August 2, 2002

Mr. Ronald A. Milner, Chief Operating Officer

Office of Civilian Radioactive Waste Management

U.S. Department of Energy

1000 Independence Avenue, SW

Washington, DC 20585

SUBJECT: U.S. NUCLEAR REGULATORY COMMISSION’S OBSERVATION AUDIT 

REPORT NO. OAR-02-08, “OBSERVATION AUDIT OF THE BECHTEL SAIC 

COMPANY, LLC, AUDIT NO. BSC-02-028 OF THE GENERAL ELECTRIC 

GLOBAL RESEARCH AND DEVELOPMENT CENTER”

Dear Mr. Milner:

I am transmitting the U.S. Nuclear Regulatory Commission’s (NRC’s) Observation Audit Report

No. OAR-02-08. It is on the U.S. Department of Energy’s (DOE’s), Office of Civilian Radioactive

Waste Management (OCRWM), Management and Operating Contractor, Bechtel SAIC

Company, LLC (BSC), Quality Assurance (QA) supplier audit of the General Electric Global

Research and Development Center (GE Research), Schenectady, New York. This audit was

conducted on June 25–26, 2002.

The purpose of this audit was to evaluate the effectiveness of the GE Research QA Program

implementation, as delineated in the BSC procurement documents and technical services

statement of work. 

The scope of the audit included evaluating the implementation of the GE Research QA

Program, associated QA Administrative Procedures, and technical test instructions, as applied

to the stress-corrosion-crack growth rate and associated studies.

The NRC observers (observers) determined that the BSC audit was effective in identifying

potential deficiencies and recommending improvements for the reviewed GE Research

activities. During the conduct of the audit, both the BSC audit team (audit team) and the

observers reviewed applicable documents, procedures, and activities within the audit’s scope.

The audit team identified two potential quality observations in the areas of: (1) procurement,

and (2) measuring and test equipment controls. The observers noted that the BSC audit was

well-planned, thorough, and adequately evaluated the GE Research QA activities.

The observers agreed with the audit team’s conclusions, findings, and recommendations

presented at the audit exit meeting. The staff will continue to interface with OCRWM and follow

the progress GE Research is making to address the issues identified during this audit.
R. Milner -2-

A written response to this letter and the enclosed report is not required. If you have any

questions, please contact Ted Carter of my staff at 301-415-6684.

Sincerely,

/RA/

Janet Schlueter, Chief

High-Level Waste Branch

Division of Waste Management

Office of Nuclear Material Safety

 and Safeguards

Enclosure: “NRC Observation Audit Report No. OAR–02–08, 

 ‘Observation Audit of the Bechtel SAIC Company, 

 LLC Audit No. BSC–SA–02–028 of General Electric 

 Global Research and Development Center’ ”

cc: See attached list
R. Milner -2-

A written response to this letter and the enclosed report is not required. If you have any

questions, please contact Ted Carter of my staff at 301-415-6684.

Sincerely,

/RA/

Janet Schlueter, Chief

High-Level Waste Branch

Division of Waste Management

Office of Nuclear Material Safety

 and Safeguards

Enclosure: “NRC Observation Audit Report No. OAR–02–08, 

 ‘Observation Audit of the Bechtel SAIC Company, 

 LLC Audit No. BSC–SA–02–028 of General Electric 

 Global Research and Development Center’ ”

cc: See attached list

DISTRIBUTION: 

File Center HLWBr/f DWM r/f ACNW PUBLIC OSRs

LSN CNWRA CWReamer JSchlueter KStablein DBrooks

CTrottier SWastler BSpitzberg WMaier, RIV LChandler DDambly

MYoung DHiggs LCampbell BMabrito TTrbovich TCarter

MEhnstrom JParrott TAhn

DOCUMENT NAME: S:\DWM\HLWB\THC\OARreport.wpd 

ADAMS Accession No.

OFC HLWB Tech Ed HLWB HLWB 

NAME TCarter EKraus KStablein JSchlueter

DATE 08/01/02 08/01/02 08/01/02 08/02/02

OFFICIAL RECORD COPY 
Enclosure

U.S. NUCLEAR REGULATORY COMMISSION

OBSERVATION AUDIT REPORT NO. OAR–02–08,

“OBSERVATION AUDIT OF THE

BECHTEL SAIC COMPANY, LLC,

AUDIT NO. BSC–SA–02–028 OF THE GENERAL ELECTRIC

GLOBAL RESEARCH AND DEVELOPMENT CENTER”

 /RA 08/01/02 /RA/ 07/29/02

Tamara E. Bloomer Thomas C. Trbovich

Projects and Engineering Section Center for Nuclear Waste

High-Level Waste Branch Regulatory Analyses

Division of Waste Management

Reviewed and Approved by:

 /RA/ 08/01/02

N. King Stablein, Chief

Projects and Engineering Section

High-Level Waste Branch

Division of Waste Management
1

1.0 INTRODUCTION

1.1 General Electric Global Research and Development Center Background

The current “Technical Services Statement of Work for GE Global Research and Development

Center,” Revision 02, January 23, 2001, describes experiments to measure stress-corrosioncrack initiation and growth rates under conditions that are both relevant and most likely to

induce stress-corrosion cracking and to characterize the passive film characteristics and

stability of Alloy 22 and titanium grade 7 materials. Three quality affecting tasks are involved:

(1) Crack-Growth-Rate Studies, (2) Stress-Corrosion-Crack-Lifing Studies, and (3) Passive Film

Characteristics and Long-Term Stability studies.

