United States Nuclear Regulatory Commission - Protecting People and the Environment

Information Notice No. 84-52, Supplement 1: Inadequate Material Procurement Controls on the Part of Licensees and Vendors

                                                 SSINS No. 6835            
                                                 IN 84-52, SUPPLEMENT 1

                                 UNITED STATES
                         NUCLEAR REGULATORY COMMISSION
                     OFFICE OF INSPECTION AND ENFORCEMENT
                            WASHINGTON, D.C. 20555

                                  May 8, 1985

INFORMATION NOTICE NO. 84-52, SUPPLEMENT 1: INADEQUATE MATERIAL PROCUREMENT 
                                            CONTROLS ON THE PART OF LICENSEES 
                                            AND VENDORS

Addressees:

All nuclear power reactor facilities holding an operating license (OL) or 
construction permit (CP).

Purpose:

This notice provides additional information to licensees of hardware problems 
and deficient procurement controls and quality assurance (QA) practices on
the  part of suppliers of nuclear material that have been inspected by the
IE  Vendor Program Branch (VPB) since IE IN 84-52 was issued. It also is
intended  to call attention to generic problems in procurement activities on
the part of  licensees. No specific action is required in response to this
information  notice, but it is expected that recipients will review the
information  presented for applicability to their facilities.

Discussion:

Information Notice 84-52 described deficient procurement controls and QA 
practices identified during inspections performed by the VPB from 1982 to 
early 1984. Since that time, 13 additional inspections have been performed
of  material suppliers and material manufacturers. Deficiencies similar to
those  noted in IN 84-52 were found for all 13 vendors. Those deficiencies
are  described in Attachment 1. In addition to procurement and QA
deficiencies,  hardware deficiencies were noted for three of these vendors.
IN 85-15, was  issued on February 22, 1985, to specifically address the
hardware deficiencies  identified at one of the three vendors, Interstate
Steel and Supply Company.  The hardware deficiencies identified at the other
two vendors, Phoenix Steel  Corporation, Tube Division, and LTV Steel Company
(formerly Jones and Laughlin  Steel), Tubular Division, Campbell Plant, are
discussed in this notice. The  hardware deficiencies identified involved the
production and shipment of  seamless carbon steel pipe, portions of which did
not meet the required  minimum wall thickness because of inadequate
manufacturing process controls  and inadequate inspection methods.

An NRC inspection of seamless pipe supplied by the two companies was recently 
performed at a nuclear power plant in which 20% of the LTV pipe and 40% of
the Phoenix pipe inspected did not meet the minimum wall thickness
requirements

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                                                 IN 84-52, Supplement 1    
                                                 May 8, 1985               
                                                 Page 2 of 3

specified by the ASME Code. The worst case found during the inspection was
a  pipe which was 5.3% below the required minimum wall thickness along a
portion  of its length. However, because of the inadequate manufacturing
process  control and inadequate inspection methods by the two vendors, this
cannot be  assumed to be a limiting worst case.

With the exception of the hardware deficiencies identified above, the issues 
listed in Attachment 1 are representative of findings made by the Vendor 
Program Branch during other inspections of quality programs and of the 
implementation of quality programs in the material supply and manufacturing 
industry. The number and nature of the findings suggest that significant 
problems may exist in the implementation of the nuclear industry's vendor 
evaluation and surveillance programs.

The NRC's position is that the ultimate responsibility for the adequacy of 
these programs rests with the licensees. A contributing factor to the overall 
problem discussed above has been deficiencies identified with respect to 
licensee procurement and associated QA activities. Deficiencies of this type 
include:

a.   inadequate inspection of materials and components when received

b.   inadequate survey and auditing of vendor QA programs

c.   failure to perform adequate internal audits of the procurement process

d.   inadequate training of personnel who procure nuclear materials under the
     requirements of 10 CFR 21, Appendix B to 10 CFR 50, and the ASME Code

e.   insufficient management attention to procurement activities

Attachment 1 lists vendors and recent VPB inspection reports where specific 
discrepancies have been identified regarding implementation of the vendors' 
quality assurance programs. These reports are published quarterly by the NRC 
in the "Licensee Contractor and Vendor Inspection Status Report," NUREG0040. 
Copies of this document (the White Book) may be obtained at a nominal cost 
from the National Technical Information Service, Springfield, Virginia 22161. 
Correspondence with contractors and vendors relative to the inspection data 
contained in NUREG-0040 is placed in the NRC Public Document Room, 1717 H 
Street, N.W., Washington, D.C. 20555. All of the vendors listed in Attachment 
1 have submitted corrective action plans addressing the noted deficiencies.


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                                                 IN 84-52, Supplement 1    
                                                 May 8, 1985               
                                                 Page 3 of 3

No specific action or written response is required by this information
notice.  If you have any questions regarding this notice, please contact the
Regional  Administrator of the appropriate NRC regional office or the
technical contact  listed below.



Edward L. Jordan, Director
Division of Emergency Preparedness
and Engineering Response
Office of Inspection and Enforcement

Technical Contact: E. Baker, IE
                   (301) 492-4874

Attachments:
1. Deficient Practices Identified in Recent VPB Inspections   
2. List of Recently Issued Information Notices


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