[Federal Register Volume 59, Number 247 (Tuesday, December 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-31777]


[[Page Unknown]]

[Federal Register: December 27, 1994]


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NUCLEAR REGULATORY COMMISSION
[Docket No. 99900271]

 

Rosemount Nuclear Instruments, Incorporated; Director's Decision 
Under 10 CFR 2.206

    The Director, Office of Nuclear Reactor Regulation, has taken 
action with respect to two related Petitions filed by Paul M. Blanch. 
Notice is hereby given that by letter dated December 31, 1992, Mr. 
Blanch requested that the Nuclear Regulatory Commission (Commission) 
impose immediate enforcement action against Rosemount Nuclear 
Instruments, Incorporated for a knowing and intentional failure to 
submit, as required by 10 CFR Part 21, a notice to the Commission that 
``basic components supplied'' to its customers ``contained defects,'' 
as defined by 10 CFR Sec. 21.3. In a second letter dated March 28, 
1994, the Petitioner requested the Commission to inform all users of 
Rosemount 1150-series pressure transmitters and trip units of 
``significant safety problems'' identified in Commission Inspection 
Report 99900271/93-01, and that the Commission take ``prompt and 
vigorous'' enforcement action against Rosemount for careless disregard 
of the reporting requirements of 10 CFR Part 21.
    The Director of the Office of Nuclear Reactor Regulation (NRR) has 
granted these Petitions in part and denied them in part. The reasons 
for the Director's actions are set forth in the ``Director's Decision 
under 10 CFR Sec. 2.206'' (DD-94-12), which is available for public 
inspection in the Commission's Public Document Room at 2120 L Street, 
NW. (Lower Level), Washington, DC 20555-0001.
    A copy of the Director's Decision will be filed with the Secretary 
for the Commission's review in accordance with 10 CFR Sec. 2.206(c) of 
the Commission's regulations. As provided by that regulation, the 
Decision will constitute the final action of the Commission 25 days 
after the date of issuance of the Decision unless the Commission on its 
own motion institutes a review of the Decision within that time.

    Dated at Rockville, Maryland, this 15th day of December, 1994.

    For the Nuclear Regulatory Commission.
William T. Russell,
Director, Office of Nuclear Reactor Regulation.

