FAA Delays MAG rev. 5 Provisions to Permit 8130-3 Revisions

April 1, 2016 by Leave a comment

As many of you know, the FAA issued a revision (rev # 5) to the US-EU Maintenance Annex Guidance (“MAG”) last September.  This revision was met with much resistance in the aviation community because it seemed to impose new documentation requirement that did not exist in either FAA or EASA regulations.  This could have become a problem for the ASA community because it would have imposed new documentation requirements that could have severely affected the value of existing inventories.

ASA has been working with FAA and EASA (as well as other trade association) to revise some of the language of the MAG.  Late in 2015, we reported some success when the FAA and EASA issued a letter to ARSA verifying that parts released by the production approval holder before April 1, 2016 would be ‘grandfathered,’ and would not be subject to the new documentation requirements.  In response to this decision, ASA has been advising members to record all parts in their inventories as of midnight on March 31, 2016.  A simple flag in the parts inventory should be enough to meet this requirement, and should serve as evidence that the part was produced and released by the PAH before that point.

Working Toward MAG rev. 6.

But the core problem remained – the ‘sample supplement’ in the MAG still had language about acceptance of components that was inconsistent with both regulatory requirements and normal industry practice.

We have been working with FAA and EASA personnel to develop new language for the component acceptance section of the ‘sample supplement’ in the MAG.  The authorities have been both responsive and receptive to our proposals to revise the MAG language.

The revision five language included requirements not found in either set of regulations, so we worked with both authorities to develop replacement language that would be published in a MAG rev. 6.  This language is more consistent with regulatory requirements, and it also supports the changes that permit Production Approval Holders to issue their own 8130-3 tags under 14 CFR 21.137(o) [this change was one of the drivers for some of the new requirements].

The draft language would still accept PAH 8130-3 tags that are issued under the new authority, but it would also reopen the standards to permit acceptance of DAR 8130-3 tag, and other forms of FAA-issues 8130-3 tags.  It would also remove unnecessary provisions, like linkage to the OEM IPC, which would only inhibit transactions (reliance on the IPCs would inhibit transactions in third-party approved parts like those produced under TSOA or PMA, and it would also inhibit transaction in replacement OEM parts where the IPC has not yet been updated to reflect the new part number).

Postponement

But getting such a change approved through both authorities takes time.  In order to buy some more time, the FAA plans to postpone by six months the parts receiving inspection provisions of the MAG.  This was announced earlier today in an internal FAA email (as reported by ARSA).  The text of the email reads like this:

From: Logan, Cindy (FAA)
Sent: Friday, April 01, 2016 7:23 AM
To: 9-AWA-AFS-300-Maintenance (FAA)
Subject: FYI from the AFS-300 Management Team — April 1, 2016 >> FAA Notice 8900.336 FAA Form 8130-3 requirements <<

Good Morning Everyone…

This email is provided as interim notification.

Since the release of the Maintenance Annex Guidance (MAG) Change 5,  between the United States and the European Union (EU), many concerns were raised by U.S. repair stations regarding changes contained in Section B, Appendix 1, paragraph 10: “Release and Acceptance of  Components,” and the timelines established.  Industry stakeholders recommended that the MAG be aligned with the changes in part 21 set forth in Amendment 21-98, which became effective on March 29, 2016.  The alignment would allow PAHs in the U.S. to establish a process in their quality systems to issue an authorized release using FAA Form 8130-3 for new parts.  Other concerns include what provisions could be made regarding components received prior to that date.

On November 17, 2015, the FAA issued FAA Notice 8900.336, aligning the requirements of MAG CHG 5, Section B, Appendix 1, paragraph 10, with the effective date of the part 21 Amendment 21-98.  Unfortunately, implementing the changes to part 21 set forth in Amendment 21-98, i.e. 21.137(o) is taking longer than stakeholders expected. Both FAA and EASA were asked by several industry stakeholders to extend the implementation date of MAG CHG 5 requirements specified above (specifically Section B Appendix I, Paragraph 10).

