POLICY ISSUE 

INFORMATION 

October 17, 2008 SECY-08-0155

FOR: The Commissioners 

FROM: R. W. Borchardt 

 Executive Director for Operations 

SUBJECT: UPDATE ON THE DEVELOPMENT OF THE CONSTRUCTION 

INSPECTION PROGRAM FOR NEW REACTOR CONSTRUCTION 

UNDER 10 CFR PART 52 

PURPOSE: 

This information paper summarizes the development of the construction inspection program for 

new reactor construction under Title 10 of the Code of Federal Regulation (10 CFR) Part 52 and 

the incorporation of lessons learned from construction experience into the U. S. Nuclear 

Regulatory Commission’s (NRC’s) program. This paper does not address any new 

commitments or resource implications. 

SUMMARY

This information paper summarizes the development of the construction inspection program for 

new reactor construction under Title 10 of the Code of Federal Regulation (10 CFR) Part 52. 

The major topics discussed are ongoing development of the assessment process, enforcement 

process development, evaluation of safety culture attributes within the construction inspection 

program, and implementation of enhancements to the NRC's operating experience program to 

better integrate construction experience for new reactor construction under 10 CFR Part 52. 

CONTACT: Ian Spivack, NRO/DCIP 

 (301) 415-2564
The Commissioners - 2 - 

The program has been developed with stakeholder input and used the existing reactor oversight 

program as a point of reference. Major program elements will include: 

• Evaluating construction issues utilizing a defined process; 

• Providing a predictable NRC response for a given level of overall licensee performance 

during construction by using the construction response table; 

• Utilizing the traditional enforcement approach for construction; 

• Developing a construction experience program; and 

• Communicating domestic and international operating experience related to construction 

amongst stakeholders and incorporating appropriate lessons learned in NRC’s policies and 

programs.

Future activities include staffing an allegation program infrastructure for NRO and evaluating 

attributes important to safety culture for potential use in the construction inspection program. 

BACKGROUND: 

The Division of Construction Inspection and Operational Programs in the Office of New Reactors 

(NRO) and the Region II Center for Construction Inspection have been conducting periodic 

public meetings with the industry and other NRC stakeholders for the past 21 months to discuss 

the development of programs and procedures related to new reactor construction under 10 CFR 

Part 52. One of the primary purposes of these meetings has been to develop NRC programs in 

the areas of assessment, safety culture, and enforcement for the oversight of new reactor 

construction. 

Additionally, this paper also addresses the staff commitment, as discussed in Staff 

Requirements Memorandum dated November 13, 2007, to keep the Commission informed on 

how lessons from domestic and foreign construction experience are being incorporated into 

NRC programs. 

DISCUSSION:

Assessment Process

A fundamental goal of the NRC’s oversight of new reactor construction activities is to ensure that 

each plant is constructed in accordance with the design and will operate safely. The intent of the 

NRC’s oversight program is to ensure that licensees (and their contractors/vendors) detect and 

correct problems in a manner that focuses on quality and safety as top priorities. The 

construction inspection program and construction assessment process have been structured to 

reflect the rapidly changing nature of a construction environment. Additionally, the staff has 

evaluated NUREG-1055, “Improving Quality and the Assurance of Quality in the Design and 

Construction of Nuclear Power Plants,” the lessons learned from domestic construction 

experience, as well as the lessons learned and challenges to our international regulatory 

counterparts who are currently overseeing nuclear construction activities. These insights have 

been incorporated into construction inspection and assessment documents. As a result, the 

staff has developed a transparent and predictable process that objectively evaluates licensee 

performance of construction activities, and the effectiveness of licensee or contractor oversight 

and quality assurance efforts associated with construction. 
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The attributes and structure of Inspection Manual Chapter (IMC) 0305, “Operating Reactor 

Assessment Program,” were used as a point of reference for the development of the 

assessment process for new nuclear reactor construction under 10 CFR Part 52. Relevant 

aspects of IMC 0305 that will be utilized for assessing licensee performance during construction 

were incorporated into the development of the construction assessment process. 

The construction assessment process is documented in IMC 2505, “Periodic Assessment of 

Construction Inspection Program Results,” and will be implemented on a periodic basis to 

evaluate licensees’ performance and to assess the allocation of NRC inspection resources. The 

construction assessment process will begin after a Limited Work Authorization or a Combined 

License has been issued, and the NRC has begun inspections under either IMC 2503, 

“Construction Inspection Program: Inspections of Inspections, Tests, Analysis, and Acceptance 

Criteria (ITAAC),” or IMC 2504, “Construction Inspection Program - Non-ITAAC Inspections,” 

and there is sufficient activity occurring for an assessment to be meaningful. 

