Does a Dual-Certificated Part 145 Repair Station Need Documentation for Parts, or Can It Inspect Them, Prior to Installation?

An ASA member recently asked us to answer a MAG 6 question.  MAG 6 refers to revision 6 of the Maintenance Annex Guidance between the Federal Aviation Administration and the European Aviation Safety Agency.

QUESTION: The ASA member (a dual-certificated repair stations subject to the MAG 6 requirements) asked “Concerning USED replacement parts intended to be fitted to an engine during the maintenance process, does EASA expect every single one of those items installed during the maintenance process to have a dual-release 8130-3, dual-release TC Form One, or dual/tri-release EASA Form one with it assuming it is not a standard part?  (Reference item 10, Section B, Appendix 1 from US-EU Mag, Chang 6)”

ANSWER: The short answer is that a dual-certificated (part 145) repair station in the US generally need specified documentation for used parts intended to be fitted during maintenance, BUT such a repair station can accept a part without the specified documentation if it inspects the part under FAA Notice 8900.429.

First of all, the reader should note that MAG 6 is DIFFERENT from the EASA regulations and therefore an answer under MAG 6 might be different from the answer to a similar question posed purely under EASA regulations.

MAG 6 explains that when a repair station wants to install used components, those components must meet the following conditions before they are fitted during maintenance:

  • Must be in a satisfactory condition for installation;
  • Must be eligible for installation as stated in the PAH parts catalogue or aviation authority (AA) approval document (like a FAA-PMA supplement);
  • Must include one of these authorized release documents (as a maintenance release for a used component) from an appropriately rated maintenance facility:
    • FAA Form 8130-3 from EASA-approved U.S.-based 14 CFR part 145 repair stations;
    • EASA Form 1 from EASA Part-145 approved maintenance organizations not located in the U.S.
    • Canadian Form 1 from a Canadian EASA-approved maintenance organization;
  • In the case of life limited parts, the life used must be appropriately documented.

The FAA recognized that there are significant problems with this language.  It simply doesn’t cover all of the normal situations typically found in the industry.  So the FAA issued FAA Notice 8900.380 (which expired in 2017), followed by FAA Notice 8900.429 (which effectively extended the policy published in Notice 8900.380).  Each of these Notices permits new and used parts to be inspected by a properly rated repair station (notwithstanding the apparent limitations of MAG 6).  The repair station should have appropriate inspection criteria for conducting the inspection.

FAA Notice 8900.429 will expire August 8, 2018, and is expected to be encompassed in permanent guidance before that date.  If this Notice has not been replaced by appropriate guidance by next summer, then ASA will likely petition to have a third Notice issued in order to protect the industry’s ability to accept and use airworthy parts.

So, in summary, a dual-certificated repair station in the U.S. (and subject to MAG 6) receiving used components that are intended to be fitted during maintenance must either (1) receive them with an appropriate 8130-3, EASA Form 1 or TCCA Form 1, or (2) perform an inspection of the parts and find them eligible for installation.

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More FAA Guidance Creates More Confusion

The FAA has issued new guidance that interprets the Maintenance Annex Guidance (MAG).  At first, it looks like it is going to fix some of the problems.  And just when it looks like the problems might be fixed, it throws us a curve ball with a limitation that appears to once again work to the disadvantage of distributors with new and new surplus parts.

The new guidance is FAA Notice 8900.380.  The key language in this new guidance states:

“b. Inspections. For the purposes of this notice, inspections may be performed on:

(1) New parts in inventory prior to October 1, 2016, that are not accompanied by FAA Form 8130-3, a dated certificate of conformance, or similar documentation issued by a U.S. PAH or supplier with direct ship authority in accordance with the notes in MAG CHG 6, Section B, Appendix 1, subparagraph 10k)(1)(a) and Section C, Appendix 1, subparagraph 7c)(1)(a); and
(2) New parts released by a U.S. PAH on and after October 1, 2016, that are not accompanied by FAA Form 8130-3.”

The problem language is the “in inventory” phrase in section (b)(1).  Does it mean parts in a repair station’s inventory?  Or is it broader, applying to parts in anyone’s inventory? If it is limited to parts in a repair station’s inventory prior to October 1, 2016, then this still seems to prevent a distributor from selling a part without an 8130-3 or Form One to a repair station as of October 1, as implied by the MAG.  Repair stations would not be able to accept new parts with manufacturer’s certificate of conformity (but no 8130-3) and inspect them to confirm airworthiness, as they have done for many years in the past.

