ASA Argues 8130-3 Tags Before the DC Circuit

ASA appeared in court this morning to argue that the FAA’s new MAG-based documentation requirements violate US law and should be enjoined.  This is an important case for distributors whose parts sales have been impacted by the MAG.

The three judge panel consisted of Judge Tatel, Judge Millet and Judge Williams. Most judges are pretty smart, but these are three of the top jurists in the country.

We tried to focus the written briefs on the simple legal issues, but the underlying issues – those that involve questions like “just what is an 8130-3 tag, anyway,” and “why is the government doing this”? – are very complicated. Copies of our written briefs are available here:

As you might expect from three very smart judges, they wanted to know what the case was really all about.  This was difficult because the case is limited to the record on appeal and the FAA’s official ‘record’ was very sparse.  Last summer, ASA had tried to supplement the record with additional facts (affidavits from our members), but the FAA opposed our efforts (they standard approach is to limit the appeal to the record, so the court denied our efforts to supplement the record, but did take the member affidavits into account in analyzing our motion for a stay).  So we found ourselves having to describe a set of facts that were not well-documented in the record (and a lawyer is not supposed to testify as to new facts).

We did our best to try to explain how documentation works in the industry and when parts might enter a system without an 8130-3 tag, but with other indicia of airworthiness.

Questioning ran long this morning, as the judges tried to understand how 8130-3 tags work, and when (if ever) a part is allowed to enter a repair station without an 8130-3 tag.  The FAA’s attorney did not help matters by suggesting that parts without 8130-3 tags “lack provenance,” but we were able to explain that parts can be identified using other means and that the FAA has endorsed the use of other means of identification in AC 20-62E.

The Court was very much focused on FAA Notice 8900.380.  This is the Notice that reminds repair stations that they can inspect a part that doesn’t have an 8130-3 tag.  ARSA has put together an excellent checklist for that sort of inspection.  But even that FAA Notice 8900.380 appears to fall short, as some FAA inspectors have suggested that the Notice does not remedy the MAG requirement for a left-side signatures (“release must be documented on an FAA Form 8130-3 as a new part”).  So we have run into a problem with the Notice (which was supposed to at least provide a temporary solution) being ignored by the FAA’s own inspectors (who would not permit their repair station charges to adopt the terms of the Notice.

Judge Williams closed out the argument by suggesting the Europeans “snookered the US.”

The next step in the case is for ASA to wait for the opinion from the Court. There is no specific timetable for an opinion but often opinions are issued about 60-90 days after argument.  ASA remains engaged with the FAA in an effort to resolve some of the underlying issues in a way that allows airworthy parts to be accepted and used

An audio recording of the oral argument is available on line; you can hear the lawyers but unfortunately the Judges are difficult to hear on the recording (this is unfortunate indeed as their questioning demonstrated a keen thought process for each).



ASA Goes to Court to Protect Distributors

ASA will be protecting distributors’ rights next week when it argues before the U.S. Court of Appeals for the District of Columbia Circuit.

Many distributors have already felt the pinch of the new Maintenance Annex Guidance (MAG) standards which impose a requirement for 8130-3 tags when selling US-produced aircraft parts to dual-certificated repair stations in the United States.  This new standard ignores the plain language of the Maintenance Annex, which requires US repair stations to only adopt the European Special Conditions (those Special Conditions do not include an 8130-3 documentation requirement).  Moreover, it ignores the ‘safety valves’ that exist in the actual EASA regulations, so the standard imposed on US-based repair stations is actually more stringent that the standard imposed on EU-based repair stations.

This presents a problem for distributors who cannot economically obtain 8130-3 tags for all of the new PAH parts in their inventories.

ASA is seeking to have the documentation standard, that was introduced in the MAG, curtailed in favor of the plain language of the Maintenance Annex.  ASA is not opposed to the 8130-3 tag., but we recognize that many aircraft parts are accepted using other indicia of airworthiness, such as packaging or commercial documentation that traces the part to an FAA-production-approval-holder (FAA PAHs are prohibited from releasing an aircraft part from their quality assurance systems unless the part is FAA-approved, e.g. 21 C.F.R. § 21.146).

Both ASA and FAA have filed extensive briefs explaining the situation to the court.  The essence of the FAA’s claim is that the MAG is attributable to EASA, and so the FAA does not need to answer for it.  Our response is that the 8130-3 tag and other documentation requirements are not part of the Special Conditions, and the requirement is not a match for European law (European law is more reasonable that then plain language of the MAG).  So pointing a finger at EASA does not work.

What is in the EASA Special Conditions?  Here is the Special Condition language:

1.1. To be approved in accordance with EASA Part-145, pursuant to the terms of this Annex, the repair station shall comply with all of the following Special Conditions.
1.1.1.The repair station shall submit an application in a form and a manner acceptable to EASA.