The goal of oversight during the fast-paced activities of new reactor construction is to quickly 

and effectively identify and resolve issues that may arise. The Construction Finding Flowchart 

(Enclosure 1) visually depicts the process that the NRC will follow in order to disposition a 

construction issue. NRC-identified issues that are greater-than-minor and are not in compliance 

with regulatory requirements or legally binding licensee commitments are considered to be 

findings. Findings will be evaluated to determine if the issue is related to an ITAAC, if the issue 

has an impact on the ITAAC acceptance criteria, and if the licensee has submitted an ITAAC 

closure letter. Appropriate regulatory actions will be taken based on the staff’s evaluation of the 

finding. In addition, all violations will be evaluated in accordance with the Enforcement Policy to 

determine the appropriate severity level. For the construction inspection program, the traditional 

enforcement approach will be used to assess significance in lieu of a Significance Determination 

Process (SDP) for construction. Escalated enforcement actions will be included in the 

assessment process for 6 months from the date of the issuance of the violation, or until the NRC 

has accepted the licensee’s corrective actions, whichever is longer. 

The staff has developed a Construction Response Table (CRT) (Enclosure 2). The CRT will be 

used to develop a predictable NRC response to licensee’s performance. Significant issues that 

are identified could potentially have broader implications regarding the licensee’s performance 

than just the single issue. Therefore, significant issues are the input to the CRT and will result in 

the inspection program being expanded beyond the baseline inspection program to review either 

additional samples in the area of concern or to review non-targeted ITAAC in the area of 

concern. As such, the CRT provides for increasing NRC actions in response to declining 

licensee performance. Increasing NRC actions could include additional NRC inspections, 

increased engagement of NRC management with licensee management, and additional 

enforcement actions. As the expected relatively short construction periods make it likely that 

Performance Indicators (PIs) would not have time to develop meaningful insights, PIs will not be 

developed for the construction inspection program. 

The construction assessment process is divided into three basic parts: continuous assessment, 

quarterly assessment, and semi-annual performance review. The periodic assessments will 

continue until construction is complete and the assessment process has transitioned to the 

Reactor Oversight Process (ROP). The construction inspection and assessment process will 

include a review of inspection findings, enforcement, allegations, safety culture, and the results 

of NRC program inspections. During performance assessments, violations applicable to the 
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assessment period will be evaluated to determine if a construction safety focus issue (CSFI) 

exists by determining if the violations had a common cause warranting additional licensee and/or 

NRC attention. A CSFI will be an NRC-identified issue concerning a common cause for 

violations identified during an assessment period. The appropriate column of the CRT 

applicable to the licensee will be determined by the violations and CSFIs identified during the 

assessment period. Performance assessment letters will generally be issued following the semiannual assessment meetings. 

As is done with the operating plants, plants under construction with significant performance 

weaknesses will be discussed at the existing Agency Action Review Meeting to confirm the 

appropriateness of NRC actions. The Commission will be briefed on the results of this meeting. 

Additionally, an annual public meeting will be held near the new reactor construction site. This 

meeting provides an opportunity to engage interested stakeholders on licensee’s performance 

and the role of the NRC. 

Use of Safety Culture Attributes

Reviews of historical construction issues identified in the U.S. (e.g., NUREG-1055) and current 

international experiences have reemphasized the importance of safety culture in the new 

construction environment. While the construction assessment process will address components 

of safety culture for new reactor construction, final details of the process have not been fully 

developed to date. The staff has discussed proposed approaches that include consideration of 

areas important to safety culture in the assessment process during public meetings with 

stakeholders. Considerable feedback regarding NRC review of areas important to safety culture 

has been received from the industry during these public meetings. The staff is continuing to 

monitor the evaluation of safety culture components within the framework of the ROP and to 

engage with industry and other public stakeholders to discuss proposed approaches for 

including safety culture in the context of the construction assessment process. CSFIs are 

envisioned to be similar to the ROP’s substantive cross-cutting issues in order to address the 

agency’s review of attributes important to safety culture. Informed by ongoing ROP initiatives, 

the final inputs to CSFIs will continue to be developed with stakeholders during the conduct of 

future public meetings. 

Enforcement

Violations identified during construction inspections will be dispositioned utilizing a traditional 

enforcement approach because the staff has concluded that it is most appropriate for this 

application. The use of traditional enforcement has already been established and was 

effectively used to address issues identified by inspectors during the Browns Ferry 1 recovery 

project. Traditional enforcement is also being used for the Watts Bar Unit 2 reactivation. 

