Back-to-Birth Traceability is STILL NOT a Legal Requirement

Lately, I have been encountering a number of people who appear to want back-to-birth traceability for articles that traditionally have not required back-to-birth traceability, like expendable articles.  The obvious problem is that when back-to-birth traceability has not been a requirement, it will often not exist for pre-existing articles.  A request for documentation that does not exist, and is not an industry norm, causes frustration for everyone involved.

An installer or other person determining airworthiness needs to have evidence to support that determination.  Evidence!  While back-to-birth traceability is certainly one form of evidence, the form of allowable evidence under current law is much broader than mere “back-to-birth traceability.”

Back-to-birth traceability has been a commercial norm for life-limited parts.  Nonetheless, in 1992, the FAA issued a Chief Counsel’s opinion letter explaining that this commercial norm is NOT an FAA requirement.

Back-to-birth traceability has NOT been a commercial norm for non-life-limited parts, like expendables.  It would be difficult to maintain reliable back-to-birth traceability for non-serialized parts, because of the difficulty in proving that the documents belong to the unserialized articles.

The FAA has repeatedly said that back-to-birth traceability is not an FAA requirement, and that traceability is not an FAA requirement.  The FAA Chief Counsel’s office issued at least three legal opinions between 1992 and 2009 asserting this.  One of the reasons that back-to-birth traceability is not an FAA requirement is because there is no regulation requiring it.  Under the Paperwork Reduction Act, the OMB needs to approve any situation where a person is required to create or maintain records – the OMB will then issue an OB control number to track that activity.  See, e.g., 44 U.S.C. § 3512 (preventing agencies from imposing any penalty for any record-keeping or other information-collection requirement unless the OMB has explicitly approved the requirement and the OMB control number is published with the requirement).  There has never been an OMB control number for back-to-birth traceability.

So if back-to-birth traceability is not a requirement, then what is a requirement?  Typically, our mission as distributors is to preserve evidence to support the ultimate airworthiness decision made by the installer.  The installer has a regulatory need to determine, at the time of installation, that the article will return the product to a condition at least equal to an acceptable/approved configuration (like type certificated configuration or STCed configuration).  E.g. 14 C.F.R. § 43.13(b).  The installer needs to use the right article (so proper identification is important) and needs to know that it is airworthy.  Airworthiness has been described in FAA guidance as (i) the article conforms to its design requirements and (ii) the article is in a condition for safe operation.  E.g. 14 C.F.R. 21.331(a)).  The installer needs evidence to support this conclusion, but the FAA regulations do not limit the forms of evidence that may be used.  FAA Chief Counsel opinions have addressed this and found that one could rely on a variety of different forms of evidence (traceability is just one way to develop the evidence).

Incidentally, when a designee makes a determination about airworthiness of an article the designee uses the same metrics (conforms to design requirements and is in a condition for safe operation).  The designee may then document that finding by issuing an 8130-3. So the same standards that apply to an installer’s determination of airworthiness could also apply to a designee’s determination.

There is a variety of sources of evidence that the industry has traditionally used to support an airworthiness determination. The regulations require Production Approval Holders (PAHs) to assure airworthiness of any articles they release before those articles are released.  Therefore, evidence that the part was released by an FAA PAH is sufficient to show that the part was airworthy at the time of release.  FAA guidance has made it clear that this does not mean back-to-birth traceability – but rather some lesser level of evidence.

FAA AC 20-62E explains, under the heading “PAH’s Documents or Markings,” that “Documents or markings such as shipping tickets and invoices may provide evidence that a part was produced by a manufacturer holding an FAA-approved manufacturing process.”  I have had people ask me about whether one may rely on packaging as evidence that a part came from a PAH. Packaging typically bears the PAH name and/or other marks that reference or represent the PAH. Such marks are protected from misuse under laws like the Lanham Act.  The Lanham Act provides both criminal and civil penalties for counterfeiting or other misuse of a PAH’s name or mark.  Part of the reason that the industry can rely on things like PAH packaging is because the law protects against counterfeiters who might try to spoof that packaging.  For reasons like this, industry generally relies on credible PAH packaging and commercial documentation.

