapplied."

The memorandun does not specify the nature of the " serious deficiencies" referred to in any further detail. However, it indicates that a delay "of at least one week" might be necessitated by the corrective action program. A copy of the November 13 internal memorandum is attached hereto as Exhibit A. The memorandum notes that Consumers Power had shut down all cadweld splicing operations at the site on November 9, but that other unrelated work would continue. It also notes that Consumers Power had agreed not to resume cadweld splicing until exist-ing splices had been reinspected and accepted by properly qualified inspection personnel and until a DRO-III inspection had established that an acceptable program for cadweld splicing had been developed and implemented.

13 On November 15, 1973, Mr. Rohrbacher of DRO-III conducted a short follow-up inspection at the Midland site to detemine the ade-quacy of the cadweld reinspection program. He determined that "(1) ap-propriate and adequate cleaning of Cadwelds had been completed prior to reinspection; (2) adequate procedures, techniques, and tools were being utilized, (3) Cadweld inspectors were adequately trained and ccupetent, and (4) important quality aspects for each Cadweld were determined and recorded concurrent with inspection."

g DRO-III Inspection Report No. 050-329,-330/73-10, dated December 14, 1973, Attachment A, p 1.

11 114 On November 16, 1973, the Director of Project Quality Assurance Servlces and two other members of the Consumers Power head-quarters CA ataff visited the Midland site to determine the status of corrective action associated with the DRO-III cadweld findings. They inspected splices for evidence of proper cleaning and centering, and corrective action associated with the DRO-III cadweld findings. They inspected pieces for evidence of proper cleaning and centering, and reviewed Bechtel report forms being used to record the reinspection of cadwelds. A modified reporting form was agreed to for use after resump-tion of cadwelding. The status of activities to be completed prior to a IRO-III reinspection was discussed with Bechtel field and QC engineers.

It was determined that cadwelding procedures had been rewritten, that inspectors had been retrained and that cadwelders vould be retrained by November 19 The Bechtel reinspection of Unit 2 cadwelds was sched-uled to be completed by November 19 15 On November 16, after the Consumers Pover-Bechtel meeting, Mr. Rohrbacher of DRO-III was advised by telephone that there appeared to be no reason for DRO-III not to reinspect on November 20.

16. A DRO-III reinspection was performed on November 20-21, 1973 to determine "the adequacy of the licensee's corrective action relative to: (1) Cadwelding and Cadwelding inspection violations and deficiencies, and (2) an apparent lack of management involvement in the implementation in the Midland Quality Assurance Program." b As a re-sult, the Licensee was informed that the cadwelding suspension must continue. The inspectors commented that although " corrective action on the part of the licensee relative to the issue at hand had been y J,d. , Attachment B, p 1.

12 substantial," at least the following additional correctiv.e action was required:

a. Consumers Power documentation demonstrating enalysis of the cadveld pro 6 ram violation circumstances, with respect to any indication of QA program breakdown or shortecmings, and if any such are identified, pre-scribing corrective action.

b. Completion of Bechtel procedures, including draft "oncs, for QA perfomance accounting covering the perfomance and inspection of cadvelding.

c. Consumers Power QA review and approval of such Bechtel procedures.

d. Demonstration by Consumers Power that Bechtel's re-qualification of existing cadwelds has been acccm-plished to the satisfaction of Consumers Power QA.

e. Documentation defining specific audit responsibilities and scope of construction activities by Consumers power QA personnel.

f. Demonstration that there are procedures de-signed to specifically assure that specifica-tions covering Class I work properly reference and deal with all applicable criteria.

1 I

j Ibid.

g Id., Attachment B at p 2. In this connection, the Licensee, on December lo,1973, filed a letter report addressed to Dr. Donald F.

Knuth, IE0 Director, reporting such deficiencies and corrective ac-tion pursuant to 10 CFR $50 55(e) .

lj ,Id., Attachment B at p 2.

s 13 With respect to the cadweld program, the DRO-III report noted that the following significant corrective action had already been taken:

a. All cadwelders and cadweld inspectors had received training which included demonstrations at the site by the cadweld manufacturer.

b. New instructions ami procedures had been written to cover cadwelding and cadweld inspection.

c. Personnel involved in cadwelding activities had been required to complete a written test designed to pro-vide evidence of adequate qualifications.

d. New forms, designed to demonstrate conformance to quality requirements, had been generated and found to be adequate in most areas of application. Some, however, were merely in rough draft or were lacking in one or more respects, or both.

The inspectors had concluded, however, that the cadwelding problems indi-cated shortenmings in the implementation of the Midland QA program Senerally.

" Discussions with site and corporate manage-ment personnel indicated that the licensee had given considerable thought to this matter and that a number of meetings had been held by the licensee, both internally and with Bechtel.

However, there were no documented results of this activity available for review at the time of the inspection anc it was, therefore, not evident that licensee management had made an effort to specifically identify problem areas, lg Id., Attachment B at p 4.

I

14 and/or shortcomings, in QA program implementa-tion, or that specific, corrective action measures had been taken to deal vi pro-gram implementation deficiencies."

In short, the DRO-III inspectors concluded that the Licensec was making significant progress in correcting the cadweld deficiencies, and their implications for the Midland QA program generally, but that not enough had yet been done. .

17 In an action which can at best be characterized as extra-ordinary, the members of the Appeal Board Panel who sat in the Midland licensing case wrote a memorandum to the Director of Regulation dated November 26, 1972, prodding the Staff to shut down all construction activity at the Midland site pending a determination as to whether the QA shortcomings noted in the internal AEC memorandum of November 13 had implications for other aspects of the construction work. The memoran-dum notes receipt of the November 13 internal memorandum. Althou6h recog-nizing th<.c the Appeal Board " clearly lacks jurisdiction to take official cognizance of the irregularities disclosed by the inspection, let alcne issue any orders with respect thereto," the authors of the November 26 memorandum nevertheless stated that they felt constrained to record their g/ Ibid. Consumers Power senior management personnel present at the exit interview were prepared to discuss fundamental changes in the QA program, but did not furnish the inspectors with a written description of such changes, none having been requested by DRO prior to the inspection.

2j Memorandum to L. Manning Munt:ing from Alan S. Rosenthal, John H.

Buck and William C. Parler, " Quality Assurance Deficiencies En-  !

countered at Midland Facility," November 26, 1973, para. 3 at p 4

(" Appeal Board Members' Memorandum"). This memorandum was attached to the Director's December 3, 1973 " order to Show Cause," and was not sent to the Licensee prior to that time. See Licensee's

" Motion to Dismiss Order to Show Cause" filed concurrently with this Answer, at p 10.

21/ Id. at p 2.

15

" extreme dismay" respecting the new QA deficiencies, and their " firm -

belief that more drastic action against Consumers Power and its architect-engineer should be prcanptly considered."

"In this connection, had the construction per-mit proceeding still been before our Board at the time that the results of the November 6-8 inspection were announced, it is a virtual cer-tainty that we would have ordered forthwith a cessation of all construction activities--to continw in effect at least until such time as properly trained quality assurance inspectors, fully independent of the const ion organiza-tion, were available on site.a2 In support of their position, the Appeal Board members cited ALAB-106, which was concerned with implementation of the QA program as it related to a concrete pour in 1970. The new deficiency, they said, " bears a startling resemblance to the deficiency referrect to in ALAB-106 respecting the QA and QC personnel present at the concrete pour location . . . ."

On the basis of the Licensee's report pursuant to Condition 1 of ALAB-106, and a number of inspection repor+s filed by the Staff, the Board had found that "there is now a reasonable assurance that appropriate QA action is being taken by the applicant" and that, except for an organizational 22/Theauthorsofthememorandumapparentlyactedeitherintheircapac-ity as private citizens or as employees of the AEC without any relevant official responsibilities concerning the Midland construction permits.

As noted above, they freely admitted the lack of jurisdiction of the Midland Appeal Board either to take " official cognizance" of the mat-ter referred to in the November 13 memorandum or to issue any orders with respect thereto.

2}/ Ibid. The Board members did not indicate whether, had the matter still been before the Board, the Licensee would have been notified of and given an opportunity to ecxament upon such an order prior to its issuance.

2,,h_/Id.atpp3-4.

16 deficiency, there was no QA problem pertaining to Bechtel requiring cor-rective action.2 Nevertheless, said the Board members, "The only reasonable conclusion which we can draw from the disclosures of the November 6-8 inspection is that the assurances which we had received from the applicant were false and that, in point of fact, it and the architect-engineer still have not manifested both an ability and a villingness to take the steps necessary to vaiveproperQAactivities."2,6/

Therefore, the Appeal Board members concluded, it seemed evident that,

" contrary to our finding in ALAB-147 (which necessarily was founded on the materia]s then before us), there is not a reasonable assurance that appropriate QA action is now being taken.

If anything, there is a solid assurance that exactlytheoppositeisthecase.2_7/

What we have here is a pattern of repeated, flagrant and signific " QA violations of a non-routine character" .--coupled with an un-redeemedpromiseofreformation."2g From the Board members ' memorandum it appears that the pejorative con-clusions there expressed3_o.] vere based solely upon the four conclusory 25] AIAB-lh7, RAI-73-9, 636, at 637, 640 (fn lo) (September 18,1973).

26/ Appeal Board Members' Memorandum, at p 3 2j Such " solid assurance" being based, of course, on the new material then before the Board, apparently consisting solely of the interaal DRO memorandum of November 13, 1973 28/Withrespecttothe1970QAviolationspertainingtotheconcrete pour, however, the Staff's testimony was that the alleged deficien-cies were " typical problems that occur" and that " fall into a general category of problems that we do run into continually in our inspec-tion work at Midland and other sites." (Emphasis supplied) (Tran-script,pp46o8-o9).

22/ Appeal Board Members' Memorandum, p 4.

30/E.g.,assurancesreceivedfromtheapplicant"verefalse";thereis

" solid assurance" of inappropriate QA action; " repeated, flagrant and significant QA violations"; " unredeemed promise of refomation."

17 sentences in the November 13 memorandum, which were wholly lacking in detail. The Board members did more, however, than merely derive their strong views conceming Consumers Power and Bechtel from that memorandum.

To be sure, they expressly recognized that since the adjudicatory pro-ceeding had been completed, "the on-going supervisien of construction activities is your function and not ours." Nevertheless, in stressing that if they still had the authority to do so, they would, on the basis of the November 13 internal memorandum, "have ordered forthwith a cessa-tion of all construction activities . . .," they clearly conveyed their opinion that the memorandum required the Director of Regulation to take such action.

18. On November 27, 1973, Consumers Pover's Director of Proj-ect Quality Assurance Services, Mr. G. S. Keeley, wrote a memorandum, at-tached hereto as Exhibit B, suggesting certain changes in the procedures to be followed and QA actions to be taken with respect to cadwelding, in light of DRO-III's verbally connunicated inspection findings. Mr. Keeley recommended consideration of changes in void measurement method; a re-view of the procedures and acceptance criteria for other work functions to avoid misunderstandings of the kind disclosed by the void-measurement differences; a system for resolving differences among specifications, the PSAR and regulatory guides; Consumers Power review and discussion of inspection plans with Bechtel prior to commencement of work; greater depth and more written guidance for Consumers Power QA audits; more fre-quent routine presence of Consumers Power headquarters QA personnel at the site for the immediate future; and additional procedures and training for Consumers Power QA personnel. Mr. Howell replied to Mr. Keeley in

18 a November 29 memorandum, attached hereto as Exhibit C, directing Mr. Keeley to proceed imediately to carry out his November 27 recan-mendations and stressing the need to study the entire QA program, not just that portion applicable to cadvelding. Mr. Keeley thereafter trans-mitted such of the suggestions as applied to Bechtel to Bechtel's Midland Project Manager, Mr. M. Krout, by letter of December h,1973, referred to in item d. at page 10 of DRO Inspection Report 73-11 and attached hereto as Exhibit D.

19 By telephone conversation on November 29, 1973, a meet-ing tetween Consumers Power and DRO-III representatives in Chicago was arranged for Monday, December 3 The purpose of the scheduled meeting was to present to DRO-III the cadweld reinspection results, the redrafted cadweld procedures, and the Licensee's approach to the implications of the cadweld problems for other activities. Documentation of these items was assembled and reviewed by Consumers Power and Bechtel representatives on Friday, November 30, in preparation for the December 3 meeting.

