FAA DRAFT Designee Policy is Open for Comment

A draft version of the FAA’s designee policy has been published for public comment.

Known by it title, “Designee Management Policy,” this Order is an omnibus of FAA designee policy. It is important to both designees and to the people whose businesses rely on designees. If you use designees to issue 8130-3 tags, then this means you!

One element on which ASA intends to comment is the continuing disconnect between current published 8130-3 tag policy and the function code policy. Despite the FAA eliminating distinctions between 8130-3 tags supporting export vs. domestic transactions, the function codes continue to support the prior practice that drew a distinction between the tags. This creates unnecessary artificial barriers to the documentation of airworthiness, and has been shown by the FAA to undermine both safety and commercial interests.

Resources:

If you have comments or edits for this draft document, then please share them with ASA so ASA’s comments can address industry’s concerns.

EASA Warns of Stolen Bell Parts

EASA has posted two Suspected Unapproved Parts (SUP) notices. Both SUP Notices are for serialized Bell strap assemblies:

  • Product: BELL AB206 / B206
  • Part name STRAP ASSY
  • Part Number 206-310-004-101

The first SUPs Notice is for Serial Number LPFS8480. The second SUPs Notice is for Serial Number LPFS7659.

The two parts appear to have been reported from Sweden, on or about September 23, 2021.

In each case, EASA states the following:

“EASA has become aware that a Strap Assy with P/N 206-310-004-101 and S/N [see serial numbers, above] and its associated log card have disappeared from a maintenance facility. The part and log card are suspected stolen. The part is considered not-airworthy and not eligible for installation on an aircraft.”

Recommendation: If this part is found in stock or installed on an aircraft, it should be quarantined until a determination can be made regarding its eligibility for installation.”

“Dangerous Goods in Articles:” The Proper Shipping Name is ALMOST Ready to Be Used in the United States

I was looking at the list of major changes for next year’s IATA Dangerous Goods Regulations. I noticed that the major changes include expanded reliance on the new proper shipping name “Dangerous Goods in Articles.”

As a reminder, Hazmat shippers in the United States should NOT YET be using the proper shipping name “Dangerous Goods in Articles.”

This is a technical variance in what the law allows, but current use of the term in the United States as if it were a hazmat proper shipping name is not permitted, and could become the subject of an enforcement action.

The way that U.S. hazmat regulations work, is that you need to comply with the US regulations, for example, when you choose a proper shipping name for your package, it must be an authorized name. Right now, “Dangerous Goods in Articles” is not an authorized proper shipping name under U.S. law.

You are permitted to rely on the ICAO Technical Instructions when shipping things by air (except where prohibited). When US law permits reliance on an alternative source, that source must typically be incorporated by reference in the U.S. legal structure, which means that typically a specific edition or revision must be referenced. The specific edition of the ICAO Technical Instructions that is currently incorporated by reference is the 2019-2020 edition, which is incorporated at 49 C.F.R. § 171.7.

In the 2021-2022 revision, ICAO published a proper shipping name that will be quite useful to the aviation community: “Dangerous Goods in Articles.” The problem is that IATA immediately included this in the 2021 IATA Dangerous Goods Regulations, but the United States did not immediately incorporate the new ICAO edition by reference.

It is worthwhile to remind the reader that despite bearing the name “regulations” in the title, the IATA Dangerous Goods Regulations are not actually regulations. They reflect a ‘field manual’ for compliance, and they are based on the ICAO Technical Instructions.

The United States regulations still reference the 2019-2020 edition of the ICAO Technical Instructions as the edition that is currently permitted to be used for compliance.

The United States is taking steps to incorporate by reference the 2021-2022 edition (which includes the new term). The Notice of Proposed Rulemaking that will accomplish this was published on August 10, 2021. If you have a comment to share, then you may wish to submit it to the Pipeline and Hazardous Materials Safety Administration. The proposed rule is open for comments through October 12, 2021.

