June 2013
Table of Contents
Latest News
Sarah Says
Clock Strikes Zero: TSA Once Again Misses Deadline
ARSA Seeks Consistency in EASA SMS Requirements
ARSA Urges FAA to Clarify Technical Data Requirements
Government Watchdog Knocks FAA on Safety
Preparing for the ACA
Office of Management and Budget Recognizes Importance of Industry Relationships
Charles Taylor Bust, Database to Honor Awards Recipients
ARSA Publications: Summer Sale
Fabian Joins GE Aviation
New Gallup Poll is Bad News for Congress, but Good News for Us
The Big 5-0
Creating Jobs Throughout the World
Legislative News
ARSA Presses for Support of Bipartisan House, Senate Regulatory Accountability Bills
Legal Briefs
ARSA on the Hill
Final Documents/Your Two Cents
Quality Time
Legal Waypoints
Employment Law & Repair Stations
Membership
New Government Affairs Committee Launched
Member Spotlight
Have You Seen This Person?
A Member Asked
Check Out ARSA’s Library of Recorded Webinars and Online Training Classes
Get 10% Off on Membership Dues by Utilizing ARSA’s Members Getting Members Program
Advertise Today in ARSA’s Newsletters and Website!
Interested in Exhibiting or Sponsoring the 2014 Repair Symposium?
Positive Publicity
International News
International Roundup
Welcome New Members
Regulatory Compliance Training
Upcoming Events
Previous 12 issues
Latest News
Sarah Says: It’s Just Ugly, Folks
By Sarah MacLeod, ARSA executive director
This month, ARSA Executive Director Sarah MacLeod discusses how government inaction has global implications. To read MacLeod’s blog, as well as other commentary issued during the month of June, please visit http://blog.arsa.org/
Clock Strikes Zero: TSA Once Again Misses Deadline
The TSA once again failed to meet its deadline to finalize the repair station security rule, expected by today. TSA’s inaction means the FAA still faces a moratorium on certificating foreign aviation repair stations, plaguing the industry since 2008. Read more at http://arsa.org/clock-strikes-zero-tsa-once-again-misses-deadline-to-finalize-repair-station-security-rule/
ARSA Seeks Consistency in EASA SMS Requirements
On May 22, ARSA submitted comments to a European Aviation Safety Agency (EASA) Notice of Proposed Amendment (NPA) incorporating safety management system (SMS) requirements into EASA part 145. Read more at http://arsa.org/arsa-seeks-consistency-in-easa-sms-requirements/
ARSA Urges FAA to Clarify Technical Data Requirements
On June 9, ARSA submitted comments to Federal Aviation Administration (FAA) draft order 8300.X providing guidance on requirements for the approval of technical data associated with major repairs or alterations. Read more at http://arsa.org/arsa-urges-faa-to-clarify-technical-data-requirements/
Government Watchdog Knocks FAA on Safety
On June 20, the U.S. Department of Transportation’s Office of the Inspector General (OIG) released a report criticizing the Federal Aviation Administration (FAA) for the way the agency determines the number of flight standards safety inspectors needed to maintain a robust air carrier network. Read more at http://arsa.org/government-watchdog-knocks-faa-on-safety/
Beginning January 2014, the employer mandate under the Affordable Care Act (ACA) (Public Law 111-148) goes into effect, establishing different requirements for businesses depending on the number of full-time employees, the number of workers eligible for federal health insurance subsidies, and the quality of coverage the employer offers. Read more at http://arsa.org/how-will-repair-stations-prepare-for-the-affordable-care-act/
Office of Management and Budget Recognizes Importance of Industry Relationships
On May 28, the White House Office of Management and Budget (OMB) issued a memo to federal agencies offering guidance on best practices for approving travel and conference expenses. The memo acknowledges the importance of government and industry interaction, highlighting the need for agencies to limit unnecessary expenditures while maintaining relationships with industry stakeholders. Read more at http://arsa.org/office-of-management-and-budget-recognizes-importance-of-industry-relationships/
Charles Taylor Bust, Database to Honor Awards Recipients