Similarly, I have had people ask “what about counterfeiters who might spoof packaging or paperwork?”  There was famous tale in the 1990s of a counterfeiter who spoofed the Pratt and Whitney logo, but printed the Eagle upside-down.  Ultimately, though, modern technology makes it easy to create bogus paperwork (much easier than creating bogus parts), so insistence on back-to-birth traceability is not a sound strategy for counterfeit avoidance.  Packaging is a little harder to spoof, so it is potentially slightly more reliable than documentation.  But ultimately, we need to rely on our system of laws and industry norms to protect us.  Just as we do not assume everyone on the street is going to murder us, we also cannot assume that every article we receive is counterfeit.  Instead we rely on the convention that packaging and paperwork will be genuine,and that it is safe to rely on them; and then we apply counterfeit avoidance mechanisms to support that convention.  So that is part of why we rely on normal packaging and paperwork  as evidence that the part came from a PAH and was airworthy at the time of release.

Don’t forget that evidence of PAH sourcing – alone – may not be enough to install an article.  Articles can suffer damage or degradation, so the second half of the airworthiness analysis (“in a condition for safe operation”) also applies.  If we know that the article was airworthy in the past, and is unused, then the installer merely needs to assess whether the article has suffered damage or degradation since that release.

Designees and installers have historically relied on things like PAH packaging, PAH shipping tickets, PAH packing lists, etc. as evidence of sourcing from PAHs during their inspections.  The receiving inspection AC (FAA AC 20-154) explains that inspection is “[t]he act of testing or checking a product or part thereof against established standards to assure it conforms to its design requirements and is in a condition for safe operation.”  Note that the goal in that sentence is to assure that the article “conforms to its design requirements and is in a condition for safe operation” – these are the traditional elements of airworthiness.  This section goes on to explain that “Inspection could include documentation review, visual inspections, bench or functional tests, preservation (condition), packaging, technical data, or shelf life limits are a few examples to consider.”  So the FAA has explicitly recognized that checking documents and packaging is a part of the airworthiness check.

It is important to remember that industry’s obligation is to have sufficient evidence to support airworthiness decisions – not to have a ‘magic document’ nor back-to-birth traceability.  Documents from credible sources (like airline commercial documentation asserting identity and condition of the article) can be used as evidence of PAH sourcing, or of other important facts.

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ASA and ACPC Partner to Offer Classes on Changes in the Global Parts Paradigms; NEXT WEEK!

ASA will be at the Air Carrier Purchasing Conference (ACPC) in Washington, DC this weekend and next week. Look for us all weekend long, but we hope to see you all on Monday during our FREE classes!.

On Monday, August 12, 2019, Jason Dickstein will teach three professional development classes at ACPC that will be useful for the aircraft parts community. The first, in the morning, will focus on what we expect out of Brexit, and how it will impact global aircraft parts transactions. The second, after lunch, will discuss import law – as the US imposes new tariffs on imported aircraft parts, it is important to understand your compliance obligations as well as the duties you need to pay on the imported parts. Finally, the third session will look at a number of parts issues documentation issues, including both recent and impending regulations that are changing the parts transactional paradigms.

Read on for expanded descriptions, below!


Monday 10:00 AM – 11:00 AM

Doing Business in the Post-Brexit World

Brexit is almost upon us…. Maybe. We will discuss what factors to watch as the world approaches the current Brexit deadline, what the aircraft parts community should anticipate under several different Brexit possibilities, what aviation negotiations are going on behind-the-scenes and how to protect yourself from the worst-case scenarios.


Monday 2:00 PM – 3:00 PM

Import Law for Aviation Professionals: From Harmonized Tariffs to Country of Origin

Most aircraft parts are usually imported “duty-free” and this can give us a distorted view of import law; a view that is upset when you receive ab unexpected bill for import duties. With existing China tariffs and proposed tariffs on Airbus parts, many aircraft parts importers are facing unwanted surprises in the form of import duties. We will examine the process for importing, how to classify your imports, and how to identify the tariff and related import duties for your import.

