POLICY ISSUE 

INFORMATION 

April 2, 2010 SECY-10-0038

FOR: The Commissioners 

FROM: Michael R. Johnson, Director 

Office of New Reactors 

SUBJECT: UPDATE STATUS ON THE DEVELOPMENT OF CONSTRUCTION 

REACTOR OVERSIGHT PROCESS OPTIONS 

PURPOSE: 

This paper provides an update on the staff's progress toward the development of construction 

oversight process options for Commission consideration in response to the Staff Requirements 

Memorandum - M081022, “Staff Requirements - Periodic Briefing on New Reactor Issues, 

9:30 A.M. and 1:30 P.M., Wednesday, October 22, 2008.” This paper does not address any 

new commitments or resource implications. 

BACKGROUND: 

In SECY-09-0113, “Update on the Development of Construction Assessment Process Policy 

Options and the Construction Inspection Program Information Management System,” dated 

August 14, 2009 (Agencywide Documents Access and Management System Accession 

No. ML091970152), the staff of the U.S. Nuclear Regulatory Commission (NRC) updated the 

Commission on the development of construction assessment process policy options. 

On November 16, 2009, the staff hosted a Category 3 public meeting that featured a panel 

discussion during which views on construction assessment program issues were presented in a 

forum open to the agency's stakeholders and the public. 

CONTACT: Thomas Kozak, NRO/DCIP 

 301-415-6892 
The Commissioners - 2 -

Meeting participants included senior managers from the NRC, the Nuclear Energy Institute 

(NEI), industry representatives, and a representative from the State of Georgia. 

During that meeting, stakeholders provided feedback to the staff that a construction reactor 

oversight process (cROP) analogous to the NRC's Reactor Oversight Process (ROP) should be 

developed and that all aspects of the operating reactor assessment program should be 

evaluated. It was emphasized to the staff that the cROP should be an objective, 

understandable, and predictable process that implements a regulatory framework under which 

the NRC collects information about licensee performance, assesses the information for its 

safety significance, provides for appropriate licensee and NRC response, and communicates 

the results of its assessment to licensee management, members of the public, and other 

Government agencies. 

The staff formed a cROP team in December 2009 with representatives from each regional 

office, the Office of Nuclear Reactor Regulation, the Office of Nuclear Security and Incident 

Response, and the Office of New Reactors. Team members offer a cross section of experience 

including personnel with extensive experience in developing and implementing the ROP. 

Through public workshops and stakeholder interactions, the cROP team is developing options 

for a cROP with elements similar to those used in the ROP. Specifically, the team is identifying 

the objectives, attributes, and activities that a construction oversight process would need to 

adequately and objectively assesses licensee performance, as well as the sources of 

information necessary to support the assessment. These attributes include the application of 

thresholds to determine the significance of findings, a viable means to ensure appropriate NRC 

response to degrading licensee performance, and the assessment of licensee safety culture. 

NEI formed the Construction Reactor Oversight Process Task Force, which is actively engaged 

with the NRC staff’s development of the cROP. To date, the NRC cROP team has hosted four 

Category 2 public meetings with the NEI task force and has solicited input from other 

stakeholders during two Category 3 public meetings. The cROP was also discussed during the 

2010 Regulatory Information Conference, Construction Inspection Program Technical Session. 

DISCUSSION: 

The NRC anticipates that construction activities authorized by the limited work authorization 

issued to Vogtle Unit 3 and Unit 4 will warrant the implementation of the NRC’s construction 

assessment program in the near future. Therefore, the staff has developed and issued an 

interim construction assessment program as described in Inspection Manual Chapter (IMC) 

2505, “Periodic Assessment of Construction Inspection Program Results,” to ensure that the 

agency can appropriately assess licensee construction activities. The staff has received 

feedback from interested stakeholders that the interim assessment program is acceptable for 

implementation in the near term. 

The interim assessment program uses traditional enforcement approaches to evaluate the 

significance of inspection findings and a construction response table, analogous to the ROP’s 

action matrix, to provide guidance for the appropriate NRC response to degrading licensee 

performance. This is similar to the approach the staff is using to assess construction activities 

at Watts Bar Unit 2 and fuel cycle facilities. The staff also developed a near-term approach to 

safety culture that closely resembles the operating reactor assessment program. This approach 

includes tagging findings with construction safety focus aspects (analogous to the ROP’s cross-
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cutting aspects), evaluating these findings against a pre-defined set of criteria to determine if a 

significant concern exists, and conducting appropriate follow-up actions using a graded 

approach. In this approach, significant concerns will be treated in a manner analogous to the 

ROP’s substantive cross-cutting issues. 

