October 2013

Table of Contents
Latest News
Blogs
Legal Briefs
ARSA on the Hill
Regulatory Outlook
Quality Time
Membership
AVMRO
International News
Welcome New Members
Regulatory Compliance Training
Upcoming Events

Latest News

Sarah Says: On Planned Growth

By Sarah MacLeod, ARSA Executive Director

This month, ARSA Executive Director Sarah MacLeod discusses the association’s future strategic direction. To read MacLeod’s blog, as well as other commentary issued during the month of October, please visit http://blog.arsa.org/.

ARSA Comments on FAA Standardization Delays

Last week, the House Subcommittee on Aviation conducted a hearing titled “Review of FAA’s Certification Process: Ensuring an Efficient, Effective, and Safe Process.” The purpose of the hearing was to review progress the FAA has made in implementing provisions from the FAA Modernization and Reform Act of 2012 that require the agency to address inconsistencies with regulatory interpretations and streamline its certification process. Read more at http://arsa.org/delays-in-implementing-key-faa-regulatory-standardization-provision-concern-arsa/.

New DHS Secretary Nominated, ARSA Eager for Repair Station Security Rule

On Oct. 17, the White House announced President Obama will nominate Jeh Johnson for secretary of the Department of Homeland Security (DHS). Johnson, a former general counsel for the Department of Defense, will take over for Secretary Janet Napolitano, who left office in September to become president of the University of California system. Read more at http://arsa.org/new-dhs-secretary-nominated-arsa-eager-for-repair-station-security-rule/.

Aviation Maintenance Leaders Analyze Landscape of Industry

Executives from aviation maintenance companies around the world convened in Washington, D.C. recently to hear how industry, regulatory, and legislative changes will impact their bottom lines in 2014. Read more at http://arsa.org/aviation-maintenance-leaders-swarm-to-dc-to-analyze-landscape-of-industry/.

On Oct. 16, the House and Senate approved legislation (H.R. 2775) to end the two-week federal government shutdown and permit increasing the debt ceiling. President Obama signed the bill into law almost immediately after it was sent to his desk. Read more at http://arsa.org/government-shutdown-ends-default-avertedfor-now/.

Federal Register Proposes IBR Rule

On Oct. 2, the Office of the Federal Register (OFR) issued a proposed rule to update the requirements for incorporation by reference (IBR). The proposal follows the OFR’s review of comments to a petition for rulemaking submitted to the agency last year. An IBR makes materials not published in the Code of Federal Regulations but cited in a rule binding. This most often negatively affects the civil aviation community when Airworthiness Directives IBR manufacturer service instructions that are not publicly available. Read more at http://arsa.org/federal-register-proposes-ibr-rule/.

Fall Webinars Cover Variety of Government Regulations

The fall lineup of online training webinars hosted by ARSA covers a wide range of governmental issues that aviation businesses face regularly. Read more at http://arsa.org/fall-webinars-cover-variety-of-government-regulations/.

House Gears Up to Strengthen Aviation Security

On Oct. 29, the House Homeland Security Committee approved legislation that would enable the aviation industry to offer greater feedback on the development and implementation of policies, programs, rulemaking, and security directives. Read more at http://arsa.org/house-gears-up-to-strengthen-aviation-security/.

Deviation(s) to FAA Orders 8100.8, 8100.15, and 8120.23 Issued

On Oct. 24, the FAA’s Aircraft Certification Service and Flight Standards Service Offices issued a memorandum allowing field office personnel to extend deadlines for recurrent training and requisite oversight duties. Requirements that were due to be completed in October 2013 may now be granted extensions through Jan. 31, 2014. Read more at http://arsa.org/deviations-to-faa-orders-8100-8-8100-15-and-8120-23-issued/.

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Blogs

FAA Standardization:  Complicating What Is Simple

ARSA Vice President of Communications, Policy and Planning Eric Byer discusses how it’s time for the FAA to wipe the slate clean and start standardizing FAA regulatory interpretations. Read blog post at  http://blog.arsa.org/?p=273.

