ARSA Renews “Serious” Effort on SDRs
In May 2017, an ARSA-led coalition of aviation industry associations and private businesses sent a letter to the FAA seeking an objective standard for service difficulty reports (SDRs) under § 145.221.
In its July 26, 2017 response, the FAA agreed the term “serious” in context of failures, malfunctions or defects detected in articles during maintenance was “not well defined or interpreted consistently.” The agency, unfortunately, failed to see the industry’s logic regarding mitigation by corrective action or airworthiness directive.
To rectify the situation, ARSA has been working with the FAA regarding development of clear SDR guidance for repair stations. At the agency’s urging the association and its allies are developing a draft advisory circular that will align the SDR requirements for repair stations with those of design and production approval holders as well as owners and operators. The association is currently finalizing its draft and coordinating review with its association and business partners.
To read the coalition’s May 23, 2017 letter, click here.
To read the FAA’s response, click here.
To review the entire “serious” issue, which was created by the FAA’s 2014 updates to part 145, review the content below.
Previously from ARSA on 'Serious' Issues...
May 24, 2017
The letter had 13 signatories and was prompted by reports from ARSA members of inconsistent enforcement of SDR reporting requirements. The group sought clarity regarding the application of the word “serious” for determining when a report must be filed.
“The fact is most articles sent for maintenance or alteration actions have ‘serious’ issues; it is why they are being sent for restoration or alteration,” the letter said, noting that defects caused by design or production deficiencies are easily spotted. “On the other hand, the ‘serious’ failures and malfunctions that are known, anticipated, recognized as correctable or have corrective action instituted are the bread and butter of the maintenance industry. It seems incongruous that the agency would need [an SDR] on any and all items received for processing by a repair station that have known and correctable ‘serious’ failures, malfunctions or defects.”
The agency can alleviate enforcement inconsistencies by focusing on issues without appropriate corrective actions. When maintenance providers have the data or practices to support a fix, there is no “serious” issue.
To help make that determination, the group suggested a process for evaluating articles: Whenever an “unknown or unusual discrepancy” is determined to have caused a failure, the issue should be further investigated to determine if it would require a report from a design approval holder (§ 21.3) or an operator (§§ 91.1415, 121.703 or 135.415). If so, an SDR should be submitted.
In 2014, ARSA lead an industry-wide campaign to prevent the new repair station rule from becoming effective without the word “serious” in § 145.221 (see below). As it was written when published to the Federal Register that August, the rule would have imposed the onerous burden of requiring an SDR on every failure, malfunction or defect. Returning to the “serious” issue, the association and its allies now seek an objective standard for aviation safety inspectors to use while ensuring compliance with reporting requirements.
To read the full letter, click here.
The following organizations joined ARSA in signing the letter:
Aerospace Industries Association
Aircraft Owners and Pilots Association
Airlines for America
Aviation Suppliers Association
Cargo Airline Association
General Aviation Manufacturers Association
Modification and Replacement Parts Association
National Air Carrier Association
National Air Transportation Association
November 4, 2014
Thanks to a coalition of aviation trade associations and the responsiveness of the FAA, the Code of Federal Regulations (CFR) will retain seven important letters. The word “serious” has been reinserted into the paragraph of 14 CFR part 145 requiring repair stations to report failures, malfunctions or defects in articles received for work to the agency within 96 hours.
The group included ARSA, the Aerospace Industries Association, the Aircraft Electronics Association, Airlines for America, the Cargo Airline Association, the General Aviation Manufacturers Association, the National Air Carrier Association and the National Air Transportation Association. It petitioned the FAA on Sept. 22 to reinsert the word in the new repair station rule before the Nov. 10 effective date. Over 40 industry members submitted supportive comments highlighting that a plain reading of the service difficulty reporting requirement without the seven-letter word would mean submitting information on everything that comes through the door; repair stations only receive articles that need work because of failures, malfunctions or defects.