1.2 Audit Performance

Staff from the U.S. Nuclear Regulatory Commission (NRC), Division of Waste Management,

and the Center for Nuclear Waste Regulatory Analyses (CNWRA) observed the Bechtel SAIC,

LLC (BSC) audit of the implementation of the General Electric Global Research (GE Research)

Quality Assurance (QA) Program, Corrosion Program Revision 1.1, dated December 20, 1996,

as applicable to the testing activities being conducted. The audit was conducted on

June 25–26, 2002, at the GE Research Laboratories, Schenectady, New York. 

The purpose of this audit was to measure the effectiveness of the GE Research QA Program

implementation as delineated in the BSC procurement documents and the technical services

statement of work. The scope of the audit included evaluating the implementation of the GE

Research QA Program and associated QA Administrative Procedures (QAAPs) and technical

test instructions.

The NRC observers’ (hereafter observers’) objective was to assess whether the BSC QA,

Product Quality Engineering/Supplier Audits and Evaluation Section, audit team (hereafter audit

team) and GE were properly implementing the QA requirements contained under “Quality

Assurance Criteria” in Part 63 of Title 10 of the U.S. Code of Federal Regulations (10 CFR

Part 63) and to gain a better understanding of the corrosion-testing activities GE Research

was conducting.

This report presents the observers’ determination of the effectiveness of the BSC audit and

whether GE Research implemented adequate controls in the audited areas.

2.0 MANAGEMENT SUMMARY

Within the areas evaluated, the audit team identified two potential quality observations. These

discrepancies could be easily corrected and did not appear to impact the quality and technical

adequacy of the GE Research products being supplied to BSC. The two potential quality

observations identified were in the areas of: (1) procurement controls; and (2) control of

measuring and test equipment. The staff believes that this BSC audit was well-planned,

conducted in a professional and thorough manner, and adequately evaluated the GE Research

QA activities.
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The observers determined that BSC Audit No. BSC–SA–02–028 was effectively executed. The

audit team members were independent of the activities they audited and were knowledgeable

regarding the QA and technical disciplines within the scope of the audit. The observer team

lead had previously reviewed the audit team members’ qualifications and had found

them acceptable.

3.0 AUDIT PARTICIPANTS 

3.1 Observers

Thomas C. Trbovich—Team Leader, CNWRA

Tamara E. Bloomer—Technical Specialist, NRC

3.2 Audit Team

Daniel A. Klimas—Audit Team Leader, BSC QA

Robert D. Habbe—Auditor, BSC QA

Frank M.G. Wong—Technical Specialist, Management and Technical Services

4.0 REVIEW OF THE AUDIT AND AUDITED ORGANIZATION

The BSC QA Audit of GE Research was conducted in accordance with the Office of Civilian

Radioactive Waste Management Administrative Procedure (AP) AP–18.2Q, “Supplier

Surveys/Audits,” and any identified conditions adverse to quality were reported in accordance

with AP–16.1Q, “Management of Conditions Adverse to Quality.” The NRC staff’s observation

of this audit was based on NRC Manual Chapter 2110, “Conduct of Observation Audits,” dated

July 12, 2000.

4.1 Audit Scope

The scope of the audit was to evaluate the effectiveness of the GE Research QA Program,

Corrosion Program Revision 1.1, dated December 20, 1996, that was developed to meet the

requirements of the QA Program identified in the original procurement and the current

Technical Statement of Work, Revision 2, dated January 23, 2001, and referenced in the BSC

purchase order.

4.2 Audit Conduct and Timing

The audit was performed effectively and the audit team demonstrated a sound knowledge of

the applicable GE Research programs and procedures. The audit checklist was developed

using the GE Research QA Program and QAAP. Audit team members conducted thorough

interviews; they challenged responses when appropriate; and they effectively employed their

detailed checklists. The observers concluded that the timing of the audit was appropriate for

the auditors to evaluate ongoing GE Research corrosion-crack-growth study activities. The

audit team was able to observe the 150 stress-corrosion-cracking samples outside the

autoclave system. In addition, the crack-growth-rate studies were completed on one set of
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specimens and the second set was observed during testing. The audit team and the observers

caucused at the end of each day. Audit team and GE Research management meetings were

held as necessary, to discuss the current audit status and preliminary audit findings. The

observers attended these meetings.

