By Brian Schimmoller, Contributing Editor

Events in 2007 and 2008 have renewed regulatory and utility concerns about counterfeit parts in the nuclear power industry. Although none of the counterfeit items were installed in safety-related applications, their existence reinforces the need for vigilance in ensuring the quality of equipment and components entering nuclear plant supply chains.

In April 2008, the Nuclear Regulatory Commission (NRC) issued Information Notice 2008-04 to inform nuclear plant owners about the potential for counterfeit parts to enter the supply chain, citing two recent events: the discovery of a counterfeit stop check valve on the stator cooling water skid at Hatch Unit 2 in November 2007 and the discovery that counterfeit circuit breakers manufactured in China and labeled as “Square D” products may have been purchased by Duke Energy’s Oconee, McGuire and Catawba nuclear plants sometime between 2003 and 2006.

“We authenticated the circuit breakers at McGuire and Oconee, but decided not to authenticate the circuit breakers at Catawba because there were only four and they were relatively inexpensive items,” said Sherry Grier, procurement quality manager at Duke Energy. The four suspect circuit breakers at Catawba were destroyed.

Concerns about counterfeit items are not new in the nuclear power industry. The NRC has been tracking the issue for more than two decades. In 1989, Generic Letter 89-02 described effective program elements for detecting counterfeit or fraudulently marketed products, including:

• Engineering staff involvement in the procurement and product acceptance process
• Effective source inspection, receipt inspection and testing programs
• Engineering-based programs for review, testing and dedication of commercial-grade products for use in safety-related applications.

To further guard against the introduction of counterfeit or substandard items, the NRC inspects licensees’ quality assurance and commercial dedications programs and inspects vendors’ implementation of their quality assurance and reporting requirements.

The nuclear power industry has been equally attentive to the significant operational risks. In 1989, the industry formed the Nuclear Procurement Issues Committee (NUPIC) to conduct nuclear supplier audits and ensure quality materials are procured within the industry. NUPIC is a working group composed of nuclear quality assurance auditors representing all U.S. nuclear licensees and some international nuclear operators. NUPIC conducts supplier assessments in accordance with comprehensive criteria outlined in standard checklists, recently updated to address counterfeit and fraudulent items. NRC requires that suppliers be assessed every three years, but due to the efficiency resulting from joint audits, NUPIC typically audits equipment suppliers every 30 months.

“NUPIC is a key link with nuclear suppliers that maintain a quality assurance program meeting the requirements of 10CFR50, Appendix B,” said Marc Tannenbaum, senior project manager at EPRI. “Assessment teams are typically composed of auditors representing several NUPIC member utilities as well as an engineer/technical specialist and the results of assessments are made available to NUPIC member utilities.” EPRI’s Joint Utility Task Group, composed of engineers whose primary responsibilities include ensuring that spare and replacement items are correctly specified and meet all applicable design requirements, interfaces closely with NUPIC to address technical issues such as how to prevent and detect counterfeit items.

Concerns about counterfeit items are not just increasing because of recent events. A conceivably larger risk relates to the construction of new reactors. The pool of “Appendix B” qualified suppliers has decreased since the last wave of construction projects in the U.S., said John Nakoski, NRC chief of quality and vendor branch 2. NRC staff is concerned this potential imbalance could lead to counterfeit, fraudulent or substandard items entering the supply chain of NRC licensees. The expectation that more components will be sourced from countries with possibly less stringent quality assurance standards places greater pressure on utility commercial dedication programs.

EPRI has formed an advisory group of nuclear licensees that is working closely with U.S. government agencies, key nuclear suppliers, NUPIC and the Nuclear Energy Institute to identify best practices and develop tools to manage risks. The effort includes benchmarking industry and government databases such as the Department of Energy’s Occurrence Reporting System and the Government-Industry Data Exchange Program, which is used by government agencies involved in procurement in accordance with Federal Acquisition Regulations.

“The advisory group has also become acutely aware that the scope of concern extends beyond nuclear safety,” said Tannenbaum. “Counterfeit and fraudulent items pose risks to security, industrial and personnel safety. ”

It’s become almost cliché, but the nuclear power industry is only as strong as its weakest link. Because a given accident or miscue doesn’t know or care whether it was caused by an authentic or counterfeit part, the nuclear power industry knows it must constantly keep its guard up. As the nuclear renaissance takes root, this will become increasingly difficult. The thousands of parts that fill up the spec sheet for a new nuclear power plant, and the thousands of suppliers and sub-tier suppliers involved in a large construction project, represent thousands of latent opportunities for substandard items to enter the supply chain. The sanctity of this chain could be as important as the sanctity of the nuclear core itself.

The author works for EPRI.