Information Notice No. 96-40, Supplement 1: Deficiencies in Material Dedication and Procurement Practices and in Audits of Vendors

                                       UNITED STATES
                               NUCLEAR REGULATORY COMMISSION
                                WASHINGTON D.C.  20555-0001

                                      October 7, 1996

                                              DEDICATION AND                                                
                                              PROCUREMENT PRACTICES                                         
                                              AND IN AUDITS OF VENDORS

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


The U.S. Nuclear Regulatory Commission (NRC) is issuing this supplement to correct an
inspection date that was incorrectly reported in Attachment 1 to Information Notice (IN) 96-40
and to discuss further the applicability of the material dedication concerns identified in IN 96-
40 to the individual suppliers identified in Attachment 1 to that notice.  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 supplement do not constitute NRC requirements; therefore, no specific action or
written response is required.


On July 25, 1996, the NRC issued IN 96-40 to alert addressees to deficiencies in
commercial-grade-item dedication practices used by manufacturers and suppliers of material
to NRC licensees under the rules of Appendix B to Part 50 of Title 10 of the Code of Federal
Regulations (10 CFR).  The information notice included a summary of NRC inspection
findings and a listing of the material manufacturers and suppliers inspected.


1.     Attachment 1 to IN 96-40 gave the NRC inspection date for Cardinal Industrial
       Products, Las Vegas, Nevada, as November 29-December 1, 1995. The correct date
       of this inspection is November 29-December 1, 1994.

2.     The series of inspections described in IN 96-40 was specifically designed to assess
       the current dedication practices for commercial-grade-items and ASME Code material
       upgrading practices in the nuclear industry.  The inspections also assessed the
       licensee oversight of these practices.  The inspections were initiated in early 1994 and
       concluded by mid-1995, after the inspectors had determined that a sufficient cross-
       section of material vendors had been inspected to draw reasonable

9610010230 .                                                                     IN 96-40, Supp. 1
                                                                     October 7, 1996
                                                                     Page 2 of 2

       conclusions about current material supply practices under the rules of the ASME Code
       and under the quality assurance requirements of 10 CFR Part 50, Appendix B.  

3.     There was no effort to compare or rank the vendors inspected during this series of
       NRC inspections.  The concerns identified on page 2 of the IN are a summary of
       findings on all of the vendors inspected, and it should not be assumed that these
       findings are applicable to each of the vendors inspected.  The specific inspection
       findings for each of the vendors are discussed in the respective inspection reports,
       which are available in NRC's Public Document Room and have been published in
       NUREG-0040, "Licensee Contractor and Vendor Inspection Status Report."
4.     Although the NRC had inspected material suppliers before the start of this inspection
       series, no attempt was made to include historical data in IN 96-40 since the main
       purpose of the series was to characterize current industry practice.  The earlier
       inspections generally had a different or more narrow scope and did not cover the
       same program areas.  The exclusion of any suppliers inspected earlier from the
       vendors listed in Attachment 1 to the IN should not be viewed as an indication that the
       commercial-grade-item dedication practices of these suppliers were found to be
       superior to those of the companies identified in the IN.
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 contacts listed

                                                 signed by B.K. Grimes

                                          Thomas T. Martin, Director
                                          Division of Reactor Program Management
                                          Office of Nuclear Reactor Regulation

Technical Contacts:  Uldis Potapovs, NRR         
                        (301) 415-2959              
                        Larry Campbell, NRR
                        (301) 415-2976

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