4.3 Audit Team Qualification and Independence

The audit team’s qualifications, based on previous reviews, conformed to the requirements of

the U.S. Department of Energy (DOE) Procedure (QAP)–18.1 “Auditor Qualification.” The

observers concluded that the audit team members had the necessary expertise to perform the

audit and were qualified to audit the GE Research activities. The observers also concluded that

the audit team members had sufficient authority and organizational freedom to make the audit

process meaningful and effective.

4.4 Examination of the QA Elements

4.4.1 QA Program, Procedures, and Training—(QAAP 2-1, “Indoctrination and

Training”; QAAP 2-2, “Personnel Qualifications”)

The audit team reviewed the GE Research corrosion project organizational structure and

determined that it provided adequate organizational freedom for the QA Project Officer to

perform his independent functions. The audit team determined that adequate policies,

procedures, and instructions were available and properly controlled for performing

quality-related activities on the corrosion-crack-growth studies. The audit team provided

several recommendations on various procedures to eliminate excessive details that were not

necessary to satisfy the quality requirements specified in the BSC Technical Services

Statement of Work.

Also, the audit team reviewed several indoctrination, training, and qualification records for

various GE Research personnel involved with the crack-growth studies and found them

acceptable. A recommendation was made to revise the procedure to make more use of the GE

Corporate personnel forms, rather than generating a specific project form and attaching the GE

Corporate form to it.

The observers agreed with the audit team’s findings in this area.

4.4.2 Procurement Document Control—(QAAP 4-1)

The audit team reviewed several purchase orders for calibration services. The QAAP contains

a listing of nine items that...“shall be included in the procurement documents as a minimum.” It

was determined that several of the procurement documents did not contain all of the nine items. 

It was also determined that a few of the nine items, such as the requirements in 10 CFR Part

50, Appendix B, and 10 CFR Part 21, were beyond the requirements necessary to meet the

BSC Quality program. A potential Quality Observation was initiated to describe the deficiency.

The observers agreed with the audit team’s findings in this area.
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4.4.3 Control of Measuring and Test Equipment—(QAAP 12-1, “Calibration”)

Calibration stickers on thermocouples in the Passive Film Characteristics and Long-Term

Stability laboratories were labeled inconsistently with the equipment list and calibration log. 

Similarly, inconsistencies in the calibration schedule for one of the Instron machines were

identified. The audit team brought these to the attention of the GE Research staff, which

corrected them. A potential Quality Observation was initiated on the discrepancy. In addition,

the master equipment list initially given to the observers was not up-to-date. The audit team

brought this to the attention of the GE Research staff and the correct equipment list was

located in the procedure book.

The observers agreed with the audit team findings in this area.

4.4.4 Scientific Investigation—(QAAP 11-1, “Test Control”)

BSC does not require GE Research, in the purchase order/statement of work, to keep scientific

notebooks to the level dictated in the QA and Requirements Description, Revision 11,

Section III.2.2. However, the Technical Services Statement of Work for GE Research states

that scientific investigation activities shall be documented in scientific notebooks that provide a

description of both the planned work and the work actually performed, as well as the results. 

Two of the three notebooks the audit team reviewed had appropriate detail and were traceable. 

The third scientific notebook was problematic in that additional information had to be reviewed

from other sources to get the complete information and make the notebook traceable. A

recommendation was made by the audit team that GE Research should consider using a

separate notebook for each of the different tests so the test could be easily understood, easily

retraced, and the test easily repeated without recourse to the original investigator.

The observers agreed with the audit team findings in this area.

5.0 NRC STAFF FINDINGS

The observers determined that Audit No. BSC–SA–02–028 was effective in determining the

level of compliance of the GE Research activities associated with the corrosion-crack-growth

testing. The observers agreed with the audit team’s conclusion that the purchase order,

statement of work, and the GE quality program had been satisfactorily implemented, except for

the identified potential observations.

The observers recommended that BSC should require GE Research to bring the scientific

notebooks up to the standards set in the QA and Requirements Description. This was

suggested because some of the results GE reported will be used as direct input into DOE’s

total system performance assessment code.

5.1 NRC Audit Exit Summary

During the audit exit meeting, the observers expressed appreciation for the excellent

cooperation and responsiveness they received during their observation activities. In addition,

the observers stated that they agreed with the audit team’s findings and recommendations, as
5

presented at the audit exit meeting. Also, during the audit exit, the observers stated that they

will continue to interface with DOE and BSC to follow the progress that GE Research is making

to address the issues identified during this audit.

5.2 NRC Audit Observer Inquiries

There were no audit observer inquiries initiated as a result of Audit BSC–02–028. However, the

open audit inquiry, LLNL–ARC–02–07, was discussed with the Bechtel/SAIC Procurement

Quality Representative in order to explain the background and circumstances regarding the lack

of documentation for receipt inspection performance. A response package has been prepared

for management review.

The Audit Observer Inquiry, LLNL–ARC–02–7 remains open pending response.