(a) The application for both initial and continuation of the EASA approval shall include a statement demonstrating that the EASA certificate and/or rating is necessary for maintaining or altering aeronautical products registered or designed in an EU Member State or parts fitted thereon.
(b) The repair station shall provide a supplement to its Repair Station Manual (RSM) that is verified and accepted by the FAA on behalf of EASA. All revisions to the supplement must be accepted by the FAA. The supplement shall include the following:

(i) The supplement must contain a statement by the accountable manager of the repair station, as defined in the current version of EASA Part 145 which commits the repair station to compliance with this Annex and the special conditions as listed.
(ii) Detailed procedures for the operation of an independent quality monitoring system including oversight of all multiple facilities and line stations within the territory of the United States.
(iii) Procedures for the release or approval for return to service that meet the requirements of EASA Part-145 for aircraft and the use of the FAA Form 8130 3 for aircraft components, and any other information required by the owner or operator as appropriate.
(iv) For airframe/aircraft rated facilities, procedures to ensure that the certificate of airworthiness and the Airworthiness Review Certificate are valid prior to the issue of a release to service document.
(v) Procedures to ensure that repairs and modifications as defined by EASA requirements are accomplished in accordance with data approved by EASA.
(vi) A procedure for the repair station to ensure that the FAA-approved initial and recurrent training programme and any revision thereto include human factors training.
(vii) Procedures for reporting un-airworthy conditions as required by EASA Part-145 on civil aeronautical products to the EASA, aircraft design organization, and the customer or operator.
(viii) Procedures to ensure completeness of, and compliance with, the customer or operator work order or contract including notified EASA airworthiness directives and other notified mandatory instructions.
(ix) Procedures in place to ensure that contractors meet the terms of these implementation procedures; that is, using an EASA-approved Part-145 organization or, if using an organization which does not hold an EASA Part-145 approval, the repair station returning the product to service is responsible for ensuring its airworthiness.
(x) Procedures to permit work away from the fixed location on a recurring basis, when applicable
(xi) Procedures to ensure appropriate covered hangars are available for base maintenance of aircraft.

1.2. To continue to be approved in accordance with EASA Part-145, pursuant to the terms of this Annex, the repair station shall comply with the following. The FAA shall verify that the repair station:

(a) Allow EASA, or the FAA on behalf of EASA, to inspect it for continued compliance with the requirements of the 14 CFR part 145 and these Special Conditions (i.e. EASA Part-145).
(b) Accept that investigation and enforcement action may be taken by EASA in accordance with any relevant EC regulations and EASA procedures.
(c) Cooperate with any EASA investigation or enforcement action.
(d) Continue to comply with 14 CFR part 43 and part 145, and these Special Conditions.

Notice that the Special Conditions require the dual-certificated repair station to release work on an 8130-3 tag, but there is no correlative requirement to accept parts with an 8130-3 tag.  So the Special Conditions do not authorize the 8130-3 tag documentation requirement found in the MAG.

ASA continues to be open to a settlement that would protect the value of existing inventories, and has left the lines of communication open with the FAA.

Oral argument is scheduled for 9:30 am on Friday, January 13, 2017.  If you plan to be in the DC area then the proceedings are open to the public and you are welcome to join us.  The court is located at 333 Constitution Ave, NW, Washington, DC 20001. It is right behind the DC (local) Courthouse so be careful not to get confused! The FAA and ASA will each have a ten minute window within which to discuss their cases before the court.

ASA and FAA Meet to Discuss 8130-3 Options

On December 20th, ASA met with FAA Aircraft Certification Director Dorenda Baker.  In addition to ASA staff and FAA staff, the meeting also included ASA members John Nepola (East Air), Brent Webb (CAVU Aerospace), Mitch Weinberg (International Aircraft Associates) and Paul Wolf (Boeing).  The topic of discussion was the documentation (8130-3 tag) requirements of the FAA/EASA Maintenance Annex Guidance (MAG).

During the meeting, the FAA agreed that the new documentation standards appear to reflect an unintended consequence.  This members explained that the unintended consequence is adversely affecting domestic aircraft parts transactions and is creating an environment that could diminish safety.

The FAA has expressed that there are some international political pressures that make it difficult to rescind the documentation requirements of the FAA/EASA MAG.  So we discussed ways to support the documentation paradigm by making 8130-3 tags reasonably available for existing, airworthy, inventory.

One option would be to add a considerable number of new DARs to the system.  The actual number of DARs available to tag aircraft parts inventories is frighteningly small, which has led to monopolistic pricing, which has caused their services to become economically unavailable for many aircraft parts.

The DAR Function Code 56 privilege reflected a good start, but the privilege is too narrow to do much good.  Even for distributors whose business models are perfectly aligned with the function code’s scope, they found that only about 1/3 of their inventory could be tagged under this function code.  And most distributors found that the privilege was considerably less useful than that.  Consistent with our June 2016 written proposal, we suggest that

  • the function be expanded to include parts bearing indicia of airworthiness (including documentation from certificated air carriers indicating that the parts are in new surplus condition, as well as documentation described in FAA AC 20-62E);
  • the end date of the program be extended (in part because aircraft parts are still being manufactured and released without 8130-3 tags, and in part because it is still common for air carriers to sell new surplus inventories without 8130-3 tags);
  • the program element that limits Function Code 56 to only parts received before November 1, 2016 be removed.