Private Businesses Get Stiffed With Government Shutdown

ARSA Vice President of Communications, Policy and Planning Eric Byer discusses how private businesses get stiffed with the latest government shutdown. Read blog post at http://blog.arsa.org/?p=271.

Taking Control

ARSA Executive Director Sarah MacLeod discusses how members with delegated authority should take control of their own destiny during this government shutdown. Read blog post at http://blog.arsa.org/?p=269.

Legal Briefs

Aircraft Parts: Regulations Impacting the Sale

Title 14 Code of Federal Regulations (C.F.R.) part 3 is short and to the point; it only has two sections. Section 3.1 simply states the part applies to any person (which means an individual or a company; see the § 1.1 definition of person) who makes a record regarding the sale or advertisement of a type-certificated product or a product part, appliance, or material that may be used on a type-certificated product.

Section § 3.5(a) defines the term “product” as an aircraft, aircraft engine, or aircraft propeller. The section also defines “record” as basically any conveyance of information about a civil aviation article, including a part number or marking. Although not specifically defined in part 3, “type-certificated” means the product has a design approval from the FAA in the form of a type certificate.

With applicability and terms defined, the substantive elements prohibit any person from making or forcing someone else to make fraudulent and intentionally false statements (§ 3.5(b)(1)), fraudulent or intentionally false copies or alterations (§ 3.5(b)(1)) and intentionally misleading statements (§ 3.5(c)(1)) or omitting material details (§ 3.5(c)(2)) when conveying information. The prohibitions extend to any statement or omission that relates to the airworthiness of a type-certificated product or the acceptability of any product, part, appliance, or material for installation on a type-certificated product.

The elements necessary to show intentional falsification are: (1) a false statement about a material fact; (2) knowledge that the statement is untrue; and (3) intent to deceive. Fraud comprises those same three elements plus (4) justifiable reliance on the false statement; and (5) resulting harm.

For omissions and intentionally misleading statements, the test is whether the statement is likely to mislead a consumer acting reasonably under the circumstances. In either case, there is no violation if a person can show the product is airworthy or the product, part, appliance or material is acceptable for installation on a type-certificated product (§ 3.5(d)).

Also, the fraudulent or intentionally false provision in § 3.5(b) does not apply to part 43 records (§ 3.1(b)) since § 43.12 prohibits fraudulent and intentionally false statements in maintenance records (i.e., it would result in the same, or similar, charges). However, maintenance records used in sales or advertisements will be subject to scrutiny for omissions or intentionally misleading information under part 3.

There are other regulations specific to transfers of life-limited parts (§ 43.10) and aircraft (§ 91.419), along with U.S. State Department and U.S. Department of Commerce requirements for the sale of “dual use” (i.e., military and civil) parts. In addition, U.S. laws that prohibit the transmission of falsified records or conspiracies to perform illegal acts may apply. Many states have similar laws.

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ARSA on the Hill

By Daniel Fisher, ARSA vice president of legislative affairs

In October, ARSA’s legislative team continued implementation of the “lift the ban” lobbying effort, including working with targeted lawmakers representing districts consisting of interested constituents. Simultaneously, the association continues to engage Capitol Hill allies to pressure the Office of Management & Budget and the Department of Homeland Security to finalize repair station security rules.

Working with Rep. Richard Hudson, R-N.C., the legislative team secured the participation of repair stations on the Aviation Security Advisory Committee, which has been proposed in the Aviation Security Stakeholder Participation Act (H.R.1204). The legislation, approved by the House Homeland Security Committee on Oct. 29, contains an amendment introduced by Hudson to ensure repair stations have a seat at that table should Congress enact the bill. It is expected to be approved by the House in the near future and sent to the Senate for consideration.

