ML20249C696

Insp Rept 99901330/98-01 on 980609-10.No Violations Noted. Major Areas Inspected:Programs & Procedures Re Internal & External Audits & Conformance W/Licensee Purchase Order Requirements

ML20249C696
Person / Time
Issue date:	06/26/1998
From:	NRC (Affiliation Not Assigned)
To:
Shared Package
ML20249C692	List: ML20249C691 ML20249C696
References
REF-QA-99901330 99901330-98-01, 99901330-98-1, NUDOCS 9807010051
Download: ML20249C696 (9)

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l U.S. NUCLEAR REGULATORY COMMISSION OFFICE OF NUCLEAR REACTOR REGULATION Report No: 99901330/98-01 Organization: Duke Engineering & Services

Contact:

William H. Rasin, Vice President Nuclear, Fuels and Quality Assurance Services (978) 779-6711 l Nuclear Activity: Supplier of quality assurance services to the nuclear industry.

Dates: June 9-10,1998 Inspectors: Gregory C. Cwalina, Senior Operations Engineer Larry L. Campbell, Reactor Engineer Juan D. Peralta, Operations Engineer l

Approved by: Robert A. Gramm, Chief Quality Assurance and Safety Assessment Section Quality Assurance, Vendor Inspection and Maintenance Branch Division of Reactor Controls and Human Factors  ;

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9807010051 990626 Enclosure 1 PM GA999 EECDUKEE 99901330 pm

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i 1 INSPECTION

SUMMARY

On June 9-10,1998, the U.S. Nuclear Regulatory Commission (NRC) performed as inspection at the Duke Engineering & Services, incorporated (DE&S) facility in Bolton, Massachusetts. The inspection was conducted to review selected portiens of the DE&S l quality assurance (QA) program, and its implementation, as it relates to the current l supply of quality assurance services to the nuclear industry. The inspection specifically reviewed programs and procedures related to internal and external audits, conformance l with licensee purchase order requirements, qualification of audit and inspection  !

personnel, and the interface with the Duke Engineering and Services corporate office.

The inspectors also assessed DE&S's conformance to customer's procurement requirements and compliance with NRC regulations.

The inspection bases were:

- 10 CFR Part 50, Appendix B, " Quality Assurance Criteria for Nuclear Power l Plants and Fuel Reprocessing Plants."

. 10 CFR Part 21, " Reporting of Defects and Noncompliance."

. Yankee Atomic Electric Company Operational Quality Assurance Program l (YOQAP-1-A), Revision 27 ,

i During this inspection, no violations or nonconformances were identified. l 2 STATUS OF PREVIOUS INSPECTION FINDINGS I

This was the first NRC inspection of DE&S.

3 INSPECTION FINDINGS AND OTHER COMMENTS e

3.1 Backaround '

On December 1,1997, the assets of Yankee Atomic Electric Company's (YAEC)

Yankee Nuclear Services Division (YNSD) were acquired by DE&S. As a result of that transaction, DE&S has assumed responsibility for all safety related quality services previously provided by YNSD. These services include maintenance of an onsite QA staff at nuclear licensees; maintenance and upkeep of an approved vendors list (AVL)

[~ for several licensees; performance of surveillance, surveys or source inspections of vendors; audit and evaluation of new vendors for inclusion in the AVL; and other services (e.g., performance of fuel fabrication services, various engineering services and decommissioning activities). Previously, these services had been performed by YNSD in accordance with the NRC-approved YAEC quality assurance program,

" Yankee Atomic Electric Company Operational Quality Assurance Program (YOQAP-1-A)," Revision 27. ll 2

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Due to previously existing work obligations with YNSD customers, DE&S activities performed for those custome 3 subsequent to the acquisition were performed in accordance with existing cor,;ractual obligations, i.e., YOQAP-1-A. Continued adherence of DE&S to the NRC-approved YOQAP-1-A allows the licensees to use DE&S as their quality assurance services provider without having to perform an additional audit to re-approve the QA program. l DE&S is in the process of upgrading and implementing a new QA program to cover all activities to be performed by DE&S at its Bolton facility. This conversion is scheduled to occur in or around July 1998. Following that conversion, licensees will need to audit and j approva the DE&S QA program for new and current contracted services.