The FAA has limited ability to oversee new DARs.  For this reason, ASA has volunteered to audit DARs operating within the ASA-100 environment (subject to their own willingness to be audited).  ASA is already auditing these facilities on a regular basis under the AC 00-56 program, and is already subject to FAA oversight within this AC 00-56 program.  The FAA may use ASA’s audits as a risk-mitigating factor in planning its own oversight schedules.

We have discussed other options, like creating an ODA for distribution businesses to obtain 8130-3 tags, or rapidly increasing the community of DAR-F or DAR-T personnel; but the DAR Function Code 56 program seems like a solid foundation upon which to build a scalable program that can be scaled-up to meet FAA safety needs, and then scaled-down as the industry moves into the new documentation paradigm.

Update on MAG issue and ASA Efforts

What is the Issue?

The latest revision of the Maintenance Annex Guidance [“MAG”] creates a new system in which existing industry documentation (which is acceptable under current EU and US regulations) becomes unacceptable within US repair stations. It is objectionable because it imposes new documentation standards that do not exist in either US or European regulations, and in doing so creates a documentation requirement for aircraft parts that will render worthless significant portions of existing aircraft parts inventories.

Under current US standards, no documentation is required in order to receive an aircraft part into a repair station’s inventory. See, e.g., FAA Chief Counsel’s Opinion Letter (August 6, 2009) (stating “there is no Federal Aviation regulation that requires traceability of an aircraft part to its origin” and explaining that parts may be found airworthy based on documentation, markings, or inspection and testing).  The repair station may install the part as long as it confirms that the article will return the product to a condition “at least equal to its original or properly altered condition.” 14 C.F.R. § 43.13.

The European system is a bit different. The European system distinguishes parts into six different categories, but for purposes of this analysis only two are relevant.

The first is serviceable parts – those in a satisfactory condition. Serviceable parts must be accompanied by the European manufacturer’s document known as the EASA Form One, or an equivalent document. EASA 145.A.42(a)(1).  EASA has recognized that the FAA 8130-3 tag is an equivalent document for receipt purposes (when signed on the left side).  EASA AMC M.A.501(a) ¶ (5)(a) (documents under the terms of a bilateral agreement); Technical Implementation Procedures for Airworthiness and Environmental Certification Between the FAA and EASA, ¶ 5.1.10 (Rev. 5 Sept. 15, 2015) (the bilateral agreement).

Because there are many articles produced by US manufacturers that do not bear 8130-3 tags, a ‘safety valve’ provision allows European repair stations to accept articles without such documentation.

There is a second provision in the EASA regulations that permits “unserviceable parts” to enter into a repair station without documentation when they are intended to be maintained. EASA 145.A.42(a)(2).  The European definition of “unserviceable” includes articles that are missing “necessary information to determine the airworthiness status or eligibility for installation.” EASA M.A.504(a)(3).  Thus, any new aircraft part that is missing an EASA Form One or 8130-3 (whichever is appropriate) is deemed unserviceable and can enter a repair station without documentation. Such an article may then be inspected to serviceable condition and installed if it passes inspection. See, e.g., EASA AMC M.A.501(a) (Installation); EASA AMC M.A.613(a) (Component certificate of release to service).  It cannot be treated as serviceable until it undergoes that inspection.

The problem with the MAG is that it closes the safety valve that allows acceptance of new parts without an 8130-3 or EASA Form One. It does this by establishing two different categories that are inconsistent with the “serviceable/ unserviceable” categories established under European law. The two categories are “new” and “used.” Under existing European law, a new part without the correct documentation can be received as unserviceable, and subsequently inspected to serviceable condition, but under the MAG, a new part is required to have an 8130-3 or EASA Form One. There is no exception under the MAG for new parts without the designated documentation – they are simply excluded.

So How Does this Affect Members?

Actual implementation has already shown that the language of the MAG is being enforced by FAA field inspectors as mandatory even though there is no regulatory basis under US or EU law for such enforcement. Thus, the real implementation has been that all US repair stations with EASA credentials are required to have a written manual (known as a Supplement) requiring them to exclude new parts without 8130-3 documents or EASA Form One documents – even though both US and EU regulations permit acceptance of these new parts.

This is starting to have a real world effect that will be expanded with the October 1, 2016 implementation.  Distributors are finding that parts that they could sell with manufacture’s trace (or other reasonable trace) are no longer “good enough.” Repair stations are starting to demand 8130-3 tags on everything (including parts that are not eligible for 8130-3 tags).

What is ASA Doing About It?

ASA continues to work with the FAA to achieve a solution.  FAA management recognizes that this is a potential problem, and they have been optimistic about finding a solution.

Our first efforts were to find a way to “grandfather” existing aircraft parts inventories.  FAA supported this solution, but EASA opposed it.