In essence, aircraft parts that were released by a U.S. PAH before October 1, 2016 (today, this means ALL parts) and that are ‘not in the right inventory’ as of October 1, 2016 would not be eligible to be inspected by a repair station.

On the other hand, if the terminology is broader, and it applies to all inventories, then this would return us to the position that we’ve always been in – where EASA 145 repair stations can accept parts without an 8130-3 as “unserviceable” parts and then inspect them to satisfactory condition (which inspection can be supplemented by review of the PAH certificate of conformity or other PAH documentation).  This interpretation would be much better for the industry.

So which one is it? Unfortunately, this phrase, “in inventory,” was discussed in a June meeting among FAA, EASA and industry.  The meeting was called to discuss the MAG.   ASA raised the term and suggested that it be interpreted to include parts in a distributor’s inventory.  This suggestion was soundly rejected by EASA.  EASA explained that the context of the MAG was that it applied to repair stations and therefore “in inventory” must be read to only include repair station inventories (and not distributor inventories).  ASA explained that such an interpretation closed an important safety valve for parts in distributors’ inventories.  The matter seemed final in the meeting, with the FAA acquiescing to the EASA interpretation.

In recent conversations, an ARSA representative suggested that the term “in inventory” should apply to any inventory, anywhere.  He suggested that the prior EASA interpretation might be ignored for the Notice because the Notice is a separate document.  The problem is, the Notice interprets the MAG (and explicitly states that it will be incorporated into the MAG in the next revision).  It therefore appears to be subject to the same interpretations and limitations as those associated with the MAG.

On the same day that we received a copy of this FAA Notice, ASA made a request for interpretation to the FAA, asking how to interpret the term “in inventory.”  The request remains pending.  We are hoping that the FAA will issue a response explaining that parts in a distributor’s inventory are “in inventory” and can be sent to a dual-certified repair station for purchase and inspection by that repair station.  To do so, though, might require the FAA to exercise some political courage, because such an interpretation would contradict the EASA statements. We also hope for a rapid response from the FAA, because these questions are interfering with commerce in aircraft parts from the United States.

But even if we get the interpretation that we want, there will still be perfectly good aircraft parts that remain ineligible for inspection under the peculiar limitations imposed by the MAG and Order 8900.380.  We continue to hear stories from members about necessary and safe aircraft parts that are excluded from the system by the new rules.  ASA will continue to work with the FAA and the courts to obtain a remedy that returns some sanity to the system.

Two-Year Record Retention Requirement for Repair Stations

Many ASA members hold repair station certificates, and we find ourselves answering many repair station related questions.

One ASA member recently asked:

“It is our understanding, that all maintenance related records are to be kept on file for two years.   If that is the case, are we allow to destroy maintenance related records that are older than 2 years?”

The answer is yes, a repair station is generally allowed to destroy its own records, such as its maintenance records, after the applicable retention period(s) have expired.  The current retention period for maintenance records under the FAA’s regulations is two years.  14 C.F.R. 145.219(c).  The general rule that you may destroy records after two years holds true AS LONG AS there is no other obligation to maintain those records for a longer period.

Other record maintenance obligations that could apply include (but are not limited to):

  • Obligations published in your repair station manual, quality manual, or other business directives;
  • Contractual obligations to maintain records;
  • Relationships with operators in which they rely on your business to maintain their records;
  • Regulatory obligations to maintain hazardous materials shipping records;
  • Regulatory obligations to maintain export records;
  • Obligations to maintain records for (or in anticipation of) litigation (non-spoliation obligation – if litigation is threatened then be sure to seek legal advice, as you may be precluded from engaging in regular record disposal practices).

Note that the obligation to hold records for two years applies to “records in English that demonstrate compliance with the requirements of part 43” including the maintenance release.  Thus it may not apply to other documents – like certain commercial and transactional documents, as well as financial records.

It is often advisable to have a written document destruction policy so that (1) employees have a plan to follow, and (2) if challenged, the business can show that this was a regular business practice that was uniformly administered.

But just because you have a right to destroy your documents doesn’t always mean that you should destroy them.  The company’s own records can be important evidence of proper performance of company obligations, in the event of litigation or enforcement action.  A business may wish to hold/maintain records for a time that is reasonably related to the most likely statutes of limitations that might apply in the event of litigation.  With this in mind, ASA has established a seven year minimum document retention period for distributors accredited to ASA-100.  Always remember that product liability claims can arise many years after the sale of an aircraft part!

