ML20052H226

Motion for Leave to File New Contentions Re Serious QA Breakdown & Lack of Corporate Character & Competence of Util.Certificate of Svc Encl

ML20052H226
Person / Time
Site:	Zimmer
Issue date:	05/18/1982
From:	Bernabei L, Devine T GOVERNMENT ACCOUNTABILITY PROJECT, MIAMI VALLEY POWER PROJECT
To:	Atomic Safety and Licensing Board Panel
References
NUDOCS 8205200080
Download: ML20052H226 (130)

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UNITED STATES OF AMERICA f- ;7 NUCLEAR REGULATORY COMMISSION- 4 Before the Atomic Safety and Licensing Boar @

In the Matter of )

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The Cincinnati Gas & Electric ) Docket No. 50-358 Company, et'al. )

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(Wm. H. Zimmer Nuclear Power )

Station) )

MVPP's MOTION FOR LEAVE TO FILE NEW CONTENTIONS Pursuant to 10 C.F.R. 2.714 and based on recent Nuclear Regulatory Commission ("NRC") reports and testimony; as well as affidavits from witnesses and documentation not previously available on the public record, Miami Valley Power Project

("MVPP") moves for the admission of eight new contentions on tro fundamental issues yet to be considered by the Atomic Safety and Licensing Board (" Board" or "ASLB") --

(1) the serious quality assurance breakdown with broad repercussions at Zimmer; and (2) the lack of corporate character and competence of the Applicant Cincinnati Gas and Electric ("CG&E") to run a nuclear plant. O3 I. HISTORY OF BREAKDOWN OF h QUAuITY AS$URANCE PROGRAM The NRC reports supporting intervenor's new contentions

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include the Special Inquiry re: Adequacy of IE Investigation 50-358/80-9 at the William H. Zimmer Nuclear Power Plant, Office l

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of Inspector and Auditor, U.S. Nuclear Regulatory Commission (Aug. 7, 1981) ("OIA Report"), the IE Report No. 50-358/81-13 (Nov. 2, 1981) ("IE Report"), and other reports issued by the NRC Office of Inspection and Enforcement. The OIA and IE Reports were both released in November 1981. Each report contained significant findings after investigations into misconduct at Zimmer and ordered major reforms.

The OIA Report evaluated NRC Region III's ("RIII") own 1980 investigative response to allegations raised by " whistle-blower" Thomas Applegate. OIA concluded, Clearly, IE Investigation No. 50-358/80-9 did not satisfy . . . generally accepted investigative standards of other govern-ment agencies.... Fundamentals basic to all investigations were simply not observed in this instance.

(October 9, 1981 memorandum from James J. Cummings to Nunzio J. Palladino, attached and incorporated herein as Exhibit 1).

On November 19, 1981 Chairman Palladino wrote to Congressman Morris Udall (D.-Ariz.): "I agree with OIA's finding that OIE's original investigation should have been more comprehensive.

The Commisuion is ordering the necessary internal reforms....

[When] a full investigation is called for, as for example in the case of possible criminal conduct, NRC needs to conduct" that investigation consistent with fundamental standards that i

govern investigations by any agency." Palladino letter is attached and incorporated herein as Exhibit 2.

The IE Report was equally significant. RIII presented this report on November 24, 1982 as the interim findings of a massive reinvestigation into the allegations of Mr. Applegate

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and others. The IE Report identified 40 new noncompliances j based on nearly 1000 examples that involved 12 of the 18 criteria contained in 10 CFR Part 50, Appendix B, which establishes the requirements for an adequate quality assurance program. The findings of the IE Report are attached with a November 24, 1981 cover letter ~as Exhibit 3.

The NRC's corrective action program is best understood in light of the Commission's assessment of the causes for the QA breakdown. In the November 24, 1981 cover letter to CG&E President William Dickhoner, NRC I&E Director Richard DeYo'ung explained, "The cause of the breakdown was your failure to exercise adequate oversight and control of your principal con-tractors to whom you had delegated the work of establishing and executing quality assurance program" (see Exhibit 3).

The NRC proposed a $200,000 fine, the largest in history for a nuclear power plant under construction. The basis of the fine was as follows - (1) $50,000 for false QA records; (2) $50,000 for harassment of and retaliation taken against QC inspectors; and $100,000 for failure adequately to document and implement the quality assurance program at Zimmer. On February 26, 1982 CG&E paid the fine.

In addition to this fine, the NRC required completion of a Quality Confirmation Program ("QCP"). RIII originally ordered the QCP in an April 8, 1981 Immediate Action Letter. CG&E proposed and administered the QCP on a day-to-day basis, with RIII approval. In publicly describing the QCP, RIII Director i James Keppler stated that it would be a 100% reinspection of l

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safety systems.- HE explained, "'All' means 100%," ... "no more spot checks." (A November 21, 1981 Cincinnati Enquirer article is attached as Exhibit 4.)

In releasing the IE Report, Mr. Keppler characterized the Quality Assurance Program at Zimmer as " totally out of control." (The relevant news article is enclosed as Exhibit 3.) Further, in March 1981 congres-sional testimony, Executive Director for Operations William Dircks identified Zimmer as one of five nuclear plants under construction nationally that have " serious quality assurance breakdowns with broad repercussions." Testimony of Chairman Palladino and Mr. Dirck is attached as Exhibit 6.

It appeared that the regulatory system had identified and taken adequate corrective action against fundamental quality abuses at Zimmer. Recently, however, MVPP has learned that (1) the OIA and IE Reports revealed only a small portion of the QA breakdown and resulting hardware damage; (2) the causes and responsibility for the QA breakdown rest squarely with high-level CG&E management; and (3) neither CG&E nor RIII have followed through with adequate corrective action. As a result, the RIII-imposed Quality Confirmation Program may i

further exacerbate the previous QA breakdown, while providing the public with false reassurances that a " final solution" has been achieved at ZLnmer.

7 Throughout these developments the NRC staff has sat silently r

on the sidelines. In recommending an operating license the

! NRC staff failed to mention the OIA and IE reports, which were a topic at numerous congressional hearings and received close scrutiny by the Comissioners. Before making this recommendation the staff did not even wait for RIII to finish its reinvestiga-tion sometime between August and September 1982.

The staff's silence may have been reasonable had RIII and CG&E in fact fully disclosed and corrected the QA breakdown.

In light of newly discovered evidence, however, MVPP raises the contentions summarized below. These issues must be resolved if the Zimmer plant is to operate safetly. If the NRC grants an operating license without fully considering these challenges it would be responsible for tolerating an unacceptable risk to public health and safety.

II. MVPP's PROPOSED NEW CONTENTIONS MVPP submits the following additional contentions for litigation in this phase of the operating license proceedings:

1. CG&E and Kaiser Engineering, Inc. ("KEI")

have failed to maintain sufficient quality assurance controls to ensure that the as-built condition of the plant reflects the final version of a design that com-plies with all applicable regulations and requirements for public health and safety, as requi' red by 10 CFR Part 50, Appendix B.

To illustrate, installation has proceeded on the basis of construction aids rather than final drawings '

approved by the architect / engineer, Sargent and Lundy

("S&L ") . Further, design revisions have not been fully incorporated and distributed to all relevant

f construction and QA personnel. As a result, the

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as-built condition of the plant does not match the approved final design. Even if the specified equip-ment were installed in the designated locations, however, S&L-approved. erroneous Design Document s

. Changes ("DDC"). i The basis for this contention includes IE Report 1 -

SS 4, 7, and Attachment A; affidavits from witnesses about the suppression pool, large-bore and small-bore piping, and hangers in the-primary containment; i interviews with current or former employees willing l 3

to testify; and internal CG&E and KEI documents.

2 CG&E and KEI have failed to maintain ade-quate material traceability to identify and document l the history of all material, parts, components and welds, as required by 10 CFR Part 50, Appendix-B, 4

Criterion VIII.

To illustrate, it is impossible to identify and

! trace the history of items due to flaws such as inaccurate or overgeneralized blueprints; installation damage i to materials; missing, incomplete, or unreliable i

records; and lack of identifying markings on equip-ment.

j As a result, there exists little basis to rely on the existing traceability system. Guessing and

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unproven assumptions undermine the traceability records "

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that do exist. .

The basis for this contention includes IE Report SS 4 - 7 ; affidavits that demonstrate that methods are inadequate to identify and con-trol large and small bore piping, flanges, and welds, as illustrations that prove a breakdown throughout the plant; examples supplied by current or former employees; and internal CG&E and KEI documents.

3. CG&E and KEI have failed to maintain an adequate quality assurance program for vendor pur-chases, as required by 10 CFR Part 50, Appendix B, Criterion VII.

The QA breakdown for vendor purchases has been systematic, from selection of individual ven-dors to toleration of hardware defects uncovered after installation. To illustrate, vendors have been accepted for the approved vendors list on the most superficial basis, such as unsupported memoranda from CG&E and/or KEI management, or a review of vendor QA manuals unsupported by on-site surveys.

As a result, unqualified vendors have been placed on the Approved Vendors List ( " AVL ") . Once on the -

AVL list, it has been unreasonably difficult to remove i

the vendors despite poor performance.

CG&E has improperly made vendor purchases and l then directed KEI to assume quality assurance f

responsibility for the purchases. KEI receipt inspection was improperly restricted to a check for transit damage and completeness. CG&E denied permission to KEI to conduct necessary source inspec-tions of vendors. CG&E and KEI did not maintain reliable, comprehensive identification records and documentation packages,which resulted in uncertain traceability.

After receiving vendor purchases, the items I

frequently were upgraded from "ncn-esential" to

" essential" status. As a result, items were installed 1

in critical safety systems without first meeting '

the corresponding safety requirements. When QA/QC inspectors found defects in vendor hardware, they were instructed not to write up Nonconformance Reports ("NR") .

The vendor QA breakdown spilled over into the rest of the plant. Inadequate traceability has led to confusion over which items are vendor purchases and which are not. Vendor purchases at Zimmer are not covered by on-site QA inspectors. As a result, in a significant number of cases items fabricated on-site have been erroneously defined-out of the CG&E and KEI QA systems.

The flaws described above are illustrative, not exhaustive. This contention applies to safety systems throughout the plant. Tens of thousands of purchase i

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l orders are questionable. '

The basis for the contention includes IE Report S7; affidavits from current or former plant employees; i

interviews.with current and former plant employees willing to testify; and internal CG&E and KEI docu-ments. ,

4. CG&E and Kaiser have failed to maintain

, an adequate quality assurance program, to identify and correct construction deficiencies, as required by 10 CFR Part 50, Appendix B, Criterion XVI. This contention challenges the structure and premises of the QA program at Zimmer, rather than. specific t

inspection hardware deficiencies. '

To illustrate, traditionally there has not been a comprehensive quality assurance manual for either 4

CG&E and KEI QA/QC personnel. Training procedures

, for QA/QC personnel have been inadequate, and some classes were taught by instructors with few qualifi-f l

cations. Until establishment of the Quality Confirma-tion Program, the KEI QA/QC program was severely under-staff at CG&E'c direction. Mandatory inspections l did not occur of safety-related items. Necessary j audits were not conducted for unjustifiable long periods.

CG&E and KEI management have not always made good faith efforts to comply with audit recommendations.

Corrective action procedures for identified construction m

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defects have looked' to correct QA defects prospectively while failing to reinspect for the damage that may have been previously overlooked. Underpinning all these l structural flaws has been the core of the QA breakdown at Zimmer -- the lack of independence for QA/QC de-l partments and personnel from their construction counter-parts, in both the CG&E and KEI organizations. The absence of even a minimally acceptable QA program casts f a shadow over all safety-related systems at Zimmer.

The basis for this centention includes the congres-sional testimony and public statements of NRC officials, .

1 Exhibits 1-6; IE Report SS 4-7 and Attachment A; l affidavits from and interviews with current and former employees; and internal CG&E and KEI documents.

5. CGsE and KEI officials failed to maintain adequate controls to process and respond to internal Nonconformance Reports identifying violations of inter-nal or government requirements. To illustrate the scope of the problem, the IE Report analyzed in-depth 26 reports of nonconforming conditions out of over 1000 that were voided between 1978 and 1981. The IE Report concluded that 25 out of the 26 reports were voided anzneously. Potentially thousands of NR's have been improperly voided or discarded under the QA program.

To illustrate, KEI QA inspectors in practice have been ordered not to write NR's on procedural or "sof tware" deficiencies. A convoluted system of multiple approvals

makes it unreasonably difficult to issue NR's. CG&E has developed a bewildering system of reports on non-conforming conditions including Surveillance Reports, Inspection Reports, Corrective Action Recommendations

(" CAR") and In-Process Inspection Deficiency Reports, punch lists and exception lists. These QA report categories avoid the accountability and NRC oversight of the NR system, and thus violate Appendix B.

Many NR's have been eliminated entirely from the QA system. For example, NR's have been voided as "not issued," and so expunged from the QA records' system.

In a significant number of cases, NR's voided as "Not Issued" cannot now be found.

Due to this high ratio of improperly voided NR's Zimmer contains an unknown number of dormant, identified

deficiencies which were found and later lost or disposi-tioned without correcting the identified defects. Any decision to license Zimmer is premature until all QA reports on aonconforming conditions are located, entered into the NR system and properly dispositioned through adequate corrective action.

The basis for this contention includes IE Report SS 4-7; the OIA Report; affidavits and interviews with current and former Zimmer employee witnesses; and internal CG&E and KEI documents.

6. CG&E and KEI have engaged in illegal retali-ation against QA/QC personnel vho attempt diligently to i.

perform their duties or who disclose QA problems to the NRC. This retaliation violates 10 CFR Parts 19 and Part 50, Appendix B, Criterion I. Harassment occurred on all levels. Both CGAE and KEI openly tried to discourage or neutralize QA/QC initiatives, internal disclosures through this retaliation, or employee disclosures to the NRC.

To illustrate, construction personnel on at least one occasion physically attacked, and repeatedly intimidated QA inspectors. QC personnel attempting to conduct inspections were doused with buckets of water and scattered with high-pressure fire hoses. Management officials did not pursue and discipline the offenders, nor did they deter repeat harassment.

KEI top management berated QC inspectors and supervisors for writing up nonconformances. Both CG&E and KEI management retaliated against employees who pursued significant corrective action programs for QA violations, or disclosed serious violations to the NRC during its 1981 reinvestigation. These reprisals included dismissal, demotions and job transfers.

Employees who retracted or modified their NRC statements,after interviews with CG&E counsel, kept their supervisory positions. This pattern stretches from the mid-1970's to 1982.

CG&E removed Butler Services, Inc. and Peabody Magnaflux, Inc., from responsibilities for QC inspection

~i and radiographs, respectively, in an effort to destroy the independence of this portion of the QA program.

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, on both the individual auxi institutional level, f

reprisal victims were replaced with substitutes whose 7 qualifications and commitments to sound QA practices are i

open to' serious challenge. These examples are illus-trative, not exhaustive, of an environment where it takes.

repeated acts of courage for QA/QC personnel to do their j jobs right. QC inspections and findings that arose out  ;

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of fear and pressure are an inadequate basis to satisfy I

public health and safety requirements.

, The basis for this contention includes IE Report i SS 4 and 6; CG&E letter concerning fine, attached and in-corporated herein as exhibit 7; affidavits from and inter-1 j views with witnesses; and additional documents.

j! 7. The CG&E Quality Confirmation Program ("QCP") is i

i inadequate to mitigate or remedy the serious consequences j of QA breakdown at Zimmer. On April 8, 1981 RIII imposed i

i on the Zimmer QA program the QCP as a structural reform i

j intended to neutralize the previous abuses. CG&E obtained NRC approval for the QCP and administers it on an ongoing I- basis. The ACP has led to a welcome increase of QA per- [

sonnel. However, the QCP is fundamentally deficient in i

i that its scope is too narrow and its implementation spotty.

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To illustrate, the QCP plan presented as Exhibit 17 of the IE Report gives. broad discretion to CG&E,

! instead of clearly defined specific duties. This fails 1 ,

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to guarantee a full solution for a quality assurance program " totally out of control."

To illustrate further, the QCP is only a review and sampling program of individual deficiencies, not a 100-percent reinspection of all safety-related systems.

CG&E has the discretion to select small samples for reinspections that may give a clean bill of health to large safety systems which remain shot through with

, structural deficiencies.

The QCP applies only to deficiencies identified I

by the NRC. New information obtained by MVPP evidences 4

potential QA and hardware problems ranging far beyond those disclosed in the IE Report and demonstrates the j need for a 100-percent reinspection of all safety 1

equipment installed on-site. A review based on the I

public record to date and the even smaller sampling reinspection program is a hopelessly inadequate re-sponse to a near-decade of substandard quality control at Zimmer.

This list does not claim to be comprehensive, but represents merely a few structural flaws in the QCP based on information currently available to MVPP.

Additional weaknesses will be identified as the details of the QCP are made available.

The basis for this contention includes IE Report Exhibit 17; conversations with RIII management officials;

and affidavits and interviews with witnesses willing to testify.

8. CG&E lacks the necessary character and competence to operate a nuclear power plant. In Houston Lighting and Power Company (South Texas Project, Units 1 and 2), CCl-80-32, 12 NRC 281 (1980), the Com-mission held that abdication of responsibility for construction to its contractor or abdication of know-ledge about construction activities by a prospective licensee is an independent, sufficient basis to deny an operating license: "In large part, decisions about licenses are predictive in nature, and the Commission cannot ignore abdication of responsibility or abdi-cation of knowledge by a license applicant when it is called upon to decide if a license for a nuclear facility should be granted." 12 NRC at 291.

The most charitable explanation for the massive QA breakdown is that CG&E abdicated its duty to devise a technically competent QA program and to monitor that program. This generous assessment of CG&E's performan'ce during the construction phase is consistent with the conclusions of the IE Report, and certainly sufficient to deny Applicant an operating li' 'se.

In fact, CG&E has been well aware of KEI's QA program. CG&E management made key decisions about the QA program and has had a cominant role since at least 1974. (Examples of internal memoranda confirming this relationship are attached and incorporated herein as Exhibit 8.) On the public record, the IE Report references over a dozen examples of CG&E knowledge of or participation in activities covered by the RIII investigation, despite its conclusions. (See, e.g,.,

IE Report Exhibits 4, 5 and 52, attached and incor-porated herein as Exhibit 9 by reference.) According to Exhibit 52 of the IE Report, former CG&E QA manager William Schwiers said that CG&E suffers- the same lack of independence from construction as Kaiser. He also admitted that CG&E management was responsible for refusing to increase KEI's requests for additional QA/QC personnel.

CG&E also denied Kaiser authorization to spend funds'for adequate QA staff and training, and the CG&E construction department generally dominated the Applicant's QA program. CG&E has adopted the same philosophy the NRC attributed ti KEI -- the pur-spective that QA activities are an unwanted impediment to construction. CG&E made the key decisions in the i

construction. CG&E made the key decisions in the QA program for vendor purchases, on occasion despite objections from Kaiser's QA personnel. CG&E mishandled QA/QC records and sustained clearly inadequate QA procedures equivalent to those of KEI.

CG&E activities in other context raise serious concerns about its character. A comparison of the public record, and CG&E correspondence with a church share-holder organization of American Electric Power, a co-owner of Zimmer, is illustrative. An attached CG&E letter sent to the shareholder organization is undeniably inaccurate in its description of the RIII reinvesti-gation, despite the NRC's prior notice to CG&E of serious deficiencies. The NRC's "early" findings were so significant that the Quality Confirmation Program orders instituted on April 8, 1981, over 7 months before the IE Report was released. (Compare CG&E letter of April 3 , 1981 with the IE Report at 155-57, attached and incorporated herein as Exhibit 10.) ,

Similarly, in November and December 1981, CG&E representatives publicly made blanket statements denying hardware problems in general and agg single defective weld in particular, despite a previous notice of NRC laboratory tests that demonstrated theco deficiencies.

Compare IE Report No. 50-358/81-27 at 7-8, with a November 26, 1981 news article, attached and enclosed herein as Exhibit 11. On November 16, 10 days before

. 1 CG&E President Dickhoners' assertions of a clean hardware bill of health, the NRC informed the Applicant, inter alia:

The visual examination of piping welds that were conducted revealed six welds which exceeded the ASME Code allowable reinforcement height on the outside surface of the weld.

For each of the above inaccurate self-serving statements by CG&E, evidence was not publicly available at that time to refute the Applicant's misrepresentations.

In Houston Power and Lighting, supra, the Commission emphasized that false statements to the NRC, and parti-cularly intentional false statements, are grounds to deny an operating license. There is evidence that records relating to such basic QA defects as material traceability and personnel qualifications were intentionally falsified.

Similarly the OIA Report disclosed that construction crews made informal, undocumented repairs on welds.

These repairs were made concurrently with the NRC inspec-tors' review of inaccurate paperwork on the very same welds. Although MVPP does not claim at the present time that CG&E officials were responsible for any deliberate falsification, such significant misconduct evidences applicant's failure to supervise the QA program to ensure its independent and proper operation.

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l j In some instances KEI employees engaged in deceptive conduct toward the NRC. For example, when RIII requested copies of all essential, and later nonessential voided nonconformance reports, KEI personnel did not include voided NR's improperly filed with Inspection reports. Their excuse was that RIII had not asked for voided NR's filed with Inspection Reports.

Any remaining doubts about the necessity for a full hearing on CG&E's character and competence should be resolved by a currently-suspended criminal investigation of QA abuses, as well as the congres-sional call to pursue the probe more aggressively.

Last summer OIA began a criminal investigation into falsified QA reports and failure to conduct mandatory inspections. However, the OIA criminal probe has been suspended until some time between August and October 1982, when Part II of the RIII reinvesti-gation will be completed. The issues addressed in Exhibit 52 of the I Report, the interview with CG&E QA manager William Schwiers, suggest that CG&E officials may have been targets of the investigation.

NRC investigators inquired into the role of CG&E Vice President Earl Borgman. This criminal investi-

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gation was so significant that on October 27 and 28, 1981 the NRC Commissioners concidered the ongoing law enforcement proceedings in a closed meeting on Zimmer.

A March 19, 1982 letter from Intervenor's counsel to the United States Attorney for the Southern District of Ohio is attached and incorporated herein as Exhibit 12, along with the accompanying original exhibits.

Evidence of harassment and retaliation toward employees coupled with criminal falsification of records has led to calls from Congress for a criminal investi-gation. As Representative Toby Mof fett (D-Conn. )

explained:

Such harassment, as this Subcommittee has already found through previous inves-tigations and as the NRC has now admitted in its own investigation, are precisely the sort of actions that occurred at the Zimmer site near Cincinnati.

These new criminal penalties were not placed in the Atomic Energy Act as window-dressing. The Congress provided for criminal penalties for utility failures to obey NRC safety rules for a very impor-tant reason: the public health can be endangered by nuclear crimes just as surely as it can be by street crimes.

Congressman Moffett's December 14, 1981, opening state-ment at congressional hearings is attached and incorporated herein as Exhibit 13.

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Evidence of non-QA related criminal and non-criminal misconduct must also be examined before this Board in granting Applicant an operating license. Witnesses have identified on-site criminal misconduct including diversion of nuclear materials to underground businesses that sell belt-buckles manufactured on-site. Witnesses have also provided affidavits detailing widespread illegal gambling including horse-racing bets placed from the security guard's desk on the seventh floor where nuclear fuel is kept. Dangerous alcohol and narcotics use on-site further demonstrates CG&E's abdication of its duties.

(See, e.g., a January 16, 1981 affidavit from Jeffrey Hyde, attached and incorporated herein as Exhibit 14.)

The above overview helps explain why previous QA/

QC retaliation and failure to respond adequately to 4

identified deficiencies continues to date. The same management organizations are making the decisions.

Through the CG&E-led Quality Confirmation Program, RIII in effect may have ordered the fox to strengthen its control over the henhouse. It is imperative that an operating license not be granted without a full hearing into Applicant's character and competence.

The basis for this contention is the OIA Report at ,

33-5; IE Report in general; and documentation, affidavits and interviews with witnesses willing to testify at ,

hearings.

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III. MVPP' S NEW CONTENTIONS HAVE MET CRITIERIA OF 10 CFR 2.714 FOR LATE ADMISSION Although recognizing the late date of its eight new contentions, MVPP contends that all five criteria of 10 CFR 2.714 (a) (1) for admission of late contentions have been satis-fied. Further, these contentions so seriously challenge the safety of the Zimmer plant that this Board should properly exercise its discretion to admit them even if one or more of the requirements for late submission of contentions is not met.

The following requirements of 10 CFR 2.714:

must be balanced to determine if late contentions may be admitted:

(i) Good cause 'or failure to file these contentions on time; (ii) The availability of other means whereby the petitioner's interest will be protected; (iii) The extent to which the petitioner's participation may reasonably be expected to assist in developing a sound record; (iv) The extent to which the petitioner's interest will'be represented by existing parties; (v) The extent to which the petitioner's participation will l

broaden the issues or delay the proceeding.

Intervenor MVPP has good cause for late submission of these contentions since it obtained the information about the total  !

quality assurance breakdown at the Zimmer plant only after the 1

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NRC issued its second IE Report and MVPP communicated with CG&E and KEI employees who remained dissatisfied and frightened by the continuing, inadequate quality assurance program at Zimmer and the NRC's apparent inability to impose significant reforms on CG&E.

Only within the last few months, when CG&E and KEI employees saw that the NRC had not in fact initiated the necessary scope of reforms and overhaul of the Zimmer QA pro-gram, were many such workers willing to speak to MVPP or counsel -- even anonymously or through intermediaries in some instances -- about the problems they believe threaten its safe operation. Because of the serious nature of the charges outlined above, MVPP's counsel carefully investigated all information received with other workers and obtained corro-borating documents. MVPP submitted these new contentions as soon as it could obtain the necessary affidavits and docu-mentation to support contentions that the quality assurance program at Zimmer threatened the safe operation of the plant, and CG&E lacked the character and technical competence to operate the plant.

Counsel is continuing to receive evidence at an accelerated rate. MVPP is only moving to admit these con-tentions now due to the NRC staff's precipitous recommendation that the Board immediately grant an operating license.

It is well-settled law that the availability of new documentatary information is good cause justifying the ad -

mission of new contentions filed out of time. Indiana and Michigan Electric Company (Cook Nuclear Plant, Units 1 and 2),

l CCI-72-25, 5 AEC 13, 14 (1972). As the Commission explained, "Unless special considerations dictate otherwise in specific circumstances, new information appearing in previously un-available documents would generally constitute good cause for amendment...." l 1

Secondly, only by full litigation of these issues before the Board can the Board and the public be assured that the Zimmer plant can run safely and be operated by a licenseo competent to manage a nuclear plant. The repeated comments of employees that they want to move their families at least 100 miles away if Zimmer goes on line is a sober warning if the operating license is granted prior to resolution of these QA and " character and competence" issues. Just as with the South Texas Project, the Zimmer project has undergone two extensive NRC investigations, one of which led to an unprece-dented $200,000 fine against the utility, a requirement of a massive Quality Confirmation Program of CG&E, and considera-tion of criminal prosecution. Illegal on-site activities, unsubstantiated charges of harassment, intimidation and threats of QA/QC personnel, fa'sified reporting practices, massive and improper voiding of nonconformance reports, and the construction of the plant without regard for any basic, integrated design plan are base level prob 1 cms that must be examined.

MVPP is in the midst of an intensive investigation spurred by disclosures from CG&E and KEI presonnel, and enhanced by numerous internal documents produced by these workers. By con-trast, it is obvious that Region III does not intend to pursue

vigorously so-called Part II of its reinvestigation. The NRC has established no priorities for the second phase five months after the completion of Phase I. Region II representatives were unable to tell intervenor's counsel the number of affidavits taken to date in the reinvestigation. Mr. Jim Foster, who now

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heads Region III's reinvestigation, opposed reopening the in-vestigation of Zimmer from the beginning, according to a memor-andum he wrote on September 3, 1981 to James G. Keppler. See Foster Memorandum, attached and incorporated herein as Exhibit

15. This memorandum not only protests reopening the investi-gation but further attempts to rebut the QA Report. It is no surprise, therefore, that in published news reports, attached

• and incorporated herein as Exhibit 16, Region III has already predicted that it will make no significant new findings.

The NRC staf f has similarly abdicated its responsibilities to bring these serious issues into contest before this Licensing Board. The staff has already recommended an operating license and remains in unqualified support of CG&E even after the IE and OIA Reports outlined, in part, the serious breakdown in the QA program at Zimmer. NRC staff has done no more than inform the Board that these two critical reports are in the Public Documents Room. Certainly this is in violation of the staff's clear duty to inform the Board about any significant discovery, regardless of whether the record is open or closed. As the Commission wrote in Virginia Electric and Power Company (North Anna Power Station, Units 1 & 2), CLI-76-22, 4 NRC 480, 492 n. 11 (1976), "The Licensing Board, the parties and the public have a right to be promptly informed of a discovery of this magnitude, before staff evaluation of that discovery ... No other policy is consistent with the staff's obligations to help the Com-mission fulfill its statutory mandate." Since the Licensing Board has only the information the parties bring before it,

" disclosure . .. goes to the very heart of the adjudicatory process. Its sacrifice for the sake of expediency cannot be justified and will not be tolerated." Duke Power Company (McGuire Nuclear Str tion, Units 1 and 2) , ALAB-14 3, 6AEC 623, 626 (1973).

Additionally, MVPP can make a unique contribution to the development of these hearings since it represents the principal grass roots organization in the Cincinnati area concerned about the safety of the Zimmer plant. In 1980 Intervenor's counsel conducted a long investigation at Zimmer which led to Thomas Applegate's whistleblowing disclosures and later served as a major catalyst for the NRC's OIA and IE Reports. At this point MVPP is the uncontradicted expert on the QA breakdown at the Zimmer nuclear plant. MVPP has collected affidavits, received offers by other witnesses to testify, and received internal documents that the NRC in its multiple investigations shunned. At this point the quality assurance and " character and competence" prob-lems are so severe that only through a direct challenge to CG&E's license before this licensing board can these issues be adequately addressed and hopefully resolved.

Litigation of these new contentions would not delay -the licensing proceeding since other investigations, already set -

in motion, must be completed prior to grant of a license to CG&E. ,

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For example, the criminal investigation that may already have focused on .CG&E management personnel - " suspended"? at the present time -- must be completed before the licensing board can issue a license with any assurance that CG&E is qualified to operate

. Zimmer. OIA, because of institutional delays will not activate e

this criminal investigation at least until August, 1982. The United States Attorney's Office, of course, may take up to a year to pursue a prosecution depending on the recommendation 2

of NRC investigators.

Although these new contentions will broaden the scope of the licensing proceeding, they cannot be ignored. The massive breakdown of the OA program at Zimmer, acknowledged by the NRC, and the NRC's abortive attempts to take corrective action man-date that this licens ng board formally consider the quality .

assurance contentions. CG&E's false statements and the falsi-

fication of records during construction at Zimmer require this Board to consider the character of the licensee prior to issuing

, a license. As the Commission wrote in Houston Lighting and Bgwer Company (South Texas Project, Units 1 and 2) , CLI-8 0-3 2, 13 NRC 281', 291 n. 4 (1980), "[T]he Commission cannot ignore false 4

ststements in documents submitted to it," and " abdication of Y

kngwledge, whether at the construction or cperating phase, could folin an independent and sufficient basis for revoking ... or denying a license ... . 42 U.S.C. 2232a." Id. at 291.

The licensing board, as the ultimate decisionmaker, alone bears responsibility at this stage for ensuring that' the Zimmer plant will operate safely and that the licensee is technically

-2 7-

competent and has the requisite character to run a nuclear plant. Therefore, the Board should exercise its descretionary authority to accept these contentions regardless of whether or not intervenor has met all criteria of 10 CFR 2714. See Virginia Electric and. Power Company (North Anna Power Station, Units 1 and 2), ALAB-363, 4 NRC 631 (1976).

The United States Congress, CG&E shareholders and the Cincinnati City Council are disturbed about the serious safety problems at Zimmer and concerned that even after two lengthy NRC investigations, there is no assurance that the quality assurance program at Zimmer is "under control." It is imperative that the Board admit MVPP's contentions and establish a discovery schedule for full examination of the Applicant's QA program, and most importantly CG&E's character and competence.

IV. MVPP MOTION FOR' PROTECTIVE ORDER MVPP, by separate motion, will request a protective order to protect the identity of those employees who have submitted affidavits and/or evidence that provides, in part, the basis for these contentions. Because of the history of harassment and intimidation of QA/QC personnel at Zimmer, MVPP will ask that the identify of these employees be kept confidential from all except the Board.

Counsel has already attached or cited sufficient docu-mentation to support these contentions and to demonstrate CG&E's significant role in the OA breakdown at Zimmer. The full basis for the contentions will be available through discovery and after confidentiality for affiants and other witnesses is assured.

, +

V. CONCLUSION For the foregoing reasons MVPP respectfully requests this Board to admit its new contentions that the quality assurance program at Zimmer cannot ensure the operation of the plant so not to endanger the public's health and safety and that CG&E lacks the requisite character and technical competence to operate a nuclear plant.

