Regulatory Guide 1.234

Rev 1, Evaluating Deviations and Reporting Defects and Noncompliance Under 10 CFR Part 21

ML24038A311
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Issue date:	03/31/2024
From:	Deanna Zhang NRC/NRR/DRO/IQVB
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DG-1416 RG-1.234, Rev. 1
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U.S. NUCLEAR REGULATORY COMMISSION

REGULATORY GUIDE 1.234, REVISION 1

Issue Date: March 2024 Technical Lead: Deanna Zhang

EVALUATING DEVIATIONS AND REPORTING DEFECTS

AND NONCOMPLIANCE UNDER 10 CFR PART 21

A. INTRODUCTION

Purpose

This regulatory guide (RG) describes methods that the staff of the U.S. Nuclear Regulatory Commission (NRC) considers acceptable for complying with the pr ovisions of Title 10 of the Code of Federal Regulations (10 CFR) Part 21, Reporting of Defects and Noncompliance (Ref. 1).

Applicability

This RG applies only to applicants, licensees, dedicating entities, and their suppliers associated with constructing, owning, opera ting, or supplying the componen ts of nuclear power plants subject to

10 CFR Part 21, and regulated pursuant to 10 CFR Part 50, Dome stic Licensing of Production and Utilization Facilities (Ref. 2), and 10 CFR Part 52, Licenses , Certifications, and A pprovals for Nuclear Power Plants (Ref. 3).

Applicable Regulations

• 10 CFR Part 21 establishes the procedures and requirements to i mplement Section 206, Noncompliance, of the Energy Reorganization Act of 1974 (Ref. 4), which requires that the NRC receive immediate notification that a facility, activity, o r basic component (1) fails to comply with the Atomic Energy Act of 1954, as amended (Ref. 5), or any applicable NRC rule, regulation, order, or license of the Commission relating to sub stantial safety hazards or

(2) contains a defect that could create a substantial safety h azard, as defined by NRC

regulations.

• 10 CFR 50.55(e) requires, among other things, that entities hol ding a facility construction permit under 10 CFR Part 50, a combined license (until the Commission makes the finding under 10

CFR 52.103(g)), or a manufacturing license under 10 CFR Part 52 must have procedures to evaluate deviations and compliance failures associated with substantial safety hazards as soon as practicable, and in all cases within 60 days of discovery, except as set forth in 10 CFR

Written suggestions regarding this guide may be submitted throu gh the NRCs public Web site in the NRC Library at https://www.nrc.gov/reading-rm/doc-collections/reg-guides/index .html under Document Collections, in Regulatory Guides, at https://www.nrc.gov/reading-rm/doc-collections/reg-guides/contactus.html, and will be considered in future updates and enhancements to the Regulatory Guide series. During the development process of ne w guides suggestions should be sub mitted within the comment period for immediate consideration. Suggestions received outside of the co mment period will be considered if practical to do so or may be considered for future updates.

Electronic copies of this RG, previous versions of RGs, and oth er recently issued guides are also available through the NRCs public web site in the NRC Library at https://www.nrc.gov/reading-rm/doc -collections/reg-guides/index.html/ under Document Collections, in Regulatory Guides.

This RG is also available through the NRCs Agencywide Document s Access and Management System (ADAMS) at http://www.nrc.gov/reading-rm/adams.html, under ADAMS Accession Number (No.) ML24038A311. The regulator y analysis may be found in ADAMS under Accession No. ML23187A550. The associated Draft guide DG-1416 may be found in ADAMS under Accession Number ML23187A549. There were no comments received during the public comment period.

50.55(e)(3)(ii). This requirement overlaps and supports the 10 CFR Part 21 requirements because both 10 CFR Part 21 and 10 CFR 50.55(e) require that deviations and failures be evaluated.

Related Guidance

• NUREG-0302, Revision 1, Remarks Presented (Questions/Answers Discussed) at Public Regional Meetings to Discuss Regulations (10 CFR Part 21) for R eporting of Defects and Noncompliance, July 12-26, 1977, dated October 1977 (Ref. 6), provides the NRC staffs remarks and answered questions on the meaning and application o f the 1977 rule.

Purpose of Regulatory Guides

The NRC issues RGs to describe methods that are acceptable to the staff for implementing specific parts of the agencys regulations, to explain techniqu es that the staff uses in evaluating specific issues or postulated events, and to describe information that the staff needs in its review of applications for permits and licenses. Regulatory guides are not NRC regulations and compliance with them is not required. Methods and solutions that differ from those set fort h in RGs are acceptable as long as the alternative method or solution complies with regulations and is adequately supported by a basis for an alternative, as determined by the Commission.

