ML19340B814

Interim Deficiency Rept Re Breakdown in Quality Program for Procurement Cycle of Purchased Matls & Equipment. Activities Associated W/Investigative Review Detailed & Vendor Control Program Verified

ML19340B814
Person / Time
Site:	South Texas
Issue date:	10/31/1980
From:	Oprea G HOUSTON LIGHTING & POWER CO.
To:	Seyfrit K NRC OFFICE OF INSPECTION & ENFORCEMENT (IE REGION IV)
References
10CFR-050.55E, 10CFR-50.55E, ST-HL-AE-570, NUDOCS 8011120341
Download: ML19340B814 (16)

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The Light l m P a n y ne ,,e. tiss,io ,& re. , e.o.ooxi,oo no.,,o 1 ..,,,o0,<,,3,22s.,2,,

October 31, 1980 ST-HL-AE-570 , Ei SFN: V-0530 $

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Mr. Karl Seyfrit ~a] C3 Director, Region IV g

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I- y Oc Nuclear Regulatory Comission 5 en 611 Ryan Plaza Drive, Suite 1000 2

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Dear Mr. Seyfrit:

South Texas Project Units 1&2 Docket Nos. STN 50-498, STN 50-499 Third Interim Report Concerning the Breakdown in the Quality Program - Procurement Cycle of Purchased Materials on June l'.,,1980, Houston Lighting & Power Company notified your office, pursuant to 10CFR50.55(e), of a deficiency concerning a breakdown in the quality program for the procurement cycle of purchased materials and equip-ment. Interim reports regarding this subject were provided to your of fice on July 14, 1980 and September 12, 1980 (see correspondence ST-HL-AE-495 and ST-HL-AE-536 respectively). In response to a comitment made in the September 12, 1980 letter, please find attached a detailed program description and The associated implementation schedules for resolving the subject deficiency.

next interim report will be submitted to your office by March 19, 1981.

If there are any questions concerning this item, please contact Mr.

Michael E. Powell at (713) 676-8592.

Very truly yours,

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h y-G. W. Oprea, Jr.

Executive Vice President

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MEP/pjb Attachment

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GIfI 8011120 %

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Hcuston Lighdng & Power Company October 31, 1980 l ST-HL-AE-570 Sni: V-0530 Page 2 cc: J. H. Goldberg D. G. Barker Howard Pyle R. L. Waldrop H. R. Dean -

D. R. Beeth i

• J. D. Parsons G. B. Painter L. K. English A. J. Granger R. A. Frazar H. S. Phillips (NRC)

J. O. Read Read-Poland, Inc.)

M. D. Schwarz Baker & Botts)

R. Gordon Gooch Baker & Botts)

J. R. Newman Lowenstein, Newman, Reis, Axelrad & Toll)

Director, Office of Inspection & Enforcement Nuclear Regulatory Comission Washington, D. C. 20555

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Houston Lighting & Power Company October 31, 1980 ST-EL-AE-570 SFN: V-0530 Page 3 M. L. Borchelt Executive Vice President Central Power 6 Light Company P. O. Box 2121 Corpus Christi, Texas 78403

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R. L. Range Central Power 6 Light Company P. O. Box 2121 Corpus Christi, Texas 78403 R. L. Hancock Director of Electrical Utilities City of Austin P. O. Box 1088 Austin, Texas 78767 T. H. Muehlenbeck City of Austin P. O. Box 1088 Austin, Texas 78767 J. B. Poston Assistant General Manager of Operations City Public Service Board P. O. Box 1771 San Antonio, Texas 78296 A. vonRosenberg City Public Service Board P. O. Box 1771 San Antonio, Texas 78296

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! Houston Ughdng 8e Power Cbmpany - October 31, 1980 ST-EL-AE-570 SFN: V-0530 Charles Bechoefer, Esquire Page 3 Chairman, Atomic Safety & Licensing Board U. S. Nuclear Regulatory Commission Washington, D. C. 20555 .

Dr. James C. Lamb, III 313 Woodhaven Road

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Chapel Hill, North Carolina 27514 Dr. Emmeth A. Luebke Atomic Safety 6 Licensing Commission U. S. Nuclear Regulatory Commission

• Kashington, D. C. 20555 Steven A. Sinkin, Esquire 116 Villita Street San Antonio, Texas 78205 Citizens for Equitable Utilities c/o Ms. Peggy Buchorn

~ Route 1, Box 432 Bra:oria, Texas 77422 Richard W. Lowerre, Esquire Assistant Attorney General for the State of Texas P. O. Box 12548 Capitol Station Austin, Texas 78711 Bernard M. Bordenick

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Hearing Attorney Office of the Executive Legal Director U. S. Nuclear Regulatory Commission Washington, D. C. 20555

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Third Interim Report Concerning 4

Breakdown in Quality Program-Procurement Cycle of Purchased Material

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1.0 PURPOSE

• 1.1 General s

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The purpose of this report is to describe South Texas Project activities associated with the investigative review and i verification of the Yeador Control Program (VCP) for

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safety-related equipment and material. The completion of these activities will result in an unconditional release of the safety-related equipment and materials.

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1.2 Background During a review of the Vendor Control Program of representative purchase orders, several generic areas of concern in the procurement cycle were identified. These were

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reported to the Nuclear Regulatory Commission as follows:

1. Review of vendors' Quality Assurance Program prior to award of contracts was not, in some cases, properly documented in accordance with project procedures.

2. Approved design change documents were being utilized by

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vendors prior to or without issuance of a Purchase Order

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Change Notice making them contractually binding.

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- 3. Interface agreements used to define the comunication link between the South Texas Project and vendor and to identify the processing requirements of vendor-related documents l were not, in some cases, imposed or strictly followed.

4. Approved Supplier Deviation Requests were apparently

utilized to make generic changes to design specifications f without the issuance of required Document Change Notices

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to those specifications.

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5. Vendor documentation requirements for retention at their facility and submittal to the project for review and  !

approval were not, in some cases, adequately defined and/or implemented.

6. Trending of vendor audit deficiencies and nonconformances to identify repetitive deficiencies, evaluate root causes, and implement corrective action to prevent recurrences, was not being effectively accomplished.

7. Planned vendor surveillance inspection activities were not being performed, nor did documented evidence exist to substantiate the acceptability of deviating from these planned activities.

8. Verification of personnel certification for individuals performing vendor surveillance activities was not, in some cases, adequately documented.

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9. Materials received at Site reflected shipment from vendors' facilities other than those locations which had been approved by the project.

Due to the apparent failure to develop and/or implement a totally effective quality program during the procurement

cycle, the quality status of purchased safety-related

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materials and equipment must be reestablished. A controlled-release procedure was initiated at the STP site on June 16, 1980, to provide quality control verification of required records for safety-related materials and

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2.0 DEFINITIONS The following are definitions of terminology used throughout this report:

1. Baseline Requirements - Those requirements that will satisfy essential safety-related commitments.

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2. Provisional Items - Those items that are generated or revised in order to completely define the baseline requirements. The " provisional" aspect of these items

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will remain until they are reviewed and approved in accordance with established project procedures.

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3. VCP Baseline Procurement Documents - Those documents necessary to define exactly what is being procured, to complete the basic purchasing cycle, to substantiate the

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legality and integrity of the purchase, and to provide traceability to the purchased item. The document package will contain, as a minimum, the following provisional items generated or revised as appropriate to show the baseline requirements.

a. Statement of compliance with project commitments (PSAR/FSAR and other comitments).

b. Engineering specification which reflects the baseline requirements.

c. Purchase Requisition from Engineering which defines, in detail, changes that are required to the existing procurement documents to reflect the baseline requirements. (This requistion will event'ually be the basis for any Change Notice that is required).

d. Purchase Order Attachments which are in agreement with Specification and existing Purchase Order, except as revised by requ1stion above.

3.0 PROGRAM 3.1 Technical Reference Document In order for this activity to proceed a Technical Reference Document (TRD) is being generated to define all aspects of

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work associated with this activity: responsibilities,

' interfaces and authorities, activities, work process logics, review requirements, format of reports and records, etc.

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6 3.2 Work Process Logic The work process logic for this overall activity is shown in flowchart form on Attachment "A". In general, the overall I

activity consists of the following major tasks which will be l performed serially in order to achieve final unconditional release of the safety-related material and equipment.

1 3.2.1 Establish Priorities This task requires the development, accumulation and analysis j l

of data in order to establish the priority for investigative review and verification of safety-related purchase orders.

3.2.2 Generate "VCP Baseline Precurement Documents" This task requires the joint effort of Engineering and Quality Engineering to accomplish the following:

1. Review of existing procurement documents to determine compliance with SAR commitments and other B&R Project commitments to HL&P.

2. Comparison of existing specification with Purchase Order, P0 Special Clauses, Changes Notices, etc., to determine if any conflicting requirements have been imposed on Vendor.

3. Review of communications files (written and oral) against

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Purchase Order, Specification, and all other procurement

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documents to determine if any agreements reached alter the explicit requirements of either document. (Tyoical examples of agreements would be: changes in documentation

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requirements; waiver of tests or inspections; approved SDRs; Interface Agreements, etc.).

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4. Determination that all DCN's, Specification Revisions, i etc., have been formally incorporated into the Purchase Order by official Change Notices.

5. Resolution of all differences found in the above items.

The TRD will cover this task. It will define the documents that will be reviewed, establish the governing documentation in the case of conflicts, prescribe methods of arbitration l and/or adjudication, provide for complete documentation of the reasoning leading to decisions that are reached and changes  ;

that are made, etc. The TRD will also define the manner in which the resultant provisional items will be utilized, with all limitations regarding distribution, possession, use, and authority 3ccurately defined.

3.2.3 Investigation & Verification l

Brown & Root has engaged the services of the NUS Corporation (NUS) for the purpose of performing an independent, third-party investigation and verification of the procurement l cycle for all safety-related materials and equipment. New j procedures are being generated for this task, to assure a uniform and comprehensive review of the applicable procurement

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utilized for conducting, documenting, reporting, and i I

closing-out the correspondence generated by these l

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investigations. These procedures will have the concurrence of Brown & Root Project Management to ensure that the proper interfacing between various project organizations will be provided.

The QA Audit Section within the B&R QA Department perforats

vendor audit activities on a schduled basis. In cases where the NUS task force identifies possible discrepancies, a special investigation and verification will be performed at the Vendors' facility. Where possible, the schedule of the QA Audit Section will be adjusted to accomodate the special

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investigation. In the case of inactive Purchase Orders, i.e.,

those on which there is no longer any scheduled vendor surveillance activity, it may be necessary for NUS to perform the investigation partially at the Vendors' facilities.

NUS will be consulted during the resolution of any NUS-identified discrepancy by direct interfacing with the affected organization, if required. The satisfactory closure of any NUS-identified discrepancy will constitute acceptance

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of the corrective action undertaken. ,

3.2.4 Resolution of Discrepancies The TRD will cover this task, since the major documents being utilized are provisional items and the results or the NUS

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documents.

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When discrepancies are found, they will fall into two general categories: discrepancies in requirements that were included or intended in the existing procurement documents; and discrepancies in requirements that were identified in the development of the YCP Baseline Procurement Documents or in the NUS investigation itself, both types of which were not included in the existint procurement documents.

In the case of discrepancies of the first category, the files will be searched to verify that they were not simply overlooked, then standard project expediting activities will be undertaken to accomplish timely delivery of the missing items.

In the case of deficiencies of the second category, additional negotiations with the Vendor will eventually be required, but first the existing project documents will be revised, reviewed, and approved to reflect the final requireme:.ts which will result in successful disposition of the discrepancies.

If the requirements were identified and documented in the generation of VCP Baseline Procurement Documents, Section 3.2.1 above, these documents will be placed into the standard project review-and-approval cycle. If the requirements were identified or changed during the NUS investigation, the VCP Baseline Procurement Documents will then be revised to reflect

_.the fi";l requirements, after which they will be placed into the standard project review-and-approval cycle.

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3.2.5 Update Purchasa Orders +o Final Requirements This task will be accomplished utilizing standard project procedures, since at this point of the activity all documents

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utilized will be those that have been revised, reviewed and approved in accordance with project requirementu.

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' Correct Vendors' Deficiencies 3.2.6 This task will be accomplished utilizing standard project procedures. However, there will be spe ial emphasis given to

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c, the receipt, identification, and review for adequacy of these items in order to facilitate the final resolution and closeout of discrepancies, and to allow for subsequent unconditional

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release.

3.2.7 Unconditional Release Following the successful completion of the tasks defined in 3.2.1 through 3.2.6, above, the safety-related material and equipment will be given an unconditional release by Project QA for continuation of construction activities.

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3.3 Schedule of Activities Attachment "B" is a bar chart which shows the tentative overall schedule for this activity. Additionally, detailed l l

schedules are being developed which show the estimated time

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each purchase order for safety-related equipment and material.

Attachment "B" indicates that the Unconditional Release phase

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of this activity will be completed by October 1,1981. This only refers to the disposition of any discrepancies that are identified, and not to the full implementation thereof. Every

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. effort will be made to fully implement the dispositions by

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that time, but there may be hardware or documentation f shortages that will be rceived and utilized after that date.

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M J J A S 0 N D J F M A M J J A S 0

1. ESTABLISH PRIORITIES ' ' ' '

AND SCHEDULE ,

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2. GENERATE " BASELINE ,

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REQUIREMENTS" ,

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' 3. INVESTIGATION & VERIFICATION-

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(By NUS -CORPORATION)

4. RESOLUTION OF DISCREPANCIES ,

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5. UPDATE P0's TO FINAL .

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REQUIREMENTS

6. CORRECT VENDOR'S

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DEFICIENCIES '

j 7. UNCONDITIONAL RELEASE i

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,' ESTIMATED TASK DURATIONS

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INVESTIGATIVE REVIEW & VERIFICATION OF VENDOR CONTROL PROGRAM j FOR SAFETY-RELATED EQUIPMENT AND MATERIAL

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ATTACHMENT "B"

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