Information Notice No. 92-56: Counterfeit Valves in the Commercial Grade Supply System

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

                                August 6, 1992


NRC INFORMATION NOTICE 92-56:  COUNTERFEIT VALVES IN THE COMMERCIAL 
                               GRADE SUPPLY SYSTEM 


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 of the results of an NRC investigation of suspect
valves, suggesting that counterfeit commercial grade valves may have been
procured by NRC licensees.  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 are not NRC requirements; therefore, no specific
action or written response is required.

Description of Circumstances

In 1987, Coffeyville Valve, Incorporated, (CVI) supplied approximately
47 Crane Company (Crane) valves through a valve supplier, to the
Swinerton & Walberg Construction Company (Swinerton), for installation in the
Impell Co-Generation Plant, Camarillo, California.  Upon receiving the Crane
valves, Swinerton, with the assistance of a Crane Company representative,
determined that all of the Crane valves were counterfeit.  One of the flaws in
the fraudulent nameplate labels found by the Crane Company representative was
that only "Crane" was imprinted on the label, instead of "Crane Co."  In
June 1988, Crane won a civil court action for trademark infringement against
CVI. 

The NRC staff determined that, in 1987, CVI purchased approximately
7500 nameplate labels from a label manufacturer, and these labels were
imprinted with several valve manufacturers' names.  The manufacturers' names
that were imprinted on the labels that CVI purchased included Crane, Pacific,
Walworth, Powell, and Lunkenheimer.

On December 16, 1987, CVI shipped two Crane, 14-inch gate valves, to the
Consolidated Edison Company of New York (Con Ed) Indian Point Station Unit 2
(IP-2), through a valve supplier.   Con Ed procured the two Crane valves for
its nonsafety-related "Feed and Condensate System" and did not require the
valve supplier to meet the NRC requirements of Appendix B to 10 CFR Part 50 or
10 CFR Part 21.

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                                                       August 6, 1992
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At the request of the NRC staff, a Crane Company representative subsequently
inspected the two 14-inch valves, which had been installed at IP-2.  After the
inspection, the Crane Company representative informed the NRC staff that: 

     The conclusion to be drawn from the marking, lettering and
     dimensional observations is that there are sufficient grounds to
     suspect that the subject two 14-inch valves installed in the Con Ed
     condensate system were not new Crane manufactured valves at the time
     they were purchased.   The valves are in all likelihood either old
     Crane valves that have been in unknown service and reconditioned by
     parties other than Crane Company, or valves of unknown origin with
     the Crane name applied without the consent of the Crane Company.  
     In either event, the valves were furnished outside the control of
     Crane Company and would therefore not be under any Crane warrantee
     as to fitness for service.

Discussion

The information that the NRC staff has compiled suggests that CVI may have
supplied suspect Crane valves to other valve suppliers or distributors. 
Additionally, this information suggests that CVI may have also supplied
suspect commercial grade Pacific, Walworth, Powell, and Lunkenheimer valves.

The NRC staff determined that CVI procured several thousand valve labels
similar to those used on the fraudulent Crane valves.  Although the NRC staff
does not have any example where a suspect valve was installed in a safety-
related application, the NRC staff is concerned that suspect valves may have
been introduced by CVI into the commercial grade valve supply system and may
have been installed at some licensee facilities.  

NRC requirements allow for commercial grade item dedication for safety-related
application.  In March 1989,  the NRC issued Generic Letter (GL) 89-02,
"Actions to Improve the Detection of Counterfeit and Fraudulent Marketed
Products."  The purpose of GL 89-02 was to share elements of procurement and
dedication programs that appeared to be effective in detecting counterfeit
or fraudulently marketed products.  

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




                                   Charles E. Rossi, Director
                                   Division of Operational Events Assessment
                                   Office of Nuclear Reactor Regulation

Technical contact:  Joseph J. Petrosino, NRR
                    (301) 504-2979

Attachment:  List of Recently Issued NRC Information Notices
.