The association executed a legislative panel discussion during the Strategic Leadership Conference and coordinated the participation of House Aviation Subcommittee member Rep. Reid Ribble, R-Wis., as the reception speaker.

ARSA PAC continues to encourage support from those who have given prior consent. Twenty-one individuals have given $7,240 so far this year.

Regulatory Outlook

Final Documents/Your Two Cents

This list includes Federal Register publications, such as final rules, Advisory Circulars, and policy statements, as well as proposed rules and policies of interest to ARSA members. Read more at http://arsa.org/final-documents-your-two-cents/.

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Quality Time

Editor’s note: The views and opinions expressed by contributing authors do not necessarily state or reflect those of ARSA, and shall not be used for endorsement purposes.

How Does “Honest Belief” Work?

By Jonathan w. Yarborough,Constangy, Brooks & Smith, LLC, 80 Peachtree Rd., Ste. 208, Asheville, NC 28803-3160. © 2013 Jonathan W. Yarborough ALL RIGHTS RESERVED.

Employers can prevail in lawsuits alleging termination contrary to the Family and Medical Leave Act (FMLA) by using an “honest belief” defense. Two different cases with similar facts and reasoning are instructive.

In both cases the employee used intermittent leave for chronic back pain; each sought FMLA leave when the pain became severe. Both employers initiated an investigation based on the employees’ potential abusive pattern of requesting FLMA leave.

In one case, the employee’s physician stated the exacerbated pain was not predictable. However, the employee would often provide several weeks advanced notice of the need for FMLA leave. The supervisor and co-workers also noticed the tendency to take FMLA leave on Friday’s and weekend days when he was scheduled to work, which resulted in three- or four-day weekends.

The company hired a private investigator to observe and record activities of the employee during FMLA leave. The report established the employee had engaged in activities inconsistent with serious back pain – including working in a garage bending down and lifting pieces of wood. The company provided the report and video to an outside medical consultant who concluded the activities were “inconsistent with the physical behavior typical of someone with incapacitating back pain.” Since the company demonstrated it had an honest belief the employee had abused FMLA leave, the court upheld the termination.

In the second case, a physician certified the employee could not reasonably report to work on days when she suffered severe pain. She had been diagnosed among other conditions with osteoarthritis. However, her supervisor began to notice that whenever the employee’s annual FMLA benefit had been exhausted she wouldn’t call in sick until the leave balance recovered. She also requested leave before and after scheduled days off, but did not call in sick on premium pay shift days. Finally, she scheduled FMLA leave on a Saturday following an off-day Thursday and a vacation-day Friday. Since she was not scheduled to work on either Sunday or Monday of the next week, she gave herself five consecutive days off.

The company hired a private investigator to observe, record and report her activities during scheduled FMLA leave. The investigator’s logs and videotape were reviewed by a company-retained physician who stated the employee could have certainly performed her job duties on the days she had been observed. On one occasion, for example, the employee took a two- hour car trip.

The company also confirmed the employee had used FMLA leave on six consecutive Saturdays to attend classes at her church. When confronted, the employee explained she had attended church on Saturday to “receive prayer.” The court upheld termination, concluding there was no need to determine whether the employee had actually abused her FMLA leave. It was only necessary to show the company had an honest belief the employee had done so.

There are a number of lessons to learn from these cases:

• Pay attention to employees who routinely use FMLA leave on an intermittent basis. Watch for a pattern that suggests abuse — for example, if the employee works on a shift basis and can schedule FMLA leave to coincide with other scheduled days off.
• If a pattern indicates potential abuse, confirm those suspicions with logs and video. Hiring an independent investigator provides the best evidence as well as a creditable record for the independent medical review.
• The final step in the development and use the “honest belief” defense is for a medical expert to determine the employee could have performed the job duties on the FMLA leave dates.

TKC v. Napolitano – A Case Study in Maintenance Responsibility

By Steven E. Pazar, Attorney at Law, 11 Carriage House Lane, Boxford, Massachusetts 01921. © 2013 Steven E. Pazar ALL RIGHTS RESERVED.