In the coming weeks, the Aviation Maintenance Technicians Association (AMTA) will donate a bust of Charles E. Taylor, the “father of aviation maintenance,” to the Wright-Patterson Air Force Base Museum. Read more at http://arsa.org/charles-taylor-bust-database-to-honor-award-recipients/
ARSA Publications: Summer Sale
All summer, ARSA is offering a special two for one price on publications. Buy one publication, and get another one absolutely free! Read more at http://arsa.org/arsa-publications-summer-sale/
Fabian Joins GE Aviation
ARSA Vice President of Regulatory Affairs and Assistant General Counsel Craig Fabian concluded his tenure at Obadal, Filler, MacLeod & Klein (OFMK) to join GE Aviation in Cincinnati, OH. Fabian worked for OFMK from 2006 to 2007 and rejoined the firm in 2009 after serving as director of technical operations for the Air Transport Association. He was previously an attorney in the aerospace practice of another Washington, D.C., law firm. Read more at http://arsa.org/fabian-joins-ge-aviation/
New Gallup Poll is Bad News for Congress, but Good News for Us
ARSA’s Executive Vice President Christian Klein explains how the results of a recent Gallup poll reinforce what ARSA’s been saying for a long time: Small business owners are highly credible messengers. That’s good news for the aviation maintenance industry’s public relations efforts. Read more at http://blog.arsa.org/?p=169
The Big 5-0
ARSA’s Communication Manager Josh Pudnos explains the complexity of the Affordable Care Act’s employer mandate to provide healthcare coverage to full-time employees. Read more at http://blog.arsa.org/?p=151
Creating Jobs Throughout the World
ARSA’s Vice President of Legislative Affairs Daniel Fisher blogs about recent developments that may assist when explaining the aviation maintenance industry to lawmakers. Read more at http://blog.arsa.org/?p=141
Legislative News
ARSA Presses for Support of Bipartisan House, Senate Regulatory Accountability Bills
In June 4 letters to members of the House and Senate, ARSA joined the business community in urging lawmakers to pass the Regulatory Accountability Act of 2013 (H.R. 2122; S. 1029). Introduced by Rep. Goodlatte, R-Va., and Sen. Portman, R-Ohio, the bipartisan legislation aims to reform the current federal rulemaking process, lower costs, and improve the quality of new regulations. Read more at http://arsa.org/arsa-presses-for-support-of-bipartisan-house-senate-regulatory-accountability-bills/
Legal Briefs
Editor’s note: Over the next several editions of the hotline, Legal Briefs will outline the association’s top regulatory issues including history and current status. The information will become available on www.arsa.org along with a news feed on the latest developments.
Instructions for Continued Airworthiness: Where Do We Stand?
Since its inception, ARSA has worked to ensure that basic safety information (i.e., Instructions for Continued Airworthiness (ICA), including component maintenance manuals (CMM)) is developed by all design approval holders (DAHs) that essential information is made available at a fair and reasonable price to operators, maintenance providers, and any other person required by 14 Code of Federal Regulations (CFR) to comply with those instructions. Read more at http://arsa.org/regulatory/faa/design/ica-efforts/
ARSA on the Hill
By Daniel Fisher, ARSA vice president of legislative affairs
In June, ARSA’s legislative team continued implementation of the “lift the ban” lobbying effort. The initiative has gained new momentum after the Office of Management & Budget’s 90-day mandatory review period concluded on June 14 without a final repair station security rule. ARSA informed House and Senate lawmakers of the 90-day review period expiration and the urgent need to allow the FAA to certificate new foreign repair stations.
The association also announced its revamped Government Affairs Committee. Thank you to the leaders willing to serve for the benefit of the entire industry. The committee’s initial focus is to schedule August lawmaker visits to member facilities. If you are interested in hosting a lawmaker or staffer at your facility (or if you already have one scheduled), please contact ARSA’s Communication Manager Josh Pudnos.
