January 4, 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 COMMISSIONíS OBSERVATION AUDIT

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

COMPANY, LLC, AUDIT NO. BSC-SA-02-005 OF METAL SAMPLES COMPANYî

Dear Mr. Milner:

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

(No. OAR-02-02) 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 Metal Samples Company (Metal

Samples). Metal Samples is a division of Alabama Specialty Products, Inc. This audit was

conducted on November 26-28, 2001, at Metal Samples facilities in Oxford, Alabama.

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

Specialty Products, Inc.ís QA Manual and to determine if applicable requirements of the

OCRWM Quality Assurance Program Description were being met. 

The scope of the audit was to evaluate the effectiveness of the QA Program delineated in the

TRW Environmental Safety Systems Purchase Orders A15414SS0B and A15382YS9B and

evaluate the implementation of the Alabama Specialty Products Inc. Quality Manual, Revision

2/16/99 and associated Operational Procedures and Work Instructions, as relating to various

sample preparations.

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

potential deficiencies and recommending improvements for Metal Samplesí activities reviewed. 

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

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

The audit team identified three potential deficiencies in the areas of procurement, control of

measuring and testing equipment, and nonconformance control. The staff believes that this

BSC audit was well-planned, thorough, and adequately evaluated Metal Samplesí QA activities.

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 Metal Samples 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-02-02, ìObservation Audit

of the Bechtel SAIC Company, LLC, 

Audit No. BSC-SA-02-005 of Metal Samples Companyî

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-02-02, ìObservation Audit

of the Bechtel SAIC Company, LLC, 

Audit No. BSC-SA-02-005 of Metal Samples Companyî

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.

DOCUMENT NAME: S/DWM/HLWB/thc/OAR-02-02 Metal Samples.wpd

*See Previous concurrence

OFC HLWB Tech Editor HLWB HLWB

NAME TCarter thc *EKraus ek NKStablein nks CWReamer cwr 

DATE 01/02/02 12/17/01 1/04/02 1/04/02

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 January 4, 2002 

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-02-02

ìOBSERVATION AUDIT OF THE 

BECHTEL SAIC COMPANY, LLC

AUDIT NO. BSC-SA-02-005 OF METAL SAMPLES COMPANYî

 /RA/ 01/03/02 /RA/ 01/02/02 

Ted Carter Thomas C. Trbovich

Projects and Engineering Section Center for Nuclear Waste Regulatory

High-Level Waste Branch Analyses

Division of Waste Management

Reviewed and Approved by:

 /RA/ 01/04/02 

N. King Stablein, Chief

Projects and Engineering Section

High-Level Waste Branch

Division of Waste Management
-2-

1.0 INTRODUCTION

1.1 Metal Samples Company (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 Metal Samples Company (Metal Samples), is TRW Environmental

Safety Systems Purchase Orders A15414SSOB and A15382YS9B. The scope of Metal

Samplesí work, under the current statement of work, is to fabricate and provide metal

specimens in accordance with the schedule included in the purchase orders.

1.2 Performance of the Audit 

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

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

SAIC Company (BSC), audit BSC-SA-02-005 of activities regarding the implementation of Metal

Samplesí Quality Assurance (QA) Manual (QAM). This audit was conducted on November 26-

28, 2001, at Metal Samples facilities in Munford, Alabama.

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

Specialty Products, Inc.ís QAM, and to determine if applicable requirements of the OCRWM QA

Program Requirements and Description (QARD), Revision 10, were being met. The scope of

the audit included evaluating the implementation of the Alabama Specialty Products, Inc.ís

QAM, and any associated Operational Procedures and Work Instructions, as relating to various

sample preparations.

The NRC observersí (hereafter observers) objective was to assess whether BSC QA, Product

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

and Metal Samples 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. 

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

whether Metal Samples 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 Metal

Samples products being supplied to BSC. The audit team identified three potential deficiencies

in the areas of procurement, of control of measuring and testing equipment, and

nonconformance control. The staff believes that this BSC audit was well-planned, thorough,

and adequately evaluated Metal Samplesí QA activities.

The observers determined that BSC Audit No. BSC-SA-02-005 was well-planned and 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

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 do not appear to have a significant

potential to adversely affect the quality of the product. The observers agreed with the audit

teamís conclusions, findings, and recommendations presented at the audit exit. The staff will
-3-

continue to interface with OCRWM and follow the progress that Metal Samples is making to

address the issues identified during this audit. 

3.0 AUDIT PARTICIPANTS

3.1 Observers

 Ted Carter Team Leader NRC

 Tom Trbovich QA Specialist CNWRA

3.2 BSC Audit Team

 Richard Maudlin Audit Team Leader BSC QA

 Robert Habbe Auditor BSC QA

4.0 REVIEW OF THE AUDIT AND AUDITED ORGANIZATION

The BSC audit of the Metal Samples was conducted in accordance with OCRWM QAP 18.2,

ìInternal Audit Program,î and QAP 16.1, ìManagement of Conditions Adverse to Quality.î The

NRC staffís observation 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 was to evaluate the effectiveness of the QA Program delineated in the

TRW Environmental Safety Systems Purchase Orders A15414SS0B and A15382YS9B and

evaluate the implementation of the Alabama Specialty Products, Inc., QAM, and associated

operational procedures (OPs) and work instructions (WIs), as related to various sample

preparations.

4.2 Conduct and Timing of the Audit

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

the applicable Metal Samples program and procedures. The audit checklist was developed

using the Purchase Orders, QARD, and the Metal Samplesí QAM. Applicable procedures and

WIs were reviewed and used during the audit. The audit team members conducted thorough

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

audit checklist. The observers concluded that the timing of the audit was appropriate even

though a stop-work order had been issued to Metal Samples, because of the initiation of a

Nonconformance Report, Discrepancy Report (DR), and Corrective Action Report, identifying

sample weld location and test report traceability problems. The audit team and the observers

caucused at the end of each day. Meetings between the audit team and Metal Samples

management, with the observers present, were held each morning, to discuss the current audit

status and preliminary findings.

