June 3, 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-02-07, “OBSERVATION AUDIT OF THE OFFICE OF

CIVILIAN RADIOACTIVE WASTE MANAGEMENT, OFFICE OF QUALITY

ASSURANCE, AUDIT NO. BSC-ARC-02-09”

Dear Mr. Milner:

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

No. OAR-02-07. It is on the U.S. Department of Energy’s (DOE’s), Office of Civilian

Radioactive Waste Management (OCRWM), Office of Quality Assurance (OQA) audit of

Bechtel SAIC Company, LLC (BSC), on May 6-10, 2002.

The OQA audit team (hereafter, audit team) performed a full-scope compliance-based quality

assurance (QA) audit to evaluate BSC’s implementation of the applicable provisions of the

OCRWM Quality Assurance Requirements and Description document, DOE/RW-0333P,

Revision 11, and associated implementing procedures relevant to BSC activities supporting the

Yucca Mountain Site Characterization Project Office. During the audit, the audit team

examined the effectiveness of the actions taken to correct deficiencies identified during the

previous audits and surveillances performed by OQA.

The NRC observers (hereafter, observers) determined that DOE’s audit of BSC was effective in

identifying potential deficiencies and recommending improvements for the reviewed BSC

activities. During the audit, both the audit team and the observers independently reviewed

applicable QA procedures, and activities within the audit’s scope.

Although the audit team identified potential deficiencies, and quality observations, the observers

believe that BSC has shown improvement in the implementation of its QA program. The

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

at the audit exit meeting.
R. A. Milner -2-

A written response to this letter and the enclosed report is not required; however, the open audit

inquiry, LLNL-ARC-02-07, was discussed with the Bechtel/SAIC Procurement Quality

Representative to explain the background and circumstances regarding the lack of

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

management review and LLNL–ARC–02–07 remains open pending response. 

The staff will continue to interface with OCRWM and follow the progress that BSC is making to

address the issues identified during this audit. 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-02-07, “Observation Audit of the

Office of Civilian Radioactive Waste Management,

Office of Quality Assurance, Audit No. BSC-ARC-02-09”
R. A. Milner -2-

A written response to this letter and the enclosed report is not required; however, the open audit

inquiry, LLNL-ARC-02-07, was discussed with the Bechtel/SAIC Procurement Quality

Representative to explain the background and circumstances regarding the lack of

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

management review and LLNL–ARC–02–07 remains open pending response. 

The staff will continue to interface with OCRWM and follow the progress that BSC is making to

address the issues identified during this audit. 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-02-07, “Observation Audit 

of the Office of Civilian Radioactive Waste Management,

Office of Quality Assurance, Audit No. BSC-ARC-02-09”

cc: See attached list.

DISTRIBUTION:

FILE CENTERHLWB r/f DWM r/f ACNW PUBLIC OSRs

LSN CNWRA CWReamer JSchleuter KStablein DBrooks

TEssig SWastler BSpitzberg WMaier, RIV LChandler DDambly

MYoung DHiggs LCampbell BMabrito TTrbovich TCarter

M. Ehnstrom WSmith JParrott TAhn

DOCUMENT NAME: S:\DWM\HLWB\thc\OAR-02-07.wpd

ADAMS ACCESSION NUMBER: ML021560518

OFFICE HLWB Tech Ed HLWB HLWB

NAME T. Carter E. Kraus K. Stablein J. Schlueter

DATE 05/29/02 05/28/02 06/03/02 06/03/02

 OFFICIAL RECORD COPY 

ACNW: YES X NO Delete file after distribution: No

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

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

3) This document is Non-Sensitive.

