FAA Gears Up for Covid-19: What Does This Mean for Distributors and their DARs?

Ali Bahrami hosted a teleconference yesterday afternoon and invited industry leaders to discuss the FAA ongoing work to support aviation safety during the Covid-19 crisis.  Bahrami is the FAA’s Associate Administrator for Aviation Safety but he used to be with AIA so he understands the industry perspective, and the importance of transparency in government.

Bahrami expects the situation to impact the FAA for about 60-90 days, and has been planning accordingly. The FAA expects to issue new policy statements and extensions in order to facilitate aviation business while maintaining aviation safety.  They expect the first of the new guidance documents to be released by the end of this week.

Risk-Based Approach

Last week and this week the FAA has been working on using a risk-based approach to identify and categorize the tasks the FAA performs.  The FAA has used this approach to distinguish which tasks can be delayed and which ones must be accomplished as planned in order to preserve the expected level of safety.  Among those that must be performed as planned, they are investigating how best to ensure health and safety when they perform the tasks.  Some examples include:

  • The FAA is publishing guidance on how technologies can be used to perform remote oversight during the Covid-19 crisis;
  • Expiring class one medical certificates will be extended for 90 days so that holders will not have to visit aviation medical examiners during the Covid-19 crisis;
  • The FAA is investigating ways to mitigate the health dangers of Covid-19 in confined spaces, like health risks to to inspectors, trainers and students in simulators;

The FAA has been coordinating its plans with the International Civil Aviation Organization (ICAO) in order to help ensure that the FAA’s practices are consistent with those of the rest of the world, and will not adversely affect acceptance of  US aviation products in the rest of the world.

FAA Aircraft Certification Service

Earl Lawrence is the Executive Director of the FAA’s Aircraft Certification Service. He’s also a former trade association guy and an old friend – having worked for EAA for many years.  Lawrence joined the call to talk about FAA oversight of design and production, but he also answered questions about DARs, which is an important issue for ASA members.

DAR Extensions and Privileges

Lawrence explained that he remembered our concerns about DARs, and that the FAA is already working on the guidance for them.  The current guidance for the Covid-19 crisis will be modeled on the approach that the FAA adopted during the last government shutdown.

During the last government shutdown, ASA worked with Lawrence on protocols for extending DARs’ recurrent training and extension requirements.  Under those protocols, those who needed training during the shutdown would be able to wait and get the training after the shutdown; and those whose authority expired during the shutdown would be permitted to operate until after the end of the shutdown (the guidance included a window of time after the shutdown, because of the recognition that the FAA would not be able to process everything immediately, after the shutdown ended). This should be the model for treatment of DAR renewal and training during the Covid-19 crisis.

The new designee guidance is being developed jointly with the Flight Standards Service to make sure that all DARs are covered.  He expects it to be issued next week.

Remote Witnessing and 8130-3 Tags

Lawrence explained that his office is also working on how best to use technology during Covid-19 to accomplish their oversight goals.

In fact, his office is working on two pieces of guidance – one on deviation authority to permit use of remote technologies to carry out FAA oversight responsibilities and one on using technology to accomplish testing, oversight, witnessing and certification in FAA projects.  Lawrence expects both of these documents to be in draft form by today, and hopes to have them issued by early next week.

He expects that their ideas will be turned into guidance that can be used by FAA designees as well.  He specifically mentioned using remote technologies for issuing 8130-3 tags during the Covid-19 crisis.

Change 7 to the FAA-EASA Maintenance Annex Guidance

Change seven to the FAA-EASA Maintenance Annex Guidance has been published.  The 171 page document was effective on its publication date (November 18, 2019) and must be implemented within 90 days of the issue date (February 16 is a Sunday, so that means February 17, 2020).

The latest draft appears to correct the prior omission of third parties authorities – like Brazil – by drawing reference to the third-party bilateral agreements.

ASA will publish more about how this affects distributors, soon, and this will be a topic of discussion at the Quality Committee Meeting on Friday December 6, 2019, in Dallas.

An 8130-3 With a Distributor’s Address in Block 4

Recently, a non-US buyer asked whether a distributor can release an article as “New” even though the distributor is not the PAH of the article.  The non-US buyer explained that the distributor’s address was found in block 4, where the production approval holder’s address is often found.  The non-US buyer explained that the 8130-3 tag accompanying the article was issued by an FAA DAR.

The FAA has the ability to delegate certain powers to designees.1 FAA DARs are persons who are delegated the FAA power to review evidence, come to a conclusion that an article is manufactured under FAA part 21, meets FAA-approved design requirements, and is currently airworthy.2  The DAR documents the finding by issuing an 8130-3 tag.  This procedure is usually limited to new parts, except where an importing nation has agreed to accept used parts under an FAA 8130-3.