Respectfully submitted, Government Accountability Project Thomas Devine Lynne Bernabei Counsel for the Intervenors

. .[ .

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l UNITED STATES OF AMERICA

! NUCLEAR REGULATORY COMMISSION ATOMIC SAFETY AND LICENSING BOARD Mr. John H. Frye III J6dge Stanley M. Livingston Dr. Frank F. Hooper In the Matter of  :

CINCINNATI GAS AND ELECTRIC  :

COMPANY, ET AL,  : DOCKET NO. 50-358 (William H. Zimmer Nuclear  : APPLICATION FOR Power Station)  : OPERATING LICENSE.

CERTIFICATE OF SERVICE I hereby certify that copies of MVPP's Motion for Leave to File New Contentions in the above-captioned proceed-ing have been served on the following persons by posting the same .

in the U.S. Mails, postage prepaid, this /k day of M, 19f% .

Mr. John Frye III Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission Washington, D.C. 20555' Dr. Frank F. Hooper Troy B. Conner, Esq.

School of Natural Resources Conner, Moore & Corber University of Michigan 1747 Pennsylvania Avenue, N.W.

Ann Arbor, Michigan 48109 Washington, D.C. 20006 William J. Moran, Esq. John D. Woliver, Esq.

General Counsel P.O. Box 47 #

Cincinnati Gas & Electric Co. 550 Kilgore Street P.O. Box 960 Batavia, Ohio 45103 Cincinnati, Ohio 45201

, Chairman W. Peter Heile, Esq. Atomic Safety and Licensing Appeal Assistant City Solicitor Board Room 214, City Hall U.S. Nuclear Regulatory Commission Cincinnati, Ohio 45220 Washington, D.C. 20555 l l

• Chairman

' *~ ** ChcIles A. Barth, Esq. l U.S. Nuclear Regulatory Commission Atomic Safety and Licensing Board Room MNBB 9604 Panel 7735 Old Georgetown Road U.S. Nuclear Regulatory Commission Bethesda, Maryland 20014 Washington, D.C. 20555

• Chase Stephens Mary Reder Docketing and Service Section Box 270 I office of the Secretary Route 2 U.S. Nuclear Regulatory Commission California, Kentucky 41007 Washington, D.C. 20555 David K. Martin, Esq.

• Richard S. Salzman, Esq. Assistant Attorney General Chairman Division of Enviromental Law Atomic Safety & Licensing Appeal Attorney General for the Commonwealth Board of Kentucky U.S. Nuclear Regulatory Commission 209 St. Clair Street Washington, D.C. 20555 Frankfort, Kentucky 40601

• Lawrence Quarles Andrew B. Dennison Atomic Safety & Licensing Appeal 200 Main Street Board Batavia, Ohio 45103 U.S. Nuclear Regulatory Commission Washington, D.C. 20555

• Michael C. Farrar, Esq.

Atonic Safety & Licensing Appeal George Pattison Board Prosecuting Attorney U.S. Nuclear Regulatory Commission Clermont County

- Washington, D.C. 20555 154 Main Street Batavia, Ohio 45103 Administrative Judge M. Stanley Livingston 1005 Calle Largo Santa Fe, New Mexico 87501

'~)' V) " )

1M/

Thomas Devine Government Accountability Project Institute for Policy Studies 1901 Que Street, N.W.

Washington, D.C. 20009

• SERVED THROUGH INTERNAL NRC MAIL SYSTEM L

1

• /'gmtg%-

UNITED STATES . . . 2XIIIBIT #1 8 NUCLEAR REGULATORY COMMISSION

j i

• 'f WASHINGTON, D. C. 20555

%...** OCT S 19 9)

Chairman Palladino MDiORAtlDUM FOR:

FROM: James J. Cummings, Director

/ ,

Office of Inspector and Audito f/ W NethvNN [

SUBJECT:

OIA REPORT DATED AUGUST 7,1981, "ADEQUA 0F IE IfNESTIGATI0fl 50-358/80-09 AT THE WILLIAri H. ZIMMER NUCLEAR P0llEP. STATI0ti" Your memorandum of October 2,1981, requested that the Office of Inspector

'and Auditor (0IA) review ED0 comments on the subject report. OIA has j completed a review of the ED0's memoranda dated September 17, 1981, and 1 our responses are as follow:

\

EDO Comment (First EDO memorandum - Attachment 1)

"The OIA findings and supporting arguments contained in the August 7, 1981 memorandum, J. Cummings to the Commissioners, disturb me deeply. I am forced to conclude that DIA may not clearly understand i the tiRC mission or priorities, nor the processes and controls involved in the construction of a nuclear power plant. I am unable to conclude that the OIE investigation of Applegate's allegations was unsatisfactory.

"Our goal for plants under construction is to ensure that they are constructed in a manner to provide adequate public protection after they are licensed to operate. lie attempt to ensure that all potential construction defects, irrespective of how they are identified, are adequately corrected prior to the operation of a nuclear power pla nt. To that end, the optimal use of our resources is achieved when identified defects are verified to be in a utility's corrective action system. The potential for further reduction of risk to the public is not commen'surate with the incremental resources required to broaden the depth and breadth of this type of investigation as suggested in the OIA report.

. "2-~: .- 3 ~ m. ..

"I have been infomed there are factual inaccuracies in the OIA report. I will be forwarding our detailed comments on the OIA 9 C:7 81 9 : p report in a separate nemorandum."

3- .

Chairman Palladino 2 DIA Response The above ED0 comment attempts to obfuscate the real issues by questianing OIA's understanding of NRC programs and suggesting that the public health and safety would not have been served if IE had conducted a detailed investigation in this and similar type cases.

First, the issue is whether IE conducted an adequate investigation of Mr. Applegate's original allegations, not whether 0IA understands the NRC's mission and priorities. An investigation is defined on page 4, Chapter 8 of the IE Inspector's Manual as follows:

"An investigation can be defined as an activity conducted as a result of an incident, accident, ~ reportable occurrence, allegatfors or complaint reported by a licensee or others which involves licensable materials or activities to gather, correlate and evaluate information indepth for the purpose of establishing the cause, nature, extent, cnd circumstances of a condition or an occurrence.

"An investigation differs from an inspection in that it is not a scheduled activity but is a response to an outside stimulus.

It focuses on a specific matter and examines it in detail.

The goal of an investigation is to obtain all pertinent information available regarding a specific subj.ect or event. Investigations are conducted to determine what nappened, to identify causes, to determine canoliance or noncanpliance, and to provide the infonnation necessary to evaluate the significance of the matter. In some instances the results of an investigation may identify the need for a change in NRC regulations or policy.

The tena~ investigation does not carry with it the implication of criminality, wrongdoing or dishonesty. A given investigation may, however, involve these matters." (Emphasis added.)

Clearly, IE Investigation 50-358/80-9 did not satisfy the above standards or generally accepted investigative standards of other Govermnent agencies. It should clearly be understood that DIA did not evaluate IE's investigation based on FBI or other criminal law enforcement investigative procedures and/or standards. Fundamentals basic to all investigations were simply not observed in this instance.

The investigative file contained no results of interview at all nor was there any detailed record of copies of the documentation reviewed.

Second, the ED0's position that the potential for further reduction of risk to the public would dictate that investigations of this

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Chaiman Palladino 3 type not be broadened-is without merit in this instance. In this case the IE investigation did not even review the weld data packages relative to the specific welds alleged to be defective, nor did the IE investigation pursue logical leads on the . issue of whether the CG&E QA lianager ardered the alteration of the flR which allowed the pipe spool pieces to be released for installation. DIA believes that the minimal additional resources required to adequately address these issues would have been more than justified by the potential benefit to the public health and safety.

Third, OIA believes that the ED0's statement "I have been informed there are factual inaccuracies in the OIA report" is not supported by the ED0's detailed comments.

Finally, over the past several years IE has conducted numerous investigations and inspections of the Zimmer plant. Despite this presence it is only recently that the dimension of the licensee's paperwork problem associated with the QA welding program in some areas has surfaced. A contributing factor to the delay in identifying this defect might have been that these inspections and investigations were not sufficiently comprehensive to identify this issue in a timely manner.

, EDO Comment (Second ED0 memorandum - Attachment 2)

" Enclosed are the OIE comments relative to the OIA investigative findings. I would like to specifically direct your attention to the enclosed weld chronologies. Clearly, these welds had been identified and placed in a corrective action system prior to Applegate's invol vement.

"I believe thE OIA report summary (page 2) best characterizes the safety issue.

'One of Applegate's main allegations was that defective welds in safety-related systems have been accepted,... By virtue of prior IE inspections..., it is clear that Region III was well aware of the chronic and long history of welding problems at Zimmer: specif,1cally, that unacceptable welds in safety-related systems had for all intents and purposes been accepted by both the contractor and, in some cases, the licensee.

. Based upon these inspections, Region III required the licensee to rereview radiographs and reports of all welds which had been accepted for turnover prior to operation; this review started in October 1979 and portions of this review are still being studied by Region III.'

"It appears to be irrelevant to debate whether or not the welds had been accepted; the pertinent fact is that the welds were in a system to obtain corrective action.

l

• . l Chairman Palladino 4 "I am confident that the aggregate of licensee and NRC actions would have resulted in adequate welds prior to the operation of this plant, irrespective of Applegate's involvement."

0IA Discussion Enclosure 1 to the second EL'O memorandum is Office of Inspection and Enforement Comments entitled " Replies to 01A Findings." This document lists seven 0IA findings and discusses each of these findings. Unfortun-ately, this IE document is not responsive to the four reasons listed by OIA as the justification for 01A's finding. Rather, it is a selection of seven portions from the summary section of the OIA report. Enclosure 2 to the same letter is Weld Chronologies and relates to the three welds in question.

The basis upon which IE attempts to dispute the "seven OIA findings" is based to a large degree on information which was not known to IE until after the OIA report was issued and after IE had conducted a reinvestigation of the facts. Nevertheless, the following is an 01A response to the seven conments.

IE REPLIES TO OIA Findings "1. OIA Finding OIA review of investigative files disclosed inadequate documentation.

Discussion i The OIA comment on documentation (page 2) refers to the RIII investigative file, rather than the investigation report i tsel f. They noted that no "results of interview" or copies of weld documentation reviewed were in the file. On page 13, it is pointed out that no identification key was generated for the investigative file. -

Neither NRC, IE, nor RIII procedures require a "results of interview" to be generated for each interview, and all interviews are not required to be portrayed in detail in an investigation report. Investigation reports should contain all pertinent infonnation, whether obtained through observations, records or interviews, concerning the matter investigated.

There is no need for retention of copies of all documentation obtained during an investigation. If a document appears to be relevant to the case, it is often reviewed onsite, and no copy is obtained. If a docunent appears central to an allegation,

Chairman Palladino 5 it is then copied, and may be made an attachment to the report, if warranted by the issue involved."

OIA Response See OIA response, page 2, paragraphs 3 and 4 (continued on page 3) of this menorandum.

"2. OIA Finding IE investigative report did not identify the dates on which l the welding rework was conducted on weld K-811. '

Discussion Although the IE investigation report did not identify the cate when weld K-811 was renoved (approximately January 16,1980),

the report did correctly identify that the weld had been removed as provided by the disposition of NR No. E-2138Rl.

Thus, the veld alleged to be improper was nonexistent, having been renoved eighty-two days prior to the investigation team's arrival at Zimmer. Determination of the date of rework was  ;

not necessary in our view."  ;

DIA Response The rework on weld K-811 was done in mid January 1980. This was after Applegate had been hired by CG&E - approximately mid December 1979 -

and after Applegate had brought information of potential weld defects in weld K-811 to the attention of CG&E officials - early January 1980.

Thus the question of exactly why and when weld K-811 was replaced should have been fully resol ved. Despite IE's review of NR No. E-2138R1, (this document indicated a cut out and replacement date between January 14, 1980, and January 22,1980), IE neither resolved the question nor reported this information in their investigative report.

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"3. DIA Finding The IE investigation report did not identify that a nonconformance report (NR) on weld K-811 had initially been closed with the notation " accept as is," and was later voided and reopened to order the weld cut out.

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Chaiman Palladino 6 Discussion The finding as stated is incorrect. The " accept as is" statement on the HR was conditional in that it only applied if a radiograph showed the veld to be acceptable. Apparently the OIA investigator misunderstood the flR."

OIA Response.

Weld K-811 was welded in January 1979 and accepted by Kaiser in January 1979 according to the Kaiser weld data sheet. Some 10 months later, October 1979, f1R No. E-2138 was generated by Kaiser noting that the ANI hold point had been missed and directed that the teld be radiographed and, if the radiograph were acceptable, the weld was to be accepted as is. The NR further categorized the problem as a " procedural" one. The IE investigation never reviewed (or even attempted to locate) this original version of NR No. E-2138; therefore the IE investigation failed to detemine that Kaiser had proposed accepting the weld without the approval / waiver of the ANI. More importantly the IE investigation relied on a revision of this NR, NR No. E-2138R1, which contained bogus infomation both as to the date of the seld, October 1977, and the date a decision was made to cut out the weld, October 1979.

"4. OIA Finding The investigation did not detemine that weld RH-42 had been cut out and replaced after initiation of the investigation.

Discussion The finding is correct. The investigation did, however, properly detemine that weld defects had been identified and corrective action was planned. The actual date of corrective action is not significant."

OIA Response OIA believes IE's failure to determine the fact that weld RH-42 was in fact cut out after the investigation was initiated is indicative of the shallowness of the investigation. IE's bottom line statement that "the NES level II radiographer found some discrepancies that have not been resolved, and the veld has not been given final acceptance" (IE Report at page 8) is a far cry from the true status of this weld.

Chairman Palladino 7 ,

"5. DIA Finding None of the welds alleged to have been deficient were inspected by the investigation team nor was all pertinent weld documentation reviewed.

Discussion The finding is correct but considered irrelevant. The investigators did not inspect the welds but did review the radiographs, which was the correct method of evaluation. Visual examination of the weld would not identify internal defects. The investigators did not review all weld documentation but did review the pertinent documentation to establish proper weld disposition."

.01A Response If a visual inspection had been conducted, IE would have discovered that weld RH-42 was non-existent and that weld CY 606 was covered by concrete -

despite its NES review status. These f. acts are hardly irrelevant.

"6. OIA Finding The IE investigators did not fully investigate or accurately report on the alteration of a noncomformance (NR) related to '

spool pieces containing defective welds. The IE report only identified an individual as a "CG&E official" vice "QA Manager,"

thus obscuring that this was the licensee's senior person responsible for the site QA program who ordered improper voiding ~of a NR.

Discussion Investigator Phillip indicates that the natter was discussed with his supervisor, and the pursuit of who directed the lining-out was seen as having little significance. This was because a separate NR had been opened, providing tracing of the nonconformance. Finally, neither 0IE nor 01A could substantiate the allegation."

OIA Response As a result of IE's investigation Region III cited CG&E - infraction -

for release of the pipe spools "...This release was achieved through unauthorized removal of the noted exceptions on the NR." (Iten a., para-graph 2 of the Notice of Violation, Appendix A to letter from Keppler (NRC) to Borgmann (CG&E) dated July 2, 1980.) IE also had received information l

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Chairman Palladino 0 l

i that the CG&E QA manager was the individual who directed this unauthorized I action. If the action in question was considered serious enough to warrant a citation against the licensee then how can it now be rationalized as "having little significance" with respect to identifying the individual who was responsible for this action. Furthermore, IE was unable to produce any results of interview of the parties involved. Significant information simply cannot be arbitrarily withheld from investigative reports.

"7. DIA Finding The IE report found Applegate's allegations on defective welds was "not substantiated" because welds had not been finally accepted. This is a question of semantics and not consistent with the facts.

Discussion The use of the term "not substantiated" was linked with the RIII view of the status of the c:ceptance of welds. RIII was, through previous inspection findings, well awara that nondestructive examination techniques had been found to be deficient. Based on the NRC findings and related concerns, a consultant had been hired by the licensee to review weld radiographs. That action negated any previous " acceptance" of plant weld radiography.

The previous inspection findings and status of the welds in 1

question are correctly stated in the IE report. As such, it should be clear that the licensee had not given final acceptance to the welds in question and a system was in place to assure that defective welds would be identified and corrected prior to final acceptance. As shown in the chronologies, decisions to grind out and replace two of the welds in question (WR-K-811 and RH-42) had been made prior to initiation of the RIII investigation."

OIA Response Applegate alleged that defective welds had been accepted - among them  ;

CY 606, RH-42 and K-811. CY 606 was accepted by Kaiser in August 1976 and again in June 1977. RH-42'was accepted by Kaiser in August 1976 and K-811 was accepted by Kaiser in January 1979. Furthermore, until 1979 acceptance and turnover of a weld by Kaiser, for all practical purposes, amounted to acceptance by CG&E.

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Chairman Palladino 9 Weld Chronologies (See Attachment 2)

OIA Response OIA fails to see the ED0's point in asterisking items in the weld chronology with the notation "significant information not in 0IA's chronol ogy. " If the point is that DIA's investigation was deficient /

incomplete because it also failed to document' the complete history and status of the welds in question then it should be pointed out that DIA's job was not to conduct a comprehensive reinvestigation but rather to evaluate the work done by IE. The additional field work done by IE to detennine the correct status and history of the welds in question is precisely the type of field work that should have been done by IE in their initial investigation. 01A's determination that the IE investigation failed to determine the correct status and history of several welds is

-valid, i.e., weld RH 42 was cut out in April 1980, weld K 811 was not welded on November 9,1977 but on January 29, 1979.

Attachments:

As stated.

cc: Conmission (4)

. W. Dircks V. Stello W

e t

,[, UNITED STATES J

1. % NUCLEAR REGULATORY COMMISSION

,.h^ 9 WASHINGTC N, D. C. 20555 EXHIBIT #2  ;

/

[ November 16, 1981 The Honorable Morris K. Udall Chainnan Subcommittee on Energy and the Environment Committee on Interior and Insular Affairs United States House of Representatives Washington, D. C. 20515

Dear Mr. Chairman:

You recently inquired about the adequacy of the investigation by our Office of Inspection and Enforcement (0IE) into quality assurance / quality control problems at the William H. Zinmer Nuclear Power Station. Thc OIE investigative effort at Zimmer is not yet complete. However, a recent report of our Office of Inspector and Auditor (0IA) was critical of an earlier 0IE investigation. My own inquiry into this matter convinces me that, while there are inadequacies in the initial 0IE investigation of Zimmer and in its investigatory program generally, the findings presented to the Commission to date do not indicate that these problems have contributed to an adverse public health and safety situ-ation at the plant. The pertinent documents are enclosed.

Early last year, 0IE investigated and reported on allegations of impro-prieties in quality assurance / quality control activities at the Zimmer plant. 01A was asked to evaluate the adequacy of that OIE investigation.

In its report of August 7,1981, 0IA concluded that the OIE investigat1on

. was unsatisfactory. DIA's fundamental criticisms were that OIE failed to adequately document its investigation and failed to follow through on significant leads. I requested interactive comments from OIA and OIE and, thereaf ter, met with the main participants on October 9,1981. My conclusions are as follows:

1. I agree with OIA's finding that OIE's original investigation should have been more comprehensive. The Commission is considering the necessary internal reforms.

I believe we need criteria to determine the instances which require such full-scale investigations. The NRC does not have the resources to conduct in-depth investigations in all instances, and such in-depth investigations are not called for by the circumstances of every case. However, when a full investigation is called for, as for example in the case of possible criminal conduct, NRC needs to conduct that investigation consistent with fundamental standards

6 O that govern investigations by any agency. I have requested the Executive Director for Operations to develop guidelines for deter-mining when to conduct investigations, and to establish more formal investigative standards and procedures for such investigations .

2.

Power Plant to protect public health and safety.I am investigation is nearly complete. A follow-up OIE available shortly. 0IE's final report should be In addition, I note that the licensee has .

problems that have been found at the Zimmer plant.rece In sumary, reveal shortcomings a generic problem. in the earlier 0IE investigation of Zimmer In addition, 0IE will shortly release its final report on the ZimmerSt plant.

The Comission will look closely at that, report. Finally, the licensee is committed to a verification program to provide further assurances to public health and safety.

sions set forth in this letter.The Comissioners have been informed and If you me.

contact have further questions on this matter, please do not hesitate to Sincerely, i, ,

s QW * ' M'W$

Nunzio d. Pa ladino Enclo:,ures: ,

1.

Memo fm James J. Cummings, IA, to Commission dtd August 7,1981 trans-mitting OIA report: " Adequacy of IE Investigation 50-358/80-9 at the William H. Zimmer Nuclear Power Station" 2.

Memo fm William J. Dircks, EDO, to the Cornission dtd September 17, 1981 3.

Memo fm William J. Dircks, EDO, to the Commission dtd September 17, 1981 4.

Memo fm James J. Cummings, IA, to the Commission dtd October 8,1981 cc: Representative Manuel Lujan c:9 :)

E

[ \[ Io UNITED SThTES

[ N yJ .,., c j';g NUCLEAR REGULATORY COMMISSION

/ C WASHINGTON. D. C. 20Z5 0 5

%...' .. ..M k ^/ / $ NOV 24 1981 4

Occket No. 50-358 Construction Permit No. CPPR-88 EA 82-12 Cincinnati Gas and Electric Ccmpany

• ATIN: Mr. W. H. Dickhoner President 139 East 4th Street Cincinnati, OH 45201 Gentlemen:

This refers to the investigation conducted by Region III during tne period January 12 to October 9, 1981, of constructiun activities at the Wm. 4. Zimmer l

Naciear Fower Station. The details of that investigation are aescribed in Reg)ionIIIinvestigationreportNc. 50-358/81-13. The violations described ,

in Appendix A tc this letter are cross-referenced to that report in accordance with Apoendix B to this letter.

The investigation was initiated as a result of allegations made to the NRC by a Quality Control Inspector wno formerly worked at the Zimmer site and by the Government Accountaoiiity Droject of the Institute for Policy Studias (a non geverrental'sgency) on betsif of f4. Thomas Appiegat?. The results of the continuing investigation reveal a widtspread braakdown of your ::uality assurance program as evidenced by numerous examples of nonccmpliance witn twelve of the eighteen different criteria for a cuality assurance program as set forth in 10 CFR 50, Appendix B. The cause of the breakdcan was your failure to exercise adecuate oversight and control of your principal contractors to whom you had delegated the work of establishing and executing quality assurance programs. You thereby failed to fulfill your vital respcnsibility as described in Criterion I of 10 CFR 50, Appendix 2, to assure the execution of a quality assurance program.- The potential safety concern of your quality assurance program breakcown was discussed during an enforcement conference at our Region III cffice in Glen Ellyn, Illinois, on August 5, 1981, attended by you and members of your staff and tne NRC Region III staff.

Two of tne violations (Itens A and B of Appendix A of this letter) are of particular concern to us because of the very essential role they play in the execution of an effective cuality assurance program. These two violations relate to false records and to harassment / intimidation of quality contrcl inspectcr!.

With regard to false records, the examples we identified raise serious questions

'as to the accuracy of quality records at the site. Our concern in this area served as a major factor in requiring the concuct of a confirmation prograrr to be completed by you to furnish evidence of plant quality.

CERTIFIED MAIL -

RE10MTTECEleT REOUESTE0 1

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Cincinnati Gas and Electric Company Because the NRC inspection program is a sampling program, the importance of.

accurate quality records cannot be overemphasized. Accordingly, we have addressed this matter as a separate violation and assessed a separate civil penalty for it.

With regard to harassment /intimidatiun of quality control inspectors, we have also addressed tais matter as a separate violation and assessed a separate civil penalty for it. We' determined that your construction contractor took some action to stop the water dousing of quality control inspectors; however, those actions did not stop the activity. Harassment / intimidation of quality control inspectors is clearly a barrier to effective implementation of a quality assurance prcgram and results in loss of the organizational independence described in Criterion I of 10 CFR 50, Appendix B. The importance of this matter is reflected in the recent amendment (Public Law 96-295, June 30,1980) to the Atomic Energy Act of 1954, which added Section 235 relating to protection of nuclear inspectors such as your quality control inspectors.

The impact of the identified quality assurance deficiencies on the actual construction has yet to be determined. . Limited independent measurements were performed by the NRC in selected areas of concern in an attempt to characterize the actual safety significance of these deficiencies. Although a few problems requiring corrective action were identified (i.e. , four unacceptably installed pipe hangers), the majority of the NRC independent measurements did not dis-close hardware problems. However, recognizing that significant construction deficiencies could have resulted from the cuality assurance problems identified during this investigation, the NRC has required the establishment of a compre-hensive quality confirmation program to determine the quality of plant systems important to nuclear safety. The NRC will confirm the adequacy of the program and may make additional independent verifications. Deficiencies identified by these programs will require resolution prior to issuance of an Operating License.

Notwithstanding the fact that serious construction deficiencies have not been identified, in order to emphasize the need for licensees to have complete and accurate records, to maintain a work atmosphere where quality assurance personnel are not harassed or intimidated, and to assure implementation of an effective quality assurance program which identifies and corrects construction deficiencies, we propese to impose civil penalties in the cumulative amount of Two Hundred Thousand Dollars for the matters in the Natice of Violation. We expect that this penalty will result in an adequate deterrent against future similar violations by you and other licensees of plants under construction.

Some of the examples in the Notice of Violation occurred subsequent to the issuance of the revised enforcement policy and some prior to that time. In arriving at the amount of the proposed civil penalties we have exercised dis-cretion, considered changes in the enforcement policy and considered the amount of the civil penalties that have been issued to licensees of other plants under construction as well as the number of examples found of each violation and when they occurred. We have for convenience and clarity categorized the items in the Notice of Violation at'the Severity Levels described in accordance with the Interim Enforcement Policy published in the Federal Register, 45 FR 66754 (October 7, 1980).

• - . . e Cincinnati Gas and Electric Company The results of this investigation and our review of your 10 CFR 50, Appendix B, noncompliance history reveal an additional matter which is of significant concern to us. This matter concerns inadequate corrective actions. The results of our normal inspection program for the construction and testing of Zimmer indicate you were found in noncompliance forty-fnur times since December 1979 with thirteen of the eighteen cifferent criteria of Appendix B to 10 CFR 50.

Duri-ng our Systematic Assessment of Licensee Performance review on December 16, 1980, we expressed concern with your relatively poor performance in this area.

This poor history of compliance with 10 CFR 50, Appendix B, when considered with the recer.t findings of the investigation indicates that your corrective actions only addressed individual problems and not underlying programmatic causal factors.

Consequently, we request that you review your history of noncompliance with 10 CFR 50, Appendix B. for the past two years and in your response to this letter provide those steps you have taken to address and correct tne underlying programmatic causal factors related to the noncompliances.

You are required to respond to the Notice of Violation and in preparing your response you should follow the instructions in Appendix A. You should give particular attention to those actions designed to assure continuing compliance with NRC requirements. Your written reply to this letter and the results of future inspections will be considered in determining whether further enforce-ment action is appropriate.

In accosrdance with Section 2.790 of the NRC's " Rules er Practice," Part 2, Title 10, Code of Federal Regulations, a copy of this letter and the enclosure will be placEd in the NRC Public Document Room.

The responses directed by this letter and the enclosed Appendix A are not subject to the clearance procedures of the Office of Management and Budget as required by the Paperwork Reduction Act of 1980, PL 96-511.

Sincerely, p wf 4 Richard C. oung,prector OfficeofdnspectionandEnforcement J

Enclosures:

1. Appendix A - Notice of Violation and Proposed Imposition of Civil Penalties

2. Appendix B - Cross

References:

Noncompliances to Report Details cc:

See next page I

Cincinnati Gas and Electric Company cc w/ encl:

E. A. Borgmann, Senior Vice President, Engineering Services and Electric Production J. R. Schott, Plant Superintendent DMB/Occument Contro! Desk (RIOS)

Resident inspector, RIII Harold W. Kchn, Power Siting Commission Citizens Against a' Radioactive Environment Helen W. Evans, State of Ohio Thomas Applegate Louis Clark, Director, GAP Iastitute for Policy Studies

^

Appendix A NOTICE OF VIOLATION AND r

PROPOSED IMPOSITION OF CIVIL PENALTIES Cincinnati Gas and Electric Company Docket No. 50-358 Wm. H. Zimmer Nuclear Power Station Construction Permit No. CPPR-88 EA 82-12 As a result of the investigation conducted at the.Wm. H. limmer Nuclear Power Station in Moscow, Ohio, on January 12 - October 9, 1981, tne violations listea below with multiple examples were identified. The numerous examples of the violations demonstrate your failure to exercise ade'quate oversight and control of your principal contractors, to whom you had delegated the work of estab-lishing and executing cuality assurance programs, and thereby fulfill your responsibility of assuring the effective execution of a quality assurance program. Your failure manifested itself in a widespread breakdown in the implementation of your quality assurance program and caused the NRC to require an extensive quality conf.irmation program to provide confidence that safety-related structures, systems, and compo6ents will perform satisfactorily'in service. Included in the breakdown were findings we consider to be part.icu- -

larly disturbing relating to false records and harassment and intimidatibn of quality control inspectors. >

Becauss of the significance of not having complete and accurate r6 cords, not maintaining a work atmosphere where qual.ity assurance personnel are not harassed or intimidated, and not assuring' implementation of an effective quality assurance program which identifi,es and corrects construction defi-ciencies, and in accordance with the Interim Enforcement Policy, 45 FR 66754 (October 7, 1980), the Nuclear Regulatory Commission proposes to impose civil penalties pursuant to Section 234 of the Atomic Energy Act of 1954,'as amended,

("Act"), 42 U.S.C. 2282, and 10 CFR 2.205 in the amounts set forth/for the violations listed below. j, ,r .

A, ~

10CFR50,AppendixB,CriterionXVIIstate's,inpart,"Sufficie(trecords shall be maintair.ed to furnish evidence of activities affecting' quality." is Contrarytotheabove,recordswereidentifiedthatdidnot-ffnish evidence of activities affecting quality in that they were false. '

Examples of false records are as follows: '

1. Isometric drawings, weld inspection records,.or other record,s did 2 not furnish evidence of the actual piping components ~ installed in the 11. pipelines in the diesel generator cooling' water, starting air and fuel oil systems, in that the heat numbers recorded on-the' '

N drawings or weld inspection records did not match the heat numbers ~ ,

or color coding marked on the respective components. The11 pipe-/

lines were: ~

f'

/

{'- s ,/-

6 <

p.

E

/

/r .

. -- -a-.

, f) i

4 I

Appendix A (Continued) )

l 10G28AB1 1DGCSAA3/4 1DG28AE1 1DG27AB1 1DGF6AA1/2 1DG25AC2 1DG01AB1 10GC5BA3/4 1DG11AA3 1DGF2AA1/2 1DGF6BA1/2

2. Tne Kaiser Noncontormance Reporting Loo did not reflect all reports initiated.as eviaer. cec cy the following:

a. The original entry for a recort (CN-4309) initiated by a QC Inspector on January 7.1981, relating to deficient weld fit-up was ooiiteratec cy tne use of wnite correction fluia and there was no otner recora of this report in the Noncompliance Report (NR) system.

b. The original entry for a recort (CM-5412) initiated by a CC Inspector on February 3, 1981, and relating to violation of a hold tag was obliterated by the use of white correction fluid and there was no other record of this report in the NR system.

c. A report (NRC-0001) initiated by a QC Inspector on February 11, 1981, relating to excessive weld weave was not assigned a number and there was no other record of this report in the NR systcn.

3.

Written statements as to planned actions which were made to justify voiding reports E-1661 (voiced 11/11/5C), E-1052 (voided 11/11/80),

andE-2iG6(voided 6/30/80)werqnotl+asen./HvoltitDl2q WWcoJF0ftf I/F//ANA

4. Written statements relating to the availability of records which were made to justify voiding reports E-1777 (voided 4/30/79) and

. E-5108 (voided 6/20/80) were false.

5.

Reports CN-5476, CN-5477, and CN-5479 were kncwingly improperly voided (2/27/81) and copies deleted from the NR system at the direction of the Kaiser QA Manager.

This is a Severity Level III violation (Supplement II).

, (Civil Pena,1ty - $50,000).

B.

10 CFR 50, Appendix B, Criterion I states, in part, "The persons. . .

performing quality assurance functions shall have suf ficient... organ-izations) freedom to identify quality problems. . . including suf ficient independence from cost and schedule."

/

The Wm. H. Zimmer QA Manual, Section 1.2.3 describes QC Inspectors as members of QAD (Quality Assurance Division) and Section 1.2.4 states; in part, "QAD,has been assigned sufficient... organizational

,freedog

/e ,

to Y

identify quality problems..."

T 1

?

l t.

j -

y >

/,

n '

s.

V- ,

Appendix A (Continued)  ;

3-Contrary to the above> QC Inspectors did not have sufficient freedom to identify quality problems and were not sufficiently independent from cost and schedule. The results of interviews indicate that some QC Inspectors were: (a) harassed by construction workers and super-visors; (b) not always supported by'QC management; and (c) intimidated.

