**\[DNFSB LETTERHEAD\]**

September 14, 2005

The Honorable J. Clay Sell

Deputy Secretary of Energy

1000 Independence Avenue, SW

Washington, DC 20.585-1000

Dear Mr. Sell:

The Defense Nuclear Facilities Safety Board (Board) has noted some
instances of reduced rigor in the selection of readiness review
processes for defense nuclear facilities. Such reduced rigor also
affects the application of design requirements and preparation of safety
documents. One cause for this situation appears to be inconsistent
interpretation and implementation of rules and orders that apply to new
Hazard Category 1, 2, and 3 nuclear facilities and major modifications
to existing nuclear facilities. In the cases noted by the Board, some
sites have used nonconservative interpretations that can lead to less
vigorous readiness reviews and omission of required Department of Energy
(DOE) reviews of design and safety documentation.

The Board recently conducted a detailed review of both DOE and
contractor procedures at several sites to assess the implementation of
the requirements of DOE Order 425.1C, *Startup and Restart of Nuclear
Facilities*. In the course of this review, the Board noted that some
requirements have been misinterpreted. Of particular concern is a
practice whereby new Hazard Category 2 nuclear facilities have been
considered to be modifications instead of new facilities. In some cases,
the new facilities have even been considered less-than-substantial
modifications. This determination leads to a less rigorous readiness
review for the facility (e.g., a contractor Readiness Assessment instead
of an Operational Readiness Review). This determination can also lead to
the omission of nuclear safety requirements in Title 10, Code of Federal
Regulations, Part 830 (10 CFR 830), *Nuclear Safety Management*, Subpart
B, "Safety Basis Requirements," and design requirements in DOE Order
420.1A, *Facility Safety*.

The misinterpretation hinges primarily on the definition of a "new
Hazard Category 1, 2, or 3 nuclear facility," as discussed in all three
directives. A closely related shortcoming stems from nonconservative
interpretations of what constitutes a "substantial process, system, or
facility modification" (from DOE Order 425.1C), a "major modification .
. . that substantially changes the existing safety basis" (from 10 CFR
830), and a modification that "significantly degrades the approved
safety basis for the facility" (from DOE Order 420.1A).

Regarding shortcomings in selecting the proper readiness review, the
Board has noted similar difficulties in the past, as discussed in a
letter dated August 26, 1999. Although DOE and its contractors took some
corrective actions in response, it is apparent that additional problems
have surfaced.

Detailed observations are presented in the enclosed report. The Board
believes DOE needs to take prompt action to address the inconsistent
implementation of requirements related to startups, restarts, safety
basis documents, and facility design. Therefore, pursuant to 42 U.S.C. §
2286b(d), the Board requests a report from DOE within 90 days of receipt
of this letter on the following issues:

-   The adequacy of local DOE and contractor implementation procedures
    for DOE Order 420.1A, DOE Order 425.1C, and 10 CFR 830, Subpart B,
    with particular focus on the definition of a "new Hazard Category 1,
    2, or 3 nuclear facility," and "substantial modification."

-   The actions necessary to ensure that any deficient site procedures
    are corrected and that site contractors appropriately apply design
    requirements, develop Preliminary Documented Safety Analyses, and
    perform Operational Readiness Reviews for new Hazard Category 1, 2,
    and 3 nuclear facilities as required.

-   The need for revision or clarification of the definition of a "new
    Hazard Category 1, 2, or 3 nuclear facility" and/or "substantial
    modification" within the DOE directives system.

If you have any questions on these matters, please contact me.

Sincerely,

***A. J. Eggenberger***

***Chairman***

c: The Honorable Linton F. Brooks

Mr. Thomas P. D'Agostino

Mr. James Rispoli

Mr. Jeffrey M. Allison

Mr. Keith A. Klein

Mr. Mark B. Whitaker, Jr.

Enclosure

**DEFENSE NUCLEAR FACILITIES SAFETY BOARD**

**Staff Issue Report**

July 18, 2005

MEMORANDUM FOR: J. K. Fortenberry, Technical Director

COPIES: Board Members

FROM: D. G. Ogg

SUBJECT: Requirements for New Nuclear Facilities and Major Modifications

The staff of the Defense Nuclear Facilities Safety Board (Board) has
noted some instances in which contractor personnel have been
inconsistent in applying the definitions of a "new nuclear facility" and
a "substantial modification" to an existing nuclear facility or process.
The definitions of these terms directly affect three aspects of nuclear
facility safety: determination of the level of startup review,
determination of the formality of the safety basis, and application of
formal design requirements.

**Level of Startup Review.** The Department of Energy (DOE) Order
425.1C, *Startup and Restart of Nuclear Facilities,* Attachment 1,
*Contractor Requirements Document*, contains a straightforward
requirement \[4.a.( l)(a)\] that contractors conduct an Operational
Readiness Review (ORR) for the initial startup of a new Hazard Category
1, 2, or 3 nuclear facility.