We have also asked for guidance explaining that repair stations can apply US standards to parts destined for US registered aircraft, but early implementers have shown that this idea is not consistent with what FAA inspectors are requesting so it is likely to be ineffective.  In addition, it creates a logistical problem for component repair stations who may not know the ultimate destination of the components on which they are working.

We are now looking at new ways to obtain 8130-3 tags for good inventory.  This will not be a 100% solution to the impediment created by the documentation requirements, but it should help preserve the value of some inventories.  We expect to continue discussions of this proposal with the FAA, next week.

On the legal front, we continue to pursue a halt to the MAG documentation requirements.  This would not affect the EASA regulations – they still apply where appropriate – but to the extent that the MAG imposes additional standards that would be enforced by the FAA, we have asked the DC Circuit Court to issue a “Stay” that would prevent the FAA-enforcement of these new documentation requirements.

Today, as part of this effort, we filed this Motion for a Stay.  We would like to thank the many ASA members who worked with us to develop  affidavits explaining the factual situation of 8130- 3tags and aircraft parts inventories.

MAG Threatens to Prevent Parts from Entering Repair Stations

FAA and the European Aviation Safety Agency (EASA) have been discussing new ways to document and transfer aircraft articles across international borders.  This ends up affecting the rest of the world, because it sets standards for how both of those authorities will operate that they then incorporate into their other international relationships.

Some issues have arisen in the industry that find their roots in the FAA-EASA Maintenance Annex Guidance (MAG).  This MAG document is meant to reflect the working procedures for shared maintenance oversight between FAA and EASA.  In theory, it should not add any new legal requirements – those are supposed to already exist in the regulations.  But in practice, the MAG has recently evolved into a document that is setting new legal standards that do not exist in the regulations of either FAA or EASA.  Because inspectors for the two authorities are requiring compliance to the MAG, it is important to review it and understand what new standards are included in that document.

The MAG changes are motivated in part by a recent change in US law that has permitted US production approval holders (PAHs) to issue their own 8130-3 tags for their articles.  This is found at 14 C.F.R. 21.137(o).  Those who take advantage of this option would no longer need to rely on the legal fiction of designees.  This was meant to ease the process of creating 8130-3 tags, which have recently been viewed by the FAA as an administrative matter that merely documents a finding of airworthiness that is made whether the tag is created or not.  This change also helps to harmonize with EASA, which has permitted European manufacturers to issue EASA Form One since EASA’s inception.

Although this new privilege should permit more manufacturers to issue 8130- 3 tags, thus creating a wider pool of articles documented with 8130-3 tags, the fact remains that many existing aircraft articles do not bear EASA Form One or 8130-3 tags.  Real-world implementation hurdles have mean that manufacturers needed some time before they could start issuing the tags.  In addition, there is a huge quantity of existing articles in distributors’, air carriers’, and repair stations’ inventories.  Many of those existing articles do not bear EASA Form One or 8130-3 tags.

The industry has struggled for the last twenty years to obtain these documents, or in the alternative to find ways to receive aircraft articles into inventory without these magic documents. In many cases, the easiest path has been to find a way to determine airworthiness without the Form One or 8130-3 documentation – this is a path that remains legal under United States law because we have no general documentation requirements for articles under the FAA regulations.

Historically, repair stations with EASA 145 credentials have taken advantage of the EASA regulatory clause that permits articles to enter the repair station’s systems when they are unserviceable (EASA 145.A.42(a)(2)).  The definition of unserviceable includes articles with inadequate documentation (M.A. 504(a)(3)):

M.A.504 Control of unserviceable components

(a) A component shall be considered unserviceable in any one of the following circumstances:

3. absence of the necessary information to determine the airworthiness status or eligibility for installation;

These articles are not required to have any specific documentation and could enter a repair station undocumented.  The repair station would then perform an analysis / inspection of the article to confirm its airworthiness (such as an inspection to a serviceable condition – an inspection is defined as a species of maintenance under both the EASA system and the FAA system).  Repair stations could therefore receive new articles without a Form One or an 8130-3, so long as the repair station independently evaluated airworthiness of the article.

The MAG appears to put an end to this practice by distinguishing new parts and specifically requiring them to have specific documentation even when received under EASA 145.A.42(a)(2) – thus closing the industry’s normal safety valve for receipt of articles that typically do not bear 8130-3 tags.

FAA Solution Rejected By EASA

The FAA was open to the idea of a grandfather clause for existing inventory.  Such a grandfather clause would have extended to all articles produced before October 1, 2016 (the date by which the FAA believes many US PAHs will issue their own 8130-3 tags).  They were also open to the idea that a distributor could certify that the article existed before October 1, 2016 on the grounds that it existed in the distributor’s inventory before October 1, 2016 (the installer would still need to make a determination of airworthiness prior to installation – the distributor’s certification would merely have indicated eligibility for treatment under the grandfather clause).