Steven is a counselor to businesses operating in high-risk industries, including aviation. He provides templates, tools, and training to improve contracting efficiency, close deals faster, and control costs.

Aircraft operators are generally familiar with the requirements for “scheduled” or “depot” maintenance on their airframe and engine(s).  Technical requirements are in production approval holder and original equipment manufacturer maintenance manuals; operator compliance helps ensure continued airworthiness under Federal Aviation Administration (FAA) regulations.

“Day-to-day” or “routine” maintenance is another side to the airworthiness coin.  It is widely accepted that these activities will be performed by FAA-certificated mechanics pursuant to the latest maintenance manuals and accepted industry practices.  The mechanics may be employed directly by the operator or by another maintenance provider. In either event, certificated entities are very familiar with their responsibilities to the FAA for performing and recording maintenance properly no matter the title used for the particular activity.

A recent non-precedential opinion in a federal appeal (TKC Aerospace, Inc. v. Napolitano (Fed. Cir., 2013) illustrates how contract language can determine responsibility for maintenance actions, no matter the FAA obligations.

In 2005, TKC Aerospace, Inc. (TKCA) and the U.S. Coast Guard entered into an aircraft lease.  As part of the contract, the Coast Guard selected an option to perform day-to-day maintenance with its own personnel; the contract set forth an on-site TKCA maintenance coordinator tasked to “monitor” the work.  Scheduled maintenance was to be accomplished under a separate agreement between TKCA and Bombardier, without cost to the Coast Guard.

In 2008, during scheduled maintenance, Bombardier discovered and repaired a small amount of corrosion damage in the aircraft’s seat tracts.  In 2009, Bombardier discovered more extensive corrosion beneath the carpet and around the same seats.  TKCA had Bombardier make the necessary repairs and the aircraft was approved for return to service in January 2010.

In April 2010, TKCA received a letter from the Coast Guard that it would withhold approximately $500,000 because the aircraft was unavailable due to required corrosion repairs.  TKCA countered that the corrosion was the Coast Guard’s fault as it should have discovered and corrected the discrepancy under its day-to-day maintenance responsibilities.  Further, TKCA demanded credit for the downtime and reimbursement for the corrosion repair performed by Bombardier.

The contracting officer denied the counterclaim by TKCA, as did the Civilian Board of Contract Appeals in a subsequent appeal.  Ultimately, the Federal Court of Appeals noted:

“[T]he Board concluded that responsibility for repairing the damage fell on TKCA ‘[a]s part of Bombardier’s depot maintenance program.’ The Board found that ‘TKC was responsible for all maintenance of the aircraft’ under the contract, even if Coast Guard personnel were performing some of it. In support of that conclusion, the Board noted that TKCA had assumed responsibility for the 2009 corrosion repair until after the Coast Guard assessed it for the aircraft’s downtime during the repair period.”

Under an FAA analysis, the certificated persons performing the work are responsible for completing and recording it properly; however, a contract can turn that obligation on its head. In the final analysis, the on-site TKCA representative’s stated monitoring obligation carried the day on the question of maintenance responsibility despite the fact that Coast Guard personnel were performing the work.

Please feel free to contact me by email if you would like a copy of the decision. It is well worth reading in its entirety.

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Membership

Member Spotlight: Turbine Controls, Inc. – Bloomfield, Connecticut

Turbine Controls, Inc. (TCI) is an FAA-approved repair station with more than 30 years of expertise. TCI focuses on the overhaul and repair of components and accessories for commercial, military, industrial and airframe applications.

The Connecticut-based company provides a wide range of capabilities including fuel, oil, and pneumatic applications in addition to sub-assembly component repair. TCI also performs machining and grinding to plasma, welding, shot peening, painting and blasting. The maintenance provider also has in house non-destructive testing for both rotating and static engine components. TCI’s unique combination of accessory and engine component repair provides customers with a unique one stop alternative to fulfill many of their maintenance requirements.