20. At 4:45 FM on November 30, Mr. n. Knop of DRO-III noti-fied Mr. Keeley by telephone that the meeting scheduled for December 3 was cancelled and that the Licensee would be notified on December 3 of a new date for the meeting. When no notification had been received by 2:00 PM Monday, December 3, it was determined by a telephone call to DRO-III that the IRO-III representatives with whom the meeting was to be held were away from the office. That evening, Dr. Knuth, Director of Regulatory Operations, notified Mr. Howell of Consumers Power that an Order to Show Cause had been issued.

19

21. It should be apparent from the foregoing that (a) the Li-censee's QA program has been determined to be adequate, (b) doubts about the Licensee's implementation of its QA program and the adequacy of Bechtel's field QC organization that were raised in the Appeal Board's orders have been previously resolved, (c) while there were deficiencies in cadwelding installation and inspection, the Licensee was taking prompt action to correct the specific deficiencies relating to cadweld-ing, (d) the f.icensee was taking action intended to substantially is-prove its QA program so as to provide reasonable assurance that that program would be implemented in accordance with Commission regulations throughout the constniction process, and (e) the deficiencies, as well as the steps designed to improve the Licensee's QA program generally, were well along the road toward satisfactory resolution when the Order to Show Cause was issued, apparently prompted solely by the Appeat Board members' November 26 memorandum, which in turn was triggered by the in-ternal DRO memorandum of November 13 We next turn to a specific dis-cussion of the recited bases for the Order to Show Cause.

II. The 1970 Nonconfomances

22. As noted in paragraph 4, above, the Appeal Board imposad several conditions on the Licensee in ALAB-106, relying on certain QA deficiencies and discrepancies disclosed by the record in the proceeding, relating to concrete work at the Midland site. These deficiencies were reported in the report of DRO-III's site inspection of September 29- l October 1, 1970, as follows:

"1. Observation of concrete placement activi-ties at the construction site revealed:

a. The use of vibrators to move concrete.

20

b. A lack of sufficient vibrator pene-tration.

c. An absence of vibrator action at reconsnended intervals.

The above items are in disagreement with ACI-301, Paragraph 803.d (II-A-1.a). ,

"2. The site testing laboratory was not taking aggregate gradation and organic tests at the frequencies stated in the PSAR (II-A-1.a).

"3. The concrete sample obtained for the slump test at the point of transit truck discharge was not taken in accordance with the sam-pling instructions in ASTM-C-172 which re-quire a representative sample (II-A-9.a).

"4. The QA and QC inspection personnel present at the concrete pour location did not promptly identify and correct apparent deviations from the ACI-301 standard regarding consglidation of concrete (II-A-9.b) ."J31 The Order to Show Cause references these deficiencies, presumably to indicate that there has been a history of nonconformance to QA require-ments on the part of the Licensee.

23 Immediately thereafter the Licensee and Bechtel took action to correct the deficiencies. The next DRO-III inspection report, in 1971, notes:

"1. According to Messrs. N. Paige and B. Peck, corrective action by the applicant to im-prove the use of vibrators has been taken.

Bechtel established a special crew of craft personnel to do the vibrator work. This crew has been trained in the proper use of vibrators.

"2. Regarding the taking of aggregate grada-tion and organic tests in accordance with 31/DRO-IIIInspectionReportNo. 050-329,-330/70-6,pp1-2. DRO-III requested comments on the first two items an1 on corrective action '

being taken, including any QA program changes, in the January 18, 1971 letter from Mr. B. H. Grier to Mr. R. C. Youngdahl attached hereto as Exhibit E. Mr. Youngdahl's Febraary 5,1971 reply is attached as Exhibit F.

21 the PSAR, Mr. Peck said that Consumers Power has reviewed the frequency of aggregate testing and, where necessary, more frequent tests vill be made to ccuply with the PSAR.

"3 Mr. Peck stated that they have been taking concrete samples for slump in accordance with ASTM-C-172-Sh (Revised 1958) which re-quires only a single cample of concrete from stationary mixers. ASTM-C-172-68, which is a later edition, requires samples at two intervals during discharge of the middle por-tion of the batch. This difference in re-quirements has been brought to the attention of the applicant by telephone and vill re-ceive follow-up attention at the time con-crete work resumes.

"4. Regarding the lack of prompt attention on the part of QC inspection staff to identify and correct apparent deviations, the appli-cant, (according to Peck) has requested that Bechtel upgrade the QC inspection force in the area of concrete placement. In this regard, Peck reported that Bechtel and Consumers Power (CP) have conducted reviews of the ACI-301 standard. Addi-tionally, special inspector training ses-sions have been conducted for the site inspection force and Bechtel has assigned a full- engineer to inspect all Q-list pours."

This report also indicated that all construction was shut down prior to that inspection. The shutdown occurred due to delays in obtaining the construction pemits and continued until 1CJ/3, after the Appeal Board af-firmed the ASLB's granting of the construction permits. Bechtel has advised the Licensee that, upon resumption of construction, it took further corrective action to prevent repetition of the four noncon-fomances itemized in Inspection Rep"rt No. 70-6, supra, as follows:

}2] IRO-III Inspection Report No. 050-329,-330/71-1,pp2-3

22 Items 1 &1 + - An intensive indoctrination and training program vnn implemented for personnel involved in forming, placing, cur-ing and inspecting concrete work. This program was developed and pre-sented by San Francisco Bechtel Home Office Quality Control, the Project Field Engineer and the Project Field Quality Control Engineer, and, in addition to the foregoing, contained detailed instructions in the proper use of vibrators. Detailed inspection plans were developed and implemented.

Explicit instructions were given to quality assurance personnel to prompt-ly identify, and take necessary actions to correct, any discrepancies noted during concrete operations.

Item 2 - Bechtel assigned a quality Control representative to full-the monitoring of ' test lab activities. Additional requirements for indoctrination and training of Quality Control personnel at the Midland jobsite were established. In addition, the requirements for frequencies of aggregate gradation and organic testing were reemphasized to quality assurance and quality control personnel.

Item 3 - Upon project reactivation, the Bechtel speci-fication governing testing of concrete, Specification C-8, was super-seded by Specification C-208. In C-208, the applicable codes and stand-ards were updated to the latest revision of the ASTM-C-172 which is specified in the 1971 revision and calls for obtaining fresh concrete samples "at two or in regularly specified intervals during discharge of the middle portions of the batch." As noted above, Bechtel assigned a Quality Control Representative to full-time monitoring of test lab activities, i

l l

23

24. On September 5-7, 1973, following reactivation of con-crete placement activities, DRO-III inspectors made an unannounced in-spection at the Midland site. With respect to the matters identified as deficient in 1970, the following findings were made:

"During this inspection, activities associated with the use of vibrators during concrete place-

!+ -

ment was observed. Through discusnions with site personnel, review of records, and observa-

' tion of concrete placement activities in progress, it was determined that the use of vibrators dur-ing concrete placement met applicable require-m_ents resolved.(ACI-301).

However,This matterinspection periodic is considered of con-

' crete activities, including use of vibrators, s

' aretobemadeduring/ubsequentinspections."

(Emphasis supplied.)33

" Discussions with site personnel during the current inspection, review of records, and observations of batch plant operation provided information to establish that the required frequency of the subject testing was being maintained. However, this matter remains open pending ibrther record review anl ob-servat during further concrete produc-tion."

"The Unit 2 tendon gallery outer wall placement area was inspected prior to concrete placement.

It was observed that the fomvork was solid, clean, tight, and adequately braced. The re-bar was free from loose rust, properly spaced, and adequately held in place. Adequate trans- ,

porting and handling equipment, vibrators, and crew were on hand prior to placement. Adequate ,

personnel, as well as sampling and test equip- i ment, were available at the placement site, and l I/DRO-IIIInspectionReportNo. 050-329,-330/73-07,p2. f h I,d. at p 3 l l l

2h Bechtel QA, QC, and field engineers were present to observe and inspect operations in progress.

   "Throu6h observation of QA cnd QC activities at the time of concrete placement and from discus-sion with the QA and QC engineers present, it was detemined that these engineers were qualified to monitor and audit concrete activities. A representative of CP stated that CP had reempha-sized the need for adequate engineering surveil-lance and QC coverage by Bechtel during placement of all Class I pours.
    "It was observed that concrete handling and vi-brator usage were in accordance with applicable requirements. Two vibrator crews were observed at four areas of the pour during placement.

Through discussions with site personnel and re-view of records, it was verified that instruction in the use of vibrators took place on August 27, 1973 Demonstration and practice included use of vibrators in fresh concrete. About 27 at-tended this Bechtel training session, including ten laborers, three foremen, and fourteen engi-neers (field, QA, and QC) .

     "During placement, it was observed that truck transit tickets were received and reviewed upon truck arrival and that sampling and test-ing was done properly and the results recorded.

The inspector observed that the first load of concrete received for this pour was rejected at the placement location, due to improper slump. Methods used to take slump and air entrainment measurements met applicable re-quirements. It was observed that sampling and testing frequency was more frequent than required at the placement location and that samples were taken in a manner to obtain repre-sentative samples. A Bechtel QA engineer, among other engineers, was at the pour location veri-fying that sampling and testing requirements were met. The inspector did not identify any deviations frcm applicable requirements during observation of concrete placement activities.

      "During observation of batch plant operations, it was noted that the required mix was being

25 batched and that sampling and testir_g met appli,- cable requirements." (Emphasissupplied)g Accordingly, the Licensee and its architect-engineer immediately responded to and have corrected the deficiencies noted in DRO-III Inspection Report 70-6. Their efforts began before the shutdown of construction in 1970 This is hardly and continued when construction was resumed in 1973 evidence of the Licensee's incorrigibility or flagrant disregard of QA requirements. It is one of the functions of quality control and quality assurance to anticipate and detect human error and to assure that correc-tion occurs. The effectiveness of the efforts of the Licensee and Bechtel to correct and prevent recurrence of the discrepancies identified in 1970 is reflected in the fact that, after reactivation of the Midland project, the AEC found no discrepancies relating to the concrete work. The Licensee and 3echtel are involved in continuous programs of inter-pretingAppendixBandupdatingqualitystandardsandprocedures.b Their efforts hardly demonstrate "a pattern of repeated, flagrant and significant QA violations of a non-routine character--coupled with an unredeemed promise of reformation" as discerned--at a glance, appar-ently--by the Appeal Board members.b

       }5/Id.,atpp10-11.

j6/AnticipatinginterpretationsofAECQArequirementsisnosimple matter. As noted by the General Accounting Office in a January 19, 1973 decision (B-164105) reecamending improvements in the inspection program on the basis of a survey of DRO operations (including Region III) in 1972, "We analyzed the 18 criteria (set forth in title 10, l part 50, appendix B of the Code of Federal Regulations, effective July 1970), and found that 21 terms, in our opinion, are subject to i considerable subjective interpretation. * *

• Without more thorough guidance to inspectors, it appears likely that decisions abcut the acceptability of licensees' quality assurance programs and the depth of inspections necessary to make such decisions will be made more on l the basis of individual Judgment than on the basis of established criteria."

J7/AppealSoardMembers' Memorandum,p4

4 26 III. The September 1973 Recordkeeping Violations 25 As support for the Order to Show Cause, the Director of Regulation also cites the results of a design engineering inspection conducted on September 10 and 11, 1973, and a discussion of the findings on September 27, 1973: ,

                         " Inspections conducted on September 10,11, and 27,1srT3, revealed several additional viola-tions of 10 CB Part 50, Appendix B, Criteria II and V, involving inadequate record keeping procedures relating to quality assurance and unavailability of certain quality assurance records."