Letter to R. Milner from J. Schlueter dated June 3, 2002 
cc:

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

S. Frishman, State of Nevada L. Stark, Lincoln County, NV

M. Chu, DOE/Washington, DC M. Baughman, Lincoln County, NV

C. Einberg, DOE/Washington, DC J. Shankle, Mineral County, NV

S. Gomberg, DOE/Washington, DC L. Bradshaw, Nye County, NV

N. Slater, DOE/Washington, DC M. Murphy, Nye County, NV

C. Newbury, YMPO J. McKnight, Nye County, NV

R. Dyer, YMPO D. Weigel, GAO

J. Ziegler, YMPO W. Barnard, NWTRB

R. Murthy, YMPO R. Holden, NCAI

S. Mellington, YMPO A. Collins, NIEC

C. Hanlon, YMPO R. Arnold, Pahrump Paiute Tribe

T. Gunter, YMPO J. Larson, White Pine County

K. Hess, BSC R. Clark, EPA

D. Krisha, BSC F. Marcinowski, EPA

S. Cereghin, BSC R. Anderson, NEI

N. Williams, BSC R. McCullum, NEI

M. Voegele, BSC/SAIC S. Kraft, NEI

D. Beckman, BSC/B&A J. Kessler, EPRI

B. Price, Nevada Legislative Committee D. Duncan, USGS

J. Meder, Nevada Legislative Counsel Bureau R. Craig, USGS

I. Navis, Clark County, NV W. Booth, Engineering Svcs, LTD

E. von Tiesenhausen, Clark County, NV L. Lehman, T-REG, Inc

A. Kalt, Churchill County, NV S. Echols

G. McCorkell, Esmeralda County, NV N. Rice, NV Congressional Delegation

L. Fiorenzi, Eureka County, NV T. Story, NV Congressional Delegation

A. Johnson, Eureka County, NV J. Reynoldson, NV Congressional Delegation

A. Remus, Inyo County, CA S. Joya, NV Congressional Delegation

M. Yarbro, Lander County, NV J. Pegues, City of Las Vegas, NV

I. Zabarte, W.S.N.C. R. Bahe, Benton Paiute Indian Tribe

C. Anderson, Las Vegas Paiute Tribe C. Bradley, Kaibab Band of Southern Paiutes

J. Birchim, Yomba Shoshone Tribe R. Joseph, Lone Pine Paiute-Shoshone Tribe

L. Jackson, Timbisha Shoshone Tribe L. Tom, Paiute Indian Tribes of Utah
C. Meyers, Moapa Paiute Indian Tribe E. Smith, Chemehuevi Indian Tribe

V. Miller, Fort Independence Indian Tribe J. Charles, Ely Shoshone Tribe

A. Bacock, Big Pine Paiute Tribe of

 the Owens Valley

D. Crawford, Inter-Tribal Council of Nevada

R. Quintero, Inter-Tribal Council of Nevada

(Chairman, Walker River Paiute Tribe)

H. Blackeye, Jr., Duckwater Shoshone Tribe

M. Bengochia, Bishop Paiute Indian Tribe D. Eddy, Jr. Colorado River Indian Tribes

J. Egan, Egan & Associates, PLLC J. Leeds, Las Vegas Indian Center

W. Briggs, Ross, Dixon & Bell G. Runkle, DOE, Washington, DC

A. Funk, Mineral County, NV
1

U.S. NUCLEAR REGULATORY COMMISSION

OBSERVATION AUDIT REPORT NO. OAR-02-07

“OBSERVATION AUDIT OF THE

OFFICE OF CIVILIAN RADIOACTIVE WASTE MANAGEMENT,

OFFICE OF QUALITY ASSURANCE,

 AUDIT NO. BSC-ARC-O2-09”

 /RA/ 05/31/02 /RA/ 05/29/02

Ted Carter T. C. Trbovich

Projects and Engineering Section Center for Nuclear Waste Regulatory 

High-Level Waste Branch Analyses

Division of Waste Management

 /RA/ 05/29/02 

M. R. Ehnstrom

Center for Nuclear Waste Regulatory 

Analyses

Reviewed and Approved by:

 /RA/ 06/03/02 

N. King Stablein, Chief

Projects and Engineering Section

High-Level Waste Branch

Division of Waste Management
2

1.0 INTRODUCTION

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

the Center for Nuclear Waste Regulatory Analyses (CNWRA) observed the U.S. Department of

Energy’s (DOE’s) Office of Civilian Radioactive Waste Management (OCRWM), Office of

Quality Assurance (OQA) audit of Bechtel SAIC Company (BSC), Las Vegas, NV.