ICA Guidance Open for Comment

The FAA has released for comment two guidance documents pertaining to Instructions for Continued Airworthiness (ICA): Draft FAA Order 8110.54B and Draft Advisory Circular 20-ICA. ICA availability is an issue that has a direct effect on repair stations and distributors, and ASA has done a significant amount of work to ensure that ICA are available and accurate in accordance with the Federal Aviation Regulations.

Draft Order 8110.54B is guidance directed at FAA personnel and persons responsible for administering the requirements for ICA.  Among other changes, the draft reorganizes the Order to reflect material moved to AC 20-ICA (below), and importantly incorporates guidance implementing the FAA’s Policy Statement PS-AIR-21.50.01, Type Design Approval Holder Inappropriate Restrictions on the Use and Availability of Instructions for Continued Airworthiness.  ASA has been supportive of the FAA in the adoption that Policy Statement that is intended to protect the industry from anti-competitive ICA restrictions.

Draft AC 20-ICA is a new Advisory Circular that removes industry-specific guidance from the internal FAA Order and places it in a stand-alone AC.  This effort is similar to the FAA’s actions in revising other Orders, which are directed to FAA employees, and removing guidance that is actually intended to be directed outward toward industry and properly placing it in an Advisory Circular.  Like Draft Order 8110.54B, the draft AC implements the FAA policy on ICA established in the Policy Statement.  The proposed AC provides guidance to design approval holders (DAH) and design approval applicants for developing and distributing ICA.

Not only does the availability of ICA directly effect repair stations, the availability of parts lists that are included as a part of the ICA is an important issue for the supplier community.

After a preliminary review these documents appear to offer very positive guidance for the aviation maintenance and distribution industries.  ASA will be reviewing both of these documents closely and offering comments and support for these policies to the FAA.  We encourage repair stations and distributors to review both documents as well.

Comments on both guidance documents must be submitted by October 6, 2015, and may be submitted to the FAA via email to 9-AVS-ICA@faa.gov.  If you have comments or observations that you feel ASA should include in its comments to the FAA, email them to Ryan Aggergaard at ryan@washingtonaviation.com so the we can include them.

No, Aircraft Disassembly is Not a Maintenance Activity Under the FAA Regulations

Many ASA members have entered the exciting world of aircraft disassembly.  A member recently reported that he has encountered some customers who believe that aircraft disassembly can only be performed by a repair station under FAA regulations. This belief is untrue.

Part 43 of the FAA’s regulations requires that alteration, rebuilding, maintenance, and preventative maintenance be performed only by parties authorized to do so under the regulations. 14 C.F.R. § 43.3(a). Other functions that are not specifically regulated by the FAA remain unregulated functions.

Aircraft Disassembly is Not Regulated Under Part 43 nor Part 145

It should be obvious that disassembly of an aircraft does not constitute alteration or rebuilding. But could it be a maintenance or preventative maintenance task?

Maintenance is defined in the regulations to be “inspection, overhaul, repair, preservation, and the replacement of parts….” 14 C.F.R. § 1.1 (definition of “maintenance”). This definition also specifically excludes preventive maintenance, which is defined separately.

Aircraft disassembly is different from inspection, overhaul, repair, preservation, and the replacement of parts, so aircraft disassembly is not a species of maintenance under U.S. law.

Preventative maintenance is defined in the regulations to mean “simple or minor preservation operations and the replacement of small standard parts not involving complex assembly operations.” 14 C.F.R. § 1.1 (definition of “preventative maintenance”). This definition is further refined in Appendix A to Part 43. That appendix limits the scope of preventive maintenance only to certain listed functions (this is explicitly described as a limitation so it cannot expand the definition of preventative maintenance). It clarifies that the removal, installation and repair of landing gear tires is a preventative maintenance function (but this only applies in the context of simple or minor preservation operations, and disassembly alone is not a preservation operation). So removal, alone, without any effort to preserve, is not a preventative maintenance function.

Aircraft disassembly is neither a preservation operations nor the replacement of small standard parts, so aircraft disassembly is not a species of preventative maintenance under U.S. law.

Whereas aircraft disassembly is neither alteration, rebuilding, maintenance, nor preventative maintenance, it is not regulated under Part 43, and therefore is not one of the functions reserved to only certain certificate holders,

Thus, it is clear that the FAA Part 43 regulations (and by extension the Part 145 regulations) do not apply to disassembly of aircraft.

The unregulated nature of disassembly is one of the reasons that the Aircraft Fleet Recycling Association AFRA) stepped in and offered their Best Management Practices (BMP) for disassembly of aircraft in order to encourage practices designed to preserve airworthiness as well as to guard the environment.  The AFRA BMP provides guidance, and the AFRA auditing program supports compliance to the standard.

This does not mean that repair stations are prevented from disassembling aircraft for their parts. Because this is an unregulated function, repair stations may also perform the disassembly function if they wish.

No Obligation Imposed by Advisory Circular

Some have taken text in FAA’s AC 20-62 out of context and suggested that it might impose restrictions on removal of parts. The text in question (take alone and out of context) states: “Parts with removal records showing traceability to a U.S. certificated aircraft, signed by an appropriately certificated person.” But look at this text in its full context and you see a different picture:

8. INFORMATION RELEVANT TO USED PARTS. The following information may be useful when assessing maintenance records and part status.

d. Seller’s Designation. The seller may be able to provide documentation that shows traceability to an FAA-approved manufacturing procedure for one of the following:

(1) Parts produced by an FAA-PAH by TC, PC, PMA, TSOA.

(2) Parts produced by a foreign manufacturer (in accordance with part 21 subpart N).

(3) Standard parts produced by a named manufacturer.

(4) Parts distributed with direct ship authority.

(5) Parts produced, for the work being accomplished, by a repair station to accomplish a repair or alteration on a specific TC’d product.

(6) Parts produced by an owner or operator for installation on the owner’s or operator’s aircraft (i.e., by a certificated air carrier).

(7) Parts with removal records showing traceability to a U.S. certificated aircraft, signed by an appropriately certificated person.”

Eligibility, Quality, and Identification of Aeronautical Replacement Parts, FAA AC 20-62E, para 8(d) (December 23, 2010).

In its full context, it is obvious that this text is just one of a list of types of parts that are considered acceptable. Most parts removed from aircraft that are intended for reuse will fit into category one (TC, PC, PMA, TSOA), and therefore the analysis will never get to category seven. That category exists for articles that do not fit within one of the first six categories.  Note also that this text harkens back to the time when it was assumed that any part removed from an aircraft was a good part – modern practice recognizes that mistakes are made at installation and therefore modern disassembly procedure scrutinizes each part and its records to properly identify it without making unsubstantiated assumptions.

Further, the FAA does not have any removal record, and has no regulations reflecting removal records. For this reason, no certificate is necessary in order to sign a removal record.

 

Changes to Export License Exceptions Demand Caution by Industry

Subtle changes to the export license exceptions that are frequently used by the aviation industry could harm your business if you do not ensure continued compliance with the standards as they are evolving.

Many parties in the aviation industry have noticed and used the license exception for servicing and replacement of parts and equipment.  This exception is known as the “RPL” exception, because that is the code used in the electronic export information filing to indicate use of the exception.  This exception generally applies to articles that would require an export license, and it permits those articles to be exported without a license when they have been brought into the US for servicing and are then exported to their original owners (the transaction must also meet certain other criteria).  It is therefore highly useful to U.S. repair stations that are servicing parts for non-U.S. customers, and also to U.S. distributors that manage repairs for non-US customers.

The old scope clause read like this:

(1) Scope. The provisions of this paragraph (b) authorize the export and reexport of items that were returned to the United States for servicing and the replacement of defective or unacceptable U.S.-origin commodities and software.  15 CFR 740.10(b)(1) (2013).

The new scope clause reads like this:

(1) The provisions of this paragraph (b) authorize the export and reexport to any destination, except for 9×515 or “600 series” items to destinations identified in Country Group D:5 (see Supplement No. 1 to this part) or otherwise prohibited under the EAR, of commodities and software that were sent to the United States or to a foreign party for servicing and replacement of commodities and software “subject to the EAR” (see Sec.  734.2(a) of the EAR) that are defective or that an end user or ultimate consignee has found unacceptable.  Corrections and Clarifications to the Export Administration  Regulations; Correction, 79 Fed. Reg. 48660-48661 (August 18, 2014); 15 CFR 740.10(b)(1) (effective August 18, 2014).

This new text confirms certain limitations on the use of the RPL exception.  It may not be used for article bearing ECCN 9×515 or any “600 series” ECCN if the article is destined for Group D:5 country.

The new text also adds the detail that if the article is not defective, then the end-user or ultimate consignee must have found the article to be unacceptable.  Articles that are not defective may be overhauled or tested to confirm their airworthiness – this may be accomplished by a non-U.S. distributor.  The term “ultimate consignee” is defined in 15 C.F.R. 748.5(e):

(e) Ultimate consignee. The principal party in interest located abroad who receives the exported or reexported items. The ultimate consignee is not a forwarding agent or other intermediary, but may be the end-user.

