New FAA Language Affects DAR Management and Operation

The FAA has proposed a revision to their Inspector’s Handbook (Order 8900.1) which would provide new guidance for managing DARs.  This post suggests a s few preliminary notes on areas that could be improved in the proposed guidance; ASA would love to hear your views on this proposed language.

Geographic Expansion In the US

The proposed guidance includes significant new instructions for managing DAR applications to perform work outside of their geographic region.  The proposed guidance would establish a standard that would effectively preclude DARs from obtaining permission to work outside of their geographic area.  The proposed language states that when a DAR applies for permission to work outside of his or her geographic region:

The geographically responsible office should deny the request when a local inspector or designee can accomplish the work.  [proposed section 13-409(A)(2)]

Because every geographic region has DARs that are capable of issuing 8130-3 tags, you can always say that it is possible for a local DAR to perform work in another region.  This can therefore be used in every case as a justification for denying an application for geographic expansion.   Creating an “automatic no” in the guidance undermines the safety mission that DARs perform.

This proposed language would effectively preclude DARs from competing with  other DARs in other regions.  Competition is already limited by the small number of DARs that are eligible and available to issue 8130-3 tags for parts held by the industry.  By further limiting competition, the natural result would be for patterns to emerge which cause pricing to rise to monopolistic or oligopolistic levels (current charges for DAR services are already out-of-line with costs for government services).  FAA employees are generally precluded from issuing 8130-3 tags for aircraft parts (under the restrictive terms of FAA Order 8130.21G), but the FAA has made these tags generally necessary for both domestic and international commerce.  This means that FAA policy and executive agreements have made it commercially necessary to hire DARs to issue 8130-3 tags for demonstrably airworthy parts.  By introducing policies that encourage  monopolistic or oligopolistic pricing levels, the FAA is doing a disservice to the U.S. industry.

Principle Advisor

The guidance uses the term “Principal Inspector” or “PI” to reference the FAA employee with direct supervision of the DAR.  This seems incorrect.  Norms in the industry, as well as existing usage in FAA Order 8100.8D, use the term “Principal Inspector” or “PI” to reference the FAA employee with direct oversight over a certificated facility, while the term “FAA advisor” is generally used to reference the FAA employee with direct supervision of a DAR (in particular, “FAA advisor” is the term used in Order 8100.8D).

Applicant Convenience for International Authority

In 2007, the FAA published a rule change for 14 C.F.R. 21.325 to permit issue of an 8130-3 tag outside the United States.  This was done because it was more convenient for certain types of international transactions, and the FAA had granted a number of exemptions that accomplished the same end in the past.  The proposed guidance would undermine this 2007 rule change by proposing language that reads:

The designee has adequately identified the specific reasons for the performance of this activity outside the United States. Applicant convenience is not an adequate reason.

Applicant convenience is, in fact, the real justification for the rule change (combined with a finding that applicant convenience does not undermine FAA safety goals).  Imagine a situation where there is a large inventory of aircraft parts in a foreign nation.  Each of these parts is well documents with traceability that makes it clear that they were produced under US production approval, but the parts do not have FAA 8130-3 tags.  The documents that do exist make it easy to issue the 8130-3 tags.  The problem is that the inventory is significant and it is located outside of the United States.  While it would be possible to return the entire inventory to the United States for FAA 8130-3 tags, it would be economically impractical.  Sending a DAR to review the parts and issue 8130-3 tags is much more practical (and ultimately more convenient).  Thus, applicant convenience should be a valid rationale for international geographic expansion, as long as the international geographic expansion does not impose an undue burden on the FAA.

Conclusion

Please review the draft FAA guidance with your DAR, and get back to ASA with any other concerns you have identified.  Comments are due to the FAA by Sunday, February 10, 2013, so we would like to have industry comments by Monday, February 4 so we can incorporate them into ASA’s comments.