To: File

From: Michael Jensen, DOE GC-71 Date: September 23, 2010 Re: Ex parte discussion with RADCO, Inc.

On September 22, 2010, Michael Jensen (GC-71), Bob Lucas (PNL), and Dave Conover (PNL) spoke with Mike Zieman of RADCO, Inc., on RADCO’s role as both a production inspection primary inspection agency (IPIA) and as a desi gn approval primary inspection agency (DAPIA) under the U.S. Department of Housing and Urban Development (HUD) manufactured housing

program.

Mr. Zieman mentioned that RADCO rarely perfor ms site inspections of manufactured homes. He noted that, in many states, state or lo cal government regulates the installation of manufactured homes and other work performed on site; HUD is required by current law and soon will be regulating the installati on of homes in states without th ese codes (“default states”).

Mr. Zieman also recommended that it woul d be most efficient for DOE use the HUD enforcement system to avoid having dual enfo rcement programs with multiple inspection agencies operating in plants. Mr. Zieman explained that IPIAs and DAPIAs currently are monitored by HUD and HUD’s mon itoring contractor: The Ins titute for Building Technology and Safety (IBTS). He noted that DAPIAs and IPIA s are required to send IBTS: (1) copies of all approved manufactured home design s; (2) reports certifying new manufactured housing plants or plants that have undergone significant changes; and (3) monthly manufactured housing production reports. Moreover, he explained that IBTS performs annual audits of all DAPIAs and IPIAs and that the reports are shared with HUD.

Mr. Zieman also provided a general overview of how the DAPIA and IPIA approval processes works. On the design side, he explained that the DAPIA will issue a desi gn deviation report to the manufacturer upon any finding of noncomp liance with HUD standards (MHCSS) or regulations. The DAPIA will perform a second re view after the design is corrected. This process continues until the design is finally accepted as conforming. A copy of the conforming design is forwarded to IBTS. On the production side, Mr. Zieman explained that any instance of noncompliance is listed in the IP IA inspection report along with th e root cause of the problem, whether the problem has been co rrected, and the action taken to correct the problem. If the problem is not corrected, he noted that IPIAs must “red-tag” the manufactured home, preventing the manufacturer from attaching a HUD certification label to the home.

He noted that genuine disagreements among manu facturers, DAPIAs, and IPIAs over whether a manufacturer has adequately complied with HUD standards or regul ations occur very infrequently, but that these rare occurrences i nvolve HUD in the resolution of the disagreement. Mr. Zieman also mentioned that HUD may invol ve itself in instances where a manufacturer disagrees with an IBTS audit.

Mr. Zieman was uncertain about the extent to which manufacturers use 2x4 versus 2x6 construction. Addressing issues associated w ith the number of climate zones, he noted that, during periods of slow sales, manufacturers ofte n know the eventual destination of the home andthus can design and build the home for a specific zone. However, if the eight IECC zones are

used in the DOE standards, manufacture d home manufacturers can supply a market encompassing 2, 3, or even 4 IECC climate zone s. When business picks up, manufacturers would be forced to design and build the house to the most restrictive and therefore the most costly zone, thus adding needle ss cost to the consumer.

Finally, Mr. Zieman addressed the complexities of basing the proposed DOE energy efficiency standards on lifecycle co sts versus the initial purchase price of the home, and that DOE should consider a compromise. He not ed that initial purchase price is an important consideration because if the consumer cannot afford to buy the house, the lifecycle cost is of little importance.

End of conversation.