The objectives of the OQA audit were to assess the adequacy and effectiveness of the Quality

Assurance Requirements and Description (QARD) and implementing procedures, and to verify

BSC’s compliance with the requirements in the areas reviewed. The NRC observers’ (hereafter,

observers’) objective was to assess the effectiveness of the OQA audit team (hereafter, audit

team) and audit process, as well as the BSC implementation of the provisions in the QARD. 

This report documents the observers’ determination of the effectiveness of the OQA audit, and

the BSC implementation of QARD provisions.

2.0 MANAGEMENT SUMMARY

The observers determined that OQA Audit BSC-ARC-02-09 was effective in determining the

level of compliance of BSC QA activities, with the QARD, and with associated implementing

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

recommendations. The observers found that the audit team members were qualified,

independent of the activities that they reviewed, and knowledgeable of the QA requirements. 

Based on these observations, the OCRWM QA program had been satisfactorily implemented,

except for the items noted in the six potential deficiencies reports (DRs), two Deficiency

Identification and Referrals (DIRs), and eight Quality Observations (QOs). The potential DRs,

DIRs, and QOs were in the areas of QA program requirements, nonconformances, software,

and scientific investigation.

3.0 AUDIT PARTICIPANTS

3.1 Observers

Ted Carter Team Leader NRC

Thomas C. Trbovich QA Specialist CNWRA

Mark R. Ehnstrom QA Specialist CNWRA

3.2 Audit Team

Donald Harris Audit Team Leader OQA/Navarro Quality Services (NQS)

Harvey Dove Audit Team Leader In Training OQA/NQS

Marilyn Kavchak Auditor OQA/NQS

Christian M. Palay Auditor OQA/NQS

Robert Toro Auditor OQA/NQS

James Voigt Auditor OQA/NQS
3

4.0 REVIEW OF THE AUDIT AND AUDITED ORGANIZATION

OQA conducted this audit of BSC in accordance with OCRWM QA Procedures AP 18.2Q,

“Internal Audit Program,” and AP 16.1Q, “Management of Conditions Adverse to Quality.” The

NRC staff’s observation was based on NRC Manual Chapter 2410, “Conduct of Observation

Audits,” dated July 12, 2000.

4.1 Audit Scope 

The scope of the audit was to conduct a full-scope compliance-based audit to evaluate BSC’s

implementation of the OCRWM QA program defined in the QARD, DOE/RW-0333P, Revision

11, and applicable implementing procedures. The audit team evaluated the implementation,

compliance, adequacy, and effectiveness of the QA program and procedures in place for

activities supporting the Yucca Mountain Site Characterization Project (YMSCP). In addition,

the audit evaluated the effectiveness of the actions completed to correct the deficiencies

identified during the previous QA audits and surveillances. 

4.2 Audit Conduct and Timing

The audit was performed in a professional manner and the audit team demonstrated a sound

knowledge of the applicable BSC and DOE programs and procedures. The audit team

personnel were unified in approach, persistent in their interviews, challenged responses when

appropriate, and followed their checklist questions, deviating when necessary to more fully

understand the BSC process or pursue discrepancies. The audit team performed a thorough

and effective audit.

The audit team and observers caucused at the end of each day to discuss the audit status and

any new and developing issues. The observers were encouraged to participate in the

discussions with any comments, concerns, or questions. The audit team met with BSC

management each morning, with some of the observers present, to discuss the current audit

status and potential discrepancies. Members of the BSC organization also participated in the

discussions via teleconference. The observers determined that the timing of the audit was

appropriate for the team to evaluate the BSC QA program. It was also noted that the BSC

personnel had a good understanding of the QA program requirements and accepted ownership

of the products audited. The implementation of the QA program was improved over previous

observation audits.

4.3 Audit Team Qualification and Independence

The observers determined that the qualifications of the audit team lead (ATL) and the OQA

audit team members met the requirements of QAP-18.1, “Auditor Qualification.” The ATL

provided the qualification records for two auditors unknown to the observers. The observers

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

had sufficient authority and organizational freedom to make the audit process meaningful and

effective. 