To allow implementation of the privileges under 21.137(o) to the greatest extent possible, FAA and EASA agreed to extend the implementation deadline specified in FAA Notice 8900.336 from April 1, 2016 to October 1, 2016.  All other provisions of MAG CHG 5 remain in effect.

FAA Notice 8900.336 is undergoing revision and will address this change and will be issued as soon as coordination procedures are complete.

This message was sent to Principal Maintenance and Avionics inspectors and Office managers. While our list is extensive it may not touch everyone, please distribute as necessary.

Have a GREAT weekend!

Cindy Logan,
Management and Program Analyst, AFS-310

Stakeholder FeedbackOR AFS300 Group Mailbox >>9-AWA-AFS-300-MAINTENANCE@FAA.GOV

The provision referenced in the email – “Section B Appendix I, Paragraph 10” – is the section of the sample supplement that addresses acceptance of components.  The extra six months of delay will allow the FAA and EASA to publish rev. 6.  It will also allow more production approval holders to start issuing their own 8130-3 tags (a process that is delayed for some production approval holders due to the fact that other trading partners have not yet agreed to accept PAH 8130-3 tags for parts from the United States).

Conclusion

If a repair station tells you that they cannot accept your parts due to new (and unusual-seeming) documentation requirements, then ask them for the source of these requirements.  If the new requirements come from the MAG rev. 5, then it is possible that the new provisions may not be appropriate, and your repair station customer may need to change its receiving inspection criteria back to the pre-MAG requirements due to the facts that (1) MAG rev. 5 acceptance criteria have been tolled until October 1, 2016 and (2) we expect the FAA and EASA to publish MAG rev. 6 that realigns the MAG language with the regulatory requirements of both authorities, and therefore removes some of the unaligned criteria currently found in the sample supplement.  The result should be a sample supplement that achieves the goals of the authorities without imposing undue burden on the industry.

Got more questions?  ASA will have a booth at MRO Americas next week – come and join us for a chat on the trade floor.  We will be in booth 3445.

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MAG rev. 6 Will Mitigate Some 8130-3 Tag Issues

February 29, 2016 by 4 Comments

We reported in December on the changes to the US-EU agreement that appeared to change the standards for documentation for both US-based repair stations and also EU-based repair stations.  As written, this had the potential to dramatically affect ASA members by changing the traceability requirements for aircraft parts and also by limiting which 8130-3 tags were eligible for use.

The change was found in the US-EU Maintenance Annex Guidance (MAG).  It arose in revision 5 which was published in September 2015.  The most important changes were found in the sample EASA Supplement and the sample FAA Supplement.  Although these were samples, many U.S.-based repair stations have reported that their local FAA inspectors are requiring them to conform to the language in the samples.  This caused problems because the sample Supplement language was inconsistent with the regulatory requirements of both the EU and the US.

Some of the problems included language that seemed to suggest that a repair station could not accept a component that was not listed in the OEM’s parts catalogue.  This would have excluded TSOA articles that were not part of the original configuration (e.g. seats defined in an STC), PMA parts, and replacement part numbers where the part number has rolled but the parts catalogue has not yet been brought up-to-date.  At the root fo this problem was a set of apparent requirements that were not found in FAA or EASA regulations or policy and instead existed only in the MAG sample Supplements.

The good news is that we’ve been working with EU and US authorities to correct the problems.  Both have clarified that the language we identified did not reflect a change in traceability policy among the authorities – rather it was intended to merely better reflect the regulatory requirements of both authorities.  They have admitted that the policy could have been more clear and they are seeking to inject greater clarity.

ASA and other trade associations brought these issues to the attention of the civil aviation authorities.  The authorities reviewed our concerns and recognized that MAG rev. 5 did not adequately reflect their intent and has been interpreted in a manner that is inconsistent with their intent.  In order to combat this misinterpretation, US and EU authorities are working together to correct the language in a MAG rev. 6 document.  Thus, the language of the MAG rev. 5 that has caused concern in the industry is being changed to clarify the EU and US intent.