When the FAA DAR performs this task, the FAA DAR is acting on behalf of the FAA (the distributor is merely the applicant) and is subject to FAA reporting obligations and FAA oversight.  The FAA DAR must follow the FAA’s rules for issuing 8130-3 tags (this can impose additional limits; for example many DARs are only allowed to issue 8130-3 tags at the locations of accredited distributors).  It is important to recognize that the distributor is not issuing the tag – the FAA is issuing it through the FAA DAR.

FAA Order 8130.21H directs the FAA DAR to list the “full name and physical address (no post office box numbers) of the organization or facility for which the form is being issued.”3  This is the applicant.  The FAA DAR is typically required to list the distributor’s location in block 4.4

In recent years, the FAA has increased pressure on the industry to voluntarily use 8130-3 tags to identify their articles as airworthy.  This has caused more distributors to rely on FAA DARs as a source of 8130-3 tags.  8130-3 tags issued at a distributor’s facility have been around for decades, but the focus in recent years on 8130-3 tags has made it increasingly common to see 8130-3 tags with a distributor’s address in block 4.

 

ENDNOTES

(1) 49 U.S.C. § 44702(d); 14 C.F.R. § 183.1 et seq.
(2) E.g. 14 C.F.R. § 21.331 (explaining the standards for obtaining export 8130-3 tags).
(3) Procedures for Completion and Use of the Authorized Release Certificate, FAA Form 8130-3, Airworthiness Approval Tag, FAA Order 8130.21H change 1 paras. 2-8(d), 3-6(d), 4-5(d) (Jan. 11, 2016).
(4) See Id.at Appendix A, Figure A-5 (showing a sample 8130-3 tag issued at a distributor’s facility).

Guidance Concerning Batch and Lot Splitting (US, EU, and Canada)

I was recently asked about guidance for batch and lot splitting.  I thought it might be useful to have an online resource for that sort of guidance.

Batch and lot splitting is typically necessary when you receive a large batch of articles, but you want to sell or transfer only a smaller subset of that batch.  For example, you might receive a lot of 10,000 fasteners; but your customers typically purchase them in lots of 100.  That means you expect to sell them in 100 lots of 100 units each.  You have one document that confirms their compliance to a standard, but says it applies to a shipment of 10,000 units.

The normal way to handle this is by making copies of the original document, keeping records and controlling the lot to ensure that (A) you only issue copies of the document for parts you sell from that lot, and (B) your count verifies that only the parts received (by number as well as identity) are associated with that document.

Generally, the questions I get about batch and lot splitting center on the legality of making copies of the authorized release certificate or other documents associated with the entire shipment.  Distributors often want to know whether they can make copies of the document to provide with the smaller (split) shipments.  Here is some guidance from three aviation authorities.

United States

First of all, remember that the FAA does not directly regulate distributors.  Thus, the FAA is not in a position to directly regulate batch or lot splitting by distributors.

The FAA has no regulations that would directly prohibit the copying of documents like 8130-3 tags.  Under the Paperwork Reduction Act, the FAA is not permitted to bring an enforcement action for “failing to comply with a collection of information” unless there is an OMB control number associated with the collection – and this limits the FAA”s enforcement options related to 8130-3 tags (especially since export airworthiness of parts was removed from the OMB control documents).  The FAA has no regulations directly limiting one’s ability to copy and circulate an 8130-3 tag once it is created.

This doesn’t mean that you can do anything you want with no consequences!  Fraud concerning aircraft parts is a federal crime.  Misleading statements about aircraft parts can get you into trouble with the FAA.  So it is always best practice to ensure that anything you pass along is neither fraudulent nor misleading.

The FAA does have recommendations for distributors with respect to splitting of bulk shipments, and the associated copying of 8130-3 tags.  Under FAA Order 8130.21H, the FAA has published guidance on issuing new 8130-3 tags for split lots, as well as how to control copies of the old 8130-3 when it is copied (so no new 8130-3 tag is issued).  The guidance explicitly says that distributors are authorized to split bulk shipments, and provides a three-step process for controlling the copies of the 8130-3 tag:

“(1) Make a copy of the FAA Form 8130-3 received with the original shipment of products or articles that identifies the bulk shipment.