A proposed revision to the Enforcement Policy was published in the Federal Register on 

September 15, 2008, for public comment. The proposed revision contains examples of 

violations (including construction) to reflect the 10 CFR Part 52 licensing process and lessons 

learned. Violations that do not meet the criteria of Severity Level I, II, III, and IV would be 

considered minor and, as in the ROP, would not typically be documented by NRC inspectors. 
The Commissioners - 5 - 

The use of non-cited violations (NCVs) as part of the enforcement process is predicated on a 

licensee having an effective correction action program (CAP) into which identified issues are 

entered and are effectively resolved in a timely and lasting manner. The NRC will assess the 

effectiveness of the CAP by screening CAP issues on a frequent basis, performing semi-annual 

trend reviews, reviewing the disposition of NRC identified issues, and performing periodic 

problem identification and resolution team inspections. Licensee performance weaknesses in 

the identification and resolution of issues in the CAP may lead to enforcement actions. 

Initially, it is expected that licensee individuals will have limited experience with the 

implementation of their licensee’s CAP. Therefore, prior to or near the beginning of construction 

for each plant, problem identification and resolution inspections will be conducted to assess the 

licensee’s implementation of their CAP for the purpose of making a determination regarding the 

use of NCVs. A subsequent sufficient degradation of the CAP program may result in the NRC 

reverting to the issuance of a Notice of Violation for Severity Level IV violations instead of 

issuing non-cited violations. The use of a standardized and clearly documented CAP program 

has been discussed at public workshop meetings. The industry continues to develop a 

standardized CAP program which the NRC will review and will endorse, if found acceptable. 

Construction Experience

As discussed in SECY-08-0117, in close coordination with the Office of Nuclear Reactor 

Regulation, the staff is developing a construction experience program for new reactors. The 

staff is communicating construction experience to stakeholders via generic communications and 

will continue to incorporate lessons learned into NRC programs from recent and ongoing 

domestic and international construction activities. For example, issues identified at the fuel cycle 

facilities that are under construction will be considered in the development of inspection 

documentation and enforcement thresholds. In another example, a recently identified Catawba 

construction error regarding incorrectly installed floor drain orifice plates is being incorporated 

into construction inspection program guidance. 

The staff also continues to interact extensively with international colleagues regarding 

experience in ongoing new reactor construction inspection and assessment activities and has 

incorporated lessons learned into NRC programs. For example, recent safety culture issues 

identified at foreign construction sites are being considered during the development of guidance 

for inspection and assessment of safety culture components. A recent internal flooding event at 

a foreign reactor construction site is being evaluated for lessons learned and a possible generic 

communication regarding vulnerabilities to adverse weather. Another recently identified issue at 

a foreign reactor construction site concerning containment liner bulging and weld joint quality 

controls were assessed against the inspection procedures and communicated to all NRC 

construction inspectors via the internal construction experience program. The staff has realized 

great benefit from the evaluation of domestic and international construction activities and will 

continue to assess events for incorporation into NRC programs. 

Future Activities

Currently, the new reactor allegation process is being supported by the Office of Nuclear 

Reactor Regulation, using existing agency policies and procedures. To date, there have been 

relatively few allegations related to new reactor activities. As planned, NRO will develop its own 

allegation review infrastructure to support the anticipated increase in allegations associated with 
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new construction activities. The Region II Center for Construction Inspection has received 

allegations associated with construction activities related to fuel cycle facilities and is utilizing the 

existing allegation process to address these issues. 

The staff incorporated the comments and insights from stakeholders and meetings over the past 

21 months into IMC 2505, which was approved on September 25, 2008. The incorporation of 

areas important to safety culture into the inspection and assessment process will occur following 

completion of the ongoing staff efforts with full consideration of stakeholders’ input and 

feedback. Once the inspection and assessment process for new reactors is fully developed and 

includes safety culture attributes, a review will be conducted to determine if there are any 

additional resource needs required to properly implement the program. 

NRO has been developing the necessary programs and procedures to address the inspection of 

anticipated new nuclear power plant construction. The staff will continue to discuss the 

development of these programs and procedures with stakeholders in periodic public meetings 

and Commission briefings. 

COORDINATION: 

The Office of the General Counsel reviewed this report and has no legal objection. 

/RA by Bruce S. Mallett acting for/ 

 

R. W. Borchardt 

Executive Director 

 for Operations 

Enclosures: 

1. Construction Finding Flowchart 

2. Construction Response Table
The Commissioners -6- 

new construction activities. The Region II Center for Construction Inspection has received 

allegations associated with construction activities related to fuel cycle facilities and is utilizing the 

existing allegation process to address these issues. 

The staff incorporated the comments and insights from stakeholders and meetings over the past 

21 months into IMC 2505, which was approved on September 25, 2008. The incorporation of 

areas important to safety culture into the inspection and assessment process will occur following 

completion of the ongoing staff efforts with full consideration of stakeholders’ input and 

feedback. Once the inspection and assessment process for new reactors is fully developed and 

includes safety culture attributes, a review will be conducted to determine if there are any 

additional resource needs required to properly implement the program. 