Remember that distributors typically pass along documents, packaging and markings that can help the installer make his or her own determination of airworthiness. So the sole purpose of the distributor’s certification would have been to show that the article existed  before October 1, 2016 and was thus eligible for treatment under the grandfather clause.  Nothing more.

This grandfather clause has been rejected by EASA.

Unfortunately, EASA did not agree with the FAA’s interpretation of a grandfather clause.  In the FAA-EASA-Industry meeting that took place on June 17, the EASA senior representative disagreed, and insisted that the grandfather clause could only extend to parts in a repair station’s inventory by October 1, 2016.  This made the grandfather clause meaningless, because articles already in inventory no longer need to be tested under the EASA 145.A.42 receiving standard.  More importantly, it meant that existing inventory in distributor’s warehouses – inventory that in some cases was produced before EASA existed – could be precluded from entering EASA 145 repair stations in the US and in Europe.  Over a thousand US repair stations bear EASA 145 credentials, and this includes nearly all of the major MROs handling commercial transport category aircraft, so this is a very serious issue.

Disappointingly, the EASA representative admitted that he knows that European repair stations accept undocumented parts, but expressed that he could not recognize those transactions because they did not fit within the EASA ideal.  He suggested that airlines and MROs could bypass distributors and buy direct from manufacturers.  This ignores a host of real-world issues, including the fact that many necessary articles are not in active production and cannot be obtained from anywhere unless they are purchased from existing distribution inventories.  Expecting manufacturers to instantly be able to produce each part that they have ever produced in the past ‘on -demand’ in simply unrealistic.

ASA and FAA Working Toward a Solution

If taken at its face value (including the EASA interpretation), the MAG could render a huge chunk of existing inventory valueless.

We have been working with the FAA to stave off this possibility.  The FAA is taking a realistic approach to this issue.  The FAA realizes that this has both financial implications (rendering existing inventory valueless) and safety implications (certain necessary parts would become unavailable, making aircraft maintenance impossible).  Because the FAA’s primary focus is on aviation safety, they are acting to ensure that demonstrably airworthy articles can be documented appropriately, so that paperwork does not get in the way of safety.

The solutions are still being discussed and developed, but industry should expect to see changes in the way that 8130-3 tags are issued for aircraft parts.  This change needs to happen very quickly in order to make sure that good inventory is not rejected because it has the wrong paperwork.

New FAA MAG Guidance Corrects Some Problems; But Documentation Challenges Remain

Revision Six of the Maintenance Annex Guidance (MAG)  has been released.  ASA has been working with both FAA and EASA contacts to make changes to the prior revision (rev. 5), because it included unnecessary restrictions that were not based on either US-FAA or EU-EASA regulations.

Many will remember that the MAG rev. 5 language included a number of unacceptable requirements.  Unacceptable provisions included a requirement that the part number be found in the TC holder’s parts catalogue (which would have excluded many PMA and TSOA parts, as well as OEM parts issued in advance of IPC changes) as well as a requirement limiting 8130-3 tags to those issued by PAHs (discounting 8130-3 tags issued by the FAA itself through its designees).  Most of the unacceptable language has been removed and/or remedied in revision 6.  The replacement language for new parts in MAG rev. 6 looks like this:

(a) New components must be traceable to the Production Approval Holder
(PAH) and be in a satisfactory condition for installation. An authorized
release document, as detailed below, must accompany the new

This language is found in sections 10(k)(1)(a) (for US-based Repair Stations) and 7(c)(1)(a) (for EU-based Repair Stations) of the appropriate Sample Supplements in the MAG.  It explicitly requires traceability, without defining what sort of traceability is acceptable.   This is a potential problem: the FAA is taking an industry term for which there is no set meaning (and about which industry experts disagree) and is trying to use it as if it were an objective standard.  They have done this in other guidance, like FAA Order 8130.21H, and it has resulted in disagreements and confusion.  The traceability requirement also belies the various FAA Chief Counsel Opinion letters which have repeatedly asserted that there is no FAA regulation that requires traceability of an aircraft part to its origin.

Repair Station Experience

At the ASA Quality Committee meeting last Fall, members with repair stations expressed that their local FAA FSDO inspectors were requiring strict compliance with the exact language of the MAG Supplement (despite the fact that the language is explicitly labelled as a sample).  Repair station representatives also explained that they were being required by their FAA inspectors to have a single receiving inspection system.  This means that all of the parts that they receive would have to meet the EASA requirements and the MAG requirements (including parts ultimately destined for installation in FAA-registered aircraft).  They would NOT be permitted to receive parts that met FAA requirements (but not EASA requirements) for installation on FAA-registered aircraft (despite the fact that the regulations still permit this).

FAA headquarters has said that these are misinterpretations by the field offices and that they reflect unintended consequences; but when pressed about how they plan to remedy this, the FAA Headquarters representatives could only  suggest that we bring these situations to their attention on a case-by-case basis.  They had no plans to remedy these “unintended consequences.”

