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Repair Stations

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Inappropriate Restrictions on the Use and Availability of ICAs

Some of you may be wondering where to find the FAA’s policy memo on design approval holder restrictions on ICA availability.  Older MARPA links to the original position of that guidance are no longer valid because it has been moved.  But it is still available if you know where to look!

Many MARPA members look for this policy memo because it clarifies that anti-competitive language in ICAs (restricting use of PMAs or third party repairs) is unacceptable to the FAA:

While not exhaustive, the FAA finds the following practices of using restrictive language in the ICA or through restrictive access or use agreements unacceptable under the provisions of 14 CFR §21.50(b) and related ICA airworthiness requirements:

1) Requiring the owner/operator to only install DAH-produced or authorized replacement parts, articles, appliances, or materials.
2) Requiring that alterations or repairs must be provided or otherwise authorized by the DAH.
3) Requiring the use of only maintenance providers or other persons authorized by the DAH to implement the ICA.
4) Establishing, or attempting to establish, any restriction on the owner/operator to disclose or provide the ICA to persons authorized by the FAA to implement the ICA.

The guidance has found a permanent home in the FAA Regulatory and Guidance Library.  A copy of that guidance is also available on the MARPA website.

New TCDS Guidance Stresses Avoidance of Anti-Competitive Language

The FAA has released Notice 8110.116, which stresses the importance of writing clear notes in the Type Certificate Data Sheet (TCDS), and of ensuring that those notes are consistent with FAA policy.  This new guidance can be very valuable to everyone in the industry.  The value to TC applicants and holders (who create draft TCDS for FAA adoption) is obvious, but less obvious are the subtle and not-so-subtle admonitions against using the TCDS for anti-competitive effect.

One valuable element of this guidance is that it stresses certain things that should not appear in the TCDS.  For example, in paragraph 6(a)(6), the guidance advises against language that limits work to a scope narrower than permitted by the regulations:

(6) Do not include requirement that is non-regulatory in the notes. For example: “This aircraft shall be maintained in accordance with the BHT-427 Maintenance manual.” This note implies that BHT-427 is the only source for maintaining the aircraft, and conflicts with 14 CFR 43.13(a) which states “Each person performing maintenance . . . shall use methods . . . or other methods acceptable to the administrator.”

This admonition is consistent with FAA guidance that has prohibited language limiting operators options in seeking repairs.  E.g. PS-AIR-21.50-01: Type Design Approval Holder Inappropriate Restrictions on the Use and Availability of Instructions for Continued Airworthiness (March 23, 2012).  In the past, there have been problems with manufacturer’s guidance that seeks to limit operators’ repair options, which in turn has had an adverse effect on independent repair stations who are qualified by the FAA to perform the same repairs.  Other language in the guidance highlights the prohibition against anti-competitive statements by stating:

Avoid language promoting a TC holder or their suppliers as the sole source for maintenance or overhaul.

and

It is contrary to 14 CFR parts 43 and 21 to include a note that all repairs or modification schemes must be approved by the TC holder prior to FAA approval.

In a similar vein, the guidance also forbids use of notes that could be interpreted as statements of FAA General Policy.  The obvious reason for this is because the TCDS should not be used as a vehicle for establishing FAA policy.  The example that is given is useful in its own right, because this is clearly not a statement of FAA policy, despite the fact that some government prosecutors have tried to promote similar policies:

(8) Avoid notes that can be interpreted as FAA general policy. For example: “Reuse of parts and assemblies that have been involved in an accident is not permitted unless approved by FAA Engineering.”

In subsection 6(a)(10), the FAA advises against the use of brand names, but in subsection (11), the FAA requires that when a specific brand name is used, then the note must also advise of the possibility of using FAA-approved alternatives:

(11) If a specific brand name material needs to be listed, then you must state that an equivalent material is also may be approved. For example: “SOHIO BIOBOR JF biocide additive is approved for use in fuel at a concentration not exceeding 270 PPM. Use of other, equivalent material, may be approved by the FAA.”

Aviation is a competitive industry, but some companies have attempted to use FAA-approved and FAA-acceptable documents as levers to inhibit competition.  The FAA has repeatedly asserted that its job is safety – not competition – and that it will not allow its approvals to be used as independent inhibitors of competition where no safety interest is served.  While the main purpose of this new guidance is to standardize the layout of TCDSs, it also includes important admonitions that should help prevent anti-competitive behavior.

Get Ready, Get Set, Go! Foreign 145 Certificates are Back on the Table, as TSA Issues its New Rule.

Many of MARPA’s PMA members also hold repair station certificates, so the entire MARPA community will be interested to know that the decade-long saga that is the Repair Station Security rule is finally coming to a resolution.  The rule is scheduled to be published in the Federal Register on Monday.