I have had an opportunity to review draft MAG rev. 6 language and the language I have seen represents a dramatic improvement – one that should be acceptable to both the US and EU industries.  The version I saw was not the final version.  FAA and EASA officials are working diligently on this revision and we expect to see it earlier, rather than later.

There had been some fear that the MAG would preclude acceptance of 8130-3 tags issued by designees.  It is likely that the final language of MAG rev. 6 will recognize all appropriate 8130-3 tags.  This will likely include both 8130-3 tags issued by production approval holders (FAA-approved manufacturers) and those issued by the FAA’s designees.

One question that I have seen from the distribution community is whether DARs will continue to be relevant for purposes of issuing 8130-3 tags.  The answer to this is “Yes;” there appears to be no move to change current policy which permits DARs with the right function codes to issue 8130-3 tags for demonstrably airworthy parts.  The MAG applies to US-EU relations, but remember that the rest of the world is still out there, too.  Whatever change is occasioned by the MAG, it only applies to US-EU transactions and not to the other countries with which the US trades.  Most other countries still expect FAA (designee) 8130-3 tags.

Also, we still expect the authorities to recognize a ‘grandfathering’ (consistent with a joint FAA-EASA letter on this point) in which parts produced before April 1, 2016 would benefit from an exception.  The parts would need to be accompanied by documentation providing information equivalent to the 8130-3 tag (like a manufacturer’s C of C) that was issued before April 1, 2016.  We have recommended that all distributors should set a flag in their inventory system in order to be able to identify parts in their system as of 23:59 on March 31.  This will allow those distributors to later certify that the components were produced prior to the grandfathering date.  You may still encounter some commercial resistance to these components, but at least you can show that the component was produced before April 1, 2016 (because it had to have been produced before it existed in your inventory).

Other expected clarifications include a clarification that parts can be received into repair stations without 8130-3 tags if they are intended to be serviced.  This will allow repair stations to accept parts in need of repair without imposing absurd documentation requirements on them.  Distributors with as-removed parts in their inventories should continue to be able to send those parts to repair stations for overhaul.

Do you have other concerns as a consequence of MAG rev. 5?  Let us know your concerns!  The authorities have been clear that they did not intent to inhibit valid, legal and safe transactions, and they are open to clarifications in order to make sure that the industry understands their intent.

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Major Changes Involving 8130-3 Tags

December 18, 2015 by 2 Comments

Any ASA member who has attended an ASA Board Meeting or an ASA Quality Assurance Committee meeting in the past three months knows that an important topic of discussion has been the recent FAA and EASA changes affecting 8130-3 tags.

Two significant changes in the regulations and policy have affected 8130-3s this Fall.  Both have the potential to impact the business models of distributors.  This post analyzes the two sets of changes and provides guidance for aircraft parts distributors who may be impacted by those changes.

International Agreements

The first significant change was published in the latest revision to the Maintenance Annex Guidance (revision 5). The United States has a Bilateral Airworthiness Safety Agreement (BASA) with the European Union (EU). The EU-BASA explains how the United States and the European Union will share safety duties and permit products and articles to be freely moved between jurisdictions.

The EU-BASA is interpreted by several guidance documents. One of those guidance documents is the Maintenance Annex Guidance (MAG). The MAG explains how the US and EU will share oversight of repair stations that hold authority from both jurisdictions. Under the MAG, repair stations in the US that hold EASA 145 acceptance will be subject to oversight by the FAA, and the FAA will assess compliance to both the US and the EU regulatory requirements.

In order to facilitate compliance to both standards, the MAG includes two sample supplements for the repair station manual (for US-based repair stations) or the Maintenance Organization Exposition (for EU-based repair stations). Repair stations are expected to adopt such supplements in order to ensure that their work will meet the requirements of both jurisdictions; however they are expected to be able to make changes to the sample supplement; in fact the guidance explains that:

“The applicant must customise [sic] the supplement to reflect the specific repair station operation and related procedures.”