Did you miss the webinar on engaging lawmakers and becoming an effective advocate? If so, you can still download a recorded copy here.
On June 27, ARSA PAC delivered campaign support to Congressman Mike Pompeo (R-Kan.). A tireless advocate for the aviation industry on Capitol Hill, he received ARSA’s Legislative Leadership Award during the 2013 Legislative Day.
Be sure to provide ARSA PAC solicitation consent by visiting http://arsa.org/about-arsa-pac/.
Final Documents/Your Two Cents
“Final Documents”: This list includes Federal Register publications such as final rules, Advisory Circulars (ACs), policy statements and related material of interest to ARSA members. For proposals opened for public comment, see “Your Two Cents.” The date shown is the date of publication or other official release.
“Your Two Cents”: This is your chance to provide input on rules and policies that will affect you. Agencies must provide the public notice and an opportunity for comment before their rules or policies change. Your input matters. Comments should be received before the indicated due date; however, agencies often consider comments they receive before drafting of the final document begins.
“Final Documents” and “Your Two Cents” are available at http://arsa.org/final-documents-your-two-cents/.
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.
Legal Waypoints:“Pay when Paid” v. “Pay if Paid” – a Subcontractor’s Nightmare
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 many industries, including aviation. He provides templates, tools and training to improve contracting efficiency, close deals faster and control costs.
“Everything was going along fine and then I stopped getting paid. Because I had a prior relationship with the prime contractor I just kept working. Then I found out the project was shut down and the owner was out of cash. What do I do now?”
This is a common scenario for many subcontractors. In many instances it can turn into a subcontractor’s worst nightmare – no payment, unexpected legal costs, and yet a continuing obligation to make payroll or pay lower tier vendors and suppliers. The first step in the legal assessment is to review the contract documents between the subcontractor and the prime contractor. Specifically, the payment provisions are usually the focus of that initial assessment. Is it a “pay when paid” or a “pay if paid” provision? Does the payment provision merely fix a time for payment or does it actually shift the risk of the owner’s insolvency to the subcontractor?
Examples of typical “pay when paid” and “pay if paid” provisions commonly used by prime contractors in their standard form subcontracts are presented below:
Paid when Paid: Subcontractor shall submit to Prime invoices for services rendered either monthly or at completion of the services. Prime shall review each invoice and shall promptly notify Subcontractor if it objects to any portion of the invoice. Prime shall invoice Owner/Client monthly on account of approved Subcontractor’s amount and shall pay Subcontractor within fifteen (15) days of receipt of payment from Owner/Client. It is intended that payments to Subcontractor will be made as Prime is paid by Owner/Client and that Prime shall exert reasonable and diligent efforts to collect prompt payment from Owner/Client.
Paid if Paid: Prime shall pay the Subcontractor in accordance with the unit costs specified in Exhibit C – Commercial Basis. Payment will be made based on monthly billings invoiced to Prime no later than fifteen (15) days after the end of each month. Prime will review such invoices and, upon approval, process for payment. Prime shall not be required to pay Subcontractor any portion of the unit costs, and/or any adjustments thereto, including those requested by Subcontractor under change orders, unless and until Prime receives the applicable payment from the Owner/Client. Receipt of such payment from the Owner/Client by the Prime is considered a condition precedent to any obligation of Prime to make payments to Subcontractor under this Agreement.