Because of the transfer of safety-related services from a licensee to a vendor, the NRC was concemed regarding the performance of these activities during the transitional period. Specifically, the NRC was concerned as to what QA program was applicable to  ;

DE&S activities, the control and qualification of auditors and inspectors (previously i YNSD, now DE&S), relationships and interactions with DE&S/ Corporate (Charlotte),

maintenance of the approved vendors list, interface and interactions with licensees and the Nuclear Procurement issues Committee (NUPIC), and assumption of Part 21 responsibilities.

3.2 Review of DE&S's 10 CFR Part 21 Proaram and its lmolementation

a. Insoection Scooe The inspectors reviewed DE&S Procedure DPR-16.2, "NRC Reporting Requirements,"

Revision 3 and YAEC Tehnical Administrative Guideline (TAG) No. 6, "10 CFR, Part 21 Reporting," Revision 25 'o determine compliance with NRC regulations as promulgated in 10 CFR Pr,t 21.

b. Observations and Findinas Due to DE&S's adherence to the YOQAP-1-A QA manual, the inspectors determined that TAG 6 is currently applicable to DE&S safety-related quality activities. The inspectors noted several weaknesses within TAG 6, most notably the lack of adequate direction regarding deviations and their evaluation and a time limit constraint for evaluations that is inconsistent with NRC regulations.

DPR-16.2, which will become applicable for all DE&S activities following the conversion to the DE&S QA program, had similar deficiencies. Chief among those was the lack of specificity regarding evaluating deviations.

The inspectors also observed 10 CFR Part 21 postings and found them to be consistent with the current requirements.

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c. Conclusions The inspectors concluded that the Part 21 procedures contained weaknesses and were

. inconsistent with NRC regulations. However, the inspectors concluded that the weaknesses would not prevent DE&S from fulfilling their Part 21 evaluation and reporting responsibilities. The weaknesses were identified to the DE&S management who stated that the identified weaknesses would be evaluated and appropriate revisions made to the procedures.

3.3 Review of Licensee Purch=== Orders (POs)

a. Inspection Scope

. The inspectors reviewed several NRC licensee purchase orders (POs) issued to YNSD and, subsequently revised and reissued, to DE&S to identify the applicable QA program requirements for DE&S performed safety-related work activities.

b. Observations and Findinas The inspectors examined Vermont Yankee Nuclear Support Services Contract VY-1097-10, November 26,1997. The contract was effective as of December 1,1997 (the date -

of the DE&S purchase of YNSD) through December 31,1998. Section Xill, " QUALITY ASSURANCE PROGRAM," states, " All services provided hereunder shall be performed in accordance with the Yankee Atomic Electric Company Operational Quality Assurance Program (YOQAP 1-A)..." The inspectors noted that this contract requires DE&S to utilize the YOQAP program when performing safety related services for Vermont

. Yankee, the same program previously authorized and approved when YNSD was performing the services; The inspectors reviewed a January 29,1998, letter from the Northeast Utilities Service Company (NUSCO) to DE&S. The letter included execution copies terminating the Nuclear Support Services Agreement with YNSD and executing a Master Services .

Agreement with DE&S, effective January 31,1998 through December 31,1998. I Section 33, " QUALITY ASSURANCE REQUIREMENTS," states, " Contractor shall

. perform all Work pursuant to a Quality Assurance Program to be submitted by the Contractor and approved by Utility prior to Contractor's undertaking any work." The

, inspectors noted that the specific QA program requirements were not included in the agreement. The inspectors reviewed the following three blanket release forms provided i from NUSCO for DE&S quality services under PO 02055432: Work Release (WR) 009, l l

. January 30,1998, WR 011, February 25,1998, and WR 017, March 6,1998. All three WRs imposed adherence to YOQAP-1-A, Revision 27 and noted that the January 29,  ;

1998, Master Services Agreement applied. Again, this contract (as' implemented via the l WRs) requires DE&S to utilize the previously approved YOQAP program when l performing safety related services for NUSCO.- j The inspectors also reviewed the Master Services Agreement from the North Atlantic L . Services Corporation which became effective as of January 31,1998 and the February p ,