The following are examples of insufficient freedom of QC Inspectors, including insufficient freedom from cost and schedule, which occurred b between Summer 1978 and March 11, 1981i i

, , \h- FiveQCInspectorsinterviewedexecuteddignedswornstatements wherein they claimed they were coused wi,tN water (while engaged

' in the performance of inspection duties)iby construction personnel.

Two other QC Inspectors made similar statements.

2. AQCInspectionshervisorclaimedthatover,hisobjections qualified QC Inspectors who were doing thorough jobs were re-assigned by QC marvnjement because of complaints by construction personnel. '

3. Two QC InspecCors" executed signed sworn statements wherein they claimed they had been harassed by being searched for alcohol by security personnel at the request of construction supervisory personnel. One other QC Inspector made a similar statement.

4. A QC; Inspector executed a signed sworn statement wherein he claimed the QA Manager hcd threatened to fire him after con-struction personnel ccmolained he had us'ad a magnifying glass to visually inspect a weld when in fact he was using a mirror and either device was an acceptable tool.

, 5. A QC Inspector executed a signed sworn statement wherein he claiined he was struck by a stream of water from a fire extin-guisher while performing an inspection.

/

6. A QC Inspector executed a signed sworn statement wherein he claimed he was threatened with bodily harm by a construction

~

s person i.f he did not pass a weld.

7. .

, A Lead QC In,spector, executed a signed sworn statement wherein he s claimed: ,

< - a. He was accused by the QA Manager for holding up a concrete 4 pour when in fact the delay was caused by the concrete trucks beini.,lats.

b. Construction' management frequently approached QC Inspectors

+

and challenged,their inspection findings and questioned their judgement.

y

s.

1%- s

,,, [h r4*-  % 8

[- . t

,%' "'s #

i Appendix A.(Continued) i

c. The QA Manager said things like, "our-job here is to accept, not reject, and we are here to get this plant built."

8. A Lead QC Inspector executed a signed sworn statement wherein he claimed he was relieved of his inspection duties because.he con-t tinued to submit legitimate nonconformance reports over construc-

-tion management objections for deficient welds on pipe support hangers. He also stated that QA management had previously told QC Inspectors to not write anything to make Kaiser look bad.

9. A QC Inspector executed a signed sworn statement wherein he claimed he was told by QA management to accept inspected items that were unacceptable.

This is a Severity Level III violation (Supplement II).

(Civil Penalty .550,000).

C. 10 CFR 50, Appendix B, Criterion II requires holders of construction permits for nuclear power plants to document, by written policies, pro-cedures, or instructions, a quality assurance program which complies with the requirements of Appendix B for all activities affecting the quality of safety-related structures, systems, and components and to implement that program in accordance with those documents.

Contrary to the above, Cincinnati Gas and Electric Company and its contractors did not adequately document and implement a quality assurance program to comply with the requirements of Appendix B as evidenced by the following examples:

1.

10 CFR 50, Appendix B, Criterion XV states, in part, "Noncon-forming items shall be reviewed and accepted, rejected, repaired or reworked in accordance with documented procedures."

Kaiser Procedure QACMI G-4, " Nonconforming Material Control,"

provides detailed instructions for the review and disposition of reports (Nonconformance Reports) of nonconforming items.

Contrary to the provisions of QACMI G-4, the sample of NRs reviewed indicate significant deficiencies with the nonconformance reporting system i'n the areas of voiding of reports, not entering reports into the system, improper dispositioning of reports, and incomplete report L.

l files. The deficiencies identified were as follows:

f

a. Two NRs related to documentation deficiencies had been impro-perly voided in _ that records used to justify the voiding did not provide evidence necessary for proper voiding. (NR-E-2233 l voided 1/24/80, NR-E-2237 voided 12/19/79) i f'

,__ m *,- -$"

Appendix A (Continued) b. One NR related to nondestructive examination of a T quencher-weld had been erroneously closed (not voided) by adminis-trative error. (NR-E-2996 closed 3/17/81)

c. Two NRs related to nondestructive examinations of service water system welds had been incorrec'ly dispositioned (nct voided).

(f4R-E-2836 closed 11/13/80, NR-E-2596 closed 4/16/80)

d. Eive reports had been voided by personnel other than the QA Manager. (CN-5122 voided 1/2/81. CN-5476 voided 2/27/81, CN-5477 voided 2/27/81, CN-5479 voided 2/27/81, CN-4369 voided 12/02/80)

e. In one case during revisions of the report some nonconforming items were removed from a NR without adequate justification.

(NR-E-2466 voided 6/30/80)

f. The following nine reports had not been issued NR numbers and/or copies of the reports had not been retained in the Site Document Center:

CN-4389 CN-4957 CN-4930 CN-4958 CN-4931 CN-4959 CN-4955 CN-5122 CN-495G

2. 10 CER 50, Appendix B, Criterion XVI states, in part, " Measures shall be established to assure that conditions adverse to quality, such as... deviations... and nonconformance are promptly identified and corrected."

The Wm. H. Zimmer QA Manual, Section 15.2.2 states, "HJK is responsible for identifying and reporting nonconformances in receiving inspection, construction, or testing activities which are delegated to HJK Quality Assurance Procedures to assure that nonconforming items are conspicuously marked to prevent their inadvertent use or installation."

AWS Code D1.1-1972, Section 3 and 8.1.5 define requirements for weld quality and address slag, weld profiles, blowholes, porosity, and undercut.

AISC, Seventh Edition (1969), Page 4.113 requires 1/2 inch minimum radius for re-entrant corners.

' Contrary to the above, the following nonconforming conditions were not identified and corrected:

l a. Based on an inspection of the 25 structural hanger support

! beams described in Item C.4 below:

l

4 App:ndix A (Continued) (1) - Gyeral elds on nine beams did not conform with AWS-tT1-1*T9/2 requirements in that they contained unaccept-able slag, weld profiles, blowholes, porosity, and/or undercut.

(2) Five beams did not conform with AISC reauirements in that the re-entrant corners were notched, creating potential stress risers, instead of being rounded with required radii.

(3) Four beams, two of which had unacceptable welds as described in Item C.2.a.(1) above, did not conform with design documents in that they were not specified on any design document.

b. Based on an inspection of about 100 cable tray hangers in the Cable Spreading Room, four did not conform with AWS D1.1 1972 requirements in that the welds contained unaccept-able slag, weld profiles, blowholes, porosity, and/or undercut.

3. 10 CFR 50, Appendix B, Criterion XVI states, in part, " Measures shall be established to assure that conditions adverse to quality, such as... deviations. . .and nonconformances are promptly identified and corrected. In the case of significant conditions adverse to quality, the measures shall assure that the cause of the condition is determined and corrective action taken to preclude repetition."

The Wm. H. Zimmer QA Manual, Section 16.5 states, in part,

" Vendors, contractors, and subcontractors are required to determine

, cause and corrective action to prevent recurrence of errors which could result in significant conditions adverse to quality."

ASME Code, Section III-1971 Edition, Article NB-3661.5(b) states, in part, ".. .a gap of approximately 1/16 in, shall be provided between the end of the pipe and the bottom of the socket before welding."

ASME Code, Section III-1971 Edition , Winter 1972 Addenda, Articles NA-4130(a), NA-4420, NA-4510, NA-4442.1, NB-4122, NA-4451, NB-4230, and NB-3661.5(b) require, in part, in process inspections for pipe fitup, weld procedure, weld filler metal traceability, and welder qualifications...

Contrary to the above, the NRC inspectors identified the following nonconforming conditions that had not been corrected and action had not been taken to preclude their repetition:

M'

a Appendix A (Continued) a. Licensee records indicate that the socket engagement (fitup) for more than 439 socket welds was not verified in accordance with ASME Code, Section III-1971 Edition, Article NB-3661.5(b) and the condition was not corrected in that the corrective action was not commensurate with the ASME Code. The welds date back to 1979.

b. Licensee records indicate that the in process inspections for more than 22 welds in the diesel generator cooling water, starting air, and fuel oil piping systens were not performed ,

l by Kaiser in accordance with ASME Code Section III-1971 i Edition, Article NB-3661.5(b), et al. , and the condition was not corrected in that the corrective action was not commensurate with the ASME Code. The welds date back to 1978.

c. Five licensee QA audits (audit performed 8/8-9/74 - no number, and Audit Nos. 78/07, 78/09, 78/10, 80/04) of Sargent & Lundy identified repetitive problems concerning S&L not performing certain cesign calculations, reviews, and verifications and action was not taken to preclude repetition.

4. 10 CFR 50, Appendix B, Criterion VIII states, in part, " Measures shall be established for the identification and control of materials... These measures shall assure that identification of the item is maintained..."

The Wm. H. Zimmer QA Manual, Section 8.2 states, in part, "H. J. Kaiser Company procedures provide that within the H. J. Kaiser Company jurisdiction the identification of items will be maintained by the method specified on the drawings, such as heat nucher, part number, serial number, or other appropriate means. This identification may be on the item or on records traceable to the item. The identification is maintained through-out fabrication, erection, and installation. The identification is maintained and usable in the operation and maintenance program."

Contrary to the above, based on an inspectic. by NRC inspectors in March 1981 of approximately 25 structural hanger support beams located in the Blue Switchgear Room and the Cable Spreading Room, the identification of the material in nine of those beams was not maintained to enable verification of quality.

5. 10 CFR 50, Appendix B, Criterion III states, in part, " Measures shall be established to assure that applicable regulatory require-ments and the design basis...are translated into... drawings..."

The Wm. H. Zimmer FSAR, Section 8, provides the design basis for electrical cable separation that includes the following:

Appendix A (Continued) 8-Associated cables (Green / White, Blue / White, and Yellow / White) from more than one Division cannot be routed in the same raceway. (FSAR Paragraph 8.3.1.13.2)

Vertical separation of three feet or more must be maintained between cables from different Divisions. (FSAR Paragraph 8.3.1.11.2.1.d)

Instrument (low-level signal) cables cannot be routed in the same raceway with power and control cables. (FSAR Paragraph 8.3.1.12.1.3)

The Wm. H. Zimmer QA Manual, Section 3.3.2. states, " Composite...

drawings are prepared, translating the design concepts into layouts of structures, systems, and components necessary for the construction of the plant."

Contrary to the above, as of March 1981, the FSAR design basis for electrical cable separation had not been translated into drawings and this resulted in the following cable installation deficiencies in the Cable Spreading Room:

a.

Associated Cable (Yellow / White) A Pen R for Division 1 was routed in the same raceway (two-inch conduit and Class IE Sleeve No. 79) as Associated Cable (Blue / White)_No. RE058_for Divisien 2. Also, Associated Cable No. RE053 was routed so that in placas there was only a vertical separation of fcur inches between Division 2. it and cableQBlue Trav No.MC for b.

Instrument Cable (Green) No. WS714 and others for Division 3 were routed in the same raceway (Tray No. 46388) as Asso-ciated Control Cables (Yellow / White and Blue / White) for Divisions 1 and 2. This deficiency was due, in part, to a design which specified the installation of a Green Instrument Tray {No. anNQ inside a White Control Tray (No. 46388).

c. Many Associated Cables from all three Divisions were routed in the same raceway IWhito Tray No. .1080K1 including Cable g lue/Ubi 4 No. TI192, Cable (Yellow / White _) No. RR781, and e

Cable (Grenn/ Whit d No. TI816.

d.

Associated Cables (Yel__ low / White) No. TI942 and 30. TI943 for Division 1 were routTein the same ratw a7 (White Tray Riser 27 No. RK46_27) as Associated Cables (Blue /Wnite) No. TI808 and Tio. II760 for Division 2. ~

e. Many Associated _ Cables _(Yellow / White) for Division 1 were routed in the same raceway (White Tray Riser No. 4139) as Associated Cables (Blue /Whitej for Division 2.

_ _ . . ._ _ m. _ .- -e, -

. ~

Appendix A (Continued) 6. 10 CFR 50, Appendix B, Criterion III states, in part, " Design control measures shall be applied to...the delineation of acceptance criteria for inspections and tests."

The Wm. H. Zimmer QA Manual, Section 3.13.1 states, in part,

" Design control measures also apply to delineation of acceptable criteria for inspections and tests."

Weld acceptance criteria are required by the ASME Code, Section III-1971 Edition and'the AWS 01.1-1972 Code.

Contrary to the above:

a. The weld acceptance criteria used by H. J. Kaiser Company from July 1980 to January 1981 were not applied to weld inspections during that period in that the weld acceptance criteria for such items as the drywell support steel were deleted.

b. The acceptance criteria for Held 55H (isometric drawing PSK-1WS-31) performed on Service Water System Line No.

1WS17A18 by H. J. Kaiser Company in November 1979 were not applied in that they were designated as not applicable.

7. 10 CFR 50, Appendix B, Criterion XI states, in part, " Test results shall be evaluated to assure that test requirements have been satisfied."

The Wm. H. Zimmer QA Manual, Section 11.1 states, in part, " Test programs to assure that essential components, systems, and struc-tures will perform satisfactorily in service are planned and performed in_accordance with written procedures and instructions at vendor shops and at the construction site."

ASME Section III-1971 Edition, Winter 1972 Addenda, Appendix IX, Paragraph IX-3334.4 states, in part, "The shim thickness shall be selected so that the total thickness being radiographed under the penetrameter is the same as the total weld thickness..."

M. W. Kellogg Co. (pipe manufacturer and agency performing the

! prefabricated pipe weld radiography in question) Radiographic Procedure No. ES-414, dated September 26, 1972, Paragraph 4.1.8,

! states, "Wherever required, shims shall be used to produce a total thickness under the penetrameter equal to the nominal thickness of the base metal plus the height of the crown or l reinforcement."

Contrary to the above, the licensee's review of 187 radiographs did not assure that test requirements were satisfied in that the licensee failed to detect that the penetrameter shimming was insufficient to satisfy the requirements of M. W. Kellogg Procedure

' e Appendix A (Continued)

This deficiency was identified during No. ES-414 or the ASME Code.

the NRC review of approximately 800 radiographs involving 206 pre-fabricated pipe welds in such systems as main steam, feedwater, and diesel generator support systems.

8. 10 CFR 50, Appendix B, Criterion III states, in part, "These measures [ design control] shall include provisions to assure.

that appropriate quality standards are specified and included in design documents and that deviations from such standards are controlled...The design control measures shall provide for verifying or checking the adequacy of design."

The Wm. H. Zimmer QA Manual, Section 3.4 states, in part, " Design reviews are conducted to assure that the appropriate cuality standards are specified and included in design documents."

The Wm. H. Zimmer QA Manual, Section 3.6 states, " Measures are established to assure that any deviations from the applicable standards are controlled."

i The Wm. H. Zimmer QA Manual, Section 3.11.2 states, in part,

" At S&L, design verification reviews are performed. . . ."

The Wm. H. Zimmer ESAR Section 8.3.3.1.1 states that cable ampacity An additional limita-is based on IPCEA Publication No. P-46-426.

tion on cable ampacity as stated in Section 8.3.3.1.3 is that "the summation of the cross-sectional areas of the cables shall not exceed 50% of the tray usable cross-sectional area or two layers ~

of cables, whichever is larger, but not to exceed 60% of tne cross-sectional area in any case."

AWS Dl.1-1972 Code, Section 3.6.4, states, "For building and tubular structures, undercut shall be no more than 0.01 inch deep when its direction is transverse to primary tensile stress in-the part that is undercut, nor more than 1/32 inch for all other situations."

Contrary to the above:

a. As of. March 1981, design control measures had not been established to assure that deviations from design conditions (quality standards) identified by Sargent & Lundy engineers were controlled. For example, Sargent & Lundy noted on a 27, 1979, that the desig7 calculation sheet dated December thermal loading for two power cab _les (VC016 and VC073) in Yellow Tray No. 1057A would allow the cables to be thermally overloaded and no program existed to control those design  ;

deviations.

i I

0 5

9

. Appendix A (Continued) b. As of March 1981, destgn control measures had not been established by Sargent & Lundy to provide for verifying or checking the adequacy of the design for the thermal loading of power cable sleeves and the physical weight loading of cable trays.

c. As of March 1981, the cable ampacity design by Sargent &

Lundy was not based on IPCEA P-46-426 and the FSAR limit on cross sectional area.

d. As of March 1981, the design allowable undercut on cable tray hangu welds was not based on AWS D1.1-1972 Code (appro-priate quality standard). The design undercut was instead based on Sargent & Lundy Specification H-2713, Supplement 7, Sargent & Lundy Standard EB-117, and H. J. Kaiser Procedure SPPM No. 4.6, " Visual Examination," Revision 8, Paragraph 5.2.9, allowed up to 1/16 inch undercut.

9. 10 CFR 50, Appendix B, Criterion X states, in part, "A program -

for inspection of activities affecting quality shall be estab-lished and executed by or for the organization performing the

• activity to verify conformance with the documented instructions, procedures, and drawings for accomplishing the activity."

The Wm. H. Zimmer QA Manual, Section 10.1.2 states, in part,

" Inspections are performed in accordance with written procedures which include requirements for check lists and other appropriate documentation of the inspections and tests performed."

AWS D1.1-1972 Code, Section 3.10.1, requires work to be completed and accepted before painting.

Contrary to the above:

a. As of March 1981, a QC inspection program had not been estab-lished to require verification of separation of electrical cables routed from the Cable Spreading Room to the Control Room. An example of a nonconforming condition that should have been identified by such a program was Blue Cables RIl03 and CM111 that had been routed into Tray Riser (Green)

No. M , which extended from Tray (Blue) No. 2077A in the Cable Spreading Room to the Control Room.

b. The programs established for in process and final inspections of welds on 180 cable tray hangers located in the Cable Spreading Room were not executed as required in the AWS 01.1-1972 Code. Specifically, the final weld inspections were made after the welds were painted (Galvanox).

i s

Appendix A (Continu:d) -I12 -

10. 10 CFR 50, Appendix B, Criterion V states, in part, " 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, procedures, or drawings."

The Wm. H. Zimmer QA Manual, Section 5.1 states, " Construction, fabrication, and manufacturing activities which affect the quality of the facility are accomplished in accordance with written instructio'ns, procedures, and drawings which prescribe acceptable methods of carrying out those activities."

The Wm. H. Zimmer QA Manual, Section 3.12 states, in part, " Design changes... including field changes, are subject to design change control measures commensurate with those applied to the original design."

Contrary to the above:

a. Kaiser Procedure QACMI G-14, " Surveillance Reports," (SR) was not appropriate to the circumstances in that it allowed in process nonconformances which constitute field changes to be dispositioned within 30 days without being subjected to design control measures commensurate with those applied to the original design. Examples of nonconformances so dispositioned were identified in SRs F-2899, F-2903, and

,F-2914

b. Kaiser Procedure QACMI G-14 was not followed in that SRs F-290ji, F_-3070; F-3071, F-307,2, E-307.3, F-3074, E-3075.

'_F-3076, E-3083 and F-7019 were not dispositioned within 30 days and were not transferred to Nonconformance Reports as required by Paragraph 5 of QACMI G-14.

11. 10 CFR 50, Appendix B, Criterion VII states, in part, "The effectiveness of the control of quality by contractors and subcontractors shall be assessed by the applicant or designee...."

The Wm. H. Zimmer QA Manual, Section 7.3.1 states, in part, "As  ;

part of the vendor selection process, S&L makes an independent evaluation of the bidders' QA programs as a part of their total bid evaluation."

Contrary to the above, as of March 1981, neither the licensee nor designee (Sargent & Lundy) had assessed the effectiveness of the control of quality by vendors who had supplied structurSl beams. Specifically, evaluations of the vendor (LI.S. Steel

, Supply,2BI__ Stool Fxchq.n.ge, n and frank Adams Company) quality assurance programs for control of mill cert.ifications and structural beams were not performed.

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. 1 Appendix A (Continued) 12. 10 CFR 50, Appendix B, Criterion XVII states, in part, " Sufficient records shall be maintained to furnish evidence of activities affecting quality. The records shall include... monitoring of work performance, and. . . include closely-related data such as qualifications of personnel, procedures, and equipment."

The Wm. H. Zimmer QA Manual, Section 17.1.4 states, in part, "Documentatien of all performance surveillance includes personnel identification and qualification, procedure, type observation, date of performance, person or organization monitored, results and corrective action if required."

Contrary ts the above, the Bristol Steel and Iron Works Quality Control Steel Erection Report, which was a generic form for monitoring in process steel erection, did not identify closely related data such as weld procedure numbers, types of welding material, welder identification, and specific welds inspected.

13. 10 CFR 50, Appendix B, Criterion XVIII states, in part, "A com-prehensive system of planned and periodic audits shall be carried out to verify compliance with all aspects of the quality assurance program and to determine the effectiveness of the program."

The Wm. H. Zimmer QA Manual, Section 18.1 states, in part, "QA Division conducts a comprehensive system of planned and periodic audits of S&L, HJK...to verify compliance with all aspects of the quality assurance program."

Contrary to the above, during the past 9 years the licensee's QA Division did not perform an audit of the Sargent & Lundy nonconformance program.

This is a Severity Level II violation (Supplement II).

(Civil Penalty - $100,000).

Pursuant to the provisicns of 10 CFR 2.201, Cincinnati Gas and Electric Company is hereby required to submit to this office within 30 days of the date of this Notice a written statement or explanation, including for each alleged violation: (1) admission or denial; (2) the reasons for the vio-lation if admitted; (3) the corrective steps which have been taken and the results achieved; (4) the corrective steps which will be taken to avoid further violations; and (5) the date when full compliance will be achieved.

Any statement or explanation may incorporate by specific reference (e.g.,

giving page and paragraph numbers) the provisions of your quality confirma-tion program and your actions in response to our Immediate Action Letter of April 8, 1981. Consideration may be given to extending the response time for good cause shown. Under the authority of Section 182 of the Act, 42 U.S.C. 2232, this response shall be submitted under oath or affirmation.

, . k Appendix A (Continued) Within the same time as provided for the response required above under 10 CFR

- 2.201, Cincinnati Gas and Electric Company may pay the civil penalties in the cumulative amount of Two Hundred Thousand Dollars or may protest imposition of the civil penalties in whole or in part by a written answer. Should Cincinnati Gas and Electric Company fail to answer within the time specified, this office will issue an Order imposing the civil penalties in the amcunt proposed above. Should Cincinnati Gas and Electric Company elect to file an answer in accordance with 10 CFR 2.205 protesting the civil penalties, such answer may: (1) deny the violations listed in this Notice in whole or in part; (2) demonstrate extenuating circumstances; (3) show error in this Notice; or (4) snow other reasons why the penalties should not be im-posed. In addition to protesting the civil penalties in whole or in part, such answer may request remission or mitigation of the penalties. Any answer in accordance with 10 CFP. 2.205 should be set forth separately from the statement or explanation in reply pursuant to 10 CFR 2.201, but may incorporate by specific reference (e.g., giving page and paragraph numbers) to avoid repetition. Cincinnati Gas and Electric Con.pany's attention is directed to the other provisions of 10 CFR 2.205, regarding the procedure for imposing civil penalties.

Upon failure to pay any civil penalties due, which have been subsequently determined in accoraance with the applicable previsions of 10 CFR 2.205, this matter may be referred to the Attorney General, and the penalties, unless compromised, remitted, or mitigated, may be collected oy civil action pursuant to Section 234c of the Act, 42 U.S.C. 2282.

FOR THE NUCLEAR REGULATORY COMMISSION

,/ F ~ ,[f Richard C. DeVoong, }Djgector Office of Insp4ction and Enforcement Dated at Bethesda, Maryland this 24 day of November 1981

t. .

Appendix B CROSS

REFERENCES:

NONC0!1PLIANCES TO REPORT DETAILS Noncompliance Criterion Report Section A.1 XVII 4.3.3.7 and 4.3.3.8 A.2 XVII 4.1.3 A.3 XVII 4.1.3 A.4 XVII 4.1.3 A.5 XVII 4.1.3 B.1 I 6.1. 3 B.2 I '6.1.3 B.3 I 6.1.3 B.4 I 4.4.4.

B.5 I 6.1.3 B.6 I 6.1. 3-B.7 I 6.1. 3 B.8 I 6.1.3.

B.9 I 6.1. 3 C.1 XV 4.1.3 C.2.a XVI 7.1.3.2 C. 2. b XVI 5.10.3.2 C.3.a XVI 4.3.3.6 C.3.b XVI 4.3.3.6 C.3.c XVI 7.3.3 4

C.4 VIII 7.1. 3. 3 C.S.a III 7.2.2 C.S.b III 7.2.2 C. S. c III 7.2.2 C.S.d III 7.2.2 C.S.e III 7.2.2 C.6.a III 6.2.2 C.6.b III 6.2.2 .c C.7 XI 5.8.3.10 C.8.a III 5.10.3.3.6 C.8.b III 5.10.3.3.5 C. 8. c III 5.10.3.3.3.b C.8.d III 5.10.3.2 C.9.a X 7.2.2 C.9.b X 5.10.3.2 p.. . . - , - . - - +- e

a, Appendix B (Continued) C.10.a V 6.3.1 C.10.b V 6.3.1 C.11 VII 7.1.4 C.12 XVII 7.1. 5 C.13 XVIII 7.3.1 i

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' FC1GTGCi Dy .A BY BEN L KAUFMAN Tills CONFIDENCE contrasts Enquirer Reporter with his characterization of Unprecedented inspections of CGLE's program for the decade when c ntractors did most qual-safety systems at Zimmer nu- ity assurance. . hey were inef-clear power station are being fccthe In carrying out their as-carried out under Nuclear Regu-s!g en , h said latory Commission (NRC) orders.

James G. Keppler, head of enough and forced COLE to NRC's Midwestern Region III, shake up and expand its quality said Friday "all safety systems" assurance staff so it could do the are being checked by Cincinnati job.

Gas & Electric Co. (CG&E). If NRC has any doubts about "All means 100%," Keppler CGLE's performance, outside said."No more spot checks." consultants will be ordered in.

Exceptions w111 be rare, Kep- Keppler said. Those costs wou*d pler said, adding, "They haven't be included in Zimmer bills en.

asked for any." which rate increases eventua!!y p It is !!mited, however, to "non- w!!! be computed.

Kepp:er said the new inspec-I'tearing destructive" tests.

out concrete CG&E istions structures notlneed not delay Zimmer's I,or cutting apart its stainless steel start-up.

ireactor. J Tuesday, Kepp!er is coming to L - A utility spokesman called the Cincinnatt to tell CG&E about his new inspections a " confirmation staf f's latest investigation. It was

! program. one of tt least two provoked by I private investigator Thomas IT,S %.IIAT critics have been Applegate's complaints of dan-demanding for years. gerously shoddy work at Zimmer.

They never accepted NRC,s explanation that federal inspec- WHATEVER THE probe tors function mostly as auditors' found,it W111 not require CGLE to cheaking a sample of work wh11e halt construction, Keppler sr.id.

relying on quality assurance Applegate also said CG&E and documents provided by CG&E lts contractors hid fau!ty work and its contractors. and documentation from NRC Today, however, there is a inspectors.

growing consensus within NRC Was there a cover-up by

, that its paperwork system for COLE? "Not that I'm aware of,"

Identifying, track!ng and cor-recting nuclear facility construc- .Keppler said. The contractors?

.That's in the report."

tion flaws is itself flawed. Keppler wou!d not say if his Top NRC officials conceded as staff's invest!gation recommend-much before Congress this week, ed new fines for errors at Iciting Zimmer and Marble Hill Zimmer. He wants to present the l nuclear power stat!on nelr Mad!- report to ut!!ity officials betare son, Ind., as two places the sys- commenting pub!!cly, tem hasn't wor %ed well enough. CG&E spokesman Bruce Keppler, in a telephone inter- Stoeck!!n said the new "confir-view from his Chicago office, said f CG&E can handle the inspections (See NRC,

, today. back of this section)

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. tion probitms hava bedeviled th2 O  !' d.y kl.

7 CONTINUED FROM PAGE A-1 pr: Ject, "We haven't uncovered real hardware problems."

' mation program" at Zimmer in- - WII AT ABOUT Applegate's volves only safety systems whose charges of false or altered docu-documentation was questioned. ments?

"I don't think we found any,"

he said."We found stoppiness.

CG&E INSPECTORS are re- "We don't see any evidence of Ylewing welds, metal cable trays,.

radiographs of pipes c.nd welds, a cover-up."

nonconformance reports on In an interview from his Be-known problems, etc. thesda, Md., off!ce, Dircks said

• Stoecklin could not explain most of the blame falls on the why CGLE officials told him utilities,"but I'm not exonerat-checks are !!mited to systems Ing us."

which were challenged while- For too long, CG&E delegated Keppler said all safety systems too m'2ch responsib!11ty fcr qual-were being reviewed. ity assurance, Dircks said, "and The thoroughness of the cost- that's not good practice." New to ,

ly and time-consuming new in- nuclear power, CG&E should spect!ons also will be new to NRC have stayed on top of events or inspectors, William J. Direks, hired someone to do so, he added. ,

executive director of NRC's na. Dircks agreed that the new tional operations, said. inspections needn't deIay Investigators w!!! trace sys- Zimmer's start-up, but he lef t tems r!ght down to individual open the possiblitty that new components and their serial findings could force a halt to numbers, Dircks said, because work on the billion-dollar fac111-NRC wants to know if what was ty.

Installed " matches the design" !n the documents. "I DON'T think it will be re-

"We're goin g beyond th e . quired but we'll just have to see,"

paperwork to the hardware in he said.

the plant," Dircks said. "Now, Despite their concessions we're going to grab a it c folder about problems with NRC over-and trace the who'e thing back sight of quality assurance at

...." Zimmer, Keppler and Dircks both are optimistic about im-NRC IS go!ng back because of proving NRC's peformance as the

" quality assurance breakdovms project nears completion.

with broad repercussions" at That agreement !s no surprise. i Zimmer, Marble Hill and three Earlier this week, Dircks and other unfinished plants. Kepp!ct rebutted in-house crit!-

"Essentla!!y, we have found cism of the way Region III is too much wrong." handling Zimmer and Apple-Most NHC reviews involve gate's complaints about qua11ty '

" skimming across" work and assurance there.

documentation, Dircks conceded, NRC's Office of Inspector &

but now,1nspectors w!!!" bore in." Auditor concluded that Region Dircks, who oversees NRC in- III's top inspector botched the spection and enforcement pro- probe into Applegate's charges by grams, said he will be surprised if relying too much on documenta-major flaws are found at tion and falling to check welds Zimmer. Whatever documenta _identifledin the complaint.

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THURSDAY, NOVEMBER 26,1981 - __- _ _

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BY DEN L KAUFMAN CG&E PRESIDENT William II. !

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mission (NRC) Wednesday con. unnecessary, but he said the firmed it will fine Cincinnati Gas " unusually high degree of scrut!-

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& Electric Co. (CG&E) a reccard ny" will assure Zimmer meets the

$200.000 for foul.ups at Zimmer highest safety standards.

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• tion, but James G. Keppler, & Light and Columbus & South. !

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violations and civil penalty: "In "In the event we pay the fine," '

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i Zimmer was totally out of con- will be charged to our custom- i trol." ers."

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highest against an unfinished tions into "Iaise qua: tty assur.

_ _ _ . ',, ,faci!!ty, .)1 reficcted NRC findings ance documents, harassment :

/ since January. The probe is not and intimidatica of quality con- i complate. trol personnel, and nu:acrous; i

The results of the NRC inves. examples of failure to implement '

ti; ition and unprecedented fine an actc,uate quality a.=:.mu ,

• w(re a " setback

• to the troubled program. ' 3, commercial nuclear power (Sca y.IT.::, t l ,

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, ' ' 'l UNITED STATES l1UCLEAR REGULATORY COMMISSION

? I BEFORE THE i  :* .

SUBCOMMITTEE ON ENERGY AND THE EINIRONMENT

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9 COMMITTEE Oli INTERIOR AND INSULAR AFFAIRS UNITED STATES HOUSE OF REFRESENTATIVES WASHINGTON, D.C.

NOVEMBER 19, 1981 s

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' MR. CHAIRMAN AND MEMBERS '0F THE COMMITTEE,1 AM PLEASED T BEFORE YOU THIS MORNING TO DISCUSS QUALITY ASSURANCE F POWER PLANTS.

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• s- l BELIEVE THAT AN EFFECTIVE QUALITY ASSURANCE (OA VITAL ELEMENT IN THE MAf1AGEMENT'0F ACTIVITIES.THAT ACCOMPLISHED DURING THE DESIGN AND CONSTRUCTION OF E POWER PLANT, ^

QUALITY ASSURANCE SHOULD BE USED AS A FORMAL MANAGEMENT TOOL TO ATTAIN THE MUTUALLY COMPLEMENTARY ASSURING THAT THE DESIGN IS CORRECT AND THAT THE PLAN CONSTRUCTED IN FULL ACCORD WITH THE TO DESIGN.

BE EFFECTIVE, A QA PROGRAM MUST HAVE THE FULL SUPPORT AND ATTEN NUCLEAR INDUSTRY MANAGERS RESPONSIBLE FOR DESIGri AND CONSTRUCTION. '

THE NRC LICENSING AND INSPECTION AND ENFORC AIMED AT ASSURING THAT AN EFFECTIVE CA PROGRAM

• IMPLEMENTED T0 PROVIDE THE tiECESSARY C0tiFIDE O

POWER PLANT FULLY SATISFIES NRC REQUIREMENTS.

