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| MEMORANDUM FOR: Charles E. Rossi, Director1 Division of Reactor Inspecticnf and Licensee Performance ;: :) FROM: Leif J. Norrholm, Chiefi Vendor Inspection Branch4 Division of Reactor Inspectionj and Licensee Performance!

SUBJECT: MINUTES OF PUBLIC MEETING WITH NUMARC-ON;; COMMERCIAL GRADE DEDICATIONt

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| Background.

i Between December 1991 and June 1992, the NRC completed the five-! pilot inspections that were conducted to evaluate the implementa-

tion of licensee programs for the procurement and dedication ofCGIs and to finalize an inspection procedure for future inspec-

| tions of this type. These inspections identified weaknesses inlicensee CGI dedication programs.and their implementation. During,this same period, the NRC received significant feedback from!

j several utilities and the Nuclear Management and Resources Councilj (NUMARC) questioning the regulatory basis for the CGI dedication; guidance contained in Generic Letter 91-05, as well as specific" interpretations of that guidance by the NRC_ inspection teams.

Because of the need for additional discussion of:the requirementsand implementing guidance for dedication of CGIs, no enforcementaction was taken based on any of the five pilot inspections.Rather, it was decided that a series of meetings with licensees and !industry representatives woul be beneficial to-indentify, and -attempt to resolve, specific areas of difference.

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Meetina Summary

On November 13, 1992, members of the NRC-met-with representativesof NUMARC to discuss key procurement and commercial gradededication issues' identified duriny the five-pilot inspections. A (list of attendees is included as En :losure 1. The meeting agenda

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-is included as Enclosure 2.

During the meeting, the NRC's Vendor Inspection Branch identifiedkey procurement and dedication issuus whera apparent differenceswith.NUMARC exist. A list of these dedication-issues is includedas. Enclosure 3_and the slides used during the meeting are includedas Enclosure 4. As a result of the meeting, NUMARC representativesagreed to review the NRC's list of' dedication issues and-determine h

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Charles-E. Rossi -2-

whether any other areas or-issues need to Se added. Both the 100;and NUMARC representatives agreed to address these issues toidentify'and document _their positions and, therefore, help toclearly define the disagreements in each area. This-will allow theNRC to focus discussions on achieving resolution of the' differenceswithout compromising safety and still^ meeting-the regulations.-NUMARC also stated it would identify NkC inspection findings from-the pilot inspections which are considered to have gone beyond the~intent of the NUMARC procurement initiatives. It was also agreedthat the NRC and NUMARC would exchange written positions before thenext meeting.

The next meeting with NUMARC to discuss these positions, in detail,is scheduled for December 10, 1992, at the NRC headquarters offic'e.At this public meeting, any issues that are clearly in-disagree-ment, as well'as those in agreement, will be identified and includedin the meeting minutes. The areas of agreement will be punctuatedwith actualoor hypothetical examples of properly dedicatedcommercial grade items.

The NRC suggested that NUMARC may wish to provide written commentsor a markup of Generic Letter 91-05-identifying specific areas feltto exceed utility commitments to the NUMARC procurement-initiatives.The NRC explained that meetings would also be conducted with one ormore individual utilities inspected during the pilot inspections todiscuss specific dedication _ examples identified as findings.Finally, it was stated that the NRC wouldLbe conducting a_publicworkshop which will address issues concerning the existingdedication guidance and specific. interpretations of;that guidance.Prior to the public workshop, the proposed inspection procedure for 1

I future inspections will be issued for public' comment and discussionat the workshop.

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Leif J. orrholm, ChiefVendor Inspection BranchDivision of Reactor Inspection

and Licensee performanceOffice of-Nuclear Reactor Regulation

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| Enclosures:| 1. Meeting Attendees

2. Agenda3. Dedication-Issues4. Slides

cc/without enclosures:W. Russell

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MEET 04 Gr 64Cl.450GE 1SMR&4T { DEDtCATiod

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ENCLOSURE 2,

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MEETING ON PROCUREMEKT ISSUES, NOVEMBER 13, 1992

DRAFT AGENDA

. 0;tt ing remarks

2 5:atcs of NRC Procurement Inspections, Future Initiatives.

3. Fr ie of Specific Dedication Issues and Positions;'

Basis for selection and verification of criticala*characteristics

i b. Sa piing '

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c. Traceability

d. Comrercial Grade Surveys *

t. Like-For-like Replacemer,t

f. A:ceptance of CMTRs and COCs.

4 l':: t:1er. cf Sample Dedication Packages / Examples-

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! ' r.NCLOSURE 3!i ]* *,

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| DEDICATION ISSUESid

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Basis for the Selection and Verification of Critical Characterit''cs,

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j 1. Cons 4deration of item's Safety Functions! 2. Iailure Modes and Effects Analysisi

{ 3. Reasonable Assurancei

| 4. Engineering Judgment i1

Sampl ir.g|+

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i 1. Established Heat Traceability (Materials)l ,

{ 2. Established Lot / Batch Control,

|j 3. Bulk Commodity Items,

j 1raceability '*1 t

j 1. Material /Ite'n Purchased from Distributors6

Co" ercial Grade Surveys; *?

j !. Verification of Vendor's Controls of Specific Characteristics '} ?. Identification of Applicable Program / Proceduresi,-'

4 nocumentation of Survey Results.

Like for like Replacements-*<'

l. Replacement with Identical item

j 2. Like for like Verificationt.

} Acceptance of CMTRs and COCs+

!1. Validity verified through vendor / supplier audit or testing

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ASSESSMENT AND PILOT~

jINSPECTION FINDINGS

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| General improvement in Programs* ie

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j !Inadequate Identification and Verification of|

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j Safety Functions and Related Critical|

L Characteristics ie :-:

| !j Lack of Traceability to the Original Equipment |

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LICENSEE REACTIONS !.'

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Dedication Guidance of GLs 89-02/91-05 I! *

| and staff interpretation of App. B challenged!

[ Specific findings challenged {*

! - No regulatory basis ii - Lack of safety significancei

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| Commitment to implement corrective actions l*

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| NUMARC challenge to specific guidance of GL 91-05 ~*,

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Relating critical characteristics to safety function-1

Definition of reasonable assurance ij -

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Mr. Charles E. Rossi -2-

DISTRIBUTION without enclosures

U. Potapovs G. Cwalina G. ZechC. Rossi R. McIntyre A. MondiolaR. Zimmerman R. Pettis R. CorreiaL. Campbell

DISTPIBUTION with enclosures:

VIB R/F.PDR#

* SEE PREVIOUS CONCURRENCE

OFC RIS-1:VIB RIS-1:VIB C:VIB'DRIL DD:DRIL:NRR

NAME RMcIntyro UPotapovs LNorrholm RZimEbr$and

DATE 11/25/92* 11/25/92* 11/25/92* /2 / 8/92OFFICIAL RECORD COPY DOCUMENT NAME: NUMMTG. SUM

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