[Federal Register Volume 60, Number 108 (Tuesday, June 6, 1995)]
[Notices]
[Pages 29896-29900]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13766]



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NUCLEAR REGULATORY COMMISSION
[Docket Nos. 50-213, 50-245, 50-336, 50-423]


Northeast Utilities; Haddam Neck Plant and Millstone Nuclear 
Power Station, Units 1, 2, 3; Issuance of Director's Decision Under 10 
CFR 2.206

    Notice is hereby given that the Director, Office of Nuclear Reactor 
Regulation, has taken action with regard to a Petition dated March 3, 
1994, by Mr. Ronald Gavensky (Petition for action under 10 CFR 2.206). 
The Petition pertains to the Haddam Neck Plant and Millstone Nuclear 
Power Station, Units 1, 2, and 3.
    In the Petition, Petitioner, a quality control receipt inspector 
raises, numerous concerns regarding receipt inspection activities by 
Northeast Utilities at both the Haddam Neck Plant and Millstone Nuclear 
Power Station, Units 1, 2, and 3, Petitioner alleges violations of 10 
CFR Part 50, Appendix B, by Northeast Utilities in the receipt 
inspection area. Petitioner alleges that parts represented as having 
been inspected and accepted for use were in fact deficient. Petitioner 
alleges that adequate training, skilled personnel, and necessary tools 
were not available to perform adequate receipt inspections. Petitioner 
alleges that he observed unethical and incorrect methods of receipt 
inspection, and that he sought to identify quality problems within his 
own department, along with recommendations and solutions, but was not 
permitted to do so. Finally, Petitioner accuses Northeast Utilities of 
``white washing'' his concerns in the receipt inspection area. 
Petitioner alleges that, on two occasions, Northeast Utilities' 
management hired investigators to pursue concerns raised by Petitioner 
only to conclude that there were no problems. Petitioner requests that 
the licenses of Northeast Utilities be temporarily revoked until after 
the NRC conducts an investigation of Petitioner's allegations.
    The Director of the Office of Nuclear Reactor Regulation has 
determined to deny the Petition. The reasons for this denial are 
explained in the ``Director's Decision Pursuant to 10 CFR 2.206'' (DD-
95-11), the complete text of which follows this notice, and is 
available for public inspection at the Commission's Public Document 
Room, the Gelman Building, 2120 L Street NW., Washington, DC, and at 
the local public document rooms located at the Russell Library, 123 
Broad Street, Middletown, CT 06457 for the Haddam Neck Plant, and at 
the Learning Resources Center, Three Rivers Community-Technical 
College, Thames Valley Campus, 574 New London Turnpike, Norwich, CT 
06360, for Millstone Nuclear Power Station, Units 1, 2, and 3.
    A copy of the Decision will be filed with the Secretary of the 
Commission for the Commission's review in accordance with 10 CFR 
2.206(c) of the Commissions regulations. As provided by this 
regulation, the Decision will constitute the final action of the 
Commission 25 days after the date of issuance unless the Commission on 
its own motion institutes a review of the Decision within that time.

    Dated at Rockville, Maryland, this 31st day of May 1995.

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

    On March 3, 1994, Mr. Ronald Gavensky (Petitioner) filed a Petition 
with the U.S. Nuclear Regulatory Commission (NRC) pursuant to 10 CFR 
2.206. In the Petition, the Petitioner, a Northeast Utilities (NU) 
quality control inspector raised concerns regarding receipt inspection 
activities by NU at the Haddam Neck Plant and the Millstone Nuclear 
Power Station.\1\