The staff has determined that internal and external stakeholders will more clearly understand 

the construction processes if the terminology used is more consistent with ROP terminology, 

using the word “construction” in the name as appropriate. Therefore, in the near term, the staff 

plans to revise the terms in applicable inspection manual chapters to reflect the new 

terminology. Examples of name changes include renaming “expanded inspections” to 

“construction supplemental inspections,” and renaming the “construction response table” to the 

“construction action matrix.” 

Based on public interactions with stakeholders and working group discussions, the team is 

using the following basic guiding principles to develop the cROP: 

• The objective of construction oversight is to evaluate licensee performance of 

construction activities and the effectiveness of licensee/contractor oversight and quality 

assurance efforts associated with construction in order to provide a sufficient basis to 

support the Commission determination in accordance Title 10 of the Code of Federal 

Regulations, Part 52, Section 52.103(g) (10 CFR 52.103(g)) that the acceptance criteria 

in a combined license have been met and the plant will be operated safely. 

• The cROP should include a regulatory framework consisting of strategic performance 

areas and associated cornerstones. 

• The significance of findings should be determined using a predictable and transparent 

process, similar to the ROP’s significance determination process (SDP). 

• The construction inspection program is not limited to verifying the completion and 

closure of inspections, tests, analyses, and acceptance criteria (ITAAC) listed in the 

combined license. The NRC must also consider inspection and assessment of both 

construction and operational programs that are required to be developed and 

implemented by the licensee prior to fuel load. 

• Transition from construction to operating reactor oversight is expected to occur following 

the Commission’s finding under 10 CFR 52.103(g) that all ITAAC acceptance criteria are 

met. 

• The cROP must be robust enough to continue to be relevant and viable until the ROP is 

ready to assume oversight responsibilities after the 10 CFR 52.103(g) finding. 

• The cROP structure should be kept as simple as possible. The agency should not 

attempt to create a process that can handle all possible scenarios, but should only 

design it to handle routine and expected situations. The cROP should define an 
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appropriate process to ensure that the necessary deviations resulting from unexpected 

situations are documented and approved in a predictable and transparent manner. 

• While the ROP uses inspection to supplement performance indicators (PIs), the cROP 

will consider PIs to supplement inspection where relevant. 

• Similar to the ROP, the cROP and construction assessment process should identify and 

define bands of performance requiring increased levels of NRC oversight corresponding 

to degraded licensee performance. The bands should include a threshold above which 

licensee performance is deemed unacceptable and identify the corresponding regulatory 

actions. 

• Similar to the ROP, the cROP and construction assessment programs should identify a 

licensee performance band that does not require additional regulatory oversight beyond 

the baseline inspection level. 

• Unlike the ROP, the cROP should evaluate both licensee performance deficiencies and 

programmatic deficiencies. 

• Unlike the ROP, due to the inherently transitory phases of construction, the cROP 

cornerstones may not be of equal weight, and a construction assessment process may 

not integrate them equally. 

The team used a top-down hierarchical approach to develop the concept for a new construction 

regulatory oversight framework that addresses the agency’s regulatory principles. The team 

then identified those aspects of licensee performance during the construction lifecycle that are 

important to the mission and, therefore, merit regulatory oversight. To date, the staff's 

interaction with NEI and other stakeholders on construction oversight program options has 

resulted in substantive agreement on the cROP framework, including cornerstone objectives 

and attributes. 

The staff plans to continue interacting with the industry and the public to further develop the 

cROP and corresponding construction assessment program options for Commission 

consideration. The staff has planned several Category 2 and 3 meetings for this purpose from 

now through September 2010. The staff expects to address the following aspects of the cROP: 

• Develop an SDP-like process to objectively evaluate the safety significance of findings. 

• Reconsider the role of PIs in construction oversight. 

• Review the assessment process to ensure all expected findings can be evaluated. 
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COORDINATION: 

This paper has been coordinated with the Office of the General Counsel, which has no legal 

objection to this paper. 

 /RA/ 

Michael R. Johnson, Director 

Office of New Reactors 
The Commissioners - 5 - 

COORDINATION: 

This paper has been coordinated with the Office of the General Counsel, which has no legal 

objection to this paper. 

 /RA/ 

Michael R. Johnson, Director 

Office of New Reactors 

ADAMS Accession: ML100550490 *via e-mail SECY-012 

OFFICE DCIP/CAEB DCIP/CAEB:BC TECH ED NRR:OD NRO/PMDA 

NAME TKozak* TFrye KAzariah-Kribbs * ELeeds (MCheok for)* BGusack 

DATE 02/22/10 03/12/10 03/03/10 03/04/10 03/01/10 

OFFICE NRO/DCIP R-II OCFO OGC NLO NRO:OD 

NAME GTracy LPlisco (GGardner)* JDyer ( GPeterson)* SBurns (MZobler for)* MJohnson 

DATE 03/17/10 03/23/10 03/19/10 03/17/10 04/02/10 

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