These provisions can vary greatly from contract to contract. Additionally, the interpretation and enforcement are usually guided by state case law. For this reason, drafting provisions requires careful understanding of the applicable law, the roles of the parties, and the goals of the prime and/or the subcontractor in any particular contract. In most instances the summary points below provide a basic contract guide:
- A pay when paid provision merely fixes the time for payment and does not shift the risk of the Owner/Client’s insolvency to the subcontractor
- Properly drafted, a pay if paid provision shifts the risk of the Owner/Client’s insolvency to the subcontractor
- Typically, use of the words “condition precedent” is required to craft an enforceable paid if paid provision
- Pursuant to a paid when paid provision, courts will generally require a Prime to make payment to a subcontractor after a reasonable waiting or time period, even if the Prime has not been paid by the Owner/Client
Note: The sample provisions above are for illustration purposes only and are not intended for use without appropriate review in your jurisdiction.
Employment Law & Repair Stations: Two Interesting Twists on “Reasonable Accommodation” Under the Americans with Disabilities Act
By Jonathan W. Yarbrough, Constangy, Brooks & Smith, LLC, 80 Peachtree Rd., Ste. 208, Asheville, NC 28803-3160. © 2013 Jonathan W. Yarbrough ALL RIGHTS RESERVED
Jonathan is experienced representing employers in employment law issues; his pragmatic approach helps keep relationships with employees from becoming difficult. Please contact him for questions regarding employment relationships.
Under the Americans with Disabilities Act (“ADA”), an employer is required to provide a disabled employee with a reasonable accommodation that will enable the employee to perform the essential functions of the job unless the employer can show that the requested accommodation would result in an “undue hardship” to the employer.
Case 1:
United Airlines had “Reasonable Accommodation Guidelines” to deal with employees who were no longer able to perform the essential functions of their jobs. The guidelines noted that although “transfer to an equivalent or lower-level vacant position” might be a reasonable accommodation, but the employee would not automatically be placed into a vacant position. However, the employee would be given preferential treatment in the form of a guaranteed interview and priority consideration over a similarly qualified applicant.
The Americans with Disabilities Act (ADA) includes “reassignment to a vacant position” as a possible “reasonable accommodation” for disabled employees. Earlier cases held that the ADA did not require an employer to reassign a disabled employee to a job for which there was a better qualified applicant, provided the employer’s consistent and honest policy was to hire the best applicant for the position.
The Equal Employment Opportunity Commission (EEOC) filed a lawsuit against United, arguing that United’s “reassignment” policy violated the ADA. The EEOC contended that “reassignment” under the ADA required an employer to appoint an employee losing his current position due to disability to a vacant position for which the employee is merely qualified – not the most qualified or even equally qualified, but simply qualified. The court in this case agreed and held that the disabled person must be advanced over a more qualified nondisabled person, as long as the disabled employee is at least minimally qualified to do the job, and unless the employer can show undue hardship.
The court adopted a “two-step case specific” process, which it borrowed from a seniority case involving reassignment under the ADA. In this two-step process, the employee need only show that the accommodation seems reasonable “on its face.” The burden then shifts to the employer to show some special (case specific) circumstance that provides evidence of undue hardship.
Case 2:
In a second case, an employee with an arthritic condition had requested to be transferred to another location so that she would be closer to her physical therapist’s office and could attend therapy after work. Her request was denied and she eventually resigned. The employer made a motion to dismiss the case. The court denied the motion. The employee argued that the employer’s failure to accommodate her request to move to a different location was an “adverse employment action” in that she was forced to resign due to her pain; that is, she was “constructively discharged.” The court concluded that while the employee may not ultimately be able to prove that the employer constructively discharged her due to her disability, she should at least be allowed to go forward with her ADA claim.
The take away from these two cases is, once again, to think outside the box when dealing with accommodation requests. Simply concluding that an accommodation request is not reasonable without seriously looking at whether the request would constitute a hardship may very well result in a violation of the ADA.
Membership
New Government Affairs Committee Launched
In order to ensure ARSA’s legislative program continues to build upon its recent successes, the Association unveiled a new government affairs committee that represents a diverse range of regions and sectors of the aviation maintenance industry. Read more at http://arsa.org/new-government-affairs-committee-launched/
Member Spotlight: Chromalloy – Palm Beach Gardens, Fla.