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l 1998 Services Agreement from Boston Edison. Both of these agreements were similar to the NUSCO agreement in that specific QA program requirements were not included in l the contract but were included in individual POs or work requests. As with NUSCO, the inspector identified that both licensees referenced the previously approved YOQAP-1-A as the applicable QA program in the POs and work requests.

c. Conclusions i

The inspectors concluded that all DE&S activities for their current customers (licensees) are required to be performed under YOQAP-1-A. That program had been reviewed and approved as an acceptable QA program by the NRC. The inspectors noted that DE&S is planning to transition to their own QA program in or around July 1998. At that time, licensees will need to audit and approve the DE&S QA program prior to allowing DE&S to perform safety related work under the new DE&S program.

I 3.4 Quality Assurance Proaram

a. Insoection Scone The NRC inspectors reviewed the Yankee Atomic Electric Company (YAEC)Nermont Yankee Nuclear Power Corporation (VYNPC) Operational Quality Assurance Program, YOQAP-1-A, Revision 27, to assure that DE&S was adhering to the licensee-imposed requirements.

b. Observations and Findinas Quality Assurance Proaram Acolicability YOQAP-1-A is an NRC approved quality assurance topical report for the YAEC Yankee Nuclear Power Station and the VYNPC Vermont Yankee Nuclear Power Station. YOQAP-1-A satisfies the NRC requirements contained in 50.34(b)(6)(ii) by describing how the requirements of Appendix B to 10 CFR Part 50 will be satisfied. The NRC inspectors reviewed several sections and the organizational charts contained in YOQAP-1-A which identified YAEC, Yankee Nuclear Service Division (YNSD), as the responsible organization for providing QA services.

The NRC inspectors and DE&S staff discussed the applicability of YOQAP-1-A for the QA services provided to licensees and the fact that the YOQAP-1-A organizational charts and text refer to YNSD and not DE&S. The NRC inspectors reviewed memoranda from the YAEC Chairman and Chief Executive Officer and the VYNPC Senior Vice President, Operations dated November 7,1998, and November 24,1997, respectively. Both memoranda stated, in part that " Effective December 1,1997, those responsibilities defined in the Yankee Atomic Electric Company Operational Quality Assurance Program (YOQAP-1-A) and previously assigned to the Yankee Nuclear Services Division are hereby delegated to Duke Engineering & Services, Inc. (DE&S)."

These memoranda indicated that DE&S had been retained to provide certain services, that all work shall be performed in accordance with YOQAP-1-A, and that the organizational responsibility for the continuing review and audit of the implementation of the YOQAP-1-A has been assigned to DE&S Quality Services.

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l DE&S informed the NRC inspectors that the YAEC President and VYNPC Senior Vice l President retain the authority for assuring that the QA Program is implemented within their respective plants as stated in YOQAP-1-A.

The inspectors and DE&S discussed the provisions contained in YOQAP-1-A for j providing QA services (auditing vendors, source inspection, certification of auditors and inspectors, and maintenance of the approved vendors list). Although there have been some title changes and DE&S has assumed the duties and responsibilities of YNSD, the functions and reporting relationships appeared to be consistent with the QA organizational structure contained in YOQAP-1-A.

DE&S informed the NRC inspectors that it is in the process of making a transition from performing certain work activities in accordance with YOQAP-1-A to performing those work activities in accordance with a DE&S QA Program. During this transition period, DE&S will continue to provide licensees QA services in accordance with the provisions of the licensee PO. DE&S plans to implement its own QA Program in or about July 1998 and plans to maintain both the YOQAP-1-A QA Program and implementing procedures and its own QA program and implementing procedures. DE&S indicated that the QA program and implementing procedures to be used after July 1998 will be the one specified in licensee POs or contracts.

Audits to Assess the DE&S QA Proaram Implementation The inspectors reviewed YAEC Procedure OQA-XVill-2, " Audit Program," Revision 27, and determined that this procedure was being used by DE&S for performing intemal audits.