The repair station security rules are authorized under the repair station security statute (49 U.S.C. 44924). That statute barred the FAA from issuing any new foreign repair station certificates until TSA security audits were completed for existing stations. Now that the rules are out, once TSA has audited all existing repair stations, the FAA may be able to once again start issuing foreign repair station certificates. Of course, this must be balanced against the comments of FAA Deputy Associate Administrator John Hickey who suggested last Spring that the FAA may not have the resources to process the applications when TSA issues its rules.

Throughout the foreign certificate hiatus, we’ve advised MARPA members who are interested in pursuing new foreign repair station certificates to file applications with the FAA in order to secure their place in the queue when the restrictions are lifted.  In private meetings with FAA officials, we’ve been told that the FAA does not intend to strictly follow the first-in-first-out approach to these applications, but companies who desire new foreign repair station certificates ought to start working immediately in order to be able to pursue and support those applications with the FAA.

The final rule contains the following requirements:

  • To Whom Does the Rule Apply?: The regulations apply to repair stations certificated by the FAA under Part 145, except repair stations located on a U.S. or foreign government military base. All repair stations are subject to inspection as provided in the rule and to Security Directives should there be a security need. However, the rule text requires only certain repair stations, discussed below, to carry out security measures on a regular basis.
  • TSA Inspection Authority. Repair stations must allow TSA and other authorized DHS officials to enter, conduct inspections, and view and copy records as needed to carry out TSA’s security-related statutory and regulatory responsibilities. For repair stations not required to carry out security measures on a regular basis (i.e., those repair stations not located on or adjacent to an airport), TSA does not intend to inspect such facilities, except (1) for compliance with security directives issued by TSA and with airport security programs required by TSA (for those repair stations that are included in an airport security program), and (2) to respond to security information provided to TSA by U.S. or foreign government entities.
  • Implementation of Security Measures: The security measures in this rule cover repair stations that are on or adjacent to certain airports. TSA will consider a repair station to be “on airport” if it is on an air operations area (AOA) or security identification display area (SIDA) of an airport covered by an airport security program under 49 C.F.R. part 1542 in the United States, or on the security restricted area any commensurate airport outside the United States regulated by a government entity. TSA will consider a repair station to be adjacent to an airport if there is an access point between the repair station and the airport of sufficient size to allow the movement of large aircraft between the repair station and the area described as “on airport.”
  • What are “Security Measures?”: Repair stations required to implement “security measures’ will be required to (1) designate a point of contact(s) to carry out specified responsibilities; (2) prevent the unauthorized operation of large aircraft capable of flight that are left unattended; (3) verify background information of those individuals who are designated as the TSA point(s) of contact; and (4) verify background information of those individuals who have access to any keys or other means used to prevent the unauthorized operation of large aircraft capable of flight that are left unattended.
  • Security Directives: Repair stations are required to comply with Security Directives (SDs) issued by TSA. We had objected to Security Directives to the extent that they could represent rulemaking activities promulgated in the absence of notice and comment rulemaking procedures. TSA has added language to the final rule to clarify that repair stations may comment on SDs issued by TSA, but TSA has imposed on itself no obligation to respond to such comments. Thus, we remain concerned that Security Directives could be used to promulgate new rules in circumvention of the notice-and-comment requirements of the Administrative Procedures Act.
  • Notification of Deficiencies; Suspension of Certificate and Review Process: The regulations describe the process whereby TSA will notify the repair station and the FAA of a security deficiency identified by TSA and provide an opportunity for the repair station to obtain review of a determination by TSA to suspend its operating certification. Such a suspension would be an immediately-effective suspension that would not be stayed through petition for review (note that 49 U.S.C. 44924(c) already requires the FAA to suspend or revoke a certificate upon the advice of TSA). This could give TSA tremendous power to impose interpretations of their standards that may be beyond the published scope of the rule, and the repair station may be largely powerless to seek review of those standards, because the only practical way to seek review is to be accept suspension during the entire period of the review process (TSA is allowed to grant itself an extension so the time limits on TSA action may be meaningless). TSA would perform an internal review of the petition for review and would create the record but then the matter would be subject to review by a Court of Appeals.
  • Immediate Risk to Security; Revocation of Certificate and Review Process: The regulations specify that when TSA determines a repair station poses an immediate risk to security, TSA will notify the repair station and the FAA that the certificate must be revoked. The regulations also provide the process for the repair station to obtain review of such a determination. Many of the same concerns regarding suspension apply to the revocation process as well.

The new rule can be found online at http://origin.library.constantcontact.com/download/get/file/1102873717486-941/TSA+Security+Rule+Published.pdf.

