Nuclear Industry Assessment Committee Overview ASQ Energy & Environmental Conference August 28, 2006 Ed Stankiewicz Joseph Oat Corporation NIAC Chairman

Presentation Overview Brief history of NIAC Organization structure Benefits / recent audit activity Comparison of NIAC / NUPIC approaches Success examples Status summary

History Founded in 1994 by 11 Charter members Patterned after the NUPIC concept subject to some interesting challenges –Needed to address the anti-trust (collusion) aspects of competitors sharing audits –Sharing arrangement resulted in an innovative ratio technique to address assessment assignments Amended charter / checklists in 2003 /2004 –Include DOE complex suppliers –Include Transportation and Storage 10CFR71 / 10CFR72 Current membership is at 76 members

Organization Structure Executive Officers Steering Committee Compliance Committee General Membership

Organization Structure Executive Officers –ChairmanEd Stankiewicz Joseph Oat Corporation –Vice-ChairRosalie NavaCrane Nuclear Inc. –SecretaryJohn De KlineEnertech –TreasurerJohn Salasky Axion Technical Services Responsible for general direction of NIAC activities as identified by the Steering Committee

Organization Structure Steering Committee –Executive Officers –Up to 8 additional elected members Control and issuance of NIAC documents (meeting minutes / procedures / audit plans and schedules) Administration of NIAC funds Identify matters subject to approval of the General membership –Issues of noncompliance –Membership fee and dues structure –Changes to NIAC operating procedures or NIAC charter

Organization Structure Compliance Committee –Three person committee –Led by an elected chair person Identify noncompliance issues for Steering Committee or General Membership action Charter issues –Attendance at annual meeting / performance of scheduled audits –Performance of scheduled assessments Assessment quality issues –Late issuance of assessment reports –Lack of follow-up –Quality Issues

Organization Structure General Membership –Currently 76 members Attend annual membership meeting (November) Plan / perform assigned assessments Conduct assessments as a safety-related service Maintain Lead Auditor qualifications (ASME NQA-1 / ANSI ) Obtaining supplier authorization to perform as a NIAC audit and share results Provide audit plans / reports and follow-up information to sharing members

 Supplier quality assurance programs are evaluated using a consistent basis. Standard methodology is utilized for the performance of supplier assessments. Member companies save on audit costs by the sharing of assessment results. Suppliers save on audit costs by a reduction in the number of assessments conducted. Interface and cooperation between industry peers is increased. Benefits Collectively NIAC members have improved the quality of our audit processes to benefit of our customers as well as our industry

Audit activity and savings Estimated aggregate member savings over last 5 years - $2.5 Million Based on dues, annual meeting attendance and performance of one assessment and receiving two - payback period for participating member is in the first year

Comparison NIAC / NUPIC Organization and Objectives –Similar approaches and goals –Executive leadership / committees Audit performance –Equitable sharing arrangement –NUPIC performs joint assessments –NIAC charter prohibits joint assessments –Members evaluate / accept assessments under their individual QA programs Similar benefits and cost savings to participating members Stable, institutionalized and effective processes Approaches have achieved industry / NRC acceptance

Some successes - examples Ability to address emergency needs –Supplier of needed raw material not on QSL / AVL –Normal “fire drill” would require dispatch of auditor to audit and qualify supplier - 3 to 5 day cycle time –Review NIAC database indicated a NIAC member had performed an audit –NIAC at its best!! Contacted auditing member Processed authorization letter / forms Obtained / evaluated supplier audit report (pdf / overnight mail) Qualified supplier for use –NIAC success - same day / next day cycle time

Some successes - examples Ability to address routine needs –Overseas supplier of fabricated components needed by participating NIAC member –Participating member had audited and qualified supplier –Routine request processed to share audit avoiding overseas travel –NIAC success - evolving global nature of participating NIAC members is becoming evident as sharing of European and Asian suppliers is becoming more common

Status summary We’ve grown We’ve expanded beyond the nuclear utility supply base Processes continue to be stable and efficient Continuing to benefit participating members Continuing to benefit the nuclear industry Adapting to the global economy –Sharing increased number of European and Asian supplier assessments –Membership expanding to non-US suppliers

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