**NRC INSPECTION MANUAL** RII

INSPECTION PROCEDURE 88114

QUALITY AFFECTING ITEM PROCUREMENT (10 CFR PART 21) AND

COMMERCIAL GRADE ITEM DEDICATION PROCESS (REACTIVE)

PROGRAM APPLICABILITY: 2630

88114-01 INSPECTION OBJECTIVES

To determine whether the failure of an item relied on for safety (IROFS)
was the result of a deficient quality-affecting item (QAI) procurement
process (10 CFR Part 21) or a commercial-grade item (CGI) dedication
process.

88114-02 INSPECTION REQUIREMENTS

02.01 [Reactive Inspection Requirements]{.underline} (to be performed
after the failure of a QAI or CGI dedicated for safety-related
applications during the pre-operational or operational phases).

a.  [Initial Evaluation]{.underline} After reviewing the licensee\'s
    evaluation of the failed item, determine if the failed item was
    procured as a QAI or CGI and dedicated for safety-related
    applications. If the failed item was dedicated, review the complete
    procurement and dedication records to determine if the
    commercial-grade dedication process was sufficiently thorough.

b.  [Further Assessments]{.underline} If it is determined that the
    dedicated item failed as the result of certain critical
    characteristics not being identified and/or properly verified,
    perform the following assessments:

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1.  Determine if other QAIs or CGIs from the same accepted lot or batch
    as the failed QAI or dedicated CGI have been similarly dedicated and
    installed in other safety-related applications. If yes, determine if
    the licensee has evaluated the operability of the systems or
    components where these QAIs or CGIs are installed. The inspector
    also should review licensee-provided data, if available, for some
    CGIs (non-dedicated) that failed in applications that were not
    safety-related. Explore the possibility that the same CGIs also may
    have been used (following dedication) in a safety-related
    application and may have the potential to affect the safe operation
    of a structure, system or component (SSC).

2.  If possible select and evaluate, as in step 1 above, at least three
    other QAIs or dedicated CGIs having similar applications and
    critical characteristics as the QAI(s) or CGI(s) that resulted in
    the identified failures.

02.02 [Programmatic Reactive Inspection Requirements]{.underline} (If,
after performing the step above, it is determined that there were
weaknesses in the CGI dedication process, the inspector should perform a
more comprehensive inspection of the licensee\'s dedication process, in
accordance with the inspection requirements in Section 02.02 below.)

a.  [Review of Program and Procedures]{.underline} Using the inspection
    guidance contained in Section 03.02 and Appendix A to this
    procedure, review the licensee\'s program and procedures for the
    procurement of QAIs and procurement and dedication of CGIs, to
    understand the basic operation of the licensee\'s program.

b.  [Selection of Dedication Packages]{.underline} Select several
    dedication packages for evaluation from a list of commercially
    dedicated items provided by the licensee. Request that the licensee
    provide (or make available for review) a complete package of the
    pertinent procurement and dedication records for each item.

c.  [Evaluation of Dedication Packages]{.underline} Using the inspection
    guidance contained in Section 03.01 of this procedure, perform a
    detailed evaluation of the dedication packages selected in item b,
    above.

d.  [Evaluation of Training Effectiveness]{.underline} If the
    inspector\'s evaluation of commercial-grade dedication activities
    indicates there are weaknesses in the way these activities are being
    performed, the inspector should investigate further to determine if
    weaknesses within the licensee\'s training program may have
    contributed to the cause. The inspector should determine if the
    licensee is implementing an effective training program.

88114-03 INSPECTION GUIDANCE

[Background]{.underline}. Licensees are required to ensure the quality
of items purchased and installed in safety-related applications. In the
past, licensees procured major assemblies from approved vendors who
maintained quality assurance (QA) programs pursuant to the licensee=s
NRC-approved QA program requirements. Because of the decrease in the
number of qualified vendors, licensees are increasing the number of
commercial-grade replacement parts that they procure and dedicate for
use in safety-related applications.

Since CGI dedications have increased in number, it is intended that this
inspection procedure provide guidance to assist the inspector in
assessing the effectiveness of the implementation of the licensee\'s
commercial-grade procurement practices and provide for identification of
any adverse trends or emerging problems.

[Scheduling the Inspection]{.underline}. This inspection procedure
should be considered for implementation when there is reason to believe
that the failure of an IROFS , or a part thereof, to perform its
intended safety function, was the result of weaknesses in QAI
procurement or CGI dedication. This inspection procedure may be
implemented independently, or it may be used as a supplement to other
major team inspections. Such inspections may include maintenance;
modification; or system-specific inspections, where review of failed
IROFS, or parts thereof, is appropriate; or an augmented inspection team
investigating failures.

Before the beginning of the onsite inspection, advise the licensee of
information that will be needed, such as a list of items that the
licensee purchased as commercial grade and subsequently dedicated for
use in safety-related applications. In addition, the inspector should
request and review the licensee\'s program and procedures to become
familiar with the licensee\'s procurement and dedication process. Also
explore with the licensee the possibility of obtaining a list of recent
component failures. The list of component failures can be used by the
inspector, during the selection of dedication packages for review, as
described in this inspection procedure.

