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Safety Management Systems

SMS – Get Involved or the Joke May be On You!

When developing significant new safety regulations, it is especially important to “get it right the first time.”  The reason for this special emphasis in the context of safety regulations, is because an incorrect safety regulation can oppose its intended effect – it can diminish safety – and this is unacceptable in our industry.  “Getting it right the first time” is about more than increasing safety in a static analysis – it is about creating safety regulations that will continue to increase safety in the future, without impeding other safety advances.

Take humor as a metaphor for regulation.  A joke may be uproariously funny today but if it fails to tickle the funny bone in ten years, then it is has failed to withstand the test of time (it is not “timeless” humor).  We might find the latest joke about the sitting President’s verbal gaffe to be amusing today, but how many laughs can you get, today, from President Calvin Coolidge’s one-liner “Call again.”

Often, the jokes that survive the test of time are the ones that are the simplest.  Jokes about Lindsey Lohan may seem nonsensical ten years from now, but fart jokes, however disgusting, will remain funny to a certain segment of the population forever (just ask my seven and nine year old sons).

Similarly, the regulations that tend to stand the test of time are often the ones that are the simplest.  They tend to be regulations that establish clear standards for compliance without offering a preference for the method of compliance (Executive Order 12866 actually expresses a preference for these sort of regulations).  Such regulations are the ones that still make sense fifty years after promulgation; they are also the ones that don’t inhibit safety innovation and that don’t impose documentation and reporting requirements that become outdated.

The Federal Aviation Administration (FAA) is currently working on a regulatory change that could reflect the most significant change in aviation law since the 1958 recodification.  The new regulations are known collectively as “Safety Management Systems,” or SMS.  SMS represents a significant step in the nature of quality systems applied to aviation products and services.

The idea of a quality system theory being embodied into the FAA regulations is not new.  The early repair station regulations embraced a quality control mechanism in the Inspection Procedures Manual (IPM) regulations, and this shifted in the direction of a quality assurance paradigm in the 2001 changes to Part 145 (that rule dropped a proposed quality system requirement but retained process-oriented quality manual requirements).  Similarly, the current manufacturing regulations require a mixture of quality assurance and quality control, and the new Part 21 manufacturing regulations that apply as of April 16, 2011 will strengthen the quality assurance character of those regulations.

SMS builds on existing quality assurance paradigms, but there are several things that make SMS new.  One of them is that SMS focuses resources on predictive risk analysis – the process of identifying potential hazards, assigning risk levels to them, and then mitigating the risks below a certain level.  Another is that it mandates a documentation trail whenever the company engages in any sort of safety risk acceptance (placing companies between the Scylla of over-documentation and the Charybdis of violation by failure to identify a hazard); such a documentation trail could lead to new avenues of liability as predictive analysis becomes subject to discovery in civil litigation.

Taken as a quality system, SMS provides a company with tools to help improve an already impressive safety record, by identifying possible future hazards and permitting the company to try to mitigate those hazards before they manifest themselves.  There are certainly positive elements to SMS.  SMS has the potential to generate safety over an extended time the same way that a fart joke generates laughs.

But SMS is not a perfect system, especially based on its contemplated implementation found in the regulations.  In a company that has already identified clear and present hazards, there is no clear mechanism for relief from the requirement to analyze data and identify hazards in order to shift resources to remediation.  If SMS were merely a quality system, then a quality manager would likely give herself the discretion to pull resources from data analysis and focus them on known  hazards.  But in a regulated SMS, a company may find itself perversely focused on data analysis (to meet regulatory requirements) even when those resources could be better expended on identifying and implementing a mitigation to a looming hazard.  This sort of inflexibility in directing resources could actually yield lower net safety as a consequence of SMS, in some cases.

Although the SMS regulation is written with significant apparent flexibility, the SMS Advisory Circular, which has already been drafted, appears to contemplate a resource-intensive system that could be difficult to run in small companies.  It also surrenders a great deal of discretion over the systems to the overseeing FAA inspector, providing a recipe for inconsistent implementation.

In the past, when the FAA has attempted to implement quality system elements, they have been based upon quality elements that have been implemented and for which there is considerable empirical support.  There is some data on the implementation of SMS in air carriers, but there is relatively little data  about the implementation of SMS in other types of aviation businesses – and much of that data suggests that the implementations are not always working out the way that they were intended (a significant number of the repair stations that signed-up to participate in the pilot program, later withdrew because the costs vastly outweighed the benefits).

How can the industry enjoy the benefits of SMS while avoiding its regulatory pitfalls?  How can we avoid SMS becoming the Lindsey Lohan joke of the aviation regulatory system?  It is vital that everyone in the industry read the proposed regulation and also read the draft advisory circular, and offer the FAA comments on ways to (a) simplify the rule, (b) create objective standards for the rule to permit compliance to be easily tested, and (c) provide procedural safeguards to ensure that SMS does not redirect safety resources in a negative way.  The rule remains open for comment through March 7, 2011 (this is an extension of the original comment period).

We can all hope that we end up with a rule that has the staying power of a fart joke.

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About Jason Dickstein

Mr. Dickstein is the President of the Washington Aviation Group, a Washington, DC-based aviation law firm. He represents several aviation trade associations, including the Aviation Suppliers Association, the Aircraft Electronics Association, the Aircraft Fleet Recycling Association and the Modification and Replacement Parts Association.

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