    \1\ Northeast Nuclear Energy Company (Millstone licensee), an 
electric operating subsidiary of Northeast Utilities (NU), holds 
licenses for the operation of Millstone Nuclear Power Station, Units 
1, 2, and 3. The Connecticut Yankee Atomic Power Company (Haddam 
Neck licensee), an electric operating company owned in part by NU, 
holds the license for the Haddam Neck Plant. Reference in the 
Petition to the ``license of Northeast Utilities'' refers to the 
licenses of the Haddam Neck Plant and Millstone Nuclear Power 
Station, Units 1, 2, and 3.
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    The Petitioner alleged violations of 10 CFR Part 50, Appendix B, by 
NU in the receipt inspection area. He alleged that parts represented as 
having been inspected and accepted for use were in [[Page 29897]] fact 
deficient; that adequate training, skilled personnel, and necessary 
tools were not available to perform adequate receipt inspections; and 
that he had observed unethical and incorrect methods of receipt 
inspection, and that he had sought to identify quality problems within 
his own department, along with recommendations and solutions, but had 
not been permitted to do so. Finally, the Petitioner accused NU of 
``whitewashing'' his concerns. Specifically, the Petitioner alleged 
that on two occasions NU's management had hired investigators to 
investigate concerns he had raised only to conclude that there were no 
problems. The Petitioner requested that the ``license of Northeast 
Utilities'' be temporarily revoked until after the NRC investigates his 
allegations.
    On May 9, 1994, I informed the Petitioner that the Petition had 
been referred to my office for preparation of a Director's Decision. I 
further informed the Petitioner that his issues were not considered 
immediate safety concerns and, therefore, did not warrant immediate 
shutdown of the Haddam Neck Plant and Millstone Nuclear Power Station, 
Units 1, 2, and 3. I also informed the Petitioner that the NRC would 
take appropriate action within a reasonable time regarding the specific 
concerns raised in the Petition. By letter dated November 28, 1994, 
following a telephone conversation with the Petitioner of November 15, 
1994, this office provided him portions of NRC Inspection Reports that 
relate to his concerns and a copy of a Brookhaven National Laboratory 
Associated Universities, Inc. report of an evaluation of 30 bolts 
chosen at random from the Millstone Warehouse in November 1993. This 
office also provided the Petitioner status reports of the Director's 
Decision concerning his Petition pursuant to 10 CFR 2.206 of March 3, 
1994, by letters dated February 23, and May 9, 1995.
    NU voluntarily submitted a response to the NRC on July 26, 1994 (NU 
response), regarding the issues raised in the Petition. The Petitioner 
voluntarily submitted a response dated August 16, 1994, regarding the 
issues raised in the NU response. Based on a review of the issues 
raised by Petitioner as discussed below, I have concluded that no 
substantial health and safety issues have been raised that would 
require the initiation of formal enforcement action.

II. Discussion

    In the Petition, the Petitioner raised numerous concerns regarding 
receipt inspection activities by NU at the Haddam Neck Plant and 
Millstone Nuclear Power Station, Units 1, 2, and 3. The issues raised 
in the Petition are summarized and evaluated below.