As far as timing goes, there is a good chance that the final rule incorporating by reference the 2021-2022 ICAO Technical Instructions will be published by the end of 2021. And when it is, we should be authorized to use “Dangerous Goods in Articles” when shipping by air. That same U.S. rule making project is also expected to add “Dangerous Goods in Articles” to the United States’ list of proper shipping names in the hazardous materials table (permitting more general use of the term). But that step hasn’t been taken yet.

So please, be patient and wait. The new proper shipping name is coming!

Looking for more hazmat compliance advice? We will be teaching a live, online, hazmat class for shippers of aviation goods next month (October 6-7). See our hazmat training webpage for more details!

Now that the Vaccine is Approved, Can I Require My Employees to Get It?

Today, the U.S. FDA has granted full approval to Pfizer’s Covid vaccine. This vaccine had previously been subject to an emergency use authorization (EUA). Now that there is an FDA-approved vaccine available, members have been asking whether they are allowed to make the vaccine a condition of returning to (or remaining at) work.

One important concern is that the Americans with Disabilities Act (ADA) says that a business may not discriminate on the basis of a disability. There are also other federal and state laws with similar restrictions. The non-discrimination standards have resulted in questions about how the ADA applies to a business’ response to COVID-19.

The U.S. Equal Employment Opportunity Commission (EEOC) published pandemic guidance in response to the H1N1 flu pandemic, and updated it last year for COVID-19. Their guidance explains that:

  • The ADA prohibits an employer from making disability-related inquiries and requiring medical examinations of employees, except under limited circumstances
  • The “direct threat” standard permits an employer to make inquiries when an employer has a reasonable belief, based on objective evidence, that an employee’s medical condition will pose a direct threat.
  • During a pandemic, employers should rely on the latest CDC and state or local public health assessments.
  • Until CDC rescinds its guidance, the COVID-19 pandemic meets the direct threat standard

The federal equal employment opportunity laws do not prevent an employer from requiring all employees physically entering the workplace to be vaccinated for COVID-19, subject to the reasonable accommodations provisions of laws like the ADA.

Under the reasonable accommodations provisions, an employer must make reasonable accommodations to help someone with a disability be able to meet the terms of employment. Other protected conditions that coudl generate a need for a reasonable accommodation may include pregnancy (protected under the Pregnancy Discrimination Act) or religious objection to the vaccine (protected under Title VIII of the Civil Rights Act). EEOC has published a discussion of reasonable accommodations for COVID-19. Many of ASA’s members are part of the critical infrastructure, and the EEOC guidance clarifies that the ADA provisions apply to critical infrastructure workers as well.

If you plan to require employees to prove their vaccination status as a condition of entering thew workplace, then remember that documentation or other confirmation of COVID-19 vaccination is confidential employee medical information. The ADA requires this sort of information to remain confidential. Like all medical information, this information must be kept confidential and stored separately from the employee’s personnel files under the ADA.

Resources

New White House Policy on Anti-Competitive Behavior Could Affect Aviation

The President is expected to sign a new Executive Order on competition, today. Although the Order is not yet available,the Administration has already released a Fact Sheet about the planned Executive Order. The title of the new Executive Order is expected to be “Executive Order on Promoting Competition in the American Economy.”

The official purpose of this Executive Order is to promote competition. The Administration says it is taking aim at large companies that adversely impact competition. But every new policy has the potential for unintended consequences, so we will be carefully watching this Executive Order and the regulations that are generated to implement it.

Here are some highlights from the Fact Sheet of items that could potentially affect aviation businesses:

  • The Executive Order encourages DOT to issue rules requiring that air carriers offer certain ancillary fee refunds to consumers.
  • The Executive Order encourages DOT to issue rules requiring greater clarity and disclosure of ancillary fees (including baggage, change, and cancellation fees).
  • The Executive Order encourages the FTC to ban or limit non-compete clauses that affect the labor market. Such clauses are fairly normal for employees who have access to economically-sensitive confidential information in our industry. A ban on such clauses could affect existing relationships and cause companies to pursue other strategies for protecting sensitive data.
  • The Executive Order encourages the FTC and DOJ to prevent employers from sharing wage and benefit information with one another.
  • The Executive Order encourages the FTC to establish rules on surveillance and the accumulation of data. This is meant to apply to “Big-Tech” but it could easily spill-over into obligations on anyone who collects data and uses the internet (i.e. everyone).
  • The Executive Order encourages the FTC to issue rules against restrictions on using independent repair shops. This is meant to apply to cell phones, but this could set a precedent that applies to aviation repair.
  • The Executive Order calls for passage of the “Protecting the Right to Organize Act.” This Act would expand the reach of the Fair Labor Standards Act, would permit secondary strikes (under which a union can strike in support of someone else’s rights, even when it does not have a direct interest in the issue), and expanding whistleblower protection.
  • The Executive Order describes an Administration policy of greater scrutiny of mergers, including acquisition of small companies. This is meant to apply to internet service companies but it could easily be applied to other industries (including aviation).

It often takes several days after an Executive Order is announced for it to be published in the Federal Register. We will be watching carefully for this one, as well as watching the regulations and policies that are generated in its wake.

Chinese Aerospace Strategic Priorities

Many people in the ASA Community have asked me about how to get into the Chinese market.  One important tool for getting into the market is understanding the market. 

The Chinese government has a tremendous influence on the Chinese commercial market – more so than many European or North American governments.  Thus, having an understanding of Chinese government priorities can be valuable to those seeking to enter he Chinese market. 

China publishes an “Industrial Structure Adjustment Guidance Catalog” that serves as a blueprint for Chinese industrial development.  The most recent version of the Catalog is the 2019 Edition. This document is intended to identify the strategic path for ensuring that China’s economy is focused on high-quality development.  The 2019 Edition of the Catalog was adopted by the government on August 27, 2019, and went into effect on January 1, 2020.

The Catalog has three categories of industries: “encouraged”, “restricted”, and “obsolete” (industries that are not listed in the Catalog are “permitted”).  The “encouraged” category refers to industries and industry subsectors that China believes will play an important role in achieving the high-quality economy that is part of China’s strategic plan.  China has identified these as industries that need to be encouraged. 

Aerospace is listed as one of the “encouraged” industries.  There are seventeen sectors under the aerospace category that have been identified as encouraged sectors:

  1. Development and manufacturing of trunk lines, branch lines, general aircraft and parts and components;
  2. Development and manufacturing of aero-engines;
  3. Development and manufacturing of airborne equipment, mission equipment, air traffic control equipment and ground support equipment systems;
  4. Overall helicopter, rotor system, transmission system development and manufacturing;
  5. Development and production of new materials for aerospace;
  6. Manufacturing of gas turbines for aerospace use;
  7. Manufacturing of satellites, launch vehicles and parts;
  8. Application of aviation and aerospace technology and system software and hardware products, terminal product development and production;
  9. Aircraft ground simulation training system, test system development and manufacturing;
  10. Aircraft ground repair, maintenance, and testing equipment development and manufacturing;
  11. Satellite ground and application system construction and equipment manufacturing;.
  12. Aircraft special emergency rescue equipment development and application;
  13. Aircraft, equipment and parts repair;
  14. Advanced satellite payload development and production;
  15. UAV development and manufacturing of general, materials, communications, control systems, etc;
  16. Design of civil aircraft and helicopters; and
  17. Development and production of solar cells for aerospace use.

The Catalog also encourages development of aerospace ceramics, specialized aerospace aluminum alloys, and aerospace instruments and avionics (all of these are encouraged sectors under other headings).

There are a lot of factors to consider when considering entry into any foreign market, but if you are a non-Chinese businesses thinking about entering the Chinese aerospace market, then identifying ways that your project supports the Chinese Government’s strategic plan, may help facilitate your efforts.

Payroll Grants for AS9100 Businesses

If your businesses designs, develops, or provides an aviation product or service – including a part, component, or assembly – and that process is certified under AS9100, then you may be eligible for a payroll grant from the US government.

