November 28, 2001

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 COMMISSIONíS OBSERVATION AUDIT

REPORT NO. OAR-02-01, ìOBSERVATION AUDIT OF THE BECHTEL SAIC

COMPANY, LLC, AUDIT NO. BSC-SA-01-030 OF LAMBDA RESEARCH, INC.î

Dear Mr. Milner:

I am transmitting the U.S. Nuclear Regulatory Commissionís (NRCís) Observation Audit Report

(No. OAR-02-01) of the U.S. Department of Energyís (DOEís), Office of Civilian Radioactive

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

Company, LLC (BSC), Quality Assurance (QA), audit of Lambda Research, Inc. (Lambda). This

audit was conducted on October 31 and November 1, 2001, at Lambda facilities in Cincinnati,

Ohio.

The purpose of this audit was to evaluate the effectiveness of the implementation of Lambdaís

QA Manual (QAM) and to determine if applicable requirements of the OCRWM Quality

Assurance Program Description (QARD) were being met. The scope of the audit included

evaluating the implementation of the QARD and QAM for the residual stress measurements of

welded mockups supporting the design of the high-level waste containers for the proposed

repository at Yucca Mountain, Nevada.

The NRC observers (observers) determined that this audit was effective in identifying potential

deficiencies and recommending improvements for the Lambda activities reviewed. During the

conduct of the audit, both the BSC audit team (audit team) and the observers reviewed

applicable documents, procedures, and activities within the auditís scope. 

Also, the audit team and observers reviewed and observed ongoing testing activities. The audit

team identified potential deficiencies in training, calibrations, document control, software

verification and validation, and corrective action. The staff believes that this BSC audit was

well-planned, thorough, and adequately evaluated Lambdaís residual stress measurement

activities. 

The observers agreed with the audit teamís conclusions, findings, and recommendations

presented at the audit exit. Notwithstanding the audit teamís findings, the staff believes that

Lambda is properly controlling residual stress measurement activities within the scope of the

audit. The staff will continue to interface with OCRWM and follow the progress that Lambda 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 at (301) 415-6684.

Sincerely,

/RA/

C. William Reamer, Chief

High-Level Waste Branch

Division of Waste Management

Office of Nuclear Material Safety

 and Safeguards

Enclosure: NRC Observation Audit Report

 No. OAR-02-01, ìObservation Audit

of the Bechtel SAIC Company, LLC, 

Audit No. BSC-SA-01-030 of Lambda Research, Inc.î

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 at (301) 415-6684.

Sincerely,

/RA/

C. William Reamer, Chief

High-Level Waste Branch

Division of Waste Management

Office of Nuclear Material Safety

 and Safeguards

Enclosure: NRC Observation Audit Report

 No. OAR-02-01, ìObservation Audit

of the Bechtel SAIC Company, LLC, 

Audit No. BSC-SA-01-030 of Lambda Research, Inc.î

CC: See attached list

DISTRIBUTION:

File Center PUBLIC ACNW LSS CNWRA NMSS r/f HLWB r/f

LCampbell SWastler BMabrito KNaidu RLatta DWMr/f

TTrbovich TCarter DBrooks BSpitzberg Rbrient WSmith

Dhiggs Jparrott TAhn

ADAMS Accession No. ML013330072

DOCUMENT NAME: S/DWM/HLWB/thc/OAR-02-01 Lambda.wpd

*See Previous concurrence

OFC HLWB Tech Editor HLWB HLWB

NAME TCarter Thc *EKraus ek NKStablein nks CWReamer cwr 

DATE 11/19/01 11/08/01 11/27/01 11/28/01

OFFICIAL COPY

ACNW: YES X NO Delete file after distribution: Yes No 

1) This document should be made available to the PUBLIC. Yes - thc1 

2) This document is related to the HLW program. It should be placed in the LSS. Yes - thc1

This document is Non-Sensitive 
Letter to R. Milner from C.W. Reamer dated November 28, 2001 

cc:

R. Loux, State of Nevada R. Massey, Lander County, NV

S. Frishman, State of Nevada J. Pitts, Lincoln County, NV

L. Barrett, DOE/Washington, DC M. Baughman, Lincoln County, NV

A. Brownstein, DOE/Washington, DC A. Funk, Mineral County, NV

S. Hanauer, DOE/Washington, DC J. Shankle, Mineral County, NV

C. Einberg, DOE/Washington, DC L. Bradshaw, Nye County, NV

J. Carlson, DOE/Washington, DC M. Murphy, Nye County, NV

N. Slater, DOE/Washington, DC J. McKnight, Nye County, NV

A. Gil, YMPO D. Weigel, GAO

R. Dyer, YMPO W. Barnard, NWTRB

S. Brocoum, YMPO R. Holden, NCAI

R. Davis, YMPO A. Collins, NIEC

S. Mellington, YMPO R. Arnold, Pahrump Paiute Tribe

C. Hanlon, YMPO J. Larson, White Pine County

T. Gunter, YMPO R. Clark, EPA

K. Hess, BSC F. Marcinowski, EPA

D. Krisha, BSC R. Anderson, NEI

S. Cereghina, BSC R. McCullum, NEI

N. Williams, BSC S. Kraft, NEI

M. Voegele, BSC/SAIC J. Kessler, EPRI

R. Henning, BSC D. Duncan, USGS

B. Price, Nevada Legislative Committee R. Craig, USGS

J. Meder, Nevada Legislative Counsel Bureau W. Booth, Engineering Svcs, LTD

I. Navis, Clark County, NV J. Curtiss, Winston & Strawn

E. von Tiesenhausen, Clark County, NV S. Echols

A. Kalt, Churchill County, NV N. Rice, NV Congressional Delegation

G. McCorkell, Esmeralda County, NV T. Story, NV Congressional Delegation

L. Fiorenzi, Eureka County, NV J. Reynoldson, NV Congressional Delegation

A. Johnson, Eureka County, NV S. Joya, NV Congressional Delegation

A. Remus, Inyo County, CA J. Pegues, City of Las Vegas, NV

M. Yarbro, Lander County, NV L. Lehman, T-REG, Inc.
I. Zabarte, W.S.N.C.

C. Anderson, Las Vegas Paiute Tribe

J. Birchim, Yomba Shoshone Tribe

L. Jackson, Timbisha Shoshone Tribe

C. Meyers, Moapa Paiute Indian Tribe

V. Miller, Fort Independence Indian Tribe

A. Bacock, Big Pine Paiute Tribe of

 the Owens Valley

R. Quintero, Inter-Tribal Council of Nevada

(Chairman, Walker River Paiute Tribe)

M. Bengochia, Bishop Paiute Indian Tribe

J. Egan, Egan & Associates, PLLC

R. Bahe, Benton Paiute Indian Tribe

C. Bradley, Kaibab Band of Southern Paiutes

R. Joseph, Lone Pine Paiute-Shoshone Tribe 

L. Tom, Paiute Indian Tribes of Utah

E. Smith, Chemehuevi Indian Tribe

J. Charles, Ely Shoshone Tribe

D. Crawford, Inter-Tribal Council of Nevada

H. Blackeye, Jr., Duckwater Shoshone Tribe

D. Eddy, Jr. Colorado River Indian Tribes

J. Leeds, Las Vegas Indian Center

W. Briggs, Ross, Dixon & Bell
-1-

U.S. NUCLEAR REGULATORY COMMISSION 

OBSERVATION AUDIT REPORT NO. OAR-02-01

ìOBSERVATION AUDIT OF THE 

BECHTEL SAIC COMPANY, LLC

AUDIT NO. BSC-SA-01-30 OF Lambda Research, Inc.î

 /RA/ 11/08/01 /RA/ 11/08/01

Ted Carter Robert D. Brient

Projects and Engineering Section Center for Nuclear Waste Regulatory

 High-Level Waste Branch Analyses

Division of Waste Management

Reviewed and Approved by:

 /RA/ 11/27/01

N. King Stablein, Chief

Projects and Engineering Section

High-Level Waste Branch

Division of Waste Management
-2-

1.0 INTRODUCTION

1.1 Lambda Research, Inc. (Background)

The current ìStatement of Work Agreementî between the U.S. Department of Energy (DOE)

Office of Civilian Radioactive Waste Management (OCRWM), Management and Operating

Contractor (M&O) and Lambda Research, Inc (Lambda) is Bechtel SAIC Company, LLC (BSC)

Purchase Order 24540-000-TSA-0005, Rev. 1, and the ìTechnical Services Statement of Work

for Lambda Research Incorporated, Revision 03," dated September 24, 2001. 

The scope of Lambdaís work under the current statement of work is to measure residual

stresses of welded mockups of selected materials related to the high-level waste container

design for the proposed repository at Yucca Mountain, Nevada.

1.2 Performance of the Audit 

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

and the Center for Nuclear Waste Regulatory Analyses Center (CNWRA) observed the M&O,

BSC, audit BSC-SA-01-30 of activities regarding the implementation of Lambdaís Quality

Assurance Manual (QAM). This audit was conducted on October 31 through November 1,

2001, at Lambdaís facilities in Cincinnati, Ohio.