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1 AFTER REVIEWIfiG BOTH If1DUSTRY AtiD NRC PAST PERFORMAriCE IN QA, I f READILY ACKff0WLEDGE THAT NEITHER HAVE BEEN AS EFFECTIVE AS THEY -

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i SHOULD HAVE BEEN If1 VIEW 0F THE RELATIVELY LARGE NUf'.BER OF C0ftSTRUCTION-RELATED DEFICIENCIES THAT HAVE COME TO LIGHT.

i HOWEVER, RECOGNIZIllG THAT THERE IS A PROBLEM IS THE FIRST STEP TO FIXING IT. I HOPE THAT CUR TESTIMotlY TODAY WILL DEMONSTRATE NRC'S RESOLVE TO DEAL FORCEFULLY WITH CONSTRUCTI0t1 RELATED DEFICIENCIES AtlD THE QA PROBLEMS THEY REVEAL.

MR. CHAIRMAN, ACCOMPANYING ME TODAY IS MR. WILLIAM DIRCKS, EXECUTIVE DIRECTOR FOR OPERATIONS, MR. HAROLD R. DEf1 TON, DIRECTOR OF THE OFFICE OF NUCLEAR REACTOR REGULATI0ft, MR. RICHARD DEYOUNG, DIRECTOR OF THE OFFICE OF ltlSPECTION AND ErfFORChMEllT, MR. JAMES G. KEPPLER, REGI0tlAL ADMINISTRATOR OF NRC REGION III, A.ND MR. JOHil COLLIris, REGI0t!AL ADMINISTRATOR OF NRC REGION IV.

MR. DIRCKS WILL PRESEllT THE REST OF NRC'S WRITTEN TESTIMONY,'AFTER WHICH WE WILL BE PREPARED TO A!1SWER ANY CUESTI0 tis YCU MAY HAVE. ,

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TESTIMONY OF WILLIAM J. DIRCKS

• 1 BEFORE THE -

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SUBCOMMITTEE ON ENERGY AND THE ENVIRONMENT OF THE ,

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COMMITTEE ON INTERIOR AND INSULAR AFFAIRS .

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UNITEDSTATESHOUSEOFREPkESENTATIVES WASHINGTON, D.C.

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! OUALITY ASSURANCE FOR NUCLEAR PLANTS Ui; DER CONSTRUCTION l  : . i THIS TESTIM 0tlY ADDRESSES THE ADECUACY OF QUALITY ASSURAliCE AS IT APPLIES TO NUCLEAR POWER PLANTS Uf1 DER CONSTRUCTIOff, WHY IDEllT!-

, FIED C0ftSTRUCTION OR QUALITY ASSURANCE DEFICIENCIES HAVE NOT BEEN l DETECTED ON A MORE TIMELY BASIS, AND ACTIONS BEING TAKEN TO SOLVE 1

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{ RECOGNIZED PROBLEMS.

}

THE NRC LOOKS TO .THE POWER PLA!!T OWllERS, THE UTILITIES THEMSELVES, TO TAKE THE LEADERSHIP ROLE IN ASSURING THE QUALITY OF THEIR PLANTS AND OPERATIONS. THIS REQUIRES HEAVY EMPHASIS AND ACTIVE INVOLVE-MENTOFTOPLICENSEEMANAGE5E!!T.5fkdAPROGRAMS. CAREFUL ATTEN-TION IS REQUIRED Ill THE SELECTION OF ENGINEERING SPECIFICATIONS AND OA PROCEDURES AtiD PRACTICES FOR EACH TASK AND THEIR IMPLEMENT-

ATION BY THE WORKERS Off THE J0B. MOST IMPORTANTLY, THERE MUST SE ADEQUATE RESOURCES OF QUALIFIED PERSONNEL AT MAf!AGEMEt?T, OPERAT-

'ING, AllD STAFF LEVELS.

L HRC ASSESSES THE PERFORfiA!!CE OF THE UTILITIES AND THEIR MAJOR C0tlTRACTORS DURING THE DESIGN AND CONSTRUCTIO!1. PHASES. THE NRC DOES N0T ATTEMPT TO REDO THIS WORK OR INSPECT'IT COMPLETELY SItiCE J

. THE NRC RESOURCES Ot! A PARTICULAR PLANT ARE ONLY A SMALL FRACTI0ti OF WHAT WE REQUIRE A UTILITY TO DEVOTE TO INSPECTION, QUALITY CONTRbL, AND QUALITY ASSUR$NCE. THE NRC'S REGIONAL OFFICES CARRY OUT A SAMPLING If!SPECTI0tl PROGRAM AIMED AT DETERMINIt:G COMPLI ANCE WITH THE PROGRAMMATIC ColiMITMEliTS. THE REGULATORY RECUIREMENTS PLACE THE MAJOR If;SPECTION RESPONS!BILITIES FOR OUALITY ASSURANCE

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• t ON THE LICENSEE'S CONTRACTORS,

• AUDITED BY THE LICENSEE'S STAFF.WH AND OVERVIEW OF THE LICEllSEE ASSURANCE ACTIVITIES. CTORS' QUALITY IN CARRYlliG ^'?T THESE INSPECT ACTIVITIES, NRC INSPECTIONS COVER APPROXIMAT THE.INSPEC. TION ACTIVITIES CONTRACTORS.

PERFORME ICENSEE AND ITS THE HRC'S QUALITY ASSURANCE AINED IN REQ APPENDIX B TO PART 50 OE TIT [E 16' EDERAL REGULATIONS, "OUALITY ASSURANCE CRITERIA AND FUEL REPROCESSING PLANTS." UCLEAR POWER PLANTS UPON WHICH THE NRC JUDGES TH THE CRITERIA 0F APPENDIX BTIES APPLY AFFECTIl{G TO ALL AC SAFETY-RELATED FUNCTIONS SYSTEMS, AND COMPONENTS.

OF NUCLEAR PO R REACTOR STRUCTURES, t

DUALITY ASSURANCE ISONS ,

DEFINED AS "ALL THOSE IN OU PLANNED AND SYSTEMATIC ACTIONS !!ECES O PROVIDE ADEQUATE CONFIDENCE THAT A STRUCTURE, SYSTEM -

SATISFACTORILY IN SERVICE.", OR COMPONENT WILL PERFORM HAVING SAFETY SIGNIFICANCE Il ER PLANT:

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THE DESIGN IS VERIFIEDO INCLUDE TO BE COR '

APPROPRIATE REGULATORY RECUIREMEtiTS; ^

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o PROCUREMEt T DOCUMEt:TS CONTAIN ADEQUATE It1FORMATI0t! Atil; ARE VERIFIED; o INSPECTI0tt 0F PARTS, MATERIALS, AND PROCESSES ARE TIMELY Arid ADEQUATE;

.o DEFICIENCIES IN DESIGN, C0t!STRUCT10tl At!D INSTALLATI0t!

ARE IDEllTIFIED AND APPROPRIATELY REMEDIED;

~

0 THE DA PROCESS IS AUDITED 'At0) REPORTED TO All ORGANI-ZATI0tiAL LEVEL CAPABLE OF ASSURING EFFECTIVE CORRECTIVE MEASURES; 0

RECORDS ARE KEPT WHICH CLEARLY DEMot! STRATE SUFFICIEi!C OF ACTIVITIES AFFECTII;G CUALITY; At4D o

THE ORGAt!IZATI0 tis PERFORMIt G QA FUP!CTI0 tis HAVE SUFFICI INDEPEtlDEtCE At!D AUTHORITY TO IMPLEMENT THESE ACTIVITIES.

.THIS DISCUSSION WILL FOCUS ON SOME EXPERIENCES THAT HAVE AN

,, TINUE TO GEtiERATE WIDESPREAD PUBLIC INTEREST. SPECIFICALLY,

• i THERE HAVE BEEN SOME SERIOUS' QUALITY ASSURANCE BREAKDOWNS WITH BROAD REPERCUSSI0t;S AT THE MARBLE HILL, MIDLAtiD, ZIMMER, SOUTH TEXAS, AND DIABLO CANYON CONSTRUCTI0ft SITES.' '

s 4

MARBLE HILL In 1979, WEAKNESSES WERE IDEf1TIFIED IN THE PROGRAM FOR THE -

PLACEMENT OF CONCRETE AND RELATED CUALITY ASSURANCE MEASURES AT Tile MARBLE HILL 'f!UCLEAR PLANT CONSTRUCTION SITE IN SOUTHERN IND,IANA. .

WE INVESTIGATED THESE PROBLEMS WHEN A CONCRETE WORKER  : RAIS ALLEGATIONS THAT HONEYCOMBING, VOIDS AND SURFACE DEFECTS WERE  :

..-..~.-

BEING IMPROPERLY PATCHED. THESE ~ LLEGXTIONS, WHICH WERE ~

SUBSEQUENTLY SUBSTANTIATED, LED TO A BROADER INVESTIGATION THAT ADDRESSED OTHER AREAS OF WORK AT THE SITE. ABOUT THE S'AME TIME, CODE COMPLIANCE PROBLEMS WERE IDENTIFIED BY THE INDIANA BOILE CODE INSPECTOR AND THE NATIONAL BOARD OF BOILER AND PR VESSEL INSPECTORS.

THESE EVENTS LED TO A HALTING OF ALL SAFETY-RELATED W SITE IN AUGUST 1979 -- A MOVE TAKEN BY THE UTILITY AND CONFIRM BY AN NRC ORDER.

WORK WAS NOT PERMITTED BY THE NRC TO RESUME .

UNTIL DECEMBER 1980, SOME 16 MONTHS LATER, WHEN THE UTILITY'S QUALITY ASSURANCE PROGRAM --AND THAT OF ITS CONTRACTORS -- HA BEEN SUBSTANTIALLY UPGRADED AND THE ADEQUACY OF COMPLETED CONSTRUCT!0N WORK HAD BEEN VERIFIED. DELAYS IN CONSTRUCTION AND I

EFFORTS TO CORRECT THESE AND OTHER PROBLEMS ARE ESTIMATED '

COST THE UTILITY HUNDREDS OF MILLIONS OF DOLLARS. .

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MIDLAND IN THE CASE OF THE MIDLAf1D FACILITY IN MICHIGAN, EXCESSIVE -

SETTLEMEf1T OF THE DIESEL GE!1ERATOR BUILDING WAS OBSERVED IN 1978.

THE UNEXPECTED SETTLIt1G WAS SUBSEQUENTLY ATTRIBUTED TO It1 ADEQUATE AND'POORLY. COMPACTED SOIL UNDER THE BUILDI!1G. FURTHER INVESTI-GATIOff BY THE LICEtlSEE REVEALED THAT OTHER SAFETY-RELATED SYSTEMS AND STRUCTURES WERE AFFECTED. ALL OF THESE SYSTEMS AND STRUCTURES WERE 11EARIl1G COMPLETI0f! AT THE TIME THE PROBLEM WAS DISCOVERED.

THE RRC'S IttvESTIGATION DETEMMINED 5 HAT DESIGN At1D CollSTRUCTION SPECIFICATIONS HAD NOT BEEN FOLLOWED DURING PLACEMENT OF THE SOIL FILL MATERI ALS Ar1D THAT THERE WAS A LACK 0# CONTROL AND SUPER-VISI0ff 0F THE Soll PLACEMEt1T ACTIVITIES BY THF. UTILITY AND ITS

~

CONTRACTORS. THE COSTS ASSOCIATED WITH ASSURING PROPER SOIL C0M'PACTI0li AND DEMONSTRATING THE ADEQUACY OF THE PLANT DESIGN ARE SIGNIFICANT. THE MATTER HAS STILL NOT BEEN RESOLVED AND THE ISSUES ARE CURRENTLY BEING LITIGATED BEFORE Art NRC HEARit1G BOARD.

ZIMMER -

AT THE ZIMMER FACILITY IN SOUTHERii OHIO, THE NRC HAS BEEN liiVESTIGATING ALLEGED QUALITY ASSURANCE IRREGULARITIES SINCE JANUARY OF THIS YEAR. THIS INVESTIGATION EFF'RT, O WHICH IS STILL ONGOING, STARTED WITH ALLEGATIONS FRO.'4 A COUPLE OF SOURCES, BUT SOON ER0ADENED TO MANY WORKERS AND EX-WORKERS. TO DATE WE HAVE 9

_ _ _ _ _ _ _ _ _ _ _ _ _ ^-

K

. l'~

~

~

ItiTERVIEWED APPR0XIMATELY 100 INDIVIDUALS At:D EXPElibED OVER 250 MAN-DAYS O!! SITE PURSUIT 4G THESE ALLEGATIONS.

~

THE CURRENT INVESTIGATI0ft HAS IDENTIFIED A NUMBER OF' QUALITY' ~

ASSURANCE-RELATED PROBLEMS AT THE ZIMMER SITE. THEMAUORITY0F$ ~

THE, PROBLEMS IDENTIFIED TO DATE FOCUS ON THE IllEFFECTIVfNESS OF CONTROLS IMPLEMEllTED BY THE LICENSEE AND ITS CONTRACTORS'FOR ASSURIliG THE QUALITY OF WORK PERFORMED. IN THAT REGARD; llUMEROUS DEFICIE!!CIES HAVE BEEN FOUND C0tiCERiilliG TRACEABILITY OF MATERIALS,

~

'HAtIDLI!!G OF !!0NCONFORMANCE, IllTEidAdE l3ETWEEN CONSTRUCTION AND QUALITY CONTROL, QUALITY RECORDS, Af!D'THE LICENSEE'S OVERVIEW 0F .

ONGOING WORK. ~

THE IMPACT OF THE IDENTIFIED QUALITY ASSURANCE DEFICIENCIES ON THE ACTUAL CONSTRUCTION HAS YET TO BE DETERM!NED. AN EXTENSIVE REVIEW 0: THE AS BUILT PLANT IS CURRENTLY BElilG PERFORMED.

LIMITED ItDEPEt: DENT MEASUREMENTS WERE PERFORMED BY THE NRC IN SELECTED AREAS OF CONCERN IN AN ATTEMPT TO CHARACTERIZE THE ACTUAL SAFETY SIGNIFICANCE OF THESE DEFICIEtiCIES. ALTHOUGH A FEW PROBLEMS REQUIRING CORRECTIVE ACTIOff WERE IDENTIFIED, THE MAJORITY OF THE TESTS AtiD EXAMINATIONS DISCLOSED NO HARDWARE -

/

PROBLEMS.

BEFORE THE PLANT CAi! EE LICENSED A CCMPREHENSIVE QUALITY CON MATION PROGRAM WILL HAVE TO BE CONDUCTED AND IDEt1TIFIED PROELE",

h

1 AREAS RESOLVED. BY ITSELF, WITHOUT FACTORING Ill ANY REWORK, THE QUALITY C0!iFIRMATION PROGRAM WILL BE BOTH COSTLY AND TIME CONSUM- .

IliG .

THE EFFECT OF THIS-ON THE CONSTRUCTION SCHEDULE OF THE PLANT REMAlt:S ,

o, TO BE DEIERIONEDI 1 -

t ,

• ~ -

. SOUTH TEXAS '

j IN JANUARY 1981,-HOUSTON LIGHTING AND POWER COMPANY (HLaP)

INITIATND A DESIGN REVIEW OF THOSE PORTIONS OF THE ENGINEER . . . ... .. -

DESIGN WORK PERFORMED BYRB'~0WN AN,D R00T, INC,, (B&R) FOR THE SOUTH TEspS PROJECT ELECTRIC GENERAT NG STATION (STP). THE

- PURPOSE OF THIS REVIEW WAS TO ASCERTAIN THE OVERALL ADEQUACY OF THE STP DESIGN.

QUADREX CORPORATION WAS ASKED TO ASSIST HLSP IN

' A REVIEW OF THE FOLLOWIllG B8R TECHNICAL DISCIPLINES:

CIVIL / STRUCTURAL

-- COMPUTER PROGRAMS AND CODES ELECTRICAL / INSTRUMENTATION AND CONTROL

. . . - GEOTECHI,1IC '

HEATING,,-YENTILATING AND AIR CONDITIONING MECHANICAL

• NGCLEAR ANALYSIS

'"~ -

PIPING AND S'UPPORTS/ STRESS AND SPECIAL STRESS -

RADIOLOGICAL CONTROL ~ '

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THE LICEtiSEE MET WITH-0UADREX CORPORATION FOR THE FIRST T JAtlUARY 16,1981, 'AND SEVERAL OTHER TIMES Ill JAtlUARY AnD FEBRUARY 1981, TO PLAN THE REVIEW.

THE REVIEW BY 00ADREX It1VOLVED 12 EliGIt!EER!ttG CONSULTANT PERSONt!EL WHO SPEtlT MORE THAff SIX WEEK AUDITIllG BaR DESIGN EtiGINEERING DOCUMEtlTS AND It1TERVIEWING l

V/)RIOUS E8R DISCIPLINE Et!GINEER,S.

, THE REPORT ON THE QUADREX EFF0,RT DATED MAY 1981, k!AS SUBMITTED BY THE LICENSEE TO THE NRC LICENSING HEARIttG BOARD Ott SEPTEMBER 28,~ 1981.

BREIFLY, THE -

00ADREX REPORT FOUND THAT BROWil & ROOT APPAREllTLY FAILED TO PROPERLYIMPLEMENTTHEDAPEOGRUf.'IN HE DESIGN AREA BUT ALSO

. FAILED TO PROPERLY IMPLEMENT AN OVERALL DESIGil PROCESS CONSIS WITH THE flEEDS OF A fiUCLEAR POWER PLANT. 'AS A RESULT VERIFICA-TION OF DESIGN-ItiFORMATION WAS APPAREtiTLY NOT PERFORMED IN A TIMELY-mat;NER, At1D' REGULATORY COMMITMENTS FOR SAFETY DID NOT APPEAR TO BE FULLY OR PROPERLY IMPLEMENTED TO SATISFY NRC REQ MENTS FOR LICENSABILITY.

11RC It!SPECTI0tl REPORTS DATING BACK TO 1979 FOUND. PROB SOUTHTEXASPLANTSI.AilLARTOTHOSEIDEffTIFIEDINTHEQUADREX REPORT. HOWEVER, THE AGEtlCY'S AUDITS DID flCT SJRFACE THE NUMBER OF PROBLEMS SUGGES,TED BY THE QUADREX REPORT. THOUGH WE WERE AWARE OF GA PROBLEMS AT SOUTH IEXAS AND HAD CITED THE LICE FOR A BREAKDOWN IN THEIR QA PROGRAM IN APRIL 1980, THE MAGNITUDE

. 0F POTENTI AL PROBLEMS WAS t10T FULLY APPRECI ATED UtiTIL WE FIRS i  :

-s NEVIEWED THE REPORT IN AUGUST OF 1931.

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IN LATE SEPTEMBER THE LICEt1SEE Altfl0UNCE BEING REPLACED BY BECHTEL POWER CORPORAT .

WE INTEllD TO CAREFULLY MONITOR HOW BECHTE DISPOSES OF THE PROBLEMS SURFACED BY THE QUADR DIABLO CANY0t{ .

AT DIABLO CA!! YON, THE PACIFIC GAS a ELECTRIC COMPAf1Y PROVIDED INCORRECT INFORMATION TO A EXPERT C0!!SULTANT, .

'THE INFORMATION IN DEVELOPIfiG Tiib. SE13MIC RE THE DESIGN OF CERTAlft SEISMIC PIPIT!G AND EQUIPM .

OUR I;iVESTIGATORS HAVE FOUtiD THAT THERE WhS A LAC  ?

FORMALITY IN THE PROCEDURES USED FOR YERIF INFORMATI0!! TRANSFERRED BY THESE PGaE TO ITS PROCEDURES DID.NOT COMPLY WITH OUR REQUIRE FICATION OF DESIGN INFORMATIO!! AT EACH STA INDEPEtiDENT PERSON QUALIFIED IN THE PERTINEl;T DISCIPLINES PROPER QUALITY ASSURAfiCE CONTROLS WE ,

AND PROCUREMENT COMMUNICAT10fiS WITH . NORSERVIC HERE DOCUMEllT CONTROLS ADEQUATE TO ASSU DESIGN HAD READY ACCESS TO THE MOST RECEt BECAUSE OF THE INADEQUACY OF GA CONTRO TION, PROCUREMENT AND THE TRAf;SMITTAL OF DOCOMENTS'TO CONTRACTORS, THE ACCEPTABILITY OF THE DESIG!!S BASED ON T At!ALYSES IS NOW IN QUESTIO!I. -

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l AS A RESULT, THE STAFF HAS DECIDED THAT THERE IS SUFFICIEtiT a

REAS0tt TO REVIEW THE ENTIRE PROCESS FOR SEISMIC DESIGN; TO REVIEW ,

THE ADEQUACY OF OTHER PLAtiT DESIGN ASPECTS, PARTICULARLY THOSE THAT WERE BASED ON ENGINEERING It?FORMATI0ti DEVELOPED UtI SERVICE-TYPE CollTRACTS; At!D TO REVIEW THE IMPLEMENTATION OF THE UT.ILITY QA PROGRAM IN THESE AREAS.

IN LOOKING AT THE MARBLE HILL, MIDLAtiD, ZIMMER, SOUTH TEXAS, AND

. DIABLO CANYON PROBLEMS, QUESTIONS HAVE BEEN RAISED AS TO WHY TH LICENSEE'SQUALITYASSURAliC5PRdG5At[AtiDTHENRCINSPECTIO PROGRAM HAD fiOT IDEtiTIFIED THE PROBLEMS S00t1ER. CLEARLY, IN EACH CASE, THERE WAS AN OVERRELI A'NCE BY THE UTILITY O'1 ITS 'ColiTRACTORS FOR Malt!TAltiltiG A THOROUGH QUALITY ASSURANCE PROGRAM. THE UTILITY'S OWti QA STAFF WAS TOO SMALL TO MAINTAIN SUFFICIEN SURVEILLAliCE CVER THE WORK OF C0tiTRACTORS.IN TWO OF THE CASES WE SAW INSTAliCES WHERE THE CONSTRUCTI0fl MANAGEt4EtiT DO C0!iTROLLED THE QUALITY ASSURAtiCE PROGRAti AND PERSolitiEL. AND, IN EACH OF THE CASES WHERE PROBLEMS HAD BEEN IDENTIFIED, THE CORRECTIVE ACTION TAKEN WAS NOT SUFFIC)ENTLY-BRO'AD. TOO -

FREQUENTLY, THE RESPONSE WAS ONE OF TREATING THE SYMPTOM, RATHER THAN FINDING THE BASIC CAUSE AND CORRECTING IT. '

IN ANALYZING THE IDENTIFIED PROBLEMS AREAS, ONE CAli COME UP WITH l

A LIST OF IMMEDIATE CAUSES -- SUCH AS UNQUALIFIED NORKERS OR CC ItiSPECTORS, FALSIFIED RECORDS, INTIMIDATION 0F QUALITY I

9

. l

. ~- . CONTROL INSPECTORS, LACK OF AUTHORITY, LACK OF COMMUNICATION, It{ ADEQUATE STAFFIf;G LEVELS, INADEQUATE CORRECTIVE ACTION SYSTEM , LACK OF SUPERVISI0ti, POOR TO N0f! EXISTENT PROCEDURES, POOR DESIGN AND CHAT 1GE CONTROL, DESIGfi ERRORS, INADEOUATE AfiALYSES, POOR QUALITY COMP 0NEtiTS, AND SO Off. MOST OF THESE CAff BE TRACED TO FA.ILURE OF QUALITY ASSURANCE DUE TO INEFFECTIVE MAllAGEM CONTROL OF THE DA PROGRAM. THERE ARE A MYRIAD OF EXCUSES REAS011S WHY MANAGEMENT FAILS. SOME ARE EXPLICIT FAILURES OF PERFORMAtiCE OR LACK OF ATTENTION. OTHER FAILURES ARISIfiG FROM POOR ATTITUDES AND PERCEPTIUNS RE D15FICULT TO IDENTIFY THE NRC CAtNOT TOLERATE THESE DEFECTS BECAUSE OF TH

              !MPACT IN TERMS OF PUBLIC RISK.      IT IS SURPRISING THAT SOME
                                                                                         ~

LICENSEES ARE INSUFFICIENTLY CONCERf!ED ABOUT QUALIT NOT ONLY BECAUSE OF THE SAFETY IMPLICATI0flS BUT ALSO THE IMMENSE COST OF MISTAKES AND OF THE RESULTING DEL CONSTRUCTI0t!. GIVEft THESE It4 STANCES OF BREAKDOWNS IN MANAGEM CONSTRUCTI0t? QUALITY AND THE COMMISSION'S DISSAT'ISFACTION, THE ISSUE IS "WHAT ARE WE DOIrlG ABOUT IT?" WITHOUT DOUBT, THERE HAVE B'EEN SHORTCOMINGS IN THE NRC PROGRAM AT CONSTRUCTI0tt SITES. THERE HAVE BEEti CASES.WHERE WE IIAVE FAILED TO SEE THE BREADTH OR DEPTH OF'A'PROBLE'M. WE IDENTIFIED SPEC.'r!C VIOLATIONS OF REQUIREMENTS WIT THE CORRECTION OF THE BASIC CAUSE OF THE FROBLEM. ADDITI0 TALLY, O

                                                 -12.                 .

WE MAY HAVE SPENT T00 LITTLE TIME WITH QUALITY CONTROL IriSPECTO.RS , AND CONTRUCTION WORKERS TO GET THEIR VIEWS Off THE IMPLEMENTATION OF QUALITY ASSURANCE ACTIVITIES AT THE SITE. HOWEVER, WE ARE TAKING STEPS TO ASSURE ATTEllTION TO C0!!STRUCTION DA IliCLUDING DESIGNATION OF RESIDENT IllSPECTORS AT ALL COUTRUCTI0li SITES. THE COMMISSION HAS MADE OR IS CONSIDERING A NUMBER OF CHANGES OF

             ,ITS INSPECTION AND ENFORCEMENT PROGRAM TO INCPEASE THE EMPHASIS                      .

ON IMPLEMEllTATION OF GA PROGR' AMS. . LET'ME ADDRESS SIX SPECIFIC - ACTIVITIES:

1. AS INDICATED ABOVE, NRC RESIDENT INSPECTORS HAVE BEEN OR ILL BE STATI0 tied AT ALL CONSTRUCTION SITES WHERE ACTIVE C0!!STRUC-TION IS PRESENTLY UNDER WAY AND THE PROJECT IS AT LEAST 15 PERCENT COMPLETE. BASED ON OUR EXPERIENCE WITH THE RESIDENT INSPECTION PROGRAM TO DATE, WE BELIEVE RESIDENT INSPECTORS ENHANCE THE NRC'S hBILITY TO M0!!ITOR QUALITY. ASSURANCE ACTIVITIES AND IDENTIFY THE SYMPTOMS OF BREhKDOWN IN .

MANAGEMENT CONTROL. -

2. THERE HAS BEEN A TOUGHENING OF THE NRC'S ENFORCEMENT POSTURE OVER THE PAST COUPLE OF YEARS AND THE NRC'S_REyISED EtlFORCE-MENT POLICY HAS PLACED EMPHASIS ON DEALI'bG WITH POOR REGULA-TORY _. PERFORMANCE Ill THE CONSTRUCTION AREAS.

                                               .-__..._____     ..__ ..~

                                                                                                               ~

3. WE HAVE COMPLETED A TRIAL PROGRAM OF TEAM It?SPECTI0fts WHEREBY SEVERAL flRC It:SPECTORS GO TO A C0f!STRUCTIO!! SITE FOR . TWO TO THREE WEEKS TO DO A BROAD, INTE!!SIVE It?SPECTION OF. THE QUALITY ASSURAtlCE PROGRAM FOR Of!GOIt!G WORK. THIS APPROACH EtiABLES liRC TO GAlti A TOTAL PROJECT PERSPECTIVE TO A GREATER EXTEtiT THAN PAST, PRACTICE. THE ADVANTAGE OF THIS

                              , DETAILED "St:APSHOT" IS AN ENHAfiCED ABILITY TO EVALUATE MA!!AGEMENT EFFECTIVENESS.

THE USE OF SUCH INSPECTI0ff TEAMS IS EXTREMELY LIMITED BY THE AVAILABILITY'0F IllSPECTORS AND FullDS.FOR THIS PURPOSE',' 5 WIYH'AD3ITI0t1AL RESOURCES, WE COULD SEND INSPECTION TEAMS TO EACH ColiSTRUCTI0ft SITE TO DO MORE COMPREHE!!SIVE IlisPECTIONS ' 11 . THE NRC CONSTRUCTION IliSPECTION PROGRAM IS UNDER RE ACC0t'.PL ISH SEVERAL OBJECTIVES. WE ARE RECASTING IllSPECTION PROCEDURES TO DELETE INSPECTION ACTIVITIES OF LESSER IMPOR TA!!CE AND TO REDUCE DUPLICATION OF EFFORT BY RESIIA!!T AND REGIONAL-BASED SPECIALIST INSPECTORS. IN S.ITUATIONS WHEP,E INSPECTORRESOURCESLIMITATIONSPffECLUDECOMPLETINGTHE . ENTIRE INSPECT!CN PROGRAM, WE ARE ORDERING OUR PRIORITIES SO THAT THE MOST IMPORTANT INSPECTIONS WILL BE COMPLETED. e

                                                                                                 ,  e t

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5. ,

FORMALIZED PERFORMANCE APPRAISALS OF LICE PERFORMAliCE ARE BElliG C0fiDUCTED ii'INUALLY B . ATIC ASSESSMEtiT OF LICENSEE PERFORMAt1CE THE PROGRA - APPRAISALS, WHICH REVIEW THE COLLECTIVE NRC EXPERIENCE EACH POWER' REACTOR, BRI!1G THE BROAD ISSUES OF PERFORMAtlCE EFFEC.TIVEliESS TO THE ATTENT10fl 0F SENIOR LIC 6. WE ARE NOW USING OUR OWN MOBILE LABORATO TIVE EXAMillATI0li (NDE) AT CONSTRUCTI0t! SITES. THIS NDE Vari HAS MULTIPLE CAPABILITIES THA7'IktLUDE RADIOGRA MEffT, METALLURGICAL AliALYSIS, AND HARDNESS, ULTRASONIC PENETRANT AND MAGNETIC PARTICLE TESTIDs. THE THAT WE PERFORM ARE ItiTEtiDED TO C0f1 FIRM QU SELECTIVE SAMPLING APPROACH. THE COMMISSION IS CONTINUlfiG TO REVIEW ITS THE NUCLEAR QA AREA If1 ORDER TO DEVELOP IMP REQUIREMENTS, REVIEWING LICENSEE QA PROGRAMS, AND INSPEC PRACTICES WHERE THEY ARE CALLED FOR. e 4 e ,

                                                                                                    \

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EXHIBIT #7

• NM gT$[11as%.I M THE CINCINNATI GAS & E.LECTRIC COMPANY MYa%it cmcenumonno asao,

                                                                                                         ~
                  " " ."$f"P""                                 February 24, 1982 QA-1632 Office of Inspection and Enforcement

• U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Attention: Mr. Richard C. DeYoung, Director

         .                         RE:   WM. H. ZIMMER NUCLEAR POWER STATION-UNIT 1 i

NRC NOTICE OF VIOLATION AND PROPOSED IMPOSITION OF CIVIL PENALTIES DATED NOVEMBER.24, 1981. NRC INVESTIGATION

   '                                     REPORT 81 DOCKER NO. 50-358,

' CONSTRUCTION PERMIT NO. CPPR-88, W.O. 57300, JOB E-55 90, FILE NO. NRC-1 Gentlemen: This letter constitutes our response in accordance with 10 CFR 2.205, relative to the subject Proposed Imposition of Civil Penaltics, and our response in accordance with 10 CFR 2.201, relative to the Notice of Violation and Investigation Report. We have concluded an investigation of each of the allega-tions set out in Appcndix A to your letter dated November 24, 1981. Our review has been informative and useful in proving the quality of the Zimmer construction. With our Quality Confirmation Program, our enhanced Quality Assurance staff, and our overall Quality Assurance Improvement Program, additional insight into the quality of the Zimmer Nuclear Project has been provided. All of this will

     ,            provide additional assurance as to the safety of the Wm. H. Zimmer 1

Nuclear Power Station. The results of this investigation lead us to the follow-ing conclusions: . a) Although some records examined by the NRC were incomplete or inaccurate, we do not believe any of these records are " false" with regard to

        -

• either the commonly understood or legal meaning of the word. .

I b) Even though there were some dousing and water spraying incidents, we found no evidence that i QC inspectors were selectively doused and I l ' l

                                                       ,   w--                   ---+-,-r-.