The referenced inspection was conducted at Bechtel's Ann Arbor, Michigan offices. The DRO-III inspection report recited the following Bechtel activities as activities which appeared to be a violation of AEC regula-tions or in nonconformance with the Bechtel fluclear quality Assurance Manual or the Bechtel Procedures Manual for the Plant:

                         "1. 10 CFR Part 50, Appendix B, Criterion II,
                                                         '       . This pro-states, in part, that:      .. .

gram shall be documented by written poli-cies, procedures, and instructions . . . .' Criterion XVII of 10 CFR Part 50, Appendix B, states, in part, that: ' Consistent with ap-plicable regulatory requirements, the appli-cant chall establish requirements concerning record retention, such as duration, location, and assigned responsibility.' Contrary to the above, the Bechtel Corpora-tion Nuclear Quality Assurance Manual does not include a requirement for retention of records common to activities affecting qual- l ity. Furthemore, other quality assurance 1 program documentation dealing with record re- l tention requirements was unavailable during l the course of the inspection . . ..

                          "2. 10 C B Part 50, Appendix B, Criterion V, states, in part, that:    ' Activities affecting quality shall be prescribed by documented instructions,             l procedures, or drawings of a type appropriate 1

27 to the circumstances and shall be accomplished in accordance with these instructions, pro-cedures, or drawings.' The Bechtel Power Corporation Internal Pro-cedures Manual for Midland Units No. I and No. 2, Section 7 5, titled, ' Drawing Control and Stick Files' requires that the current revision of each drawing be maintained in the stick files. Contrary to the above, current revisions of certain drawings were missing from the stick files . . . .

    "3  10 CFR Part 50, Appendix B, Criterion V, states, in part, that:     ' Activities affecting quality shall be prescribed by documented instructions, procedures, or drawings of a type appropriate to the circumstances. . .     .'

Contrary to the above:

a. Procedures to prescribe control of inter-face activitics between design groups were not available for review by the inspector at the time of the innpect.1 on . . . .

b. Procedures to prescribe control, isounnec, and changes to the Ecchtel Ccrporation In-ternal Procedures Manual for Midland Units No.1 and No. 2, were not available for review by the inspector during the inspec-tion . . . .

    "4. 10 CFR Part 50, Appendix B, Criterion V, states, in part, that:    ' Activities affecting quality shall be prescribed by documented instructions, procedures, or drawings of a type appropriate to the circumstances and shall be accomplished in accordance with these instructions, pro-cedures, or drawings.' The Bechtel Corporation Nuclear Quality Assurance Manual, Section III, Procedure No. 4, specifies the use of Exhibits 3.6A.1, 3.6A.2, and 3.6A.3 for vendor control.

Contrary to the above, quality as' 3 % nce speci-fications No. 7220 G-20, No. 7 0 , C-21, end No. 7220 G-22 were being us.d ;r n -.7mplish this activity in the absent e " y,;pcoved change to the manual authoriring tha; se of these Specifications . . . ."

s 28 The inspection report was transmitted to the Licensee by letter dated October.24, 1973, from Mr. James G. Keppler of DRO-III. The letter refer-enced the above findings as apparent violations of AEC rules and regula-tions and nonconformances with the Bechtel Nuclear Quality Assurance Manual (NQAM) or the Bechtel Internal Procedures Manual (IPM) for the Midland units, or both. The letter vent on to state:

                      "This letter is a notice of violation sent to you pursuant to the provisions of Section 2.201 of the AEC 's ' Rules of Practice,' Part 2, Title 10, Code of Federal Regulations. Section 2.201 requires you to submit to this office, within thirty (30) days of the date of this letter, a written statement or explanation in reply, in-cluding (1) corrective steps which have been taken by you, and the results achieved; (2) cor-rective steps which vill be taken to avoid a further violation; and (3) the date when full compliance vill be achieved."

26. In compliance with the October 24, 1973 notice of viola-tion, Mr. S. H. Hovell, Vice President of Consumers Power, submitted a citten explanation by letter of November 23, 1973 The letter and its attachment are attached hereto as Exhibit G, and indicate that appro-priate corrective action either had been completed or was in the process of. being completed in an exneditious manner. Moreover, it should be noted that most of the violations had been identified by Bechtel's own quality assurance program p:'Mr to the AEC inspection:

a. liechte 14A had not concluded that it was necessary to include record retention requirements in the NQAM. However, the need to review record control procedures, including record retention procedures, had I

l l

29 been identified by llechtel QA, as evidenced by the QA Daily Log Sheet dated August 21, 1973 and attached hereto as Exhibit H.

b. The deficiency consisting of certain drawing revisions missing from the stick files was identified in the Bechtel Quality Audit Find-ing bearing an audit date of September 5, f

1973andattachedheretoasExhibipI. As I the DRO-III inspector acknowledged: I

                           ". . . Bechtel Ann Arbor QA haq also detected this discrepancy on August 30, 1973     corrective action, as a result of the Bechtel August 30, 1973, findings ,

requires preparation of a specific pro-cedure for drawing control which vill es-tablish the res sibility for maintaining the stick file.

c. The Bechtel Quality Audit Findings attached here-to as Exhibics J and K, dated September 6,1973 and August 28, 1973, respectively, indicate that Bechtel QA had already identified the dis-crepancies consisting of unavailability of in-terface control procedures and procedures for control of the IH1. Respecting the former, the AEC inspector states that be was advised "that en audit by Bechtel Ann Arbor, Michigan, QA, on September 6, 15TT3, had previously revealed this defi-ciency. Bechtel QA described cor- l rective action, in regard to this I

g DRO-III Inspection Report No. 050-329,-330/73-08,p12. l 1

30 matter, as the development and im-plementation of procedures to provide a means to assure that interface ac-tivities affecting quality have been satisfactorilyaccomplished."39/ Concerning the IPM, the DRO-III report states:

                            "An audit by Bechtel, San Francisco, California, management QA had also established this deficiency in an audit performed on August 27 and 28, 1973."_W./

d. At the time of the DRO-III inspection, the NQAM procedure No. !+ specified that Exhibits 3.6A-1, 3.6A-2 or 3.6A-3 de applied for vendor QA pro-gram requirements. However, the inspector found that these Exhibits had been replaced in the Manual by QA Specifications 5, 6 and 7 More-over, the specifications then actually in use were Nos. 7220 G-20 and G-21, both issued prior to May i6, 1973, and G-22. issued later. The vio-lation consisted in not having revised the NQAM to reflect the use of the new specifications.

But as the DRG-III report notes, "A [Bechte1] QA Engineering audit re-port, No. 005, dated May 16, 1973, identified this conflict with the ap-proved program and directed that cor-rective action be accomplished. On , July 6, 1973, a letter was issued to  ! the QA manager, San Francisco, request-ing that the manual be revised to in- ) corporate the new specifications and t g Id. at p 10. g/Ia.atp11.

31 delete the old s,pecifications, numbered 5,6,and7."D+1 Quality Audit Finding 005, dated May 16, 1973, is attached hereto as Ex-hibit L. Thus, Bechtel's quality assurance program had already identi-fied, prior to the AEC inspection, most of the violations cited by the DRO-III inspectors. This demonstrates that the QA program was being implemented properly and was effective--not the reverse. IV. The 1973 Cadwelding Deficiencies

27. -The remaining specific bases for issuance of the Order to Show Cause were the deficiencies associated with the cadweld splicing of rebar. These deficiencies were identified at a IRO-III inspection con-ducted on November 6-8, 1973 As a result of that inspection and subse-quent conversations with DRO-III representatives, the Licensee voluntarily suspended all cadwelding operations on November 9 After the Licensee informed DRO-III that the corrective action would be completed by November 19, a special increction was conducted on November 20-21. At that time, ,

                           "The inspectors commented that, while the m -

sults of the inspection had established that corrective action on the part of the licensee relative to the issue at hand had been sub-stantial, a number of additional steps must betakentoassurethatthequalityassurance/ quality control program shortcomings, identi-fled in conjunction with inadequate perform-ance of Cadweldg d Cadweld inspection, 1 would not recur 1 y Id. at p 13 To preclude repetition of the discrepancy, the NQAM was amended by December 17 , 15773 to provide Midland Project Engineering with the flexibility to respond to evolving QA requirements by means of QA specification changes with proper QA approval and without

              -changing the NQAM.

g IRO-III Inspection Report No. 050-329,-330/73-10, Attachment B, pp 1-2.

32 The record thus establishes that the Licensee had attempted to correct the deficiencies identified. in the November 6-8 inspection, and be-lieved that it had done so. In this connection, it must be remembered that the written report of the November 6-8 inspection was not issued until December 14, 1973 and was not received by the Licensee until Fur-December 17--two weeks after issuance of the Order to Show Cause. themore, no written notice of violation confoming to the requirements of 10 C1'E $2.201 was issued. The Licensee was proceeding with its cor-rective action on the basis of verbal discussions with DRO-III represent-atives. Under the circumstances, no inference of " incorrigibility" or lack of effort to remedy the deficiencies may properly be drawn.

28. The specific cadweld violations and deficiencies have been described in paragraph 8, supra, and in the DRO-III report of the November 6-8, 1973 inspection (No.73-10). On December 6-7, 1973, IRO-III made a special inspection of the Midland site to detemine the statusoftheLicensee'scorrectiveactionrelativetoQA/QCprogram deficiencies and the specific, apparent violations identified in con-junction with cadwelding. In the report of that inspection, the inspectors concluded "that CP management personnel had adequately analyzed the circumstances associated with the violations and discrepancies identified during the RO:III review of site Cadwelding activities, and had prescribed corrective ac-tion measures which, if properly implemented, provideadequateassurancethatfutureprobg lems of a similar nature should not occur y Dated December 11, 1973 and received by the Licensee on December 17, 1973 44]DRO-IIIInspectionReportNo. 050-329,-330/73-11,p5

'- 33 29 The corrective action relative to the specific cadweld violations and deficiencies is desc21 bed at pp 11-11+ of Inspection Re-port 73-11, and may be simenarized , /ollo..s : Violation 1: (a) unavaJ.able or inadequate pro-cedures for cadwelding and cadweld inspection, (b) improperly implemented instructions and pro-cedures for preheating, and (c) failure of in-spection personnel to demonstrate knowledge and proper implementation of cadweld inspection cri-teria, leading to acceptance of twelve splices which were either questioned or rejected upon later reinspection. Corrective action: (la) The Licensee produced approved procedures for cadwelding and cadveld inspection ac-tivities, covering all requirements of the specifications, the site QA program, and the manufacturer's instructions and recem-mendations. (lb) Such procedures include specific instruc-tions regarding all cadwelding preheat re-quirements and the means for verifying that these requirements have been met. (le) All cadweld inspection personnel have been appropriately retrained and tested. The cad-weld void measurement criteria have been

34 revised. All cadwelds at the site (320 in Unit 2, and 147 in Unit 1) have been reinspected at least twice by Bechtel for confomance to quality requirements. On the basis of rein-spection utilizing a refined void measurement technique, nine cadwelds which were suspected of having unacceptable voids have now been accepted (one was later rejected for excess porosity). One splice previously identified as having excessive porosity has been rejected. The two splices with no evidence of reference lines have been accepted through engineering evaluation. Violation 2: unavailable or inadequate, documented pro-cedures to demonstrate control of handling and issuance of cadweld material, including return of unused r material. Corrective action: The Licensee has included instructions and procedures for storage and handling of cadweld materials, and return of unused material to storage, in the cadwelding production and inspection procedures. Violation 3: unavailable procedures relative to con-trol of nonconfoming cadweld material, and unavail-

       . able records establishing proper control of nonconforming material.

4 35 Corrective action: The Licensee has included in its production and inspection procedures adequate reference to instructions and procedures for iden-tifying, handling, controlling and segregating nonconfoming materials. Violation 4: failure to maintain records to turnish evidence of conformance to quality requirements. Corrective action: (a) Inspection report forms, as revised, now include all quality requirements iden-tified in the governing specification and inspection plan, plus instructions requiring timely verifi-cation and documentatice of conformance to qual-ity requirements. Deficiency 1: inadequate provisions for maintaining continued acceptable cadwelder performance qualifi-cations. Corrective action: Bechtel Specification No. C-231 has been revised to reflect requalification re-quirements. Deficiency 2: inconsistencies between design documents relative to cadwelding. Corrective action: (a) the Licensee has asked Bechtel to develop instructions for review of work specifications to identify any such incon-sistencies prior to the conduct of Class I work, (b) the Licensee has established provisions for

36 its QA review of work procedures whi' s to in- ' clude attention to this matter, and (c) the Licen-see has established procedures for auditing Class I work on an intensified scale. No violations of AEC requirements were identified during the inspection.