The purpose of this audit was to evaluate the effectiveness of the implementation of Lambdaís

QAM, and to determine if applicable requirements of the OCRWM Quality Assurance Program

Description (QARD) were being met. The scope of the audit included evaluating the

implementation of the QARD and QAM for residual stress measurements supporting the

design of the high-level waste containers for the proposed repository at Yucca Mountain,

Nevada.

The NRC observersí (observersí) objective was to assess whether BSC Quality Assurance

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

team) and Lambda were properly implementing the QA requirements contained in Subpart G,

ìQuality Assurance,î to Part 60, of Title 10 of the U.S. Code of Federal Regulations (10 CFR

Part 60) and the provisions contained in the QARD. Before the start of the audit, the audit team

and observers were given a tour of the Lambda facility.

This report presents the observersí determination of the effectiveness of the BSC audit and

whether Lambda implemented adequate QARD and QAM controls in the audited areas.

2.0 MANAGEMENT SUMMARY 

Within the areas evaluated, the audit team identified several minor potential deficiencies. 

These deficiencies did not appear to impact the quality and technical adequacy of the Lambda

products being supplied to BSC. The audit team identified the potential deficiencies during the

audit regarding training, calibration (i.e., measuring and test equipment) controls, document

controls, software controls, and corrective action.

BSC had previously identified an open item regarding the statement of work requirement to

destructively test representative samples of strain gages used in the measurements, so as to

confirm their performance characteristics. This item was discussed with Lambda management

during the audit.

The observers determined that BSC Audit No. BSC-SA-01-030 was well-planned and effectively

executed. The audit team members were independent of the activities they audited and were
-3-

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

audit team membersí qualifications were reviewed and were found acceptable. 

The audit team concluded that the QARD and QAM had been satisfactorily implemented in the

areas evaluated. The potential deficiencies identified did not appear to have a significant

potential to adversely affect the validity of the residual stress measurements. The observers

agreed with the audit teamís conclusions, findings, and recommendations presented at the

audit exit. The staff will continue to interface with OCRWM and follow the progress that

Lambda is making to address the issues identified during this audit. 

3.0 AUDIT PARTICIPANTS

3.1 Observers

Ted Carter Team Leader NRC

Robert D. Brient QA Specialist CNWRA

3.2 BSC Audit Team

Robert F. Hartstern Audit Team Leader BSC QA 

Richard L. Hand Auditor BSC QA

Ahmed Monib Technical Observer BSC

4.0 REVIEW OF THE AUDIT AND AUDITED ORGANIZATION

This BSC QA audit of Lambda was conducted in accordance with OCRWM Quality Assurance

Procedure (QAP) 18.2, ìInternal Audit Program,î and QAP 16.1Q, ìPerformance/Deficiency

Reporting.î The NRC staffís observation of this audit was based on NRC Manual Chapter

2410, ìConduct of Observation Audits,î dated July 12, 2000.

4.1 Scope of the Audit

The scope of the audit included evaluating the implementation of the QARD and QAM for the

residual stress measurements supporting the design of the high-level waste containers for the

proposed repository at Yucca Mountain, Nevada. The audit was programmatic in nature, and

evaluated the QA requirements contained in Subpart G of 10 CFR Part 60,, QARD Supplement

II, ìSample Control,î and QARD Supplement V, ìControl of Electronic Management of Data.î

4.2 Conduct and Timing of the Audit

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

the applicable requirements. The audit checklist was developed using the QARD and the

Lambda QAM. Applicable Lambda implementing procedures were evaluated during the audit. 

Audit team members conducted thorough interviews; they challenged and clarified responses

when appropriate; and they effectively employed their detailed audit checklist. The observers

concluded that the timing of the audit was appropriate for the auditors to evaluate completed

and anticipated residual stress measurement activities for BSC. The audit team and the

observers caucused at appropriate times. A meeting between the audit team and Lambda (with

the observers present) was held after the completion of the first audit day, to discuss the

current audit status and preliminary findings.
-4-

4.3 Audit Team Qualification and Independence 

The qualifications of the audit team had been previously reviewed for accuracy and

completeness in accordance with the requirements of DOE Procedure QAP 18.1, ìAuditor

Qualification.î The observers concluded that the audit team members had the necessary

expertise to perform the audit and were qualified to audit Lambdaís activities and that the audit

team members were independent of the audited activities.