DE&S informed the NRC inspectors that an audit was conducted in September 1997 to assess the effectiveness of the YAEC Corrective Action, Audit, and Vendor QA program activities and that this audit satisfied the YOQAP-1-A provision for confirming that DE&S was effectively implementing QA controls and commitments contained in the YOQAP A and the implementing YAEC procedures for these activities. DE&S also informed the NRC inspectors that because it was performing those activities in accordance with the QA controls contained in the YOQAP-1-A and the implementing YAEC procedures, it believed that the September 1997 intemal audit was applicable for activities currently being performed by DE&S.

The inspectors also reviewed a DE&S/ Corporate (Charlotte) audit of the QA services provided by DE&S conducted in March 1998. DE&S informed the NRC inspectors that this audit was not performed to satisfy the YOQAP-1-A provision for conducting internal audits (i.e., to confirm that the QA controls for providing QA services were being effectively implemented), but was conducted as part of a DE&S/ Corporate (Charlotte) audit program. The NRC inspectors agreed with DE&S that the DE&S/ Corporate (Charlotte) audit could not serve as the required YOOAP-1-A internal audit because DE&S/ Corporate (Charlotte) had not been audited and approved by DE&S for such auditing services.

Maintenance of the Acoroved Vendors List (AVL) The NRC inspectors reviewed YAEC Procedure OQA-XVill-3, " Vendor Audits," Revision 22, with Interim Procedure Change 6

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(IPC) Nos; 1 and 2, and ' determined that this procedure was being used by DE&S for performing vendor audits, review of vendor QA manuals, and for preparing and i

controlling the AVL. The inspectors also reviewed YAEC Procedure OQA-XVill-6,

" Evaluation of YAEC Approved Vendors," Revision 13, with IPC No.1, and determined that this procedure was being used by DE&S for performing the annual evaluations of l

vendors.

DE&S informed the NRC inspectors that one AVL was maintained for all of its customers. The NRC inspectors reviewed the revision of the AVL that was in effect prior to the DE&S purchase of YNSD and the current AVL being maintained by DE&S.

The NRC inspectors determined that DE&S, itself, was on the AVL for providing various services, including QA services, based on a licensee audit of YNSD conducted in March 1996. DE&S informed the NR,C inspectors that the next licensee audit of DE&S is scheduled to be performed shortly after it implements its new QA Program in approximately July 1998..

The inspectors also noted that DE&S/ Corporate (Charlotte) was on the AVL for providing engineering, computer, and calibration services. - DE&S informed the NRC l

inspectors that DE&S/ Corporate (Charlotte) was only being used by licensees and that only licensees had issued POs to DE&S/ Corporate (Charlotte) for the approved safety-related services.

The NRC inspectors and DE&S discussed the possibility of using DE&S/ Corporate (Charlotte) to supplement the QA services being provided to licensees. DE&S informed the NRC inspectors that no QA services were being subcontracted to DE&S/ Corporate (Charlotte) and that there were no plans to subcontract any QA services provided to licensees to any vendor, l

c. Conclusions The inspectors determined that, for the scope of activities reviewed, DE&S met the applicable YOQAP-1-A QA commitments, YAEC implementing procedures, and the l

licensee's POs provisions for the QA services provided. A review of the September 1997 audit performed by YNSD found that the report contained an adequate scope to satisfy the intemal audit provision of YOQAP-1-A for QA services. Finally, the inspectors concluded that the AVL appeared to be maintained in accordance with l

applicable YAEC procedures.

l 3.5 Vendor Ame/ Surveillance and Personnel Qualification 1

a. Insoection Scone  !

L The inspectors reviewed a sample of Vendor Audit Reports (VARs), Vendor Surveillance

' Reports (VSRs), and Commercial Survey Reports (CSRs) which documented the results  ;

of QA activities performed by DE&S (or YNSD) personnel before and after the acquisition by DE&S to assure that DE&S activities were being performed by properly l.

qualified inspectors and auditors.