NRO has been developing the necessary programs and procedures to address the inspection of 

anticipated new nuclear power plant construction. The staff will continue to discuss the 

development of these programs and procedures with stakeholders in periodic public meetings 

and Commission briefings. 

COORDINATION: 

The Office of the General Counsel reviewed this report and has no legal objection. 

/RA by Bruce S. Mallett acting for/ 

 

R. W. Borchardt 

Executive Director 

 for Operations 

Enclosures: 

1. Construction Finding Flowchart 

2. Construction Response Table

ADAMS Accession No.: ML082330415 WITS 200700454/EDATS: SECY-2007-0544 *Via E-mail

OFFICE DCIP/CCIB Tech Editor* DCIP/CCIB:TL DCIP/CCIB:BC RII: D NRO/PMDA

NAME ISpivack RRihm for HSpencer RPascarelli RRasmussen LPlisco TGody for BGusack 

DATE 08/19/08 09/03/08 08/29/08 09/02/08 09/16/08 09/02/08 

OFFICE OE CFO* OGC* NRO/DCIP/D NRO:OD EDO 

NAME CCarpenter SMagruder for RMitchell MSpencer GTracy JMunday for MJohnson RBorchardt 

(BMallett acting for)

DATE 09/16/08 09/25/08 09/25/08 09/25/08 10/09/08 10/17/08 

OFFICIAL RECORD COPY 
Construction Findings Flowchart 

Construction 

Issue 

Licensee 

Identified or 

self-revealing? 

CAP 

NRC 

Issue 

Non-compliance 

with regulatory 

 Requirements or 

Licensee 

Commitments? 

Minor? 

Inform 

licensee 

Associated 

with Specific 

ITAAC? 

Closeout 

Letter Issued? 

Inform 

Licensee 

Material to 

ITAAC 

Acceptance 

Criteria? 

Document as 

ITAAC 

Finding 

Has the NRC 

Accepted 

ITAAC 

Closure? 

NRC rejects 

Closeout letter 

Treatment of 

Invalid Closeout 

Letter 

Document as 

Construction 

Finding 

Inform 

Licensee 

Material to 

ITAAC 

Acceptance 

Criteria? 

Greater than 

SL IV 

violation? 

> SLIII per 

Enforcement 

Policy? 

Yes 

Yes 

Yes Yes 

Yes 

Yes 

Yes 

Yes 

No 

No 

No No 

No 

No 

No 

Yes 

No 

Yes 

Screening 

Criteria Met? 

Yes No 

CAP 

Evaluate need 

to re-open other closed ITAAC’s 

Review actions 

Document as 

ITAAC Related 

Construction 

Finding 

> SLII per 

Enforcement 

Policy? 

Yes 
Construction Response Table 

Baseline Program column Increased Focus Program column Expanded Program column UnacceptOnly SL IV violations and no Construction Safety Focus Issues (CSFIs). License requirements fully met 

One or two SLIII violations and/or CSFIs. License requirements met with some challenges to licensee 

Any combination of three SL III violations or CSFIs, or one SL II violation. License requirements met with some significant challenges to licensee 

One SL I violationsfollowing: SL III violaseven SL Loss of Cwithin liceareas of c

Regulatory Performance Meeting 

None Branch Chief (BC) or Division 

Director (DD) Meet with Licensee 

Deputy Regional Administrator (DRA) or designee meet with senior licensee management 

Executive (EDO) or licensee m

Licensee Action Licensee Corrective Action Licensee root cause evaluation and 

corrective action with NRC Oversight 

Licensee cumulative root cause evaluation with NRC Oversight. 

Licensee Plan and with NRC 

NRC Inspection Baseline Inspection 

Program 

Limited increase in NRC oversight of area(s) of concern. Expanded Inspection in accordance with IP 90001. 

Expanded NRC oversight in area(s) of concern. ITAAC sample increased as appropriate. Expanded inspection in accordance with IP 90002. 

Reactive of conceraccordanc

Regulatory Actions 

None (Additional actions considered for plants exiting Expanded Program column or Unacceptable Performance column). 

Additional inspection only. (Additional actions considered for plants exiting Expanded Program column or Unacceptable Performance column). 

Additional inspection only. Evaluate continued use of non-cited violations. (Additional actions considered for plants exiting Unacceptable Performance column). 

At minimuAction LeDemand fOrder. Diviolations

Assessment Letters 

BC or DD review/sign assessment report (w/ inspection plan) 

DD review/sign assessment report (w/ inspection plan) 

DRA review/sign assessment report (w/ inspection plan) 

RA or EDreport (w/ 

Annual Public Meeting 

SRI or BC Meet with Licensee BC or DD Meet with Licensee DRA (or designee) Discuss 

Performance with Licensee 

EDO (or dPerforma

Commission Involvement 

None None None Commiss

Licensee 

INCREASING SAFETY/REGULATORY SIGNIFICANCE ---------->