[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
                    IS THE FLYING PUBLIC PROTECTED?
          AN ASSESSMENT OF SECURITY AT FOREIGN REPAIR STATIONS

=======================================================================

                                HEARING

                               before the

                SUBCOMMITTEE ON TRANSPORTATION SECURITY
                     AND INFRASTRUCTURE PROTECTION

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                           NOVEMBER 18, 2009

                               __________

                           Serial No. 111-44

                               __________

       Printed for the use of the Committee on Homeland Security
                                     

[GRAPHIC] [TIFF OMITTED] TONGRESS.#13


                                     

      Available via the World Wide Web: http://www.gpo.gov/fdsys/




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2011
                               __________

                     COMMITTEE ON HOMELAND SECURITY

               Bennie G. Thompson, Mississippi, Chairman
Loretta Sanchez, California          Peter T. King, New York
Jane Harman, California              Lamar Smith, Texas
Peter A. DeFazio, Oregon             Mark E. Souder, Indiana
Eleanor Holmes Norton, District of   Daniel E. Lungren, California
    Columbia                         Mike Rogers, Alabama
Zoe Lofgren, California              Michael T. McCaul, Texas
Sheila Jackson Lee, Texas            Charles W. Dent, Pennsylvania
Henry Cuellar, Texas                 Gus M. Bilirakis, Florida
Christopher P. Carney, Pennsylvania  Paul C. Broun, Georgia
Yvette D. Clarke, New York           Candice S. Miller, Michigan
Laura Richardson, California         Pete Olson, Texas
Ann Kirkpatrick, Arizona             Anh ``Joseph'' Cao, Louisiana
Ben Ray Lujan, New Mexico            Steve Austria, Ohio
Bill Pascrell, Jr., New Jersey
Emanuel Cleaver, Missouri
Al Green, Texas
James A. Himes, Connecticut
Mary Jo Kilroy, Ohio
Eric J.J. Massa, New York
Dina Titus, Nevada
Vacancy
                    I. Lanier Avant, Staff Director
                     Rosaline Cohen, Chief Counsel
                     Michael Twinchek, Chief Clerk
                Robert O'Connor, Minority Staff Director
                                 ------                                

 SUBCOMMITTEE ON TRANSPORTATION SECURITY AND INFRASTRUCTURE PROTECTION

                 Sheila Jackson Lee, Texas, Chairwoman
Peter A. DeFazio, Oregon             Charles W. Dent, Pennsylvania
Eleanor Holmes Norton, District of   Daniel E. Lungren, California
    Columbia                         Pete Olson, Texas
Ann Kirkpatrick, Arizona             Candice S. Miller, Michigan
Ben Ray Lujan, New Mexico            Steve Austria, Ohio
Emanuel Cleaver, Missouri            Peter T. King, New York (Ex 
James A. Himes, Connecticut              Officio)
Eric J.J. Massa, New York
Dina Titus, Nevada
Bennie G. Thompson, Mississippi (Ex 
    Officio)
                     Michael Beland, Staff Director
                   Natalie Nixon, Deputy Chief Clerk
              Joseph Vealencis, Minority Subcommittee Lead


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               Statements

The Honorable Sheila Jackson Lee, a Representative in Congress 
  From the State of Texas, and Chairwoman, Subcommittee on 
  Transportation Security and Infrastructure Protection..........     1
The Honorable Pete Olson, a Representative in Congress From the 
  State of Texas.................................................     3

                               Witnesses

Mr. Calvin L. Scovel, III, Inspector General, Department of 
  Transportation:
  Oral Statement.................................................     5
  Prepared Statement.............................................     7
Mr. Doug Dalbey, Deputy Director of Flight Standards for Field 
  Operations, Federal Aviation Administration, Department of 
  Transportation:
  Oral Statement.................................................    16
  Prepared Statement.............................................    17
Ms. Cindy Farkus, Assistant Administrator, Global Strategies, 
  Transportation Security Administration, Department of Homeland 
  Security:
  Oral Statement.................................................    19
  Prepared Statement.............................................    20
Mr. Robert Roach, Jr., General Vice President of Transportation, 
  International Association of Machinists & Aerospace Workers:
  Oral Statement.................................................    35
  Prepared Statement.............................................    36
Mr. Robert Gless, Assistant Director of the Transport Workers 
  Union of America, Air Transport Division:
  Oral Statement.................................................    38
  Prepared Statement.............................................    40
Mr. Chris Moore, Chairman, Teamsters Aircraft Mechanics 
  Coalition, International Brotherhood of Teamsters:
  Oral Statement.................................................    44
  Prepared Statement.............................................    46
Mr. Basil J. Barimo, Vice President, Operations and Safety, Air 
  Transport Association of America, Inc.:
  Oral Statement.................................................    49
  Prepared Statement.............................................    50
Mr. Christian A. Klein, Executive Vice President, Aeronautical 
  Repair Station Association:
  Oral Statement.................................................    58
  Prepared Statement.............................................    60