In light of this experience, ASA members should expect that most repair stations will be pressured by the FAA to strictly comply with the MAG language as if it were a regulation.  This means that the normal protections of the law may not apply to your transactions, and an appeal to the regulations may fall upon deaf ears!  If you encounter a repair station customer that has been pressured to limit their receiving inspection system in a manner that is more narrow than required by the regulations, then please talk to ASA and we will put you in touch with the right people at the FAA.

A New Source of 8130-3 tags

Last Fall, the FAA promulgated a new rule that permits production approval holders to issue their own 8130-3 tags. The MAG changes are meant to reflect this new privilege.  There are a lot of problems with this:

  1. The 8130-3 privilege was an option – not a requirement – so many manufacturers might choose not to issue 8130-3 tags (and this makes it difficult for distributors to economically and conveniently obtain those forms).
  2. While the EU has agreed to accept manufacturer’s 8130-3 tags, all of the other the US bilateral agreements require FAA 8130-3 tags.  This means that other trading partners might reject manufacturer 8130-3 tags as unacceptable.  When ASA met with the Civil Aviation Administration of China (CAAC) in March, CAAC expressed reservations about manufacturer 8130-3 tags and reminded us that the China-US bilateral agreement did not authorize acceptance based on manufacturer 8130-3 tags.
  3. The MAG rev. 5 language failed to adequately address the significant existing inventory that was not documented according to the new standards.
  4. Even if the other hurdles had not existed, the governments did not permit enough time to ramp-up 8130-3 tag issuance in order to meet the new demand imposed by the MAG revision.

The limits and burdens associated with this privilege have cause some manufacturers to decide that they are not going to issue these tags.  Large manufacturers like Boeing have said that they feel more comfortable sticking with their ODA program as a source of 8130-3 tags.  Smaller manufacturers fear that their local MIDO inspectors may impede them from issuing 8130-3 tags, and plan to stick with issuing their traditional commercial certificates of conformity.

The reason this new source of 8130-3 tags is important is because it was supposed to be a driving force behind the MAG rev. 5 changes.  And the fact that some manufacturers will not issue manufacturer-8130-3 tags on components means that the the FAA and EASA are operating under false assumptions as they manipulate the receiving requirements of repair stations.

Existing Inventory Problem – Grandfather Clause Failure

A significant disappointment in all of this is that the FAA and EASA recognized the need for a grandfather clause for existing inventory, but they failed to create a grandfather clause with enough breadth to reflect the realities of existing inventory.

In recognition of the fact that the new manufacturer-based 8130-3 tag-privilege was supposed to remedy a past lack of 8130-3 tags, the FAA and EASA agreed upon a grandfather clause that would apply to parts produced before October 1, 2016.  The grandfather clause was meant to apply to demonstrably airworthy parts without 8130-3 tags, that were produced before the October 1 date.  In order to take advantage of the grandfather clause, the parts were supposed to bear (1) evidence of airworthiness and (2) evidence of manufacturer before October 1.

Evidence of airworthiness is well understood and necessary in the industry. But the new grandfather clause requirement is that the evidence must consist of “a document or statement (containing the same technical information as an FAA Form 8130-3) issued by the PAH or supplier with direct ship authority.”  So common documents that would be excluded might include (but not be limited to):

  • Airline trace for new surplus parts (not issued by the PAH);
  • OEM C of C (typically does not contain all of the technical information contained in an FAA Form 8130-3);
  • OEM inventory list for a lot purchase (typically does not contain all of the technical information contained in an FAA Form 8130-3);
  • Spec 106 Form from the OEM-authorized distributor (even if it includes all of the technical information contained in an FAA Form 8130-3, it was not dated by the PAH).

This creates an initial challenge but there is some good news.  In an earlier publication of the guidance, found in FAA Notice 8900.360, the PAH documentation needed to have been dated prior to October 1, 2016.  This meant that undated PAH documentation was not usable.  This has been changed in the new version of the language.  This is important because it means that a distributor who possesses adequate evidence of airworthiness (meeting the guidance of the MAG) can produce their own evidence of manufacturer before October 1 by specifying that the article was released before October 1.

We wish that the FAA had been explicit that this was meant to ‘fix’ 8900.360, because we fear that some people will not realize that the later language of MAG rev. 6 was meant to be a remedy to incorrect language in the earlier Notice.  Based on our discussions with the FAA, the change in the date language was explicitly intended to remedy the earlier flaw in the Notice 8900.360 language.  Today, anyone ought to be able to look at a calendar, see that the date is before October 1, and certify that an existing article was manufactured by that date.  And distributors ought to be able to do this for their entire inventories by flagging those parts received by September 30, 2016 (a secure flag in the electronic inventory system ought to be adequate to serve as a basis for a distributor’s C of C that states that the part was received before October 1, 2016 and was therefore released prior to October 1, 2016).

More Unintended Consequences?

An interesting effect of this is that the United States may be somewhat increasing the US trade deficit in the near future.