Although the supplements are explicitly described as “samples,“ experience has shown that many FAA employees treat these samples as the only acceptable language (this was most recently re-confirmed by repair station personnel at the ASA Quality Assurance Committee Meeting in Dallas who continue to experience this phenomenon).  This is not a new phenomenon – many complaints were raised when the FAA had an advisory circular that featured sample language for the repair station’s Inspection Procedures Manual (IPM) – and ultimately the FAA found it necessary to cancel the IPM AC because safety inspectors were requiring adherence to the sample as if it were a legal requirement.  The net result in cases like this is that the “samples” become de facto regulations, because they are being enforced as if they were required by regulation. I won’t get into all of the Federal laws that are being violated when the FAA enforces a domestic record-keeping requirement that imposes new regulatory standards not previously found in US law.

With the Supplement “samples” being treated as if they were requirements, we find a number of requirements being imposed that are not required under US law, and a few that are not required under either US law or EU law (thus making MAG rev. 5 a source of brand new quasi-legal obligations).

The most significant elements for distributors are found in the MAG rev. 5 requirements for acceptance of new parts.  The language that applies to US based repair stations (who need the supplement to retain their EASA privileges) includes this text:

New components must be traceable to the OEM as specified in the Type Certificate (TC) holder’s Parts Catalogue and be in a satisfactory condition for installation. A release document issued by the OEM or Production Certificate (PC) holder must accompany the new component. The release document must clearly state that it is issued under the approval of the relevant AA under whose regulatory control the OEM or PC holder works.

The acceptance language that applies to standard parts provides an exception for those parts, but PMA parts enjoy no such exception which means that independent PMA parts (which are typically are not included in the type certificate holder’s parts catalogue) appear to be unacceptable (violating EASA standards and conflicting with the existing Technical Implementation Procedures).

More importantly, all new components will have to be accompanied by a “release document issued by the OEM or Production Certificate (PC) holder.”  Today, most 8130-3 tags are issued by the FAA (usually through its designees).  This provision would cause the rejection of existing FAA 8130-3 tags because they were not issued by the OEM or Production Certificate holder (instead, until now, they have always been issued by the FAA, directly or through designees).  This could have a tremendous impact on existing inventories, which would not meet the acceptance requirements described in the supplement even if they were accompanied by 8130-3 tags issued by the FAA.

The FAA and EASA have agreed to delay the implementation of MAG rev. 5 until March 29, 2016.  This was meant to permit time for manufacturers to start issuing 8130-3 tags for new parts.

8130-3 Tag Regulations

Under the new regulations, a production approval holder (PAH) will be permitted to issue its own 8130-3 tags. These tags will be known as “authorized release documents.”  This privilege will be permissive and not mandatory, so some manufacturers may choose not to issue authorized release documents.  The FAA has issued guidance that says that once a production approval holder has set up a system for issuing authorized release documents, the production approval holder will be required to surrender its ODA privileges or other designated privileges that permit issuance of an FAA 8130-3 tag.  Thus, for manufacturers, the choice of issuing 8130-3 tags under the manufacturer’s own authority or obtaining them through designees will be an ‘either-or’ choice, without the opportunity to use both systems.

The FAA implies that these documents can be used for export purposes, by explaining that when an authorized release document is issued for export purposes, the production approval holder must follow the procedures specified in § 21.331 and must comply with the responsibilities of exporters specified in § 21.335.  One of the many problems with these authorized release documents is that although they appear to now be potentially acceptable for European repair stations, our bilateral agreement with the rest of the world all require FAA-issued 8130-3 export tags.  So manufacturer’s authorized release documents would not meet the requirements of our other bilateral agreements.  In addition, the BASA Technical Implementation Procedures (TIP) with the EU anticipates that EASA can expect FAA-issued 8130-3 tags (it repeatedly uses language explaining that the FAA must certify facts on the 8130-3 tag, such as in section 5.1.6(a)(1) for TSOAed articles).

On December 17, the FAA published a correction to the final rule that explained that PAHs are permitted to start issuing 8130-3 tags as early as January 4, 2016. This is specifically intended to permit PAHs to issue 8130-3 tags to support the new requirements for 8130-3 tags that are needed for domestic repair stations that possess EASA privileges (the preamble to the rule specifically mentions MAG rev. 5 as a motivating factor for the correction).

There are already manufacturers who rely on their own certificates of conformity and do not obtain 8130-3 tags for domestic transactions.  We have spoken with manufacturers who are not sure whether they will begin issuing 8130-3 tags because of some of the problems and limits associated with the PAH-authorized release document policy; so distributors may be unable to obtain PAH authorized release documents for some parts; and will likely have extreme difficulties obtaining PAH authorized release documents for existing inventory.

How Big of an Issue is this in the United States?

According to EASA, there are 1474  valid repair stations in the US with EASA privileges (EASA Table dated Nov. 12, 2015 – this does not include ‘not valid’ and invalid EASA repair station approvals in the US).  This is about one-third of the domestic US repair stations; but as a practical matter, it is nearly all of the US repair stations that service commercial aircraft customers.  This means that most repair stations that purchase parts from ASA members will be affected by the MAG rev. 5 requirements.  Because it is easier for FAA employees to simply enforce the MAG rev. 5 sample as if it were a requirement, we should expect most of these repair stations to adopt supplements that are consistent with the language of MAG rev. 5.  This will have a very significant affect on the business of aircraft parts distribution.

What Does This Mean for Distributors?

Distributors should expect to have problems selling aircraft parts without 8130-3 tags after March 31, 2016.  This could result in devalued inventory as a consequence of the FAA’s actions (There are months yet to go before this implementation date so ASA can do little to predict, today, what the actual devaluation will be).

The authorities (FAA and EASA) have agreed that for parts released by production approval holders before April 1, 2016, those parts will not be expected to be accompanied by 8130-3 tags.  The fact that an aircraft part produced by a PAH is in a distributor’s inventory as of that date is prima facie evidence that the part was released by the production approval holder before that date.  This means that aircraft parts in a distributors inventory as of close of business on March 31, 2016 or start of business on April 1, 2016 are grandfathered from the provisions of MAG rev. 5 (although, of course, parts intended to be used on European-registered aircraft will be expected to meet the requirements of the BASA TIP).  Distributors may wish to find a way in their inventory database systems to identify all parts held as of COB March 31, 2016 in order to be able to certify that the part was released by the production approval holder before April 1, 2016.

What Can You Do to Make Things Better?

1) Communicate with your repair station customers and ask them to ensure that their EASA Supplements permit them to accept parts without 8130-3 tags (e.g. parts with a manufacturer C of C) consistent with US policy in documents like FAA AC 00-56B.  Nothing in either US or EU law should prevent them from being able to receive a demonstrably airworthy part in new condition under their FAA 145 privileges and then issuing a single release certificate for their domestic U.S. customers.

2) Communicate with your repair station customers and ask them to ensure that their EASA Supplements are consistent with EASA regulations instead of using the MAG rev. 5 language, which adds limits that are not required under EASA regulations;

3) Communicate with your repair station customers and ask them to ensure that their EASA Supplements accept all 8130-3 tags that are acceptable by European 145s under the BASA Technical Implementation Procedures;

4) Communicate with your manufacturer business partners and encourage them to release their parts with 8130- 3 tags;

5) To the greatest extent possible, obtain 8130-3 tags for parts.  Even though they are not required by law in the US, the FAA is going to impel repair stations to reject parts that do not have 8130-3 tags, which will make the 8130-3 tag a de facto requirement for selling to repair stations.

6) Share your thoughts!  ASA is eager to hear your thoughts about potential problems and solutions.

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