                    IS THE FLYING PUBLIC PROTECTED? 
          AN ASSESSMENT OF SECURITY AT FOREIGN REPAIR STATIONS

                              ----------                              


                      Wednesday, November 18, 2009

             U.S. House of Representatives,
                    Committee on Homeland Security,
Subcommittee on Transportation Security and Infrastructure 
                                                Protection,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 2:05 p.m., in 
Room 311, Cannon House Office Building, Hon. Jackson Lee 
[Chairwoman of the subcommittee] presiding.
    Present: Representatives Jackson Lee, Himes, Titus, and 
Olson.
    Ms. Jackson Lee. The committee will come to order. The 
subcommittee is meeting today to receive testimony on the 
security of foreign repair stations. Our witnesses will help us 
assess the security of these facilities and how stakeholders 
have been working together to ensure the safety and security of 
the traveling public.
    I now recognize myself for an opening statement. I think it 
is important to note that this hearing is crucial because all 
of the stakeholders have finally come together. But I also 
think this hearing is crucial in the backdrop of recent news 
reports on the inspector's comments on foreign repair stations.
    The general representation of that particular report is 
unacceptable, and even though we are here to factually assess 
where do we go next, we know we have a problem, and that 
problem must be affixed and, it must be addressed quickly.
    We are gratified that we have not only our representatives 
from the Government, but we have representatives from the 
private sector who we know has worked very hard on these 
issues, and as well, we are pleased to have those who work in 
these facilities to be present as well.
    Just yesterday the TSA issued a notice of rulemaking, which 
I will weave into our ultimate discussion, and I would applaud 
that only to say that I will be interested in why it took so 
long, what is the next step, and how we will be able to 
proceed.
    So we are here today to discuss the security of foreign 
repair stations and how the Federal Government will carry out 
an inspection program that will protect the flying public. I 
have long been concerned with the safety and security of 
aircraft repair stations and after following recent news 
stories raising oversight problems, I decided to call this 
hearing.
    My view is that if the inspector general and the media are 
discovering safety oversight issues, security vulnerabilities 
may exist as well. Accordingly, we need to address these 
comprehensively and immediately.
    Congress is already on record asking TSA to develop a 
security program for foreign repair stations. After years of 
delay under the past administration, the agency has finally 
released its notice of proposed rulemaking for repair station 
security, which I just mentioned, and we applaud that.
    But time is of the essence, and I might suggest that safety 
and security are very much intertwined. Vulnerabilities in 
safety are open doors on the question of security. Codifying 
the security oversight of foreign repair stations has never 
been more essential. According to the Department of 
Transportation's inspector's general, major air carriers 
outsourced 67 percent of maintenance costs in 2007 compared to 
37 percent in 1996.
    Further, between 1994 and 2008 the number of FAA-certified 
foreign repair stations has more than doubled from 344 to 709. 
One might accept that as positive growth, and I do recognize 
that as our industry grows the need for repair stations 
internationally is important.
    But again, the question is how effective is the 
certification and how concerned are those who are certifying in 
issues of safety and security, and whether or not there needs 
to be a collaborative effort between the Department of Homeland 
Security and the Department of Transportation anyway that 
security is as much an issue as safety.
    Clearly, domestic air carriers are outsourcing more and 
more repair maintenance work to foreign repair stations and 
important questions have been raised about the security of 
these stations and the security threat associated with their 
workers. To be clear, I understand that we live in a globalized 
economy, but we have to be sure that this is not at the expense 
of security.
    Today's hearing is not intended to end the use of foreign 
repair stations, but from my perspective it is to enhance the 
scrutiny to provide intense regulations and to determine 
whether or not these efforts are as trustworthy and secure as 
they possibly can be. But I believe it is also to determine 
best practices.
    With the passage of 2000 and 2003 FAA reauthorization 
legislation Vision 100, Congress directed TSA to complete a 
security review and audit of foreign repair stations that are 
certified by the FAA. Because the rulemaking was long overdue, 
Congress prohibited FAA in 2007 from certifying any new foreign 
repair stations until TSA has released its regulation.
    Almost 2 years later, I was so frustrated by the delay in 
the issuance of the NPRM I included language in the TSA 
authorization bill, H.R. 2200 that required TSA to release it 
in consultation with FAA.
    Now that the rulemaking has been released, I have several 
questions and concerns. For example, the law requires 
consultation and communication between TSA and FAA in 
developing a risk assessment of these repair stations and in 
suspending their certification should security discrepancies or 
vulnerabilities remain unaddressed. It may need, in a new look 
at this, more than consultation between the two entities.
    It also directs FAA to revoke its certification should TSA 
discover an immediate security risks at a repair station. While 
this relationship between FAA and TSA forms a crux of an 
effective security oversight program, the NPRM is unclear in 
describing how the agencies will work together to implement 
these processes and the aftermath of such.
    Congress also needs clarification on the frequency of 
security audits and inspections following TSA's initial review 
of FAA-certified foreign repair stations. Although the law is 
silent on this issue, we are interested in the agency 
developing a program that will provide consistent and periodic 
oversight of security at foreign repair stations.
    In light of the issues I just raised, I look forward to 
hearing more from TSA and FAA in order to acquire answers to my 
concerns. From the second panel I want to hear about the extent 
to which stakeholders have been consulted on NPRM and what they 
feel should be included in any final rule.
    We want to see the establishment of an effective robust 
security oversight program for foreign repair stations so that 
we can finally address a key vulnerability in the global 
aviation system. We also want to address the question of the 
utilization of American workers.
    That is, I believe, a key element of security, and I hope 
the second panel will address the utilization of American 
workers. This subcommittee will continue to oversee the 
implementation of this important security program and support 
policies and protocols that will strengthen our homeland 
security efforts.
    The Chairwoman is now pleased to recognize the gentleman 
from Texas, Mr. Olson, for an opening statement. The gentleman 
is recognized.
    Mr. Olson. Well, thank you, Madame Chairwoman. Thank you 
for having this hearing today. Thank you to the witnesses for 
coming and giving us your expertise on this important subject.
    I am happy to be sitting in for Ranking Member Charlie Dent 
today, and I would like to thank all the witnesses again for 
been here. It is certainly nice to have TSA with us again and 
very good to see the Department of Transportation and the 
Federal Aviation Administration before this subcommittee.
    As we all know, the responsibility for oversight of safety 
and security of air transportation is divided between the FAA 
and the TSA. But it is indeed essential that the FAA and the 
TSA work jointly together on many aviation issues as they are 
required to do so on the issue of foreign and domestic repair 
stations.
    Our second panel is a comprehensive panel of both views in 
the industry. Everyone has a voice here today, and we should 
really be able to explore all the issues related to foreign 
repair station security. I look forward to a very productive 
discussion.
    In the aftermath of the terrorist attacks on September 11, 
Congress tasked TSA with the responsibility of issuing 
regulations on both domestic and foreign repair station 
security by August 2004, and I understand that TSA announced a 
notice of proposed rulemaking this week.
    While it was disappointing that it took TSA over 6 years to 
commence rulemaking process on repair station security, we do 
appreciate and understand that TSA directed its limited 
resources to more pressing security matters that developed as 
higher priorities over the years.
    There is no question that foreign repair station security 
is important and that a potential vulnerability that bad 
people, including terrorists, may exploit. However, we should 
take note that despite the issuance by TSA of formal 
regulations on repair station security, there are currently 
security measures at foreign repair stations in place.
    While we are aware of the Department of Transportation 
inspector general's 2008 report that cited submissions of 
concern regarding the FAA safety audits of repair stations, we 
also acknowledge that the FAA take its responsibility very 
seriously and is addressing the recommendations of the 
inspector general to improve its oversight of repair stations.
    We are also aware of the recent media reports of some 
serious safety issues at a foreign repair station in Central 
America, including the inadvertent crossing of engine wires on 
a US Airways aircraft. The reality, however, is that those 
instances are rare.
    As both the Air Transportation Association and the 
Aeronautical Repair Station Association here before the 
committee today indicate in their written testimonies, security 
of foreign repair stations exists and is very good. These 
measures will only be enhanced by the more formalized 
regulations that TSA has announced this week.
    We should also be mindful that security does not begin and 
end with the foreign repair station itself. There are many 
layers of security and safety in place. In fact, Continental 
Airlines, which is headquartered in Houston, a place the 
Chairwoman and I know pretty well, employs a company policy 
where Continental Airline employees accompany any aircraft that 
was repaired at a foreign repair station to oversee the 
compliance with FAA regulations.
    Continental employees also inspect an aircraft after it 
returns from a repair station and before it is put back into 
flight. I understand most U.S. air carriers employ these 
procedures. In fact, it was a US Airways employee who during 
inspection discovered the crossed engine wires on the US 
Airways aircraft that had been repaired abroad. The layers of 
security and safety are working.
    We live in a world becoming more globalized each day. The 
airline industry has endured a very difficult decade. Airlines 
are making business decisions that will enhance their 
viability. To shut out the foreign repair station market would 
be catastrophic.
    We should also be mindful that international flights by 
foreign air carriers into the United States has increased over 
the last decade. That means many foreign aircrafts are being 
repaired and maintained by U.S. repair stations. That means 
more jobs here in the United States. In fact, I am told that in 
the $50 billion repair station market, nearly $20 billion of 
those dollars are generated in the United States and Canada.
    In homeland security, we strive to strike a balance between 
security and the free flow of information, commerce, and trade. 
I believe that adequate security measures at foreign repair 
stations are in place and that they will only be enhanced and 
more formalized by TSA's repair station security regulations. I 
look forward to working with both TSA and FAA on this issue.
    Thank you very much, and I yield back the balance of my 
time.
    Ms. Jackson Lee. I thank the gentleman. The Chairwoman now 
recognizes the witnesses that have come, and I wish to 
acknowledge that other Members of the subcommittee are reminded 
that in the committee rules opening statements may be submitted 
for the record.
    I welcome our first panel of witnesses. Our first witness 
is Mr. Calvin Scovel, the inspector general at the Department 
of Transportation. Mr. Scovel's office released a 2008 report 
that raised serious concerns about FAA's oversight of foreign 
repair stations.
    Our second witness, Mr. Doug Dalbey, is the deputy director 
of Flight Standards for Field Operations at FAA. His office set 
standards for the certification oversight of foreign repair 
stations.
    I do want to note that the invitation went to the FAA 
administrator, and I hope that our committee will have an 
opportunity for the administrator to appear before this 
committee as he has been invited, and I thank you for conveying 
that message to them.
    Our third witness is Cindy Farkus. Ms. Farkus is TSA's 
assistant administrator in the Office of Global Strategies. 
This office is responsible for security at foreign repair 
stations. I should note, my welcoming of TSA's issuance of its 
long overdue NPRM for securing these stations. We hope this 
testimony today will be helpful in how TSA proceeds, and we 
hope in your testimony or in the questioning you will advise us 
of that.
    I think today's hearing is going to be an important 
discussion, and we welcome you. Without objection, the witness' 
full statements will be inserted in the record. I now ask each 
one witness to summarize his or her statement for 5 minutes 
beginning with Mr. Scovel.
    Mr. Scovel, you are recognized for 5 minutes.

    STATEMENT OF CALVIN L. SCOVEL, III, INSPECTOR GENERAL, 
                  DEPARTMENT OF TRANSPORTATION

    Mr. Scovel. Madame Chairwoman, Congressman Olson, Members 
of the subcommittee, we appreciate this opportunity to testify 
on FAA's oversight of domestic and foreign repair stations. Air 
carriers' use of repair stations has increased significantly, 
both in the volume and type of repairs outsourced.
    In 2007, nine major carriers sent over 70 percent of their 
heavy airframe checks to repair stations, double what was sent 
just 4 years earlier, and more than a quarter of these repair 
stations were foreign. While most repair stations are domestic, 
the number of foreign repair stations certificated by FAA has 
more than doubled during the last 15 years to over 700.
    Despite these increases, FAA's oversight lacks the rigor 
needed to ensure repair stations meet FAA safety standards. 
Over the past decade, we have consistently reported weaknesses 
in FAA's oversight and have made numerous recommendations aimed 
at removing these weaknesses and closing identified safety 
gaps.
    In addition, in 2003 we reported security vulnerabilities 
at repair stations, including susceptibility to sabotage. While 
FAA oversees repair station safety and operations, DHS and TSA 
oversee their security.
    Madame Chairwoman, we have previously provided copies of 
our 2003 security report as were adapted by TSA because it 
originally included sensitive security information, and I 
request that this report be entered into the record at this 
time.
    Ms. Jackson Lee. Without objection, so ordered.*
---------------------------------------------------------------------------
    * The information has been retained in committee files.
---------------------------------------------------------------------------
    Mr. Scovel. Today I will discuss our longstanding concerns 
with FAA's oversight and the actions still needed to improve 
safety and security at repair stations. First, FAA continues to 
lack the data need to effectively oversee its outsourced repair 
work. In response to our past recommendations, FAA has 
developed a process to identify both the type and volume of 
outsourced repairs to pinpoint those that are safety critical.
    However, we found this process fundamentally ineffective 
because carriers voluntarily report this information and FAA 
inspectors do not validate the data. FAA agreed to improve the 
system, but the completion date has repeatedly slipped.
    Improving its data collection would also help FAA locate 
non-certificated facilities performing critical repairs. These 
facilities operate without an FAA certificate and, therefore, 
do not have the associated regulatory and quality control 
requirements, including training and maintenance supervision.
    Despite these vulnerabilities, neither FAA nor carriers 
regularly inspect non-certificated facilities. In fact, we 
found in 2005 that FAA had inspected only 4 of the 10 
facilities we reviewed and was unaware that non-certificated 
facilities performed the same type of work as certificated 
repair stations, including engine replacements.
    FAA relies heavily on carriers to oversee repair stations 
and uses their audits to approve repair stations for air 
carrier use, even if those carriers themselves have flawed 
audit and quality assurance programs.
    In addition, FAA does not specify how inspectors should 
gather information needed to approve air repair stations, and 
it may be months, even years, after stations are approved 
before inspectors conduct on-site reviews.
    As a result, maintenance issues at repair stations have 
gone undetected. In one case, FAA inspectors found that more 
than 100 mechanics at an approved repair station lacked the 
specialized training required to work on that carrier's 
aircraft.
    Given these safety gaps, it is imperative that FAA take 
long-overdue actions. Of key importance is the need for FAA to 
obtain information on where critical maintenance is performed. 
Without this information FAA will fail in its attempt to 
implement a risk-based oversight approach and of key interest 
to this committee, FAA will also have difficulty supporting TSA 
as that agency prioritizes its scarce resources in order to 
identify and address security gaps at repair stations.
    Following our recommendations in 2003, Congress mandated 
that FAA and TSA jointly review foreign repair stations to 
assess risk and develop security programs according to risk 
levels. Today that mandate remains unmet.
    We recognize that this process will be a challenge given 
that foreign repair stations are not subject to U.S. security 
requirements, such as background checks, but it must be done. 
Just this week TSA issued its proposed security rule, which is 
an important step in closing security gaps at repair stations.
    In addition, pending House and Senate reauthorizations for 
FAA would put foreign repair stations in parity with domestic 
stations on matters, such as drug and alcohol testing and 
education and licensing of maintenance personnel.
    Until FAA has fully addressed our on-going safety and 
security concerns, we will continue to monitor carefully its 
progress in working with TSA and improving its oversight of 
aircraft repair facilities.
    This concludes my statement, Madame Chairwoman. I would be 
happy to answer any questions you or other Members of the 
subcommittee may have.
    [The statement of Mr. Scovel follows:]

              Prepared Statement of Calvin L. Scovel, III

    Madame Chairwoman and Members of the subcommittee: We appreciate 
the opportunity to testify on the Federal Aviation Administration's 
(FAA) oversight of repair stations. As you know, air carriers have long 
contracted out maintenance to repair facilities to reduce operating 
costs or obtain specialized repair services from manufacturers. While 
the large majority of repair stations are domestic, the number of 
foreign repair stations that FAA has certified has more than doubled 
over the past 15 years.
    Since 2003, we have consistently found that FAA's oversight of 
aircraft repair facilities is not robust enough to ensure that 
outsourced repairs meet FAA standards, and we have made numerous 
recommendations aimed at improving this oversight. Today, I will focus 
on two key concerns: (1) Significant weaknesses we have identified with 
FAA's oversight, and (2) actions needed to improve safety oversight and 
security at repair stations.
    In summary, safety oversight and security of repair stations cannot 
be ensured in part because FAA does not know where critical outsourced 
repairs are being performed--including both certificated and non-
certificated facilities. Instead, it relies heavily on air carriers' 
oversight of repair stations--even air carriers with identified quality 
assurance problems. Given these weaknesses, a number of actions, 
including implementing our past recommendations, are needed to improve 
the safety oversight and security of repair stations.

                               BACKGROUND

    Repair stations conduct a range of repairs and maintenance, from 
critical components--such as landing gear and engine overhauls--to 
heavy airframe maintenance checks, which are a complete teardown and 
overhaul of the aircraft. Currently, there are 4,858 FAA-certificated 
repair stations, 4,126 of which are located in the United States. Since 
1994, the number of FAA-certificated foreign repair stations has 
increased from 344 to 731. Figure 1 shows worldwide locations of FAA-
certificated repair stations. 



    Air carriers' use of repair stations has risen dramatically in the 
last several years--both in the volume and type of repairs outsourced. 
As shown in figure 2, between 1996 and 2008, the percentage of 
outsourced maintenance increased from 37 percent to 64 percent (based 
on dollars spent). The first two quarters of fiscal year 2009 indicate 
that this trend is likely to continue, as 63 percent of maintenance 
expense was outsourced as of June 2009.



    The nine major air carriers we reviewed sent 71 percent of heavy 
airframe checks to repair stations in 2007, up from only 34 percent in 
2003 (see figure 3). Foreign repair stations performed 27 percent of 
this work, compared to 21 percent in 2003. 



    While FAA oversees repair station safety and operations, the 
Department of Homeland Security's (DHS) Transportation Security 
Administration (TSA) oversees aviation security, including repair 
stations.\1\ To fulfill their statutory obligations, FAA and TSA must 
collaborate on repair station activity, such as the type of work 
performed and facility location (airport or non-airport).
---------------------------------------------------------------------------
    \1\ In 2003, TSA was transferred from the Department of 
Transportation (DOT) to DHS.
---------------------------------------------------------------------------
    FAA'S OVERSIGHT LACKS THE RIGOR NEEDED TO ENSURE THE SAFETY OF 
                         OUTSOURCED MAINTENANCE

    Consistent with our recommendations, FAA has begun taking a risk-
based approach to overseeing repair facilities. Generally, this 
approach was developed to target FAA's limited inspector resources to 
those facilities posing the greatest safety risk. However, FAA lacks 
the information on certificated and non-certificated facilities to 
successfully implement such an approach. At the same time, FAA relies 
heavily on air carriers' audits to approve repair stations to perform 
substantial maintenance--even air carriers with identified quality 
assurance problems. These weaknesses undermine FAA's efforts to target 
surveillance to high-risk areas.

FAA Lacks the Data and Processes To Identify Facilities That Perform 
        Critical Repairs
    In 2003, we reported \2\ that despite the growth in outsourcing, 
FAA's oversight continued to target air carriers' in-house facilities--
even when high volumes of repairs, including critical maintenance, were 
outsourced. For example, in 2002, FAA completed 400 in-house 
maintenance inspections for 1 air carrier but only 7 inspections of its 
outsourced maintenance, which comprised 44 percent of the carrier's 
maintenance costs that year.
---------------------------------------------------------------------------
    \2\ OIG Report Number AV-2003-047, ``Review of Air Carriers' Use of 
Aircraft Repair Stations,'' July 8, 2003. OIG reports and testimonies 
are available on our website: www.oig.dot.gov.
---------------------------------------------------------------------------
    FAA has been challenged to shift its oversight to external 
facilities because it lacks the data and processes for identifying and 
tracking the types of maintenance outsourced and the facilities air 
carriers use. For example, air carriers are required to provide and FAA 
must approve substantial maintenance providers--repair stations that 
can conduct major repairs on an air carrier's aircraft. However, the 
list does not always represent the facilities air carriers actually use 
or show the quantity of work they send to each facility. In one 
example, we found a foreign repair station was designated a 
``substantial maintenance provider'' for a major U.S. carrier even 
though it had not conducted any significant maintenance for the air 
carrier in almost 3 years.
    In 2003 and in 2008,\3\ we recommended that FAA determine what type 
of repairs air carriers send to repair stations and which repair 
stations carriers use the most. In response, FAA set up a system \4\ 
for air carriers and repair stations to report outsourced repairs. 
However, the system is unreliable because it is based on voluntary 
reporting--both for volume of repairs and locations of critical 
repairs. Moreover, FAA inspectors do not validate the reported data. As 
a result of these weaknesses, FAA cannot determine the type of repairs 
air carriers outsource or the facilities they use and target its 
oversight accordingly.
---------------------------------------------------------------------------
    \3\ OIG Report Number AV-2008-090, ``Air Carriers' Outsourcing of 
Aircraft Maintenance,'' September 30, 2008.
    \4\ The system, known as the Quarterly Utilization Report, was 
developed by FAA in fiscal year 2007.
---------------------------------------------------------------------------
Non-Certificated Repair Facilities Perform Critical Maintenance With 
        Little FAA Oversight and Often Without FAA's Knowledge
    FAA regulations permit air carriers to use non-certificated repair 
facilities as long as the mechanics approving the repairs are 
certificated and the air carrier oversees the work performed. However, 
as we reported in December 2005,\5\ the use of non-certificated repair 
facilities can also create safety vulnerabilities. Because these 
facilities do not operate under FAA repair station certificates, they 
are not required to comply with associated regulatory and quality 
control standards. For example, non-certificated facilities are not 
bound by FAA operating requirements, such as maintaining a quality 
control system. Unlike domestic certificated repair stations, there is 
no requirement for non-certificated repair facilities to employ 
supervisors and inspectors to monitor maintenance work as it is being 
performed. Non-certificated repair facilities are also not required to 
have an aircraft hangar in which to operate. In fact, of the 10 non-
certificated repair facilities we visited, two were operated by only 
one mechanic with a truck and basic tools.
---------------------------------------------------------------------------
    \5\ OIG Report Number AV-2006-031, ``Review of Air Carriers' Use of 
Non-Certificated Repair Facilities,'' December 15, 2005.
---------------------------------------------------------------------------
    In addition to not being bound by FAA operational requirements, 
non-certificated facilities can perform a vast array of scheduled \6\ 
and critical repair work, including engine replacements. When we 
reported this finding in 2005, FAA was unaware that domestic and 
foreign non-certificated facilities performed the same type of work as 
FAA-certificated repair stations--not just minor aircraft work on an 
as-needed basis, as was widely believed. We examined records at three 
air carriers and identified six domestic and foreign non-certificated 
facilities that performed scheduled maintenance and 21 that performed 
maintenance critical to the airworthiness of the aircraft.\7\
---------------------------------------------------------------------------
    \6\ This maintenance is required to be performed at regularly 
scheduled times, such as inspections required after the aircraft has 
flown a designated number of hours (e.g., inspections of crew and 
passenger oxygen, aircraft fuselage, wings, and engines).
    \7\ ``Airworthiness'' means the aircraft conforms to its approved 
design and is in a condition for safe operation.
---------------------------------------------------------------------------
    Despite these vulnerabilities, neither FAA nor air carriers 
regularly conduct on-site reviews of non-certificated facilities. In 
fact, FAA had not inspected 6 of the 10 domestic and foreign non-
certificated facilities we reviewed. According to FAA, the quality of 
repair work at non-certificated facilities is ensured because the 
mechanics at these facilities hold FAA certificates. However, as we 
reported in 2005, some mechanics at these facilities are also temporary 
personnel and neither the carrier nor FAA ensures that their work meets 
FAA standards. Moreover, repair station certification involves 
additional controls to ensure repairs are performed properly. 
Specifically, certificated facilities have approved quality control 
systems, undergo multiple levels of oversight, and have recurring 
training programs. It is incumbent upon FAA to determine which non-
certificated facilities perform critical and scheduled maintenance \8\ 
so that it can target inspections accordingly or limit the type of work 
these facilities can perform.
---------------------------------------------------------------------------
    \8\ Gathering data on locations and carrier use of non-certificated 
facilities is possible, as we were able to do so by conducting a 
detailed analysis of air carrier maintenance vendor lists.
---------------------------------------------------------------------------
FAA Relies on Air Carriers With Known Quality Assurance Problems To 
        Provide Oversight of Repair Stations
    Last year, we reported that FAA does not specify how its air 
carrier inspectors should gather information needed to approve FAA-
certificated repair stations to perform substantial maintenance. 
Instead, FAA allows inspectors to use an air carrier's initial audit as 
a basis for approval even when inspectors determined that the carrier's 
audit processes and quality assurance programs had problems, such as 
limited quality assurance staff and inaccurate reporting of audit 
findings.
    We found it may be months or even years before FAA inspectors do an 
on-site review after FAA has approved a repair station for carrier use. 
For example, over a 3-year period, FAA inspectors for an air carrier 
inspected only 4 of its 15 substantial maintenance providers. Among 
those uninspected was a major foreign engine repair facility. The 
inspectors did not visit this facility until 5 years after FAA approved 
this facility for carrier use although the repair station had worked on 
39 of the 53 engines repaired for the air carrier.
    As a result of FAA's flawed approval and untimely inspection 
processes, maintenance problems either went undetected or reoccurred. 
For example, FAA inspectors relied on one carrier's initial audit 
report to approve a repair station for use, but they later found during 
a site visit that more than 100 mechanics had not received specialized 
maintenance training prior to working on the carrier's aircraft. At 
other repair stations that did not receive timely FAA inspections, 
problems existed such as untrained mechanics, lack of required tools, 
and unsafe storage of aircraft parts. While these problems were not 
immediate safety-of-flight issues, they could have affected aircraft 
safety over time if left uncorrected.

 ACTIONS NEEDED TO IMPROVE THE SAFETY OVERSIGHT AND SECURITY OF REPAIR 
                                STATIONS

    Several of our recommendations aimed at improving FAA's oversight 
of foreign and domestic repair stations remain open. Successfully 
implementing these recommendations would allow FAA to identify and 
target repair facilities in need of safety oversight as well as meet 
its statutory mandate to provide TSA with information needed to improve 
security oversight.

Recommendations To Improve FAA Oversight of Repair Stations Remain 
        Unaddressed
    Over the last 7 years, we have made a total of 23 recommendations 
intended to improve FAA's safety oversight of domestic and foreign 
repair stations; 16 of these recommendations remain unaddressed (see 
exhibit)--a number of which are critical. FAA made progress by 
implementing seven of the nine recommendations we made in 2003, 
including improved inspection processes for foreign authorities 
overseeing FAA-certificated facilities. However, the two that remain 
open from that report are ones that, if implemented, would help FAA 
target its oversight resources to facilities with the greatest safety 
risk. We also made seven recommendations in 2005 to improve oversight 
of non-certificated facilities, but FAA has yet to propose actions to 
address them.
    While FAA has proposed actions for each of the seven 
recommendations we made in 2008, it has yet to complete any of them, 
including those that are relatively straightforward and key to 
implementing other improvements. For example, FAA has not reassessed 
its definition of substantial maintenance \9\ to include all critical 
components, such as landing gear. We reported that omissions such as 
these can lead to wide disparities in air carriers' reports of 
locations performing repairs of critical components, which in turn 
limits FAA's ability to assess risk.
---------------------------------------------------------------------------
    \9\ FAA inspection guidance defines substantial maintenance as 
major airframe maintenance checks; significant engine work; major 
alterations or major repairs to airframes, engines, or propellers; 
emergency equipment repairs; and aircraft painting.
---------------------------------------------------------------------------
    Some actions that FAA has taken to address our recommendations are 
insufficient, including its voluntary system for reporting outsourced 
repairs, which has not provided reliable or FAA-validated data. FAA 
agreed to improve its reporting system by March 2009, but the 
completion date has slipped repeatedly. Completing this recommendation 
would also help FAA address other long-standing issues, such as 
locating non-certificated facilities performing critical repairs and 
improving their quality controls.
    FAA states it will implement other recommendations by December 31, 
2009, pending inspector and industry responses on redefining 
substantial maintenance. However, given that FAA has taken little 
action to date, it is questionable how it will implement these 
recommendations as planned. We will continue to monitor FAA's progress 
in effectively implementing all recommendations.

FAA Must Identify Critical Maintenance Locations To Effectively 
        Collaborate With TSA in Improving Security at Repair Stations
    In addition to the safety oversight gaps we have reported, we have 
identified security vulnerabilities at repair stations located at 
commercial and general-aviation airports and off-airport property. We 
issued a report in 2003 \10\ disclosing these vulnerabilities and 
recommended that TSA and FAA assess repair stations to identify the 
greatest security risks--including susceptibility to sabotage--and 
develop security programs appropriate to the significance and 
criticality of the work performed. Implementing effective security 
programs will be a challenge for both TSA and FAA because foreign 
facilities are not subject to U.S. security requirements. The level and 
depth of security programs in other countries, including background 
checks, are subject to Government requirements in the country where the 
repair station operates.
---------------------------------------------------------------------------
    \10\ OIG Report, ``Review of Security at Aircraft Repair 
Stations,'' February 28, 2003.
---------------------------------------------------------------------------
    Due in part to our recommendations in 2003, Congress enacted FAA's 
2003 Vision 100 Century of Aviation Reauthorization (Vision 100),\11\ 
which mandated TSA to complete large-scale security reviews of FAA-
certificated foreign repair stations and issue final regulations by 
August 2004 to improve the security of foreign and domestic repair 
stations. TSA did not meet the 2004 deadline (see figure 4).
---------------------------------------------------------------------------
    \11\ Pub. L. No. 108-176 (2003).