If you import parts, then tariff duties can have a direct impact on your bottom line – this session will help you to avoid surprises.


Monday 3:15 PM – 4:15 PM

How Do International Agreements (like the MAG) Affect Aircraft Parts Transactions?

The rules for aircraft parts transactions are changing! This session will begin with an examination of the relationships between international agreements and acceptance of traceability documents, but it will also address recent and impending rule and policy changes that could significantly affect the documentation requirements for aircraft parts transactions. If you have questions about documentation and international transactions, then this is the place for answers.


All sessions will be held in the Maryland Suites in the Marriott Wardman Park Hotel on Monday, August 12, 2019.

The Electronic Records/Signature Law (ESIGN) turns 18

The Electronic Signatures in Global and National Commerce Act (ESIGN) was signed into law on June 30, 2000.  That makes the law 18 years old on Sunday.  If there was any justice in the world, we’d all be buying the law a cigar and allowing it to vote.

ESIGN established a general rule of validity for electronic records, electronic contracts, and electronic signatures.  Prior to the law, many courts had refused to recognize electronic signatures and they questioned electronic records.

ESIGN applies to transactions “in interstate commerce,” which is a term of art meaning that the transaction is open to being regulated by Congress under the Interstate Commerce Clause of the Constitution (most transactions, today, are subject to the Interstate Commerce Clause of the Constitution).  Generally, it explains that when records and agreements are required to be in writing, an electronic version of them counts as a “writing.”

ESIGN also applies to federal and state government agencies.  They are forbidden from adopting record-keeping rules that would “impose unreasonable costs on the acceptance and use of electronic records.”  The law explains that if an agency wants to require paper records (to the exclusion of electronic), then the agency needs to show “there is a compelling governmental interest relating to law enforcement or national security for imposing such requirement.”

Eighteen years after the law was enacted, the aviation industry still struggles with full implementation of the law.  Even though it is clear that aviation records can be recorded and transmitted electronically, the aviation industry remains wedded to paper.  Nowhere is this more clear than with respect to parts documentation.  While distributors are now more comfortable reducing paper 8130-3 tags, and paper material certifications to electronic format for archival storage, transactional records remains stubbornly rooted to a paper paradigm.

One reason for this paper paradigm is because most aircraft parts are unserialized, and therefore it can be difficult to uniquely tie an electronic record to a particular (unserialized) part. A paper record, on the other hand, can be literally, physically, connected to the part to which it applies.  In a world in which we deal with so many different parts coming and going through our warehouses, paper records provide a level of comfort that we are connecting the uniquely correct record to the uniquely correct part.

The FAA has repeatedly said  that commercial documentation paradigms (like back-to-birth traceability) are not required by FAA regulations.  They have specifically stated that there is no Federal Aviation regulation that requires traceability of an aircraft part to its origin, and the FAA does not require back-to-birth records even for life-limited parts.  The FAA has explained that a part may be identified as having been released by a manufacturer as an airworthy part using  “a shipping document, a manufacturer’s certificate of conformance or material certification, or an FAA Airworthiness Approval Tag, Form 8130-3,”  but that in the absence of such documentation, “the part may be submitted for inspection and testing to determine conformity.”

Despite the best efforts of the FAA’s lawyers, the industry remains stubbornly rooted to a paperwork paradigm.  There are many commercial reasons for this, but one important pseudo-regulatory reason is that FAA inspectors frequently insist that the manuals for FAA certificate holders feature documentation requirements.  Once these requirements are published in the manuals, then these FAA-approved manuals drive the documentation requirements which are flowed-down throughout the industry.  And because these documentation requirements are not directly tied to FAA regulations, there is no opportunity to apply the ESIGN mandates and protections to them.

Through recent conversations with both the FAA and EASA, we are starting to see a new understanding of the value of several important paperwork paradigms:

  • limiting documentation ‘requirements’ only to those that are actually valuable to safety;
  • making acceptable safety information more readily available through available (and trusted) industry channels; and
  • permitting greater reliance on electronic information where availability of such data supports safety.

