**NRC INSPECTION MANUAL** NMSS/FCSS

MANUAL CHAPTER 2600

FUEL CYCLE FACILITY OPERATIONAL SAFETY

AND SAFEGUARDS INSPECTION PROGRAM

TABLE OF CONTENTS

2600‑01 PURPOSE [1](#__RefHeading___Toc188076859)

2600‑02 OBJECTIVES [1](#__RefHeading___Toc188076860)

2600-03 APPLICABILITY [1](#__RefHeading___Toc188076861)

2600‑04 DEFINITIONS OF INSPECTION FREQUENCIES
[2](#__RefHeading___Toc188076862)

04.01 [As Needed (AN)]{.underline} [2](#__RefHeading___Toc188076863)

04.02 [Core Inspection Program Completion]{.underline}
[2](#__RefHeading___Toc188076864)

2600-05 RESPONSIBILITIES AND AUTHORITIES
[2](#__RefHeading___Toc188076865)

05.01 [Director, Office of Nuclear Material Safety and Safeguards
(NMSS)]{.underline} [2](#__RefHeading___Toc188076866)

05.02 [Regional Administrator, Region II]{.underline}
[2](#__RefHeading___Toc188076867)

05.03 [Director, Division of Fuel Cycle Safety and Safeguards
(FCSS)]{.underline} [2](#__RefHeading___Toc188076868)

05.04 [Director, Regional Inspection Division]{.underline}
[3](#__RefHeading___Toc188076869)

05.05 [Director, Nuclear Security and Incident Response
(NSIR)]{.underline} [3](#__RefHeading___Toc188076870)

05.06 [Chief, Regional Fuel Facility Inspection Branch]{.underline}
[3](#__RefHeading___Toc188076871)

05.07 [Chief, Technical Support Branch (TSB), Division of Fuel Cycle
Safety and Safeguards]{.underline} [4](#__RefHeading___Toc188076872)

05.08 [Chief, Material Control & Accounting Branch (MC&A), Division of
Fuel Cycle Safety and Safeguards]{.underline}
[4](#__RefHeading___Toc188076873)

2600‑06 PROGRAM DESCRIPTION [4](#__RefHeading___Toc188076874)

06.01 [General]{.underline}. [4](#__RefHeading___Toc188076875)

06.02 [Material Control and Accounting Inspection Program]{.underline}
[4](#__RefHeading___Toc188076876)

06.03 [Physical Protection and Transport of Special Nuclear Material
(SNM) Program]{.underline} [5](#__RefHeading___Toc188076877)

2600‑07 FUEL CYCLE FACILITY INSPECTION PROGRAM ELEMENTS
[5](#__RefHeading___Toc188076878)

07.01 [Program Elements]{.underline} [5](#__RefHeading___Toc188076879)

07.02 [Core Inspection Program]{.underline}
[5](#__RefHeading___Toc188076880)

07.03 [Plant Specific Reactive Inspections]{.underline}
[5](#__RefHeading___Toc188076881)

07.04 [Plant Specific Supplemental Inspections]{.underline}
[6](#__RefHeading___Toc188076882)

07.05 [Generic Safety Issue Inspections]{.underline}
[6](#__RefHeading___Toc188076883)

07.06 [Licensee Performance Reviews]{.underline} 7

07.07 [Backshift Inspections]{.underline}
[7](#__RefHeading___Toc188076885)

07.08 [Inspections During the Construction, Preoperational, and Startup
Phases]{.underline} [7](#__RefHeading___Toc188076886)

2600-08 PROGRAM IMPLEMENTATION [7](#__RefHeading___Toc188076887)

08.01 [Master Inspection Plan]{.underline}
[7](#__RefHeading___Toc188076888)

08.02 [Establishment of the Core Inspection Program]{.underline}
[7](#__RefHeading___Toc188076889)

08.03 [Program Adjustments]{.underline}
[8](#__RefHeading___Toc188076890)

2600‑09 EVENT REVIEW AND RESPONSE [9](#__RefHeading___Toc188076891)

2600-10 PLANNING FOR INSPECTIONS [9](#__RefHeading___Toc188076892)

2600-11 CONDUCTING INSPECTIONS [9](#__RefHeading___Toc188076893)

11.01 [Management Entrance and Exit Meetings]{.underline}
[9](#__RefHeading___Toc188076894)

11.02 [Findings Related to Non-NRC Regulations]{.underline}
[10](#__RefHeading___Toc188076895)

11.03 [Performance-based Inspection Focus]{.underline}
[11](#__RefHeading___Toc188076896)

11.04 [Third Party Assistance]{.underline}
[11](#__RefHeading___Toc188076897)

11.05 [Findings Outside of Inspectors Qualifications]{.underline}
[11](#__RefHeading___Toc188076898)

11.06 [Inspection Documentation]{.underline}
[12](#__RefHeading___Toc188076899)

11.07 [Independent Inspection Effort]{.underline}
[12](#__RefHeading___Toc188076900)