TCI has been an ARSA member for 25 years.

For more information, visit http://www.tcimro.com

Are you an ARSA member who would like to be in the “Member Spotlight?” If so, please contact Matt McKinney at matthew.mckinney@arsa.org .

Have You Seen This Person?

Each month, the hotline spotlights key regulatory, legislative, and business leaders making important contributions to the aviation industry. This month we look at Sen. Jay Rockefeller III, D-W.Va., chairman of the Senate Commerce, Science & Transportation Committee..

Sen. Jay Rockefeller III, chairman of the Commerce, Science & Transportation Committee  

Jay Rockefeller III was first elected as a U.S. Senator from West Virginia in 1984. He is currently serving his fifth term but has announced he will not run for reelection in 2014.

As chairman of the Commerce, Science & Transportation Committee, Rockefeller has embraced a broad agenda that includes protecting consumers, improving the economy, heightening the nation’s security, building technology infrastructure and promoting transformative research.

In addition to the Commerce Committee, he is also chairman of the Health Care Finance Subcommittee and serves on the Select Committee on Intelligence where he worked as chairman from 2007-2009 and vice chairman from 2003-2007. He also sits on the Veterans’ Affairs Committee.

Rockefeller graduated from Harvard University in 1961 with a B.A. in Far Eastern Languages and History. In 1966, he was elected to the West Virginia House of Delegates and to the office of West Virginia Secretary of State in 1968. He served as president of West Virginia Wesleyan College from 1973 to 1976. Following his tenure at Wesleyan, Rockefeller was elected governor of West Virginia for two terms.

A Member Asked…

Q: How do repair stations typically deal with the duty time limitations in section 121.377 when performing work for air carriers? Is there a standard rule of thumb? Specifically, is the rule being applied to supervisory personnel who are directly in charge of maintenance?

A: Starting with your second question, the standard rule of thumb should be the regulations! A repair station should clearly differentiate supervisory and directly in charge of maintenance functions from performing the work. The duty time limitation of section 121.377 does not apply to supervisory or directly in charge functions provided no actual work is performed. However, if a supervisor or person directly in charge of maintenance performs maintenance, preventive maintenance or alterations for an air carrier, the duty time limitations apply to those working hours or days.

Check Out ARSA’s Library of Recorded Webinars and Online Training Classes

ARSA is pleased to announce that recorded online training classes and webinars are now available for member purchase. Check back often as courses will be continually added. Read more at http://arsa.org/training-2/online-training/.

The best form of advertising is word of mouth. Use the Members Getting Members Toolkit to recruit an ARSA member and your company will receive a discounted membership rate for your next membership term. Get more information at http://arsa.org/membership/members-getting-members/

Target Your Message: Advertise Today in ARSA’s Newsletters and Website!

ARSA recently updated its menu of advertising opportunities for arsa.org, the hotline and the ARSA Dispatch. Take advantage of these great opportunities today to showcase your company, a new product or event. For more information go to http://arsa.org/advertise/

Exhibit, Sponsor the 2014 Repair Symposium

As the maintenance industry’s top event devoted exclusively to regulatory compliance, the ARSA Symposium attracts a highly qualified professional audience. Use this opportunity to promote your company while showing support for ARSA. Get more information at http://arsa.org/news-media/events/arsa-symposium/arsa-annual-repair-symposium-sponsorship/

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AVMRO

Aviation Maintenance Resource Site Takes Flight

Addressing the need for a single hub of information about the aviation maintenance industry, ARSA recently announced the launch of www.avmro.arsa.org (AVMRO).

AVMRO Industry Roundup

ARSA monitors media coverage on aviation maintenance to spread the word about the valuable role repair stations play in their communities by providing jobs and economic opportunities and in civic engagement. These are some of this month’s top stories highlighting the industry’s contributions.