4.4 Examination of the QA Elements

The NRC staff observed the audit team conducting detailed checks of the adequacy of

Bechtel/SAIC QA activities related to the YMSCP. The audit team effectively used its prepared

checklist identifying the QA program implementing procedures. Interviews were held with

Bechtel/SAIC personnel, as well as appropriate management personnel, who had performed or

are currently performing activities required by the implementing procedures. Several record

packages were also reviewed to assure documentation was in compliance with procedural
4

requirements. The audit team effectively shared information among team members and

assisted one another to assure each area was adequately covered and completed.

4.4.1 Organization—LP–1.0Q–BSC, Revision 1 ICN 1

The audit team reviewed several organization charts of various Bechtel/SAIC groups. 

Administrative and functional reporting structures of the matrixed organizations (i.e., direct

reporting of a staff member to an administrative and a technical manager) were not completely

clear. These charts were discussed with the Bechtel/SAIC Projects Director, who agreed the

charts could lead to confusion. Since the reorganization process is continuing, the audit team’s

recommendations will be incorporated into the revised organization charts.

The observers agreed with the findings in this area.

4.4.2 Software Management—AP–SI.1Q, Revision 3, ICN 3

The audit team reviewed three software packages, of which two were found to be in compliance

with procedural requirements. However, the software, TCODMU, Version 1 (commonly referred

to as Qconvert), which has been in continuous use for the Drift Scale Test data collection

process at the site, was found to be in noncompliance. This software has been used for many

years and apparently had not been qualified nor baselined. It was originally exempted from

qualification, because it was classified as integral to measuring and test equipment. The audit

team noted that the software contains 20 subroutines, none of which is associated with

measuring and test equipment. The audit team also questioned why nobody had documented

this known condition as a deficiency and in light of the management–imposed ‘stand-down’ on

software usage, why nobody had obtained special authorization to continue use of this

software. The audit team noted that a potential DIR would be made to the open Corrective

Action Request, BSC-01-C-002, on this discrepancy.

The observers agreed with the audit team findings in this area and expressed concern at the

closing meeting that with all the corrective actions taken and promised with regard to software

qualification, unqualified software is still being found.

4.4.3 Procurement Document Control

The audit team reviewed documentation to assure compliance with three procurement

procedures: LP–4.3Q–BSC, Revision 0 ICN 1, “Subcontracts”; LP–4.4Q–BSC,

Revision 0 ICN 1, “Technical Service Agreements”; and LP–4.5Q–BSC, Revision 0 ICN 0,

“Processing Purchase Requisitions.” The audit team noted compliance with the documentation

reviewed. However, it was noted that the procurement activities are aided by the use of a

Procurement Directives Manual. This manual contains step-by-step instructions to complete

various forms and guidance on meeting procedural requirements. This manual is not part of

the quality system and is maintained by the Procurement Controller. Since personnel use this

document to complete the various purchasing processes, the audit team recommended that the

applicable administrative and line procedures should be referenced in the Manual, to better

align it with the QA program. 

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

4.4.4 Scientific Notebooks—AP–SIII.1Q, Revision 1 ICN 1

The audit team reviewed three scientific notebooks for compliance with procedural

requirements. The technical review of Scientific Notebook–Sandia National 
5

Lab–SCI–024–Volume 1 had been properly accomplished. However, the Principal Investigator

did not respond to, nor resolve, the technical reviewer’s comments. The audit team identified a

potential DR for this discrepancy. 

In another scientific notebook, the audit team found that data were being entered on some

occasions, two to three days after the work had been completed, rather than on the next work

day, as required by procedure. The audit team identified a potential QO for this discrepancy.

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

4.4.5 Technical Product and Data Review—AP–2–14Q, Revision 0 ICN 0

The audit team reviewed several data packages and determined that the required reviews were

not being conducted in accordance with procedural requirements. Three occurrences were

noted where the reviewer did not sign for concurrence on the Review Record. In other

packages it was noted that mandatory comments were not resolved. There was no standard

comment documentation, but comments were documented in three different ways; there was

one occurrence where six out of eight Review Records had not been included in the records

package. The audit team identified a potential DR for these conditions.