A. Adequacy of the NU Receipt Inspection Program

    The Petitioner alleged that NU did not have skilled personnel or 
the necessary tools or equipment to perform adequate receipt inspection 
until 1990 for the Haddam Neck Plant and could not have had a properly 
executed receipt inspection department until 1989 for the Millstone 
Nuclear Power Station, Units 1, 2, and 3. He alleged that at the 
present time there are only two skilled mechanical receipt inspectors 
at the Millstone Nuclear Power Station. Also, all current receipt 
inspectors are qualified at Level 2 to ANSI/ASME Standard N45.2.6-1972. 
However, most lacked the actual experience in mechanical receipt 
inspection required by the standard to which NU is committed.
    The Petitioner alleged that, when he was first employed by NU 16 
years ago, he found parts still packed in the original containers 
unopened but green tagged (acceptable for use). He also found cracked 
parts, bent parts, mismatched parts, all of which were green tagged, 
and many bad parts accepted for use by the architect-engineer, Stone 
and Webster Engineering Corporation (SWEC) and wrongly installed.
    The Petitioner also claimed that he had observed unethical and 
incorrect methods of receipt inspection and that he was prevented from 
raising quality problems either by his supervisor or the Director of 
Quality.
    Most of the specific concerns raised by the Petitioner appear to 
relate to NU procurement activities before 1990. At that time, NU, as 
indicated in the NU response to the Petition, maintained an approved-
suppliers list and relied heavily, like most utilities, on vendor 
audits and certifications to ensure the adequacy of procured parts. 
Because of extensive use of an approved-suppliers list, NU stated that 
its internal programs, including elements for ensuring independently 
the quality of procured parts, were not relied on to the same extent as 
they are now. NU considered this approach appropriate at the time, 
given the number of vendors who maintained 10 CFR Part 50, Appendix B 
quality assurance programs.
    As the number of vendors maintaining Appendix B programs declined 
and the instances of counterfeit and fraudulent products increased, the 
nuclear industry, including NU, found it necessary to develop more 
sophisticated internal programs to qualify commercial-grade parts 
procured for nuclear safety-related applications. Generic Letter 89-02, 
``Actions To Improve the Detection of Counterfeit and Fraudulently 
Marketed Products,'' dated March 21, 1989, describes these emerging 
procurement issues. To address these issues, Generic Letter 89-02 
conditionally endorsed Electric Power Research Institute (EPRI) Report 
NP-5662, ``Guideline for the Utilization of Commercial Grade Items in 
Nuclear Safety Related Applications (NCIG-07),'' dated June 1988. On 
June 28, 1990, the Nuclear Management and Resources Council (NUMARC) 
board of directors directed licenses to adhere to the guidance in EPRI 
Report NP-5652 and to review and strengthen their procurement programs 
in accordance with specific guidance in NUMARC 90-13, ``Nuclear 
Procurement Program Improvements.'' The procurement programs for the 
Haddam Neck Plant and Millstone Units 1, 2, and 3 were significantly 
upgraded in response to Generic Letter 89-02 and the NUMARC 
initiatives.
    In February 1989, the vendor interface and procurement programs at 
Haddam Neck were inspected (see NRC Inspection 50-213/89-200 dated May 
25, 1989) as part of an initial group of 13 team inspections conducted 
by the NRC to evaluate licensee procurement and commercial-grade 
dedication programs. That inspection identified several deficiencies 
including weaknesses in the procurement and dedication of commercial 
grade items for safety-related applications at the Haddam Neck Plant.
    Upgraded procurement programs have been implemented at the Haddam 
Neck Plant and Millstone Nuclear Power Station, Units 1, 2, and 3. The 
programs at the Millstone units were inspected by the NRC (NRC 
Inspection Reports 50-245/91/-201, 50-336/91-201, and 50-423/92-201 
dated November 5, 1991). The upgraded program at the Haddam Neck Plant, 
while not inspected by the NRC in the level of detail as Millstone, was 
reviewed in part during the resolution of the identified deficiencies 
from NRC Inspection 89-200 as well as the 1990 Maintenance Team 
Inspection. The inspection at Millstone found that, before June 1987, 
commercial-grade items were purchased and receipt inspected with 
acceptance criteria primarily based on verification of the correct part 