Appendix A to This Document--Director's Decision Under 10 CFR 2.206

I. Introduction

    On December 31, 1992, Mr. Paul M. Blanch (the Petitioner) filed 
a Petition with the Executive Director for Operations, pursuant to 
Section 2.206 of Title 10 of the Code of Federal Regulations (10 CFR 
2.206), in which he requested that the U.S. Nuclear Regulatory 
Commission (NRC) impose immediate enforcement action against 
Rosemount for a knowing and intentional failure to submit, as 
required by 10 CFR Part 21, a notice to the Commission that ``basic 
components supplied'' to its customers ``contained defects,'' as 
defined by 10 CFR 21.3. On March 2, 1993, the Petitioner sent a 
letter to the NRC in which he stated, in part, that he ``was 
requesting enforcement action against Rosemount for failing to 
report defects as required by 10 CFR 21,'' and making ``a simple 
request that [the NRC] investigate a potential cover-up and a 
failure to report a defect in accordance with the requirements of 10 
CFR 21.'' On March 28, 1994, the Petitioner filed a second Petition 
in which he requested that the NRC inform all users of Rosemount 
1150-series pressure transmitters and series 510 and 710 DU trip 
devices of ``significant safety problems'' identified in NRC 
Inspection Report 99900271/93-01 (which addressed principally the 
NRC staff inspection of Rosemount's 10 CFR Part 21 and Appendix B to 
10 CFR Part 50 established programs), and that the NRC take ``prompt 
and vigorous'' enforcement action against Rosemount for careless 
disregard of the reporting requirements of 10 CFR Part 21. In a 
letter dated May 2, 1994, the Petitioner reiterated his request that 
the NRC take action to inform all users of Rosemount 1150-series 
pressure transmitters and series 510 and 710 DU trip devices of the 
``significant safety problems'' identified in NRC Inspection Report 
99900271/93-01,
    By letters dated February 2 and April 7, 1993, in response to 
the Petition of December 31, 1992, and letter of March 2, 1993, the 
NRC staff stated that the request for immediate action was denied 
because the actions it had already taken to address the problems 
with Rosemount transmitters were sufficient to ensure that the 
problems did not constitute an immediate safety concern for any 
nuclear power plant. The NRC staff also stated in those letters 
that, as provided by 10 CFR 2.206, action would be taken on the 
Petition within reasonable time. By letters dated April 25 and June 
3, 1994, in response to the Petitioner's letters of March 28 and May 
2, 1994, the NRC staff stated that the NRC inspection report was 
included in the April 1994 publication of NUREG-0040,\1\ ``which is 
sent to all nuclear power plant licensees,''\2\ and that none of the 
identified issues were considered significant enough to warrant 
immediate notification of the nuclear industry.
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    \1\NUREG-0040, ``Licensee Contractor and Vendor Inspection 
Status Report,'' is distributed to NRC licensed facilities, 
manufacturers, suppliers, architect engineer firms, nuclear steam 
supply system suppliers and is publicly available at NRC public 
document rooms, National Technical Information Services (NTIS) and 
through the Government Printing Office (GPO) sales office.
    \2\Subsequently, NRC staff identified the NUREG-0040 was not 
distributed to ``all nuclear power plant licensees'' as stated to 
the Petitioner by letter dated April 25, 1994, because of an NRC 
staff error that was made concerning the NUREG-0040 distribution 
process. Therefore, the NRC staff directed in October 1994 that 
Inspection Report 99900271/93-01 be sent to all power reactor 
licensees and construction permit holders. NRC staff has verified 
that the distribution of the inspection reports was completed.
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    In regard to the Petitioner's second request,``to take prompt 
and vigorous enforcement action against Rosemount for careless 
disregard of 10 CFR Part 21 requirements,'' the Petitioner was 
informed in the April 25, 1994, letter, that ``[t]he NRC will make 
its determination as to enforcement action, [against Rosemount] 
should such enforcement action be warranted, following the 
enforcement conference.''
    The Director of the Office of Nuclear Reactor Regulation (NRR) 
has granted these Petitions in part. Specifically, pursuant to the 
``General Statement of Policy and Procedure for NRC Enforcement 
Actions'' (Enforcement Policy), 10 CFR Part 2, Appendix C, a 
Severity Level II notice of violation was issued to Rosemount on 
November 15, 1994. On the basis of the conclusions and findings in 
NRC Office of Investigations (OI) Investigation Report 4-90-009, 
dated November 12, 1993, in NRC Inspection Report 99900271/93-01, 
and NRC staff deliberations on a Rosemount presentation of its 
relevant information regarding the Rosemount pressure transmitter 
sensor cell oil-loss problem during the enforcement conference on 
June 23, 1994, the NRC staff concluded that Rosemount acted in 
careless disregard of 10 CFR Part 21 requirements and its own 
procedures by failing to adequately evaluate or to inform its 
customers of the potential for degraded transmitter operation as a 
result of the oil-loss problem.
    Additionally, on October 11, 1994, the NRC staff received an 
unsolicited letter from Rosemount, dated September 28, 1994. In this 
letter, Rosemount stated that it agreed with the NRC ``views'' 
expressed at the June 23, 1994, enforcement conference on the 
importance of 10 CFR Part 21. However, Rosemount stated that it 
could not concur in the view that Rosemount acted in careless 
disregard of NRC requirements by failing to adequately identify and 
report potential defects in its Model 1153 pressure transmitters 
prior to December 1988. Rosemount attached a 40 page enclosure to 
its letter that takes exception to a number of statements and 
conclusions delineated in the NRC inspection report. These 
exceptions included Rosemount's position that early (1984) 
transmitter failure mechanisms were never established as resulting 
from oil loss, and the oil loss problem could have resulted from 
other factors unrelated to transmitter design. Rosemount 
additionally disagreed with the position in the inspection report 
that early non-nuclear grade Model 1151 transmitter failures should 
have made Rosemount aware of a potentially generic problem affecting 
its nuclear grade transmitters.\3\ Further, Rosemount disagreed with 
the portion of the inspection report that identifies the time that 
Rosemount began to track field returns of failed transmitters.
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    \3\During this particular period of time, the sensor cell for 
both Model 1151, non-nuclear grade transmitters, and Models 1152 and 
1153, nuclear grade transmitters, were manufactured in the same 
production line, utilizing the same manufacturing and production 
line process controls.
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    The staff reviewed the information in the Rosemount letter and 
determined that the letter did not provide new information or 
arguments that would cause any change in the staff's position. The 
inspection report and the OI investigation identified numerous 
instances where problems with transmitters implicating the 
transmitter design, manufacturing or test processes were brought to 
Rosemount's attention but were not properly addressed by Rosemount 
for their generic or common-mode failure implications. The staff 
concluded that Rosemount failed to address these generic or common-
mode failure implications, initially because it improperly 
dispositioned the failures as random rather than using available 
information to identify deviations that clearly, in the staff's 
view, represented a common mode failure potential. Despite having, 
as the OI investigation identified multiple examples of transmitter 
failures and several members of the Rosemount staff convinced that 
the failures were a result of manufacturing problems common to all 
the transmitter sensor cells, Rosemount failed to inform NRC 
licensees of the deviation.\4\ The staff concluded that Rosemount's 
knowledge of this deviation, coupled with its failure to inform 
licensees, constituted careless disregard for the requirements of 10 
CFR Part 21.
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    \4\As defined in 10 CFR 21.3, deviation means a departure from 
the technical requirements included in a procurement document. The 
identified oil-loss problem was considered a deviation because 
sensor cell oil-loss caused Rosemount transmitters to depart from 
technical performance specifications that were delineated in 
Rosemount product data sheets.
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II. Background