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

4.4.6 Self-Assessments—AP–2.20Q, Revision 1 ICN 0

The audit team reviewed the Bechtel/SAIC/DOE/U.S. Geologic Survey schedule for selfassessments that had been updated on April 30, 2002. This schedule identified over 200

internal assessments that have been performed or will be performed during this fiscal year. 

Two completed assessment reports, one from the Purchasing, and one from the Projects,

departments, were reviewed and found to be in compliance with the procedural requirements.

The audit team noted that the reports were detailed and recommendations for improvements of

the various processes were being documented in the Condition/Issue Identification and

Reporting System. The audit team noted that the self-assessments were much better done

than in previous audits. 

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

4.4.7 Potential Audit Findings 

The audit team identified 16 conditions adverse to quality during its review. These conditions

were identified as DRs, DIRs, and QOs. The following is a short description of each.

Six Potential DRs 

(1) Concurrence sections for technical reviewers were found to be incomplete on three Data

Tracking Number packages.

(2) There was no objective evidence showing that six of eight Review Records had been

forwarded to the Review Coordinator or had been included in the record packages.

(3) The Principal Investigator had not resolved the Technical Reviewer’s comments that

were in a Scientific Notebook.

(4) No Record Road Maps were generated for three audited Data Tracking Number

packages.
6

(5) There was no objective evidence that indicated a technical review had been performed

 on two Data Tracking Number packages.

(6) The Technical Data Management System does not contain any data for two Data

Tracking Number packages that had been submitted in July and August 2001. 

Two Potential DIRs

(1) Software for the Drift Scale Test data is being used, which has not been qualified nor

baselined. 

(2) Laboratory and key management personnel have received insufficient (incomplete)

training as defined in the Science Training (CSO) Requirements Matrix, Revision 3.

Eight Potential QOs

(1) The Quality Engineering Manager has not made the proper assignment of a Quality

Engineering Representative to review a Technical Error Report. The authority to

perform the assessment has not been delegated.

(2) The person noted as having performed the Quality Assurance Representative

Disposition Review on a Nonconformance Report was incorrect. 

(3) One Quality Assurance Representative had not granted signature authority to another

Quality Assurance Representative regarding the close-out of a Supplier Discrepancies

Report.

(4) The Verification of Experience for an employee did not equal or exceed the minimum

experience requirements of the job position description.

(5) Scientific Notebook entries were not recorded by the next business day or work day, as

required.

(6) The Technical Data Management System database access list for the quarter following

October 2001 was not submitted.

(7) There was an incorrect quality review of the test plan.

(8) There was a logging activity before the required distribution of the Authorization for

Borehole Logging Activity form. 

5.0 NRC STAFF FINDINGS

The observers determined that Audit No. BSC-ARC-02-09 was effective in determining the level

of compliance of BSC activities in implementing the QA program.

The auditors reviewed selected project documents identified in the Audit Plan and employed a

detailed checklist as the basis for their reviews. The audit team also examined related project

documentation to verify the accuracy of source material and the status of data qualification

activities. The auditors conducted interviews, with personnel with appropriate levels of

knowledge, who were directly responsible for work packages reviewed. During the conduct of

these interviews, the auditors effectively used the audit checklist to focus the inquiries on areas
7

of concern. The audit team also gave the observers adequate opportunities to provide

comments, and to seek clarification on QA issues.

The observers agreed with the audit team’s conclusion that BSC has shown improvement in

implementing the provisions of the QARD, despite the identified deficiencies. The observers

also expressed concern about the continuing identification of software-related deficiencies,

despite the remedial and corrective actions, to prevent recurrence, related to inadequate

software controls.

5.1 NRC AUDIT OBSERVER INQUIRIES

There were no audit observer inquiries initiated as a result of Audit BSC-ARC-02-09. However,

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

Quality Representative, 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–02–07, remains open pending response.