Paperwork Reduction Act

This RG provides voluntary guidance for implementing the mandat ory information collections in

10 CFR Parts 21, 50, 52 that are subject to the Paperwork Reduction Act of 1995 (44 U.S .C. 3501 et seq.). These information collections were approved by the Offic e of Management and Budget (OMB),

under control numbers 3150-0035 , 3150-0011, and 3150-0151, resp ectively. Send comments regarding this information collection to the FOIA, Library, and Informati on Collections Branch, Office of the Chief Information Officer, Mail Stop: T6-A10M, U.S. Nuclear Regulator y Commission, Washington, DC

20555-0001, or to the OMB reviewe r at: OMB Office of Informatio n and Regulatory Affairs, (3150-0035,

3150-0011, and 3150-0151), Attn: Desk Officer for the Nuclear R egulatory Commission, 725 17th Street, NW, Washington, DC 20503.

Public Protection Notification

The NRC may not conduct or sponsor , and a person is not require d to respond to, a collection of information unless the document re questing or requiring the col lection displays a currently valid OMB

control number.

RG 1.234, Revision 1, Page 2

B. DISCUSSION

Reason for Revision

Revision 0 of this guide was issued in April 2018 to provide li censees, applicants, and other entities subject to the requirements of 10 CFR Part 21 with an acceptable method of evaluating and reporting defects in compliance with 10 CFR Part 21. Specifical ly, this guide endorses with clarifications Nuclear Energy Institute (NEI) 14-09, Guidelines for Implement ations of 10 CFR Part 21 Reporting of Defects and Noncompliance, Revision 1, issued February 2016 (R ef. 7), which was developed to incorporate previous guidance in NUREG-0302; to add additional clarity in the specific areas where issues have historically occurred; and to include experience ga ined from the nearly 40 years of complying with 10 CFR Part 21.

This revision of this guide (Revision 1) clarifies the NRCs de finition of counterfeit, fraudulent, and suspect items (CFSI). In a ddition, the staff made several editorial changes to conform to the current format and content of RGs.

Background

The regulations in 10 CFR Part 21 establish the procedures and requirements for implementation of Section 206 of the Energy Re organization Act of 1974, which requires that the NRC receive immediate notification that a facility, activity, or basic component (1) fails to comply with the Atomic Energy Act of

1954, as amended, or any applicable NRC rule, regulation, order , or license of the Commission relating to substantial safety hazards or (2) contains a defect that could create a substantial safety hazard, as defined by NRC regulations.

The purpose of the evaluation a nd reporting requirements in 10 CFR Part 21 is to enhance the NRCs defense in depth measures for assuring the publics health and safety. Reporting of defects and non-compliances that could create a substantial safety hazard e nsures that the NRC receives prompt notification of such instances. NRC findings related to failure s to report in accordance with

10 CFR Part 21 are important. The NRC considers non-compliances to be safety and security indicators potentially affecting the agencys ability to carry out its sta tutory mission. Many of the surveillance, quality control, and auditing activities that both the NRC and its licensees rely on to monitor compliance with safety standards are based primarily on complete, accurate, and timely recordkeeping and reporting.

Therefore, the NRC may consider a failure to make a required re port that impedes its ability to take regulatory action to be significant, even if that failure was i nadvertent or did not result in an actual consequence.

The applicability of 10 CFR Part 21 is broader than most NRC re gulations. Its requirements impose obligations on certain officers of NRC licensees and on certain officers of non-licensees that construct facilities for, or supply components to, licensed fac ilities or activities (i.e., vendors or suppliers).

Consequently, developing programs that implement the requiremen ts of the regulation poses different challenges for the licensees and vendors.

In addition, the statements of consideration that accompanied t he final rule for 10 CFR Part 52 clarified the applicability of various requirements to each of its licensing processes, including how Section 206 reporting requirements and, therefore, the provisio ns of 10 CFR Part 21, should be extended to early site permits, standard design certifications, and comb ined licenses (COLs).

RG 1.234, Revision 1, Page 3 Finally, Regulatory Issue Summary (RIS) 2010-05, Applicability of 10 CFR Part 21 Requirements to Applicants for S tandard Design Certifications, dated May 24, 2010 (Ref. 8), clarified the NRCs regulatory position regarding the applicability of 10 CFR Part 21 requirements to standard design certification or design certification rule (DCR) applica nts (hereafter referred to as DCR applicants)

before and after the NRC issues the DCR. Subsequently, NEI 14-0 9, Revision 1, incorporated all the information provided in RIS 2010-05.