This is likely to be related to the greater reliance of the rest of the world on electronic data (a reliance that was facilitated by ESIGN), but it is also related to the fact that senior decision-makers in the FAA and EASA are more comfortable with electronic records than were their predecessors (again, a comfort that was facilitated by the impact of ESIGN on other parts of the world of data).  And they are also thinking more critically about what information supports safety (and should be encouraged) and what information does not support safety (and therefore becomes unnecessary to the FAA’s mission).

FUNCTION CODE 56 UPDATE: Airline Sourcing is OK; but PAH Trace Must be Established

Recent confusion about the use of function code 56 has caused some consternation in the industry.  The focus of this issue has been on parts obtained from air carriers (which represents a significant portion of the industry’s surplus parts).

The issue arose from an FAA email that incorrectly stated that articles obtained from an air carrier were ineligible for 8130-3.  This was not a correct statement, and the FAA is planning to issue a follow-up email to correct this statement.

Our FAA contacts says that they have seen at least one case where Limited DAR-F’s are issuing 8130-3 tags for parts that were not traceable to a PAH in accordance with the criteria FAA established in the DAR 56 policy memo of October 14, 2016.  The FAA reports that a function code 56 designee had issued tags based solely on paperwork from an airline, in the absence of paperwork or markings from the PAH. While some DAR function codes permit reliance on air carrier evidence (e.g. to identify new surplus parts), function code 56 does not permit that to be the sole basis of an airworthiness decision.

Recently the FAA sent an email to the entire Limited DAR-F community to warn them about this issue.  The intent of the email was to make it clear that the paperwork or the physical part markings had to be traceable to a PAH in order to issue an 8130-3 tag under DAR function code 56.

The recent emailed guidance suggested that function code 56 does not allow 8130-3 tags for articles from Part 121 air carriers.  This description was not an accurate portrayal of FAA policy, because the statement was truncated.  We have discussed this matter with Scott Geddie, who heads up designee policy for the FAA, and he confirmed that the correct statement should have looked like this:

This program DOES NOT allow issuance of an 8130-3 tag for:

….

  • Parts or articles obtained from an FAA Part 121 air carrier, unless proper documentation exists from the PAH or there are part markings traceable to the PAH

The italicized text (above) was not in the original FAA email, but the FAA has pledged to send a follow-up email with the italicized text, and has confirmed that italicized text represents the intent of the FAA.

For comparison purposes, the original October 14, 2016 policy memo makes the function code 56 requirements very clear.  To issue an 8130-3 under function code 56, you need one of the following:

  1. Certificate of Conformity/Statement of Conformity from a Production Approval Holder (PAH); or
  2. Certificate of Conformity/Statement of Conformity or shipping document from a PAH supplier with verification of direct ship authorization; or
  3. Part Markings made under 14 C.F.R. § 45.15.

If you have other evidence of airworthiness (like valid air carrier trace), then an 8130-3 may still be issued – but it must be issued by a DAR with a different function code.

ASA to Announce 2014 Workshop Schedule

ASA will soon be announcing the 2014 Workshop schedule.  The workshops change every year, but they are generally focused on identifying the regulations and policies that aircraft parts distributor need to know in order to remain successful n the industry.  In the past, we have addressed topics like:

  • AC 00-56/ASA-100
  • aircraft parts documentation topics (like the 8130-3 tag)
  • approved and unapproved parts
  • counterfeit parts identification
  • distinguishing Commerce-Department-controlled parts from ITAR-controlled parts
  • export out of the United States (BIS, DDTC and OFAC regulations)
  • FAA regulations that affect parts transactions
  • EASA regulations that affect parts transactions
  • hazmat identification in aircraft parts
  • import into the United States
  • liens and other security interests
  • “magic words” for quotes and purchase orders
  • quality assurance
  • safety management systems
  • standard parts and commercial parts
  • using commercial documents to protect your right to get paid

We are just beginning to draft the 2014 workshop.  This is your opportunity to influence the syllabus and make sure we are teaching the subjects that you want to hear about.  Send me a note if you would like to suggest a topic for the 2014 workshop.