On Nov. 7, the Federal Register posted the FAA’s direction to reinsert “serious” in 145.221(a), saving incalculable cost for both itself and also the private businesses it regulates. The rule, as it was written in August, would have imposed onerous burdens on maintenance providers and their customers as well as agency inspectors but generated no additional revenue for industry members and – most importantly – no improvements to safety for the flying public.
“Our system worked,” said Sarah MacLeod, ARSA’s executive director, about the months-long process of getting the agency to correct its misstep. “The new rule has almost 7,500 words, and we found the most serious error – the seven absent letters that were going to cause our members a world of trouble. With the regulatory record on our side, the industry got the agency’s attention. Together, we made things right.”
In the days leading up to the correction, ARSA provided its members with strategies and resources for dealing with the new rule in the event that “serious” was not re-inserted in time. “It’s our responsibility,” MacLeod said. “Even as we are fixing an issue, we make sure members are ready for its potential impact on their businesses. In this case, that extra work turned out to be unnecessary.”
October 28, 2014
By Ryan Poteet and Laura Vlieg
As reported in ARSA publications, the final rule contains a critical seven-letter omission; it removes the word “serious” from the service difficulty reporting requirements in § 145.221. That change was made without notice or opportunity for public comment, based upon the agency’s mistaken justification that the word had been “removed through notice and comment rulemaking…[and] inadvertently inserted by a separate final rule.” (Emphasis added.)
In reality, after the word “serious” was removed from the reporting requirement in 2001, it was deliberately and correctly reinserted as a direct consequence of public comments. In the 2003 rulemaking, the “FAA agree[d] with the repair station industry concerning the word ‘serious’” and stated that “[i]t was not the agency’s intent to require repair stations to report ‘any’ failure, malfunction, or defect.” Therefore, the agency was “reinserting the word ‘serious’ before the word ‘failure’ in § 145.221(a).”
The new rule’s omission prompted ARSA, industry allies, and ARSA members to request that the FAA reinsert the word “serious” into § 145.221 before the November 10 effective date. While we are confident that the agency will correct its misstep, our diligence requires us to inform members of their options if the problem is not addressed before the rule is implemented.
From a business standpoint, there are two options: attempt to comply with the new requirement, or simply comply with the current rule until the agency issues the correction and/or guidance to its employees on the matter.
With respect to the first option, as ARSA members have pointed out in comments submitted to the September 22 petition for rulemaking, compliance compels submitting reports on all failures, malfunctions, and defects. A plain reading of that requirement means reporting information on not only every unit received, but also every piece part within that article. If it is even possible to comply, it would mean hiring new employees just to keep up with this onerous new reporting obligation.
The other option is to comply with the current version of the section by reporting only “serious” failures, malfunctions and defects until the agency addresses the matter. If, during this unlikely hiatus, an FAA representative threatens or takes enforcement action, consider fighting the improperly implemented reporting requirement using these steps:
1. Discuss the matter with ARSA so that the proper strategy can be outlined and information can be reported to decision-makers in the agency’s hierarchy.
2. Wait for a letter of investigation (LOI).
3. If a LOI is received, respond within ten days using this template.
4. If the agency doesn’t withdraw the action and issues a notice of proposed civil penalty (NPCP); request a copy of the enforcement investigatory report (EIR) and an informal conference with the FAA lawyer using this template.
5. After receiving the EIR, if the agency has not corrected the rule, hire a lawyer to present your case through an informal conference with the FAA’s legal office. The LOI template response provides the information needed to defend an enforcement action that is based upon an improper rulemaking.
6. If the matter has not been resolved, your lawyer should request a hearing before an administrative law judge (ALJ).
The administrative hearing process is similar to other court proceedings. The FAA will file a complaint and the repair station will be required to respond by filing a motion or an answer. ARSA’s LOI template response provides the support for its belief that an ALJ would terminate the proceedings because the FAA will be unable to establish the repair station committed a violation of a valid regulation.