4.4 Examination of QA Elements

4.4.1 Audit Approach

The audit team interviewed Lambda QA, engineering, supervisory, laboratory, and Lambda

technical/management staff. Current laboratory activities were observed and the BSC welded

mockup was examined. The audit evaluated the activities and records for the two Lambda work

orders for stress measurements taken on the welded mockup, using ASTM E837 hole drill and

ring-core methods. The residual stress measurement processes from receipt of the mockup

through completion of the test reports were followed during the audit. In addition, the overall

adequacy and implementation effectiveness of the Lambda quality program was assessed. 

4.4.2 Audit Findings

Lambdaís quality system had been certified as meeting ISO 9002:1994 (ìQuality systems -

Model for quality assurance in production, installation, and servicingî) and has been accredited

to ISO Guide 25 (ìGeneral requirements for the competence of calibration and testing

laboratoriesî) by third-party agencies. The quality system is organized following ISO Guide 25.

During preparation of their checklists and for cross-reference use during the audit, the auditors

sorted the Lambda quality system elements according to the Part 60, Subpart G criteria. This

was an effective approach for determining whether the quality system designed for ISO 9002

and Guide 25 met QARD requirements.

Lambdaís program included an extensive array of quality system and laboratory test

procedures. The auditors thoroughly reviewed quality system procedures and laboratory

procedures directly associated with the residual stress measurements. These procedures and

their implementation were discussed with appropriate Lambda staff. 

4.4.3 Potential Deficiencies

Potential deficiencies (i.e., subject to concurrence by BSC QA management) were identified by

the audit team as follows:

Training

! No evidence was available of required training for the Laboratory Supervisor.

! Discrepancies were identified between the QAM and two procedures regarding training

requirements for Laboratory Technicians.

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

Measuring and Test Equipment Control

! No impact evaluation had been performed for gauge blocks found to be out-of-tolerance

(in November 2000). The required Out-of -Tolerance report was not prepared.

! Calibration records lacked required ìnext calibration due date,î and several had no

approval signature.
-5-

! The form/schedule used for calibration recall and other scheduled verifications had no

year indicated.

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

Document Control

! Several procedure titles and revision numbers disagreed between the procedure index

and procedures.

! Strain gauge lot numbers had not been recorded on test data forms for unambiguous

traceability regarding individual tests and the measuring equipment used.

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

Software Verification and Validation

! Purchased software ìReStressî had no evidence of the testing (verification and

validation) required by Procedure 3P4001_2.

! Verification and validation data for the in-house-developed software ìTrecalcî did not

identify the version number of the software, the date of the tests, or the individual

performing the tests.

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

Corrective Action

! QA Incident Reports had not been initiated as soon as the conditions were identified.

! No log had been used to identify and track open items requiring corrective action.

! Corrective actions did not appear to have been resolved on timely bases.

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

5.0 NRC STAFF FINDINGS

The observers determined that Audit No. BSC-SA-01-030 was effective in determining the level

of compliance of Lambdaís activities associated with residual stress measurements. The

observers agreed with the audit teamís conclusion that the QARD and QAM had been

satisfactorily implemented except for the identified potential deficiencies.

5.1 NRC Audit Exit Summary

During the audit exit, the observers stated that they agreed with the audit team findings and

recommendations as presented at the audit exit meeting.

5.2 NRC Audit Observer Inquiries

There were no Audit Observer Inquires (AOIs) written during this audit.

5.3 NRC AOI from Previous NRC Observation

The following AOI, from a previous DOE audit observed by NRC, is closed:

AOI No. M&O-APR-01-02-4, dated February 9, 2001, was written to identify an observer

inquiry for ANL-NBS-HS-00032. The AOI states: "The work upon which this model is
-6-

based (Flint, et al., 1996, "Conceptual and Numerical Model of Infiltration at Yucca

Mountain") is unqualified. (See OCRWM QA Audit Report M&O APR-00-04)(p. 9). Was

information used to support conclusions made in the Infiltration AMR? If yes, describe

how the Flint, et al. (1996) data were qualified and assumptions verified. NRC requests

additional information and details. (Refer to U.S. NRC's Observation Audit Report

No. OAR-00-04)." 

AOI M&O-APR-01-02-4 has been closed based on DOEís response to this AOI, as

provided in a letter from S. Brocoum to C.W. Reamer, dated August 16, 2001. The

NRC reviewed the letter and determined that the DOE response to this AOI was

satisfactory. The NRC considers the status of AOI M&O-APR-01-02-4 to be closed.