[SPECIFIC GUIDANCE]{.underline}

03.01 [Reactive Inspection]{.underline}

a.  [Initial Evaluation]{.underline}. A failure resulting from general
    weaknesses in the QAI procurement or commercial-grade d edication
    program may occur when the important design, material, and
    performance characteristics that are necessary to provide reasonable
    assurance that the QAI or dedicated CGI will perform its intended
    safety function are not addressed during procurement or dedication.
    For example, failures of safety-related bolting have occurred when
    the dedication process did not verify that the material composition
    and/or mechanical properties met the specified requirements, and
    nonconforming material was supplied.

> Review and discuss, with licensee personnel, the failure/root-cause
> analysis when required or applicable for the failed QAI or CGI. The
> inspector should attempt to determine if the failure was caused by a
> design deficiency, failure unrelated to the item\'s safety function,
> or normal wear, and eliminate these from further review. The inspector
> should focus on the inspection of failures that appear to be caused by
> weaknesses in the commercial-grade dedication process. If none of the
> failures are caused by weaknesses in the commercial grade dedication
> process, then the inspector should not continue using this inspection
> procedure. If the inspector decides to change the focus of the
> inspection to examine other issues related to the failures, such as
> the adequacy of corrective actions, other procedures should be used.
> Once the failure mode and cause of failure have been postulated or
> determined, review the dedication package to determine if the licensee
> had identified critical characteristics. Appendix A to this inspection
> procedure should not be interpreted as inspection requirements, but
> only as a discussion of dedication issues, including guidance on
> selection and verification of critical characteristics. Appendix A, if
> properly implemented, represents an acceptable means of complying with
> regulatory requirements. The licensee may develop alternate methods of
> achieving compliance with 10 CFR Part 70, the Construction
> Authorization Request, the QA Plan; and the implementing procedures.
> Appendix B to this inspection procedure, provides definitions of terms
> used for commercial-grade dedication activities, and Appendix C
> provides the typical contents of a dedication package.
>
> The goal of the review of the procurement or dedication packages is to
> provide reasonable assurance that the CGIs dedicated for
> safety-related applications will perform their intended safety
> functions. Inspection effort should be directed toward the
> identification of weaknesses, in the dedication process, that could
> potentially render IROFS, or parts thereof, inoperable.

1.  [Review of Dedication Packages]{.underline}. After becoming familiar
    with the licensee\'s procurement and dedication program and
    procedures, perform a detailed review of dedication packages as
    described below.

    a.  Determine if the safety function of the item for its intended
        use has been identified by reviewing the documents associated
        with the technical evaluation including, as applicable:

        1.  Classification of the item,

        2.  Consideration of credible failure modes, and

        3.  Item equivalency/substitution evaluations.

2.  Determine if the important design, material, and performance
    characteristics, necessary to provide reasonable assurance that the
    item will perform its intended safety function (critical
    characteristics), have been identified.

3.  Determine whether the licensee verified the critical
    characteristics, using appropriate acceptance methods. If
    appropriate, take into account post-installation testing and
    periodic surveillance testing and inspection. Review the engineering
    judgment when it is used as the basis for selection or verification
    of critical characteristics.

4.  Determine whether the item is an equivalent replacement or a
    new-item replacement of an obsolete item.

5.  Determine if the item is or may be used in a different
    safety-related application, than previously evaluated, in which
    different design, material, and performance characteristics may be
    applicable. This is especially applicable for generic dedications of
    bulk items and stock material. Determine if the dedication ensures
    the acceptability of those design, material, and perfor­mance
    characteristics relevant to the safety function.

6.  Determine why the item is being replaced. Have there been repeated
    failures? Is the degraded performance a result of adverse
    environment? Did it fail because it was a refurbished or fraudulent
    item?

7.  Determine how the identity of the item is controlled from the time
    it is receipt inspected, until the time it is installed.

8.  Determine if information learned during the dedication process is
    fed back to the appropriate persons to evaluate existing stock
    items, or installed items, and for future use in surveys and source
    verifications. This information could include positive and adverse
    findings obtained during surveys and source verifications.

> Refer to the discussion of significant dedication issues in Appendix A
> for guidance during the review of dedication packages. Also refer to
> the specific guidance for each of the four dedication methods provided
> below.
>
> Focus should be on those activities that are likely to affect the
> performance of the items being dedicated. Although the acceptance
> process for dedication is subject to the licensee=s U.S. Nuclear
> Regulatory Commission approved QA program requirements, it is not
> necessary to review the licensee\'s programmatic compliance to the QA
> requirements, since they may not apply to the activities reviewed. The
> licensee=s NRC-approved QA program requirements do not apply to
> commercial-grade activities, that occur before dedication for use in a
> safety-related system. It also should be recognized that Appendix B
> provides for the application of QA to safety-related systems and
> components consistent with their importance to safety (graded-quality
> approach).
>
> Although guidance concerning the application of graded QA is discussed
> in the first paragraph of Appendix A to this inspection procedure, it
> is expected that the inspector will need to exercise considerable
> judgment in determining the adequacy of controls applied to a specific
> activity.