number. Between 1988 and 1990, NU upgraded its procedures to upgrade 
its procurement inspection services. The NRC assessment team noted that 
NU had made a significant effort to strengthen the commercial-grade 
dedication program and that its [[Page 29898]] overall program 
description was generally consistent with the dedication approaches 
described in EPRI Report NP 5652. The team found that receipt 
inspection capabilities at Millstone Nuclear Power Station, Units 1, 2, 
and 3 had undergone several improvements. The Millstone Nuclear Power 
Station receipt inspectors had a new enclosed facility. The facility's 
equipment was being enhanced and included micrometers, gage blocks, a 
metal sorter, a shadow graph, and a variety of electronic devices. The 
improved receipt inspection facility and improved testing and 
inspection equipment had enhanced the capability of the receipt 
inspection process to detect misrepresented parts, equipment, and 
material. The procurement inspection services consisted of 12 
inspectors and 1 supervisor. The receipt inspectors were certified 
under requirement established by procedures. The assessment team 
identified several procedural weakness and implementation weaknesses 
involving the improper identification of design criteria, safety 
function(s), critical characteristics, and methods for verifying the 
critical characteristics. The assessment team found strengths and 
potential strengths in such areas as receipt inspection testing 
capabilities at the Metallurgy Laboratory Facilities in Berlin, 
Connecticut, and at the Millstone Nuclear Power Station site, self 
assessments of the commercial-grade dedication program, the 4-day 
procurement and commercial-grade dedication training course, the review 
project of previous commercial-grade inspections at Millstone Nuclear 
Power Station and the general consistency of the program with the 
dedication approaches of EPRI NP-5652. In addition, the quality, 
attitude, and dedication of the licensee's personnel were evident. The 
team concluded that, with appropriate modifications to address the 
weaknesses, the program, if properly implemented, would provide 
adequate control over the commercial-grade procurement process.
    Additional inspections of the procurement programs for the Haddam 
Neck Plant and Millstone Units 1, 2, and 3 have been conducted by the 
NRC (NRC Inspection Reports 50-423/92-11 dated May 30, 1992, 50-213/92-
14 dated August 12, 1992, 50-423/92-24 dated January 12, 1993, 50-423/
93-26 dated January 14, 1994, and 50-336/94-21 dated August 31, 1994). 
In 1992, after its inspection of the Haddam Neck Plant, the NRC staff 
concluded that adequate measures were in place to ensure that the level 
of quality of procured items was commensurate with their safety-related 
application. In 1993, the NRC staff reported that NU's receipt 
inspection program at Millstone Nuclear Power Station, Units 1, 2, and 
3 was deliberate, controlled, and consistent in the choice of 
attributes required to be inspected and the documentation of results. 
After its inspection of NU's procurement program late in 1993, the NRC 
staff found no significant safety issues. In 1994, the NRC staff 
reported in NRC Inspection Report 50-336/94-21 that NU's procurement 
inspection services inspections were performed by personnel certified 
under NU's Quality Services Department Procedures QSD 1.08, 
``Department Indoctrination, Training and Qualification,'' and QSD 
2.08, ``Selection, Training, Qualification and Certification of 
Inspection, Examination and Testing Personnel.'' The Quality Department 
Inspector Training Program served as the basis of the training required 
for certification. The program emphasized technical knowledge, skill 
development, and problem solving. The procurement inspection personnel 
were well trained, with 10 of 12 inspectors certified to a Level 2 in 
at least two disciplines. In addition, refresher training was provided 
to maintain proficiency and certification of personnel. Also in 1994 
(NRC Inspection Report 50-336/94-21), the NRC staff reported that NU's 
procurement inspection services maintained an inventory of over 500 
tools for measuring and testing and that appropriate inspectors were 
trained and certified in the use of these tools. Such tools are typical 
of many nuclear power plants' inventory. NU also stocked some 
exceptional tools such as an optical comparitor shadowgraph, an Ames 
hardness tester and an alloy analyzer. In summary, during these post-
1990 inspections, the NRC staff noted procurement program upgrades and 
found no significant safety issues in the procurement area.