***

(2) Include the following written statement (an example) or similar statement: “(Company name) certifies this/the attached document is a copy of FAA Form 8130-3. The prior FAA Form 8130-3 received by our facility is maintained on file pursuant to our document retention standards. That prior FAA form tracking number is [ ACE-549]. The new tracking number for this portion of the split bulk shipment is [S1-054321]. The number of products or articles being shipped under this approval is [500]. Signed [quality control/assurance manager or authorized representative] Dated [ month day year]” (Refer to appendix A, figure A-7b, to this order for an example.) A quality control/assurance manager or authorized representative from that facility must sign and date the written statement. You can include this statement by attaching a separate sheet of paper to the copy of the FAA Form 8130-3.

(3) Maintain the prior FAA Form 8130-3 and a copy of the written statement on file”

I helped write the original form of that guidance, so I am pretty happy to endorse this approach.

For those distributors that are accredited to FAA AC 00-56B, that guidance requires accredited distributors to have a the following element in its quality system:

“When documentation is required to be duplicated to meet commercial requirements, a process for controlling the copies so as to prevent the misuse, or unintended use, of a copy. Examples of appropriate documentation include lot control, batch control, and remaining inventory control and verification.”

 

European Union

There is not currently guidance in EASA materials concerning the splitting of bulk shipment.  This was intended to be addressed in the supplier evaluation and control GM (with a recommendation that suppliers have “Procedures for batch splitting or redistribution of lots and handling of the related documents”).  That GM was originally drafted to support the supplier control regulations proposed in EASA Opinion 12/2013.

The supplier control language was finally implemented last summer in Commission Regulation (EU) 2018/1142 (section 145.A.42(b)(i)).  The AMCs and GMs have not yet been updated to reflect the 2018 regulation, so there is, as yet, nothing in the EASA guidance about batch splitting or redistribution of lots and handling of the related documents.

We should expect further guidance to be forthcoming.

 

Canada

Canada just issued new guidance for 2019 that discusses splitting of bulk shipments.  It is found in CAN AC 571-024.  In section 4.2, which applies to “Parts sourced from a Canadian Approved Manufacturer or Distributor,” the advisory circular includes a note that explains a person can reproduce the authorized release certificate in the form of a certified true copy when splitting a bulk shipment:

“Note: Splitting of bulk shipments for new parts (excluding standard and commercial parts) which are certified by an approved manufacturer with an ARC is acceptable under the CARs. A single ARC may be reproduced in the form of certified true copies and utilized for the shipment of multiple items.”

Section 4.3 of that same guidance applies to “Parts sourced from a FAA Approved Manufacturer or United States (US) Distributor,” and it clarifies that it is acceptable to get a certified true copy of an FAA Form 8130-3 or a Statement of Conformity from the distributor.

Government Shutdown Advice: DARs May Continue Functioning

We continue to get inquiries about designee functions during the government shutdown.

Generally, DARs should go back to their authorizing documents and ensure that they do not have any restrictions that would forbid exercise of authority during the shutdown. As long as there is no limitation/prohibition, and as long as the DAR has general authority to issue 8130-3 tags, it should be acceptable for the DAR to continue issuing 8130-3 tags during the government shutdown in the same manner that the DAR did before the shutdown.

For a complete discussion of this issue, please see our article: DAR Privileges, During the Shutdown

Holy Grail: International Mutual Maintenance Acceptance

Today, distributors who obtain overhaul services for their rotable aircraft p[arts are well-aware of the value of the tag that accompanies the part.  Depending on the company’s business model, a distributor seeking overhaul services may ask for more than one certification on the Approval for Return To Service (ARTS) documentation.  For example, a common certification is a dual US-EU certification made on either an EASA Form 1 or an FAA Form 8130-3.  This allows the part to ultimately be installed in either a US-registered aircraft of an aircraft registered in one of the EU member nations.  For a distributor that does not yet know which customer will purchase the overhauled component, having multiple certifications approving the component overhaul expands the potential customer pool that might be able to purchase that component.

But as the number of countries potentially extending jurisdiction over maintenance grows, the number of certifications that one must consider becomes unwieldy.  This can be maddening for a distributor that enjoys a global business model.

The large number of jurisdictions that could exert jurisdiction over maintenance work has resulted in some repair stations experiencing commercial pressure to obtain multiple certificates, and to be prepared to sign-off on maintenance under the rules of multiple different jurisdictions.  One friend of mine has admitted that he is managing over 130 certificates in his maintenance facilities.

Typically, the way that the maintenance is performed doesn’t change from one jurisdiction to the next; what changes are the ancillary matters, like how the maintenance is documented, how employee training is documented, what matters must be communicated to the government that issued the certificate, etc.  Because the way that the maintenance is performed really doesn’t change from one jurisdiction to the next, if one jurisdiction can accept that the neighboring jurisdiction’s government oversight yields the same results as its neighbor, then there may be some room for the governments to extend to one another a mutual recognition of the maintenance performed in the other.