Office of Inspectioh and Enforcement February 24, 1982 U.S. Nuclear Regulatory Commission Page 2 RE: WM. H. ZIMMER NUCLEAR POWER STATION-UNIT 1 NRC NOTICE OF VIOLATION AND PROPOSED

  -          IMPOSITION OF CIVIL PENALTIES DATED NOVEMBER 24, 1981. NRC INVESTIGATION REPORT 81 DOCKET NO. 50-358, CONSTRUCTION PERMIT NO. CPPR-88, W.O. 57300, COB E-5590, FILE NO. NRC-1 thereby " harassed."  In any event, prompt and vigorous corrective action was taken to prevent any potential influence on- QC inspector
                                                  ~

performance. c) Reassignment of inspection personnel .was based on management assessment of project needs and not the result of construction complaints. 1 d) Threats of firing, searches, and the single. threat of bodily harm all appear to lack sub-stance when evaluated in light of the total l circumstances. e) QA Management communications with QC inspectors may not have sufficiently addressed and resolved quality concerns raised by QC inspectors, but this did not cause QC inspectors to be relieved from duties, nor were QC inspectors encouraged to accept unacceptable work. f) Prior to the development of the Quality Confirma-tion Program, our quality documentatio n program was not sufficiently implemented, nor was retrievability sufficient, to preclude the

        -               existence of some inaccurate records or to provide the total documentation for a given component or

• system in every case.

g) Until recently, the Quality Assurance Program was not sufficiently understood by some quality personnel, which led to misunderstandings and 4 conclusions by the NRC Investigators which differ from our own. h) The work in process relating to hanger weld, beam weld, and socket weld inspections was not accurately i documented or controlled in all instances, but not all items of noncompliance listed in Violation C-are well founded.

      .     ~

i Office of Inspection

• and Enforcement February 24, 1982 U.S. Nuclear Regulatory Commission Page 3

( RE: WM. H. ZIMMER NUCLEAR POWER STATION-UNIT 1 L NRC NOTICE OF VIOLATION AND PROPOSED

    ~

IMPOSITION OF CIVIL PENALTIES DATED NOVEMBER 24, 1981. NRC INVESTIGATION i REPORT 81 DOCKET NO. 50-358, CONSTRUCTION PERMIT NO. CPPR-88, W.O. 57300, JOB E-5590, FILE NO. NRC-1 While in the Applicants' opinion there is nothing in the Investigation Report to support the allegation of " false" records, the existence of inaccurate and incomplete documents is acknowledged. Although some misunderstanding may have existed as to the Applicants' position at the time of the NRC's review, it is our view that such documents had not received final acceptance approval by H. J. Kaiser Company and were not, therefore, quality

               " records" within the meaning of Reg. Guide 1.88.

We do not agree that the statements made by the con-tractor's inspectors, when taken in the context of the events, constitute harassment, intimidation, or a lack of effective QA management support. However, the basic facts describing these events are more or less accurate. We do not agree that al_ of the facts show noncompliance with the specific criteria of 10 CFR 50, Appendix B. We do agree, as previously stated, that deficiencies existed 'with the implementation of our Quality Assurance Program and in exercising sufficient control over our principal construction contractor, but we believe that our overall Quality Assurance Improvement Program has fully corrected these deficiencies. We are sincerely interested in assuring the continued quality of construction and moving forward with our Quality Con-firmation Program and the completion of the plant. This has been demonstrated by the prompt implementation of our Quality Assurance Improvement Program in response to the Immediate Action Letter of

            . April 8, 1981 and our progress on the Quality Confirmation Program.

Our conclusions do not agree with your findings in every aspect. In our opinion, your investigation mischaracterized our Quality Assurance effort in several instances, as noted above. In view of our ultimate decision, we have elected not to raise certain legal objections to the Notice of Violation and to the Investigation Report. Rather than dwell on our differences at this point we believe it is important that we be free to devote our full resources and attention toward the positive goal of completing the Wm. H. Zimmer Nuclear Power Station in a quality manner.

                              ~

e

Office of Inspection and Enforcement February 24, 1982 U.S. Nuclear Regulatory Commission Page 4 RE: WM. H. ZIMMER UUCLEAR POWER STATION-UNIT 1 NRC NOTICE OF VIOLATION AND PROPOSED IMPOSITION OF CIVIL PENALTIES DATED NOVEMBER 24, 1981. NRC INVESTIGATION REPORT 81 DOCKET No. 50-358, CONSTRUCTION PERMIT NO. CPPR-88, W.O. 57300, JOB E-5590, FILE NO. NRC-1 l With this view in mind, and recognicing at the same time the need for improving the implementation of our Quality Assurance Program in several areas, we will submit to the assessment of the civil penalties for Violations A, B, Appendix A to your November 24, 1981and C as set forth in letter. A check in the amount of $200,000 is enclosed as payment for the assessed penalties. Your letter also requested a review of the history of  ! noncompliance with 10 CFR 50, Appendix B for the past two years, and a statement of the steps taken to address and correct the l

             . underlying ance.              programmatic causal factors related to the noncompli-The specific history and actions taken are provided as                                                                                                      i i

Attachment A of this response to be forwarded under separate cover. A general overview indicates that the action taken to correct the programmatic causal factors related to the noncompliance was provided in our May 18, 1981 response to the Immediate Action Letter of April 8, 1981. Our response to the specific items included in the three violations cited in Appendix A to your letter of November 24, 1981, is provided as Attachment B of this response to be forwarded under separate cover. response for Violations A, B, Included in Attachment B as part of our specific and C are the histories of the-alleged items of noncompliance including the basis for our agree-ment or disagreement with the items, the apparent reason for the violation, the specific corrective steps taken and results achieved, and the corrective steps to avoid further noncompliance. ' We believe the corrective action stated in our response to the Immediate Action Letter of April 8, 1981 is sufficient to preclude further noncompliance, particularly in light of our Quality confirmation Program. The date when full compliance will be achieved scheduled forisJuly, tied1982.to completion of that program, currently thereafter and, in any event, Full prior compliance to fuel load. will occur shortly

Office of Inspection and Enforcement February 24, 1982 U.S. Nuclear Regulatory Commission Page 5 RE: MM. H. ZDOIER NUCLEAR POWER STATION-UNIT 1 NRC NOTICE OF VIOLATION AND PROPOSED

 ~                    IMPOSITION OF CIVIL PENALTIES DATED NOVDiBER 24, 1981. NRC INVESTIGATION REPORT 81 DOCKET NO. 50-358, CONSTRUCTION PERMIT NO. CPPR-88, W.O. 57300, JOB E-5590, FILE NO. NRC-1 We trust the above will constitute an acceptable response to the subject Proposed Imposition of Civil Penalties, Notice of Violation, and Investigation Report.

Very truly yours, THE CINCINNATI GAS & ELECTRIC COMPAN'I By 4 ' Enclosure W. H. Dickhoner, President cc: James G. Keppler, NRC Region III NRC Resident Inspector at Zimmer Attn: W. F. Christianson Zimmer Project Inspector NRC Region III

                  .. State of Ohio           ) ss.

founty of Hamilton) s

                       .t/-

I ff.,,Sworntoandsubscribedbeforemethis M/ day

                           *1i of Feb,ruary, 1982.

s' ' / j hi'6 0 "

                                                     // Notary Public
               .'.,I   ,.<                                     ytRGINIA P. t/.UHLHOFER

• un mce.see of C*

My Commission Espins 1413 312 CERTIFIED MAIL RETURN RECEIPT REQUESTED

                                                .t Ja

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EXHIBIT gg ' ~_

                                                                                          " "s* t .

f ENGINEERS M A4 5 E R E N G4 N E E RS. IN C. P. O B O M 201 M O S C o w. O M a o 4 515 3 f August 19, 1974 Mr. E. A. Borg= ann, Manager General Enginesta g Departnent The Cincinnati Gas & Electric Co. 139 East Fourth -Street Cincinnati, Ohio 45202 Attention: E. C. Pandorf, Principal Engineer

Subject:

Pipe Inspection Gentlemen: In letter KEM-13 fron R. L. Dirr to D. R. McSparrin dated August 9,1974, KEI has been requested to inspect pipe on delivery trucks prior to unloading. , The type of defect which initiated this request is difficult to detect during receiving inspection. We suggest that source inspection is the best way. to avoid rework and attending delays. Very truly yours, KAISER ENGINEERS , INC. o W. J. Friedrich Site Quality Assurance Manager . CAS:sbc b t' _ _ _- _ _ _ - [

F. e n"o NY

         ,                             THE CINCINNATI GAS & ELEC"R16--hdiil
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[.y h March 8, 1976 KEB-43 fr y-l' 1 Kaiser Engineers, Inc. < It F-P.O. Box 201 lioscow, Ohio 45153 U o E! Attention: Mr. W. J. Friedrich . _' _f

                                                                               ,w                =

RE: W M . 11. ZIPMER NUCLEAR POUEn STATION - UNIT 1 - INSPECTION PERSO: GEL,- W.O. 57300-957, 003 E-5590 Z~ f. Gentlerr.cn: }d ' d This is in response to your letter of February 10, 1976 requesting 10 additional inspectors for the Quality Assurance A Staff. Our people have donc cr. tensive evaluations on the need for additional inspectors. The request for 10 additional people seems rather high at this time and I do not like the idea of giving you blanket approval for 10 personnel requisitions. 6 I would like you to proceed with a'dding 2 nochanical welding inspectors, 1 instrumentation inspector and 2 electrical T inspectors to your staf f if these people are required irrediately in your opinion. I also ask you to consider the transferring

       '   of some of the structural innpectors to electrical work in lieu of hiring these 2 additional electrical inspectors.

Over the next few months, as we see the workload demands in the field, we will re-assess the need for additional personnel. Quantity is not always the answer in getting satisfactory inspection. The need is for qualified and dedicated personnel and this is our objective. . I certainly am amenable to your reviewing the situation

      -    on a month to month Lacis and when the situation warrants, I will certainly review any recuest that you might make for personnel s'ubject to the advice of my staff.
                 .i
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                                  ~N I                      Very truly yours,                                    -

A ;, ~~'."'

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• TIIE CINCINNATI GAS & ELECTRIC COMPANY N. I, .

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                                                  !          E. A. BORGMANN Vice Prenident - Engineering EAB: dew cc: ,C. C. Gray /                 .

D. K. Culver E. C. Pandorf W. W. Schwiers

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SUBJECT:

WM.'H. ZIMMER NUC 24Q TION - j ~ ~ ~ ~ 7l UNIT 1 - SITE PROJEdSIM;O;AG3 - d _.r".r4

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           #                                   Effcchive July 12, 1976, wo will take a II6re uirecc role in the construction management of Wm. H. Zirmer Nuclear Power Station Unit 1 through the appointment of Mr. H B. Gear as Site Construction Manager reporting directly to Mr. B. K.

Culver, Principal Construction Engineer. Kaiser Engineers Sahlberg will continue will remain the Constructor.and Mr. R. D. to function as their Project Manager. Mr. Gear will be in direct. charge of the construction site having the responsibility for all construction activities. These will include the activities of Kaiser Engineers, all subcontractors, and CG&E field personnel. . . Mr. Gear has had considerab3 c nuclear constructionod experience with Commonwealth Edison Company and has now fo.m. his own construction management company. He will perform this function for us on a contract basir. for the duration of the Zimmer Project. ._# . _ ., This ir being done in an effort to give CGLE r. ore direct control *over all phases of the Zirmer Project and to ' 6ffect efficiencies in the construct-ion operations. j..

                                                                                                                                                                ."--;W Your cooperation with Mr. Gear is solicited in the inte.est of poving the Ziremer Project forward to a successful                                            .                              '[

conclusion.

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{ INTER OFFICE MEMORANDUM ToQ R. SalIbe g / , DATE February 8, 1977 A' T, Moscow, Ohio ,

                                      ,                                 FROM    W. J. Friedrich COFSES TO
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AT Moscow, Ohio JOB NO. 7070 suancT ELECTRICAL PRO 3LEM AREAS (Reference letter, E. A. Borgmann to D. H. Williams, dated 2/1/77, KEC--3) , Mr. Borgmann's. letter to D. H. Williams implies that QA is causing delays in the completion of work. It may appear that way from his vantage point but let me assure you that everything is being done by inspection to keep the work moving. The cooperation between construction cupervision and inspection could not be better. To prove my point, a new system ha.s been initiated in the Reactor Building to expedite cable pulling. This system consists of informing the inspector that the conduit system and cable pan erection is complete and scheduled for cable pulling. The inspector verifies it is complete and releases the system. This generally happens two (2) weeks in advance of cable palling. The delays incurred have been caused by design definition or lack of design, such as the case of seismic hangers and separation criteria.

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Another potential problem or delay will b'e the minimum bend radius of

                    .07" for control cable which cannot b5 met by the field.

In order to improve production, the QA Department has requested additional manpower to support the anticipated build-up of electricians to pull and terminate the 2,000,000 ft. of cable to meet the fuel load date of April 1978. o t l WJF:sbg l

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                                                                                      . t.,lp-I'      THE CINCINNATI GAS & ELECTRIC COAIPANY                                                                        "C CINCINNATO C6tlO 4n201 March 7, 1977 KEQ-ll2

( Kaiser Engineers, Inc. P. O. Box 201 Moscow, Ohio 45153 - Attention: Mr. W. J. Friedrich - RE: WP1. H. ZIMMEP,iUCLEAR POWER STATI0t1 - . VilIT I - REQUEST FOR ADDITIOiAL IllSPECTI0tl PERS0f;MEL - W.0. #57300-957. JOB E-5590 Gentlemen: , This is in reply to your letter, KC-9128-Q, which requests that additional inspectors be added to the KEI Quality Assurance staff. In connection with that request, wa have reviewed future construction scheduling. We have also reviewed with you the requirement for additional inspection personnel that an expanded construction program would require. It was concluded that the request for additional inspection personnel was intended to cover an expanded construction program, particularly in the elect-rical area. After review, however, it appears that the craft work force will

 '      not be increased such that the addition of Quality Assurance inspection person-nel will be required.                                    -

In view of the above, it is felt that no additional inspectors will be required as requested by your letter. We will continually review anticipated increases in craft personnel and will again review with you possible future additions to KEI Quality Assurance i inspection personnel. , e Very truly yours, f THECIf1 cit;t1ATIGAS&ELECTRICCOMPA!4Y By V\ UT- W W. 11. SCHUIERS

             '                                   PRIfiCIPAL QUALITY ASSURAr4CE AfiD STAi;DARDS Ef;GIf1EER JHH:pa cc:    E. A. Borgmann B. K. Culver H. B. Gear E. V. Knox - Oakland                                                                                                i R. D. Sahlberg QA File

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33 Jar.very ISD I Sex Baker do hereby make the fcllowing voluntary stater.ent to Mr. J.E. M:carten who has identified hl=self to ce as an ira;estigatcr a with the L'. $. hat tar E.gu atory Cc=isticn. I take this staterer.t fresl3 witt.

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no threats or prcrises of reward being made to ce. I a: current:y er;:cyed as a Qaality Cer.irel Ir.s;t: tier. Supervisor fcr the Henry J. Kaiser Cc. at the h:.. Zi=er Na:1 ear Pcmer staticr. ir. Moscow Chio. I have been working in the @aality Control Departrer.: sir.ce April cf 1963. In late Aagust er early Septe:ber 1983 I was called into the Qua tiy Centre; Manager's office, Fr.illip Cittings the 0: Ear.ager. E&iser p oe w > was there, he s:ed Ecbert Marshall, Kaiser, site Proje:t Manager had tc1d hi-O tha e had feu.3 ene cf =y Ir.spe:ters usir.g a cag .ifyir.; g ass te 2cci at a we:d. The Inspecter was e*e Indiv.Ifwho was assig .ed to inspect pipe su;; cit ha .gers. Mr. Cittings told te to fire Indiv. I that day for this actien. I beca:e upset at wit!. this a: tier. a-d ic;d Cittings, that ac:crdir.; tc the A erican be:dir; so:e.e* <o N ty code,that we were inspectir.g byj we could use a cagnifyinE 21 ass to Icek at a weld. I said we really car..ct ter=inate the car. fer this, the cede a!!ces h: to use a =agnifying glass. I then said there could be legal ratifications W if we ter=inated him for this. After this cc::ent Cittir.dtold ce that he would-et back with te later that afterr, con. Later that afternoen. he told me to keep hi: on as an inspe:ter but to trar.sfer IP.J. I frc: his current duties as a hanger inspector to a stru:tural inspecter. 4'! k I oF/c3

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                                                      .        Staterent cf Rea Baker Page two of 4            pages 2 then transferred Ind. I to other duties. I felt I was asked to transfer Ind. I frc: hanger inspecticn to ancther area because at this time,the ir.specterg in the hanger area were fir. ding a Ict of errers and writing r.cnconferra :e re;cris, and had been a:eused cf nitpicking by the construction side of Kaiser.

pe, I alse fee! that ry etje:tf to Mr. Cittir.gs sa.ed Ind I his jet. In regsrds te ancther area of the Qualtiy Cc .trel pregra at Zi: er, shcrtly after the previous in:ident, there was ar.cther prehle: in the m s% c banger wf".D= inspection area Phil Cittir.gs called ce into his office l he had ten to fafteen ner.:enfer:ance repcrts it. his hand ar. he said lets i go look at these nonecnfor=ance reports. Myself , Dave Painter and Phillip Cittings we.: cut tc, the Ic:atiens where the non:er.forman:e reperts had been found, I had already looked at the welds and agreed with the Q: inspe:ter that the; ' were r.otacceptable to A=erican Welding Society M:5 D.1.1. code. Cittings locked at the areas and he looked at each area where the inspecter had previcus;y ide..ttf. l ( l a discrepeney, he returned to the office and Cittings said lets void the:e seven ' e nen:enfor:ance reports that he felt were acceptablejand he handed me the seven nonconfer ance reports that he wanted voided. He krew Iddagreedandso 2 handed then to Mr. Oaks and said Phil wants these voide'd and I would not de it. 12 later got ecpies of these seven Nonconfor=ance reperts with Phillip Cittings signature on them , in which he had voided the nentenformance reports. j 2 felt that this acticn by Cittings hurt the Qaaltiy Centrol Inspectica pregea: A /L* G 2 0q.4:rs at zic=er , the Inspectors at Zimmer knew that %fepinien cocid be easi1Y 4/ 2 oF 3

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f ,-- -- I FeA Baker do hereby 13 Januar)19th Mr. J.B. k:carten who hmake ary o thestater.er.t following to v lunt EXII1111T d with as identified hi:self t the 1l, S. f4: o ce as 1 car E.g.1stery Cc tis i an Ira;estigatcr no threats s . or prcrises cn. I cake this of reward being sade to staterett fresly witt ee. I a: currently er;* eyed as a o sality Centr: fer the Henry J. Kaiser 1 Inspe: tion Supervisor Cc. at the k:. Zic e Moscow Chio. I have b of 1963. In late cr A;;gusteen werking in the Og y Control Depart:ent si n car *y Septe:ber 1983 I w nce April Caaltiy Centrcl Manager's was there, he s*e& p ,ce> d office, Phillip Cittings thas called into the e Q: Ecbert Marshall, Kai Mar.ager. Kaiser tha*}We had fcand cne The Inspecter was cf :y Inspecters using aser, r had toldSite hia: Project M Indiv.Iej .e* Mr. Cittings tc1d whc was assigned to ica;*ifyirg at a weld. glass te I te to fire Indiv. I that day nspect pipe suppert gers. han with this acticn and t l for this actica. Soc *,, *ty c6 y Code that we o d Cittings, r that accc di u; set*tt I beca:e were inspecting by rg tc the A erican heldi at a we'd. jew r.; I said we really cann could use a to use et a magnifying glass terminate the est f sagnifying glass to Ice

                                             ., I then                              er this, the
                                              '          said there                                   ecie a!!cws h:

if we ter:inatedor hit this.f could be legal ramificati After this cc:c ons get back with me later th g ro. at afternoon. ent Cittindtcid ce ethat would. h Later that afternoor

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frc: his current duti.. he told me to keep him es as on as an inspector but t a hanger inspector toa o transfer Ind. I structural inspecter. w .

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Statetent of Rea Stke r Page two Orta of 4 \ pages 3 then transferredInd \ frcs hanger

                                                           . I to other duties. I felt 2 wa inspection to                                       s ancther                               asked to transfer        .I Ind in the hanger                                area because area were finding a lot                    at this time,the inspect and had been                                       of errors                                  crs accused of nitpicking b                     ar.d writing r.onconfor:ut     e 2 aise feel that ty ctj ps                     y the construction side                           reper;;,

eetf to Mr. Cittings of Kaiser. sa.ed Ind I his jet. In regards te ancther area shortly after the previous of the i Qualtiy Centr:1 pr s .r, hanger wif:p W n:ident, there was ancther egra at 2i: er, inspectior, area. Phil pretle: in the he had Cittings ten to fsfteer, nen:orf called ce into his office go look at these . er:ance reperts it his hand nonconfor..ance reports an he said lets cittings wen cut to the locati . Myself , Dave Painter ces where the ar.d Phillip ' found, I had already l were ooked at thee w lds non:c .fornan:e rep:rts een had b notacceptable to A=erican Kand agreed with the Q: i at the areas elding society D:s D.11 nspecter that the; and he looked at each ar . . code. a discrepecey. Ke Cittir.gs locked returned ea where the ins;e:ter a hd to the office non enfor:ance and previously identif reports that Cittings seven he felt w ere s said lets void ther.e seven nonconfor ance acceptableja%nd he handed te the

       ,, 2 handed then to Mr. Oaksreports that he                                                           wanted void ed.HeknewIdda#        greed and so G later got copies of th and said Phil                                  o wants these signature ese seven Nonconformance           v ide'd and I would            o it. not d reports on them , in which he had                                    with Phillip Cittir.gs I felt that this voided the nonconfor4anc action by Cittings hurt th                           e reports.

at tim er . the Inspecto e Qualtiy Control Irspe

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_. at Zimmer knew that D[ft cpinico c ocid be ea$ilf 4l 2OV3 *' 4

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                                                                        -_         - u State =ent of Rex Baker Cont Page three                              of th ree pages voided by the OC Manager.

I have read the above state =ent made the n ecessary corrections ar.d it is true a::t correct. t i Rex Baker D,,. Subscribed to before se er. this 13 th Day of Ja.uary 1981 in Mcscow Chio. 6

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1ref))h*SW 4.5.P.; Car;e..'D.URI.3 Eor

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h'itness ~' d J rry Shapker, r.spector Kn I Ii 4 e 0 9 0 e

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lir. Hillit t H. Schwiers, forwer Quality Assurance 14anager, Cincinnet'i Gas cnd Electric (CG"E) s.as intervie.:cd on July 9,1961, by tilbert B. Puglir and John R. Sinclair, In*;cstigators, Office of insoc-etor and /aditor (OIA), U.S. l.'uclear Regulatcry Ecc=ission (HRC). Prior to any questioning, ' lir. Schwicrs V:ss provided the opportunity of reviewing appropriate credontiels and advised that the areas being investigated pertained to intentior.al al llful traissions refa.teration of rdir.g QC reconis. Quality Control (QC) Records and tri 11r. Sciuiers bcgen the interview by providing a brief description of his dutics while assigned to the Zitri,2r Construction Pro,iect. Schitiers stated that he first becan workino at Zicn2r in the 1973 tima fre:..a cs c

                                                                ~

representative for Cincinnati Gas and Electric and that continued until cpproxinately 1975. At that tien Schwiers stated he became the Senior Field Project Engineer in the Quality Assurance Organintion which lasted for the next year. In '1976 Schwiers was reassigned to the functions of Quality Assurance !!anager for the project. Schwiers stated that at . that time the Quality Assurance P.ansecr for Kaiser was Bill Friedrich. Schwiers further stated that the CGEE quality Assurance group at the ' site consisted of f our other CGLE ceployces plus hir.self. According to Schwiers, it was his responsibility to audit and monitor the Kaiser QA progra:a. , Schuiers continued by cxplaining that it was his perception that the raiser QA pro;.rea, at the tino ha (Schwicrs) took over QA for CCSE. "did not have sufficient inda;cndence from the Construction Group.' Schwiers steted that at sece point Kaiser QA P.anager Friedrich, was repicced by another Kciser supervisor Bob Turnar. The exact date of the change cculd not be recalled, hts 2ver, Schwicrs did state there was a period in chich an individual from Kaiser Headquarters. Gene Knox. was acting in the espscity of Kaiser QA lianager. Sch.riers str. icd tha'. Kr.cx wa: c=r!!ing to the Zir tr Site from the Galland, Califorreia area and although he was the QA lianascr for the site, he (Kucx) uculd not relocate to the Cincinnati, Ohio area. Sch. tiers cxplained that he, as w211 as CGIE found the situation with Knox con.' ting to the Sito unacccptabic b2cau;e it did not demonstrate the cor.miinant

                                    .i.- .
                                                            -               EWIN.T 52,                     \    es 4 . v.

required to the Quality Assurance Progrtm. Schwiers further explained that Turner finally was placed in the position as Keiser 0A l'anager

• which last:d until approximately Octcher 1979. SchWiers stated that as he recalled, tharc was a probico with QA docum2ntation within Kaiser and that Turner was replaced by another QA Hanager.

Schwiers stated that part of the probica identified with the Kaiser ,QA docinentation was discovered through a CGAE QA audit. Schwiers added that th biser doctrantation prebice is still being reviewad by a contracter to CGLE, Science Application, Incorpcrated (sal). Sch.dcrs continued by stating that he believed Phil Gittings, the nost currcnt Kaiser QA lbnager, was hired by Kaiser frca a position in " corporate" at C1cycitnd Electric Illuminating (CEI). Schwiers also stated that he believed thpt"Gittings had formerly teorked for a Kaiser Project in Florida pertaining to a transportation project. .

                   /

In rcsponse to questions, Schwiers responded that on paper" he was in control of the project. Schwiers also stated that initially all of CG&E QA was located at the site. Subsequently, hcwcVer the QA organization expanded and sece QA functions secre located at CG5E corporate in Cincinnati. Schwiers then stated as the OA representative part of the responsibility was to monitor Kaiser's QA/0C activity by conducting independent audits.- Schwicrs continued by stating that he had "scce authority" in relation to denying requests for additional Quality Control inspections submitted ' by Kaiser QA. , Schwicrs was then advised that DIA had interviewed personnel at the Zimer site, including Kaiser QA personnel and as a result, infometion was develeped which indicated that Kr.iser QA supervisors had made repeated requrasts to CEEE for additional staffing of tha QC departnant in order to r. net the itquictents of faderal reguistiens, specifically 10 CFR 50, Appendix B.

       'Schwiers was also advised thet the requests had been mede in writing by Kaiser and that cach of the requests has been denied by him (Schnicrs).

Schwiers stated that he believed that he had honored all of the requests suhitted by Kaiser QA nr.d stated that as far as he could recall, cil of - the requests subitted by the current Kaiser QA, Phil Gittings, were her.ortd. Schttiers ucs apprised that his statecent concerning requests submitted by Gittings had been confimed, houtver, th specific requests and tica frc:ce alluded to occurred at the time Bob Turner was the Kaiser QA fur.ager. Sch.:lers repeated that he believed that all requests t:cre con:idered and hono.Td. He (Schwiers) was infomad that HRC had requested supporting docuacntation frca Kaiser and believed that it pas going to . be provided in the near future. J.- .

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EXHIBIT 52. , 2 c3: 9.l

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Sch<iers continued by stating that if there are such requests as described by lip.C cnd responding correspondence denying the requests. they probsbly contr.in his signature. Schwicrs was then questioned as to the extent of his auth?rity as site QA Hanager for CGLE in cither " staffing' or denying rcqutsts for additional staff. Scir.fiers stated that he had "stme authority" cnd repeated that he probably would have been the CG&E official whose nr.r.e t.ppeared un the papen:ork. However, he believed that the decisions specifically addressing the described Kaiser requests were

• probably cada in a CG&E r<anagement rx:eting.

Sch.<icrs rerponded to questions regarding the "r.anagement meeting" by stating that he believed the ettendees at the tr.ceting scre himscif, sup3rvisors frca the CG5E Generation and Construction Departments and the Project Manager (Barr.cy Culver). Schwicrs added in response to questioning if cny other CGLE officials were present by stating that he could not rtrr::ber. Schi.*iers stated that he organizational 1y reported to Earl Bore-. tan. Vice President, CGLE, howcVer he could not recall if he was present at the smeting. Sciuiers then resoonded to questions concerning CGEE's QA organizational structure by stating that as the senior site QA Supervisor he reported directly to Earl Borgmann. Vice President for CG5E. Schwiers added that other departments within CG&E (Generation. Construction. Design) niso reported directly to Borgmann. Scirfiers stated that although he stated in the beginning of the interview that he believed Kaiser's QA/QC organization lacked independence in performing its function he could not sly there uns any significant difference in the QA/QC organization - within CGSE. . Schariers was reportedly asked if he had the authority to deny staffing requests pertaining to Kaiser QA/0C at which time he (Schwiers) trculd continually stste that "his nam was probably on the paper" cr.d he ceuld not rcMar if his supervisor. Earl Borg=cnn, was in ettendance 3.t cny occting. Sctr.ders was Liso reluctant to state unambiguously that he had the cuthority to deny Kaiser 0A staffing requests and would only state that the decisiens tecte a result of CG&E cansgement ccetings. . Scintiers stated that CG1E had been conducting cudits of the Kaiser QA progrn and that was one of the nothods which disclosed QA prebice.s. Sch.fiers was then questioned as to how his statti.ent coincided with the

• fr:t trt ICC P.cgion III Inscectors had conducted a thorough inspection of the tudit function of CGEE's QA progrz:n and found th:.t there had been no cudits donc for extended periods of ti=e and in scme areas no cudits et til. Scintiers stated he was aware of the inspection refern:d to, but did not have an anst:cr regarding the violations cited by HRC pcrtaining to the QA audit requircnants.

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                                                                         ~      '

EYMrs1T 52,3 c;=4

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     .             Schwiers ut s cueriod as to the type of contract with Kaiser. Schwiers replied th..t he believed it w:s a ' cost plus-a-fixed-fee".        Schwicrs added that~ he t'as not ttmiliar with the specifics of the contract, he.icycr. ha was aware that Keiser had to get "cuthorizations" for contract chang 2s frce CG2E. Schwiers agreed that under the non al cost-plus-a-               -

fir.cd-fee contract Kaiser ).culd not have to have had CG&E's approval for staffing, however, he tes unable to explain the contract restricts which required Kaiser to sutait staffing requests to CGLE. Scht.iers explained that during his assign ent as OA Hanager at Zicr:r he y 6:as under "trc:endous pressure". When asked to elaborate Schwiers . d clined to cerr.cnt on what type of pressure he was refering to. Schwiers cenclud:d tFc interview by advising 01A that he was going to retire from CGLE in ths Octobar-November time frcte. Schwiers also stated that if there tecte cc? additicr.a1 requests to interview him, be was going to have to limit his responses to "yes" or "no" answers. e S S 9 e em " 4 O O h 0 l

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EYtg191T 510 7.3.5 Items of Noncempliance Two exacples of two items of noncompliance were identified (failure to per-form a comprehensive audit of the ST,L nonconformance program, and failure to determine the cause and preclude repetition of a recurring problem). S. Unresolved Items Unresolved items are matters about which more information is required in order to ascertain whether they are acceptable items, items of nonco=pliance, or deviations. Unresolved items are identified in paragraphs 4.1.3, 4.2.2.3, 5.2.3.6, 5.5.3.4, 5.10.3.2, 5.10.3.3, 7.1.3, 7.2.4, and 7.3.2. Items which are net censidered " unresolved" but which are considered to be "open" and which will receive followup inspection are identified in para-graphs 5.2.3.2, 5.3.4, 5.11.3, and 7.2.3.

9. Other Open Items When this investigation was initiated, the NRC interviewed numerous quality control inspectors, construction craftsmen, and managecent personnel who provided information that deserved review by the NRC. The infor=ation pro-vided was prioritized with the highest priority given to the initial four allegations received from a former Zimmer contractor QC Inspector (Section 4),

the 19 allegations received from GAP /Applegate (Section 5), and the most . significant statements and allegations received from contractor employees and ex-employees (Section 6). Other allegations and statements were given lower priority. These lower priority concerns will be investigated and/or inspected and the findings and cenclusions vill be documented in future reports until the investigation is cc=plete. As noted in Section 3, GAP provided a number of affidavits from various individuals. In these cases where an individual's concerns or allegations have previously been reviewed by NRC, those individuals will be contacted to determine:

1. If they have information not previously provided.

2. If they have significant details to add to information previously provided.

If future inspection findings (either by the licensee or the NRC) reveal significant construction deficiencies, these will be addressed in revisions to the licensee's Quality Conformation Program as appropriate.

10. Exit Interview In addition to the management meetings and enforcement conferences held as described in Section 11, the inspectors and investigators met with licensee representatives periodically during the investigation and en March 26, 1981.