Chromalloy began in the 1950s providing protective coatings for turbine airfoils, later becoming the first independent firm to repair gas turbine engine components. Today, it is one of the world’s largest non-OEM providers of advanced coatings, repairs, and replacement parts for gas turbine engines and the only non-OEM company in the world that provides coatings, repairs, castings, manufacturing, and overhauls all from a single source. It services commercial airlines and militaries around the world, power providers with industrial gas turbines, and aero-derivative engine users.
Chromalloy employs more than 4,000 and has facilities across the United States and the world, including Australia, Canada, China, France, Indonesia, Israel, Korea, Mexico, the Netherlands, Saudi Arabia, and the UK.
Chromalloy’s employees have played a vital role in ARSA’s programing throughout the years; ARSA’s Government Affairs Chairman David Albert and member of the PPC committee Cathy Gedvilas are both employees of Chromalloy and its parent company Sequa.
For more information, visit http://www.chromalloy.com/about/
Are you an ARSA member who would like to be in the “Member Spotlight?” If so, please contact Jess Hammett at jess.hammett@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 Charles Taylor, the mechanic for Orville and Wilbur Wright heralded as the “father of aviation maintenance.”
Charles Taylor, the mechanic who built the engine for the first powered aircraft, was born outside of Decatur, Ill. on May 24, 1868.
He first started working for Orville and Wilbur Wright at their bicycle repair shop in 1901. His previous experience as a machinist in a farm equipment and bicycle manufacturing facility give him the skills he would need to design and build an engine worthy of flight.
Taylor began working directly with the Wright Brothers on their flight experiments in 1902. Using only the tools and materials in the bicycle shop, he built a small wind tunnel necessary to measure air pressures on curved surfaces, providing Orville and Wilbur with critical data to refine their theories.
After their experimental aircraft had been assembled, the Wright brothers recruited Taylor to build an engine light, yet powerful enough to lift the plane and its pilot off the ground. In six weeks, he built the aluminum water-cooled engine that would allow the Wright brothers to make history at Kitty Hawk, N.C., in 1903.
Taylor continued to work for the Wrights until 1911, when he joined Cal Rodgers in his attempt to make the first transcontinental flight across the United States.
Taylor died on January 30, 1956, exactly eight years after Orville Wright.
A Member Asked…
Q: We received an Airworthiness Directive (AD) that we don’t agree with. How are ADs adopted and can I comment on them?
A: ADs are substantive rules issued by the Federal Aviation Administration (FAA) to correct an unsafe condition in a product. ADs are required to comply with the Administrative Procedures Act (APA), part 11 of the Federal Aviation Regulations, and Department of Transportation (DOT) Regulatory Policies and Procedures.
There are three main processes by which an AD may become a final rule. First, under the standard procedure proscribed by Section 553(b) of the APA, the AD will go through a notice and comment period during which interested parties are invited to comment on the proposed AD. Taking into account the comments received, a final rule will be adopted, published in the Federal Register, and distributed to registered owners and known operators of the product(s) affected.
Second, in certain situations an AD may be immediately adopted without prior notice. Since this is an exception to the standard procedure, it is used only in instances in which an action must be taken more quickly than a typical notice and comment period would allow. The AD is immediately published in the Federal Register, and is distributed to registered owners and known operators of the product(s) affected.
This process for adoption of an AD is allowed under Section 553(b)(3)(B), which permits immediate adoption of a rule when notice and comment are impracticable, unnecessary, or contrary to the public interest. Despite this leniency under the APA, it is DOT and FAA policy to invite comments to immediately adopted final rules, after which a change in the final rule may result from a significant issue raised in a comment.
Third, emergency ADs may be issued if an unsafe condition exists that requires immediate action by the owners or operators. This type of AD applies only to those who physically receive a copy of the AD, and only applies to the public once it becomes a final rule. It usually becomes a final rule by being published in the Federal Register as an immediately adopted final rule (the second process described above).