    Since the mid-1980s, the NRC staff had been aware of several 
potential problems with Rosemount Models 1152, 1153, and 1154 
transmitters (1150-series transmitters). In 1987, the NRC conducted 
an inspection at Rosemount because of a potential generic problem 
concerning degraded transmitter operation associated with 
contaminants in sensor cell oil, a condition referred to as ``latch-
up'' identified in the early 1980s. During the same period that 
Rosemount was trying to resolve the latch-up problem, another sensor 
cell related problem was identified that also caused degraded 
transmitter operation. The second problem involved transmitter 
sensor cell oil-loss, which was not readily detectable because the 
sensor cell was sealed inside the transmitter. Rosemount pressure 
transmitter sensor cell oil-loss problems in nuclear applications 
occurred in a number of instances and at varying frequencies from 
1984 on, indicating a potential generic problem with the 
transmitters. Rosemount nevertheless treated each licensee or 
Rosemount-identified oil-loss problem as an isolated occurrence, and 
handled the problems essentially on an individual basis as they 
arose. Although Rosemount indicated to the NRC staff and licensees 
that the failures resulting from oil loss appeared to be random and 
unrelated to any generic problem with Rosemount 1150-series 
transmitters, the staff nevertheless issued NRC Information Notice 
89-42, ``Failure of Rosemount Models 1153 and 1154 Transmitters,'' 
on April 21, 1989, to alert licensees to this potentially generic 
problem. On May 10, 1989, Rosemount issued the first of four 
technical bulletins in which it discussed loss of oil in its 
pressure transmitters. The NRC staff continued to monitor the oil-
loss problem and discuss the potentially generic problem with 
Rosemount and the industry.
    The NRC staff remained concerned that the transmitter oil-loss 
problem did not appear to be isolated, as Rosemount had been 
informing licensees. Therefore, on March 9, 1990, it issued Bulletin 
90-01, ``Loss of Fill-Oil in Transmitters Manufactured by 
Rosemount,'' to ensure that all licensees were adequately informed 
about the problem and would take appropriate corrective action. 
After obtaining additional information, the staff issued Supplement 
1 to Bulletin 90-01 on December 22, 1992.
    In February and March 1993, NRC staff performed an inspection at 
Rosemount. On March 4, 1994, the staff issued Inspection Report 
99900271/93-01, in which it identified an apparent violation of 10 
CFR Part 21 regarding the transmitted oil-loss problem and asked 
Rosemount to participate in an enforcement conference on the matter. 
In the report, the staff also identified several other violations of 
10 CFR Part 21 and several nonconformances regarding Appendix B to 
10 CFR Part 50. On June 23, 1994, an enforcement conference was held 
at NRC headquarters in Rockville, Maryland.