Attendees at the March 26 ceeting are designated in Section 1, Personnel Contacted, and at the end of this section. At that meeting the NEC inves-tigation team described the reascas for the investigation; the findings regarding each ccepleted allegation; and safety concerns identified during

                                                                                                - 155 -                   i

the investigation, which are described below. The team leader indicated that the investigation was not yet complete, that the findings would be reviewed with NRC Regional and Headquarters Management, and that enforcement action would be discussed in subsequent enforce =ent meetings. At the NRC's request, the licecsee agreed to meet with Region III representatives on April 10, 1981, in the Regional Office to discuss identified concerns and proposed corrective actions. The inspectors identified the following concerns: .

a. Steel beams with unacceptable welds and re-entrant corners with notches.

b. Inadequacies in the QA program of the structural steel erector (Bristol).

c. Lack of traceability of material in steel beams, small bore piping, and weld rod.

d. Surveillance reports not being converted to nonconformance reports in 30 days.

e. Structural welds inspected after painting.

f. Radiograph technique inadequate on 25*4 of the prefabricated welds -

reviewed by NRC. (Penetrameters were not adequately shimmed.)

g. Nonconformance reports being improperly voided.

h. Cable designed and installed in violation of the cable separation criteria,

i. Lack of inspection control to verify cable separation. (Three examples of failure to maintain cable separation were identified.)

j. Lack of design controls by Sargent and Lundy to require verification calculations for thermal loading of power sleeves and dead weight loading of all trays, to document design deviations identified by engineers, and to document deviations from the FSAR.

k. Inadequate action taken by CGS 2 to obtain correction of repetitive problems identified by CG&E in audits of Sargent & Lundy.

1. Lack of audits of the Sargent & Lundy nonconformance program.

m. Weld inspection criteria was deleted from the veld data sheet (KEI-1 form) from approximately July 1980 to February 1981.

n. Lack of socket veld fitup verification on numerous small bore pipes.

o. Installation of structural hanger beams which were not required on any design documents,

p. Doubts about the accuracy of weld records. Information from the weld rod issue slips was being transferred to the veld data sheets.

                                            - 156 -
                                                                                         -6

e l q. Lack of control of design document changes. f r. Site procedures allowed more weld undercut than AWS D1.1-1972. NRC Personnel Attendine Exit Interview March 26, 1981 P. A. Barrett, Reactor Inspector R. M. Burton, Investigator F. T. Daniels, Senior Resident Inspector E. C. Gilbert, Investigator, IE:HQ T. P. Gwynn, Resident Inspector F. A. Maura, Reactor Inspector J. B. McCarten, Investigator J. F. Schapker, Reactor Inspector K. D. Ward, Reactor Inspector R. F. Warnick, Chief, Reactor Projects Section 2B

11. Manacement Meetings In addition to the exit meeting held at the site on March 26, 1981, meetings involving licensee and RIII senior and/or middle management were held on March 31, April 1 , April 30, June 2, June 3, and August 5, 1981. These meetings are su=marized below.

Following the exit meeting held at the Zimmer site on March 26, 1981, . Mr. E. A. Borgmann met with J. G. Keppler and R. F. Warnick on the afternoon of March 31, 1981, in the Region III office to discuss the significance of the NRC investigation findings and required corrective actions. As a result of this meeting, Region III sent an Immediate Action Letter (IAL) dated April 8, 1981 to the licensee documenting ten corrective measures that CG&E had initiated or were planning to take concerning the problems identified by the NRC investigation team. The ten measures were established to provide assurance that similar problems do not recur during ongoing and future construction activities. The IAL and the required corrective measures are described in Section 12, NRC Actions and Licensee Commitments. An enforcement conference was held in the Regioa III office on April 10, 1981, between E. A. Borgmann and others of his s'.aff and J. G. Keppler and other NRC persennel to discuss CG&E's proposed ccrrective action program for deficiencies identified in the NRC investigation and the measures to be taken to assure acceptable quality of future activities. This enforcement conference is documented in IE Inspection Report No. 50-358/81-14. A followup meeting was held in the RIII office on April 30, 1981, between W. D. Layaire and others representing CG&E and R. F. Warnick and others of the !.C staff, to discuss the status of measures being taken to assure acceptable quality of ongoing activities at the Zi=cer project and to dis-cuss the latest draft of the licensee's proposed corrective action program for deficiencies identified. Details of this meeting are documented in IE Meeting Report No. 50-358/81-16. f.'

                                         - 157 -

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W THE CINCINNATI GAS & ELECTRIC COMPANY rr CINCINN ATI OHi0 452OI WILLI AM J. MORAN

                      ..-.....--m April 3, 1981 Mr. A. Joseph Dowd Senior Vice President and General Counsel American Electric Power Service Corporation 2 Broadway New York, New York     10004 RE:   WM. H. ZIMMER NUCLEAR POWER STATION LETTER FROM UNITED PRESBYTERIAN CHURCH Daar Mr. Dowd:

Reference is made to your letter dated March 13,. 19 81, pertaining to a letter American Electric Power i-received from Mr. John M. Fife, Chairperson of the Committee j

on Mission Responsibility through Investment of the United Presbyterian Ch6rch. The following are CG&E's. comments 4

l pertaining to Mr. Fife's letter. . The Wm. H. Zimmer Nuclear Po' er Station represents an effort of more than ten years of engineering and construction

                          ' time. Throughout this period, the Atomic Energy Commission and l                           now the Nuclear Regulatory Commission have mandated various

{ changes in order to effect a final design consistent with improvements in available technology. All design changes are 4 made with the goal of improving plant safety and reliability. - For the purpose of responding to some of the concerns in Mr. Fife's letter, it should be noted that a comprehensive i pre-operational testing program of all plant systems must be successfully completed prior to placing the plant in service and I it is not unusual for some modifications and changes to be made as a result of such testing. The following items were identified during pre-operational testing and appropriate corrective measures have' bcen implemented, in addition to retesting the system - affected.

1. Waste drain clogged: This problem was discovered during routine testing of the sys tem. It was repaired and placed

. in to service. Occasionally, drains become clogged during i the construction phase' of work. Because of the test program, this system could not have been placed in service

~with a clogged drain.

+ . To: Mr. A. Joseph Dowd April 3, 1981 Re: Wm. H. Zimmer Nuclear Power Station. Page #2 Letter from United Presbyterian Church

2. Silt buildup in the Service Water Intake Structure: The NRC was notified of this problem in a letter, dated July 23, 1979, and is a matter of public record. CG&E stated in the letter that the silt will be removed, and during operation of the plant , a sedimentation removal and monitoring program will be implemented to assure that excess sedimentation is not accumulated in the Intake.

3. Service Water Pump failure: ' This item was reported to the NRC in a letter dated December 17, 1980, as reportable under

                  .10CFR50. 55 (e) . Corrective action is in progress and consists of adding flow measuring elements and minimum flow control valves. New impellers which are more rugged and less suscepti-ble to internal recirculation are also being installed.

4. Water-tight door frames leaked: During tae early phase of testing, the ' door frames did leak. Mint modifications were made to the frames, and all 'of the doors have subsequently passed the leak test.

The doors will be checked periodically during the life of the plant. The NRC Office of Inspection and Enforcement has reviewed and signed off on" this matter. 0 5. There were some radiographers dismissed for valid reasons, not from vindictiveness or to cover up defective work. 6. Some argon gas leakage may have occurred at times from bottles used for. welding on the site but there were no instances of anyone being overcome. At the Atomic Safety and Licensing Board (ASLD) hearing in Cincinnati during June, 1979, a former worker at.the Zimmer  ; construction site testified about rough control rod seals , metal. fragments, and oversized control rods. These matters were checked immediately by CG&E as well as by the NRC. No problems with the ' control rod scals were determined and the matter was explored in depth during the testimony at the hearing. The electrical design and electrical cables for the Zimmer Station are dif ferent from the TVA Brown's Ferry Plant. The Wm. H. Zimmer Nuclear Power Station Unit 1 - Fire Protection Evaluation Plan is a large and detailed public document that can be reviewed in detail if desired. This report incorporates all , fire protection requirements for the Zimmer Station as a result l i of the NRC revised fire protection regulationn dated May 3, 1976. l Cable tray design and cable tray fire protection were also ex- l plored by the ASLB.

To: Mr. A. Joseph Dowd April 3, 1981 Re: W m . II. Zimmer Nuclear Power Station Page #3 Letter from United Presbyterian Church CGLE hired a private investigating firm to check on time card cheating. The investigator worked for about one

                 . month at the site. As a result of the investigation, three employees were discharged for time card cheating. During the course of his investigation, the investigator submitted four confidential reports that contained many rumors, hearsay, and other unsubstantiated information. The investigator, for reasons of his own, made public part of the information con-tained in the reports and took some of the information to the NRC in the summer of 19 80. The NRC submitted its report on July   3, 19 80, which did not substantiate any of the investigator's charges. The NRC is presently at the site reinvestigating the s same complaint. At present, the NRC has not issued a formal j

report they are onbasically their findings but has indicated verbally to us that j unsubstantiated. The following lis ted items' are the remainder: of those referenced in Mr. Fife's letter:

1. Approximately 2,0% of shop welds are defective.

                                                         '.+ -

2. Diversion of labor and materials for personal use.

3. Theft of materials.

4. Unreported fires.

5. Lax worker supervision.

These are all in the category of rumor and hearsay. They have all been investigated and cannot be substantiated. These were developed by the investigator through conversations at the site with persons lacking direct knowledge of the subject matter and simply passing along rumors. With regard to Item 1 above, it should be noted that safety related shop welds are srequbject to a stringent quality assu'rance program meeting NRC ui remen ts .

                                              . --    n-.-

[~*( To: Mr. A. Joseph Dowd . Apr.11 3,.1981 Re: Wm. H. Zimmer Nuclear Power Station, Page #4

                 . Letter from United Presbyterian Church We trust that' this response will answer the questions contained in Mr. Fife's letter.

Sincerely, WJM:mj l k t S 6 1

e i MUAACCd pCi! 101 dCDHC z3 . p g EXHIBIT #11 ilne .10_il O, 4n,osm 1 iii By Terry Kinney that the construction of Zimmer is ( Associated Press sound. _ I "There never has been a defec- I " CINCINNATI - The Nuclear * 'T *~ Regulatory Commission proposed a tive weld found at the plant. We have fme of $200,00) yesterday agamst the I ked at some 18M Erays of welds g gl /yg/ C,ncinnati Gas & Electric Co. for . and can fmd no evidence that there - sloppy quahty assurance darmg con , is a faulty weld." i f gj j L[jg. ,p, j struction of a 31.25 billion nuclear ' The NRC did not allege that the power plant. Wm. H. Zimmer Nuclear Power Sta , James Keppler NRC regional ad- tion at Moscow was unsafe, and did ,

            '               ministrator, said the preposed ime not order construction halted.

was meant as a warning to other uti!i- Rather, it said construction and

  '                         ties that they must keep complete testing were not adequately docu-records and fully document safety in-          mented by the Henry J. Kaiser Co. of I                        spections dunng construction, he said.          Oakland, Calif., the contractor hired i                                                                       by CGLE~
                                "I can't tell you there aren't 'other                                                      ,

' s Zimmers out there," Keppler said. (Turn foNi] CLEAR, fuck;ods) .g The plant is located on the Ohio g River at Moscow, Ohio, roughly half.

 .;                        way between Cincinnati and Mays.                   -           -

ville, Ky. iable r -

    !                                                                                                                                 o CG&E president William Dick-i i

honer said the owners of the unfm-

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ished plant have not decided whether "[.,s i a m I

                           ' 2 "de$ll.' 5 '"$ $ s:

and the NRC decides to impose the fme anyway, a heanng would have to

                                                                                = In3 OVer Work at ammer t

be scheduled. of quality control personnel and nu

!I tere From Pa2e One merous examples of failure to imse I ' The NRC in 1979 proposed a $450,- ment an adequate quality assurr.nc.

00) fme against Consumer Power Co. "The investigation identified a program," Keppler said, arts' of Jackson, Mich., for a!!eged me- rea. .w idespread breakdown in the utility's chanical vio!ations at its Palisades nu- sub- quality assurance pmgram," Keppler Work on the plant began a decac clear power plant near South Haven, was said, adding CGLE,is responsible for ago and is 95 percent complete. It wt i Mich. The NRC and the utihty later the all aspects of construction.

have a generating capacity of S;0.E agreed to halve the fme to $225,000, dar-

  ,                       and it was paid fcur months ago, util-                               "The breakdown resulted from         kilowatts and is scheduled to beg.-

the ecmpany's failure to exercise ade- commercial production of electncit; ity spokesman Robert Wischmeyer said late yesterday. able , quare oversight and control of its pnn- *^ N-330 cipal contractors in the area of qual-

                               "While we strong!v disagree with                  on't    ity assurance."

te a

                                                                                                                                  ,       CG&E, which serves about :

the pro;csed civil penilty, we concur in discussing CG&E's fine, he m!!! ion people in southwestern O.m with the NRC's main poet surrourd- e t .g this act:on, that r.o maict hard- 'h cited investi2 stive fedmgs of false, and Northem Kentucky, is the licen-misleading and doctored records. see, principal owner and operat:r; ware p ch'e: .s have beta. Idcnnfied." partner.The Dayton Power and Lir.h-D:cktener sr'. "We are centdent rec- "The fine is prcposed for three vi-Co. and Co!umbus and Southern Oh.s l pip-

                      -'           -                      -                               o!ations: false quahty assurance docu- Electnc Co. each owT1 about 30 pe: 3
        .                                                                        <ar-     ments, harassment and intimidation cent.

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j = . . i '.G. JAN. 2 2 GS2 N . Docket No. 50-358 -~~ ,/ + I' CincinnatiGasandEleItric g Ccepany ATTN: Mr. Earl A. Borgmann

                                                                                                                          ?.

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• Senior Vice President / "- Q/Qg Engineering Services and l Egg Electric Production i i:c.Fu ooh 139 East 4th Street 0.-c.7 Qp'd '8 7

M w Cincinnati, OH 45201 - Ec c3 (9 Gentlemen: ip This refers to the special safety inspection involving independent ver-ification of certain construction activities at William H. Zimmer Nuclear Power Station conducted by Mr. D. H. Danielson and other NRC technical staff and contract personnel on August 24-28, September 1-23, October 5, and Nove:Ser 2-5, 1981. This inspection also included an assessment of exactinations conducted at Franklin Research Center in Philadelphia, PA. On November 16, 1981, Mr. J. G. Keppler and others of the Region III office met with Mr. B. R. Sylvia and others of the CG&E staff to discuss the findings of the inspection. The enclosed copy of our inspection report identifies the areas examined during the inspection. Within these areas, the inspection consisted of

         ..          nondestructive examination of selected piping welds and adjacent base Qy    "

raat.:_-ials, safety related strucct.ral welds, f raroi.ig membars , ar.1 ' anger beams; selective examination of records; and interviews with personnel. No items of noncocpliance with NRC requirements were identified during the cource of this inspection. However, some instances which did not fully meet code requirements in piping welds and adjacent base materials were identified. These findings are specifically identified in Paragraph 2.d of the enclosed report.

                     ~4ith regard to the findings noted in Paragraph 2.d, please inform this office in writing within 30 days of receipt of this letter of the actions you have taken or plan to take te correct specific findings and to assure that sicilar conditions do not exist in other areas of the plant which may l

be detrimental to intended service. In respondtug, you may reference your Quality Confirmation Program to the extent applicable. ( 0165 G20122 O hCCR05000359 m PDR , S y..__,....,__-,__.-.___..,_.-....___- _. 4 8 4 * " %e-

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Cincinnati Gas and Electric man 2 31982 , Company In accordance with 10 CFR 2.790 of the Commission's regulations, a copy of this letter, the enclosures, and your response to this letter will be placed in the NRC's Public document Room. If this report contains any information that you (or your contractors) believe to be exempt from disclosure under 10 CFR 9.5(a)(4), it is necessary that you (a) notify this office by tele-phone within ten (10) days from the date of this letter of your intention to file a request for withholding; and (b) submit within twenty-five (25) days from the date of this letter a written application to this office to withhold such information. If your receipt of this letter has been delayed such that less than seven (7) days are available for your review, please notify this office promptly so that a new due date may be estab-lished. Consistent with Section 2.790(b)(1), any such application must be accompanied by an affidavit executed by the owner of the information which identifies the document or part sought to be withheld, and which contains a full statement of the reasons which are the bases for the claim that the information should be withheld from public disclosure. This section further requires the statemenc to address with specificity the considerations listed in 10 CFR 2.790(b)(4). The information sought to be withheld shall be incorporated as far as possible into a separate part of the affidavit. If we do not hear from you in this regard within the specified periods noted above, a copy of this letter, the enclosures, and your response to this letter will be placed in the Public Document Room. We will gladly discuss any questions you have concerning this inspection. Sincerely, U$IGITI$7'8?d!Md by C.ti. Nw.if e H C. E. Norelius, Director Division of Engineering and Technical Inspection

Enclosure:

Inspection Report No. 50-358/81-27 cc w/ enc 1: J. R. Schott, Plant Superintendent DMB/ Document Control Desk (RIDS) Resident Inspector, RIII Harold W. Kohn, Power Siting Coraission Citizens Against a Radioactive Environment Helen W.' Evans, State of Ohio l RIII RIII RIII Da son /so d qs $ , > 3 25j31 *WW '/I S/ge t It/T >  !

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I U.S. NUCLEAR REGULATORY COMMISSION j REGION III l Report No. 50-358/81-27 * - Docket No. 50-358 License No. CPPR-88 Licensee: Cincinnati Gas and Electric Company 139 East 4th Street Cincinnati, OH 45201 Facility: William H. Zizmer Nuclear Power Station Inspection At: William H. Zin:mer Site, Moscow, OH Franklin Research Center, Philadelphia, PA Inspection Conducted: August 24-28, September 1-23, October 5, < November 2-5 and 16, 1981 Inspectors: D a s , Ch

                                                                                          #   h Materials and Processes Section, RIII W. J. Key W                                    // // M M Reactor Inspector, RIII

((.3df P. A. Barrett f

                                                                                    ///2./ 6, f

Reactor Inspector, RIII ' ( d. 0 & K. D. Ward I/ / js /, $d f. Reactor Inspector, RIII Y' D. E. Keating Reactor Inspector, RIII y hd,

                                                                                                      /[      I 27/bv G. A. Walton                                                ' / 2-Reactor Inspector, RI                                        '
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                                                                                        //        8V
                            /W.F. Sanders                                                     '
                               ,eactor Inspector, RI                                    /

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hkw & Reviewed By: D. H. Danielson, Chief IAb Materials and' Processes Section '

                                                                                                     ~

fWho - C. C. Williams, Acting Chief

                                                                                          /       8/[A Engineering Inspection Branch                                 /

Inspection Summary Inspection on August 24-28, September 1-23, October 5, November 2-5, 16, 1981 (Repor No. 50-358/81-27) Areas Inspected: Radiographic examination, ultrasonic examination, liquid penet rant examination, thickness measurement, hardness measurement, and chemical and metallographic analyses on safety related piping welds and adjacent base materials; visual examination, magnetic particle exa:aination, and hardness g measurement on safety related structural welds, framing members, and hanger

       )      beams. The inspection onsite involved a total of 717 hours by Region I and III NRC technical specialists, 40 hours by a technician from Parameters, Inc. , (NRC contractor) and 600 hours by technicians from Wisconsin Industrial Testing Inc.

(NRC contractor) Results: No items of noncompliance were identified; however, this independent verification inspection did identify some potential defects in safety related piping welds and adjacent base materials.

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                      . Thirty (30) visual examinations of fitup and approximately                            )

one hundred and thirty (130) visual examinations of related welds were perfor=ed on the hanger beams which support cable I tray hanger assemblies. These welds had been painted and the l examinations were conducted using NRC Procedure NDE-14, Revision 0. - - ( . Forty (40) hardness tests were performed on selected beams in five areas. The tests were performed using an Equotip Portable Hardness Tester in accordance with NRC Procedure NDE-12, Revision 0.

                      . Fifty-six (56) magnetic particle examinations were performed on selected structural and hanger beam welds in two areas in accordance with NRC Procedure NDE-6, Revision 0. These magnetic particle examinations were conducted on painted beam welds and were performed to supplement the above visual examinations.
       </;                  Magnetic Particle Examination-is a method of nondestructive 4                    examination used for locating discontinuities in ferromagnetic materials. This method utilizes the leakage from an established magnetic field to attract and hold finely divided magnetic particles in or at the discontinuities.

An objective of the independent verification program was to verify onsite the type and elemental composition of selected piping and beams. The portable analyaer planned for use was inoperable due to mechanical problems and as a result, verifi-cation of material composition was limited to the samples sent to Franklin Research Center.

d. Findings t

                       . The visual examinations of piping welds that were conducted revealed six welds which exceeded the ASME Code allowable ite '                  relaforcement huight on the outside rurface of the weld.
                       . The liquid penetrant examinations that were performed revealed what appeared to be lack of penetration in the full penetration weld for hanger LP-K-114.
                        . The ultrasonic thickness measurement of welds and adjacent base materials revealed a wall thickness of .758 inches in the base material adjacent to weld HP-12A. The minimum wall thickness in accordance with com=ercial design tables is .862 inches thick.
                        . When reviewing the film of the safety related welds that were radiographed (47 carbon steel and 5 stainless steel) the following was noted:

(1) On several films the inside of the pipe contained foreign particles. The particles appeared to be a combination of dirt, rust, and loose scale. 1

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F (2) A slag indication 1-1/2 inches long in the radiographic film for weld EP-20. (3) On several films a condition that appears as a straight line (one side being darker than the other) on the radio-graphic film.* The most severe condition involved carbon steel weld HP-6A and stainless steel weld FC-100, which were cut out and sent to Franklin Research Center to characterize and document the potential defects found in the root of these welds.

3. Details of Indepth Independent Assessment

a. Piping Material Traceability - Diesel Generator Rooms (1) Objective

() For pipe not marked with a heat number, select three pipes at random and have them analyzed for material type, material composition, and hardness. For pipe identified with heat numbers not on the list of :cceptable heat numbers, select three pipes and have them analyzed for material type, material composition, and hardness. For all pipe sections sent to Franklin Research Center for analysis, also analyze each with a portable analyzer. (2) Discussion The following pipe sections were removed from the Diesel Generator rooms for shipment to Franklin Research Center. Diesel Generator Room "A"

       /f?Sg                                                      Pipe           Length
       \(if                                  Line No.           Diameter         Removed          Location 1DG-26-AA-2            2"              2'            Between elbow off tank 1DG15TA and valve IDG009A (air reservoir)

M-428-6-DG-71 1DG-11-AA-3 3" 11.2" Off cooling water expansion tank IDG14TA PSK-1DG-24 Diesel Generator Room "B" Pipe Length Line No. Diameter Removed Location 1DG-01-AD-1 1" 1" Off tank 1DG07TB between coupling to tank and 90 elbow M-428-9-DG-65

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EXHIBIT #12 l

   *'                                                                                          1 GOVERNMENT ACCOUNTABILITY PROJECT                                                     !

1

       . institute for Policy Studies                                                          l 1901 Que Street.- N.W., Woshington. D.C. 2000g                          (202)234-9382 '

March 19, 1982 Mr. Christopher K. Barnes, Esq. United States Attorney for the Southern District of Ohio United States Post Office Building and Courthouse Room 220 lst and Walnut Streets Cincinnati, OH 45202

Dear Mr. Barnes:

On behalf of Mr. Thomas Applegate, I am writing to inquire about the status of possible criminal investigations by the United States Attorney's Office ("USAO") into alleged criminal misconduct at the William H. Zimmer nuclear power plant. The relevant issues for criminal investigation include alteration or falsifi-cation of quality assurance documents; failure to conduct required quality assurance investigations; and street crimes such as theft and gambling. The Government Accountability Project (" GAP") is a nonprofit, nonpartisan public interest organization that assists federal and corporate employees.who report illegal, wasteful or improper ac-tivities by their agencies. GAP.also monitors governmental reforms, offers its expertise about personnel issues to Executive Branch offices and agencies, responds to Congressional requests for anal-ysis of issues related to accountable government and disseminates significant information about problems to appropriate places within the government. Mr. Applegate was a private detective hired by Cincinnati, Gas and Electric ("CG&E") to investigate time cheating by workers at the Zimmer nuclear power plaat. When he uncovered massive theft and black markets,.as well as possible comprcmises to the quality control program for vendor welds and piping, CG&E promptly terminated his contract. Mr. Applegate's subsequent whistleblowing disclosures to the Nuclear Regulatory Commission ("NRC") - and t he Office of the Special Counsel ("OSC") of the Merit Systems Protection Board led to an August 7, 1981 report by NRC's Office of Inspector and Auditor ("OIA Report") that condemned the adequacy of the NRC's intial re-view of Mr. Applegate's charges. In the aftermath of the OIA report, the NRC has committed itself to a fundamental shift in its investigative techniques, with an increased emphasis on witnesses and laboratory tests of components. NRC's Region III also reopened its I

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                     .   .    .          ~_  -                                                        _      _   _ -.      __-.

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                  ,Mr.' Christopher K. Barnes                                             March 19, 1982
                   -investigation into Mr. Applegate's charges. The resulting probe eled to- the discovery of widespread harassment of quality control inspectors, as well as alteration and manipulation of quality control records and inspections. The preliminary results,.

released in a November 25, 1981 report of Region III's Office of Inspection and Enforcement ("IE Report"), led to a $200,000 fine, the largest in history for a nuclear power plant under con-struction. Region III also required the utility to reinspect . 100% of the safety-related parts in a Quality Confirmation program. The IE Report was limited to civil violations of the Atomic Energy Act. Mr. Applegate's charges, however, also covered crim-inal activity. His allegations included --

1. sale of stolen guns on the site;

2. diversion of labor and materials for the personal benefit of a construction superintendent, at a cost to CG&E of more than $30,000; ,

3. fabrication and sale over seven years of belt buckles constructed from nuclear grade steel worth millions of dollars in labor and materials intended for use in pipes, braces and componants at the plant; i

4. theft of two thousand pounds of copper cable smuggled in small lots and resold within a week for $15,000 on the black market by 30 plant personnel, to finance a Christmas party; and . .. .c ,

e. . -

5. an entrenched system of time card padding, implicitly sanctioned by the construction company, Kaiser Engineering Incorporated, and CG&E, wasting significant amounts 'of time and money.

To date there has been no apparent investigative effort by law enforcement agencies. These are charges with serious impli-cations. For example, if a black market exists at Zimmer, high quality pipes or components could be switched with shoddy sub-

;                   stitutes.      The IE Report revealed numerous instances where safety-t related piping could not be traced back to the original supplier.

There is also evidence that the reports generated by Mr. Applegate's disclosures led to two criminal referrals to the Department of Justice, and one other criminal investigation.. Initially, a January 7, 1982 letter from CG&E's Donald Blum to the

 ,                 Securities and Bxchange Commission revealed that-the IE investi-gation produced a criminal referral against Kaiser management personnel. Mr. Blum explained, "The information contained in                                                     j i

the November 1981 NRC letter has been-referred by the NRC to the l I' Justice Department for one possible Justice Department action i s

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 .                                                                              I Mr. Christopher K. Barnes                           March 19, 1982 against management personnel _ of the contractor. "

A consideralbe amount of indirect evidence confirms a substantial investigation and referral by OIA into criminal issues that may explain the quality control coverup. For example, an August 17, 1981 letter from OIA's James Cummings to Ms. Ann Marie Tracey of your office explained: OIA has initiated an investigation into the recent discoveries, by Region III, relating to both alleged altering or falsifying documentation and failures to conduct quality control inspections pursuant to Appen-

           . dix B, Part 50, Title 10, Code of Federal Regulations.

These allegations as they pertain to regulatory vio-lations have been the subject of a recently completed IE investigation. (Emphasis added.) (Exhibit 1.) OIA is the only branch of NRC with 3urisdiction to conduct criminal investigations. At Commissioner Ahearne's instruction, OIA's plan for the Applegate case was used to. refer criminal activity beyond IE's reinvestigation of safety issues to the Justice Department. (A January 5, 1981 letter from James Cummings to Chairman Ahearne is enclosed as Exhibit 2.) At March 3, 198 2 congres-sional budget hearings, IE Director Richard DeYoung revealed that OIA had not only split off a criminal investigation from the Applegate probe, but had referred it to the Department of Justice: Ms. HULL. There is just one more question on this. I understand that inspections uncover certain health and safety possible violations, but that in the course of that investigation there is also, perhaps, evidence that there is criminality or a willful violation, in the case of Zimmer, the criminal inspection was postponed until the completion of the health and safety. violation, probable-violation. I understand that health and safety is your primary responsibility, and should not take second seat to any-thing, including criminal violations. But have any stan-- dards been established to determine when the health and safety threat is imminent or when the criminal investi-gation should not be postponed? i Mr. DEYOUNG. I might respond that they were not put aside. They were separated. OIA pursued the criminality, and we pursued the I&E part of it, the health and safety. So they were not dropped, they were just completely separated.

Mr. Christopher K. Barnes. March 19, 1982 It was referred. We talked to the Department of Justice. OIA did pursue that, they questioned people, and they questioned them about the staff performance in Region III as well, but they referred it to the De-partment of Justice. The Department of Justice will tell us what they want us to do. If they say, stop, do not proceed, we do not proceed. (Excerpts from the unpublished transcript of the March 3 budget hearings before the Energy Conservation and Power Subcommittee of the House Energy and Commerce Committee are enclosed as Exhibit 3.) Mr. DeYoung appeared to infer that the Justice Department will have to take any further initiatives on the Case. Finally, there is evidence that NRC Commissioners considered the criminal aspects of the case sufficiently significant to discuss in a closed meeting. In a February 3, 1982 response to a GAP FOIA request, the NRC stated that the Commission held a closed meeting on October 27 and 28, 1981 "to discuss potential enforcement actions stemming from the Zimmer investigations." The transcripts were denied pursuant to, inter alia, exemptions (5) and (7) of the Government in the Sunshine Act. Exemption (5) permits retention of transcripts likely to " involve accusing any person of a crime, or formally censuring any person." Ex-emption (7) covers transcripts likely to -- (7) disclose investigatory records compiled for law enforcement purposes, or information which if written would be contained in such records, but only to the extent that the production of such records or information would (A) interfere with enforcement pro-ceedings, (b) deprive a person of a right to a fair trial or an impartial adjudicaion, (C). constitute an unwarranted invasion of personal privacy, (D) dis-close the identity of a confidential source and, in the case of a record compiled by a criminal law enforce-ment authority in the course of a criminal investiga-tion, or by an agency conducting a lawful national security intelligence investigation, confidential in-formation furnished only by the confidential source, (E) disclose investigative techniques and procedures, or (F) endanger the life or physical safety of law enforcement personnel.... There is little escape from the conclusion that possible criminal misconduct at Zimmer was the focus of extensive discussion by the Commissioners. Their concern was understandable. A careful reading of the IE report reveals quality control violations of astounding propor-

Mr. Christopher K. Barnes March 19, 1982 l tions. The report documented 40 noncompliances, compared with 44 for.the c.ntire previous tuo years. The noncompliances involved 964 instances of records manipulation, failure to conduct quality , assurance . tests properly, harassment of inspectors, unacceptable  ! components and . similar problems. . The report documented numerous cases of faulty welds scattered througho'it safety-related systems; overfilled cable trays and pipe hangers unacceptably installed. Even more significant, Region III found repeated instances where the design blueprints for the plant did not match the installed components. The report listed a series of examples where pipes that appeared to be permanently installed did not appear on any design documents. The NRC is just beginning to conduct extensive laboratory tests on the plant to see how much equipment damage the records manipulation covered up. Preliminary results, however, suggest that substantial new welding flaws will be exposed as

   ~the tests continue. (See, e.g. NRC Inspection Report No. 50-358/81-27.)

The NRC report found massive records and inspection violations, but the investigation did not attempt to identify who was ultim-ately setting the coverup policy. The issue is of decisive sig-nificance, however. CG&E is in charge of the Quality Confirmation program intended to resolve all the remaining safety questions at Zimmer. If CG&E was the ringmaster for the quality control circus at Zimmer, it would be tragic to put the utility in charge of cleaning up the mess. Certainly the public would not be reassured by any ensuing self-exoneration. Unfortunately, there is considerable evidence found hap-hazardly in the IE report indicating that CG&E at least was aware of, and may have been directing, the Kaiser misconduct.. The IE report contains 16 references to separate instances of utility misconduct or complicity. For example, former CG&E Quality Assurance chief William Schwiers admitted that the utility's own quality assurance pro-gram sutfored from the same lack of independence from construction demands as Kaiser's QA program. While he may have. signed the paperwork refusing adequate Kaiser quality control staffing requests, he cautioned that he didn't make the decisions. They were made at CG&E management meetings that included Project Manager Barney Culver, as well as representatives of the CG&E Generation and Construction Departments. Mr. Schwiers added that he reported directly to Earl Borgman, the utility's Senior vice President for Engineering Services and Electric Production. He could not remember, however, if Borgman had attended the referenced meetings. Schwiers concluded by stating that he had been under " tremendous pressure"'during his assignment as QA Manager and refused to answer further questions beyond "yes" and "no." (The Schwiers interview, Exhibit 52 to the 1E Report, is enclosed as Exhibit 4.)