Metro Aviation Expands New Training Center (RotorNews)

AAR Surpasses Hiring Goal for New Duluth Aircraft Maintenance Facility (Northlands News Center)

Building Waiver to Allow Growth of Tucson Aircraft-Repair Firm (Arizona Daily Star)

Landmark Aviation Completes Purchase of Hangar Space at Smith Reynolds Airport (Winston-Salem Journal)

Aviation Companies Unite to Open Williston Jet Center (The Bakken Magazine)

AAR Gives Students Glimpse of Aviation Education, Careers (RotorNews)

MTU Maintenance Dallas Opens New Facility and Signs Contracts for Engine Storage (AviTrader)

HondaJet to Open Customer Service Facility in NC (Bloomberg Businessweek)

Alaska Airlines Dedicates Aircraft to Nation’s First College Preparatory, Aviation-Themed High School (eTurboNews)

Three-Week Aviation Mechanics Class Offered at Big Bend College (iFiberOne News)

Western Jet Aviation Opens Reno Location (AINonline)

Dallas Aeronautical Services Breaks Ground on New 50,400 Sq. Ft. Facility (DOM Magazine)

International News

Ukraine Complies with Strictest ICAO Standards

Recently, the Federal Aviation Administration (FAA) announced that Ukraine now adheres to safety standards set by the International Civil Aviation Organization, based on the results of a July FAA review of the country’s civil aviation authority.

The FAA upgraded the eastern European country to Category 1, meaning Ukraine conforms to the highest safety standards. The nation’s air carriers can now add flights and services to the United States. Ukraine was downgraded to Category 2 in 2005 because the country either lacked laws or regulations necessary to oversee air carriers in accordance with minimum international standards or the civil aviation authority was deficient in one or more areas.

Under a Category 2 rating, a country’s airlines are allowed to maintain existing service to the United States but cannot establish new services. Ukraine does not currently provide services to the Unites States, meaning the country was unable expand into the American market as a Category 2 nation.

International Roundup

To provide more international coverage, ARSA presents a monthly roundup of world events pertaining to the industry

Haeco Buys Timco for $389 Million to Expand Maintenance (Bloomberg)

SriLankan Commissions a New A320 Hangar (News 360)

Najib: New Airbus Customer Services Facility Will Put Malaysia on International Map (Economic Transformation Programme)

ICAO Assembly Reaches Aviation Emissions Accord (Air Transport World)

MRO Firms at Full Throttle to Serve Domestic Market (Jakarta Post)

Flying Colours Breaks Ground on Phase 1 of a $3.5m Expansion Plan (AviTrader)

Lufthansa Technik Malta Expands Overhaul Capacity (AviTrader)

ST Aerospace Books $600 Million in New Orders in 3Q (Air Transport World)

BBA Aviation’s Ontic Strengthens MRO Support (AINonline)

New Commercial Aircraft Maintenance Agreement Expands BAE Systems’ Presence in Asia (The Wall Street Journal)

Welcome New Members

• Robert Ross, Charlottesville, VA
• Meggitt, Inc., Irvine, CA
• Aero Tire & Tank, Farmers Branch, TX

Regulatory Compliance Training

Test your knowledge on §145.59 Ratings.

Upcoming Events

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the hotline is the monthly publication of the Aeronautical Repair Station Association (ARSA), the not-for-profit international trade association for certificated repair stations. It is for the exclusive use of ARSA members and federal employees on the ARSA mailing list. For a membership application, please call 703.739.9543 or visit http://arsa.org/membership/join/

This material is provided for educational and informational purposes only. It does not constitute legal, consulting, tax or any other type of professional advice.

Law, regulations, guidance and government policies change frequently. While ARSA updates this material, we do not guarantee its accuracy. In addition, the application of this material to a particular situation is always dependent on the facts and circumstances involved. The use of this material is therefore at your own risk.

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ARSA reserves all remaining rights and will use any means necessary to protect its intellectual property.

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