III. Discussion

    On the basis of the evidence developed during the investigation, 
OI determined that two allegations were partially substantiated. 
Regarding the first partially substantiated allegation, OI 
determined that Rosemount presented incomplete and inaccurate 
information to the NRC during a public meeting on April 13, 1989. 
However, the evidence developed during OI's investigation did not 
substantiate that this presentation of incomplete and inaccurate 
information was deliberate. Although the NRC staff recognized that 
the inaccurate and incomplete statements made to the NRC during the 
public meeting on April 13, 1989, were not deliberate, it had 
substantial concerns about this matter and emphasized to Rosemount 
in the letter of November 15, 1994, that the submittal of inaccurate 
or incomplete information to the NRC is unacceptable and that the 
NRC expects all licensee and vendor communications to be complete 
and accurate and to properly reflect situations that could have 
implications for public health and safety.
    Regarding the second partially substantiated allegation, OI 
determined that Rosemount acted with careless disregard when, in 
violation of 10 CFR Part 21, it failed to adequately identify and 
report a deviation regarding sensor cell oil-loss that was known to 
Rosemount staff and to inform its customers of the problem.
    This violation was of concern because Rosemount did not fulfill 
its basic 10 CFR 21.21 responsibility of ``informing the licensee or 
purchaser of the [transmitter oil-loss] deviation in order that the 
licensee or purchaser may cause the deviation to be evaluated unless 
the deviation has been corrected.'' Rosemount was aware that its 
manufacturing processes and testing were causing and allowing slow 
leaking sensor cells to be used in nuclear transmitters, but 
Rosemount did not apprise NRC licensees of those circumstances. 
Although the different causes of the oil-loss problem were known to 
the Rosemount staff, that information was not accurately or 
completely transmitted to individual licensees for their use in 
performing an evaluation pursuant to Part 21. As a result, the 
licensee Part 21 evaluations that were performed with the 
information which was provided to them by Rosemount did not 
encompass all of the known circumstances surrounding the oil-loss 
problem. The objective evidence indicated that Rosemount field 
service staff became concerned after the discovery of several 
transmitters with degraded operation that exhibited oil-loss at one 
NRC-licensed facility in 1984. Additional instances of oil-loss in 
the nuclear transmitters continued to be documented by Rosemount 
between 1984 and 1988. It appeared to the NRC staff that Rosemount's 
emphasis was on correcting the manufacturing and testing weaknesses 
which allowed degraded transmitter operation due to oil-loss without 
much consideration of candidly informing NRC licensees of the 
potential for degraded operation of Rosemount transmitters installed 
in safety-related applications at NRC licensed operating nuclear 
power plants. Between 1984 and 1988, Rosemount received many of the 
failed units from its nuclear customers, performed failure analyses, 
and determined that the degraded operation of these units was caused 
from sensor cell oil-loss. Despite these numerous indications of 
potential problems with the Rosemount Models 1152, 1153 and 1154 
transmitters, Rosemount failed to comply with 10 CFR Part 21 
requirements and its own internal policy and procedure and inform 
its customers of the potential problem in a timely fashion. The NRC 
inspectors concluded, partly on the basis of Rosemount internal 
memoranda, discussions with past and present Rosemount staff and 
correspondence between Rosemount and licensees, that weaknesses in 
Rosemount's 10 CFR Part 50, Appendix B, quality assurance (QA) 
program and the reluctance of Rosemount managers to be candid in 
their communications with customers contributed to Rosemount's 
failure to promptly inform customers of the oil-loss problem. If 
Rosemount had established effective measures to ensure that 
conditions adverse to quality, such as failures, malfunctions, 
deficiencies, deviations and nonconformances, were promptly 
identified and corrected, Rosemount management could have seen the 
developing trend of degraded transmitter response caused by 
inadequate or inconsistent controls over the sensor cell 
manufacturing process. Rosemount did not begin to inform its nuclear 
power plant customers, as required by 10 CFR Part 21 and its own 
procedures, of the deviation regarding the oil-loss problem until 
December 1988. The NRC staff believes that Rosemount's failure to 
take action between 1984 and 1988--as a result of its failure to 
avail itself of the multiple opportunities to recognize the generic 
implications of sensor cell oil-loss in its 1150-series 
transmitters, repeated failure to recognize the problems identified 
by experienced Rosemount personnel, and the reluctance of Rosemount 
personnel to allow candid communications with customers of the 
circumstances surrounding the deviations--reflects careless 
disregard of the requirements of 10 CFR Part 21.
    In summary, the NRC staff concluded that the failure of 
Rosemount to provide timely and complete notification of NRC 
licensees in the more than four years that the company was aware, or 
should have been aware, of the problem indicates a careless 
disregard of the reporting requirements of 10 CFR Part 21. In 
accordance with the Enforcement Policy, Supplement VII, Section C.5, 
the failure either to perform an adequate Part 21 review or to 
inform Rosemount customers about the problem would be classified as 
a Severity Level III violation. However, in accordance with Section 
IV.C of the Enforcement Policy, the severity level was increased to 
Severity Level II because of the careless disregard of 10 CFR Part 
21 by the Rosemount nuclear department management between 1984 and 
1988. No civil penalty was proposed because the staff had not found 
that the requirements of 10 CFR 21.61 for issuance of a civil 
penalty--that a director or other responsible officer knowingly and 
consciously failed to provide the notice required by 10 CFR 21.21--
have been met in this case.

IV. Conclusions

    The Petitioner's requests were granted, in part, and denied, in 
part, as discussed herein. As provided in 10 CFR 2.206(c), a copy of 
this Decision will be filed with the Secretary of the Commission for 
the Commission's review.

    Dated at Rockville, Maryland, this 15th day of December, 1994.

    For the Nuclear Regulatory Commission.
William T. Russell,
Director, Office of Nuclear Reactor Regulation.
[FR Doc. 94-31777 Filed 12-23-94; 8:45 am]
BILLING CODE 7590-01-M