Mr. Christopher K. Barnes March 19, 1982 In a second instance, a witness reported that Schwiers and Kaiser Construction Manager Robert Marshall directed that a

    " hold tag" be changed to " rework" in the cable spreading room in order to avoid construction interruptions. Eighteen months later the non . conforming condition had not been repaired. (IE Report, at 135.)

A third instance involved harassment of a quality control inspector. CGaB official Scott Swain and Mr. Marshall followed around an inspector who was reinspecting previously rejected welds. Swain complained and almost got the inspector fired for allegedly using a magnifying glass to find welding defects. In reality, magnifying glasses are approved tools for welding in-spections. At any rate, the employee in fact was using a flash-light. (IE Report, at l30-32, Attachment A, at 4-5.) Another chilling example is prophetic of CG&E's current "100% reinspection" of safety-related components. A witness re-counted a meeting with CG&E and Kaiser management when inspectors were rejecting 95% of the welds during aereinspection of all pipe support hanger welds. The management officials criticized the inspectors for finding defects in previously accepted welds, and pressured them to ease off. (Id., at 130-31.) The Zimmer Quality Confirmation program will continue to have a credibility gap until effective decision-making authority over the coverup is identified, and until all the criminal leads are pursued. Mr. Applegate would not publicly air this request for a status report, but he has been rebuffed repeatedly in private. Further, GAP investigators have spoken with relevant witnesses for the IE and OIA Reports, and none have been contacted by law en-forcement authorities. Mr. Applegate is requesting more than merely a status re-port. He urges the U.S. Attorney's Office to proceed with the case. As House Environment Energy and Natural Resources subcom-mittee chairman Toby Moffitt explained at the December 14, 1981 hearings: Second, the Congress last year added an entirely new provision for criminal penalties -- both criminal fines and actual jail sentences -- for knowing viola-tions of NRC safety standards in the construction or nuclear plants or in the manufacture of reactors and other nuclear equipment.... Third, the Congress also added new criminal pen-alties for the harassment, intimidation or assault of quality control inspectors. Such harassment, as this Subcommittee has already found through previous in-vestigations and as the NRC has now admitted in its own investigation, are precisely the sort of actions that occurred at the Zimmer site near Cincinnati.

4k. Christopher K. Barnes March 19, 1982 These new criminal penalties were not placed in the Atomic Energy Act as window-dressing. The Congress provided for criminal penalties for utility failures to obey NRC safety rules for a very important reason: the public health can be endangered by nuclear crimes just as surely as it can be by street crimes.. (Emphasis in original.) (Exhibit 5.) In short, these issues are too serious to ignore. As Com-missioner Gilinsky observed at..the' March 3 hearings: I think criminality, if that is the right word, is not

,              permissible under the statutes that we administer. I think that has health and safety implications just as much   as other things that we are looking into.      ~

If there is someone falsifying records, that has j health and safety implications. (Exhibit 3, supra.) Mr. Applegate and GAP will cooperate fully with your office in any efforts to solve the mystery of who ran

      . the Zimmer coverup.

Sincerely, Thomas Devine Legal Director TD/kep Enclosures i I f n-

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August 17, 19D1 Exhibit 1 s.

                                                                                                                   ,                                                                           x, l's. Ann !!aric' Tracey                                                                   ,
                                                                                                                                                                                                     . ,C Assistant U.S. Attorney                                                                          ,

linited States Attorney . Southern District of Ohio- ' Cincinnati, Ohio 45202 ,

Dear lis. Tracey:

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                                                                                                ._N                    ..          .

Enclosed is a copy of the Office of Inspector and Auditor's (OIA) report of investigation partaining to an lip.C investigation conducted in April - 1980 by the Office of Inspection and Enforcement (IE) at thir Hillian H. Zinner !!uclear Construction project. Ue are providing this report in ' order that your office rcnains fully infomed of the'results of investiga- ' / tions conducted by the linC at Zinner. As discussed during our April 22, 1981 necting, DIA was tasi:ed to investigate the adequacy of previous efforts at the Zinner site to resolve allegations' of alleged faulty construction s.hich may have violated cuality assurance

                                                                                                                                                                                ~

criteria set forth in !!RC regulations and ~ adversely effected flRC's - ebility to ensure retters effecting p>blic health and safety.

                                                                                           ~

Our report specifically focuses on the rcrits of IE investigation 50-358/80-09 and " extends neither to the evaluation of other Ecgion III- ' actions relating to Zinner nor to the cuestion of allegedly faulty i construction at Zinner." However. DIA has initiated an investigation' into the recent discoveries, by Region III, relating to both alleg9d altering or falsifying docunentation and failures 7to conduct quality s control inspections PJrsuant to Appendix B, part 50,~ Title 10, Code of \' Federal pegulations. These allegations as they pertain to regulatory . violations have been the subject of a recently completed IE investigation., This draft IE report of investigation will be forwarded to your office under senerate cover. - - If there are any questions regarding this natter or. assistance needed, feel free to contact Arthur Schnebelen, Acting Assistant Director for Investigation or John Sinclair of the investigative staff (301-492-l, 7170). _ Sincerely, , Distributio_n ' N T hlA Filn 81-18 /s/ Arthur Schnebelen~ -

                                                                                                                                                                                                         ~

OIA File 1.2.b. _ JSinclair Janes J. Cumings, Di. rector

• Office of Inspector.md Auditor .

                                                                                                                                                               'e l                  Fnclosure:                                                                                                                '

x ! OIA rpt of Investigation , a 2,,4 . ......c Da41d Tverett, 40J, u/ encl. c : Len Utucnan; r03; v/ enc 1;~ - ~ ~D ~I A . -- - ~~SI OIA $

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1 January'5, 1981 0;. M'0P.N8kFOR: Chaiman Ahearrie , 4.g ., FPCl?: Janas J. . Cunnings, Director x

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SUBJECT:

THmAS 11. APPLECATE ALLFGATIOUS

    ~                                    -

f.ttached is a , letter to you from the Office of the Special Counsel dated

             -                             <         Decmher 29, 1'980, which was directed to this office.

As you requested in your Decmber 15, 1980, nenorandun to ne, this office ~will investigate the adequacy of the Office of Inspection and Fnforcenent's (IE) handling of Applegate's allcoations. He will also refo'r to ap.nropriate law enforcenent agencies any allegations of criminal activity beyond the scope of IE's current investigation of the safety 1 issues raised by fir. Applegate.

Attachment:

Asstated.(p.C d >/ W$ Ix cci Commissioner Gilinsky, w/cy Special Counsel ltr Comrissioner l!cadr'io, w/cy Special Counsel ltr _ Cannissioner Bradford, w/cy.Special Counsel ltr Victor Stello, u/ attach _- , L. Bickuit; u/ attach s Distribution " Ja_. x. ~ " ~ 01A rdr Garble ' Sinclair ,

                                              . CONTACTS:; David-Gamble John Sinclair

_ ,01A - 27170 _ o,s..e q _ 01 OIA

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        g y,g : HEC 062930                                                pAGE    99 2c28      adeauntely.                                                                        .

242! I wonder if you would comment on that? 2430: Chairman PALLADINO. Yes, I will be glad to comment on I

           ..2431         that.

2432 The q ue.s ti r,n~ . I inves tigations has been an item of 2433 discussion for some time among the Commissioners as well as 2434 between myself and the staff, and among the staff members. I 2435 tried to bring all the parties in the staff that bear.on 2436 this issue together at a workshop, uhich I think uns held on 3 l-2437 February 8, and out of that came a number of suggested  !

2438 improvements that were written up and are now being  ; 2439 circulated for cencurrence. 3 2440 The approach being taken relates to both the headquarters h 2441 and the regional offices. With regard to headquarters, we I p;, ; I 2442 concluded'that the investigatory aspects of inspection and

       ,                                                                                           i 2443    enforcement are too-lou in the organi=ation, and that the                ll
        .         2444    investigation office should be raised to an office reporting        j 2445    directly to the Director of Inspection and Enforcement.

2446 rurthermore that the sine of the group should be doubled l 2447 and that these should be professional investigators, and J. 2448 that their main function is to make sure that the

                 '2449    procedures, the policies, the. training program, and the f

3 2450 training is well defined and carried out. As a matter of 2451 fact, during - the workshop that was one of the comments that 24'52 uns most frequently made--We don't have any policies, we

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gnE: HEC 062030 PAGE- 100 ' ' 2453 don't have any procedures, cnd we really need a good I 2454 training program, not only to train people that are being 2455 brought in from the outside on the aspects related to ' ':456 nuclear power, but also to make sure that they are 2457 continuously updated on investigation process and the 2458 policies that we set forth. t 1 2459 We said that we wanted this written, at least the first

                                                                                                                                                       *j    t 2460   draft, by May 15.                                                          When I say, we said that, we said it in a l

2461 draft document that has not yet been approved but I am i 2462 pretty confident that it will be approved, with perhaps some , i 2463 minor med.tfications, because this is the second go-round. 2464 We have also said that the regional administrators shall. I 2465 increase substantially their investigation staff and make j 2466 sure that they have qualified individuals. The region is , 2467 uhere the investigations begin, and they can call for help t; 2468 d from headquarters, or for that matter from any region if it j 2469 is a big inve s tig a, tion . - i 2470 We think that this is an important element of getting I l 2471 investigations started early, and having qualified people in , F 2472 the regions to do it, having enough of them is the key to 2473 success in that. . 2474 With regard to the criminal aspects, it did not go to the ' l 2475 point of scy ng that we ucre going to remove OIA from that.  ; 2476 As a matter of fact, this proposal retains OIA as the focal 2477 point for contact with the Department of Justice, and

                                                                                                                                                            )

l  ! i I,

                                                                                                                  '! h

_ g AM,E t HEC 062030 p A'G E 101 2478 coordinating with the regions, so as soon as the regions see I 2479 that there is something that needs to be investigated-- 4 2480 Incidentally, we said that the regional director has to , f

           - 2481 de cide and identify when he is going to call something an l

2482 investigation. When he sees'that there is anything'.that is 2483 going to involve significant criminal aspects, he notify the ,

             '2484                                                                                                            IL director of OIA, as well as the EDO, and others in the                            ,

i' 2485 chain. t Between them, they decide whether it is going to be 2486 done through the .egional office of the Department of i: 4I 2487 l 4 , Justice, or the TBI, or whether it is to be centrali=ed here  !-

                                                                                                                      ! i, i.

4 2488 l in Washington. , 1. 1 2489 So some

    ;                                   of the implications in your opening statement,'I                               4         '

2490 think, are a bit different from the way ue are proceeding at

     .                                                                                                n a

I 2491 this time.

   'f                                                                                                    r               , .
   !         2492            Ms. HULL.          Does that mean that there is no change in the                         :.

1! I + 2493 i h jurisdiction of the 10A? .: s .", t 1 2494 Chairman PALLADIHo. I think that is basically true.  ; i 2495 Ms. HULL. I 1 I understand that one of the proposals in that l  ! {' 8496 policy paper was to establish a new civil area which makes a l j 2497  : i distinction which requires a finding of a willful careless f i j 2498 disregard. i .' 2499 Chairman PALLADINO. What are you quoting from? ~ 2500 Commissioner GILINSKY. Those are tuo separate categories,

           -2501      I believe.                                                                                                 ,

I i 2$02 Ms. HULL. , I believe they were, combined, and that was (  ; i . . i I' 1 6 i

x. llI i

                                                                                                    .I g nE: HEC 062030 pAGE    102 2503   essentially the question, how can there be a uillful and 2504   knowing disregard.

b 2505 Chairman PALLADINO. What document are you referring to? 2506 Ms. HULL. I am referring to SECY-81-600A. 2507 Chairman PALLADINO. That is the neu enforcement policy. 2508 Ms. HULL. We will pursue that later. There is no reason 2509 to go into that nou. 2510 Mr. OTTINGER. Does your budget have the funds necessary 2511 to hire 1 your additional qualified people and to train them? 2512 Chairman PALLADINO. The additional people could be taken I 2513 from other aspects of the organization. In IE, they should , 2514 hire three more professional investigators for the t 2515 headquarters staff, and the personnel billets are to be 2516 taken from other operations of IE. This is a small 2517 perturbation on a si=able group of peop'le. * *

• 2518 Mr. OTTINGER. From the information that I have here, and 2519 I have to assume that it is accurate, the regions presently 2520 just don't feel that they are equipped to handle these i

2521 responsibilities. They have had difficulties fulfilling 2522 those investigations that have had to do. ' 2523 Chairman PALLADIHO. i Most of the regions, I think, have i 2524 about five investigators, and the intent of this document. ' 2525 when I first urote it up based on our workshop, said that ' 2526 i they should double that to ten. They did plead with me to , I 2527 give them a little better flexibility, and so I said that l

   ,                                                                                    s              a

f.  ;

i

                                                                                                      ,      a j; ME: HEC 062030 PAGE   103 t

2528 the regional administrator shall redistribute staff 529 resources to substantially increase the number of qualified l l 2530 and trained investigators. 2531 In some regions, doubling the sine of the investigative 2532 stafi may be warranted. These must be qualified and tr.ained [ 2533 investigators. 2534 Mr. OTTINGER. I am not sure what the staff meant, or 1 2535 uhere they got it from, but they said Region II has eschewed 1536 investigations altogether in favor of special inspections. 2537 Do the regions have latitude to decide whether or not they i ! 2538 ,t i uill make investigations or not, or what kind of personnel ', 2539 they will take on? 2540 Chairman PALLADINO. We would require this of the regions. ,, i 2541 Mr. OTTINGER. Region II is my region, so I am concerned. l: t') I i 2542 Chairman PALLADINO. I misunderstood your question. The l' f f 2543 regions i  : do have flexibility on whether or not something 1544 should be investigated, and what to investigate.

• i 2545 Mr. OTTINGER.  !

But not to escheu investigation altogether. ,. 2546 Chairman PALLADINO. t No. 2547 'I Ms. HULL. If such a policy were in place, is there an f, 2548 oversight mechanism uithin the Commission that would 1549 recogniec that there had been a lack of investigations in 1550 i this area? 255'1 Chairman PALLADINO. Yes. As a matter of fact, the

352 headquarters group does have oversight, responsibility for l

i i 1 . i  :

                                                                                    'I i

l t x _

ggnt: HEC 062030 pAGE 104 tha invastigations that go en, to maka sure that they are

         $553 2554      properly coordinated, and that they are following the 2555      procedures that have been set forth.

2556 Mr. OTTINGER. Mr. Ahearne. I I 2557 Commissioner AHEARNE. I think the chairman is addressing 2558 the proposed modification on how to improve the system. I i 2559 think your question uns right nou. 2560 Right now, the principal way in which ue come across 2561 issues that one might have concluded should have been 2562 investigated and that were not, are when an issue gets  : 2563 raised to either ICE headquarters, and then ICE headquarters 1 2564 uill then ask the region uhy they did not follou up on this; ' 2565 or an issue gets raised to the Commission, and the j h

                                                                                                     . h.

2566 Commission uill ask why is not'the region following it up; q I 2567 or OIA in one of their revious will do that, j 2568 These issues get raised sometimes by staff people within , 2559 the Commission, sometimes by intervenors on the outside, or 2570 through a variety of such sources. But at the moment there  !, 2571 has not been any formal mechanism, and the chairman's  ! t 2572 proposal would have that. J, 2573 Ms. HULL. If such a policy uere in place, it would be ,?j 2574 difficult to detect that? *!

                                                                                                               's 2575             Commissioner AHEARME. I would find it astonishing if that                            5 2576                                                                                    i         .

policy were from the headquarters, i i 2577 Ms. HULL. No, this is the policy of the regional i 1 I i, !ca

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         . HEC 062030                                    PAGE- 105              :

g 2 F IP. administrator from my understanding of the discussions [ 2579 Commissioner AHEARNE. The administrator recently changed 2580 in that region. i 2581 Chairman PALLADINO. We are addressing an item that might  ; 8582 be better handled by Mr. DeYoung. I 2583 Mr. DEYOUNG. I will try. l . 2584 We have changed about three or four months ago. The 2585 regional groups are now on their own. They are no longer a 2586 part of ICE. They are independent groups. 2587 Mr. OTTINGER. Who do they report to? 2588 Mr. DEYOUNG. They report to Mr. Dircks. j l 2589 With the new concept, and'this applies across the board,  ! 2590 the inspections, investigations, everything we do, the .*

                                                                                                      }

i 2591 headquarters group develops the' program. The regional 2592 people will implement that program. The headquarters group  : l 1  ! 2593 has the added responsibility to assess the performance of , 2594 those regions with respect to uniformity between the { i 2595 regions, and the acceptability of what they are doing uith  ; e 2596 intend of that program that we have established. ' t-2597 I think we will have some control over how they do it, and i-l 2398 uhat they are doing. We are going to be assessing the , 2599 performance of each region with respect to each part of that , i 2600 program. !I' 2601 I would like to comment on certain other comments that  ; 2602 were made about the inadequacy of the Diablo Canyon l I  !

                                                                                      =

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                                                                                              .i h :

gggg: HEC 062030 mo pAGE 106 y' l.

• investigation. They had to go back and do something.

2603

                                                                                             !. I 2604           The original directions to the group out there uns to do                     ,

2605 an investigation andRdo it quick. I think provided a date 2606 to them of about tuo weeks. They said, Gee, that is hard, l! l 2607 but we will do our best. But they wisely, on their own,  ; 2608 requested that ue put over them a peer panel review to sec , 2609 that what they did in two u'eks e was acceptable from the f .l' 2610 standpoint of breadth and depth of the investigation. And i'! 2611 that uns very fortunate because in two-weeks of work, they. 4 2612 couldn't do too much. I

                                                                                                       ? ,

2613 Another thing, when we are talking about criminal  !, 2614 ir.vestigation, we don't do them, neither does the OIA. We ' 2615 refer them to the Department of Justice. We don't do , t- l 26116 criminal investigation. When~ue suspect criminality or know E 2617 it, we refer it to the Department of Justice and they will I 2618 do the investigation. 2619 Commissioner GILIHSKY. They are responsibility for 2620 dealing with the civil aspects of actions which may have I 2621 also criminal implications. 2622 Ms. HULL. I underst'and that DIA is the only office within l ji 2623 the Commission which pursues the referral.

• l i i 2624 Mr. DEYOUNG. The only thing they do, and they help us -

i 2625 greatly, they meet with us, whether it is the ICE group or j-1626 the HRR Group, and if there is any suspicion of criminality, , 2627 ue talk about it. We give it to OIA with a recommendation t h < 8 i I  ? i

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2628 +l of uhether or not we think it should be referred to the ' Department of Justice.  ! : 2629 They do the referral. If they don't 1  ! 2630 think it should be referred, they uill come back and talk to 2631 us, and ue will argue about it. If there is any i 1632 disagreement, we tend to tilt in the direction of safety.  : I 2633 Mr. OTTINGER. Clarify this new structure for me a little i 2634 bit. You said that the regions are not going to be under l 2635 IE? i 2636 Mr. DEYOUNG. No. What we are going to do is use the I

                                                                                                           ,I 2637      regional offices to do all the work for the agency. That                               ;

2638 is, bring togethe- in the region not only the ICE parts of 2639 the agency, but also the nuclear reactor regulation parts of . 2640 the agency, and also all the work that we can get out that 2641 is related to the material safe'ty and safeguards. So that - 2642 the regional office becomes a focus for all of the agency ii 9 2643 activities.  !! hi ' 2644 In that respect, they work for all of the program

                                                                                                                  }
                                                                                                           ,[,.
    ;    2645     directors here in Washington.         They will exercise oversight                                 d 2646 for their program responsibilities nou going on in the 2647     region.

So I don't think ue can say they are cut off from i t

                                                                                          !                    :i 2648 ICE. We are having ICE programs run in the region, with                 ;, lI          '

2649 t program oversight and evaluation done by the ICE program ii  ; 2550 office here at headquarters. I i:

                                                                                             !.l 2651 The same rule applies to reactor regulation activities,                       Ih 2652 j j' and also applies to all of the material safety and                                   t I

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    ,   GAME: IIEC062030                                         pAGE   100                      '

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          .                                                                  Exhibit 3                  :

~ 2053 safeguards activities poing on in the region. i{ - 2654 Ms. HULL. There is just one more, question on this. I 2655 I understand that inspections uncover certain henith and ' 2656 safety possible violations, but that in the course of that 2657 investigation there is also, perhaps, evidente that'there is 2658 criminality or a uillful violation, in the case of Zimmer,  ! 2659 the criminal inspection was postponed until the completion ll 2660 of the health and safety violation, probable violation. j 2661 I understand that health and safety is your primary 2662 responsibility, and should not take second seat to anything, 2663 including criminal violations. But have any standards been 2664 established to determine uhen the health and safety threat

  ,     2665   is imminent or uhen the criminal investigation should not be 2666 postponed?
 )

I 2667 Mr. DEYOUNG. t - I might respond that they were not put 2668 aside. They were separated. ls

 .                                                   OIA pursued the criminality,          '

2669 and ue pursued the ICE part of it, the health and s'afety. So 2670 they were not dropped, they were just completely separated. 2671 It uns referred. We talked to the Department of Justice. 2672 OIA did pursue that, they questioned people, and they , . 2673 questioned them about the staff performance in Region III as 2674 uell, but they referred it to the Department of Justice. t 2675 The Department of Justice will tell us what they want us to f,!

      '2676                                                                                  ;

do. If they say, stop, do not proceed, we do not proceed. I 2677 Commissioner GILINSKY. I I think criminality, if that is l'l I + i ff' I  ! I

E

           )( AME : !{EC062030                                       pAGE    98
.             2403     may not be staff with trained investigators.                                       i la             '

2404 j Region V's Diablo Canyon investigation to determine

-                                                                                                        i

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 )                                                                                                      j 2405 whether the Commission had been misled uns replete uith                           !'
                                                                                                               !I I

2406 contradictions that were not addressed, leads that were not , 2407 followed, and misrepresentations at depositions,  ! l 2408 t i Similar inadequacies in Region III's investigation of I 2409 Zimmer were documented last year by the Office of Inspector , 2410 and Auditor. Region II has eschewed invc stigations i h! [l 2411 altogether in favor of what they call special p!I l 2412 investigations. 1 8413 This is significant because some of these inspections l  ! i: i. 2414 presuppose no finding of crininality, in other words, U , d 2415 uillfulness, and do not invoke the jurisdiction of the d '

                                                                                                       'j 2416      office of Inspector and Auditor.                                          l           .
                                                                                                      !j 2417                                                                                      P                   ;

OIA, a Commission level office, is currently the only i 2418 office that has jurisdiction over criminal matters,  ! and thus ' 2419 the only office with trained investigators. The Commission~ I 8420 f is proposing eliminating criminal jurisdiction from OIA, and i 2421 l' resting it solely with IE, and we are concerned that this 1422 } may place an unreasonable burden on IE to investigate that ' 2423  ! uhich its inspections fail to uncover. 2424 Since this whole question of inspection and investigation t 2425 l is so critical to the safety, we are concerned that in the 1 . s

       -2426 process of this reorgani=ation, the program for inspections 2427                                                                                   l and investigation of safesty problems may not be treated                                         g
  }.                                                                                                                4 e

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              ; Natty : HEC 062030                                                                                ,       i; FAGE   109                                                 t 2678 the right word, is not permissible under the statutes that                                    ,

c 2679 ue administer. I think that has health and safety 1 2680 inplications just as much as other things that we are  ! X 268 i 1 looking into. kt S682 ll If there is someone falsifying records, tha t ha's health l. ' 2683 and safety implications  ; Unfortunately, there has been a 2684 certain amount of confusion about uho is responsible for 2685 uhat, and that has led to { these investigations not being 2686 pursued in the way they should have been. { 2687 ' t We are trying to sort all of that out, and I hope we are  ; 2688 l l1 going to make clear what everyone's responsibilities are , 1' 2689 and that things uill improve. , 2690 Mr. OTTIMGER.

• Would you, keep us advised, since that is 2691 really important. .

y I 2692 - Commissioner AHEARME. . r. k think th6re cohtinues'to*be II 3693 confusion as . I' i to even what is a criminal charge and what is 2694 not, and hou does' that overlay the MRC responsibilities. It 2695

• has led to some difficulties on deciding when something )

2696 should be referred to the Justice Department. It has led to I; \

                                                                                                                       .j 2697                                                                                                          l difficulties uith hou we handle our investigations and the                                          I 8698      Justice                                                                                             }.

Department at times has expressed concern that we 2699 . didn't do it in such a way as to maintain their options.  ! I M00 But therse are all areas which, I think, the chairman's I t 2701

• 11 initiative is going to hopefully lead to some substantial l5 M02 reprovement.

                                                                                                                ,I We recogni=e                                                                      t i

that there have been problems, I

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, ,  ,    r3 Mc%'o                      UNITED STATES

[ g,..qt(' g NUCLEAR REGULATORY COMMISSION W ASH 84GT ON,0.C. 20555 3 6 s f.;.'Uf [E February 3, 1982

    *"/k'"[#

IN RESPONSE REFER TO FOIA-81-488 OFFICE OF THE SECHETARY Mr. Thomas Devine Government Accountability Project 1901 Que Street, NW Washington, DC 20009

Dear Mr. Devine:

This is in further response to your letter dated November 23, 1981, in which you requested, pursuant to the Freedom of Information Act (FOIA), copies of documents prepared in connection with the Office of Inspector and Auditor's report on IE's investigation of the Zimmer Nuclear Power Station. On October 27 and 28, 1981, the Commission held closed meetings to discuss potential enforcement actions stemming from the Zimmer investigations. We have reviewed those transcripts under the Government in Sunshine Act (GISA) to .' determine whether they should be released in whole or in part at this time. The meetings were closed pursuant to exemptions (5), (7), and (10) of the Government in Sunshine Act, 5 U.S.C. 552b, and 10 CFR 9.104 of the Commission's regulations, since the discussion rccused on the review of investigatory reports and the consideration of potential enforcement actions, including the imposition of civil penalties, all within the context of an ongoing agency adjudication. Commission deliberations of this nature are exempt from mandatory public disclosure in the interest of avoiding interference with current and future Licensing Board proceedings'and of protecting the uninhibited exchange of ideas and opinions which relate to such proceedings. For these reasons, the Commission has determined that the public interest does not require release of these transcripts and that they should be withheld in their entirety pursuant to

           . exemption (3) of the Freedom of Information Act and exemptions (5), (7), and (10) of the Government in the Sunshine Act.

l Because the Commission itself addressed this portion of your l request, an FOIA appeal would be redundant. Therefore, l please consider this the final agency action. Pursuant to the FOIA, judicial review of this decision is available in a Federal. District Court in the district in which your client i resides, has his principal place of business, or in the ! District of Columbia. i ( Sincerely, l CI 1J '. loyle

                                          /ActingSecretaryof the Commission

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                                                   }f)ottGt 0( 31tptt5cntatibt5 ENVIRONMEf1T, ENERGY MiD f;ATcRAL RESOURCES             EXHIBIT #13 SUCCoMMITTEC CF THC CoMMITTTE C,N GOVERNMENT OPERATIONS ftAYtIU7tN 880U$E CF FICE DUILDING. FtOOM D-379-D-C W ASHirsGT Cf 3. 0.0. 10:13 OPENING STATEMENT CHAIRMAN TOBY MOFFETT Decenber 14, 1981 Our hearing this morning provides the Subcommittee with its first opportunity to receive testimony from the i.aw Chairman of the Nuc1 car Regulatory Commission, Mr. Nun::io Palladino.                              h*e welcome him and Commissioner Peter Bradfctd, whose testimeny before us in the past has always been highly inforbative and useful.

It is particularly timely to hear from Chairman Palladino this morning. Certain remarks he has made recently about the parformance of the nuclear industry are terribly important. Chairman Palladino has sta'.ed, and I quote: '

                                "If the nuclear industry does not do its part, no amount of regulatory reform will save it from the consequences of its own failures to achieve the quality of construction and plant operations it :nus t have for its own well-being and for the safety of the public it serves.

Based on quality assurance failures that have recently come to light, I am not convinced that all of the industry has been doing its part." Those are straightforctrd, clear words to an industry that many people think can use more straight talk. Chairman Palladino is to be commended for his candor and his willingness to say some things to the industry that industry people do not want to hear. Moreover, the-NRC recently has taken a few actions which appear to back up those blunt words. The Commission has revoked the interin operating liccur.e at Diablo Canyon based on the recent revelations s

of seismic miscalculat 10: 4s. An unusually large civil penalty of

     ** $200',000 was imposed on Cincinnati Gas G !!]ectric for its failures in - quali ty assurance at the Zimmer plant construction site.

Those of us on this subcommittee who have been working for the

                                                                               ~

last two Congresses on 'the problems of this industry and the Commission's regulation of it know just how right and necessary those words and actions are. We.are here' this morning to encourage you, Mr. Palladino, and the entire NRC, to do more to force all the players in this industry to confront the very serious problems that exist at a nuuber of sites around the country. Beyond that, we want to take a close look at whether the current NRC enforcement program is tough enough to be a credible deterrent to the kinds of safety failures that Chairman Palladino has correctly critici:cd. My own assessment, based on what we have seen from this dais for the past three years, is that the NRC enforcement program is not a

                                                                      ~

credible deterrent to utility misconduct. The NRC is often too slow to respond to allegations of massive breakdowns in quality assurance, as the cases at Zimmer and. Marble lli11 illus tra te. . The NRC is often too skeptical of the contentions. of intervenors and other nuclear critics about the existence of problems at particular sites. The NRC is frequently too quick to assume that the utilities are all-knowing and do not make major mistakes in construction and operations. The Diabic Canyon fiasco is a cicar example of' that.

                          -And the NRC seems too willing at times to accept industry excuses for non-compliance with important NRC safety regulations. The Com-mission's lax handling o f emergency planning requirenents is a. vivid example of that, t

_ - _ _ _ _ _ . i

                                                 .y.

Most important, even when the NRC finally reacts to allegations, does an inves tiga tion and decides on en forcement action, its steps are too weak to be of genuine deterrent value to other utilities i and of ficials who are tempted to ignore sa fety requirements. We need to examine some very practical realities about the NRC enforcement program. The typical NRC punishment, where it does punish at all,- for an isolated violation of sa fety regulations is a civil

       .pcnalty of perhaps $40,000 to $50,000.           For a massive, years-long, systemic f ilure to adhere to proper standards, they may impose a fine as high as the $200,000 imposed on Cincinnati Gas 6 Electric.

It is true of course that the public embarrassment of such a fine is not welcomed by any utility. But the public memory is short. And the sting of a civil penalty of that size is not really very lasting. We all know that the price tag on a nuclear plant today is over a billion dollars, making civil penalties of the size meted out by the NRC quite trivial by comparison. It is important for us to review a bit of recent legislative history in this regard. Just last year, the Congress took note of the disturbing number of incidents which showed that the performance of the nuclear industry was dangerously inadequate. In the Fiscal Year 1980 authorization, we took what we felt were significant steps to strengthen the NRC's enforcement of nuclear safety. First, we provided for substantially higher civil penalties. Prior to 19S0, the most the NRC could fine a utility was $5,000 per violation -- and no more than $25,000 total in any one month. We ! raised the potential penalty per violation to a full $100,000 and i we clininated that 30-day ceiling. As a consequence, NRC fines have i become somewhat larger. 11ut as I just discussed, they certainly are not as large as the Congress has now made possible, and they are still not large enough to be very convincing deterrents.

 , ,                                    ,y,.         -- _

l l p, Second, the Congress last year added an entirely new provision for crimin:d penal ties -- both criminal fines and actual jail sentences -- for knowing violations of NRC safety standards in the construction of nucicar plants or in the manufacture of reactors and other nuclear equipment. That provision was prompted in large part by the revelations fron this Subcommittee about quality assurance problems at the Marbic 11111 site in Indiana, about which the ranking minority member, Mr. Deckard, has long been concerned, and by the allegations arising from the.Three Mile Island accident that informati'en about defects in the equipment there had been concealed. Thes,e' criminal penalties relating to construction of new nuclear reactors and plants were added to existing criminal penalt,ies for violations of NRC safety standards for opera ting nuclear plants. Third, the Congress also added new criminal penalties for the harassment, intimida tion or assault of quality control inspectors. Such harassment, as this subcommittee has aircady found through previous investigations and as the NRC has now admitted in its own investigatien, l are precisely the sort of actions that occurred at the Zimmer site near Cincinnati. These new criminal penalties were not placed in the Atomic Energy Act as window-dressing. The Congress provided for criminal penalties for utility failures to obey NRC safety rules for a very important reason: the public health can be endangered by nuclear crimes just as surely as it can be by street crimes. . Of course, when talking about the need for criminal sanctions, we are not talking about every utility in the nuclear industry. Many are solid performers who take compliance with NRC safety regula'tiens very seriously. But as Chairman Palladino has recegni:cd, there are undeniably poor performers in the nucicar industrv. For some o f

                                                  ;5_                           .
      ..                                                                                 \
             's~
             those, strong sanct ions may be necessary.      When nu~ c Icar utility of fici:.ls knowingly ignore NRC regulations, misinform and mislead the NRC, and harass or allow the harassment of quality control inspectors, they a re commi tting crimes that should be punished as such in order to protect the public health and safety.