ASA’s workshops are subsidized by the Association so the registration fees are very inexpensive. This is an excellent opportunity to introduce new employees to new concepts that they need to understand and for more seasoned employees to ask questions and get answers about the details of compliance and aviation distribution business.  We particularly recommend the class for quality, shipping/receiving and sales people.  We love hearing from sales people that a better understanding of the regulations and policies helped them cement a sale that was falling apart, or helped prevent them from making a mistake on the details of a sale.

Will we be in your city?  This year, ASA is planning to hold workshops in Atlanta, Los Angeles, Phoenix, Seattle and South Florida.  More cities may be announced later.  If we are not in your city, then we would love to see you in a neighboring city!

Dates are not yet set, as we attempt to firm things up with local hotels, but we hope to announced a more formal schedule very soon.

ASA Files Repair Station Comments to Protect Members

ASA 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 ASA Community.  Some of the regulatory proposals, for example, could interfere with documentation and traceability norms.

Issues addressed by the wide-ranging comments from ASA included:
<ul>
<li>Recertification</li>
<li>Certificate Surrender</li>
<li>Asset Sale</li>
<li>Ratings</li>
<li>Capabilities Lists in the Operations Specifications</li>
<li>Removing Operations Specifications from the Certificate</li>
<li>Capabilities Lists</li>
<li>Quality Systems</li>
<li>Appropriate Equipment and Tools</li>
<li>Permanent Blacklisting From the Industry under § 1051(e)</li>
<li>Entitlement to Certificate under § 1053(a)</li>
<li>Change to Part 43 Appendix B</li>
</ul>
A complete set of the ASA Comments will soon be posted to the <a title=”ASA Website” href=”http://www.aviationsuppliers.org&#8221; target=”_blank”>ASA website</a>.

Proposed Rule Change Would Alter the Way that Major Repairs are Recorded – Could Undermine Use of 8130-3 Tags

The FAA has proposed a change to the record-keeping requirements that repair stations must meet when they perform major repairs.  This change could affect both repair stations who perform the work, and the distributors and others who rely on repair stations to perform that work. The change can be found in the FAA’s proposed revisions to the repair station rules.

Under current law, when anyone performs a major repair, they are required to complete and file a FAA Form 337.  This requirement is found in 14 C.F.R. Part 43, Appendix B, Subsection (a).  The purpose of the form is to provide the FAA with a record of the work performed. This record-keeping requirements is in addition to the requirement to complete an approval for return to service under 14 C.F.R. § 43.9.

Under current law and standard practice, when a repair station performs a major repair, it is required to complete an approval for return to service to meet the requirements of 14 CFR 43.9, but it has the option to perform an alternative record-keeping operation instead of filing a FAA Form 337 with the FAA.  Instead of that filing, the repair station is permitted to provide the customer with a maintenance release in order to meet the requirements of Appendix B to Part 43 [note that use of a FAA Form 337 remains permitted as a mechanism to meet the requirements of Appendix B, but that Form is more commonly used for Major Alterations in the repair station sector].

Although some repair station have found ways to conflate these two record-keeping requirements into a single document, it is still very common to see two separate records that meet the two separate requirements.

Here is a table that shows some typical methods for meeting the two different documentation requirements in different repair circumstances:

Common Documentation Following A Major Repair

Documentation that Constitutes the Approval for Return to Service Documentation that Constitutes the Maintenance Release
Major Repair of a Component 8130-3 Authorized Release Certificate Maintenance Release language included in the Work Order
Major Repair of a Complete Product Log Book Entry (1) Maintenance Release language included in the Work Order OR (2) signed copy of the work order and also a Maintenance Release written into the log book

The table does not describe uniform practices, and many repair stations may have practices that differ, but these represent common ways to meet the two requirements.

The Administrator has proposed to change the Appendix B requirements in order to reference an approval for return to service, rather than a maintenance release.

Under the proposed change, repair stations would still have an obligation to provide the work order, and the would still have an obligation to use the work order to provide the traditional maintenance release language; but the work order would then become the approval for return service document as well.  This would mean that the current industry-standard-practice for documenting component repairs and overhauls, use of the 8130-3 tag, would become inconsistent with regulatory requirements, due to the fact that Appendix B would require the approval for return to service to be created using the work order.