B. Quality of Fasteners Installed at Northeast Utilities Facilities

    Petitioner has an extensive background in the area of receipt 
inspection of fasteners of NU nuclear facilities and has raised a 
number of specific concerns regarding the quality of fasteners. The 
focus of the NRC evaluation of the Petitioner's concerns is receipt 
inspection of fasteners and assurance that fasteners will perform their 
intended function. NU acknowledged in its response of July 26, 1994, 
the Petitioner's efforts in raising and aggressively pursuing valid 
issues. NU acknowledged that, in March 1992, the Petitioner had issued 
six nonconformance reports (NCRs) based on his visual inspection of 
various surplus fasteners procured in 1983 for use at Millstone Unit 3. 
Later, he issued an additional NCR, citing potential programmatic 
deficiencies by SWEC, concerning procurement of various other materials 
installed at Millstone Unit 3.
    The concerns of the Petitioner were verified in NRC Inspection 
Report 50-423/92-11 dated May 30, 1992. In the report, the staff noted 
that an inspection in 1992 by NU of 6 of the 43 items obtained from 
SWEC stock that were designated for transfer to the Millstone Nuclear 
Power Station stores resulted in an initial rejection of all 6 items. 
An item was defined as all of a specific type of bolt or fastener 
material, e.g., 600 5/16'' x 4\1/2\'' bolts were classified as one 
item. Six NCR reports were written concerning these findings and 
indicated that all of the material constituting the 6 items was 
scrapped.
    Also, the staff noted that 32 of 48 items that had been transferred 
from SWEC stock and introduced into Millstone Nuclear Power Station 
stores in 1990 were receipt inspected and green tagged without proper 
dedication. These items were considered acceptable for use as safety-
related material for installation in the three Millstone Units 1, 2, 
and 3. An NCR report was written concerning this finding. Further, NU 
identified work orders indicating that fastener material (bolts, nuts, 
washers) from the 32 items had been used in Millstone Units 1, 2, and 3 
during the previous 2 years. The bolts were used principally in the 
mounting of electrical components (relays, terminal boards, etc.), 
fans, ventilation housing, and cable trays. The materials were also 
used on various safety-related systems, such as Millstone Unit 1 
reactor protection system bypass switches, Millstone Unit 2 containment 
air recirculation fans, and Millstone Unit 3 shutdown margin monitor.
    In NRC Inspection Report 50-423/92-11, the staff noted that NU had 
tested 6 bolts from the lots of the 32 items and had found that the 
chemical properties and tests to determine tensile properties were 
acceptable. A Corrective Action Request (CAR) that was initiated on 
April 27, 1992, as a result of the NCRs, indicated that these 6 bolts 
were the poorest appearing bolts of the lots. Thus, NU determined that 
the bolts were functionally acceptable. In NRC Inspection Report 50-
423/92-16 dated September 3, 1992, the staff reported that, as a result 
of its questions about whether the 6 tested fasteners adequately 
represented the population of fasteners installed, NU tested an 
[[Page 29899]] additional 30 fasteners randomly selected from the 
warehouse and one sample chosen by the NRC staff that had linear 
indications running from the body into the head of the fastener. NU 
determined that all the fasteners met specification requirements for 
material and mechanical properties. The NRC staff raised a second 
concern, that is, that the sample did not represent all the fasteners 
because all the manufacturers were not represented. NU then took 
another sample of 30 fasteners from each of 3 manufacturers. The 
testing of these bolts showed that all the fasteners, except for one 
cap screw, were acceptable. The one cap screw had a tensile strength of 
only 121.3 ksi rather than the specified strength of 125 ksi. However, 
the cap screw did have an acceptable yield strength. The licensee 
performed a statistical analysis on the results of the testing and 
determined that the probability of an installed bolt from the 32 items 
failing to perform its safety function is extremely small (in the order 
of 1 chance in 345,000). The NRC staff concluded in NRC Inspection 
Report 50-423/92-24 dated January 12, 1993, that the results for all 
the fasteners tested except one were acceptable and that the 
nonconforming conditions, including some visual deficiencies, would not 
have impaired the capability of the fasteners to perform their 
functions, and that NU's current inspection program was deliberate and 
controlled.
    NU initially indicated that the remaining fasteners transferred 
from SWEC to the Millstone Nuclear Power Station stores would be 
scrapped. However, it did install some of the fasteners in the units 
after performing additional inspections and dedicating the fasteners 
before they were installed.
    Finally, a random sample of 30 bolts of various sizes was taken 
from the Millstone Nuclear Power Station warehouse bins during November 
1993 for laboratory tests. They were tested by the Brookhaven National 
Laboratory Associated Universities, Inc., and 26 of the 30 met 
specification requirements for chemical, mechanical, and dimensional 
properties. Four bolts did not pass the thread fit inspection with a 
``Go'' gage. However, the discrepancies would not have prevented the 
bolts from performing their function. (See letter dated May 2, 1994, 
from Brookhaven National Laboratory Associated Universities, Inc., to 
Mr. James A. Davis, NRC, which is available in the NRC's Public 
Document Room). In summary, on the basis of the extensive tests of 
samples of fasteners taken from the warehouse bins, the NRC staff 
concludes that materials in the bins are acceptable for use.
    The possibility of nonconforming fasteners already installed in 
safety-related applications was addressed in an NU letter to the NRC 
staff dated September 22, 1994. NU concluded that this issue did not 
warrant action for the Haddam Neck Plant and Millstone Units 1, 2, and 
3. NU indicated that periodic testing and inspection are performed on 
installed fastener components. Further, safety-related plant equipment 
is periodically tested to ensure that fasteners have not degraded. 
Piping systems and valves are pressure tested periodically and 
fasteners are visually inspected. Other components, such as pumps, are 
tested and key fasteners are checked for tightness and degradation. 
These inspections ensure that components remain fastened. Loose 
components, when found, are evaluated for generic implications, such as 
installation errors or defective materials, and are repaired or 
replaced as necessary. Plant walkdowns are performed in accessible 
areas at least three times a day by trained individuals able to 
identify abnormal conditions. Components that have degraded because of 
fastener problems are more likely to leak initially than suffer a 
catastrophic failure and are, therefore, likely to be identified and 
repaired. In addition, the NRC staff notes that fastener installations 
typically provide for large safety margins in application. Also, 
fastener inspection continues through the installation phase and 
nonconforming conditions, particularly visual defects, are likely to be 
identified and corrected. On the basis of these considerations, the NRC 
staff concludes that the possibility of installed nonconforming 
fasteners is not a significant safety issue.

