Payroll Grants for AS9100 Businesses

June 15, 2021 by 1 Comment

If your businesses designs, develops, or provides an aviation product or service – including a part, component, or assembly – and that process is certified under AS9100, then you may be eligible for a payroll grant from the US government.

As we discussed last week, the Aviation Manufacturing Jobs Protection (AMJP) program opened up this morning at eight am. The program provides payroll grants for the aviation industry and the scope goes beyond manufacturing. Qualified businesses include:

  • Production Approval Holders (PC, PMA, TSOA) who’ve produced or shipped articles in the last 12 months;
  • MROs holding Part 145 certification;
  • Part and service providers who operate under an AS9100 certification.

Application details can be found in yesterday’s Federal Register. Please review this for eligibility details as well as the application process.

This is not a “first-come, first-serve” program, so you should not rush in your effort to apply. This will be a single-round solicitation process in which any application that is filed by the deadline will be treated the same as the other timely applications. So take your time, collect your data, and make sure your application is complete.

The application period will be open for four weeks.  All applications are due by 5:00 p.m. Eastern time on Tuesday, July 13. Please don’t wait until the last minute to file!

ASA members and ASACB clients should reach out to the Aviation Suppliers Association for more details.

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NEW: US Gov’t Payroll Funding for Aviation Businesses

April 6, 2021 by 3 Comments

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

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

The program is targeted to three categories of aviation business:

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

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

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

What Are the Program Benefits?

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

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

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

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

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

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

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

What Can You Do Now, to Prepare?

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

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

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

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FAA Authorizes ASA to Perform Remote Auditing under AC 00-56B

April 2, 2020 by Leave a comment

This morning, the FAA sent a letter to ASA authorizing ASA to conduct remote audits during the Covid-19 National Emergency.

This will allow ASA-100 accredited companies to obtain audits during the coronavirus crisis, and to maintain their ASA-100 and AC 00-56B accreditation. ASA will continue to play its part in supporting safety through the aviation supply chain.

What if you are accredited to AC 00-56B through an ASACB audit under one of the ISO standards: ISO9001, AS9100, AS9110 or AS9120?  No problem.  ASACB also secured permission from the FAA to perform remote audits for AC 00-56B accreditees under one of the FAA-recognized ISO9001, AS9100, AS9110 and AS9120.  ANAB, the ANSI National Accreditation Board, has already issued permission for ASACB to perform remote audits.  Both sets of permission are necessary, because both FAA and ANAB have oversight authority over ASACB.

Background

Why did ASA need to go through this formal approval process?

FAA AC 00-56 Accreditation Supports Safety

In the 1980s and 1990s, there were industry concerns that aircraft parts distribution could be a source of inadequate parts that failed to meet safety standards. The FAA investigated a number of options, such as regulating distibutors, and decided to try setting voluntary standards and permitting third party oversight as a tool for establishing safety assurance standards to be used in distribution.

The FAA published AC 00-56 (the Voluntary Industry Distributor Accreditation Program) in 1996. The program recognized Accreditation Organizations with standards that were considered acceptable to the FAA.  One of those Accreditation Organizations was ASA, which used ASA-100 (and later was also permitted to use ISO9001, AS9100, AS9110 and AS9120).  The recognized Accreditation Organizations were permitted to audit Distributors’ compliance to the published voluntary standard. This meant that the distributor had to meet the quality standard (ASA-100, ISO9001, AS9100, AS9110 or AS9120) and also all of the elements of AC )0-56.

Since the inspection of the program, the FAA has audited ASA to gauge the success of the program.  FAA program audits have confirmed that this AC 00-56B program reflects a sound safety program that makes a positive contribution to aviation safety. The AC 00-56 Program has become an important tool to assist the FAA in ensuring aviation safety.

AC 00-56 has become a globally recognized program. There are AC 00-56 accredited distributors on every continent except Antarctica. The European Union has promulgated laws requiring Part 145 certificate holders to have procedures for accepting components. EASA 145.A.42(b)(i). EASA has interpreted this to mean that 145 organizations must evaluate their suppliers (EASA AMC1 145.A.42(b)(i) Components, ¶ (b)). AC 00-56 (and ASA-100) has been recognized as an acceptable program for supplier evaluation under European supplier control laws (EASA GM3 145.A.42(b)(i) Components, ¶ (b)(4)).  ASA has been in talks with other civil aviation authorities around the world to encourage them to adopt similar provisions recognizing the value of distributor accreditation.

AC 00-56B Requires Onsite Auditing

One of the features of the AC 00-56B program is onsite auditing of the Distributors. AC 00-56B requires onsite audits in section eight, paragraphs (b) and (f). The onsite audits are performed by qualified auditors who meet the requirements of AC 00-56B, under the coordination of Accreditation Organizations recognized in AC 00-56B.

On March 13, 2020, President Trump issued a Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Outbreak. The Proclamation recognized that “[t]he spread of COVID-19 within our Nation’s communities threatens to strain our Nation’s healthcare systems.” Since that date, many United States governors and mayors have issued correlative orders: restricting travel and requiring people to remain in their residences. Covid-19 has affected the availability and advisability of travel.

Health concerns related to Covid-19 are making onsite auditing under AC 00-56B an unnecessary risk.  Travel restrictions and state “stay-at-home” orders are making it impractical to perform onsite auditing under AC 00-56B.  Remote auditing mitigates the risks posed by onsite auditing, while providing a practical response to the need to “stay-at-home” to reduce disease transmission.

While remote auditing seems like the right response, it is still not permitted under AC 00-56B.  Thus, the industry needed a formal FAA deviation or exemption that permitted remote auditing.  ASA discussed with the FAA issuing a Notice to permit industry-wide remote auditing under AC 00-56B, but the FAA was uncomfortable with this because of the need for procedures that would ensure remote auditing was successful.  ASA petitioned the FAA to permit ASA to perform remote audits, based upon ASA’s remote auditing process and remote auditing auditor training program.

Remote Auditing the Right Way

The FAA authority is subject to ASA’s internal procedures for remote auditing, which have been developed by the audit team to help ensure an equivalent level of safety assurance. These procedures include new techniques for investigation by the audit team, and identification of objective evidence of adequate compliance.

ASA has already performed auditor training to teach the audit team how to perform remote auditing successfully.  Additional staff training is now planned for the approved procedures.

The current ASA authorization from the FAA for remote auditing is valid from April 1, 2020 through December 31, 2020.  The scope is global, so that ASA can continue to provide services to clients everywhere in the world.

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