Let’s say that we have two identical parts that were both produced by the same US production approval holder.  One of them was sold to a new parts distributor in the United States and it bore a standard Certificate of Conformity (which does not include all of the same technical information as an 8130-3 tag).  The other one was sold to a new parts distributor in Europe and it bore an export 8130-3 tag.  Now, a US repair station needs that part.  Existing inventory held by new parts distributors in the United States may not bear the right documentation to receive it under the MAG.  Even if the part is needed for a US-registered aircraft, FAA FSDO norms of requiring repair stations to apply the MAG to all received parts would preclude the part from entering the repair station’s system.  The new parts distributor in Europe, with the export 8130-3 tag on the part, will be the only one who can make the sale to the US repair station!

The FAA’s role is to protect aviation safety.  They do not have responsibility for protecting US competitiveness.  But this change appears to do nothing to enhance safety.  It does not address any known safety issue – it merely adds de facto documentation requirements that appear to circumvent the formalities of the Paperwork Reduction Act.  It is a little shocking that the FAA continues to publish documents that chip-away at US competitiveness without doing anything to enhance safety.

So What Does it All Mean?

EASA has approved about 1480 repair stations in the United States.  That is a very significant chunk of the US domestic repair station market, and it probably represents a substantially high percentage of the commercial aircraft repair market in the US.  This means that a substantial percentage of the commercial aviation repair stations in the US will be affected by this guidance (approaching all of them).  For US distributors, it is important to understand how to navigate through this.

If you have repair station customers that have written their manuals and supplements to require EASA-documentation for all parts received – including those destined for installation on US-registered aircraft – then you should counsel the repair station to revisit its procedures.  But for component repair stations who may not always know the final installation destination of the components on which they work, they may be stuck with applying EASA documentation standards.  Because the FAA is enforcing these EASA standards, the 8130-3 tag (and the EASA Form One) now become a transaction requirement in the commercial aviation market – including for purely domestic transactions where the FAA inspector has insisted on a single receiving system.

US distributors should be particularly aggressive in seeking out 8130-3 tags for inventory.  For inventory without 8130-3 tags, distributors need to ensure that they have access to a DAR (and also a back-up DAR) in order to ensure that they will be able to obtain 8130-3 tags as necessary.  If there are not enough DARs in your area, then please let ASA know so we can bring this fact to the attention of FAA Headquarters.

Due to commercial norms, non-US distributors typically obtain export 8130-3 tags when they receive parts from the United States.  This may give those distributors an advantage over their US counterparts who find it difficult to obtain 8130-3 tags for existing inventory.  Non-US distributors should take advantage of this while they can!

Finally, let us know what you think the effect of this guidance will be.  Will you be able to sell you inventory or does this threaten to devalue or block your inventory?  We would like to hear from the members about the real-world effects in order to judge our next steps.

Discussing 8130-3 Tag Issues – an update on the MAG rev. 5

Today, ASA met with the FAA to discuss issues related to the 8130-3 tag, especially as related to the new guidance in the Maintenance Annex Guidance revision five.

As many of you know, revision five of the MAG created a host of new problems for the industry.  Most of the problems arose in the Supplements.  The Supplements are supposed to be sample documents that describe what a supplement could look like.  But unfortunately, many FAA inspectors have told dual certified (FAA/EASA Part 145) repair stations that they may not diverge from the sample supplements, which means that the supplements are being enforced as if they were de facto regulations.

The FAA and EASA both agree that many of these problems were inadvertent mistakes.  They have said that many of these problems will be corrected in a soon-to-be-issued revision six.  Examples of the issues to be corrected include:

  • MAG 5 would require repair stations to only accept new parts listed in type certificate holder’s parts catalog.  The type certificate holder’s parts catalog is a commercial document.  Independently-marketed parts, like aftermarket TSOAs and PMAs, will not be listed in the type certificate holder’s parts catalog.  Furthermore, the type certificate holders’ parts catalogs are notorious for being out-of-date.  This means that newer OEM replacement parts may not yet be in the catalog.  But also, as the parts catalogs are updated to reflect changes in suppliers, perfectly good FAA-approved parts may no longer be listed in the online parts catalog if the supplier has been superseded.  For all of these reasons, this was not appropriate guidance, and the FAA and EASA have agreed to remove it.
  • MAG 5 would require repair stations to only accept new parts when accompanied by a PAH 8130-3 tag.  This eliminates from consideration parts bearing a DAR 8130-3 tag.  For pre-existing parts in a distributor’s inventory, there might be no legal way to obtain a PAH 8130-3 tag.  FAA and EASA have agreed that it was never their intention to eliminate other forms of 8130-3 tags from consideration.

The problems are also far-reaching because FAA field inspectors have told some dual-certified repair stations that they can only have one receiving standard – thus all parts received for any purpose must meet the EASA requirements as well as the MAG rev. 5 requirements.  This is their interpretation of the MAG rev. 5 requirements.  We addressed this issue to Tim Shaver and Tony Janco from FAA Headquarters (at today’s meeting) and they insist that this interpretation is wrong.  A dual-certified repair station is permitted to accept parts that meet only US standards (and not EASA standards) if it intends to use the part on a US-registered (“N-registered”) aircraft.