Consideration of International Standards

The International Atomic Energy Agency (IAEA) and Nuclear Energy Agency (NEA) work cooperatively with member states and other partners to promote the safe, secure, and peaceful use of nuclear technologies. This system of safety fundamentals, safet y requirements, safety guides, and other relevant reports, reflect an international perspective on what constitutes a high level of safety. To inform its development of this RG, the NRC considered IAEA and NEA saf ety requirements and safety guides pursuant to the Commissions International Policy Statement (Re f. 9) and Management Directive and Handbook 6.6, Regulatory Guides (Ref. 10).

The NRC staff did not identify any IAEA safety requirements or guides with information related to the topic of this RG. However, the staff has identified the NEA Committee on Nuclear Regulatory Activities (CNRA) Report NEA/CRNA/R (2012), Regulatory Oversig ht of Non-Conforming, Counterfeit, Fraudulent, and Suspect Items (NCFSI), dated Febr uary 13, 2013 (Ref. 11), as providing relevant information. This document discusses different approac hes to managing NCFSI and notes that existing controls may need to be put in place throughout the su pply chain. This RG incorporates quality assurance guidance and is generally consistent with the NEAs basic safety principles.

Documents Discussed in Staff Regulatory Guidance

This RG endorses the use of one or more codes or standards deve loped by external organizations, and other third-party guidance documents. These codes, standards and third-party guidance documents may contain references to other codes, standards or third-party guidance documents (secondary references). If a secondary reference has itself been incorporated by reference into NRC regulations as a requirement, then licensees and applicants must comply with tha t standard as set forth in the regulation. If the secondary reference has been endorsed in a RG as an acceptable approach for meeting an NRC

requirement, then the standard constitutes a method acceptable to the NRC staff for meeting that regulatory requirement as described in the specific RG. If the secondary reference has neither been incorporated by reference into NRC regulations nor endorsed in a RG, then the secondary reference is neither a legally binding require ment nor a generic NRC approved acceptable approach for meeting an NRC requirement. However, licensees, applicants, and other regu lated entities may consider and use the information in the secondary ref erence, if appropriately justified, consistent with current regulatory practice, and consistent with applicable NRC requirements.

RG 1.234, Revision 1, Page 4 C. STAFF REGULATORY GUIDANCE

The NRC staff endorses NEI 14-09, Revision 1, which provides an adequate basis for complying with the requirements of 10 CFR Part 21, with the following cla rifications:

1. In the context of using NEI 14- 09 and for the purposes of interactions between standard design certification or design certification rule (DCR) applicants and combined operating license (COL)

holders, the DCR applicant is cons idered to be the supplier and the COL holder the purchaser.

2. For types and location of postings, the NRC staff agrees that 10 CFR Part 21 allows postings to be hard copies, digital copies, or a combination of both. In ad dition, links to electronic postings may be identified on sites, that is, websites, commonly frequented by workers during the performance of work subject to 10 CFR Part 21. The NRC staff en dorses those positions and clarifies that posting requirements of 10 CFR 21.6 may be met t hrough electronic postings, regardless of the physical location of the workplace.

3. Regarding training guidance, NEI 14-09 states the following:

10 CFR part 21 does not establish requirements for training of personnel involved in 10 CFR part 21 activities. However, as a good pract ice, appropriate familiarization, and training in the requirements of 10 CFR par t 21 should be provided initially, and as appropriate on an ongoing basis, as necessary. As another good practice, an organi zation should designate individ uals capable of assisting the staff in part 21 evaluation, reporting requirements and training requirements.

The NRCs position regarding training of personnel involved in 10 CFR Part 21 activities is that this training would be covered under 10 CFR 50.120, Tr aining and qualification of nuclear power plant personnel. If an employee covered by 10 CF R 50.120 is required to perform tasks associated with 10 CFR Part 21, including the evaluation of a reportable condition under

10 CFR Part 21 training, the systems approach to training would evaluate and train covered employees on the related elements. The staffs position on this point relates to the requirements of

10 CFR 50.120, rather than 10 CFR Part 21, and thus should not be understood to contradict the guidance in NEI 14-09.

4. Section 2.7, Deviation, of NEI 14-09 states that Counterfeit and fraudulent items are considered to be deviations. Sec tion 7.4, Deviation in a Deli vered Basic Component, of NEI

14-09, clarifies this and states that A deviation in a basic component delivered to a purchaser for use in a facility or an activity subject to 10 CFR Part 21 must be evaluated. Other than just referencing counterfeit and suspect items, NEI 14-09 does not f ormally define CFSI.

To provide clarity and ensure consistency when addressing related NRC oversight activities, for the purposes of this guidance, the NRC staff understands CFSI t o mean Items that are intentionally manufactured or altered to imitate a legitimate p roduct without the legal right to do so (Counterfeit); intentionally misrepresented with the intent to deceive (Fraudulent); or reasonably suspected of being Counterfeit or Fraudulent (Suspec t). The NRC staff considers CFSI to be a deviation to be treated according to the guidance in NEI 14-09.