Many people will be familiar with existing examples of this sort of mutual recognition.  One of the longest-standing such relationships exists between the United States and Canada.  Under existing United States laws, maintenance performed by a Transport Canada Authorized Maintenance Organization (AMO) is accepted in the United States as if it had been performed by an FAA-certificated repair station.  See 14 C.F.R. 43.17.  The regulations also recognize certain work signed-off under an Aviation Maintenance Engineer (AME) license from Canada.  In each case, the Canadian does not need an FAA certificate – the US accepts the work done by the Canadian certificate holder because of the trust between the FAA and Transport Canada (trust that is verified and renewed through collaboration and mutual oversight at the government-level).  Canada’s regulations provide for a similar recognition of maintenance performd in the US by FAA certificate-holders.

Recently, the quadrilateral group of airworthiness authorities met in Brazil to discuss a future paradigm in which mutual recognition of maintenance might be possible.  The quadrilateral group is made up of:

  • Brazil (ANAC),
  • Canada (TCCA),
  • European Union (EASA), and
  • United States (FAA).

The essence of such mutual recognition of maintenance is close and careful coordination that allows the authorities to each conclude that the others are performing oversight which yields substantially the same results – that is, a finding that a repair station subject to FAA oversight will yield the same safety results as a repair station subject to EASA oversight.

During the Brazil meeting, industry representatives and the authorities discussed the implementation mechanisms for such a paradigm shift.  Industry would like to see the authorities adopt a multilateral focus.  As part of this, they would like to see the four authorities consider a multilateral agreement in which the four authorities agree to mutual recognition and common standards for maintenance among themselves.

The Multilateral Approach

One reason for this is multilateral approach is because variances in the way that maintenance is accepted could cause problems.  For example, imagine a scenario where where maintenance on a subcomponent X is performed in jurisdiction one.  The maintained subcomponent X is then exported to jurisdiction two, which has an agreement to accept the maintenance performed under the maintenance authority of jurisdiction one. A repair station located in jurisdiction two accepts the maintained subcomponent X and introduces it into component Y, during the course of an overhaul of component Y.  This is permitted under a mutual recognition agreement between jurisdiction one and jurisdiction two.  The problem arises when the component Y is then exported to jurisdiction three.  Under a maintenance mutual recognition agreement between jurisdiction two and three, the repair station in jurisdiction three can accept the work performed in jurisdiction two.  But if there is not yet a bilateral agreement between jurisdictions one and three, then the subcomponent overhaul work on subcomponent X may not be acceptable to jurisdiction three.

But imagine that there is also a bilateral maintenance mutual recognition agreement between jurisdiction two and jurisdiction three.  This still might not solve the problem; because if the documentation requirements differ or if small details differ, then the maintenance documentation/acceptance requirements of jurisdiction two may not be adequate for jurisdiction three.  In such a case, maintenance that would have been acceptable in jurisdiction three if it had come directly from jurisdiction one, becomes unacceptable merely because it went first to jurisdiction two under the “wrong” paperwork.

This causes a problem in smoothly accepting the subcomponent and component work in jurisdiction three.  This problem is less likely to arise if all four of the quadrilateral jurisdictions agree to the same standards for accepting maintenance in a multilateral agreement, instead of a series of six bilateral agreements.

The Bilateral Approach

The authorities on the other hand, have made it clear that they prefer to retain the multilateral coordination, but to act through bilateral agreements.  This means a total of six agreements among the four authorities:

 

Brazil (ANAC) Canada (TCCA)
| \ / |
| X |
| / \ |
European Union (EASA) United States (FAA)

 

One reason for the preference for the bilateral agreement approach is that this is the approach that has historically been used in aviation.

The authorities all agree that there is too much redundancy in maintenance oversight.  They are committed to making strides to reduce unnecessary reduncancy.  But today, they typically approach issues through bilateral relations, so they are not yet comfortable with taking a multilateral-agreement approach to maintenance acceptance.

This is not a task that will happen quickly.  The trust-building among authorities to permit reliance on one-another, alone, is a lengthy process.  But industry proposed a number of ways to faciliate progress, such as using a risk-based approach to allow staged maintenance acceptance.  Under such a scenario, lower-risk maintenance, like non-critical component maintenance, could be accepted first, and acceptance of maintenance work that incorporates a higher level of risk tolerance could be shared among the authorities at a later date, when the authorities become comfortable with sharing maintenance recognition of less-risk-sensitive maintenance.

Another idea that was floated as a model in which third parties could assess compliance to an international standard (a standard encompassing international maintenance norms).  A repair station that was certificated by its home government AND accredited to a third party standard based on international norms could be eligible to issue an internationally-recognized approval for return to service.  AC 00-56B and AS9100 are both examples of accreditation programs that can help to serve as effective models for the government bodies to consider.

The Continuing Efforts

These concepts are being developed by the quadrilateral group in partnership with industry representatives.  They recognize that with finite regulatory resources, the elimination of redundant oversight means more authority resources can be focused on maintaining and improving safety.

At the same time that the quadrilateral group is working with industry on this project, the International Civil Aviation Organization (ICAO) is also investigating an international model for mutual recognition of maintenance.  If the ICAO effort is successful, then it could lead to international standards and recommended practices (SARPs) that might make it easier for governments to engage in mutual recognition of maintenance activities.

ASA will continue to work with the regulatory authorities to facilitate their trust-building exercises, to support their efforts to eliminate unnecessary redundancy, and to eliminate paperwork and administrative impediments that actually undermine safety by diverting focus away from the true aviation safety concerns.

DARs – Where Can They Work? From Home?

I have heard from quite a few ASA members that their DARs are being told that they can no longer work from their own facilities.  This is a problem for many DARs who receive parts at their home or office, review each part and its paperwork, and then if the part is eligible the DAR issues an 8130-3 tag for the part.

The source of the issue appears to be an FAA email that stated:

It has come to the attention of the FAA some designees are unclear on where FAA Form 8130-3 may be issued when performing authorized work at the request of a distributor.  As defined in FAA Order 8130.21, any certification work when performed on a distributor’s inventory must be performed at the distributor’s place of business.  This policy does not allow for a designee to perform these functions at their personal home location.  In addition, the Designee Management Policy in FAA Order 8000.95 requires the designee to define the location of where the activity is going to take place, prior to the FAA delegating the function.

Contrary to the email, there is no general requirement in FAA Order 8130.21H that 8130-3 tags must be issued “at the distributor’s place of business.”  We’ve been in touch with FAA Headquarters about this, and they have pledged to examine the situation.

Different Type of DARs

In examining the guidance situation, it is important to remember that there are different types of DARs with different privileges.  There are DARs who received their privileges under FAA Policy memos:

Those DARs are typically restricted to only working at the facility of the sponsoring distributor.  The reason for this is because their privileges are tied to the AC 00-56B system of the distributor. They use a systems approach based on the accredited system to support their findings.

These ‘limited-DARs’ should be contrasted with traditional DARs who are not specifically tied to an accredited distributor.  Traditional DARs are typically limited to the geographical range of the office from which they received their credentials (the managing office).  If the DAR needs to work outside of that range, then there is a well-documented process for expanding those geographic limitations (it involves assurances that the FAA is able to adequately monitor and supervise the designee, as well as coordination between geographically relevant offices).

Note of course that a DAR who lives in a geographic district different from that of his or her FAA managing office should consider transferring to a more geographically-suitable FAA managing office if he or she plans to work from (and issue tags from) a home office.  Designee operations outside of the geographic territory of the managing office are typically not permitted without written permission from the FAA.

Limit on ‘Traditional’ DARs

The recent email received by some DARs appears to have been sent to traditional DARs.  But it appears to have confused the restrictions placed on the special category DARs who work on for distributors (and who must operate within the AC 00-56 quality system of the distributor), with the privileges of ‘normal’ DARs, who may operate anywhere within their prescribed geographic limitations.

This is more than just a matter of confusion of standards.  There are problems with this directive, including:

(1) Order 8130.21H states that when a tag is issued at a distributor’s facility then the distributor’s name and address should be placed in block 4 – but this does not limit where the tag can be issued – it only sets a rule for how to complete block 4 (this is consistent with the guidance in para 2-5(b) of that same order, which requires block 4 to state the name and address where the tag is issued;

(2) There is no restriction in Order 8130.21H that forbids a DAR from operating out of his or her home, even when reviewing parts that belong to a distributor;

(3) Many DARs are both semi-retired and aged, so it is not unusual for many of them to operate out of their home offices,

(4) When the DAR operates out of his or her home office, the distributor must bring the parts to the DAR for review prior to issue of the tag; and,

(5) Order 8130.21H requires that the 8130-3 state where the tag was issued, so it is supposed to list the DAR’s home office address, if that is where the tag was issued.

The recent language is already causing problems for several distributors, whose DARs feel that they can no longer accept and review parts at their home offices.

ASA has brought this to the attention of FAA management, and they rapidly pledged to examine the situation.

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