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b. Observations and Findings The inspectors reviewed the following reports to identify YNSD and DE&S personnel involved in audit, surveillance and survey activities:

Reoort No. MADdQ[ Report Date VAR 97-021 BICC-Brand-Rex May 2,1997 3 VAR 97-079 SPEC Consultants, Inc. October 2,1997 '

VAR 97-084 Research Engineers, Inc. September 22,1997 ADLPlPE Division)

VAR 98-010  : Torque Tension & Equipment, Inc. March 9,1998 VAR 98-033 U.S. Tech Services, Inc. March 27,1998 VAR 98-027 Southern Company Services, Inc. April 21,1998

' VSR 98-043 Ederer April 24,1998'

' VSR 98-039 CVI, Inc. March 16,1998 ,

. VSR 98-041 Nuclear Logistics, Inc. March 27,1998 l VSR 98-067 ~ Molten Metals Technologies, Inc. March 27,1998 l VSR 98-040 General Electric Nuclear Energy April 3,1998 '

l CSR 97-020 - GE Industrial Controls ; August 14,1997 i CSR 97-021 Hytorc _

October 21,1997 CSR 98-005 New England Balance Servicis, Inc. April 6,1998 CSR 98-007- Syseca, Inc. May 8,1998

' The inspectors also reviewed a sample of personnelfiles for DE&S-qualified inspectors and auditors identified in the reports listed above.1 in addition, the inspectors reviewed YAEC procedures (which DE&S continues to use in the transition period) OQA-X-2,

" Inspection / Surveillance Training and Certification," Revision 8 (latest), and OQA-XVlli- !

11, " Auditor Training and Qualification," Revision 9 (latest). In accordance with Revision 27 to the YOQAP-1-A, these procedures satisfy the provisions of ANSI N45.2.6-1978,

" Qualifications of Inspection, Examination, and Testing Personnel for Nuclear Power Plants," (as endorsed by Regulatory Guide (RG) 1.58, " Qualification of Nuclear Power.:

' Plant inspection, Examination, and Testing Personnel," Revision 1) and ANSI N45.2.23-1978, " Qualification of Quality Assurance Program Audit Personnel for Nuclear Power Plants,"(as endorsed by RG 1,146," Qualification of Quality Assurance Program Audit Personnel for Nuclear Power Plants," dated August 1980), respectively.

L The inspectors noted that some personnel qualification records were signed by DE&S

personnel. The inspectors reviewed the records and noted that the approving officials were DE&S (Bolton) employees and the certifications were approved in accordance with DE&S (Bolton) procedures consistent with YOQAP-1-A requirements.

c. . Conclusions The inspectors confirmed that QA activities described in the reviewed reports had been j performed by personnel who had been properly qualified in accordance with applicable i procedures.

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3.6 Relationship Wdh DE&S/Coroorate (Charlotte)

The inspectors discussed the relationship of DE&S/Bolton with DE&S/ Corporate

._(Chariotte) regarding the providing of quality assurance services to the nuclear industry (also discussed in Section 3.4, above). DE&S informed the inspectors that the two organizations were considered separate entities. Ali work performed by DE&S/Bolton is done using personnel qualified and certified using DE&S approved procedures. No Corporate personnel have been used by DE&S (or YNSD) in performing any quality assurance activities. DE&S recognized that using DE&S/ Corporate as a subcontractor to to perform quality assurance services would require audit and approval of the

. Corporate QA program. The inspectors did not have any concems in this area.

3.7 Participation in Nuclear Procurement issues Committee (NUPIC) Activities Prior to the sale of YAEC's YNS'D to DE&S, YAEC was a member of NUPIC and its membership represented the YAEC, VYNPC, Maine Yankee, Boston Edison and Northeast Nuclear Energy plants. Following the sale, YAEC, which holds the NRC license for the Yankee Nuclear Power Station, informed NUPIC that it would retain its NUPIC membership and that its membership commitments for 1998 would be fulfilled with support from DE&S, which has been contracted to implement YAEC vendor oversight activities.

PARTIAL LIST OF PERSONS CONTACTED DE&S William H. Rasin,. Vice President C. Russell Clark, General Manager, Quality Assurance Services Steven C. White, Manager, Operational Quality Assurance Walter K. Peterson, Manager, Decommissioning Quality Assurance Chris Lloyd, Group Manager, Vendor Quality Assurance 9

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