DOE Order 425.1C and accompanying DOE Standard 3006-2000, *Planning and
Conduct of Operational Readiness Reviews*, define nuclear facilities as
"activities or operations that involve radioactive and/or fissionable
materials in such form and quantity that a nuclear hazard potentially
exists to the employees or the general public". Although the requirement
to perform an ORR is straightforward, certain contractors have applied
an interpretation that allows a new nuclear facility to be considered a
modification to an existing process, system, or facility, and in extreme
cases, a less-than-substantial modification. If a new nuclear facility
is determined to be a less-than-substantial modification, contractor
personnel may then choose a form of readiness determination that is less
rigorous than an ORR.

*Example 1*―At the Savannah River Site, both DOE and contractor
procedures contain guidance that contributes to an interpretation of the
startup requirements that is less than conservative. The Westinghouse
Savannah River Company (WSRC) 12 Q Manual, *Assessment Manual*, does not
adequately define a new facility to distinguish it from a modification,
nor does it explicitly require an ORR for a "new Hazard Category 1, 2,
or 3 nuclear facility" as defined in DOE Order 425.1C. Instead, the
procedure provides general guidance in an attachment. Although the
guidance addresses new nuclear facilities, it does not require project
managers to choose an ORR as the review process for these new
facilities. In some cases, project managers have recommended lesser
startup reviews (e.g., Readiness Assessments).

In contrast, contractors at several other sites have implemented
procedures or screening checklists that are not merely provided as
guidance, but are required for determining the level of startup review.
The first question in these screening checklists is: "Does the activity
require the startup of a new Hazard Category 2 or 3 system, process or
operation?" A positive answer to this question requires that an ORR be
conducted; no further screening is required. As an example, the Y-12
National Security Complex (Y-12) checklist, UCN-2 1058, Review Level
Determination, employs this approach. The Board's staff believes this is
a proper means of implementing the requirements of DOE Order 425.1C
relative to new facility startups.

When making a readiness determination, WSRC managers are allowed under
their procedure to consider whether a new facility or activity can be
categorized as a "substantial facility modification". In a note within
the WSRC procedure, "substantial modification" is defined as follows:

> Substantial modification shall normally be defined as changes that
> modify the fundamental process, increases \[sic\] the bounding risk
> already approved by DOE for the activity, or exceeds \[sic\] \$100M in
> costs (major project). For determination of increased risk, no new
> controls (engineered and administrative) shall be included in the new
> accident evaluation unless the control strategy is extremely
> simplistic or nearly identical to already existing controls.

This definition also exists in the local DOE site procedure, SRIP
\[Savannah River Implementing Procedure\] 400, Chapter 425.1, *Nuclear
Facility Startup Approval Process*. By applying this definition, site
personnel may conclude that a new nuclear facility or activity is not a
new facility but a modification. Furthermore, they may conclude that the
new facility or activity is not even a substantial modification to a
nuclear facility.

The WSRC startup procedure and definition of "substantial modification"
are problematic in two areas:

-   In DOE Order 425.1C, Section 4.a.(l)(e) applies to the "restart of
    hazard category 1 and 2 nuclear facilities after substantial
    process, system, or facility modifications". However, WSRC is
    applying the definition to new activities or facilities for which
    "restart" is not applicable. The proper determination from the Order
    is to conduct an ORR for the initial startup of a new Hazard
    Category 1, 2, or 3 nuclear facility.

-   The WSRC procedure introduces the use of cost as a measure for
    applying safety requirements. DOE Order 425.1C does not recognize
    the cost of a project as having any bearing on the hazard it poses.

The Board's staff notes that this definition of a substantial
modification exists, verbatim, in procedure Y15-190, *Readiness Manual*,
at the Y-12 National Security Complex (Y-12), and believes it ought to
be removed or modified at both the Savannah River Site and Y-12. It
appears, however, that this definition may not directly affect the
readiness determination process at Y-12 because it is included as
general guidance in Y-12's *Readiness Manual*. The *Readiness Manual*
refers facility managers to the checklist, UCN-21058, *Review Level
Determination*, which properly directs that an ORR be selected for the
restart of Hazard Category 2 nuclear facilities after substantial
modifications.

*Example 2*―At the Hanford Site, guidance on startup readiness provided
in Fluor-

Hanford procedures provides ambiguous direction concerning readiness
reviews. Procedure HNF-PRO-055, *Startup Readiness*, contains
instructions to contractor personnel for preparing a facility or
activity for startup. In Section 4, which includes the citation of DOE
requirements, and in Appendix A, "ORR and RA \[Readiness Assessment\]
Requirements Table," the procedure correctly identifies the requirement
to conduct an ORR for the initial startup of a new nuclear facility and
for restart following substantial modifications. However, in Section
5.1, *Startup Review Determination*, the procedure provides conflicting
guidance. This section gives project personnel step-by-step instructions
for making a determination regarding the level of readiness review
necessary for a new or modified nuclear facility or activity. Here,
project managers are given an option not recognized by DOE Order 425.1C.
The procedure states:

> Implementation of a safety basis change that supports an activity
> determined to be subject to a Readiness Assessment or Operational
> Readiness Review may be excluded from startup review when using the
> implementation validation review (IVR) process of HNF-PRO-8317,
> *Safety Basis Implementation and Maintenance*. In this case, the IVR
> process incorporates the rigor, scope, and requirements of this
> procedure to validate the safety basis changes. When properly
> performed, the IVR process may allow a subsequent readiness assessment
> be \[sic\] performed in lieu of an operational readiness review at the
> time an activity is to commence.