30. On December 17, 1973, the Director of Regulation issued a

       " Modification of Order to Show Cause" which modified the December 3 order to delete the prohibition therein on the resumption of cadvelding opera-tions at the site. The Dece_.tber 17 Modification refers to the inspectiot of December 6 and 7,1973, and states:
                          "As a result of this inspection it has been deter-mined that the licensee now has appropriate pro-cedures for cadwelding operations and that all cadweld inspection personnel have been appro-priately trained. . . . In view of the forego-ing .  . ., IT IS HEREBY DETERMINED THAT: The public health, interest or safety does not re-quire the continued suspension of cadv dhig activities at the plant site .  ...

The Modification left intact the remainder of the Order to Show Cause. Thus, while the deficiencies which were the apparent occasion for and cause of the Order's issuance have been resolved to the satisfaction of the AEC Staff, there remains the question raised by the Appeal Board mem-bers in their November 26 memorandum to the Director of Regulation, namely, whether the cadweldin6 deficiencies indicate that similar QA shorterwnkgn may affect other aspects of the construction work. kj DRO-III Inspection Report No. 050-329,-330/73-11,p2. 46/ " Modification of Order to Show Cause," Constniction Permit Nos. 81 and 82, December 17, lgr(3, pp 1-2.

37 V. Present Compliance With AEC QA Regulations

31. It has previously been held that the Licensee's QA program ccanplies with applicable AEC Regulations. On the basis of submittals of the Licensee and the Staff. and the results of a full-field inspec-tion conducted by the Staff on June 26-28, 1973, the Appeal Board held that reasonable assurance had been provided that appropriate QA action was being taken, with one exception relating to Bechtel's field QC organization which was subsequently resolved.$ No question has been raised as to the continued compliance of the Licensee's QA program with the Connission's regulations, and the Licensee believes that its QA pro-gram continues to satisfy the criteria set forth in 10 CFR Part 50, Appendix B. The recited bases for the Order to Show Cause, and the underlying November 26 memorandum of the Appeal Board members, have to do, not with the adequacy of the Licensee's QA program, but with the proper implementation of that program.

! 32. As we have seen, the specific deficiencies and violations recited by tLe Director in support of the Order to Show Cause have all been, or are being, resolved to the satisfaction of the Directorate of Regulatory Operations. IE0-III inspecticn reports disclose no outstanding unresolved violations of AEC QA requirements. N A number of "unre-solved matters" have been noted in DRO-III inspect 1 u reports prepared y See paragraphs 2 and 3, supra. g See paragraph 7, supra. 1 y During the December 6-8, 1973 inspection, representatives of the Li-  ! censee called to the AEC inspectors' attention a procedural discrepancy relating to containment liner plate weld (Continued on next page.)

38 since construction resumed ear 4 in 1973.5U/ They involve possible dis-crepancies or nonconformance with required procedures, but have not been cited as violations of AEC QA requirements. Of course, some have been resolved: e.g., those relating to the deterioration of rebar tie wire; concrete vibrator activities; and the Bechtel Organization Chart. Still unresolved items relate to procedures for the protection of site stored components, further improvements in Consumers' QA manual, examination of the Babcock & Wilcox Company (vendor) QA program, possible insufficient frequency of aggregate testing, the site sampling program, the adequacy of records relating to the inspection of tendon trumplates for rusting, procedures for RT Inspection of Containment Liner Welds, and work which Bechtel in an audit of its Midland QC field activities found not to be in ccepliance with its procedures. None of these involves violations of AEC QA regulations. Many exemplify the continuing nature of the work and of the AEC inspection process. Thus, Inspection Report No. 73-7 in-dicates that the aggregate is now being tested with sufficient frequency but that the inspectors wish to recheck as more concrete is mixed.

    !@/(Con'd) repair as to which "a violation of Pe150, Appendix B may be involved."

(Emphasis supplied.) DRO-III Inspection Report No. 050-329,-330/73-11, P 7. Since the matter was still under investigation by the Licensee, the inspectors deferred a full review to the next routine inspection. Since the Licensee first identified the discrepancy, however, and since it involved possible use of an unapproved installation procedure rather than inadequate QA or QC procedures, this item obviously does not involve a breakdown of QA implementation so as to create the possibility that " serious QA shortcomings may be infecting other aspects of the construction work." 50/DRO-IIIInspectionReportNo. 050-329,-330/73-1 through 73-11.

                                                                                                               39 Gimilarly, there is to be a follow-up on the corrective action taken                                                             ,

with respect to the work found by Bechtel's audit of its QC activities not to be in compliance with its procedures. Discrepancies referred to in Inspection Report No. 73-8 involving Bechtel's Ann Arbor documents haveinfactbeenresolvedandnoviolationsexist.21/ VI. Reasonable Assurance That Licensee Will Continue to Comply with AEC QA Regulations Throughout Construction

33. Even though the specific discrepancies and violations cited by the Director in support of the show-cause order have been satisfactorily resolved, the question remains whether the Licensee has taken corrective action sufficient to provide reasonable assurance of compliance with the Conunission's QA regulations during future construc-tion activities. The Licensee believes that it has. DRO-III Inspection Report No. 73-11 notes that, in addition to action to correct and prevent the recurrence of the cadwelding and similar deficiencies, "further steps had been taken to assure that implementation of the Midland site quality assurance /qualitycontrolprogramwasconsistentwithAECrequirementsand good practice." The inspectors further advised the Licensee that its management personnel had adequately analyzed the cadweld-related dis-crepancies and "had prescribed corrective action measures which, if properly implemented, provide adequate assurance that future problems of a similar nature should not occur." The steps to assure proper implementation are set out below.

g See paragraI sh 25 and 26, supra. g DRO-III Inspection Report No. 050-329,-330/73-11,p5 See also paragraph 18, supra.

40 3r+ . on the Licensee's part, recent steps taken to assure im-proved QA performance and continued QA compliance include the following:

a. Organizational Changes (1) Field QA Engineer R. E. Whitaker was as-signed to the Midland site on May 25, 1973 (2) From July 23 to october 1, 1973, A. J. Birkle was temporarily assigned to assist the QA Administrator.

(3) On August 16, 1973, H. W. Slager was assigned to QA Services in the Licen-see's General Office (HQ). (4) On October 1, 1973, G. S. Keeley was appointed Director of Project Quality Assurance Services, reporting directly to the Vice President for Electric Plant Projects. This position is on a Inr with the Project Managers for Midland and other electric plant construction projects and with the Directors of other service de-partments. (5) On November 1, 1973, G. W. Ford was as-signed to the General Office QA staff as Quality Assurance Engineer - Electric. (( In November,1973, H. W. Slager was ap-

                                  ,ointed Midland Project Quality Assurance Su-perrisor, reporting to Mr. Keeley. Mr. Slager i

l

s kl. will be responsible for the Licensee's Midland QA program, and will be required to spend at least one day every two weeks at the con-struction site. (7) on December 1,1973, D. E. Karn was assigned to the Midland field QA organization as Field

   ,          Quality Assurance Coordinator.

(8) on December 3,1973, T. W. Bowes was as-signed to the General Office QA staff as quality Assurance Engineer-Mechanical. (9) on December 6, 1973, J. L. Corley was ap-pointed Field Quality Assurance Supervisor for the Midland Project, in charge of im-plementation of the Licensee's Midland QA program at the site. (10) On December 6,1973, D. R. Keating was ap-pointed Field Quality Assurance Coordinator for the Midland Project, reporting to Mr. Corley. (11) On December 7, 1973, R. E. Whitaker, former-ly QA Engineer at the Midland site, was as-signed as Field Quality Assurance Coordinator at the site, reporting to Mr. Corley,

b. Quality Assurance Documents (1) On November 30, 1973, the Licensee's Director of Quality Assurance Services sent DRO-III revised pages for the Licensee's Electric

42 Plant Projects Policies and Procedures Manual, describing the Licensee's new QA organization. (2) On December 6, 1973, DRO-III representatives were given, at the Midland site, updated copies of the Licensee's Midland Plant Quality Assur-ance Manual and its nev Quality Assurance Serv-ices Department Procedures Manual.

c. Quality Assurance Consultants (1) The Licensee has engaged NUS Corporation as a consultant to review the Licensee's QA organization, manning levels and pro-cedures. In addition, NUS is to make recom-mendations concerning the desirability of a continuing audit of the Licensee's and Bechtel's QA activities or of a third-party QA or QC operations.

(2) The Licensee has also contacted firms having . QA expertise in other industries, including the aerospace industry, to determine vbether it would be desirable to obtain additional viewpoints,

d. Coordination with Bechtel (1) Da December 4, 1973, the Licensee's Director of Project Quality Assurance Services wrote to Bechtel's Midland Project Manager, s eg-gestingmodificationsinBechtel'sQA/QCpro-gram in order to preclude future occurrences i

j Exhibit D.

O 43 of the type manifested with respect to cad-welding. These included suggestions to (1) revise and simplify cadweld void measurement criteria, (2) review procedures and accept-ance criteria in other areas to avoid the disparity in inspection results that appeared with respect to cadweld void measurement, (3) send to and discuss with Consumers Power Project QA Services, prior to the start of Q-listed work functions, the Master Inspec-tion Plans for such work functions, (4) re-vise inspection foms to provide " visibility" that individuai. inspection itens have been inspected, and (5) revision of work and in-spection procedures to lessen reliance on and cross-references to other, general docu-ments. (2) On December 7,1973, Consumers Power repre-sentatives met with senior personnel of Bechtel, consisting of Mr. H. O. Reinsch, Executive Vice President of Bechtel Power Corporation and General Manager of the Themal Power Organizations; Mr. H. F. Brush, Vice President and Deputy General Manager of the Thermal Power Organization; Mr. R. D. Allen,

44 l Vice President and Division Manager, San Francisco Power Division; Mr. A. P. Yates, Vice President and Deputy Division Manager of the San Francisco Power Division; Mr. P. R. Cassidy, Area Manager, Ann Arbor Office; snd Mr. M. M. Kront, Pr %ct Manager, Ann Arbor Office. The purpose of the meeting was to discuss the Licensee's concerns with the Midland QA problems, to obtain Bechtel's full comitment to the resolution of those problems, and to discuss corrective actions. 35 The Licensee has been advised that steps recently taken by Bechtel to improve its QA/QC performance include the following:

a. Organizational Changes (1) Since tse resumption of construction at Fldlsad earlier this year, the number of people assigned to Bechtel's San Francisco QC staff which pro-vides support to the field has increased fr a 12 to 23 (2) A Quality Control Supervisor, responsible for Ann Arbor QC operations, Z. G. Tucker, was added to Bechtel's Ann Arbor Office in September 1973 (3) The former Midland Project Field Quality Control Engineer was replaced in December

t 45 1973 by J. P. Connolly, who reports directly to Z. G. Tucker. (4) To support intensified efforts in field qual-ity training, a training sessions coordinator, L. R. Albert, has been assigned in the jobsite quality control organization. (5) On December 3, 1973, a materials test Quality Control Engineer was assigned to the Midland site. (6) On December 7,1973, one mechanical and one electrical Quality Control Engineer were re-called from temporary assignment and added to the site force. (7) In mid-January, 1974, en additional mechanical Quality Control Engineer and an additional electrical Quality Control Engineer are scheduled to be assigned to the Midland site. (8) In mid-January, 1974, two Quality Control velding engineers are scheduled to be assigned to the Midland site. (9) Effective November 13, 1973, testing labora-tories, previously under Field Engineering, are now receiving functional, technical direction from the Field Quality Control Engineer.

