ASA Goes to Court to Protect Distributors

January 5, 2017 by Leave a comment

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. EASA SPECIAL CONDITIONS APPLICABLE TO U.S.-BASED REPAIR STATIONS
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.

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ASA and FAA Meet to Discuss 8130-3 Options

January 2, 2017 by 1 Comment

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.

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