2.  [Review of Acceptance Methods]{.underline}

> The following are the four acceptance methods that can be used to
> accept CGIs. These methods provide, either individually or in
> combination, a means to reasonably ensure that a CGI that is received
> meets the requirements of the item specified. The results of employing
> each method should be documented.
>
> [Method 1 - Special Tests and Inspections]{.underline}
>
> General information on similar activities is provided in American
> National Standards Institute (ANSI N45.2.13-1976), Section 10,
> \"Acceptance of Item or Service.\" Use the following approach to
> review packages that were dedicated using this method:

a.  To the extent practicable, attempt to witness receipt inspections
    and tests of in-process dedication of CGIs similar to that of the
    failed item, to verify the identified critical characteristics.

b.  Review receiving records and associated tests and inspections.

c.  Review post-installation test records.

d.  Verify that the tests and inspections specified for acceptance
    adequately verify the identified critical characteristics.

e.  Verify that sampling plans are controlled and have adequate
    technical basis, considering lot traceability and homogeneity,
    complexity of the item, and adequacy of supplier controls.

f.  Verify that CGI receiving inspection activities are adequately
    controlled, under a quality program, regardless of whether they are
    being performed in conjunction with other plant receipt inspection
    activities.

g.  Verify that receipt inspection activities establish and maintain
    traceability of CGIs by capturing and appropriately relating
    traceability documents through identification and monitoring of
    CGIs.

h.  Verify that measuring and test equipment were properly calibrated,
    that approved vendors were used to perform tests, and that personnel
    were qualified to perform the tests.

> [Method 2 - Commercial-Grade Survey]{.underline}
>
> Use the following guidance to review packages that were dedicated
> using this method:

a.  Confirm that: (1) the documented commercial-quality program was
    effectively implemented; and (2) the surveys were conducted at the
    location necessary to verify that adequate controls were exercised
    on distributors as well as manufacturers.

b.  Through interview, determine if the persons who perform vendor
    surveys are knowledgeable in the following:

    1.  The use of performance-based surveys

    2.  Screening third-party surveys; and

    3.  Processing and evaluating adverse findings resulting from the
        review of third-party surveys, to ascertain if those findings
        affect CGIs already installed, or stored in the warehouse,
        awaiting future installation.

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c.  Verify that the supplier\'s commercial quality controls are imposed
    in the procurement documents.

d.  Determine if the critical characteristics that are to be verified by
    the survey team are accurately and completely incorporated in the
    survey plans.

e.  Determine if the validity of supplier documentation, relied on in
    the dedication of the item, is verified during the survey.

f.  Determine if surveys of commercial-grade suppliers are performance
    based, as opposed to programmatic. Specifically, verify that the
    critical characteris­tics for the CGIs being surveyed are controlled
    by the supplier\'s quality activities.

g.  Determine if survey teams include technical and quality personnel,
    as appropriate, who are knowledgeable in the operation of the
    item(s) and the associated critical characteristics to be verified,
    including any special processes such as welding and heat treatment
    that are specific to the critical characteristics.

h.  Determine if surveys are conducted at appropriate times relative to
    the procurement. Are surveys required to be updated on a regular
    basis to support dedication?

i.  Determine if the control of subvendors is adequately addressed by
    the surveys so that the supplier has an adequate basis to accept
    test results and certifications from the subvendor.

j.  Determine if pertinent information about a supplier or its products
    is used to plan, conduct, and report results of surveys and source
    verifications. Such information could have been available from
    source verifications, receiving inspections, the dedication process,
    supplier/product performance history, or outside sources, such as
    NRC information notices and bulletins.

> [Method 3 - Source Verification]{.underline}
>
> Use the following approach to review packages that were dedicated
> using this method:

a.  Determine if source verifications involve witnessing the supplier
    performing quality activities on the actual items being procured and
    adequately verify the item\'s critical characteristics.

b.  Determine if personnel who participated in the source verification
    surveys were qualified for their specific assignment.

c.  Determine if appropriate hold points are imposed in the purchase
    orders. This would include a hold point to verify design, material,
    and performance characteristics, relevant to the safety function,
    that cannot be verified after the item has been completely
    manufactured.

d.  Determine if the results of the source verifications were adequately
    documented.

> [Method 4 - Acceptable Supplier/Item-Performance Record]{.underline}
>
> Use the following guidance to review packages that were dedicated
> using this method:

a.  Determine if (1) the established historical record is based on
    industry-wide performance data that are directly applicable to the
    item\'s critical characteris­tics and the intended safety-related
    application; and (2) the manufacturer\'s measures for the control of
    design, process, and material changes have been adequately
    implemented, as verified by survey (multi-licensee team surveys are
    acceptable).

b.  Determine if information pertinent to the CGI\'s quality of
    performance, obtained from outside sources (e.g., operational event
    reports, NRC, vendor equipment, and technical information program)
    and from commercial-grade surveys, source verifications, receipt
    inspections, previous dedication, or qualification and operational
    history, is factored into the dedication process.

c.  Determine if the item or manufacturer is included in the licensee\'s
    performance-trending program.

    b.  [Further Assessments]{.underline}

        1.  No inspection guidance.

        2.  From the list of dedicated items provided by the licensee,
            the inspector should select for review approximately three
            other dedication packages having similar applications and
            critical characteristics as the CGI(s) that resulted in the
            identified failures. After the selections have been made,
            the inspector should request that the licensee compile a
            complete package of all the procurement and dedication
            records for each item. Typical contents of a dedication
            package are described in Appendix C of this inspection
            procedure. The inspector should review the dedication
            packages.

        3.  No inspection guidance.

03.02 [Programmatic Inspection]{.underline}

a.  [Review of Program and Procedures]{.underline}. The review of the
    program and procedures should be performed to familiarize the
    inspector with the licensee\'s QAI procure­ment and CGI dedication
    process. For cases in which problems are identified with the
    licensee\'s CGI dedication process, the inspector may decide to
    perform a more extensive review of the program and procedures, to
    determine if these problems are the result of inadequate procedures.

> The inspector\'s review should include procedures for: (1) procurement
> activities; (2) material control; (3) the dedication of CGIs,
> including receipt inspection and acceptance testing; (4) surveys of
> commercial-grade suppliers; (5) classification of components; (6)
> training of personnel; (7) trending of supplier performance; and (8)
> equipment failures. Attempt to identify any apparent weak areas to
> concentrate on during the evaluation of the program implementation.
>
> After arriving onsite, the inspector should request that the licensee
> explain its commercial-grade dedication process and conduct a
> walk-through of areas associated with it. Areas in the walk-through
> could include the engineering, receipt inspection, component testing,
> and warehouse. The inspector should become familiar with key licensee
> personnel involved in the commercial-grade dedication process. These
> key personnel should include the responsible engineer(s) who developed
> the dedication package(s), and systems engineers, procurement
> engineers, receipt inspectors, QA engineers and inspectors, and
> warehouse personnel. The inspector should discuss the commercial
> -grade dedication process with these key personnel, to gain a better
> understanding of the process, including:

1.  How processing of QAI and CGI procurement documents is controlled
    under the QA program and how quality control will receive, review,
    and approve items.

2.  How technical personnel participate in the preparation, review, and
    approval process of procurement documents.

3.  How consistency and coordination is maintained between corporate
    level, engineering/support level, and site-level programs and
    implementing procedures.

    b.  [Selection of Dedication Packages]{.underline}.

> The selection process should be performance-oriented (e.g., weighted
> toward the review of dedication packages for equipment, components, or
> parts that have experienced failures). To accomplish this, the
> inspector should request, from the licensee, several packages for
> review, using the two-step approach described below. The licensee
> should be given sufficient lead time to prepare the packages and make
> them available for the first day of onsite inspection.
>
> [Step 1]{.underline}: Review the licensee\'s records available at the
> plant site, to identify recent failures (approximately the last 2
> years) of equipment, components, or parts. Review these failures to
> determine if any were QAIs or CGIs dedicated for use in safety-related
> applications. If available, select approximately 75 percent of the
> total sample from QAI or CGI failures.
>
> [Step 2]{.underline}: From the list of dedication packages supplied by
> the licensee, under the \"Inspection Guidance\" section of this
> procedure, select the remainder of packages for review. The total
> sample size will vary, depending on the complexity of the packages and
> the time available. The inspector should select these packages on the
> basis of the following considerations:

1.  The inspector should select packages for items whose failure would
    have the most effect on the ability of the facility to safely
    operate, safely shutdown from an adverse condition, or maintain a
    safe shut down condition. If time permits, review the plant-specific
    integrated safety analysis and the safety evaluation report that
    provides information on the risk significance of safety-related
    plant equipment.

2.  The inspector should take a performance-oriented approach, to the
    selection process, by including, in the sample packages, those items
    that have been problems in the past. Review available sources of
    information to identify any known failures of QAIs or CGIs that were
    used in safety-related applications. These sources of information
    could include:

    a.  Component failure lists or lists of items requiring frequent
        maintenance or replacement, as provided by the licensee.

    b.  Misrepresented or fraudulent items reported in NRC information
        notices.

    c.  Licensee trending of equipment and supplier performance.

    d.  Previous history of component failures or malfunctions, as
        reported in licensee event reports or plant nonconformance
        reports.

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3.  The inspector should include both simple and complex packages in the
    sample, as well as packages that include a variety of dedication
    methods (e.g., Methods 1 through 4) described above.

4.  In addition to selecting packages based on the above considerations
    (safety significance, complexity, and failures), the inspector
    should attempt to select samples from each of the following areas:
    electrical, instrumentation and control, mechanical equipment, and
    materials.

    c.  [Evaluation of Dedication Packages]{.underline}. Perform a
        detailed review of the dedication packages, as described above.

    d.  [Evaluation of Training Effectiveness]{.underline}. Experience
        gained during the procurement assessments and pilot inspections
        suggested that training of personnel involved in CGI dedication
        activities was a very important factor in the development of a
        good CGI dedication program. The CGI dedication process
        generally requires more highly qualified/trained personnel than
        specified in the licensee=s procurement program requirements .
        Personnel involved in this process need to be familiar with
        current industry and NRC guidance and have a strong interface
        with the licensee\'s design/engineering organizations. The
        training expectations, however, should not exceed what is
        required by the existing licensee\'s QA program.

> As applicable to their job functions, select and review the training
> records for individuals involved in the following areas:

1.  Determining the safety classification of an item. Training in this
    area is appropriate when the job function includes reclassification
    of items or establishing safety classification of piece parts of
    safety-related components.

2.  Specifying design, material, and performance characteristics
    relevant to the safety function and establishing the acceptance
    criteria for these characteris­tics.

3.  Specifying or performing commercial-grade surveys, source
    verifications, and tests and inspections, including enhanced
    post-receipt verification testing or inspection.

4.  The preparation and review of procurement documents.

> Through observation, interviews, and a review of records of work
> performed by the individuals:

5.  Determine if the individuals selected have adequate knowledge to
    perform the specific tasks assigned to them. Attend a training
    course, if available, or review the lesson plans for selected
    training courses.

6.  Determine if training inadequacies contributed to any of the
    deficiencies that may be identified during the inspection.

7.  Determine if the personnel are familiar with the program
    requirements and procedures and if they have been properly trained
    in the dedication process.

88114-04 INSPECTION RESOURCES

This inspection procedure should be considered for implementation when
there is reason to believe that the failure of an IROFS, or a part
thereof, to perform its intended safety function, was the result of
weaknesses in QAI procurement or CGI dedication (reactive inspection).
This inspection procedure may be implemented independently or it may be
used as a supplement to other major team inspections. It is expected
that this inspection should consist of one inspector on site for 16-24
hours.

88114-05 REFERENCES

The following documents are listed for the inspector\'s information only
and are not considered regulatory requirements unless the licensee has
formally committed to implementing any of these documents for
application to safety-related activities. The inspector may wish to
review these documents to become familiar with commercial grade
dedication issues.

American National Standards Institute, ANSI N45.2-1977, \"Quality
Assurance Program Requirements for Nuclear Power Plants,\" as endorsed
by NRC Regulatory Guide 1.28, Revision 2.

American National Standards Institute, ANSI N45.2.13-1976, \"Quality
Assurance Requirements for Control of Procurement of Items and Services
for Nuclear Power Plants,\" as endorsed by NRC Regulatory Guide 1.123,
Revision 1.

Duke, Cogema, Stone and Webster, AMixed-Oxide Fuel Fabrication Facility,
MOX Project Quality Assurance Plan (MPQAP)@, Docket Number 070-03098,
under US Department of Energy Contract DE-AC02-99-CH10888, latest
revision accepted by NRC.

Duke, Cogema, Stone and Webster, AMixed-Oxide Fuel Fabrication Facility
Construction Authorization Request@, latest revision accepted by NRC.

Electric Power Research Institute (EPRI) NP-5652, \"Guidelines for the
Utilization of Commercial-grade Items in Nuclear Safety-Related
Applications (NCIG-07),\" as conditionally endorsed in NRC Generic
Letter 89-02.

U.S. Nuclear Regulatory Commission, Generic Letter 89-02, \"Actions to
Improve the Detection of Counterfeit and Fraudulently Marketed
Products\" (microfiche 48960-001).

U.S. Nuclear Regulatory Commission, Generic Letter 91-05, \"Licensee
Commercial Grade Procurement and Dedication Programs\" (microfiche
57468-264).

END

Appendices:

A. ADedication Issues@

B. ADefinitions@

C. AContents of Dedication Packages@

APPENDIX A

DEDICATION ISSUES

BASIS FOR THE SELECTION AND VERIFICATION OF CRITICAL CHARACTERISTICS

> 1\. [Consideration of Item\'s Safety Function]{.underline}
>
> Critical characteristics of a commercial grade item (CGI) should be
> based on the item\'s safety function. The licensee is responsible for:
> (a) identifying the important design, material, and performance
> characteristics that have a direct effect on the item\'s ability to
> accomplish its intended safety function; and (b) selecting from these
> characteristics a set of critical (or acceptance) characteristics
> that, once verified, will provide reasonable assurance that the item
> will perform its intended safety function. The selection of critical
> characteristics for verification can be based on a graded approach,
> consistent with the item\'s importance to safety. When an existing
> equipment specification is available that contains adequate technical
> requirements for the item being purchased, that specification can be
> used to select the critical characteristics for this item.
>
> 2\. [Graded Quality Assurance]{.underline}
>
> The application of graded QA to the CGI dedication process should
> include consideration of the item\'s importance to safety and other
> factors specific to the item being procured. Certain items and
> services may require extensive controls throughout all stages of
> development, whereas others may require only a limited QA involvement
> in selected phases of development. The following factors should be
> considered in determining the extent of QA to be applied: (a) The
> importance of malfunction or failure of the item to plant safety; (b)
> the complexity or uniqueness of the item; (c) the need for special
> controls and surveillance over process and equipment; (d) the degree
> to which functional compliance can be demonstrated by inspection and
> test; and (e) the quality history and degree of standardization of the
> item. Additional guidance on the use of graded QA can be found in the
> non-mandatory appendix to American National Standards Institute ANSI
> N45.2.13-1976.
>
> 3\. [Consideration of Failure Modes]{.underline}
>
> An evaluation of credible failure modes of an item in its operating
> environment and the effects of these failure modes on the item\'s
> safety function may be used in the safety classification of an item
> and as a basis for the selection of critical characteris­tics.
>
> 4\. [Reasonable Assurance]{.underline}
>
> The dedication process represents an acceptable method of achieving
> compliance with the licensee=s U.S. Nuclear Regulatory
> Commission-approved quality assurance program, with the purchaser
> assuming many of the responsibilities for ensuring quality and
> functionality of an item that had previously been the vendors
> responsibility. In this context, reasonable assurance consists of the
> purchaser controlling or verifying the activities affecting the
> item\'s quality, to an extent consistent with the item\'s importance
> to safety, or ensuring that these activities are adequately controlled
> by the supplier. For more complex items, dialogue with the original
> equipment manufacturer may be necessary to identify the design and
> functional parameters of specific piece parts. Once the dedication
> process is completed, the QA and/or other measures applied to those
> aspects of the item that directly affect its safety function should
> result in the same level of performance as for a like item
> manufactured or purchased under an NRC approved QA program.
>
> 5\. [Engineering Judgment]{.underline}
>
> Engineering judgment can be used in selecting those important design,
> material, and performance characteristics that are identified as the
> item\'s critical characteris­tics. The bases for engineering judgment
> used in the selection process should be documented.

TRACEABILITY

[Material/Items Purchased from Distributors]{.underline}

Traceability can be defined as the ability to verify the history,
location, or application of an item by means of recorded identification.
Where the item\'s acceptance is based entirely or partially on a
certification by the manufacturer, the traceability must extend to the
manufacturer. The purchaser should ensure, by survey or by other means,
that the manufacturer has established adequate traceability controls,
and that these controls are effectively implemented. For situations in
which intermediaries (distributors) are included in the supply chain,
the activities of these organizations may need to be surveyed, to ensure
that traceability and proper storage conditions are maintained. A survey
of the distributor may not be necessary if the distributor acts only as
a broker and does not warehouse nor repackage the items, or, in cases
where traceability can be established by other means, such as
verification of the manufacturer\'s markings or shipping records.

SAMPLING

> 1\. [Established Heat Traceability (Materials)]{.underline}
>
> When heat traceability of metallic material has been established, and
> each piece of the material is identified with the material heat
> number, chemical analysis and destructive testing required for the
> acceptance of this material may be performed on one piece of the
> material. The same rationale may be used for the acceptance of
> containers of nonmetallic materials, such as lubricants, providing
> that traceability has been established and each container is
> identified with a unique mix or batch number.
>
> 2\. [Established Lot/Batch Control (Items)]{.underline}
>
> When lot/batch (defined as units of product of a single type, grade,
> class, size, and composition, manufactured under essentially the same
> conditions and at essentially the same time) control is established
> through a commercial grade survey, the party performing dedication of
> such items can use sampling, prescribed by standard statistical
> methods that are based on homogeneous product lots. Such sample plans
> should be identified and should provide for the verification of the
> critical characteristics with a confidence level consistent with the
> item\'s importance to safety. Other means of demonstrating adequate
> lot/batch control may include satisfactory performance history and the
> results of receipt inspection/testing. When such methods are used as a
> basis for developing product sampling strategy, they should be
> supported by documented objective evidence.
>
> 3\. [Material and Items with No Lot/Batch Control]{.underline}
>
> When lot/batch control cannot be established, sampling plans need to
> be considered on individual, item-specific basis and ensure that they
> are capable of providing a high level of assurance of the item\'s
> suitability for service. There may be situations where each item needs
> to be tested.

COMMERCIAL-GRADE SURVEYS

> 1\. [Verification of Vendor\'s Control of Specific
> Characteristics]{.underline}
>
> A commercial-grade survey should be specific to the scope of the
> CGI(s) being purchased. The vendor\'s controls of specific critical
> characteristics to be verified during the survey should be identified
> in the survey plan. The verification should be accomplished by
> reviewing the vendor\'s program/procedures controlling these
> characteristics and observing the actual implementation of these
> controls in the manufacture of items identical to or similar to, the
> items being purchased.
>
> 2\. [Identification of Applicable Program/Procedures]{.underline}
>
> The vendor must have a documented program and/or procedures to control
> the critical characteristics of the item or items being procured that
> are to be verified during the survey. When many items are being
> purchased, a survey of a representative group of similar items may be
> sufficient to demonstrate that adequate controls exist. If the
> vendor\'s controls are determined to be satisfactory, purchase orders
> for these items should invoke these controls as contract requirements
> by referencing the applicable program/procedure(s) and revision. If
> multiple working-level procedures are applicable to the vendor\'s
> activities, which affect the item\'s critical characteristics, and
> these procedures, in turn, are controlled by a higher-level document,
> it may be appropriate to reference that document in the purchase
> order. It is important to ensure that the specific controls reviewed
> and accepted during the survey be applied during the manufacturing
> process. On completion of the work, the vendor should certify
> compliance with the purchase order requirements.
>
> 3\. [Documentation of Survey Results]{.underline}
>
> Commercial-grade survey documentation should include: (1) The
> identification of the item or items for which the vendor is being
> surveyed; (2) identification of the critical characteristics of these
> items that the vendor is expected to control; (3) identification of
> the controls to be applied (program/procedure and revision); and (4) a
> description of the verification activities performed and results
> obtained. Critical characteristics that are not adequately controlled
> should be addressed by contractually requiring the vendor to institute
> additional controls or by using other verification and acceptance
> methods.
>
> 4\. [Survey Frequency]{.underline}
>
> Commercial-grade surveys should be conducted at sufficient frequency
> to ensure that the process controls applicable to the critical
> characteristics of the item procured continue to be effectively
> implemented. Factors to be considered in determining the frequency of
> commercial-grade surveys include the complexity of the item, frequency
> of procurement, receipt inspection, item-performance history, and
> knowledge of changes in the vendor\'s controls.

ACCEPTANCE OF CERTIFIED MATERIAL TEST REPORTS (CMTRs) AND CERTIFI­CATES
OF COMPLIANCE (CoCs)

[Validity Verified Through Vendor/Supplier Audit or Testing]{.underline}

When the verification of critical characteristics is based on vendor
CMTRs or CoCs, the validity of these documents should be ensured. This
can be accomplished through a commercial-grade survey or, for simple
items, periodic testing of the product, on receipt. Such verifications
should be conducted at intervals commensurate with the vendor\'s past
performance. If the item\'s supply chain includes a distributor, a
survey of the distributor\'s activities may be necessary (see
\"Traceability\").

USE OF INDUSTRY GUIDANCE

The Electric Power Research Institute (EPRI) NP-5652, \"Guideline for
the Utilization of Commercial Grade Items in Nuclear Safety Related
Applications (NCIG-07),\" defines critical characteristics as\...
\"identifiable and measurable attributes/variables of a CGI, which once
selected to be verified, provide reasonable assurance that the item
received is the item specified.\" NRC\'s conditional endorsement of EPRI
NP-5652, by Generic Letter 89-02, was based on interpreting that, in the
EPRI definition of critical characteristics, the \"item specified\"
encompassed those attributes that are essential for the performance of
the item\'s safety function. This interpretation is consistent with the
definition of \"critical characteristics for acceptance\" found in EPRI
NP-6406, \"Guidelines for the Technical Evaluation of Replacement Items
in Nuclear Power Plants,\" which notes that critical characteristics for
acceptance are a subset of \"critical characteristics for design.\" The
EPRI NP-6406 definition of \"critical characteristics for design\"
includes those attributes that ensure the performance of the item\'s
design function.

Published NRC guidance does not differentiate between design and
acceptance critical characteristics, and the CGI dedication guidance
provided in Generic Letters 89-02 and 91-05 does not suggest that all
design requirements of an item need to be verified during the dedication
process. Rather, the licensee is expected to identify the item\'s
design, material, and performance characteristics that have a direct
effect on the item\'s ability to accomplish its intended safety
function, and select, from these characteristics a set of critical (or
acceptance) characteristics that, once verified, will provide reasonable
assurance that the item will perform that function. Consistency in the
definition of critical characteristics can be improved by equating
NRC\'s definition of critical characteristics to the EPRI definition of
\"critical characteristics for acceptance.\"

END

APPENDIX B

DEFINITIONS

The following terms are listed to provide the inspectors with working
definitions of important terms used during the procurement and
dedication of commercial-grade items (CGIs). These terms are defined
only in the context of the CGI dedication process and are solely to aid
the inspector in the inspection process.

[Basic Component]{.underline} - A plant structure, system, component, or
part thereof necessary to ensure one of the following:

-   The integrity of the reactor coolant pressure boundary

-   Capability to shut down the reactor and maintain it in a safe
    shutdown condition; and

-   The capability to prevent or mitigate the consequences of accidents
    that could result in offsite radiation exposures comparable to those
    referred to in 10 CFR 100.11.

Basic components are items designed and manufactured under a U.S.
Nuclear Regulatory Commission-approved quality assurance program, or
CGIs that have successfully completed the dedication process. (See
definition in 10 CFR 21.3.)

[Certificate of Compliance]{.underline} - A document attesting that the
materials are in accordance with specified requirements.

[Certified Material Test Report]{.underline} - A document attesting that
the material is in accordance with specified requirements, including the
actual results of all required chemical analyses, tests, and
examinations.

[Commercial Grade Item (CGI)]{.underline} - A CGI means a structure,
system, or component, or part thereof, that affects its safety function,
which was not designed nor manufactured as a basic component. CGIs do
not include items that have one or more critical characteristics that
cannot be verified by one or more acceptance methods (see definition in
10 CFR 21.3).

[Commercial-Grade Survey]{.underline} - Activities conducted, by the
purchaser or its agent, to verify, that a supplier of CGI controls,
through quality activities, the critical characteristics of specifically
designated CGIs, as a method to accept those characteristics, only
without further dedication for safety-related use.

[Critical Characteristics]{.underline} - Those important design,
material, and performance characteristics that, once verified, will
provide reasonable assurance that the item will perform its intended
safety function.

[Dedication]{.underline} - An acceptance process undertaken to provide
reasonable assurance that a CGI to be used as a basic component will
perform its intended safety function. This process includes the
identification of critical characteristics and their verifications by
one or more of the dedication methods. (See definition in 10 CFR 21.3.)

[Dedicating Entity]{.underline} - The organization that performs the
dedication activity. Dedication may be performed by the manufacturer, a
third-party dedicating entity, or the licensee itself. (See definition
in 10 CFR 21.3)

[Engineering Judgment]{.underline} - A process of logical reasoning that
leads from stated premises to a conclusion. This process should be
supported by sufficient documentation to permit verification by a
qualified individual.

[Source Verification]{.underline} - Activities witnessed at the
supplier\'s facilities, by the purchaser or its agent, for specific
items, to verify that a supplier of CGIs controls the critical
characteristics of that item as a method to accept those
characteristics, only without further dedication for safety-related use.

[Traceability]{.underline} - Is the ability to verify the history,
location, or application of an item, by means of recorded
identification.

END

APPENDIX C

CONTENTS OF DEDICATION PACKAGES

The dedication packages compiled by the licensee may contain the
following items, as applicable, depending on the item chosen and the
dedication methods used.

-   Purchase requisitions and purchase orders.

-   Other pertinent vendor/licensee correspondence.

-   Design specifications - -original and updated - - to verify certain
    important parameters, such as original design pressure of a system
    or degraded pickup voltage of a solenoid or relay.

-   Catalog specifications.

-   Procurement basis evaluation - like-for-like, equivalency,
    plant-design change packages, drawing and specification updates.

-   10 CFR 70.72 safety evaluation, if required.

-   Material-receiving reports, packing lists/invoices, and other
    shipping documents.

-   Receipt-inspection reports and any related test reports.

-   Other documents to trace the item from the time it was dedicated to
    the time it was installed, tested, and accepted.

-   Certificates of conformance/compliance/quality.

-   Vendor test and inspection reports.

-   Third-party or sub-vendor test and inspection reports.

-   Shelf-life information.

-   Vendor-dedication/partial-dedication information.

-   Design/material/process change-history information.

-   Completed commercial-grade dedication document, including:

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-   Safety classification,

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-   Identification of safety functions/application requirements,

-   Identification of critical characteristics,

-   Identification of verification methods and acceptance criteria for
    the critical characteristics,

-   Evaluation of credible failure modes (if applicable), and

-   Identification of the supplier=s quality assurance program that
    meets the licensee=s U.S. Nuclear Regulatory Commission-approved
    quality assurance program.

    -   Any deviation from design, material, and performance
        characteristics relevant to the safety function (nonconformance
        dispositions).

    -   Documents showing objective evidence:

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-   Special test and inspection procedures and results

-   Commercial-grade survey reports - item, design, material, and
    specific performance characteristic (relevant to safety function),
    and

-   Source inspection reports.

    -   Completed post-installation test procedure and results.

    -   Completed stock, or material-issue forms and installation work
        orders or reports.

    -   Historical performance information.

END

ATTACHMENT 1

Revision History for IP 88114

+--------+-------+------------------------+-----+-------+--------------+
| Comm   | Issue | Description of Change  | Tr  | Tra   | Comment      |
| itment | Date  |                        | ain | ining | Resolution   |
| Tr     |       |                        | ing | Compl | Accession    |
| acking |       |                        | Nee | etion | Number       |
| Number |       |                        | ded | Date  |              |
+--------+-------+------------------------+-----+-------+--------------+
|        | 10/   | IP 88114 is a newly    | N   | N/A   |              |
|        | 25/06 | issued procedure.      | one |       |              |
|        |       | Issued for MOX         |     |       |              |
|        | CN    | inspection program to  |     |       |              |
|        | 0     | improve effectiveness  |     |       |              |
|        | 6-031 | and efficiency by      |     |       |              |
|        |       | incorporating and      |     |       |              |
|        | 06    | consolidating          |     |       |              |
|        | -NMSS | inspec­tion             |     |       |              |
|        |       | requirements involving |     |       |              |
|        |       | commercial grade       |     |       |              |
|        |       | dedication and 10 CFR  |     |       |              |
|        |       | Part 21 inspection.    |     |       |              |
+--------+-------+------------------------+-----+-------+--------------+
|        |       |                        |     |       |              |
+--------+-------+------------------------+-----+-------+--------------+
|        |       |                        |     |       |              |
+--------+-------+------------------------+-----+-------+--------------+