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/.

NEW: US Gov’t Payroll Funding for Aviation Businesses

The US government has recognized the extreme hardship that has befallen many aviation companies and has passed legislation that will provide payroll support to aviation businesses.

This is a new program that has just been authorized and is in the process of being developed. It is known as the Aviation Manufacturing Jobs Protection (AMJP) program, but the actual scope includes more than just traditional manufacturing jobs.

The program is targeted to three categories of aviation business:

  • FAA production approval holders – this includes businesses that hold PC, PMA and/or TSOA;
  • MROs holding FAA Part 145 credentials; and,
  • Aviation businesses providing goods or services under an AS9100 system.

The ASA Community has members that fall into each of these three categories.

The legislation is found in Public Law 117-2 at sections 7201-7202. The Department of Transportation plans to publish a website with resources to facilitate application and compliance under the program (we will let you know once it is published).

What Are the Program Benefits?

In summary, under the AMJP program, the government provides money directly to program participants to subsidize a portion of their payroll

Businesses that participate in this program will have to identify an eligible group of employees who perform a targeted activity (see above). This group can be no more than 25% of your total workforce. The members in this group are limited to employees with a total compensation level of $200,000 or less per year (each).

You will commit to retain this eligible employee group, and in return the government will commit to paying up to 50% of their base pay and benefits (“total compensation“) for 6 months. The government has appropriated 3 billion dollars for this program and if the program is oversubscribed, then this amount could be reduced on a pro-rata basis (which might reduce the government’s potential commitment to each applicant).

This program is for the “retention, rehire, or recall of employees of the employer” so that means that you can use the money to rehire eligible furloughed/laid-off employees.

Example: Let’s say you are a small business that distributes aircraft parts kits under an AS9100 system and is otherwise eligible for the AMJP program. You only have 12 employees. Three of your employees are involved in the AS9100 kitting process, so you designate them as your employee group. The combined annual salary of this group is $300,000 (including base pay and benefits). This means that the government could commit to paying $75,000 (50% of the salary for six months).

Example: Let’s say you are a larger distributor that distributes new aircraft parts under an AS9100 system and is otherwise eligible for the AMJP program. You have 600 employees who are substantially all involved in the AS9100 operations. Let’s say that you designate a group of 150 employees as your employee group. The combined annual salary of this group is $22,500,000 (including base pay and benefits). This means that the government could commit to paying $5,6255,000 (50% of the salary for six months).

As long as the program requirements are met, these funds would not have to be paid-back to the government. The funds would likely be treated like a grant.

What Can You Do Now, to Prepare?

The internal government mechanisms for managing this new program are still being developed, but while we wait for the program to be formally announced, there are some things that businesses can do now to ensure that they are prepared to take advantage of the program:

  • Read the legislation to make sure you understand the terms and conditions;
  • Assess whether you meet the fundamental requirements, which include:
    • US Aviation Business meeting one of the three categories described above;
    • in 2020, you laid off 10+% of your workforce or experienced a reduction in revenues of 15+% (each as compared to correlative 2019 numbers);
  • Read the ineligibility provisions of the law and make sure you are not ineligible (and avoid ineligibliity);
  • Obtain a DUNS number, if your business doesn’t already have one, because that is a likely prerequisite for application;
  • Register in the System for Award Management (SAM.gov) because that is the most likely mechanism for government distribution of the funds;
  • Obtain AS9100 certification, if you do not otherwise meet the qualifications.

Finally, you should be thinking of the questions that you may have and sending those questions to us. ASA is generating a list of Frequently Asked Questions and sharing it with the Department of Transportation in order to let them know what the community needs to know to make the program successful. This is an ongoing process, so please share your questions with us as you think of them.

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