11.08 [Open Item Guidance]{.underline}
[12](#__RefHeading___Toc188076901)

2600-12 ASSESSING FACILITY PERFORMANCE
[13](#__RefHeading___Toc188076902)

12.01 [Licensee Performance Review (LPR)]{.underline}
[13](#__RefHeading___Toc188076903)

12.02 [Agency Action Review Meeting (AARM)]{.underline}
[13](#__RefHeading___Toc188076904)

12.03 [Ongoing Assessments of Facility Performance]{.underline}
[13](#__RefHeading___Toc188076905)

2600-13 ASSESSING PROGRAM IMPLEMENTATION
[13](#__RefHeading___Toc188076906)

[ATTACHMENT 1]{.underline} Revision History for IMC 2600 Att1-1

2600‑01 PURPOSE[]{#__RefHeading___Toc188076859 .anchor}

To establish the policy for the fuel cycle facility inspection program.

2600‑02 OBJECTIVES[]{#__RefHeading___Toc188076860 .anchor}

02.01 To define the minimum core inspection effort to be performed at
each type of fuel cycle facility.

02.02 Provide guidance for developing Master Inspection Plans (MIPs) for
each facility.

02.03 To determine whether licensed and certified fuel cycle facilities
are operated safely in accordance with U.S. Nuclear Regulatory
Commission (NRC) regulations.

02.04 To determine the causes of declining performance before such
performance reaches a level that may result in an undue risk to public
health and safety.

02.05 To identify those safety or safeguards significant issues that
might have generic applicability.

02.06 To provide guidance for assessing facility performance in real
time, interfacing with the Licensee Performance Review (LPR) process,
and preparing for the annual Agency Action Review Meeting (AARM).

02.07 Provide guidance for adjusting inspection effort on the basis of
facility performance.

2600-03 APPLICABILITY[]{#__RefHeading___Toc188076861 .anchor}

The fuel cycle inspection program applies to operating fuel cycle
facilities licensed by the NRC including nuclear fuel fabrication and
assembly facilities, uranium enrichment plants, and uranium conversion
plants. ([Note]{.underline}: As the safety and safeguards inspection
program is applied to facilities certified under 10 CFR Part 76,
Alicense@ shall read as Acertificate,@ and Alicensee@ shall read as
Acertificate holder@ for such facilities.)

Inspection and assessment activities for facilities undergoing
construction, preoperation, startup, major modifications, or having
ceased operations in preparation for decommissioning should be handled
on a case-by-case basis. Fuel cycle facilities in non-operating status
generally do not pose the same levels of risk as operating facilities.
Certain inspection procedures (IPs) may not be applicable in these
cases, and others may need to be adjusted to the given situation to
reflect the actual level of risk attached to each situation.

Facilities with approved Decommissioning Plans, or for which project
management responsibility has been transferred out of the Division of
Fuel Cycle Safety and Safeguards (FCSS), are not addressed in this
chapter.

2600‑04 DEFINITIONS OF INSPECTION
FREQUENCIES[]{#__RefHeading___Toc188076862 .anchor}

04.01 [As Needed (AN)]{.underline}[]{#__RefHeading___Toc188076863
.anchor}. The inspection effort should be performed when the activity or
event occurs at the facility as specified in the guidance section of
specific inspection procedures (e.g., outages).

04.02 [Core Inspection Program
Completion]{.underline}[]{#__RefHeading___Toc188076864 .anchor}. Core
Inspection Program completion for an annual inspection cycle is defined
to be completion of each core inspection procedure listed in Appendices
A-C for each facility, except where deviations are approved in advance
by the Director, FCSS.

2600-05 RESPONSIBILITIES AND AUTHORITIES[]{#__RefHeading___Toc188076865
.anchor}

05.01 [Director, Office of Nuclear Material Safety and Safeguards
(NMSS)]{.underline}[]{#__RefHeading___Toc188076866 .anchor}.

a\. Provides overall program direction for the fuel cycle inspection
program.

b\. Oversees the implementation of the NMSS-assigned portion of the fuel
cycle inspection program.

05.02 [Regional Administrator, Region
II]{.underline}[]{#__RefHeading___Toc188076867 .anchor}.

a\. Provides program direction for management and implementation of the
inspection program elements performed by the regional office.

b\. Ensures, within budget limitations, that the regional office staff
includes adequate numbers of inspectors in the various disciplines
necessary to carry out the inspection program described in this chapter,
including that which may be needed for regional supplemental and
reactive inspections.

c\. Directs the implementation of the supplemental inspection program.

d\. Applies inspection resources, as necessary, to deal with significant
issues and problems at specific facilities.