C. Alleged ``Whitewashing'' of Petitioner's Concerns

    The Petitioner alleged that the procurement inspection services 
supervisor and his manager had performed perfunctory investigations 
into his concerns related to the adequacy of NU's receipt inspection 
program and the Millstone Unit 3 construction.
    The first investigation was one commissioned by the NU Nuclear 
Safety Concerns Program (NSCP) and was performed between May 18 and May 
29, 1992, by an independent review team (IRT) composed of outside 
consultants. The IRT investigated five areas of concern identified by 
the Petitioner. These areas included NU's control and oversight of the 
SWEC Quality Assurance Program, NU control of vendor activities, 
adequacy of NU receipt inspection program in the areas of training and 
adequacy of tools, adequacy of the NCR process in the receipt 
inspection area, and adequacy of the transfer of materials with respect 
to ``visual damage'' inspection. In addition, the IRT interviewed the 
Petitioner and most, if not all, of the members of the Procurement 
Inspection Services Department.
    In NRC Inspection Report 50-423/92-16 dated September 3, 1992, the 
NRC staff presented the results of its review of the first 
investigation. The staff found that the IRT review was cursory in 
nature in two areas and that the IRT had not supported its conclusions 
in these areas. Specifically, (1) the IRT had not reviewed, in detail, 
the SWEC lower tier procedures and procurement documents pertaining to 
the fasteners transferred from SWEC to the Millstone Nuclear Power 
Station stores, and (2) the IRT concluded that NU's oversight of SWEC's 
quality assurance program was satisfactory without determining how the 
nonconforming fasteners were accepted and placed in stock and whether a 
programmatic problem existed that allowed the acceptance of the 
discrepant fasteners.
    The NRC staff made an additional observation regarding the IRT 
review of the concern regarding guidance for inspecting for visual 
damage. The concern submitted by the Petitioner to the NSCP was the 
lack of guidance for performing inspections for visual damage during 
receipt inspection. On the basis of its review, the IRT concluded that 
damage would be identified. However, the examples chosen to support the 
claim that instruction was given on identifying visual damage were 
examples for inservice inspection, not receipt inspection. The Quality 
Services Director committed to review the definition of visual damage 
and revise its as necessary for use in receipt inspection.
    Although the IRT report may have been cursory in two areas, it was 
comprehensive in the other areas investigated: the Combustion 
Engineering reactor head studs inspection, the A&G Engineering Inc. 
bolting, that tools available for use, and the training received by 
those performing receipt inspection. In addition, the IRT conducted a 
substantial number of interviews to support the investigation. During 
its inspection regarding the adequacy of the IRT report, the NRC staff 
could find no information that suggested a deliberate effort on the 
part of NU to color the results of the investigation. 
[[Page 29900]] ``Whitewash'' implies a deliberate act to conceal a 
fault or defect in an effort to exonerate or give the appearance of 
soundness. Although the NRC staff found that the IRT investigation and 
report were not complete in two areas and in regard to the definition 
of ``visual damage,'' the NRC did not find evidence of a deliberate 
effort on the part of NU to conceal a defect or falsify records. Thus 
the NRC does not consider the IRT report as a ``whitewash.''
    NRC Inspection Report 50-423/92-24 dated January 12, 1993, 
discusses the second investigation. This investigation evolved as a 
result of the NRC inspection findings on the IRT report concerning the 
effectiveness of NU's and SWEC's receipt inspection programs. It also 
was a result of a CAR initiated on April 27, 1992, as a result of 
several NCRs issued by the Petitioner. The CAR was initiated because a 
significant amount of bolting material had been transferred from SWEC 
quality assurance stock to NU and green tagged without proper receipt 
inspection and because there was a question about the SWEC receipt 
inspection program. NUNU initiated the CAR to resolve these concerns. 
The purpose of the CAR was to provide reasonable assurance that, under 
SWEC's quality assurance program for Category I, non-engineered items, 
nonconforming items were identified and were prevented from being 
installed at Millstone Unit 3. To accomplish this, UN reviewed SWEC's 
program for establishing purchase order and receipt inspections 
requirements. NU concluded that appropriate procedures existed to 
ensure the quality of Category I, non-engineered items. To review the 
implementation of the procedures, NU reviewed approximately 4500 
receipt inspection reports (RIRs) and selected for detailed review 1000 
that identified nonconforming conditions. From this review, NU 
concluded in closeout documents that SWEC's program was effective in 
ensuring the quality of Category I items.
    The NRC staff reviewed a sample of RIRs and identified a small 
number of fasteners that were not inspected for specific attributes, 
such as the fabrication attribute or coating/preservatives, as required 
by Quality Assurance Directive (QAD) 7.7, ``Receiving Inspection--
General.'' With the exception of these discrepant bolts, there were no 
other accepted nonengineered items which have subsequently been found 
to be nonconforming. Therefore, it appeared that the SWEC's receipt 
inspection program had been effective.
    The staff did note that NU had closed the CAR without adequately 
justifying that SWEC receipt inspections had been conducted in 
accordance with quality assurance program requirements. The licensee's 
review of these concerns identified that SWEC inspections for non-
engineered items relied heavily on the experience of the inspector and 
did not strictly follow QAD 7.7. Specifically, the receipt inspector 
would decide what needed to be inspected by review of procurement 
documents. The inspector conducted the inspections and documented the 
results on a generic checklist. Therefore, any required attribute could 
have been inspected and documented in another attribute of the 
inspector's choice.
    Considering the extensive effort by NU to resolve this issue and in 
spite of the deficiencies noted during the NRC inspection, the NRC 
staff could find no information that suggested a deliberate effort on 
the part of NU to conceal a defect or falsify records. Thus, the NRC 
staff does not consider the closeout of the CAR as a ``whitewash.''