Similarly, there are three ways to alter an existing AD. First, if the change is immaterial (i.e. typographical error), a correction to the AD will be published in the Federal Register. Second, any type of substantive change to an AD must be issued as a superseding AD and must comply with the processes for issuing an AD described above. Third, a revised AD will be issued for relief from an AD, or an unsubstantive change such as a change in contact information, change in address, etc. Revised ADs will be redistributed to owners and known operators.
For more information on ADs, see DOT’s Airworthiness Directives Manual.
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. The next live webinar, on July 10, titled “Part 145 Primer” will feature Sarah MacLeod, managing member, Obadal, Filler, MacLeod & Klein, and executive director, ARSA. Read more and register at http://arsa.org/training-2/online-training/
Get 10% Off on Membership Dues by Utilizing ARSA’s Members Getting Members Program
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/
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/
Interested in Exhibiting or Sponsoring 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-annual-repair-symposium-sponsorship/
Positive Publicity
As part of ARSA’s ongoing Positive Publicity Campaign (PPC), the association is actively working to enhance the media’s understanding of our $65 billion industry and its vital importance to global civil aviation. To accomplish this goal, ARSA monitors media coverage on aviation maintenance to spread the word about the valuable role repair stations provide their communities in jobs, economic opportunities, and community involvement. These are some of this month’s top stories highlighting the industry’s contributions.
International News
IATA Moves to Reduce Aircraft Emissions
On June 3, the International Air Transport Association (IATA) adopted a resolution calling for the development of a single, market-based mechanism that would seek to reduce aviation emissions.
The market-based mechanism would be part of a comprehensive strategy to achieve global carbon-neutral growth by 2020 with an emphasis on alternative fuels. According to IATA, the mechanism should be designed to be cost-efficient, preserve fair competition, and maximize environmental integrity.
The resolution also outlines other responsibilities for aircraft operators, including emissions data reporting, ensuring data integrity, and undergoing regular performance reviews.
Finally, the decree calls on member states to continue working within the International Civil Aviation Organization framework to reduce emissions and improve global annual average fuel efficiency.
International Roundup
To provide more international coverage, ARSA presents a monthly roundup of world events pertaining to the industry. Articles for June 2013 are available at http://arsa.org/international-roundup/
Welcome New Members
● Air Dallas Instruments, Inc., Lewisville, Texas
● Aviation Safety Products, Inc., Blairsville, Ga.
● Calspan Corporation, Niagara Falls, N.Y.
● Hahn Law Firm, PC, Dallas, Texas
● High Tech Avionics and Accessories, Miramar, Fla.
● Miami Air International, Miami Springs, Fla.
● Missionary Maintenance Services dba MMS Aviation, Coshocton, Ohio
● Timberline Helicopters, Inc., Sandpoint, Idaho
Regulatory Compliance Training
Click here to test your knowledge on §145.51 Application for certificate.
Upcoming Events
● July 9-11, 2013: Aviation Suppliers Association (ASA) Annual Conference, Four Seasons Hotel – Las Vegas, Nev.
● October 23-24, 2013: ARSA Strategic Leadership Conference, St. Regis Hotel, Washington, D.C.
● November 21-22, 2013: Aviation Maintenance Magazine (AVM) Summit, USA, Royal Plaza, Orlando, Fla.
Previous 12 issues:
| 2013: | Jan | Feb | Mar | Apr | May | ||
| 2012: | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
To view this publication in .pdf format, click here.
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.
All content in the hotline, except where indicated otherwise, is the property of ARSA. This content may not be reproduced, distributed or displayed, nor may derivatives or presentations be created from it in whole or in part, in any manner without the prior written consent of ARSA.
ARSA grants its members a non-exclusive license to reproduce the content of the hotline. Employees of member organizations are the only parties authorized to receive a duplicate of the hotline.
ARSA reserves all remaining rights and will use any means necessary to protect its intellectual property.
© 2013 Aeronautical Repair Station Association