This guidance appears to be intended to apply to implementation of
changes to the safety basis, but in practice has been used by project
managers at the Hanford Site to recommend an IVR followed by a
contractor Readiness Assessment, in lieu of an ORR, for the startup of a
new Hazard Category 2 nuclear activity. For example, this approach was
recommended for the Hose-in-Hose Transfer Line at the K-Basin Closure
Project―a new Hazard Category 2 activity with new hazards, new
safety-significant equipment, and new Technical Safety Requirements.

In the example cited, the DOE Richland Operations Office did not accept
the contractor's recommendation and directed the contractor to conduct
an ORR. However, the Board's staff believes that the contractor
procedure allowing the alternative approach is inappropriate.

*Staff Observations*―The staff believes the intent of DOE Order 425.1C
is clear―that the formality and thoroughness of an ORR are required for
new Hazard Category 1, 2, and 3 nuclear facilities and for substantial
process, system, or facility modifications. Although contractors
sometimes conduct a Readiness Assessment with a rigor approaching that
of an ORR, more often they apply a much less rigorous approach. The many
differences in requirements for an ORR and a Readiness Assessment,
particularly the required breadth of an ORR, are detailed in DOE Order
425.1C and DOE Standard 3006-2000. Because of inconsistent
interpretations at some sites, the staff believes DOE may need to
clarify what is meant by a "new nuclear facility" and a "major
modification" so as to facilitate a more consistent application of the
DOE requirements.

**Formality of the Safety Basis.** The staff reviewed site procedures
used to implement the requirements of Title 10, Code of Federal
Regulations, Part 830 (10 CFR 830), *Nuclear Safety Management*, Subpart
B, "Safety Basis Requirements". At nearly all sites, the implementing
procedures properly cite the definition of a "major modification" as one
that would substantially change the existing safety basis of a facility.
The site procedures direct that a Preliminary Documented Safety Analysis
(PDSA) be developed for such modifications. At some sites, the
procedures recognize that there may need to be some discussion regarding
what constitutes a "major modification," and in these cases, the
procedure directs the contractor to consult with the DOE/National
Nuclear Security Administration startup authority.

At some sites, however, a "facility" is considered to comprise many
buildings, activities, and operations in a large geographic area. The
safety basis for each of these groupings consists of one DSA. In
practice, when a new building or activity is proposed, project managers
do not consider the new building or activity a "new nuclear facility,"
but instead screen it to determine whether it is a major or a minor
modification. In some cases, project managers determine that a new
building or activity is a minor modification and therefore does not meet
the requirement for development of a PDSA. Instead, they may direct site
analysts to use a less-formal safety basis, such as a Consolidated
Hazards Analysis.

When contractor analysts develop a safety basis that is less rigorous
than a PDSA, they may omit many of the requirements of 10 CFR 830,
Subpart B, including the following:

-   Section 830.206, "Preliminary Documented Safety Analyses," which
    states that the contractor must obtain DOE approval of the PDSA
    before the contractor can procure materials or components or begin
    construction (with some exceptions).

-   Section 830.207, "DOE Approval of the Safety Basis," which requires
    DOE to review and approve the safety basis and issue a safety
    evaluation report prior to operation of the new facility or
    modification.

-   Appendix A, Section F, "Documented Safety Analysis," which
    elaborates that by issuing a PDSA, the contractor can ensure that
    substantial costs and time are not wasted in constructing a nuclear
    facility that will not be acceptable to DOE.

**Design Requirements.** Although the staff did not review site-specific
guidance pertaining to facility design, the same issue regarding the
definitions of new facilities and major modifications applies in the
design arena as well. DOE Order 420.1A, Facility Safety, stipulates that
the contractor must follow the requirements of the Order for the "design
and construction of new DOE nuclear facilities and of modifications to
existing DOE Hazard Category 1, 2, and 3 non-reactor nuclear facilities
when the proposed modifications significantly degrades \[sic\] the
approved safety basis for the facility". The design requirements of DOE
Order 420.1A are usually more stringent than the requirements to which
the existing facilities were built. Consequently, building a new
facility (or a major modification to an existing facility) using the old
design requirements would not meet DOE's safety expectations. The staff
believes it would be appropriate for DOE managers to review site
procedures used to implement these requirements to ensure that the
definitions and interpretations of "new facility" and "modification" are
properly applied.