III. Conclusion

    The institution of proceeding pursuant to 10 CFR 2.206 is 
appropriate only if substantial health and safety issues have been 
raised. See Consolidated Edison Co. of New York (Indian Point Units 1, 
2, and 3) CLI-75-8, 2 NRC 173, 175 (1975) and Washington Public Power 
Supply System (WPPSS Nuclear Project No. 2), DD-84-7 19 NRC 899, 924 
(1984). This is the standard that has been applied to the concerns 
raised by the Petitioner to determine whether the action requested by 
the Petitioner, or other enforcement action, is warranted.
    On the basis of the above assessment, I have concluded that no 
substantial health and safety issues have been raised regarding the 
Haddam Neck Plant and Millstone Nuclear Power Station, Units 1, 2, and 
3 that would require initiation of formal enforcement action. In 
particular, safety issues related to the Petitioner's allegations 
concerning discrepant fasteners were resolved by either removing those 
fasteners from stores or determining that they were functionally 
adequate. Therefore, no enforcement action is being taken in this 
matter.
    Although the concerns raised did not warrant the action requested 
in the Petition, the Petitioner's initiative has led to improvements in 
the procurement receipt inspection program for the Haddam Neck Plant 
and the Millstone Nuclear Power Station.
    Current inspection plans call for continued NRC inspection effort 
in this programmatic area for the Haddam Neck Plant and Millstone Units 
1, 2, and 3 to ensure compliance with current requirements.
    The Petitioner's request for action pursuant to 10 CFR 2.206 is 
denied. 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. 
This Decision will constitute the final action of the Commission 25 
days after issuance unless the Commission, on its own motion, 
institutes review of the Decision in that time.

    Dated at Rockville Maryland, this 31st day of May 1995.

    For the Nuclear Regulatory Commission.
William T. Russell,
Director, Office of Nuclear Reactor Regulation.
[FR Doc. 95-13766 Filed 6-5-95; 8:45 am]
BILLING CODE 7590-01-M