05.03 [Director, Division of Fuel Cycle Safety and Safeguards
(FCSS)]{.underline}[]{#__RefHeading___Toc188076868 .anchor}.

a\. Develops and directs the implementation of policies, programs, and
procedures for inspecting applicants, licensees, and other entities
subject to NRC jurisdiction.

b\. Assesses the effectiveness, uniformity, and completeness of
implementation of the fuel cycle inspection program.

c\. Approves changes to the fuel cycle facility inspection program.

d\. Approves changes to the MIP that involve proposed deviations from
the inspection program described herein.

e\. Ensures, within budget limitations, that the Headquarters Office
staff includes adequate numbers of inspectors in the various disciplines
necessary to carry out the inspection program described in this chapter,
including that which may be needed for regional supplemental and
reactive inspections.

f\. Implements the fuel cycle inspection program elements assigned to
FCSS.

g\. Assesses the effectiveness of the implementation of this inspection
program throughout the Agency.

05.04 [Director, Regional Inspection
Division]{.underline}[]{#__RefHeading___Toc188076869 .anchor}.

a\. Manages the implementation of the inspection program elements
assigned to the regional office.

b\. Develops and updates the agency-wide MIPs for fuel cycle
inspections.

c\. Coordinates with FCSS to obtain specialized inspection expertise, as
necessary.

d\. Develops and maintains the fuel cycle inspection program for
approval by the Director, FCSS.

05.05 [Director, Nuclear Security and Incident Response
(NSIR)]{.underline}[]{#__RefHeading___Toc188076870 .anchor}.

a\. Oversees the implementation of the safeguards portion of the fuel
cycle inspection program (physical security).

b\. Ensures, within budget limitations, that NSIR staff includes
adequate numbers of inspectors necessary to carry out the inspection
program described in this chapter, including that which may be needed
for regional supplemental and reactive inspections.

c\. Applies inspection resources, as necessary, to deal with significant
issues and problems at specific facilities.

05.06 [Chief, Regional Fuel Facility Inspection
Branch]{.underline}[]{#__RefHeading___Toc188076871 .anchor}.

a\. Proposes changes to the fuel cycle inspection program.

b\. Implements the assigned Regional portion of the fuel cycle
inspection program.

c\. Develops the Branch MIP input.

d\. Coordinates with other appropriate inspection organizations in
assessing facility performance.

05.07 [Chief, Technical Support Branch (TSB), Division of Fuel Cycle
Safety and Safeguards]{.underline}[]{#__RefHeading___Toc188076872
.anchor}.

a\. Proposes changes to the fuel cycle inspection program.

b\. Implements the Headquarters nuclear criticality portion of the fuel
cycle inspection program.

c\. Develops the Headquarters nuclear criticality safety MIP input.

d\. Coordinates with Region II and FCSS in assessing facility
performance.

05.08 [Chief, Material Control & Accounting Branch (MC&A), Division of
Fuel Cycle Safety and
Safeguards]{.underline}[]{#__RefHeading___Toc188076873 .anchor}.

a\. Proposes changes to the fuel cycle inspection program.

b\. Implements the Headquarters MC&A portion of the fuel cycle
inspection program.

c\. Develops the Headquarters MC&A MIP input.

d\. Coordinates with Region II and FCSS in assessing facility
performance.

2600‑06 PROGRAM DESCRIPTION[]{#__RefHeading___Toc188076874 .anchor}

06.01 [General]{.underline}.[]{#__RefHeading___Toc188076875 .anchor} The
program described herein recognizes the changes to the fuel cycle
facility licensing process resulting from the September 18, 2000
revisions to 10 CFR Part 70 that established, among other things the
requirement for Integrated Safety Analyses (ISAs), development and
implementation of items relied on for safety (IROFS), and management
measures. These changes, in concert with other NRC and industry efforts
to enhance the use of risk assessment technologies, allow for more
risk-informed inspection and assessment of fuel cycle facility
performance. The inspection program uses as one base, the risk
information from ISAs to provide more emphasis on those systems,
processes, and activities that have higher risk. The procedures
referenced in Appendix B for safety inspections have been revised based
on the revised 10 CFR Part 70.

This inspection program also provides guidance on responding to events
at licensee facilities. Depending on the significance of an event,
additional guidance for determining the level of agency response to an
event is contained in NRC Management Directive (MD) 8.3, AIncident
Investigation Program.@

06.02 [Material Control and Accounting Inspection
Program]{.underline}[]{#__RefHeading___Toc188076876 .anchor}. This
inspection program is described in a separate Inspection Manual Chapter
(IMC). The associated procedures are listed in the MIP.

06.03 [Physical Protection and Transport of Special Nuclear Material
(SNM) Program]{.underline}[]{#__RefHeading___Toc188076877 .anchor}. This
inspection program is described in a separate IMC. The associated
procedures are listed in the MIP.

2600‑07 FUEL CYCLE FACILITY INSPECTION PROGRAM ELEMENTS

[]{#__RefHeading___Toc188076878 .anchor}

07.01 [Program Elements]{.underline}[]{#__RefHeading___Toc188076879
.anchor}. The inspection program described in this IMC is comprised of
the following major program elements:

a\. Core Inspections, including Resident Inspections where applicable.

b\. Plant Specific Reactive Inspections.

c\. Plant Specific Supplemental Inspections.

d\. Generic Safety Issue Inspections.

e\. LPRs.