Un fortunctely, Subcommi ttee investiga tions have repeatedly shown that the NhC is reluctant to pursue indications of criminal conduct, particularly when the trail 1 cads higher and higher in the utility management. Documents which we will discuss this morning suggest that the NRC has failed in a number of situations to take effective steps to investigate possibic management involvement in problems at nuclear sites and to consi. der the use of criminal sanctions for the violation of NRC safety requirements.

                    'As we discuss some of these cases this morning, I want to assure the Commissioners that we are not seeking any statement from you that i

would indicate that you have prejudged such an important and sensitive question 'as a possible criminal enforcement action against a particular utility official or employee. But we are seeking from you a clear commitment that the Commission will conduct effective and thorough investigations of allegations of utility violations of safety requirements, that you are commited to addressing the question of management involvement in such violations, and that you are prepared to use the criminal penalties which the Congress enlarged last year specifically to deal with the types of. probicas that are disturbingly prevalent in the industry today. The.other aspect of this morning's hearing is of course related to this question o f ef fective inspections and en forcemen t actions. We unnt to review with Chairman Palladino and Commissioner Bradford

 . . .    .                                    - r-what steps the NIM: has taken to respond to the numerous recommendations made by the Gove rniaen t Operatior.s Committee in the four reports on NRC oversight that have emerged from this Subcommittee's work in the last three years. Again, I welcome you both.

O e 9 s e 0 0 L_ -

My na AFFIDAVIT EXilIDI; gy4 October 1980me is Jeffreye. J. Hyd I was H. Zimmer employed as a From August 7 nuclear pow n being constructeder Gas b plan t in Moscowsecurity at officer,1979 u n . Ohio. the Willia: a d Electric. y Kaiser Engineeri The pla n t is Philadelphia, Pen ng and'is s I worked for Yoh erious problems I wnsylva n Security of owned by.0incinnati This ia. 1616 , breaches as aware affidavit concer Market Stree t, of security for ns numerous nucicar fuels employ er existed at Zimmer ov hours n ees at $40 millicn doll , including ars w w a d thriving black the plant who orth of eapons, belt buckl es, pr market businessesgwthwere drunk duri orking Military Police iBefore I came to Z estitution at included ookie hot and a b security n Miesau, immer West I had workedas a operation. guarding cla Germany. member of discha rge for ssified items. After My job was in physithe 164th was the first searthritis. I was receiving hi a cal conttact. curity officer hiredred in August medical 1979 b y Yeh. I by Yoh for the Zi 1:35 A.M. inMy cefirst experien mmer dioxide 235 nuclemid-August, at afterwith problems the plant began the fuel receipt of ar ound General from the packinar fuel Zimmer. shipment s the fir t uraniu atm through Slectric's plant ig slip. I read the name the fuel the grapevine th It had been n Wilmington, North ed in from truck of at CC&E Ca storage delivere d early, rolina. in had obtained permi I heard o order to ssion to have - av id anti-nuclear Electric. avoid dchurces paying additito General e onal s When the fuel It arriv d at ni arriemonstrators. ght to ecurity supervisor f ved, Mr. Fred Laut officer or the ' .- go downstairs to amin. thonsite, called duty, myselfensinger, John Benj CC&E's other and the man e loading ar He told us to hav other stayed at ea e one pers Jchn a w the sev eapon and entt, erand watch on until the told r the fue l, while t he him te eacter, floor. Fred gave Fcr or corning cund ti.e shift'arriv stand outside guardi ed at 7:00, ar ng the fuel next 20 daya

  .thethe first chipment,                           th                                      we r        ound fiv afternoon.                          e trucks                                            ceelved shi;r *tre hours later.

During that perlarrived at all hou . eft '-

                                                                      , od s the loading dockrs. including was full on

about 12 occasions. unload the fuel outside the railroad tracksIn th and put up warning signs. , rope off the crates. warning signs were radiation warningsI thought it w in the open. , but the fuel just cat out the crates. Then the security officers would take turn s guarding The other security officers and I felt ext about having just one, or at most remely uneasy fuel. three, officers guarding the The security equipment, such as clcsed cir - E field on the fence designed to detect m cuit TV and the functional. ovement, were not yet terrorism. After having worked in Germany, I wasarfamili with I knew that even the most sophisticated cyst ems had been defeated by groups of nine to twelve people. But we were i expected to guard these shipments by, to par aphrase the CG&E security manual, placing our bodies "between th the fuel. " e adversary and i We were only armed with .38 caliber pi t l s o s that carried five rounds at a time. As a result, in the event of an attack, even at full strength all threenpote ti l a guards would only hav,e 15 rounds to defend the plant's fuel . Further, although we were carrying the we apons, none of us 3 qualified to have .38's until a May 1980 test . The utility might respond that we had prior military experienc carried a .38 before in my life. e, but I had never One of the problems that concerned me thin the A fuel sometimes was totally unguarded e most is that the officer was required when maintenance moved thThis occ seventh floor. e fuel to tne When their shift was over before was allfuel moved, maintenance would just quit and call u officers. p to the security least Taey had been working twelve hour shifts

                                                                        , and on at two occasions that I was involved        , theywith  left before I came down to watch the fuel.

fuel was totally uncuarded for around tenOne one af those minutes. Since there was no window by the seventh floor access 4 point, we couldn't even look outside to see if any ' intruders wer e approaching.

3-At the time. I just conuidored th another broken rule. ese security breaches as such a lax practice. In retrospect. I am upset and fea f r ul about sloppiness still is. I wonder just how widespread this ype of t that no fuel was ever divertedUnder state these c aware of any thefts. . although I am not personally Although the fuel was all deliver e di breaches did not stop at thatn. poi t n 20 days. the security incidents that irritated me . There were numerous small not obey his own rules For example. Mr. Lautens3ager did access to controlled areas where thon properng identificati I was not used to this kind of ga e reacter vessel was located . On one occasion during the lateme-playing in the Army. at the time. Nick White left'hissummer of 1980, our superviscr at the security office. gun in the unlocked file cabinet easily with a credit card,The office was locked ebut could b opened not yet in place. because the magnetic locking d evice was called for automatic dismissal rules. whichof allThi involved parties whenever an officer relinquished his weapo A file cabinet does not qualify n to other than authorized personnel . up an incident report, as authorized personnel. I wrote it. but Lautenslager said not to wor ry about Although practices like mismanage qualify as security breaches, they stilment and cost-cutting don't of the nuclear fuel. l endanger the security routinely put For example, we were all overwork ed. I in twelve hour days, seven days an 84 hour week. you soon become a per week. With vege table . there but no good to anyone . You're physically I needed the money for my n wife a dI couldn't pass . because up the work two children. The paycheck was the only good thing about it . 24 hour shift straight Cnce I evcn had to work a take naps. through, although we were a uthorized to I There were never more than' ten g und:rc t a.ff: d .

                    ' r" ni-hts t%rc *c:cre en%                tuards, which left us badly
                                                       .;o of un cr Since frequently one of us would b                                      . 1,.

shon any ittediate problem'arbse s the other mae out patrollin n would have to break

                                               .                  -4.

the rules by leaving the seventh floo r access point. how with cnly two cfficers on duty we w Wo discussed of deserting our partner or our poet. if theould be caught i man on perimeter duty radioed in an emergency call efor p. h l We only had direct supervision about g% was a " lead man" named Jim caplinger of the time. There than overseeing our work. , but he did paperwork rather he had a drink $ng problem and came toHe wasn't mu Mr. Caplinger's practice was not uniquework shit-fa construction crews, including the foremen at Zimmer. The on the job. , frequently were drunk lot at 7 A.M. I would see them sitting out drinking in th e parking Employees brought in six packs lunch boxes and drank very powerful mo of beer in their 1 In fact, for $10 you could buy a mason jonshine liquor at the i The plant was full of illegal black ma kar filled with moo including gambling and lotteries of all r et operations, sorts. For instance, a pyramid game similar to a chain letter was . paid $100 at a time to join the game quite popular. Employees pyramid game or the other illegal schemesI did not challenge th 4 far too common. , because they were with sense would follew the strictIt was yone understood "No Questions Asked" policy about these activities at Zimmer. existence throughout my employment e plant. at thall of the schemes hot guns. Perhaps the most chilling business inv l o ved the raffle of rifles. The prizes included handguns, shot gu - ns and high-powered ' I personally saw .357 colt handguns shotguns, and 30-6 deer rifles. , 12 gauge Remington weapon desired. I am sure a person enuld buy any The deer rifles use the same as the Army uses for machi 7 62 millimeter bullets, ne guns. The pistols were so commonly raffled that it was routine . complete with ammunition. The weapons came a raffle ticket from other unidentified ees. empicyTo get The prices ranged from $2 for a pistel~ ticket to $10 f There were up to~100 raffle tickets sold f er a decr rific ticket. or.cach we9;on. o% l

                                                        . = . _

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4 .

5-Another frequent activity involved placing horscracing bets over the telephone at the seventh floor security desk. A Kaiser electrician named Neal Weber of Amerlia, Ohio ran the bookie operation. Weber's nickname at the plant was "Shitsy. " We joked that Shitsy had to be connected with the Kafia, because he bragged that he could place a bet at any track in the country. During my entire time at Zimmer, Weber's bookie business followed a similar pattern. He would use the seventh floor telephone in the morning to get the scratches. Around seven or < eight employees would come around lunch, each representing a d section of the plant such as the Instrum.ntation and Control employees. Shitsy then would conclude his business in the after-

       ' noon, using the seventh floor phone again to place the bets and             '

learn the race results. This really wasn't much of a secret at Zimmer. In fact, the operation was so blatant that one day an employee wrote out $2 and $5 on paper and taped the signs on the table as a joke, 1 analageus to the betting windows at the track. I know that management was aware of the practice, because I told Lautenslager about it in September 1979. But nothing was done. Shitsy's foreman yelled at him about the practice semetimes but didn't make him stop. The practice made some of us sick, because Weber was receiving a $26 per hour salary to place bets. There were other black market operations at the plant. For i example, the pipefitters made belt buckles that were so beautiful I , it was havd to believe. You could buy a belt buckle directly for i about $25, or spend $1 on a raffle ticket. They sold 10-20 6 belt buckles daily throughout my time of employment. , The only raffle operatien I heard about but did not see directly involved prostitutes. Other employees told me that tho winners would receive a Fifth of liquor and a where for a whole i-Friday night session. . Luring ti,e su=.or of 1900 t: e accurity officcr. ec* . .! t:

      . unionize. Apparently Yoh lost the security contract at Zimmer a,a a result.'

Lautenslager said that our union vote was a " major

                                        ,         .-+ r         - -          r     s

4 and contributory" factor in CG&E's decision to change coeurity firms. That fall I gave a statement to an investigator from the National Labor Relations Board. Despite promices to the i contrary, I never received a copy of my statement or heard from the NLRB again. I am providing this affidavit out of a sense of obligation to the public. Previously I was afraid of retaliation on the job, so I waited unt.il obtaining new emplo pent on December 8 at 1 Good Samaritan hospital and my new supervisor's permicsion to speak out. After another former Zimmer security officer contacted i i Tom Applegate, we saw an avenue for disclosure. After the initial j contact, Mr. Applegate was so persictent that I felt he deserved my cooperation by giving this statement to his representative from the Government Accountability Project. I swear that the above state.'acnt is true, accurato and { complete to the best of my knowledge and belief.

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EXHIBIT #15 , September 3, 1981 MEMORAN'DUM FOR: James G. Keppler, Director, Region III FROM: James E. Foster, Investigator

SUBJECT:

OIA REPORT " ADEQUACY OF I&E INVESTIGATION 50-358/80-09 AT THE WILLIAM H. ZI. TIER NUCLEAR POWER STATION" I am very concerned about the adequacy and conclusions of the subject OIA report. From my review it appears that the report does not deal with all questioned areas, significantly mischaracterizes statements made by Region III personnel, does not document interviews conducted, contains statements not supported by fact, and reaches inaccurate conclusions. It also appears that the investi Eative effort neither included interviews of pertinent licensee and contractor personnel, reviews of appropriate Region III investigative procedures, nor developed crucial information. Lack of attention to detail is evident in many areas. _ Three of the-conclusions reached by OIA regarding the I&E investigation are: , 1. The investigation failed to properly document the results of investiga-tion both as to interviews and material reviewed. 2. The investiEation failed to determine the correct status and history of several welds. '

3. The overall investigative effort was neither vigorous nor sufficiently broad in scope.

These conclusions are unsupported, but do apply to the OIA review. The remaining OIA conclusion (use of the phrase "not substantiated") has some merit, but would not alter the conclusions of the I&E investigative report. In summary, the OIA effort appears totally deficient. Specifically:

1. The OIA report (Page 3 Paragraph 2, Page 4 Paragraph 3, Page 5 Paragraph 9) indicates that the matter reviewed is the agency handling of allegations by Thomas Applegate. These were:

                                                                                                         +

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c. .

James G. Keppler ' '

                                                                                                   m

a. Velds CY606, K811, HR42 have been rejected by Peabody-Magnaflux. '

personnel but accepted by Kaiser. ,.

b. System flushing procedures were improper. -

72 c. Welds on Main Steam Relief pipe spools are defective but vece ' ' accepted by Kaiser.

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The OIA repart only contains a review of the handling,of the fi.rstsallega- . tion. No dctailed review of the othe'r two allegati'ons was performed or documented . ,

2. AlthoughWilliamWari(Chief,I&EInvestigations~ Branch)playchasub-stantial part in the handling of this case by I&E (his name appears 20 times in the OIA report, Pages 5, 10, 14, 20, 35, 36, and.38),-he was not int.erviewed.

t

3. Several statements by RIII personnel (G. Phillip, K. Ward) were signifi-cantly mischaracterized or misunderstood. I understand' t hey are responding separately.

4. I&E Inspection Reports Nos. 50:358/78-39 and 50-358/79-17 are signifi-cantly mischaracterized as indicating a " chronic and long history of ' .

welding problems at Zimmer" (OIA report Page 2). These reports Jdeal-with radiographic technique, not welding problems.

5. One of the OIA report attachments is a manual chapter from the Fundamentals of Inspection course meant as a training aid (written by Gerald Phillip).

This is not an I&E or RIII procedure. RIII does have procedures covering report format, statements, etc. pertaining to investigations. N.o reference is made to these procedures.

6. For the three welds, CY606, WR-K811, HR42, significant~ information was not '

obtained by OIA. Lack of this information (weld chronologies are attached) led to inaccurate conclusions. Relevant Nonconformance Reports were not ' reviewed, and cognizant personnel were apparently not interviewed. No ' technically knowledgeable personnel assisted in the review. ' Attention to detail was lacking, as was understanding of cont,truction practices. As the report focuses considerable attention on a nonconforna6ch report (NR E-2138) related to weld WR-K-811~, it is evident that the'ciscumstances surrounding this document were not understood due to lack o'f complete - information. _

7. Unsupported statecents are characterized as-fact. _ On pages 2,12', and 35, the-conclusion is propounded that CG&E QASS Manager William Schwiers ordered-Floyd Oltz to "line out" a Nonconformance Report. "Th~e~ basis for ~

the conclusion is apparently the interview of Gerald?Phillip, who noted that Schweirs denied the action. - i

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James G. NEppler September 3, 1981 m 4 2; . 7 A subi$quen:.; interview with Oltz indicated that Mr. Turner, then Kaiser

                                'l                   QA Manager, his. sup'ervisor, advised him to line out one Nonconformance Report, knowing thst another was in existence to track the nonconform-ing menditico. Schwiers was characterized as being present for this exchange', but did not direct Oltz. This information was corroborated by
        /                                            a Mr. Decruester, who indicated that he was present during the exchange.

No info'rmation-is presented in the OIA report to support the conclusion

           ~

thatL'this action was directed by Schwiers. On Page 40, no support is similarly given for the statement that

i. -

Thomas' Applegate brought -information 'to CG&E officials.

8. Several comments in the OIA report pertain to the investigative case file maintained by RIII. These OIA criticisms are from a criminal investigation viewpoint rather than an I&E viewpoint. The one very minor discrepancy, the lack of an Identifier Key for the sole alleger in the I&E report (Thomas Applegate), was easily rectified. One criticism (lack of "results of interview" documentation) is for an x item not required and not believed necessary.

      <                             9.              Portions of the presentations of interviews are unrelated to discussion s

of the adequacy of the I&E investigation, and add nothing to the report. Examples of this are the mechanics of meeting with Applegate, what he was wearing, xerox machine difficulties, etc. 10 ~. Several of the report attachments are of little or no significance, and some (weld rod issue slips) are totally unreadable. Several attachments add nothing to the report but size and weight.

                                 . 11.              The report does not explain the thirteen day delay by OIA Director Cummings, but only states that "the Chairman was aware of that aspect
                                                   ~o f the case". The handling of Applegate's allegations by OIA is very much a part of the agency response, and should be adequately detailed
                  ,                                 and explained. .

12. While no interviews of licensee or contractor personnel are presented in the OIA report, I am personally aware that a site QC inspector was interviewed on June 10, 1981. The OIA report alludes to interviews of a QC inspector and a former supervisor of Document Control, but docu- (

              '                                     ments neither interview. An outline of the OIA report is attached, indicating, Scumented interviews an'd time frames.

I 13. The report took 7.83 months to produce. The last documented action

                                                  <in the' report took place March 5,1981 (interview of E. L. Williamson),
                ,                                   5.16 months prior to report finalization.
                      ~

14. The style and detailed content of the reports of interviews with I&E personnel strongly suggest that these interviews were tape recorded.

                                                  ' Interviewees were rot advised of such recording.
                                      \
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                                                                      /                                                                     l l

James G. Keppler- - 4- Septecher 3, 1981 )

                                                                                .1                                                          l
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15. E lle probably not of significance, the OIA report lacks signatures by the investigators or a Personnel Contacted listing.

4 c,' J. E. Foster Investigator f ,

                  ,         / - At taclaen ts :                                               -
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                                       ' RIII Foster /so 9/2/81                                 /

         .                                                                                                              i CY 606 CY 606 is a weld in the Cycled '.sndensate System, located in the ground in the tank farm area, under a concrete slab.              The line is sixteen inches in diameter (weld is 50.26 inches of weld =etal).

Design conditions for this line are 35 psig and 140 degrees F. Maximum operating conditions are also 35 psig and 140 degrees F. This line s dhL piping Class B. - CHRONOLOGY 07/ /76 Weld fit-up. 07/ /76 Veld performed. 07/15/76 RT of weld - reject. 07/16/76 RT read, reject 0-13, 13-26, unconsumed insert. 07/16/76 Approvals on WRD No. 1. 07/19/76 R1 readed, PT of grinding - accept, weld performed. 07/21/76 Approvals for WRD No. 2. 07/23/76 Ground area, PT accept, weld performed. 07/26/76 RT performed. 07/26/76 RT read, reject 0-12, 12-24, incorplete fusion. 07/27/76 Approvals for WRD labeled No. 2. 07/29/76 PT - accept. 08/02/76 RT for information only - reject. 08/04/76 PT reject grind through & adjacent area, crack in weld edge. 08/09/76 RT performed. 08/09/76 RT read, 0-12 rejected. 08/10/76 - KEI approval of above RT report. 08/10/76 Approvals for WRD labeled No. 3. 08/10/76 PT test of area - accepted. 08/11/76 RT of weld. 08/11/76 RT read - rejection areas 0-12 (Peabody-Magnaflux Personnel). 08/11/76 P-M rejection overriden by M. Low - accept veld. 08/13/76 Gamma plugs CY606GP, 606 GPS, 606GP welded, PT accept.

           *01/13/77         S&L audit of radiography, areas 8-12 rejected for surface indications and linear indications.
           *01/21/77         NR-E-633, documents above finding, grind out defect and reweld.
           *02/11/77         Approvals on disposition of NR-E-633                                        .

04/14/77 ANI approval of 08/11/76 RT. 04/15/77 Approvals on WRD labeled 3A. 06/08/77 RT of area in 3A 0-13, 13-26 accept. 06/OS/77 RT read and approved. 06/20/77 . ANI review and approval of above RT.

            *06/24/77        NR-E-633 closed.

07/19/77 Ga ma plug re-welded, PT accept.

            *10/10/79         NES Review Begins                                                                     -
            *10/12/79        NES review - technique and documentation deficiencies.
            *SignificanL} information not in OIA Chronology.

b

• 1 l

<- '*01/02/80 Applegate told acceptance of CY 606 improper. (Daily Report)

          *03/03/80       Applegate interviewed by Phillip.

04/07-09/80 Phillip onsite. .

          *10/03/80       NR-E-5172. based on NES findings for CY-606.and several adjacent velds.
          *10/27/80       Disposition of NR-E-5172, accept as is, A. Lanham.
          *11/07-12/80    Approvals on NR-E-5172.
          *11/12/80       NR-E-5172 closed.
          *12/17/80       Rex Baker notation on NES documentation review checklist form (closcout).                                     -

• Si nificant information not in OIA Chronology, E

       ?

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• e 2-

                    !.                                                                           WR-K Cl1
                                                                                                  .1-K-516 (WR-K-827)

(WR-K-916) (WR-K-917) WR-K-811 and UR-K-827 were welds on the Auxiliary Building Closed Cooling Water System. Weld WR-K ~.", ou ;Le same line, is still in existence. Welds WR-K-916, WR-K-917 are replacement welds. Veld WR-K-811 was located in the Auxiliary Building at elevation 572' . The line is 4 inches in diameter (weld , was 12.56 inches of weld metal). Design conditions for this line are 120 psig and 105 degrees F. Maximum operating conditions are 150 psig and 125 degrees F. The line is S&L piping Class C (final visual inspection only, not normally radiographed). CHRONOLOGY 08/ /77 Approvals for production of WR-K-516. 11/08/77 Consumable insert placement and tack weld WR-K-516. . 11/09/77 WR-K-516 welded, ANI waiver on hold point. . l 01/29/79 WR-K-811 weld fit-up. 01/30/79 WR-K-811 visual inspection of final pass-accept. KEl-1 misplaced.

                                                               *10/     /79     Inspector Setlock assisting with documentation location and                     ,

I correction. 10/11/79 NR-E-2138(RO) WR-K-8_11 and WR-K-516, believe missed ANI holdpoint. Disposition: RT, accept if RT acceptable.

                                                                *11/06/79       RT of weld WR-K-516 per NR-E-213SRO.
                                                               *11/06/79        Probable date of RT of WR-K-811, radiography not retained.

(RT'done twice). Reject.

                                                                *11/08/79       RT of WR-K-516 rejected for unconsumed insert, other defects.
                                                                *12/03/79       NR-E-2260, RT of WR-K-811 shows adjacent veld WR-K-827 un-acceptable, unconsumed insert.

Disposition: Replace pup piece, "see related NR-2138." 12/14/79 NR-E-2138 " Voided" (actually superseded), . .."see Revision 1."

                                                                *12/27/79       " Steve" tells Applegate K-811 "MSR pipe" has " insert fault."
                                                                *01/07/80       Speed memo, Ruiz to Pallon:                 WR-K-516 no KEl-1, RT rej e ct.
                                                                *01/ /80        NR-E-2138 Revision 1, (see related NR-E-2260).

• Dispostion: Cut out and reweld.

01/14/80 Approvals on NR-E-2138, Revision 1 (weld WR-K-516 not' mentioned). 01/16/80 Approval on KEl-1 for welds WR-K-916, WR-K-917. 01/18/80 . UR-K-916 fitup and weld. 01/21/80 NR-E-2138R1 closed. 01/24/80 WR-K-916 visual inspection and acceptance.

                                                                 *01/24/80     .NR-E-2260 closed.                                                           ,

03/03/80 Applegate interviewed by Phillip. 04/07-09/80 Phillip onsite.

                                                                 *08/ /81 .      RT for WR-K-516 found.
                                                                 *08/ /81 -      WR-K-516 Re-radiographed.
                                                                 *Significant information not in OIA Chronology.

  ~

"/ COMMINTS According to QC Inspector Setlock, Floyd Oltz asked him to locate the KEI-1 weld history forms for velds WR-K-811 and WR-K-516. He could not locate them, and found that the ANI had listed hold points on the fit-up for welds on the line. The ANI had no log notation to indicate that he had vaived the holdpoints for these welds. NR-E-2138 was written to document missing the holdpoints. Setlock was not aware that the ANI had waived the hcid point on fit-up inspection for WR-K-516. He indicated that he first learnad of this information oa approximately August 15, 1981, when he was shown the KEI-1 form for weld WR-K-516. He indicated that the form and ANI waiver are genuine. (It appears that at sone time the KEl-1 form for WR-K-516 was found, and the ANI waiver discovered.) He also stated that he was not aware of KR-E-2260 nor of Revision 1 to NR-E-2138 (RO) but does not see anything wrong with actions taken. He does feel , that he should have been advised of the revision of NR E-2138, and that the dates of the original and revision might have been shown to better document actions taken. - RT of VR-K-811 could not be found, and RT of removed welds need not be re-tained. It is very possible that WR-K-811 had a partially consumed insert, as WR-K-827 had, and WR-K-516 has this condition. This would explain why

          " Steve" (Allen Sellars) told Applegate of an " insert fault" in weld "K-811" as detailed in Applegate's daily report dated December 27, 1979. WR-K-811 and the other welds had been accepted, and would not experience further review, as RT or other examination would not normally take place on these welds.

If a weld is not subject to RT, certain defects are considered acceptable, and must be assumed to exist. The licensee has indicated that removal of WR-K-516 is planned, based on unacceptable RT of the veld. Both the original NR-E-2138(RO) and the subsequent Revision 1 incorrectly indicate that veld WR-K-811 was welded on November 9, 1977 and weld WR-K-516 was welded on January 30, 1979. Apparently, this date transposition (WR-K-811 and VR-K-516) was an error that was made by QC Inspector Setlock when NR-E-2138 was drafted. The error was carried to the subsequent r'evision, and read by R11I Inspector K. Ward during weld documentatica review.

     ~. .                                 ,

RH-42 RH-42 was a weld on line IRH01C18 in the Residual Heat Removal sys' tem. The veld was located in the reactor building at elevation 497'. The line is 18 inches in diameter (weld was 56.54 inches of weld metal). Design conditions for this line are 220 psig and 389 degrees F. Maximum operating conditions are 240 psig and 358 degrees F. The line is S&L piping Class B. , CHRONOLOGY 08/06/76 Veld fit-up. 08/06/76 Veld performed. 08/09/76 RT of weld. 08/09/76 RT read by P-M, reject markers 36-48 (Notation: re-shoot 100% following repair). 08/10/76 KE approval of above RT interpretation. 08/10/76 Approvals on VRD form. 08/10/76 RT of repair area. 08/10/76 RT read by P-M. ~ 08/11/76 RT accepted by KEI. 08/11/76 Approval of repair. 09/16/76 ANI review of 8/9/76, 8/10/76 RT reports, approval.

          *10/10/79        NES review begins.
          *01/25/80        NES review, porosity at film markers 53-55.
          *02/12/80        KR-E-5056 based on NES review findings.
          *02/15/80        NR-E-5056 dispositioned to grind out and repair defect.

03/03/80 Applegate interviewed by Phillip. 03/21/80 WRD form approvals.

          *04/07-09/80     Phillip onsite, initiation of Applegate investigation.-

04/14/80 PT of re prepped pipe ends, acceptance. 04/21/80 Approvals for WRD for new cibow. 04/23/80 PT of elbow end prep. accepted. 04/30/80 Veld fit-up breaks loose (Ref: KEIA No. 1008). 05/01/80 Re-fit-up approved and weld started. 05/02/80 Root pass made. 05/05/80 Root pass approval. 05/06/80 RT of new weld. , 05/07/80 RT approved by KEI.

          *05/07/80        ANI review and approval.
          *06/16/80        NR-E-5056 closed out.
          *Significant information not in OIA Chronology.

COMMENTS The NES documentation checklist dated January 25, 1980, by R. A. Zieler, 1 LII RT, on p. age 3, notes "NR issued to repair rejectable indication" and

          " corrective action prepared by T. McCall, February 12, 1980"..

5.-

It appears that the decision to grind out and repsir the defects at film carkers 53-55 was misinterpreted to mean cut-out the entire weld. k'e ld cut-out then necessitated a new elbow, as fit-up could not be accomplished within specifications. LFrom a review of the veld chronology, and of statements made by Applegate, he was in contact with Peabody-Magnaflux personnel after be left the site.- Otherwise, he would not know of the had review o. noted on page 6 (Alle-gation 1) of report 50-358/80-09. . I e l e e m 6 i

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                                                                                                                                                                                                                                                              -                           Y Devts e said the costs of alicerse challenge . ire N

d. '

                                                                                                    "We've received near evtiance that we think t,!d reently ns> at"nificent new find!ngs are ex.Th it snoler rep.rt is issued.perhaps by betn; e.ov-red by a E: rant fr h.r r m,ao ,e,Li&v    w.                                      meets the leg st s4ndarrts ta rSopn Ine Itcensing I. et.ct:

Au""' t. th und bmd. raising efforts by CAIG. Devine ' chin unt to name the ts;undation o' the arnoct ' , A Washl: .n r.:mat. it g oup lan<; critte nt n! be trinv., and v/c are re ,tving t'abrfantial new the l'im : er nurlent funding:to support tbc cr muttons,*r;.'d Dolne. 11: Une c' N'~ d tha NitC has not" actively the trant. CAILE bat estimated legal ex;.enu - l cnnat?uction - t tt . Contentfor:S chtt!!cn.;t:.? Issuance of the 11- p"r a' 0" t'or ud * *tlun since November. lie power station . . I m " EPs im rot t".' . w et.s try to O'- i ine tt o SI 's tAllton cense will be filed witti the three-taemtvr t?!! 9!O ' '!I:s1 t S - r!Ny*3 Quality Confirm:ttlen *f t:C N"L*S finding that allit:'enstn? require. tu.open Ike :t *, 6 Atomic Ha!cty and Ltratr !n ; 13.urd. The tunro Ptro;t in, a :3.W + U re-exatnin itton of tun. Inan'.:had ttrn met was based ora all of the Lafor- g. rtant. conclu.ted hmthys in ! W n and was etpected tc Mrue

• n p !"r tu /.pt d l'43,13 un alMactory.

ThQ move it IV '." 14*et v by t#h the e i!! of ttie h:tve alicensing recomo endation by June. mt;;c the mi:.ty is e onduct!ng its QCP, very mat an prerented to the tiecnsing tmed over thn c ,- k.e tunatl 0 1' ~ ce t '. : i t u"*+ '

                                                                                                                                                                            'if nt!k ant 13 m a 1.ety Le l~fithnetely repitted, yte rs by Tartous 11 cense challengert im tuJ.w:                                                                  -

! UA.!A icar; . <>mr .f. 5 lifPd. ',ut how the defects origi. Ntaett Valley Power Profee', Cit) of Mentor,1;y , D?vfna said the ei!@rme he has goes beyond PH'I Tud 7.lmme r Area Cill: ens. HM E$1P"M *E f % r'9'umtut to the pernsing process a Just last ' ' Fa.lbfB'C>tbll'Ofd ' (n i e u?. <Tt r. f %g it- what tN f,icC fourct in l' R:ventber l'41 r, port. 80l IMD** 1rt.1 met all I t, 2 ha whhh CG*vE was tiwl ; CM for c.on .trut.tlon David Attemuthic, manager t f snedh Fr%l9( - i f *83 0. .tv. . %.,a.m watt ha fit *<t tsy TV vene an 14. Fat Citr#, mtid F.lanstay O AP s attern;A;1N to Ten fles , it .. > r N$P "" 8 '"e nt prot, tern a, CCLM sptrod the Inne timon:; itsett anti two h*tif of the ??mmt Valley Pno r P oP et, which d& y cuan[ httun of the plant. ,f

                               ?. c',1 . .he     !. etin.tr iy Ou.      rrenuncover.

hv ha*. nt An. '

    - cmintr.bility i                                                                                                                                                                                                                                  "It see n? ns if whenever th?y lose m

• cri new tuforr %ie s! ..t !-
• ps [. anty to wfety bulkilt a J "rtners, the DM'.on Power te Light Co. LI AP novi terremn%. The f.!!nrni Yv.!tay Pmver i u

and the 8 ra m?>nsan<t ! en Mrn Ohio I:b ctric Co. prnyet an.1 t'te vnculty Ptiti-nud i r Ctnchns.t! .My ploDJLly Ottn R IMW front.( F r"' t'hr y.t

   - itefee      f*tty) t 43 '      I             - 'en 1 :             / whtt h's                   IN A* Nt)tiNf'I':f; f.'m ;tn?, the NMC s41 Its "' tree f.* I; ., r 4*..t?" f:r crn arc

• 4tt':.ly the ,i tt +. stint t. . ;h."eur mm u . I t r g Airer,igeM .,

evi tero e ws . . n- .ro y. tm. a i ,, an NRC spoke"mr.n utue vrganint'c a, nid ir. ine. ,, l D R

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