Updated Agenda for Int’l Safety Conference

Today, EASA issued an updated agenda for the 2013 EASA / FAA International Aviation Safety Conference.  The Conference is the annual meeting among EASA, FAA, TCCA and other regulators to discuss new paradigms in regulatory oversight.  This meeting directly impacts the aviation industry, which is the subject of this regulatory oversight!

The updated agenda provides better guidance on what to expect from the 2013 meeting.

Sessions that will be interesting to member of the PMA manufacturing community will include:

  • New Technology: A Challenge for Regulators
  • Safety Management and Global Harmonisation
  • Safety Continuum: Regional flexibility vs Global Harmonization?
  • Performance Based Oversight
  • Rulemaking Cooperation: towards a Regulatory Framework Based on Safety Oversight Data
  • The New Normal: Strategies for Safety Success in Fiscally Challenging Times
  • Compliance Assurance
  • Global Production: The New Reality

MARPA will be there and will be reporting on the new directions proposed by the regulators.

FAA Guidance on Major Repair/Alteration Data: Open for Comment

The FAA has released draft guidance on major repair and alteration data approval, and is seeking public comment.

The guidance is meant for FAA employees/designees and is intended to provide them with assistance in the data approval process. Nonetheless, this is very important guidance for the private sector because it will likely have the effect of limiting major repair and alteration data approval only to the scope of this particular guidance.

It is important for repair stations and air carriers to review this data to ensure that it accurately describes the categories of data that must be approved, and that it provides a reasonable mechanism for approval of that data.  It is equally important for PMA manufacturers to review the data, because it may affect their Instructions for Continued Airworthiness, as well as approval of repair and alteration data that is developed to respond to continued operational safety (COS) issues.

The draft guidance can be found online here: http://www.faa.gov/aircraft/draft_docs/media/8300.X.pdf.

Comments are due to the FAA by June 12, 2013 and should be emailed to major.ra.order@faa.gov.

Please send copies of your comments to MARPA so that we can be sure that our comments reflect your concerns.

MARPA Files Papers with the FAA on Proposed Repair Station Rule Changes

MARPA has filed comments in response to the FAA Notice of Proposed Rulemaking concerning repair stations and their ratings.  Although the ratings proposal was the centerpiece of this proposed rule, many of the proposals that caused the most concern were those unrelated to the ratings element of the proposal.

This is a proposed rule that could have a significant effect on the MARPA Community.  Some of the regulatory proposals, for example, could inhibit PMA growth if they are fully implemented.

Issues addressed by the wide-ranging comments from MARPA included:

  • Recertification
  • Certificate Surrender
  • Asset Sale
  • Ratings
  • Capabilities Lists in the Operations Specifications
  • Removing Operations Specifications from the Certificate
  • Capabilities Lists
  • Quality Systems
  • Appropriate Equipment and Tools
  • Permanent Blacklisting From the Industry under § 1051(e)
  • Entitlement to Certificate under § 1053(a)
  • Change to Part 43 Appendix B

A complete set of the MARPA Comments can be found on the MARPA website.

SBA Repair Station Rule Roundtable

As previously mentioned on this blog, the FAA’s proposed Aviation Repair Station rule is very likely to have noticeable secondary effects on other companies, including PMA parts manufacturers.  On November 5, MARPA and other members of the aviation community, as well as representatives from the FAA, met for a Small Business Administration roundtable to discuss the proposed rule.

The FAA, although not able to take comment at the meeting, offered a presentation on the purpose and intent of the rule and were available to attempt to answer any questions posed by attendees.  The FAA explained that the purpose of the rule is to align FAA regulations with current industry practices and aircraft technology.  The FAA also stated that they believe they have addressed the numerous comments that resulted in the rejection of similar proposed rules in 1999 and 2006.

Industry attendees expressed a number of concerns with the proposed rule.  One concern is that due to the slow nature of the rule-making process, current industry practices have already moved beyond that which is contemplated by the proposed rule. There also appears a risk of creating confusion as the rule introduces inconsistent terms to the regulations.

The rule may also create significant adminstrative burdens.  It would require that each of approximately five thousand repair stations renew their certificates with 24 months of the rule becoming effective.  There is some doubt as to whether the FAA has the resources to process so many renewals in such a limited time frame, particularly faced with the reality that most applications would occur toward the end of the 24-month window.

The rule creates additional administrative burdens on the repair station side, as supervisory personnel will be required to be on hand to oversee work performed, changes to capabilities lists will have to be approved by the FAA or through self-evaluation, and substantial new employee training requirments are implemented.

Additionally, the new “Component Rating” propsed by the rule poses a particular threat to PMA manufacturers.  Repair stations will be expected to maintain a component capabilities list in their operations specifications.  Because of the burdens associated with amending and updating op specs, many repair stations may have difficulties in efficiently updating their components capabilities lists.  This is especially troubling for PMA.  Even though a PMA part is most likely maintained in the exact same way as its OEM corrollary part, a repair station may still be required to call out that specific PMA part number in its op specs in order to perform maintenance.  Given the smaller population of PMA parts, many repair stations may not be willing to go through the op spec amendment process to add the PMA part to their capabilities list.