As we discussed last week, the Aviation Manufacturing Jobs Protection (AMJP) program opened up this morning at eight am. The program provides payroll grants for the aviation industry and the scope goes beyond manufacturing. Qualified businesses include:

  • Production Approval Holders (PC, PMA, TSOA) who’ve produced or shipped articles in the last 12 months;
  • MROs holding Part 145 certification;
  • Part and service providers who operate under an AS9100 certification.

Application details can be found in yesterday’s Federal Register. Please review this for eligibility details as well as the application process.

This is not a “first-come, first-serve” program, so you should not rush in your effort to apply. This will be a single-round solicitation process in which any application that is filed by the deadline will be treated the same as the other timely applications. So take your time, collect your data, and make sure your application is complete.

The application period will be open for four weeks.  All applications are due by 5:00 p.m. Eastern time on Tuesday, July 13. Please don’t wait until the last minute to file!

ASA members and ASACB clients should reach out to the Aviation Suppliers Association for more details.

Grant Opportunity For AS9100 Companies Opens Next Week – Don’t Miss It!

The Department of Transportation will publish a Federal Register Notice next week announcing the Aviation Manufacturing Jobs Protection (AMJP) application process. 

The AMJP offers grants to companies that provide aviation parts and/or services under an AS9100 system (the program also applies to production approval holders and MROs). The grants are intended to support payroll.

The application system is expected to go live on Tuesday morning, June 15, for a four-week application period that will end on Tuesday, July 13. If you do not file your application during this period, then you will likely lose your opportunity to apply.

You can find more details about the program – and about eligibility – in our past articles:

Details about the program can now be found SAM.gov assistance listing for the AMJP.

The Federal Register Notice will also invite questions. You send copies of your questions to ASA as well so we can follow-up and make sure everyone gets answers. The government will ask for questions about the application process to be submitted by Tuesday, June 22, so that they will have enough time to address the questions.

Government Information Webinar on New Funding Opportunity

If you’ve been waiting for an update on our April 6 post about the government payroll grant program for AS9100 companies, then here it is!

The Department of Transportation will hold a webinar next week to discuss the AMJP and to answer the questions that industry has about the program. This introductory webinar will be held on Wednesday, May 26, 2021, starting at 3:00p Eastern time.  The webinar will provide a brief overview of the AMJP program, and address basic questions submitted by participants.

The Department has established a registration page for their webinar. They sent out about 11,000 emails today inviting companies to register on the registration page. If you didn’t get the email, then you can still register here: https://www.transportation.gov/AMJP-webinar-registration.

Remember, AMJP is the Aviation Manufacturing Jobs Protection (AMJP) program.  The AMJP program can provide financial assistance to eligible businesses, paying up to half of the compensation costs for certain categories of employees, for up to six months. Businesses who provide aircraft parts or services under an AS9100 certified system may be eligible for the program.

DOT plans to authorize funding under the AMJP program through a single-round, expedited application process. This will allow them to identify all eligible requests before beginning the award process, but it also means that we may only get one shot at applying.

Likely AMJP Application Elements (from the Federal Register)

These are the items that you will likely need to have available when you register for the AMJP program:

  • Legal name of the applicant
  • Address, telephone, and email contact information
  • Legal authority under which the applicant was established (e.g. incorporation)
  • Name and title of the authorized representative of the applicant
  • Identity of those assisting in the application, including outside accountants, attorneys, or auditors
  • Which of the three statutory criteria does the applicant meet and how (including copies of FAA certificates or authorizations or AS9100 certificates):
    • FAA production approval holder
    • FAA Part 145 certificate holder
    • Operates a process certified to AS9100 related to the design, development, or provision of an aviation product or service, including a part, component, or assembly
  • Location where the applicant was legally established, created, or organized to do business
  • Other identification numbers, including but not limited to:
    • Employer/Taxpayer Identification Number (EIN/TIN)
    • Data Universal Numbering System (DUNS) number
    • Unique Entity Identifier under 2 CFR part 25, etc.
  • Description of the applicant’s business operations, demonstrating how the applicant meets the statutory requirement for US operations; this may include:
    • a listing of all business locations
    • the number of employees (and the percentage of their time) engaged in aviation-related versus other business activities at each location
  • Details sufficient to demonstrate how the applicant meets the requirement to have “involuntarily furloughed or laid off at least 10 percent of its workforce in 2020 as compared to 2019 or has experienced at least a 15 percent decline in 2020 revenues as compared to 2019. This is likely to be either:
    • Aggregate numbers of personnel as of April 1, 2019 and April 1, 2020, or
    • Total operating revenue figures for the applicant’s fiscal years ending 2019 and 2020.
  • Certification that the applicant has not received a credit against applicable employment taxes under section 2301 of the CARES Act (26 U.S.C. 3111 note) for the immediately preceding calendar quarter ending before such agreement is entered into, or financial assistance under section 4113 of the CARES Act (15 U.S.C. 9073) (providing payroll support to air carriers and contractors), and is not currently expending financial assistance under the paycheck protection program established under section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)), as of the date the employer submits an application under the AMJP.
  • Definition of the applicant’s Eligible Employee Group.
  • The actual aggregate total cost of compensation for the Eligible Employee Group for the six-month period ending March 31, 2021 [note: this period could change because it does not appear to match the statutory requirement].
    • DOT anticipates requiring a breakdown of the compensation costs (e.g., aggregate base salaries versus other major benefit categories, including but not limited to medical benefits paid by the employer, paid leave, insurance premiums paid by the employer, employer match on employee retirement contributions, etc.).
    • Applicants will be required to provide supporting documentation in sufficient detail to substantiate the preceding aggregate costs, like financial reports and redacted payroll reports
  • Whether the applicant business entity is currently engaged in any legal proceeding that could jeopardize its ability to fulfill the legal commitments required in statute as conditions for receiving funds under the AMJP (e.g. Bankruptcy, potential merger or acquisition discussions, or current litigation against the applicant)
  • Whether the applicant is delinquent on any debt to any Federal agency, along with supporting details.
  • Certification by the applicant that they can and will enter into a legal agreement with DOT, that will require the applicant to:
    • provide the remainder of the payroll to the Eligible Employee Group, and
    • refrain from any involuntary layoffs, furloughs, or reductions in pay rates or benefits for the Eligible Employee Group

Note that all applicants will be required to have pre-registered with the System for Award Management (SAM) at https://sam.gov/SAM/.

UK and EU Ink Aviation Manufacturing Deal, Formalizing Acceptance of New Parts

Today, the UK CAA and EU’s EASA signed a Technical Implementation Procedure (TIP).

The purpose of the TIP is to establish the rules for UK and EU acceptance of articles and products produced under the production authority of the other authority. There are correlative agreements regarding design approvals issued by each authority, and the acceptance of each by the other.

This TIP will be important because it affects parts transactions involving third parties. For example, if a US-based distributor has Airbus parts in its US inventory, and those parts were produced under (and tagged under) the authority of EASA, then the sale of those parts for installation on a UK-registered aircraft will be subject to the UK-EASA TIP.

Under the Agreement, the importing authority will expect the following documentation to accompany aircraft parts:

  • For import into the EASA system: an Authorized Release Certificate (CAA Form 1) issued by an authorized UK CAA production organization approval holder [in other words, a UK CAA Form 1 properly signed on the left side]
  • For import into the UK CAA system: an Authorized Release Certificate (EASA Form 1) issued by (a) a production organization approval holder authorized to engage in such activity by an EASA Member State, or (b) a production organization approval holder authorized to engage in such activity by EASA [in other words, an EASA Form 1 properly signed on the left side]

One interesting point is a requirement that instructions for continued airworthiness and other maintenance manuals must be provided for articles to be acceptable for import into each authority. The language specifically states:

“The following documentation will be provided as a condition of acceptance of the civil aeronautical product being imported … ICA and maintenance manuals which include airworthiness limitation sections”

Technical Implementation Procedures for Airworthiness and Environmental Certification Between The Civil Aviation Authority of the United Kingdom And The European Union Aviation Safety Agency, section 6.5.1 (May 17, 2021)

The TIP does not address maintained parts. The authorities are expected to conclude a separate set of procedures for acceptance of maintenance.

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