When the non-U.S. distributor is the party that determined the need for servicing of a non-defective article, the non-US distributor must remain the ultimate consignee in the transaction.  When might the non-U.S. distributor become something other than the ultimate consignee?  When the unit is sold to a third party and the US person holding the serviced unit is directed to drop ship it to the third party buyer.   In any other unlicensed transaction, this should be fine (assuming no other laws are implicated by the transaction), but in an RPL transaction, this can cause a problem if the conditions of RPL are no longer met by the transaction model.  To clarify, if a non-defective unit is sent to the US for servicing (like calibration, or confirmation of airworthiness), then the person who found it unacceptable (the one who found it in need of servicing) must remain either the end user or the ultimate consignee.  If that person was a non-U.S. distributor, then the non-U.S. distributor must remain as the ultimate consignee to continue to meet the requirements of RPL.

Remember, RPL is an exception – you always have the option of obtaining a license for the export.  And luckily, most civil aviation articles exported from the U.S. do not require export licenses from BIS.

EASA 145 outside the EU: New Guidance Open for Comment

The European Aviation Safety Agency has issued for comment a Notice of Proposed Amendment, NPA 2013-12, that is meant to clarify the process of issuing Part-145 approvals to maintenance organizations outside of EASA’s Member States.  The guidance is targeted at both base and line maintenance organizations, and as such has the potential to affect anyone who holds EASA Part-145 certificates for such organizations, as well as distributors doing business with those organizations.

The stated purpose of the NPA is to provide and update Acceptable Means of Compliance (AMC) and Guidance Material (GM) to address inconsistencies that have arisen when the EASA acts as a competent authority for Part-145 organizations located outside of Member States.  Some of the amendments will also touch maintenance organizations within Member States.  Organizations that perform maintenance on aircraft (or components) registered in a Member State or used by an operator overseen by a Member State must be approved in accordance with Part-145 (also known as Annex II).

One area targeted for clarification is AMC 145.A.30.(d) addressing personnel requirements.  The new proposal reiterates the importance of having adequate personnel to perform an organization’s planned scope of work. However, the proposed new language seems vague and unhelpful in terms of providing useful compliance guidance:

The objective of this provision is to ensure the stability of the maintenance organisation approved under Part-145 in order to perform their planned scope of work.

If most of the staff were contracted, the organisation which employs those persons may decide to remove them from the maintenance organisation approved under Part-145 and relocate them to another organisation if, for example, there is a better offer. In such a case, the maintenance organisation approved under Part-145 would suffer a sudden and very significant reduction of the workforce until they are able to recruit new staff, with the corresponding negative effect on its activities.

However, if most of the staff are employed by the maintenance organisation approved under Part-145, the risk of this happening is much lower.

Nevertheless, there are cases where a percentage higher than 50 % contracted staff may not negatively affect the stability of the maintenance organisation approved under Part-145 and could be allowed by the competent authority. This may be the case where the maintenance personnel are employed by a parent company of the maintenance organisation approved under Part-145.

Such language does not provide guidance (in fact it appears somewhat contradictory) but rather presents hypothetical scenarios that are commercial in nature and should be addressed by the organizations themselves, not by regulators.

The NPA also provides new guidance pertaining to the qualification of certifying staff at facilities registered in non-Member States.

Certification of maintenance performed on aircraft is another area that is clarified.  The new guidance explains that the requirements apply only to aircraft covered by the Basic Regulation, and specifically lists those to which it does not apply:

  • aircraft carrying out military, customs, police, search and rescue, firefighting, coastguard or similar activites or services;
  • aircraft listed in Annex II of the Basic Regulation;
  • aircraft registered in a non-Member State and not being used by a Community operator;
  • aircraft for which the regulatory safety oversight has been transferred to a non-Member State and which are not used by a Community operator.

Such clarifications are helpful in establishing which regulations govern certification of maintenance performed on the aircraft.  The proposed change also helpfully clarifies that for engines, propellers, and other components, an EASA Form 1 may generally be issued due to the fact that the next aircraft on which the part will be installed is often unknown.

The NPA also adds a new AMC describing a proper corrective action plan to perform a root cause analysis of Level 1 findings- those findings of non-compliance that are a serious hazard to flight safety.

Finally, the proposed amendment makes small changes to guidance related to initial approvals, changes, and revocations, suspensions and limitations.

As with all NPAs, these changes warrant a close review and comment to ensure your business is protected.  Comments for this NPA may be submitted through EASA’s Comment-Response Tool (CRT) at http://hub.easa.europa.eu/crt/, and please share your comments with ASA as well.  Comments are due October 11, 2013.

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