We believe that this is a mistake in drafting, rather than reflecting the actual intent of the Administrator.

The proposed rule provides very little discussion to explain this change.  The Proposed rule suggests that this change is being made for consistency.  77 Fed. Reg at 30071.  The Proposed rule also suggests that the approval for return to service document is identical to the maintenance release described in Appendix B.  77 Fed. Reg at 30070.  While this latter suggestion is inconsistent with past FAA practice, it nonetheless reflects good future practice; the additional text described in Appendix B for major repairs should be described as additional text for the approval for return to service in order to clarify that subsection (b) of the Appendix is merely adding additional elements to the already-required record-keeping obligation of 14 C.F.R. § 43.9.

From the context of the Administrator’s preamble, it is obvious that the Administrator wants to conflate these two documents (approval for return to service and maintenance release) in order to minimize burden.  ASA applauds this idea, because reducing unnecessarily redundant paperwork obligations is always a good idea; however, ASA feels that the actual change as proposed (1) fails to accomplish the Administrator’s goals, (2) changes an industry standard record-keeping practice (use of the 8130-3 tag) in a way that is inconsistent with FAA guidance and current safe industry practices, and (3) creates needless confusion without accomplishing any ameliorative benefit.  An important reason for this unanticipated result is that the rule change fails to modify other related obligations (like the persisting obligation to provide the work order, and the requirement to use the work order to document the required details).  ASA therefore has an alternative language proposal that we feel may better meet the Administrator’s intent.

In order to accomplish the Administrator’s obvious intent. ASA recommends that the language of Appendix B be changed as follows (proposed additions are shown as underlined words – proposed deletions are shown as struck-out):

Appendix B to Part 43—Recording of Major Repairs and Major Alterations

* * *

(b) For major repairs made in accordance with a manual or specifications acceptable to the Administrator, a certificated repair station may, in place of the requirements of paragraph (a)—

(1) Use the customer’s work order upon which the repair is recorded;

(2) Give the aircraft owner customer a signed copy of the customer’s work order upon which the repair is recorded, and retain a duplicate copy for at least two years from the date of approval for return to service of the aircraft, airframe, aircraft engine, propeller, or appliance;

(32) Give the customer aircraft owner a maintenance release an approval for return to service that meets the requirements of section 43.9 of this Part and that signed by an authorized representative of the repair station and incorporatesing the following additional information:

(i) Identity of the aircraft, airframe, aircraft engine, propeller or appliance.

(ii) If an aircraft, the make, model, serial number, nationality and registration marks, and location of the repaired area.

(iii) If an airframe, aircraft engine, propeller, or appliance, give the manufacturer’s name, name of the part, model, and serial numbers (if any); and

(43) Include, as part of the approval for return to service,  the following or a similarly worded statement—

“The aircraft, airframe, aircraft engine, propeller, or appliance identified above was repaired and inspected in accordance with current Regulations of the Federal Aviation Agency and is approved for return to service.

Pertinent details of the repair are on file at this repair station under Order No. ___,

Date____________________
Signed____________________

For signature of authorized representative)

Repair station name)      (Certificate No.)

____________.”

(Address)

Reducing redundancies in paperwork is a great idea; but right now, the industry recognizes the 8130-3 tag as a standard method for recording maintenance and for approving it for return to service.  The proposed language of the regulation, which would require the approval for return to service to be listed on the Work Order, would change this and would require distributors and others to become trained in the recognition of appropriate language on a diverse collection of Work Order formats.  This sort of reduction in uniformity would actually decrease safety by making it more likely that unusual language in a Work Order could confuse a receiving inspector in a distributor or operator environment as to the true nature and scope of the approval for return to service.  While we applaud the idea of conflating the approval for return to service and the maintenance release, we ask that the FAA carefully draft the language to ensure that industry standard practices, like use of the 8130-3 tag for approval for return to service for component work, can continue to remain in place.

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