4.3 Audit Team Qualification and Independence

The qualifications of the audit team, based on previous reviews, were 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 the Metal Samples 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-

4.4 Examination of the QA Elements

4.4.1 QA Program

The audit team determined that the OPs and WIs have been developed, approved by

management, and are available to all staff by computer through a Local Area Network. The

Metal Samples Compliance Director controls the implementation of the procedures into the

system. Metal Samples personnel have a ìread-onlyî capability. Job travelers are prepared for

the various products and identify various manufacturing steps, indicate in-process as well as

final inspections, and reference appropriate drawings, OPs, and WIs, as necessary. A review

of selected personnel job descriptions indicated proper qualification and training for persons

holding the positions.

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

4.4.2 Procurement Control

The combination of the following deficiencies were noted as a potential deficiency report (i.e.,

subject to concurrence by BSC QA management).

a. Metal Samples does not keep archival copies of their Approved Suppliers List and no

objective evidence could be provided to reflect that Carolina Commercial Heat Treating and

Certified Measurements, Inc. were on the Approved Suppliers List for the procurement

dates indicated.

b. No objective evidence could be provided to reflect that the requisitoner had reviewed and

approved ASPI purchase orders 52512, 46944, and 44585.

c. Inadequate receipt inspection by Metal Samples in that some reports failed to identify the

ASTM revisions and Metal Samples was unable to support that they had verified that

revisions provided by Laboratory Testing, Inc were current revisions as required by the

ASPI purchase order.

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

4.4.3 Identification and Control of Items and Materials

Job travelers specify when identification is applied to parts. A review of several products

indicated identification either stamped physically on the part or on slips contained in the bags if

parts were small. Two different C22 excess materials, identified as U237 and K932, were

traced from the purchase order, receiving inspection report, shop traveler, and into storage,

indicating traceability had been maintained. No discrepancies were noted with the

implementation of OP 8.0-1, îProduct Identification and Traceability,î and OP 7.0-1, ìControl of

Customer-Supplied Product.î

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

4.4.4 Inspection 

Either the Receiving Clerk or Quality Control (QC) may perform receiving inspections,

depending on purchase-order requirements. In- process inspections are performed by

manufacturing operators. Final inspections are performed by QC personnel and a verification is

performed to assure all previous inspections have been completed. The audit team reviewed

several job travelers and inspection records. A potential discrepant condition was identified by

the fact that some inspectors were completing the ìno columnî on the record, when the ìN/A

columnî was the more accurate for review of inspection data provided by suppliers. 

The observers agreed with the audit team findings in this area.
-5-

4.4.5 Control of Measuring and Test Equipment

The audit team reviewed several measuring items used for products supplied to BSC. A

Radiographic Analyzer serial number 99-14 had a calibration sticker that indicated that it was

past due for calibration. Two standards used to do a verification check on a surface

profilometer had not been calibrated since their purchase in 1996 and 1997, even though the

manufacturerís recommendation was for an annual calibration. Three gauge blocks had been

replaced in a set, with no record of replacement being documented in the calibration history

form. Only heavy-use pin gauges of a large set are being calibrated on an annual basis, with

no documentation being included in the calibration history form. The company performing the

calibration of the optical comparitor was not audited nor on the approved supplier list at the time

of the calibration. These minor deficiencies combined were noted as a potential deficiency

report (i.e., subject to concurrence by BSC QA management).

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

4.4.6 Storage, Shipping, and Handling

The audit team reviewed the job travelers and stated that appropriate handling and protection

requirements were noted. Packaging requirements for shipment were also observed. No

discrepancies were noted in this area.

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

4.4.7 Inspection, Test, and Operating Status

A review of products at various fabrication stages indicated that products were identified by part

markings and controlled by the job travelers, with definitive sequences. No discrepancies were

noted in this area.

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

4.4.8 Nonconformance Control

Anomaly Reports had been initiated for discrepant products in accordance with OP 13.1-1,

ìControl of Nonconforming Product.î Metal Samples did not prepare an Anomally Report for an

out of tolerance dimensional condition on samples provided on TRW Purchase Order

A15414SS0B, Schedule FY00-05, MSC Job No. 176043. This was identified as a potential

deficiency (i.e., subject to concurrence by BSC QA management).

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

5.0 NRC STAFF FINDINGS

The observers determined that Audit No. BSC-SA-02-005 was effective in determining the level

of compliance of Metal Samples activities associated with sample fabrication. The observers

agreed with the audit teamís conclusion that the purchase orders, QARD, and Metal Samples

quality program had been satisfactorily implemented, except for the identified potential

discrepancies.

5.1 NRC Audit Exit Summary

The audit team discussed the potential discrepancies in the procurement controls, measuring

and test equipment, and inspection elements during the audit exit meeting. Of particular

interest was the fact that no discrepancies were noted with the controls established for procured

or customer-supplied material and traceability. The audit team leader stated he would make

recommendations to BSC management to have an annual audit performed at Metal Samples

and have holdpoints established in the purchase orders for a review of Metal Samplesí

documentation, before sample shipment.
-6-

The NRC observers expressed appreciation for the excellent cooperation and responsiveness

provided to them during their observation activities. In addition, the observers stated that they

agreed with the audit teamís findings and recommendations, as presented at the audit exit. 

The observers also stated that they will continue to interface with DOE and BSC and follow the

progress that Metal Samples is making to address the issues identified during this audit.

5.2 NRC Audit Observer Inquiries

There were no Audit Observer Inquires written during this audit.