RG 1.234, Revision 1, Page 5

D. IMPLEMENTATION

The NRC staff may use this RG as a reference in its regulatory processes, such as licensing, inspection, or enforcement. However, the NRC staff does not intend to use the guidance in this RG to support NRC staff actions in a manner that would constitute bac kfitting as that term is defined in

10 CFR 50.109, Backfitting, and as described in NRC Management Directive 8.4, Management of Backfitting, Forward Fitting, Issue Finality, and Information R equests (Ref. 12), nor does the NRC staff intend to use the guidance to affect the issue finality of an approval under 10 CFR Part 52, Licenses, Certifications, and Approvals for Nuclear Power Plants. The staff also does not intend to use the guidance to support NRC staff ac tions in a manner that constitu tes forward fitting as that term is defined and described in Management Directive 8.4. If a licensee believ es that the NRC is using this RG in a manner inconsistent with the di scussion in this Implementation section, then the licensee may file a backfitting or forward fitting a ppeal with the NRC in accordance with the process in Management Directive 8.4.

RG 1.234, Revision 1, Page 6 REFERENCES1

1. U.S. Code of Federal Regulations (CFR), Reporting of Defects and Noncompliance, Part 21, Chapter I, Title 10, Energy.

2. CFR, Domestic Licensing of Production and Utilization Faciliti es, Part 50, Chapter I, Title 10,

Energy.

3. CFR, Licenses, Certifications, and Approvals for Nuclear Power Plants, Part 52, Chapter I,

Title 10, Energy.

4. Energy Reorganization Act of 1974, Section 206, Noncompliance.

5. Atomic Energy Act of 1954, as amended, Section 42, United States Code (U.S.C.) §2161, e t seq.

6. U.S. Nuclear Regulatory Commission (NRC), Remarks Presented (Q uestions/Answers Discussed) at Public Regional Meetings To Discuss Regulations ( 10 CFR Part 21) for Reporting of Defects and Noncompliance, July 12-26, 1977, NUREG-0302, Re vision 1, Washington, DC,

October 1977. (Agencywide Documents Access and Management Syste m (ADAMS) Accession No. ML062080399).

7. Nuclear Energy Institute (NEI), NEI 14-09, Revision 1, Guideli nes for Implementation of

10 CFR Part 21 Reporting of Defects and Noncompliance, Washing ton, DC, February 2016.

(ML16054A825).2

8. NRC, Regulatory Issue Summary 2010-05, Applicability of 10 CFR Part 21 Requirements to Applicants for Standard Design Ce rtifications, Washington, DC, May 24, 2010.

9. NRC, Nuclear Regulatory Commiss ion International Policy Statement, Federal Register, Vol. 79, No. 132, pp. 39415-39418 (79 FR 39415), Washington, DC , July 10, 2014.

10. NRC, Management Directive (MD) 6.6, Regulatory Guides, Washington, DC.

11. Nuclear Energy Agency Committee on Nuclear Regulatory Activitie s, Report NEA/CRNA/R

(2012)7, Regulatory Oversight o f Non-Conforming, Counterfeit, Fraudulent, and Suspect Items (NCFSI), Paris, France, February 13, 2013. 3

1 Publicly available NRC published documents are available electronically through the NRC Library on the NRCs public website at http://www.nrc.gov/reading-rm/doc-collections/ and through the NRCs Agencywide Documents Access and Management System (ADAMS) at http://www.nrc.gov/reading-rm/adams.html. For problems with ADAMS, contact the Public Document Room staff at 301-415-4737 or (800) 397-4209, or email pdr.resource@nrc.gov. The NRC Public Document Room (PDR), where you may also examine and order copies of publicly available documents, is open by appointment. To make an appointment to visit the PDR, please send an email to PDR.Resource@nr

c. gov or call

1-800-397-4209 or 301-415-4737, between 8 a.m. and 4 p.m. eastern time (ET), Monday through Friday, except Federal holidays.

2 Publications from the Nuclear Energy Institute (NEI) are ava ilable at its website: http://www.nei.org/ or by contacting the headquarters at Nuclear Energy Institute, 1776 I Street, NW, Washington, DC 20006-3708, telephone: 202-739-8000, fax

202-785-4019.

3 Publications from the Nuclear Energy Agency (NEA) are av ailable at its website: https://www.oecd-nea.org/ or by contacting the headquarters at Nuclear Energy Agency, 2, rue André Pascal, 75775 Paris Cedex 16, France, telephone:

+33 1 73 21 28 19.

RG 1.234, Revision 1, Page 7

12. NRC, MD 8.4, Management of Backfitting, Forward Fitting, Issue Finality, and

=

.

RG 1.234, Revision 1, Page 8