46

b. Quality Assurance Documents (1) Bechtel has agreed to (a) ' institute a nore formalized program of pre-planning for special work processes, (b) have QC engineers perform verification inspections on safety related work that could still be performed by field engineers under AEC requirements, (c) revise the Field Inspection Manual to provide for increased ccm-trol and more timely processing of nonconform-ances and inspection findings, (d) certify QC personnel under ANSI Standard R45 2.6 and the recently-issued AEC Regulatory Guide 158, and (e) devote additional senior mana6ement atten-tion, on a continuing basis, to evaluation of Bechtel quality perfomance at the Midland site.

(2) In response to the Licensee's suggestions con-tained in a letter from G. S. Keeley, Licensee's Director of Project Quality Assurance Services, to M. M. Krout, Bechtel's Project Manager, dated December 4, 1973, Y referenced at pp 10-11 of y Letter from Alden P. Yates to Stephen H. Howell dated December 19, 1973, attached hereto as Exhibit M. Mr. Yates states that the steps being taken by Bechtel "are intended to improve procedures and attitudes so that each person assigned to the project recognizes his responsibilities and obligations to perfom the work in accordance with client and AEC requirements for the project." g Exhibit D.

47 DIO-III Inspection Report No. 73-11, Mr. Krout has transmitted to the Licensee a memorandum dated December 19, 1973, attached hereto as Exhibit N. The December 19 mmorandum expresses Bechtel's full concurrence and intent to carry out the Licensee's suggesticn. It also reflects the fact that cadwelding procedures have already been revised in accordance with those suggestions.

36. Thus, in addition to taking corrective action to remedy the cadwelding deficiencies that has been found satisfactory on rein-spection by DRO-III, both Consumers Power and Bechtel have taken signifi-cant actions to upgrade their quality assurance efforts. The Licensee sulanits that these steps provide reasonable assurance that compliance with the Commission's QA regulations vill continue throughout the con-struction process.

VII. Safety 37 The Order to Show Cause is based upon the results of three separate sets of discrepancies or violations identified in DRO-III in-spections: the 1970 nonconformances relating to a concrete pour; the 1973 document violations at Bechtel's Ann Arbor, Michigan engineering of-fices; and the 1973 cadwelding violations and discrepancies relating to cadwelding. The 1970 nonconfomances were long ago corrected, and the auxiliary building base slab concrete in question was determined to be

48 sound. The 1973 Ann Arbor office violations were all documentary in nature, were for the most part identified by Bechtel prior to the IRO-III inspection, and appropriate action has been taken to correct them. The 1973 cadwelding violations and discrepencies have been resolved b

38. At the same inspections in which the discrepancies or violations were noted, the AEC inspectors concluded that there were no safety items involved. Thus, in CO Report No. 70-6, in which the con-crete pour nonconfomances were noted, the report states, in the Sunenary,

 " Safety Items - None.")O! 'dith respect to the Ann Arbor document viola-tions, DRO-III Inspection Report No. 73-0 states "No safety matters were identified," b and in DRO-III Inspection Report No. 73-10, in which the cadwelding violations were identified, the inspectors concluded that "No safety matters were identified."b None of these violations or discrepancies was identified as impairing the safety of the project.

This observation is made, not to depreciate the importance of quality assurance, but rather to underscore the conclusion that the public health and safety do not require suspension of activities under the Midland l construction permits.

 }6/CO-IIIInspectionReportNo. 329, 330/71-1 [ January 7, lWl], pp 3, 9 I

p_7/ 7 Paragraphs 25and26, supra;ExhibitG. 38/DRO-IIIInspectionReportNo. 050-329, -330/73-11; " Modification of Order to Show Cause," December 17, 1973 jfjCO-IIIInspectionReportNo. 050-329, -330/70-6, p 1. 60] DRO-III Inspection Report No. 050-329,-330/73-08,p3 6_1/DRO-IIIInspectionReportNo. 050-329,-330/73-10,p4. See also Licensee's' December 10, lW3 letter report to Dr. Donald F. Knuth under 10 CFR $50 55(e). _ .__1

49 VIII. Conclusion 39 The foregoing establishes that Consumers Power and a Bechtel have taken extensive steps to improve their QA programs. Sub-stantially more attention of executive officers is being devoted to QA; more and higher level personnel have been assigned to QA activities; changes in personnel have been made; quality assurance and procedures manuals have been revised and improved; inspection procedures have been more clearly related to inspection criteria; records of inspection of individual items have been clarified so as to make it apparent whether or not such inspections have in fact taken place; clearer and more easily accessible documentation describing work procedures are being established; and monthly inspection plans for significant work will be reviewed with the Licensee by the architect-engineer before the work begins. In addition, the Licensee has engaged an independent con-sultant, NUS Corporation, to review its QA organization, manning levels and procedures, as well as to make recomendations as to a continuing audit of all QA activities at Midland, or even as to the appropriate-ness of a third-party QA or QC operation. Consumers Power has also entered into discussions with QA consul.tants having expertise in other industries, including aerospace, to 'detemine the desirability of utilizing their services. In smunry, Consumers Power has taken a long, hard look at its QA program and is taking affimative and ef-fective action to u,.. rect any existing QA program weaknesses.

40. The Licensee submits that for the reasons and on ac-count of the facts recited in the foregoing paragraphs and in the

50 documents attached hereto or referenced herein, it has adequately demonstrated that it is in compliance with the Commission's regula-tions pertaining to quality assurance, and that there is reasonable assurance that such compliance will continue throughout the construc-tion process. Respectfully submitted,

                                         /s/JuddL. Bacon Judd L. Bacon Consumers Power Company 212 West Michigan Avenue Jackson, Michigan 49201 (517) 788-1366 Harold F. Reis Newman, Reis & Axelrad 1025 Connecticut Avenue, NW Washington, DC 20036 (202) 833-8371 Attorneys for Consumers Power Company Dated: December 24, 1973

         ,'.                                             EXHIBIT A              .

[ :fi2' >-/ r)7,'u

 ~

No. 101_ Date 11/13/73 DIRECT 0PATE OF REGULATORY OPEPATIONS NOTIFICAT!CM OF Ari If(CIDEflT OR OCCURRENCE , Facili ty: CONSUMERS POWER COMPANY (Midland Units No. I and No. 2) Problem: CADHELD SPLICING OF CONCRETE REINFORCING BAR AT MIDLAND A Region III inspection on November 6 - 8, 1973, at the Midland construction site, identified serious deficiencies associated with Cadweld splicing of concrete reinforcing bars. These deficiencies involved inadequate procedures for installing Cadweld splices,.for material control, and for documenting required quality parameters. In addition, the Regulatory Operations inspectors determined that inspection techniques were inadequate ar.d acceptance criteria used for quality requirements were being misapplied. In telephone conversations on November 9,1973, Consumers Power Company (CP) stated that they had shut down all Cadweld splicing operations at the site. Other unrelated work will continue at the site. CP agreed , that the cadweld splicing operations would not be restarted at the site until: (1) all currently existing Cadweld splices have been reinspected by properly qualified inspection personnel and determined to meet quality requirements, and (2) a site inspection by Region III inspectors establishes that an acceptable program for Cadweld splicing has been developed and implemented. All subject Cadweld splices at the site are accessible for inspection (i.e.,nonehavebeencoveredwithconcrete). It is estimated that the corrective action program will result in a delay of at least one week in the Cadweld splicing program at the site. Action by Regulatory Operations:

1. A letter has been'sont to CP confinning our understanding of the corrective t : tion program for Cadweld splicing.

2. A press release was issued to local pacers and wire services on laven.ber 10, 1973.

3. .+. Py on Ch r.~v , E : ; . Oct. nel h e 1 Sa-im, in t 2r m c', was Ntined on hmi:ar 9,19/3, of the applicant's shutdown o?

Cadweld splicing operation.

4. Re.gulatory Operaticr.s in:;pectors will be at the site upon completion of the corrective cction progran. The insptction will determine if the quality requirements havn been satisfied for completed Cadwelds and to determine whether a revised Cadvield splicing QA program is in place to prevent recurrence of the problem.

o . l

     .        No. 101                                                                           Date 11/13/73            ;

1 f

5. Chairr.an Ray's Special Assistant, Comissioner Doub's Technical  ;

Assistant, Commissioner Larson's Technical Assistant, Comissioner l Anders' Temporary Assistant. Commissioner Kriegsman's Assistant, the staff of the Joint Coaaittee on Atomic Energy, and the Office of Infomation Services have been notified by telephone.

Contact:

Further information concerning this occurrence can be obtained from: . l S. E. Bryan - X7353 H. D. Thornburg - X7353 J. G. Davis - X7541 Distribution: ChairmanRay(3) H. C.'Xouts, RSR V. Stello, L Commissioner Larson V. A. Moore, L Cocaissioner Doub G. R. Grove, L Consissioner Kriegsman H. Lowenberg, L Conmissioner Anders F. Schroeder, L L. M. Muntzing, DR A. W. Jackson, ATDR S. H. Smiley, L L. V. Gossick,'ADR D. J. Skovholt, L R. C. DeYoung, L C. K. Beck DRGL D. R. Muller, L . S. H. Hanauer, DRTA E. E. Triner, DRPA R. L. Tedesco, L D. J. Donoghue, DRA H.R.Denton,L(2) W. G. Dooly, DRA R. R. Maccary, L . General Manager (2) D. A. Nussbaumer L Secretary (2) _R. E. Cunningham, L F. Ingram, IS A. Schwencer, L L. I. Cobb, R0 J. Fouchard IS D. F. Knuth, R0 J. A. Harris. IS Clare Miles. IS J. G. Davis E. J. Bauser, JCAE P. A. Morris, R0 J. D. Anderson, INS - T. R. Wilson, R0

3. H. Grier, R0 H. Biles, 05 R. F. Fraley, ACRS (18) D. Thcapson, R0 L. Rogers, RS C. W. Kuhlman, R0

2. B. rlinag.e, R3 H. Werner, R0 H:ccinbatha , R0 G. A . ' rl o t 's . R"

                        ... ., -S 5    D.'d E :i    .Y.?

R. G. 3rath, RS J. L. Liverm s, D3EP, 15 Mac CON!d, OPS W. H. Weyzer., 08ER J. F. O' Leary, L C. F. Lason, AUCRR, AGiES E. G. Case, L S. Levin.a. OEA J. M. llendrie. L R0 Regional Offices , A. Gic.busso, L DR Reading file S. A. Schwart2, DRGL REG Central File S. MacKay, L PDR(5) Local PDR s_ . . . . . . _ _ . . _ _ _ . _ . . . _ . . _ . . - . . . - - - - - ..