Inspection procedures identify requirements that the inspectors must
consider while evaluating the associated area. These requirements may
not be the same as NRC requirements placed on a specific licensee. As
such, it is not implied or intended that inspection program requirements
are to be levied on the licensee.

07.02 [Core Inspection
Program]{.underline}[]{#__RefHeading___Toc188076880 .anchor}. This is
the minimum required inspection program appropriate to determine whether
a fuel cycle facility is operating safety and securely in accordance
with regulatory requirements and to identify indications of declining
safety or safeguards performance. Each inspection procedure is complete
when the objectives of that procedure are satisfied. The resource
estimate in each procedure is an estimate for planning purposes; it is
not an expected level of effort. Inspections of different licensees will
require different levels of effort to complete the objectives. The
resource estimate is an estimate of the nominal effort to meet the
objectives. (In some cases, where inspections draw from a suite of
available inspection procedures, rather than a single inspection
procedure, the suite will be considered as a single procedure for
resource planning.) The core inspections for each type of facility are
specified in Tables 1 and 2 of Appendix B.

Resident inspectors are assigned to certain fuel cycle facilities that
require such oversight because of their complexity of operation, risk,
or other significant factors. However, a resident inspector may
occasionally perform inspections other than resident inspections in
coordination with regional management if he/she is qualified to do so.
The resident inspection program is described in more detail in Appendix
C.

07.03 [Plant Specific Reactive
Inspections]{.underline}[]{#__RefHeading___Toc188076881 .anchor}.
Reactive inspections include follow-up for events through supplemental
inspections, Special Inspection Teams (SITs), Augmented Inspection Teams
(AITs), and Incident Investigation Teams (IITs). A graded approach to
reactive inspections is taken depending on the actual or potential
risk-significance of an event or conditions. As more information is
developed during an inspection, management may change the type of
inspection, for example from an AIT to a SIT. In addition to events,
reactive inspections may also be conducted for a significant change in
the conditions involving licensed activities, such as a threatened or
actual strike, a major layoff of plant personnel, or the occurrence (or
pending occurrence) of a natural phenomenon or offsite event.

07.04 [Plant Specific Supplemental
Inspections]{.underline}[]{#__RefHeading___Toc188076882 .anchor}. The
plant specific Supplemental Inspections provide more diagnostic
inspections of identified problems and issues beyond the Core
Inspections. Supplemental Inspections are performed as a result of
performance issues that are identified by Core Inspections, event
analysis, or during the LPR. The depth and breadth of specific
Supplemental Inspections chosen for implementation will depend upon the
risk, safety, or safeguards significance. Supplemental inspections might
also be conducted due to allegations. Depending on the risk significance
and breadth of the identified performance issues, the supplemental
inspections provide a graded response, which includes oversight of the
licensee=s root cause evaluation of the issues, expansion of Core
Inspection reviews to increase depth and/or breadth of review, or a
focused team inspection (as necessary to evaluate extent of condition);
or a broad scope, multi-disciplined team inspection, which would include
inspection of areas that appear to be root cause contributors such as a
Problem Identification and Resolution system. The decision to conduct a
Supplemental Inspection should be made through the assessment process,
as further discussed in Section 8.0, below. For Time and Labor reporting
purposes, supplemental inspections will normally be coded ARegional
Initiative (RI).@

07.05 [Generic Safety Issue
Inspections]{.underline}[]{#__RefHeading___Toc188076883 .anchor}.
Concerns with specific safety issues that arise may be addressed solely
through the NMSS or NSIR review processes and the use of regulatory
communications issued to licensees. Some issues are of such safety
significance that it is appropriate to perform a one‑time inspection
under the safety issues program element. These inspections may be
established by Temporary Instructions (TIs). For example, when it is
determined that a safety issue addressed in a bulletin or generic letter
requires inspection verification or follow-up, requirements and guidance
for the inspection will be developed and issued in a TI. Unless such a
TI is issued, inspection follow-up is not required to verify completion
of licensees= actions discussed in a bulletin or generic letter. The
plants to be inspected will be designated in the TIs.

Specific criteria for closing a TI will be addressed in the TI itself.
In general, TIs should not be closed until all relevant safety issue
items have been completed by the licensee and verified by inspection.
However, exceptions may be considered when the licensee=s schedule for
completing items remaining is acceptable, properly documented, and is
not a critical element to resolving the safety issue.

In addition, the need may arise for specific inspections to address
major evolutions limited to one or a few licensees, such as adding new
process lines or changing the assay of material processed in a facility.
The need for these inspections will also be assessed on a case-by-case
basis, and they can be conducted under the guidance of a TI or by using
existing IPs in a customized inspection plan as Supplemental
Inspections.

07.06 [Licensee Performance Reviews]{.underline}. LPRs are conducted in
accordance with IMC 2604 as part of the overall licensee performance
oversight.

07.07 [Backshift Inspections]{.underline}[]{#__RefHeading___Toc188076885
.anchor}. There is not a specific goal for performing backshift
inspections. Backshift inspections should be performed for operations
and activities that are ongoing on backshift and whenever required to
complete the intended scope of the inspection. (See Appendix C for
resident inspectors backshift guidance.)

07.08 [Inspections During the Construction, Preoperational, and Startup
Phases]{.underline}[]{#__RefHeading___Toc188076886 .anchor}. Inspections
for the startup of new or modified facilities are handled on a
case-by-case basis through the implementation of a project-specific
inspection plan or IMC.

2600-08 PROGRAM IMPLEMENTATION[]{#__RefHeading___Toc188076887 .anchor}

08.01 [Master Inspection
Plan]{.underline}[]{#__RefHeading___Toc188076888 .anchor}. Prior to the
start of each calendar year, a MIP will be developed for each of the
facilities covered by this IMC. The details of inspections within the
MIP will be based on the core inspection program and specific
performance issues from the LPR and ongoing or planned activities at
each facility. Inspections that deviate from the core inspections in
Appendix B will be approved by the Director, FCSS. For each facility,
the MIP will identify all planned inspections to be performed, including
Core, Supplemental, or Generic Safety Issue inspections. The estimated
staff hours to complete each item on the MIP will also be included. Note
that advanced planning for certain activities such as supplemental and
reactive inspections may not be possible.

The MIP shall be maintained by Region II, including all inspections
planned by the regional and Headquarters inspection staffs. These
inspections will be coordinated to ensure that: (1) inspections are
performed as defined in Appendix B, or modified in writing in accordance
with this chapter; (2) inspections do not overlap (i.e., multiple
inspections conducted at the same time) such that they cause undue
adverse impacts on normal operations at the facility; and (3) major fuel
facility inspection program activities, such as LPRs, can be scheduled
with minimum interruption of scheduled inspections. Any inspections that
are not to be conducted with the periodicity in Appendix B, must be
addressed as a change in the MIP (see Section 08.03, below).

Inspections normally should be announced, with adequate advance notice
given to the licensee to ensure that appropriate licensee personnel can
be made available and inspectors can arrange periodically to observe
certain activities not conducted on a routine basis. However, inspection
staffs retain the prerogative to conduct inspections on an unannounced
basis where appropriate. Resident inspections for those sites with an
assigned resident inspector are considered unannounced.

08.02 [Establishment of the Core Inspection
Program]{.underline}[]{#__RefHeading___Toc188076889 .anchor}. The annual
core inspection program for a specific facility is complete when the
inspections in Appendix B are completed for that facility. The Agency=s
ability to assess the adequacy of facility performance is the
controlling factor in determining the inspection effort necessary to
complete the Core Inspections. Appendix B provides an estimate of the
hours associated with each inspection procedure for overall resource
planning only.

a\. The Core Inspection procedures are contained in Table 1 of Appendix
B. The inspection effort is expressed for five different facility types:

1\. Category I Fuel Fabrication Facilities.

2\. Category III Uranium Fuel Fabrication Facilities.

3\. Category III Uranium Fuel Assembly Facilities.

4\. Uranium Conversion Facilities.

5\. Gaseous Diffusion Plants.

b\. Appendix B shows a list of IPs required to be used in the Core Fuel
Cycle Facility Inspection Program. They are grouped by Functional and
Program Area, as described in NRC IMC 2604.

c\. For the Physical Protection and MC&A Program areas, inspectors
select the appropriate procedures to use from a set, or suite, of
procedures, rather than use a single procedure. In these cases, the
specification of a Core Inspection pertains to use of the multiple
procedures in the aggregate (i.e., the entire procedure suite).

08.03 [Program Adjustments]{.underline}[]{#__RefHeading___Toc188076890
.anchor}. The program provides NMSS and Region II flexibility to adjust
the frequencies, focus, and intensiveness of inspections for different
functional areas at facilities. Periodic adjustments will be based on
the LPR results, taking into account the complexity, risk level, and
previous operating history of the facility. Occasional adjustments may
also occur in response to other events or activities as determined by
the responsible regional or Headquarters management. These adjustments
should be coordinated between the Regional and Headquarters Branch
Chiefs and documented in a memorandum. If the change impacts the
approved MIP, then the change must be approved by the Director, FCSS,
and the Director, Regional Inspection Division, or their designee. Minor
adjustments involving the exact timing of an inspection within the
calendar year, may be performed at the discretion of line management. It
is the intent of the program that line management use the built-in
flexibility to make the most effective and efficient use of NRC
resources to address changes in plant status and licensee operations.

A reasonable allowance for responding to events or special licensee
activities should normally be included in resource planning. In some
cases, necessary adjustments may be difficult to implement within the
constraints imposed by limited inspection resources. In such cases,
implementation may involve a shift in the focus of already scheduled
inspection resources for the subject facility, or a shift in allocated
inspection resources from other facilities that are not exhibiting
performance problems. Changes in inspections at a facility that will
reduce the planned inspections below that of the MIP must be approved by
the MIP change process with appropriate management approvals.

2600‑09 EVENT REVIEW AND RESPONSE[]{#__RefHeading___Toc188076891
.anchor}

Region II is responsible for determining the seriousness of reported
events and whether an immediate reactive inspection is necessary. This
determination is performed in coordination with NMSS and, when
appropriate, NSIR.

Non‑reportable events are those events which fall outside of the NRC=s
reporting criteria. Although these events are not reported formally to
NRC, licensees occasionally contact NRC staff informally to describe the
event. Licensees are often required, through license or certificate
conditions, to maintain records of off-normal events onsite. Inspections
should examine non‑reportable events, and associated licensee responses,
for the particular program area being inspected in order to obtain a
perspective on emerging problems or declining performance. It is not the
intent of inspections that inspectors issue violations for items
identified by a licensee=s off-normal event or problem identification
and resolution system if the licensee has taken or is taking appropriate
corrective actions. As noted in IMC 0610, licensee identified issues in
the licensee=s problem identification and resolution system need not be
documented in inspection reports unless there is an overriding safety
issue or potential generic issue important to safety. Technical details
of the issue may provide useful insight on equipment or system
reliability, or on some aspect of human performance.

The agency=s response to significant events is described in NRC MD 8.3,
ANRC Incident Response Program.@

2600-10 PLANNING FOR INSPECTIONS[]{#__RefHeading___Toc188076892 .anchor}

Prior to conducting an inspection, the inspectors shall prepare an
inspection plan. The inspector will do sufficient coordination to
identify commitments contained in CALs or confirmatory orders. As a
minimum, the inspection plan should state the facility to be inspected
(including docket number and report number); the dates of the
inspection; names of inspectors conducting the inspection; what
procedures or suites of procedures will be used; the events, open items,
orders, or any special issues that will be reviewed as part of the
inspection; and should include an approval block showing that the plan
was approved by the cognizant supervisor.

2600-11 CONDUCTING INSPECTIONS[]{#__RefHeading___Toc188076893 .anchor}

11.01 [Management Entrance and Exit
Meetings]{.underline}[]{#__RefHeading___Toc188076894 .anchor}.
Inspectors are required to meet with licensee management as part of
every inspection. An example outline for an entrance and exit meeting is
shown in Appendix D. Inspectors should hold an entrance meeting with the
senior licensee representative who has responsibility for the areas to
be inspected. At the conclusion of an inspection, inspectors must
discuss their preliminary findings with the licensee=s management at a
scheduled exit meeting. \[Note: potential safety-significant or
enforcement findings should be promptly communicated to the licensee so
that appropriate corrective actions or compensatory measures can be
initiated.\] Management entrance and exit meetings with licensee
personnel should be scheduled to have the minimum impact on other
licensee activities necessary to assure the safe operation of the
facility.

Time spent on scheduled and periodic entrance and exit meetings
(including preparing for the meetings) is considered inspection time and
should be divided among the procedures being performed for the entire
inspection. Daily communications with licensee management are considered
to be an integral part of every inspection procedure and the time used
for such routine communications should be charged to the inspection
procedures used.

Communicating inspection observations is also an integral and important
part of every inspection, whether done daily during the course of an
inspection, or periodically with status meetings. Many licensees have
expressed the desire to hear inspectors insights related to
safety/regulatory performance even in instances where they do not reach
the threshold for documentation in an inspection report, such as minor
violations (see IMC 0610). When deciding which observations and insights
to pass on to the licensee, inspectors should consider the following:

a\. Inspectors should share the same insights with their regional
managers and the senior resident inspector.

b\. The insights must relate to areas within NRC=s jurisdiction and
responsibilities.

c\. Comments should be objective and supported with examples when
possible. Avoid generalizations such as Aprocedure adherence was good.@
Instead, just state the objective facts: AProcedures were followed in
each case we observed.@ Negative observations or insights must be
supported with specific examples.

d\. Inspectors should not express an expectation for actions taken by
licensee managers. The inspectors may comment on whether or not the
actions comply with NRC requirements.

e\. Inspectors should determine before the exit if the licensee wants to
hear the observations and insights at the exit meeting. If the licensee
does not want the observations or insights at the exit meeting, the
inspectors should not discuss them.

f\. Inspectors must avoid Aconsulting@ for the licensee and not advise
them on how to improve draft documents or in-process work, or pass on to
licensees how others do the same thing.

11.02 [Findings Related to Non-NRC
Regulations]{.underline}[]{#__RefHeading___Toc188076895 .anchor}.
Inspections might uncover safety issues or other problems outside the
scope of NRC regulatory authority. These should be described to the
inspector=s management and conveyed to the licensee. In cases where the
hazard is corrected before the end of the inspection, no further action
is required (see IMC 1007, AInterfacing Activities Between Regional
Offices of NRC and OSHA@). In all cases where the finding involves a
potential effect on the safety of radioactive material, the inspector
should ask what actions the licensee plans to take. Findings of safety
issues that could impact the safety of radioactive materials shall be
reviewed during subsequent inspections until the licensee has addressed
the concern. However, special follow-up inspections solely on the basis
of an Occupational Safety and Health Administration (OSHA) issue are not
required unless the potential hazard also directly involves radiological
health or safety. Findings involving occupational risk, that do not
affect the safety of radioactive materials, will be identified to the
licensee and processed in accordance with IMC 1007.

11.03 [Performance-based Inspection
Focus]{.underline}[]{#__RefHeading___Toc188076896 .anchor}. Inspectors
should focus their attention on activities important to safety using a
performance-based, risk-informed approach. Performance-based inspection
emphasizes observing activities and the results of licensee programs
over reviewing procedures or records. For example, an inspector might
identify an issue through observing a plant activity in progress,
monitoring equipment performance, or the in-plant results of an activity
(e.g., an engineering calculation), and then let the observed
discrepancy or uncertainty lead to evaluation of other associated areas.
Discussions with plant personnel and reviewing documents should be used
to enhance or verify performance-based observations. These procedures
are designed to emphasize observation of activities, or those portions
that are most risk-significant in terms of safety and reliability.

Potential risk-significant inspection findings and regulatory
non-compliances will be handled in accordance with the AGeneral
Statement of Policy and Procedures for NRC Enforcement
Actions-Enforcement Policy.@ Findings not covered by the current license
or certificate will be forwarded to the appropriate NRC licensing branch
for resolution.

11.04 [Third Party
Assistance]{.underline}[]{#__RefHeading___Toc188076897 .anchor}. On
occasion licensees ask inspectors for recommendations for obtaining help
solving programmatic problems. Inspectors are prohibited from
recommending the services of individuals or organizations for a project
under NRC regulatory jurisdiction. Providing such a recommendation
violates 5 CFR 2635.702, which prohibits Federal employees from using
public office for endorsement of any product, service, or enterprise.
For further information refer to the Executive Director for Operations=
(EDOs=) Field Policy Manual No. 19, AGuidance for Recommending Third
Party Assistance to Licensees.@

11.05 [Findings Outside of Inspector=s
Qualifications]{.underline}[]{#__RefHeading___Toc188076898 .anchor}.
Inspectors sometimes identify issues or violations outside of the
inspector=s qualifications or expertise. In these cases the inspector is
responsible for (1) determining if an immediate threat to public or
worker health or safety exists, and if one does exist to notify licensee
management immediately, and (2) determining if the issue is better
addressed by an inspector with different qualifications. Inspectors may
follow issues outside of their qualifications or expertise with the
concurrence of an NRC manager responsible for the area associated with
the issue and the inspector=s supervisor.

The inspector=s time associated with the issue is charged to the
baseline procedure that best corresponds to the issue.

11.06 [Inspection
Documentation]{.underline}[]{#__RefHeading___Toc188076899 .anchor}.
Inspections shall be documented in accordance with the requirements of
IMC 0610.

11.07 [Independent Inspection
Effort]{.underline}[]{#__RefHeading___Toc188076900 .anchor}. As a
general rule, inspections should be conducted in accordance with
inspection procedures. However, it is not possible to anticipate all the
unique circumstances that might be encountered during the course of a
particular inspection and, therefore, individual inspectors are expected
to exercise initiative in conducting inspections, based on their
expertise and experience and risk insights, as needed to assure that all
the inspection objectives are met.

11.08 [Open Item Guidance]{.underline}[]{#__RefHeading___Toc188076901
.anchor}. Inspection findings can be tracked as one of the following
types of Open Items:

**IFI:** An Inspector Follow-up Item (IFI) is a potential safety issue
that is not a violation, non-conformance or deviation that requires
further inspection because specific licensee action is pending or
additional information is needed that was not available during the
inspection. An IFI should clearly identify the action being taken. An
inspector should only open an IFI if further NRC inspection is warranted
and the issue was evaluated and discussed with management for safety
significance. IFIs should be closed after the licensee has completed the
necessary actions to address the issue. The inspector who opens an IFI
should make every effort to obtain the needed information through either
a telephone conference with the licensee following the inspection or by
having another specialist inspector review the issue in a subsequent
inspection. If the item can be closed out as a result of a telephone
conference with the licensee, the inspector should provide a feeder
report for inclusion in the next inspection report at the facility
(Resident Inspector, Regional or Headquarters inspection).

**URI**: An Unresolved Item (URI) involves an issue that requires more
information to determine whether a violation has occurred. Because each
URI is a potential safety issue, every effort must be made to obtain the
required information. As such, the inspector should identify what
information is required to close the URI to the licensee at the exit
meeting and a schedule for obtaining that information should be
obtained. Additionally, the inspector should obtain the licensee=s
rationale for why the process is safe prior to leaving the site (e.g., a
compensatory measure is in place, the equipment is shut down, etc.).

**NOV**: A Notice of Violation (NOV) is a citation of non-compliance
with NRC requirements and is tracked when needed to assure proper
corrective actions. Items to be reviewed should include the root cause,
short and long term corrective actions. As with URIs, the inspector
should not leave the site until understanding why the process is safe at
that time. NOVs should be closed out upon verification that the licensee
has implemented the corrective actions that the licensee committed to
perform in the licensee=s response to the NOV as soon as practicable
after the date when implementation is scheduled to be complete.

**DEV**: A Deviation (DEV) is a licensee=s failure to satisfy a written
commitment or conform to the provisions of code, standard, guide, or
accepted industry practice when the code, standard, guide, or practice
involved has not been made a legally binding requirement by the
Commission, but is expected to be implemented. Examples of licensee=s
commitments include responses to bulletins, generic letters, or 10 CFR
70.22(d) requests. These items should be handled in the same manner as a
URI.

Open items will be entered in the item tracking system. Closeout of
items is the responsibility of the organization that opened them or by
another organization by agreement between management of those
organizations. If closure occurs in an inspection report issued by
another organization, it remains the responsibility of the issuing
organization to ensure that the item is closed in a timely manner in the
item tracking system.

2600-12 ASSESSING FACILITY PERFORMANCE[]{#__RefHeading___Toc188076902
.anchor}

12.01 [Licensee Performance Review
(LPR)]{.underline}[]{#__RefHeading___Toc188076903 .anchor}. LPRs are
conducted in accordance with IMC 2604 as part of the overall licensee
holder performance oversight.

12.02 [Agency Action Review Meeting
(AARM)]{.underline}[]{#__RefHeading___Toc188076904 .anchor}. The
information and performance assessments arising from the inspection
program should be the primary inputs to management discussions in
preparation for the annual AARM, which are conducted per MD 8.14.

12.03 [Ongoing Assessments of Facility
Performance]{.underline}[]{#__RefHeading___Toc188076905 .anchor}. NRC
inspectors perform a basic mission in determining whether a licensee
operates the facility safely and meets current regulatory requirements.
Limiting inspection to identification of specific instances where a
licensee fails to meet such requirements and commitments could result in
correction of symptoms rather than correction of underlying causes of
licensee problems. Thus, the inspection program requires that inspectors
and their managers evaluate problems to determine if follow-up
inspections are necessary to diagnose whether a safety concern
represents an isolated case or may signify a broader, more serious
problem based on the evaluated significance of the issues

2600-13 ASSESSING PROGRAM IMPLEMENTATION[]{#__RefHeading___Toc188076906
.anchor}

The program office expects the regions and inspectors to identify
problems in implementing the fuel cycle facility inspection program, and
to recommend changes to the program for consideration by the program
office. Any such feedback and recommendations should be submitted to
NMSS.

END

Attachments: Appendix A Guidance for Conducting Fuel Cycle Inspections

> Appendix B Core Inspection Requirements
>
> Appendix C Fuel Cycle Resident Inspection Program
>
> Appendix D Fuel Cycle Facility Inspection Planning

[ATTACHMENT 1]{.underline}

Revision History for IMC 2600

+--------+--------+----------------------+-----+---------+-------------+
| Comm   | Issue  | Description of       | Tr  | T       | Comment     |
| itment | Date   | Change               | ain | raining | Resolution  |
| Tr     |        |                      | ing | Com     | Accession   |
| acking |        |                      | Nee | pletion | Number      |
| Number |        |                      | ded | Date    |             |
+--------+--------+----------------------+-----+---------+-------------+
| N/A    | 04     | Revised to           | N   | N/A     | ML070190069 |
|        | /26/07 | incorporate the new  | one |         |             |
|        |        | inspection           |     |         |             |
|        | CN-    | procedures developed |     |         |             |
|        | 07-014 | to address changes   |     |         |             |
|        |        | to 10 CFR Part 70    |     |         |             |
|        |        | and to reflect       |     |         |             |
|        |        | enhancements made to |     |         |             |
|        |        | the fuel facility    |     |         |             |
|        |        | inspection program.  |     |         |             |
+--------+--------+----------------------+-----+---------+-------------+
| N/A    | 08     | Remove AOFFICIAL USE | N   | N/A     | ML072080010 |
|        | /15/07 | ONLY - SENSITIVE     | one |         |             |
|        |        | INTERNAL             |     |         |             |
|        | CN     | INFORMATION@         |     |         |             |
|        | 07-025 | designation from     |     |         |             |
|        |        | entire manual        |     |         |             |
|        |        | chapter to make      |     |         |             |
|        |        | publicly available.  |     |         |             |
+--------+--------+----------------------+-----+---------+-------------+
| N/A    | 03     | Revised to           | N   | N/A     | N/A         |
|        | /21/08 | incorporate          | one |         |             |
|        |        | direction regarding  |     |         |             |
|        | CN     | follow-up of issues  |     |         |             |
|        | 08-011 | related to           |     |         |             |
|        |        | confirmatory orders. |     |         |             |
+--------+--------+----------------------+-----+---------+-------------+
|        |        |                      |     |         |             |
+--------+--------+----------------------+-----+---------+-------------+