Simply put, the Administrative Procedure Act (APA) (5 U.S.C. §§ 551 et seq.) prescribes certain procedural requirements that agencies must follow in order to give their rules the force of law. Unlike general policy statements or interpretive rules, regulations that impose binding obligations on the public (i.e., “substantive” and “legislative” rules) must be properly noticed and submitted to the public for comment.
Due to the agency’s fundamental APA error, repair stations have the ability to prevail in any potential enforcement action under the new rule by using the administrative legal process. If this course of action is required, the association’s LOI response template will be invaluable in establishing the proper record for review.
That said, the association is confident that the agency will correct its unfortunate misstep in removing a vital seven-letter word before the implementation date.
This material is provided as a service to association members for educational and informational purposes only. It does not constitute legal or professional advice, and is not privileged or confidential.
Oct. 6, 2014
The petition submitted to the FAA by ARSA and a coalition of trade groups asking the agency to put the word “serious” back in the service difficult reporting requirement (14 CFR § 145.221)is open for comment—now repair stations can add serious weight to that request.
Click here to submit a comment in support of the petition. Be sure to:
(1) Illustrate the costs and challenges your company will face if the correction is not made.
(2) Include the fact that “serious” was deliberately included in the current rule due to industry comments after the agency attempted to remove it in a previous rulemaking. Specifically from “Service Difficulty Reporting,” 68 FR 75380 (2003) the agency stated:
“FAA agrees with the repair station industry concerning the word ‘serious’. It was not the agency’s intent to require repair stations to report ‘any’ failure, malfunction, or defect. […] Again, it was not FAA’s intent to require repair stations to report all failures, malfunctions, and defects. Repair stations are required to report only serious failures, malfunctions, and defects. Therefore, FAA is reinserting the word “serious” before the word “failure” in § 145.211(a). (Emphasis added.)
The association’s regulatory team has done the legwork for you. Click here to download a customized comment template.
Sept. 23, 2014
On Sept. 22, a coalition of aviation trade associations asked the Federal Aviation Administration (FAA) to fix a seven-letter mistake in the Code of Federal Regulations (CFR) that would create serious headaches for the aviation maintenance industry.
The group, which includes the Aeronautical Repair Station Association (ARSA), the Aerospace Industries Association, the Aircraft Electronics Association, Airlines for America, the Cargo Airline Association, the General Aviation Manufacturers Association and the National Air Carrier Association, petitioned the FAA to correct the new repair station ruleissued on Aug. 12. The amendment to 14 CFR part 145 will become effective Nov. 10, but includes the improper removal of the word “serious” from a paragraph requiring repair stations to report a failure, malfunction or defect of an article to the agency within 96 hours.
Complying with the section was already difficult. By removing the word “serious,” aviation repair stations are effectively required to report everything that comes through the door – if an article did not have a failure, malfunction or defect, it would not need work – an expectation that is unrealistic and inefficient. The change would impose incalculable cost on both the agency and industry and was made without warning; it was not considered in the notice of proposed rulemaking (NPRM) to which industry members submitted comments in 2012.
The FAA incorrectly claims that “serious” was removed to rectify the word’s “inadvertent” insertion during a previous rulemaking. In fact, the term was deliberately and correctly reinserted as a direct consequence of public comments in 2003, when the agency agreed with industry and acknowledged “it was not FAA’s intent to require [aviation] repair stations to report all failures, malfunctions, and defects.”
“This is why we scrutinize the rules,” said Sarah MacLeod, ARSA’s executive director. “One misplaced or misused word can cause a whole lot of trouble for repair stations, their customers and – in the end – the flying public. It takes work to dissect, apply and chronicle regulations published by the government, but it is one of ARSA’s jobs for the repair station community. The effort paid off and now the agency has the opportunity to quickly make things right.”
In the petition, the coalition urges the FAA to honor its previous rulemaking activity by replacing “serious.” Since it is in the public interest to implement a correction that was fully vetted during a prior comment period, the agency can use its authority under the Administrative Procedures Act (APA) to implement a direct final rule without delays required for public notice and comment.
To see all the ways ARSA is working as the voice of the aviation maintenance industry, visit the ARSA Works page.