                                                                                                                              ]

EXdIBIT B To SHHowell, P-26-336 , In J 8'. E-FaoM GSKeeley, P-14-306 - '.L/ y - Consumers DATE November 27, 1973 (v g POWBI c./ Company suescer Analysis of Cadweld Problem *gy at Midland INTERNAL CORRESPONDENCE Keel 169-73 cc WEKessler, P-lh 412B E4Slager, P-14-226 The following is a discussion of the problems that occurred at Midland with respect to the cadwelds. The basic causes for our nonconformance report QF-1 were: (a) Inspection procedures were not clear enough which resulted in confusion on the part of inspectors and differences of opinion on measurement of void areas. (b) There were differences in the work requirements between the PSAR, the Bechtel specification and the Erico specification. Solutions to the specific deficiencies as well as a full answer to items which were brought out by the AEC in their exit interview on November 21, 1973 will be presented to you on november 30, 1973 as you requested. As a result of the cadweld problem and the investigation that fol-lowed, I believe that the following suggestions and changes should be imple-mented. Action on some of them has already been initiated. (a) I believe that the misunderstanding in the method for taking void measurements has been cleared up, however, in conversations with Mr. D. Johnson and Mr. Z. Tucker of Bechtel, I indicated that Bechtel should investi-gate the possibility of coming up with a simplified type measurement which would prevent misinterpretation in the future and simplify the calculation of voids. I will follow up on this with a memo to Bechtel. (b) The same type of misunderstanding as in (a) above may occur on QC inspections of other work functions during the job. It is suggested Bechtel should factor this into setting up inspection procedures and inspection accepta-bility criteria. Any procedure or acceptance criteria should not result in a difference of 30% in the end result when the procedure is applied by two separate people as was the case for the cadweld voids. (c) There should not be unapproved and undocumented differences be-tween specifications, PSAR, and regulatory gui :cs. A system is necessary to

._ . r, , SHHowell 2 Analysis of Cadweld Problem at Midland November 27, 1973 prevent this and QA Services discussed this with M. Hanson and wrote a memo on November 19, 1973 on this subject. An implementation procedure will be discussed with you on November 30, 1973 (d) Because of possible misunderstanding in responsibilities of Bechtel Q': personnel which were spelled out in our response to AIAB-152, I believe that Quality Assurance Services should review and discuss with Bechtel, their Master Inspection Plan on work functions prior to initiation of work. I have written this into our procedures. QA Services will follow up on this. (e) Consumers QA personnel have not audited to the depth which I think we should. As you are aware, we have been shorthanded and have recently added another man on site. We are also working up a more formal audit plan for Consumers QA Services personnel on site to give thes more guidance. This will apply to work functions other than just cadwelds. QA Services personnel on site must do a thorough audit to Appendix B requirements prior to the start of work functions and during work functions. (f) I have asked that Harvey Slager spend a minimum of one day every two weeks on site for the immediate future. Another item which will make our group function better will be when we issue our updated Electric Plant Projects Policies and Procedures Manual, Midland Quality Assurance Manual and Quality Assurance Services Procedures Manual. As you know, we have been pointing towards a December 1, 1973 date for these. In addition, we must train QA Services per-sonnel in the application of the manuals and we have additional training planned which must be given to our personnel. I

                                             $(ON                                      "I""

To G Keeley, P-14-306a FRoM SHHowell, P-26-336 Ji err

                                                                     ~
                                                                             -\ CORSum8fS DArc         November 29, 1973                             3               i Power

{\ / Compny

                                                                     ~D#
                                                                   ^

SussccT Quality Assurance Problems at Midland lNTERNAL CCRRESPONCENCE cc WEKessler, P-14 4123 I have reviewed your letter of November 27, 1973 which contains an anslysis of the quality assurance problem at Midland and which makes reco=menda-tions for cerrective action. I have also reviewed UCR QF-1 and the series of internal memorandums discussing and documenting investigations, meetings and action on the problem. I understand the problem and your analysis and I concur with your recommendations. Where action on your recommendations has not yet been taken, please proceed immediately. Although in this case the specific problem has appeared in the per-formance of cadwelds, as we have discussed, and as is indicated by your analysis and recommendations, the problem has broader symptomatic aspects to our total quality assurance program and the remainder of the project. I wish to stress this fact, to ensure that everyone has full recognition of it, and that our whole program is critically studied for problems or weaknesses. In addition to the above, I want to add a word of caution that, in our concern for the present problem, we are not distracted from quality assur-ance in other areas. 3A0 SHH/sjb i

I i bc EXHIBIT D consumers Power s- Company

                                                                                                                 )

e.n.<.i omc..: 212 w.. *cnisen Avenue.Jaca.on. wensoon 4enoi . Ar . coo. ei7 7ee osso December 4, 1973 Keel 172-73 l 1 l SUGGESTIONS RESULTING FROM CADWELD PROBIE4S AT MIDLAND Serial: 700 . i Mr. M. M. Krout Bechtel Corporation PO Box 1000 3861 South Research Park Dr Ann Arbor, MI 48106

Dear Mr. Krout:

v As a result of the recent cadweld problems at Pldland , I

         .have the following comments or suggestions:
                     , 1. Due to the misunderstanding in =Hng void measurements on the cadwelds, I suggested to Mr. D. Johnson and Mr. Z. Tucker that someone in Bechtel should look at the possibility of si=plifying the measurement process and acceptability criteria into a possible go no go type criteria. If the measurement results on a given cadweld gives a no go, then the next step on the given cadweld would be a refined mea-surement such as is presently done. This suggestion is further sub-stantiated by E. Felton's letter to T. Cooke Bccc97 which on Page 2, 5th paragraph states that acceptance criteria for voids could exceed 3 square inches.

2. The same type of misunderstanding as occurred on cadweld voids may occur on QC inspections of other work functions during the job. It is suggested that Eechtel should factor this into setting up inspection procedures and acceptability criteria. Procedures and ac-ceptance criteria should not result in a difference of 30% in the end result when the procedure is applied by separate people as was the case for cadweld voids.

' 3 In the future, Consumers Power Project quality Assurance Services requests that Bechtel send them the proposed Master Inspection We wish to discuss these Plans for work functions on Q-listed items. w with your QC personnel prior to start of work. I would appreciate your reply to Items 1, 2 and 3

Mr. M. M. Krout 2 Suggestions Resulting From Cadweld Problems at Midland December 4, 1973

4. We also wish to discuss with you the use of inspection plan forms and " inspection results" sign-off sheets. Where an inspec-tion plan calls for inspections on. individual items it is our opinien that visability must be shown in enough detail on the sign-off sheets as to what the inspection poht was and indicate a sign-off on each individual item inspected.

5 We also wish to discuss with you the preparation of work procedures and inspection procedures. It is our opinion that Bechtel relies too much on one or two docu=ents to cover work procedures, training and qualification of personnel, caterial contrel, testing, and inspection. We believe that for most cases, i=plementing procedures - should stand on their own with a minimtm of references. As was discussed with you on the phone, we believe that Items i j 4 and 5 should be acted upon for cadweld work and that you will modify the cadweld procedures to incorporate these thoughts. l Please advise when you will be available to discuss Items 4 and 5 for subsequent work functions. Yours very truly, w . G8K/cg ' G. S. Keeley  ; i Director of Pr ject CC: Gliowell Q,uality Assurance Services l WEKessler i EWSlager l l I l 1

                                                                                                )

1 b

                                                                                            , T*hn Coq &, 'h/EMe t14 a ~

o EXHIBIT E g6/b < st C f g g UNITED STATES [ . ATOMIC ENERGY COMMISSION C . Q /// '//;.

          . ( i', (; .i                                       OlVISION Ol' COMPLIANCc 4, {,                                                        REolON lit
           %           v,,                                       70s RochEVEl.T HoAD thr., et

• GLEN ELLYN. ILLINolS 60137 0 5 %w. 2 Janucry 18, 1971

                    -             Consuuersi Poear cocpany 212 Most inchigan kanuo Jackson, !!1chigan 49201                         >

Attention: Rucn'o11 C. Youngdahl Sonicr Vice President C3ntic=ons nis letter relatco to diccuacions Mccerc. Cover end thyes of thio office hold with Ecocra. Hills, Palgo, Pech, IJruner and others

                                  'of your staff, at the conclusion of the incpection conducted on Septester 29 through October 1, 1970, regardin3 the construction activitics authori:.cd by tha Midicnd 1 & 2 construction parait exc.sption dated July 30, 1970.

As noted during the diccuosion, cortain ite=o vero identified which vero apparently not in confon:anco uith statc= cats in the preliminary safety analyclo report (PT.R) or which cay otharuico raico,socations concerning tho adequacy of construction. Rose itomo are no follova:

1. The PSAP., by roferenco to ACI-301 (Paragraph 803-d) requires that concreto be consolidated by various ceans ... vibrators chall bo incerted and withdrawn at many pointo, fro:s la to 30 inchco a part ... and uno of vibrators to transport concreto.

within form chs11 not be alloucd. Contrary to this statc=ent, cur incpectors observed (1)the transport of concrato uith vibratorn, (2) a lack of vibrator ponctration to the deuired depth and/or for tho desired periods of timo, and (3) tho absence of vibrator action in accordanco with a preplanned psttorn to assure consolidation at the recom-r.cnded spacing.

c Consumers Po'ver Company . 2- January 18, 1971

1. The PSAR, on Page 5-3, A=endment No. 2, requires that aggregate tests be carried out at cortain stated intervals.

Contrary to this statement our inspectors were informod that org'anic tests and tests on sand, 3/4 inch and li inch a03rcantos vore made at intervals which vero significantly less frequent than stated in the application. Picase provide us, within 30 days, with your co==cnts concerning thcoe itens and any steps which havo been or vill be taken to cor-rect them and to minimira recurrence, includin3 any eppropriate changes that have boca osde to your quality ascurence progrcm. Should you have any questions concerning the estters diccussed in this lutter, you may co==unicate directly with this offico. Sincercly, Boyce H. Grier Regional Director cc C. Q. Hills ' QA Ensincer O 6 enum 8e I

                                         .                                                                          l i

_ _ 9 __ -

EXHIBIT F ~ Consumers Power

       .. c. v.e - .

y Company

                    9 T f". D    ,,

e  :. . s 1. [,I Ll General Offices 212 West Micnigen Avenue..lackson, Mac.migen 49201. Arps code 517"788 1880 -~ February 5,1971 1:IDINiD PV1.T - 1"rICS 1 & 2 AEC Co pilance quest, ions thited States Atm.ic E:icrc/ Cctnission Division of Cxplianco, Kocicn III 7')9 Roosevoit Road Glen Ellyn, Illincis G0137 Genticon: Att: Mr. Boyco !!. Grier Rosicnal Director This letter is in respense to your letter of January 16, 1971 , , , . , , regarding itc.a ccnoidered to be not in confomance with state.cnts in the Preli;:.inary Safety Analysis Report (PSAR). We he.ve revicued esen . iten in depth and the folic' ting cc:xicnts suu:.arl u our review. Vibration of Coneroto The observations mdo by the AEC Compliance Inspectors were discusacd in detail at the conclusion of the Septecber 29 through October 1, 1970 inspection. To verify the structural adequacy of the structure and to insure against a recurrence of this condition, the following steps wre taken.

1. Ultrasonic testing of the structure vna perfomed, after appmxi:antely clx days when the concrete vaa still creen and again after 41 days when the concretc had undergone scno curing. The conclu-sion reached as the result of tecting the overall structure on a grid pattern, was that the quality of the concrete was gccd In the- uplaion of the consultant (Iatcher & Associatos) who tested the slab, it was sound. This report is in our files for your 1r.spection.

2. Dochtc1's engineering depart =cnt has established a proco-dure for reviewing in advence, construction placement plans for critical concreto pours.

3 Trnining oessions were instituted to insure that laborers received instructions in pmpor vibration procedures and tecimiques. e

I 2 U.S. Atcr.is Enrrcy Conrainsion  ; ~ Niditmd Plant - Units 1 & 2  ; ABC Ca r11ance Rt.cstions l February 5, l')71 l

• 4. Tho quality control survoinance effort by Bocht21 Corpora- I tion was upgraded by the addition of a placement engincor in addition to the concreto engineer. Ecth will be assigned to all critical concrete i

pours. -

                   '5   Concmars Power Costany fiofd personnel havo rev$ awed the require.::ents for correct vibration of concrote, and will provide incrcaced surveillanco during critical concreto pours to ensure cc:aplinnce with ACI-32, Pnmcraph tb3-d.

Testin't of Concreto Ap;racate The The frequency of aq:regate testing has been revie: red. require:2cnts testing laboratory. of the PSAR hed been correctly specified to the concreteAn shows provision for nCrocate tccting in confor=ance Vith tha f3A3 reqci.'a-ments. Prior to the inantction of Sc.t ta:.ber 29 throush Octob1r 1,19W. tnsts were n:aIe less from ently for noncritical concretc than for critdr=1 concrete pours; but to clieviato the !ccsibility of ccafusin;- critical vib - noncriticcl v.cating, this pactice vac discontinued c.nd cll to ;ts are per-forr.cd na for critical concreto. A review of the pour records did reveal instances during the earlier stages of project work. When tests on critical concretc wore per-formed at loss frequent intervals then specified; however, in all cases the concrete cylinder co=pression tests exceeded the design values. Bechtel Corporation has been directed to ensure complote ecc:pliance with the specifications by the concrete testing laboratory and to intensify the quality control surveillance in this area. Conau.ers Power Ccepony field personnel have niso conducted , increased surveillance of concrete aggregate testing to ensure that inter- l vals stated on Page 5-8 of the PSAR are fonowed. l Dechtel has stated that the procedurcs and the quality assurance i program of the testing laboratory will be reevaluated and revised as re- l quired to insure against deficiencies before reatning concrete work. 1*ours very tru.11, RCY/lb [H BCC: SHHowell ! CJMaynard WEKessler O

 'o .'                                                                                                           EXHIBIT G
                                                                                     ' ;; s
       'D   O I> B 7                                                             /                          CODSumerS
       @h              U
                                                                                           ~w    n -. Power hr-v.
       .... ....we...
       %ce Presodent q.,f

s y .. .- v gggg Generet Offices: 212 West MecNgan Avenuo. Jmekwon. MecNgan 40201 U:ne 20/ 23,1973

                                                      .= 'E n tu r.
                                                /JI; Auru: [L'II!1ks ioctet Soc 50-32) c'i1'r.a-330.

F.r. J:.scs G. Kesler, Ee;ionni Directt.;r

              ire.'tcrate cf Ecpilator,y Cperations Cffleo of Ec ,ulet. ion Unitr.d Statco Atcc.ic inurg/ Cocnicsics
             ;Ic.;ien III 799 & csevelt Pond Glen f.11;in, IJ, 60177 Dear fir. T.epplers
                           'Ibt. n' t.eched inibre.~. tion 1:: cuheittni in rut por:p to ' ele diseropcacice, Rich you found in :ccur nurait of the Ann An.or-Dechtel enginceritir* officca on !"pter. Ley 10 ted 11,1c73, r .d wh1ch you identified in sour letter to no dceca Cc;cter Me, 17,'/3 Le Lelieve ttnt this infon.rstion is rceyansivi to the cuestions ub}ch 3o2 he,a' ralve.1, delincates the corrective n% cures taken to Irevemt reevnvnec, and spocifies the 6ctes by which these netions vill be ccc.plete.

Youre very truly, eq, p - ,.*.., Q CU Ela!/sjb BCC: w PAs.rtinez(Eechtel,AA)/e/ene JDotsen (Ecchtel, AA) w nc MIKrout (Eechtel, AA) v/ enc GSEecley, P-14-3053 w/ enc

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5 .' MIDLAND PIJ0iT UNITS 1 & 2 J03 NO. 7220 RESPO:iSE TO AEC LETTER TO CPCO DATED OCTOBER 24, 1973 . AEC Findine, No. 1 10 CFR Pa'rt 50, Appendix D, Criterion II, states, in part, that: . . . This program shall be docu=ented by written policies , procedures , and instructions . . . Criterion XVII of 10 CFR Part 50, Appendix B, states in part that: " Consistent with applicable regulatory requirements, the applicant shall establish requirements concerning record retention, such as duration, location, and assi6ned responsibility." Contrary to the above, the Bechtel Corporation Nuclear Quality Assurance Manual does not include a requirement for retention of records conson to activities affecting quality. Furthen ore, other quality assurance program docu=entation dealing with record retention requirements was unavailable during the course of the inspection. Bechtel Corrective Action No. 1 The Nuclear Quality Assurance Manual is currently undergoing revision to incorporate the requirements for retention of records co=:en to activities affecting quality. Scheduled completion date is March 27, 1974 As an interim measure, a project amend =ent to the HQAM incorporating record retention is being processed and vill be issued by Dece=ber 17, 1973. Bechtel standards and procedures which provide requirements in co=pliance to Criterion II and XVII of 10 CFR,Part 50 and N-45 2 9 are:

1. Bechtel Engineering Standards, Volu=e G, " General."

2. Bechtel Internal Procedures Manual, Midland Units 1 & 2.

3. Bechtel Corporate Record Retention Schedule, dated October 30, 1973.

Require =ents contained in the aforementioned manuals, procedures, and standards describe the program for record retention including; location, duration of retention, and assigned responsibilities. In an inter-office me=o from the Manager of Engineering, dated November 2, 1973, project personnel vere directed to co= ply to the require =ents con-  ; tained in the Corporate Record Retention Schedule. Additional controlled j copies of Bechtel Engineering Standards, Volu=e G, have been requested  ! for project personnel and the applicable requirements therein vill simul- ) taneously be presented to project supervisory personnel. Full compliance ' to AEC Criterion II and XVII regulations for record retention vill have been completed by approximately March 15,19Th. Subsequent to March 15, the Project Quality Engineer and his staff vill perform surveillance to assure project's compliance to these requirements. l l l

                                                                                        .1

- 3 Page 2 AEC F4ndinc No. 2

                                                                         " Activities 10 CFR Part 50, Appendix B, Criterion V, states, in part , that:

affecting grality shall be prescribed by documented instructions, procc-dures, or drawings of a type appropriate to the circumstances and shall be accomplished in accordance with these instructions, procedures, or drawin63." The Bechtel Power Corporation Internal Procedures Manual for Midland Units 1 & 2, Section 7 5, titled, " Drawing Control and Stick Files" requires that the current revision of each drawing be maintained in the stick files. , Contrary to the above, current revisions of certain drawings were missing from the stick files. Dechtel Corrective Action No. 2 Measures were taken on September 18, 1973 by quality Ensincering to review all stick files on the project. The stick files were updated in accordance with the Midland drawing control log. Further corrective action taken was a revision to Section 7.5"It of the is the Midland Internal Procedures Manual which now reads in part: responsibility of each group to update and~ maintain its own stick file." Project personnel direction was provided by the Project Engineer to all project supervicory personnel requiring that this procedure be performed weekly. Additionally, the Project Administrator has been assi6ned respon-sibility for maintenance of the project record print file (which is the master stick file) in accordance with the Division Engineering Standards, . Volume G. The Project Quality Engineer and his staff vill perform a monthly surveil-lance of the project record print file and the discipline stick files to i j assure adherence to the latest Midland Drawin6 Control Register, AEC Finding No. 3 l 10 CFR Part 50, Appendix B, Criterion V, states, in part, that: " Activities affecting quality shall be prescribed by.docu=ented instructions, procedures, or drawings of a type appropriate to the circumstances . . ." l Contrary to the above:

a. Procedures to prescribe control of interface activities between design groups vere not available for review by the inspector at the time of inspection.

b. Procedures to prescribe control, issuance , and changes to the Bechtel Corporation Internal Procedures Manual for Midland Units No.1 and No. 2, were not available for review by the inspector during the inspection.

l

 .   .'.                                                                                  l Pag 2 3 Bechtel Corrective Action No. 3a Requirements regarding design office interface activities are provided in the Nuclear Quality Assurance !!anual, Section 2, Procedure No. 6.

S7t) Divisional- Quality Assurance Management is presently unending the NQAM,to include a more detailed definition of engineering design inter-face requirc=ents. This a=endnent is scheduled for issuance on Decc=ber 17, 1973 Detailed interface requirements for Projcet Engineering person-nel are presently included in the Divisional Engineering Standard (Volu=e G) in Sections 1.3 and G-200 and in the individual Discipline Engineering Standards. The requirements contained in these documents are being incorporated into an engineering department procedure which is also scheduled for issuance Dece=ber 17, 1973. Bechtel Corrcetive Action No. 3b The Bechtel Internal Procedures Manual for Midland Units 1 & 2, Revision 1 - nov has control serial nu=bers. Distribution is controlled by a tomal control list for assign =ents of the manual shoving applicable serial nunbers and assignments of the manual by recipients neme. The Internal Procedures Manual was revised and reissued in accordance with this control procedure on October 19, 1973. All superseded =enuals have been withdrawn from use. The Project Quality Engineer end his staff has perfor=ed and vill continue to perform periodic surveillance and spot checks to insure that only Internal Procedures Manuals with the latest revisions cre in use. A revision block with date cnd approvcis has also been provided. AEC Finding No. h The AEC Finding indicated that Quality Assurance specifications No. 7220-G-20, No. 7220-G-21, and No. 7220-G-22 vere being used for vendor control in lieu of exhibits 3.6A.1, 3.6A.2 and 3.6A.3 as specified in the Nuclear Quality Assurance Manual (NQAM). Bechtel Corrective Action No. k As discussed with the AEC Inspector, the appropriate actions to a=end the HQAM had been taken prior to the audit. Approval of the use of Specifications No. 7220-G020, 21 and 22 hasi been granted by Quality Assurance Manage =ent and the =echanics for change had been set in

           =otion. The HQAM will be a= ended by Dece=ber 17, 1973 deleting references to exhibits 3.6A.1, 3.6A.2 c.2d 3.6A.3. Additionally, to preclude repetition of the above finding, the amendment vill provide Midland Project Engineerin6 with the flexibility to respond to changing Quality Assurance require =ents via QA specification changes with proper Quality Assurance approval.

e

QUALITY ASSURANCE .XiRAM M - ' [ DAILY LO I-Dan [, - Job No. 7220 QAE - ACTION TAKEN 3. RESOLUTION DATE NO. ITEM ACTION REQUIRED 1 Discussed need for IPM - EDP change for Please evaluate Midland Project personnel have 12/20/73 and respond by 8/31/73 been directed to comply to recor is  ! QA Records Identification and Control with , D. Popham D. Popham control specified in the Bechtel N45.2.9 Draft 11 may apply? - Procurement Engineering Standards, General j and Engineering Records Standards, and Corporate Record

• Retention Schedule. Additionall y, an Engineering Department Proce-dure 3.13 has been issued by SF and is being coordinated for com -

   -                                                                                                                   ment in Ann Arbor at this time and will be issued effective for
             -                                                                                                         the NMdland Project in the near future.. This EDP when placed in -

to effect will be supplemented with an additional Quality Engineer -

                                                ,                                                                      ing records instruction which is now in preparation by Quality Engineering.

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                                                                                                                             ,                        l l

QU./ QUAllTY AUDIT FINDING . 9 73 - l l

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  ,       !!idland 7220                                                Engincering                    [] . .          W. Holub m.m ta                  ...........-               ..........                                                 .............                  '

3 Civil Group - Engineering R. Stafford

 ..... m ... ...,...................... .....                                          ........

tlQAM Section Il No. 6. Para. 5 & 6 l

   ;~=~. V Project checking of calculations, drawings and specifications is performed by independent checking ..............

Bechtel practices provide for several levels of review and approval of design work. l i

  ~~W" Civil Drawing C-140 is identified as Rev. 0 7-13-73 on the Drawing Control Log. This same drawing C-140 on the stick file carries a Rev. 2, also dated 7-13-73. Also neither Rev. O nor Rev. 2 of C-140 have been checked. Civil Drawing C-200 Rev. 3 on e            the stick file shows no date, no approval signatures, and no Q identification in the title block. Civil drawing C-202 Rev. 1 shows no approval signatures.

WaT:. .. ....

1) Secure appropriate approvals of the.above referenced drawings.

                                                                                                                                     ~

2) Strenghten the existing control mechanism to prevent recurrcace.

P. Martines - _ _ _ _ _

1. Drawingsin the above stick file have been corrected as of 9-13-73.

2. Qualitj Engineering is on the distribution for Midland drawing control logs and Sper.ification register, and is performing surveillance of all stick files on the C project at periodic intervals,

        .... ......          . . ..... .. ........ = = .e.       d2 -                    --       -

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E-1( 7) w'l l QUAL.ilY AUDIT FINDING

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Illdlund 7220 Engineering 8] - . .. . W. Ilolub ..

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3 Civil Group - Engineering R. Stafford

    ;; :t A.      . . . . . . . . . . . . .. .. . . . . . . . . . . . . . .                                          . . . . . . .

10 CFR SO Appendix B No. V Activities affecting Quality shall be prescribed by documented instructions, procedures . . .for determining that important activities have been satisfactorily cc'complished.

j. .... .

            '1he group supervisors have been assigned the responsibility of providing coordination m of Degign Interfacing between the various disciplines but the interfacing activities 3           currently preformed are not controlled procedurally.

N.. ...... (1) (2) . Develop and implement a procedure to provide a means to assure interface activities offecting Quality have been satisfactorily accomplished.

                                                                         . . ...( 2 )" ' * * * * - ' m  -

11/8/73

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                .. ...          .....                  73 (2) p.                 gartinegfp, popnam                                                                                             _

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EXHIBIT K 5'

                                                                                                                                            ^

QUAulY AUDIT FINDING .... . . f " 8 28 -73

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        'Midla n d              -  Job No. 7220                                       Mgmt. Enginee ring [S.. . .. .                     C. Roady       .
   .;, .u. ; .                     .............                 ..........                                                         ............        -

V 2, 4,.5 & 6 ' Quality Supervisor's Files ' D. Popham/C.Shortt

...5............

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  .N A M Se c. .II, No.. ..........                4, F:g.  ... 3. l A                                  . . . . . . .

10GI'It50 Ann. B, Crite ria II h VI " Engineering Quality Control"

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_C rite rion II This program shall be documented by written procedures, or instructions. . ."

       ,C rite rion VI
        " Meas ures shall be established to control the issuance of documents, such as instructions.

precedures and drawings, including changes thereto, which prescribe all activitics affectin;; qua lity. These measures shall assure that documents, including changes, are reviewed for ad2quacy and approved for release by authorized personnel and are distributed to and used et the location where the prescribed activity is performed. " Project Internal Procedures and Engineering Department Instructions need to be controlled in a better manner to assure that revisions are distributed to the required personnel. IPM's P e not serialized nor is there a list identifying authorized manual holders. There is no documented system in place to control distribution of revisions to IPM's or EDP's. 702T. ' !.W.

a. A ssign serial numbers to all copics of IPM's in current use.

b. Provide a formal control list of assigned IPM's showing names of holders and copy numbers.

c. Provide a document control system adequate to assure that applicable revisions are in use for IPM and EDP/EDI documents.

3 .........- ........... ............................... 10/'!?3 Project Engineer a and b. This is now incorporated into the internal Procedures Manual, Revision 1 dated 10-19-73. , A. This control is referenced in EDP 1.2 dated 8-13-73 and EDP 1.4 dated 8-13-73 lI or EDP/EDI. The control for IPfl is handled by the impicmentation of C.A. for items a and b above. ! ETICin.. .;; - r.7. .. .. .v.. .;C 2 ~ ' ~ - 3

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. Midland 7220                                                                                        Engineering,                       q) ., , ."              J. I. Dotson m, .....u.                          .............

2 3 Project P. Martinez t,m............................... ........ KQ.W Section V 1;o.1 Paref;raph 2 -

        ,7f-i3
      " Sections and procedurca contained in this nuclear quality acsurance nanual...are divi-sion standsrd practices.                                     All projcet personnel are directed to observe these requisites..."
      "Under special circumst.ances the project manager may issuc. . .or a project addendc change from the prograu."                                           .,

7, Sp;cifications G-20, G-21 have been issued for project use uithout the necessary

      ~

O"ic:/?pproval-projectcddendaiccuence. Submit G-20, 21 as project addenda. l

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G-20 and G-21 are currently revised and issued for approval. Project addenda request has bec cubmitted to Quality Assurance. Ecf: IOM P. Martinez to J. Dotson 7/2/73. l l \

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   .                                                                         EXHIBIT M Bechtel Power Corporation Post Of hce Box 1000 3621 South State Road Ann Arbor. Michigan 481rA December 19, 1973 Mr. Stephen H. Howell Vice Prc:ident Consumers Power Company 212 West Michigan Avenue Jackson, Michigan 49201

Subject:

Midland Units 1 and 2 Quality Assurance / Quality Control

Dear Mr. Howell:

The purpose of this letter is to outline our renewed emphasis upon areas of quality assurance / quality control and to assure you that this originates from the management of Bechtel, and that this direction will be transmitted to all project personnel. As a result of visiting the Midland site on Thursday, December 6th, and also returning to visit the site on Wednesday, and Thursday, 4 December 12th and 13th, and site visits by Bill Gibbons, Manager of Division Quality Assurance; Jim Marvin, Manager of Construction; Don Johnson, Chief Field Quality Control Engineer, and others; I have concluded that there are a number of areas on which we must concentrate our effort. This conclusion has also been reviewed with Ed Felton, Midland Project Superintendent; Jim Marvin, Manager of Constructicn; Milt Krout, Midland Project Manager; P. R. Cassidy, Area Manager; and R. D. Allen, Manager of the San Francisco Power Division of Bechtel Power Corporation, and has the highest priority in Bechtel. The following measures that we have taken recently or will take immediately are intended to improve procedures and attitudes so that each person assigned to the project recognizes his responsibilities and obligation to perform the work in accordance with client and AEC requirements for the project. (1) Special Work Processes A more formalized program will be instituted to define the quality requirements for special work processes. This program which constitutes the basic pre-planning of any operation will identify the required procedures, instructions or work plans, inspection plans, specifications and drawings required. Further, this pre-planning operation will assist in identifying deviations from specified requirements, as required by the eighteen criteria of L%kej6deckd99of Gyt

Bechtel Power Corporation Mr. Stephen H. Howell December 19, 1973 Consumers Power Company Page Two 10CFR-50, Appendix B, such as Field Change Requests (FCRs) and Non-Conformance Reports (NCRs). This program will include a review of all work functions to determine those that are special work processes. A list will be prepared for review by Consumers Power Company. Appropriate work plans will then be prepared and reviewed with Consumers Power Company prior to proceeding with the work.

(2) Changed Inspection Responsibilities Previously, some in process production control inspections of record as identified on the inspection plans were performed and signed off by field engineers. Now, however, all inspection activities listed on the inspection plans, including of course all quality acceptance and verification inspections (for Q-list work), will be performed and signed off by Quality Control Engineers. (3) Response to Quality Findings Implement an action program to provide more timely response to quality assurance / quality control findings, using a revised procedure for identifying, reporting and resolving non-conformances. Section G3 covering Non-Conformances in the Bechtel Field Inspec-tion Manual is under revision. This revised procedure provides for increased control over the processing of non-conformances and inspection findings by quality coctrol and quality assurance per-sonnel and for more timely and action oriented reporting of non-conformances to engineering and quality assurance personnel. (4) Organizational Changes Organizational changes have been made to provide additional coverage for quality control operations. A Quality Control Supervisor, responsible for Ann Arbor quality control operations, Z. G. Tucker, has been added to our Ann Arbor Office. The former Project Field ' Quality Control Engineer has been replaced by J. P. Connolly, who reports directly to Z. G. Tucker. This latter change was required to support the increased quality control inspection responsibilities described in Item 2. These new personnel, along with members of the construction organization, have intensified efforts in field quality training. To insure the adequacy of training, a training sessions coordinator, L. R. Albert, has been assigned in the job site quality control organization. (5) Inspector Certification Although our inspectors are qualified by training programs, past work history and education, certification of these inspectors will

   ?

Bechtel Power Corporation Mr. Stephen H. Howell December 19, 1973 Consumers Power Company Page Three be performed in accordance with a written procedure covering the qualifications, indoctrination, training, testing and certifica-tion of quality control personnel to meet the requirements of ANSI Standard Ill4 5.2.6 and the AEC Regulatory Guide 1.58. (6) Management Attention Additional manadement and supervisory personnel attention will be maintained to assure that the foregoing items have been accom-plished. Genior personnel will make periodic site visits and will receive additional monitoring reports to evaluate quality performance on a continuing basis. This list is not necessarily all inclusive. By constant monitoring we may determine that other areas require intensified attention and reassign-ment of personnel. We will keep you informed as to our progress in these matters. Very truly yours,

s. f J Alden P. Y #s Vice President A1Y/mh e: G. Keeley W. Kessler R. D. Allen E. Felton M. Krout J. Marvin P. R. Cassidy I

l l l l

EXHIBIT N J Bechtel Power Corporation Post Of fico Box 1000 3621 Gouth State ltoad Ann Arbor. Machigan 47$1f16 December 19, 1973 BLC-554 Consumers Power Company 1945 Parnall Road Jackson, Michigan 49201 Attention: Mr. G. S. Keeley

Subject:

Consumers Power Company Midland Units 1 & 2 Bechtel Job 7220 Reference Letter Keel 172-173, of December 4, 1973 File: 0270 Centlemen: This is in response to the comments and suggestions contained in your letter of December 4, 1973, Keel 172-73. We are in full agreement with the suggestion, in paragraph numbered 1 of the letter, for simplifying the measurement process and acceptability criteria relating to void measurements on cadwelds through the use, if possible, of "go, no-go" type criteria. We have, in fact, already begun investigating this possibility and representatives of Erico Products Company have been asked to assist in this investigation. As we understand the suggestions in the other four numbered paragraphs of the letter, their purpose is to strengthen the QA/QC program so as to pro-vide substantially greater assurance of quality on the project. We concur in each of those suggestions and are prepared to put them into effect. With respect to paragraph numbered 2, inspection procedures and ac eptance criteria are being reevaluated and will be revised where necessary, prior to their use, to avoid substantial differences in results when inspections are carried out by different persons. JMu e(68au19wp 4 Gy

l 4 Mr. G. S. Keeley December 19, 1973 Page Two With respect to paragraph numbered 3, Bechtel will send Master Inspection Plans for "Q-listed" items to Consumers Power Company Quality Assurance Services for discussion with Bechtel Quality Control personnel prior to the start of work. We are also in agreement with the objectives expressed in paragraphs numbered 4 and 5 of the letter. Sign-off sheets will be reviewed and revised as necessary to provide sufficient " visibility" and detail to show that each required inspection point has been signed off. Additional detailed, clear, written instructions will be furnished which require a minimum of cross referencing. Our Ann Arbor Quality Control Supervisor is prepared to meet with you at your earliest convenience to discuss Inspection Plan Forms, " Inspection Results," sign-off sheets and the preparation of work and inspection procedures in order to carry out the foregoing comments. As previously discussed, the suggestions in your paragraphs 4 and 5 have been incorporated in the following cadweld procedures: Quality Control Procedure No. C-231-1, Inspection of Cadweld Mechanical Splicing of Concrete Reinforcing Steel, dated December 5, 1973. Cadweld Rebar Splicing Instructions for the Operator, dated December 4, 1973. Quality Control Program - Description of referenced documents for Cadweld Mechanical Splicing of Concrete Reinforcing Steel, dated December 5, 1973. Very truly yours, Project Manager MMK:mmp cc: W. E. Kessler H. W. Slager J. Dotson W. Ferriss D. R. Johnson P. Cassidy Z. Tucker P. A. Martinez

f UNITED STATES OF AMERICA ATOMIC ENERGY COM4ISSION In the Matter of CONSUMERS POWER COMPANY Construction Permits (Midland Plant, Units 1 and 2) ) Nos. 81 and 82

                                        )

AFFIDAVIT STATE OF MICHIGAN SS. , COUNTY OF JACKSON Stephen H. Howell, being duly sworn according to law, deposes and says:

1. I am Vice President of Consumers Power Company in charge of Electric Plant Projects.

2. I have read the " Answer to Order to Show Cause," dated December 24, 1973, and am familiar with the facts recited themin. To the best of my knowledge and belief, the facts recited in said Answer are true and correct.

Further deponent says not.

                                                 /s/StephenH.Howell Stephen H. Howell Subscribed and svom to before me this 24th day of December,1973
                                       /s/ Phyllis Bogart Phyllis Bogart, Notary Public, Jackson County, Michigan.

My Commission Expires April 20, 1974

o UNITED STATES OF AMERICA ATOMIC ENERG1 COMESSION In the Matter of )

                                     )               Construction Permit CONSUMERS POWER COMPANY            )
                                     )                 Nos. 81 and 82 (Midlanri Plant, Units 1 and 2)     )

CERTIFICATE OF SERVICE I hereby certify that copies of the attached Licensee's " Motion to Dismiss Order to Show Cause," " Answer to Order to Show Cause," and letter of the undersigned to the Secretary of the Comission, all dated December 24, 1973, have been served on the following by deposit in the United States mail, first class, this 24th day of December, 1973: Secretary (20) U. S. Atomic Energy Comission

                      .Att:   Chief, Public Proceedings Branch Washington, DC 20545 James P. Murray, Jr.

Chief Rulemaking and Enforcement Counsel U. S. Atomic Energy Commission Washington, DC 20545 Myron M. Cherry, Esq Jenner & Block One IBM Plaza Chicago, IL 60611

                                              /s/ Judd L. Bacon Judd L. Bacon, Senior Attorney Consumers Power Company 212 West Michigan Avenue Jackson, MI 49201 (517) 788-1366

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