United States Nuclear Regulatory Commission - Protecting People and the Environment

Information Notice No. 95-12: Potentially Nonconforming Fasteners Supplied by A&G Engineering II, Inc.

                                 UNITED STATES
                         NUCLEAR REGULATORY COMMISSION
                     OFFICE OF NUCLEAR REACTOR REGULATION
                         WASHINGTON, D.C.  20555-0001

                               February 21, 1995


NRC INFORMATION NOTICE 95-12:  POTENTIALLY NONCONFORMING FASTENERS
                               SUPPLIED BY A&G ENGINEERING II, INC.


Addressees

All holders of operating licenses or construction permits for nuclear power
reactors.

Purpose

The U.S. Nuclear Regulatory Commission (NRC) is issuing this information
notice to alert addressees to the potential that A&G Engineering II, Inc.
(A&G), may have supplied substandard fastener products to NRC licensees and
vendors and that documentation may not be available to demonstrate that
fasteners supplied by A&G comply with applicable ASME Code requirements.  It
is expected that recipients will review the information for applicability to
their facilities and consider actions, as appropriate, to avoid similar
problems.  However, suggestions contained in this information notice do not
constitute NRC requirements; therefore, no specific action or written response
is required.

Description of Circumstances

A&G held American Society of Mechanical Engineers (ASME) Quality System
Certificates (Material Manufacturer and Material Supplier) and supplied a
significant volume of safety-related threaded fasteners to the nuclear power
industry.  In May 1993, the NRC received information that A&G had provided
substandard fastener products and falsely certified such products to NRC-
regulated facilities.  At that time, the A&G assets were being liquidated in
accordance with bankruptcy court procedures and its administrative offices
were in a state of disarray.

Discussion

The information that the NRC received indicated that A&G had purchased
threaded fasteners from foreign corporations knowing that they were not tested
in accordance with ASME standards and supplied the potentially substandard and
fraudulently certified threaded fasteners to the nuclear industry.  A&G has
supplied a significant number of fasteners to the nuclear industry, but at the
time the NRC received the information, the company had filed for bankruptcy
and was no longer operating as a business.  The A&G ASME Quality System
Certificates were terminated on March 18, 1993, for non-payment of fees.




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NRC initiated an investigation in June 1993.  NRC found the A&G files in a
state of disarray and its computerized record system disabled and unusable. 
Such important documents as material heat code conversion logs were incomplete
or missing.  Many of the A&G major suppliers operated outside of the United
States and most material certifications by the producing mills (heat analyses)
or the results of testing performed by the foreign manufacturers to upgrade
material for ASME Code applications could not be located.

The A&G purchase order file documentation that was available for review showed
no evidence that certifications had been falsified, and existing documentation
of testing by A&G or its subcontractors indicated that the material which was
supplied met the applicable physical and chemical requirements.  Impact
testing data and magnetic particle inspections were generally supported by
test reports from the laboratory that performed the tests.  However, in many
cases, chemical composition data, tensile testing data, material heat
treatment information, and hardness testing data cited in the A&G Certified
Material Test Reports (CMTRs) could not be verified because of the missing
records.

The NRC investigation also revealed that, in many cases, the documentation
available at A&G was not adequate to support the material certifications
issued by A&G.

Aside from this investigation, NRC has received information indicating that,
in at least one instance, material supplied by A&G was different from the heat
of material identified in the accompanying CMTR.  In January 1994, PECO Energy
Company reported to its supplier, HUB, Inc., that 143 out of 150
1� inch SA-194 GR 7 heavy hex nuts did not meet the material specifications. 
Specifically, the carbon content of the nuts was too low and significantly
different from what was stated on the CMTR.  The nuts were certified as
traceable to Hamanaka Nut Mgn. Co., Ltd., heat #565289/CGF and were supplied
to HUB, Inc., by A&G in 1986.  Although HUB removed the remaining A&G nuts
from stock with the intent to scrap them, several other utilities had
apparently been supplied with heavy hex nuts from this heat.

Presently the Superior Court of the State of California, County of Riverside,
has placed all records of A&G Engineering II, Inc., in the hands of a
Receiver.  These records include purchasing files of customers in the nuclear
power industry.  The Receiver intends to promptly abandon or destroy all
records of A&G Engineering II, Inc.

NRC believes that customers in the nuclear power industry should have received
all required documentation at the time of procurement.  However, based on the

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foregoing information anyone desiring copies of such records should contact
the Receiver's office at the address listed below.

                        Christine Pollard
                        416 N. Garey Avenue
                        Pomona, California  91767
                        Telephone:  (909) 865-5992


This information notice requires no specific action or written response.  If
you have any questions about the information in this notice, please contact
one of the technical contacts listed below or the appropriate Office of
Nuclear Reactor Regulation (NRR) project manager. 


                                    /s/'d by BKGrimes

                                    Brian K. Grimes, Director 
                                    Division of Project Support 
                                    Office of Nuclear Reactor Regulation 

Technical contacts:  Uldis Potapovs, NRR
                     (301) 415-2959

                     John R. Tappert, NRR
                     (301) 415-1167

Attachment: 
List of Recently Issued NRC Information Notices  

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