The cumulative effect of these additional burdens may have the result of decreasing the number of repair stations allowed to repair PMA parts even though they are technically proficient.  Smaller repair stations may also find themselves priced out of business by the addtional financial costs associated with the new administraive burdens.

The FAA will accept public comments on the proposed rule through November 19, 2012. Comments should reference FAA Docket Number “FAA–2006–26408.”

SBA Repair Station Meeting Rescheduled

The Small Business Administration roundtable to discuss the FAA’s proposed Aviation Repair Station Rule – postponed due to the effects of Hurricane Sandy – has been rescheduled for Monday, November 5, 2012, from 2:00 p.m. – 3:30 p.m.

The proposed rule, which the FAA claims is necessary to keep pace with current industry standards and practices, is expected to have a secondary effect on repair station customers and business partners. This includes PMA part manufacturers.  The SBA has recognized that there is significant small business interested in the proposed rule, and will typically write and file comments in response to industry concerns.

Those interested in attending the roundtable should RSVP to Bruce Lundegren via email.  A dial in conference call option may also be available with advanced request.  If you wish to dial in, contact Bruce Lundegren so that SBA can make the appropriate arrangements.

SBA Contact Information:

Bruce E. Lundegren, Assistant Chief Counsel, SBA Office of Advocacy
U.S. Small Business Administration
409 3rd St. SW, Washington, DC 20416
tel: (202) 205-6144
email: bruce.lundegren@sba.gov

SBA Repair Station Meeting Postponed!

The Small Business Administration’s small business roundtable to discuss the FAA’s proposed Aviation Repair Station rule has been postponed due to the severe weather effects of Hurricane Sandy.  The meeting will be rescheduled in the next couple of days.

The FAA’s proposed rule would revise the system of ratings, repair station certification requirements, the regulations on repair stations providing maintenance for air carriers, and even the way that repair stations record maintenance.  The rule is expected to have a secondary affect on repair station customers and business partners, including PMA manufacturers.

The SBA has recognized the potential effects of the rule changes on small businesses and originally had scheduled a roundtable meeting for tomorrow to discuss the changes. Typically, the SBA will file comments to address industry concerns.  The roundtable is an excellent opportunity to make your concerns heard.  MARPA also plans to file comments on the Aviation Repair Station rule.

The MARPA blog has previously addressed the proposed rule and will post an update when the SBA meeting is rescheduled.  Those interested in attending the rescheduled roundtable should RSVP to Bruce Lundgren via email.  A conference call option is usually available upon request.  If you wish to dial in, contact Bruce Lundgren in advance so that SBA can make the appropriate arrangements (but wait until after the Hurricane has passed and the Federal Government is open again).

SBA Contact Information:

Bruce E. Lundegren, Assistant Chief Counsel, SBA Office of Advocacy
U.S. Small Business Administration
409 3rd St. SW, Washington, DC 20416
tel: (202) 205-6144
email: bruce.lundegren@sba.gov

Tom Cooper of Team SAI Offers a Glimpse of Aviation’s Economic Future

Tom Cooper of Team SAI Discusses the MRO Outlook and How it Affects the PMA Community

At the 2012 MARPA Annual Conference, Tom Cooper of Team SAI consulting offered a glimpse of the global MRO outlook in the coming years.  Team SAI is an aviation specialty firm that combines industry experience from air carriers and MROs.

Team SAI expects slight improvement in the near term as the global economy recovers, but cautioned that the industry remains subject to shocks around the world.  Mr. Cooper projected an increase in the pace of fleet renewal, as fleets both grow in response to increased demand and air carriers replace retiring aircraft.  Mr. Cooper expects also global MRO business to shift East over the next decade, as Asia sees rapid MRO expansion.

Team SAI also observed that MRO growth in North America will be low relative to the rest of the industry, with low fleet growth, and more durable equipment and longer maintenance intervals on newer aircraft.  Additionally, OEMs will continue to attempt to capture the MRO market by pre-packaging cost-per-hour maintenance programs with new aircraft.

Team SAI suggested that OEM MRO-market capture, newer aircraft driving technical changes for non-OEM MROs, and decreasing service life of aircraft as valuations diminish and newer planes go to part-out, will be long-term trends that will continue to influence MRO.

Cooper’s economic outlook discussion was an important part of the Annual Conference.

If you missed the 2012 MARPA Annual Conference, then you can still track MARPA’s developments and the industry and regulatory changes that affect the PMA industry by joining MARPA.

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