But some of the issues are proving more difficult to address.  For example, while accepting parts with US-acceptable traceability for N-registered aircraft is a straightforward issue, repair stations that perform component-level work and intend to tag the components with a dual-certified 8130-3 tag (both FAA and EASA) for approval for return to service are left in a much more ambiguous place when they ask whether they can accept a part that meets US airworthiness standards (but that fails to meet EASA documentation standards).  FAA is interested in providing better guidance in this area, but needs to coordinate with EASA on such guidance.

One of the problems with the MAG language is that it is based on the assumption that all U.S. production approval holders will begin issuing 8130-3 tags with their new parts.  This is a new privilege that is available to U.S. production approval holders.  The privilege is optional, though, so a number of production approval holders will simply not issue 8130-3 tags.  This means that there is even more of a burden for distributors to obtain 8130-3 tags now that this is being enforced by FAA field inspectors as a de facto receipt requirement for domestic repair stations.

One of the documents that the FAA has issued to help interpret this is FAA Order 8900.360.  This Order explains that FAA and EASA have agreed to extend the implementation date of the Sample Supplement language to October 1, 2016 (this had previously been extended to April 1). For ASA members, there is some very important safe harbor language that explains that existing inventory does not need 8130-3 tags:

In addition, both authorities have agreed that parts released by a PAH prior to October 1, 2016, will not be required to be accompanied by an FAA Form 8130-3.

The problem with this language is that it requires Production Approval Holder (PAH) documentation with a date:

Note: New parts currently in inventory must, at a minimum, have a document or statement (containing the same technical information as an FAA Form 8130-3) issued by the PAH or supplier with direct ship authority. The parts currently in inventory and documented with the required information will be grandfathered and remain suitable for installation into EU articles provided the date on the document is prior to October 1, 2016. Annex 1 provisions of the agreement regarding the export of parts remain unchanged (i.e., parts that are exported to a customer under the regulatory jurisdiction of the EU will require the export certification as detailed in the Technical Implementation Procedures for Airworthiness (TIP) independent from the aforementioned grandfathering provision). All other provisions of the MAG, Change 5, will remain in effect. [emphasis added]

Many new parts in existing distributors inventories do not meet this requirement.  The part may have come from an air carrier’s inventory, and bear air carrier certification that it was received as a new airworthy part. It also could bear PAH tags, packaging, and even inspection stamps that help to verify that it is a PAH part, but none of these might be dated (dates on such packaging and labels are not often found unless the article is subject to shelf-life-limits).  This isa new requirement, so many existing airworthy parts simply do not meet this requirement.

The FAA was very open to correcting the perceived problems in the documentation requirements.  Tim Shaver confirmed that the grandfathered-parts should have traceability consistent with current industry standards.  He was open to ASA’s proposal that ASA members should be permitted to validate a part’s eligibility for grandfathering based on whether the part was known to exist before October 1, 2016 (e.g. if it was in the distributor’s inventory).  This is one of the targeted solutions we are pursuing.

But the biggest problem with the imposition of new documentation standards – the most significant frustration for distributors – is that there appears to be no thought being given to developing a systemic approach to documentation based on the airworthiness needs of the authorities and the industry.  many of the changes add no safety value.  Despite the lack of safety value, they are adding cost and frustration to the industry.  Perhaps most frustrating of all, the documentation changes imposed by the FAA-EASA agreements threaten to devalue existing inventories.  They do this by imposing requirements that are not supported with an adequate foundation (e.g. inadequate sources for the documentation).  Distributors need a way to easily obtain the documentation when it is warranted and the part is eligible (because it is demonstrably airworthy).

The FAA is sympathetic.  Dan Elgas of the FAA’s Aircraft Certification Service agrees that issuing the 8130-3 tag for a part with evidence of airworthiness is an administrative task. It should not require a designee when it is based on an existing production quality system.  He felt that the current ODA provisions reflect too much burden when the 8130-3 tag is issued in a production environment.

Scott Geddie is the Manager of the FAA’s Delegation and Organizational Procedures Section.  He explained that the FAA is open to the idea of limiting the FAA’s involvement only to what the FAA needs to do. “If the FAA doesn’t need to be involved then we should step away,” he said.

One place where there is some room for positive change is in the FAA’s detailed treatment of export 8130-3 tags.  Many people are frustrated with the situation where the tag names a country-destination, but then the part needs to be shipped to another destination.  We asked the FAA whether we could list more than one destination on an 8130-3 tag if the part compliaed with the special import requirements of each country (many DARs have been told “no” by FAA inspectors on this point).  The FAA said that it has already discussed this issue and Dan Elgas suggested that the FAA is willing to entirely remove the requirement for country specific (destination) language on the 8130-3. He agrees that this is the exporters responsibility and not the 8130-3 tag’s responsibility.

There is still much work to be done, but we are starting to move things in the right direction.  I hope to provide other updates, soon!

%d bloggers like this: