**NRC INSPECTION MANUAL** CQV/EQV

INSPECTION PROCEDURE 43005

NRC OVERSIGHT OF THIRD-PARTY ORGANIZATIONS

IMPLEMENTING QUALITY ASSURANCE REQUIREMENTS

PROGRAM APPLICABILITY: 2507 and 2700

43005-01 INSPECTION OBJECTIVES

01.01 To verify, by direct observation, the effectiveness of the
independent oversight activities performed by third-party organizations
to qualify vendors in accordance with the requirements of Appendix B to
10 CFR Part 50.

01.02 To verify that the vendor has established and implemented an
adequate system for evaluating deviations and reporting defects and
noncompliance in accordance with 10 CFR Part 21 requirements.

This procedure is to be used concurrent with the following inspection
procedure: Inspection Procedure (IP) 36100, "Inspection of 10 CFR Part
21 and 50.55(e) Programs for Reporting Defects and Noncompliance."

43005-02 INSPECTION REQUIREMENTS

02.01 Observe third-party organization\'s implementation of oversight
activities (i.e., safety-related audits, commercial grade surveys, and
vendors certifications) used to qualify vendors who supply
safety-related components or services to the nuclear industry.

02.02 Conduct an inspection of the vendor's 10 CFR Part 21 program
utilized for reporting defects and noncompliance.

43005-03 INSPECTION GUIDANCE

03.01 [Observation of oversight activities]{.underline}.

a.  [Preparation activities]{.underline}. Notify appropriate contact
    person of the organization (e.g., Nuclear Utility Procurement Issues
    Committee Chairman) of intent to observe activities within a
    reasonable time frame, between 30 to 90 days, prior to the scheduled
    start date.

It is expected that the organization:

1.  Communicate the NRC\'s interest to participate as an observer to the
    appropriate team leader.

2.  Include the NRC inspector(s) on distribution of all correspondence,
    including notification letter, activity plan, schedule and
    logistics, audit report and follow-up correspondence, including
    significant notifications issued to other members of the
    organization as a result of the activities performed.

    b.  [Observation activities]{.underline}. Observe the third-party
        organization\'s implementation of activities, including daily
        meetings.

> In the event of a situation in which the organization\'s team is not
> recognizing a compliance issue, communicate the issue to the
> organization\'s team leader and, as appropriate, document the issue in
> the trip report, including any actions taken by the appropriate
> organization\'s team leader. Allow enough time for the organization\'s
> team to recognize the issue before communicating it to the
> organization\'s team leader.

c.  [Documentation]{.underline}. Prepare a trip report documenting the
    effectiveness of the independent oversight activities performed by
    third-party organizations, including any issue discussed during the
    observation with the organization\'s team leader. The trip report is
    directed to the Director of the Division of Construction Inspection
    and Operational Programs (DCIP) in the Office of New Reactors and
    the Director of the Division of Engineering in the Office of Nuclear
    Reactor Regulation.

d.  [Follow up]{.underline}. As needed, send a letter to the
    organization to address any issue documented in the trip report.
    When possible, the NRC will discuss the trip report at the next
    scheduled periodic meeting with the organization.

03.02 [10 CFR Part 21 inspection]{.underline}.

a.  [Preparation activities]{.underline}.

    1.  Through an initial telephone call and followup with a letter,
        inform the vendor of the NRC\'s participation as observer in the
        oversight activities performed by the third-party organization
        and of the NRC\'s plans to inspect the vendor\'s 10 CFR Part 21
        program.

    2.  Prepare an Inspection Plan following the guidance of Manual
        Chapter 0613.

b.  [Inspection activities]{.underline}. Follow IP36100 for inspection
    activities. Participate in entrance and exit meetings performed by
    the organization and communicate to the vendor the areas to be
    inspected by the NRC. As needed, participate in daily meetings
    during the course of oversight activities to communicate any issue
    to the vendor related to its 10 CFR Part 21 program and to discuss
    preliminary findings.

c.  [Documentation]{.underline}. Prepare an Inspection Report following
    the guidance of Manual Chapter 0613 to communicate observations and
    any findings in the area of 10 CFR Part 21 program implementation to
    the vendor.

43005-04 RESOURCE ESTIMATE

The resource estimate for this inspection procedure is approximately 80
hours of direct observation and inspection.

END

Attachment 1: Revision History

Attachment 1

Revision History Sheet for IP 43005

+--------+-------+------------------+------+-------+-------------------+
| Comm   | Issue | Description of   | Trai | Tra   | Comment           |
| itment | Date  | Change           | ning | ining | Resolution        |
| Tr     |       |                  | Ne   | Compl | Ascension \#      |
| acking |       |                  | eded | etion |                   |
| Number |       |                  |      | Date  |                   |
+--------+-------+------------------+------+-------+-------------------+
| N/A    | 10/   | 1\. Initial      | N/A  | N/A   | N/A               |
|        | 03/07 | issue to support |      |       |                   |
|        |       | inspections of   |      |       |                   |
|        | CN    | vendor programs  |      |       |                   |
|        | 0     | described in IMC |      |       |                   |
|        | 7-030 | 2507 and 2700.   |      |       |                   |
|        |       |                  |      |       |                   |
|        |       | 2\. Researched   |      |       |                   |
|        |       | commitments for  |      |       |                   |
|        |       | 4 years and      |      |       |                   |
|        |       | found none.      |      |       |                   |
+--------+-------+------------------+------+-------+-------------------+