    
    
    In the August 2007 9/11 Commission Recommendation Act, Congress 
included a provision that if TSA did not issue a repair station 
security rule by August 2008, FAA would be barred from certifying any 
new foreign repair station.\12\ Again, TSA was not able to meet the 
deadline, and FAA was barred from certifying any new foreign repair 
stations. However, TSA announced on November 16, 2009, that its 
proposed rule is now open for public comment.
---------------------------------------------------------------------------
    \12\ H. Rep. No. 1, section 1616(a) (2007).
---------------------------------------------------------------------------
Pending Legislation Would Address Regulatory Gaps in Oversight of 
        Foreign Repair Stations
    Congress is introducing new bills to close other regulatory gaps 
between foreign and domestic repair stations that we have identified in 
our past work. While FAA verifies that approved repair stations have 
the equipment, personnel, and inspection systems to ensure that repairs 
are completed according to FAA standards, the repair stations are under 
the regulatory control of the government of the country in which they 
are located. As a result, there are some regulatory differences between 
domestic and foreign repair stations (see table 1).

   TABLE 1.--DIFFERENCES BETWEEN DOMESTIC AND FOREIGN FAA-CERTIFICATED
                             REPAIR STATIONS
------------------------------------------------------------------------
                 Domestic                              Foreign
------------------------------------------------------------------------
Duration of FAA Certificate:
    Certificate lasts indefinitely........  Certificate must be renewed
                                             every 1 to 2 years.
Fees for Certification:
    None..................................  Pay FAA for certification
                                             and renewal costs.
Drug and Alcohol Testing Program:
    Required..............................  Not required.
Certificated Mechanics:
    Certain personnel, such as return-to-   Personnel are not required
     service and supervisory personnel,      to be FAA-certificated.
     must be FAA-certificated.               (Note: Personnel must meet
                                             certain training and
                                             qualification requirements.
                                             Mechanics may be
                                             certificated by the
                                             aviation authority where
                                             they are located.)
------------------------------------------------------------------------
Note: For domestic and foreign non-certificated facilities, the
  personnel approving repairs must be FAA-certificated.

    The pending House and Senate FAA reauthorization bills contain 
language requiring drug and alcohol testing of employees in foreign 
FAA-certificated repair stations. The House bill also contains language 
to harmonize the safety standards between foreign and domestic repair 
stations, including standards governing maintenance requirements, 
education, and licensing of maintenance personnel, training, oversight, 
and mutual inspection of work sites. If passed, these bills will 
provide for greater consistency in rules governing repair station 
operations.
    In conclusion, Madame Chairwoman, with the growing trend in 
outsourcing aircraft repairs, it is imperative that FAA improve its 
oversight of repair facilities--both domestic and foreign--to ensure 
that safety measures are being adequately applied to affected carriers. 
Expeditiously implementing our longstanding recommendations would go a 
long way toward ensuring safety.

         EXHIBIT.--FAA'S ACTIONS TO ADDRESS OIG RECOMMENDATIONS

----------------------------------------------------------------------------------------------------------------
                                        Recommendations: 2003
                                     Review of Air Carriers' Use   FAA  Propose  Action?   FAA  Complete Action?
                                     of Aircraft Repair Stations
----------------------------------------------------------------------------------------------------------------
1..................................  Collect and monitor air      Yes...................  No.
                                      carrier maintenance
                                      financial data to identify
                                      trends in the source of
                                      maintenance and make
                                      shifts in inspector
                                      resources as warranted.
2..................................  Develop a process to: (a)    Yes...................  No.
                                      Identify repair stations
                                      that air carriers use to
                                      perform aircraft
                                      maintenance; (b) identify
                                      the repair stations that
                                      are performing safety
                                      critical repairs; and (c)
                                      target inspector resources
                                      based on risk assessments,
                                      or analysis of data
                                      collected on air carrier
                                      outsourcing practices.
3..................................  Implement procedures to      Yes...................  Yes.
                                      improve information
                                      sharing through FAA's
                                      newly integrated Safety
                                      Performance Analysis
                                      System by: (a) Requiring
                                      certificate management
                                      inspectors to document the
                                      name of the repair
                                      stations they have
                                      reviewed in the Air
                                      Transportation Oversight
                                      System database; and (b)
                                      requiring district office
                                      inspectors to include the
                                      areas inspected, the
                                      results, and corrective
                                      actions taken in the
                                      Program Tracking and
                                      Reporting System.
4..................................  Develop a comprehensive,     Yes...................  Yes.
                                      standardized approach to
                                      repair station
                                      surveillance by requiring
                                      inspectors to review all
                                      aspects of repair station
                                      operations, from the time
                                      the repair is received
                                      until it is released to
                                      the customer.
5..................................  Modify existing inspection   Yes...................  Yes.
                                      documentation requirements
                                      with foreign aviation
                                      authorities so that FAA
                                      receives sufficient
                                      documentation to ensure
                                      FAA-certificated repair
                                      stations meet FAA
                                      standards.
6..................................  Develop a process to         Yes...................  Yes.
                                      capture results from: (a)
                                      Foreign aviation authority
                                      inspections; and (b) FAA
                                      sample inspections of
                                      foreign repair stations in
                                      FAA's Program Tracking and
                                      Reporting System.
7..................................  Develop procedures to        Yes...................  Yes.
                                      verify that foreign
                                      aviation authorities place
                                      adequate emphasis on FAA
                                      regulations when
                                      conducting reviews at FAA-
                                      certificated facilities.
8..................................  Clarify requirements with    Yes...................  Yes.
                                      foreign aviation
                                      authorities to ensure that
                                      changes to FAA-
                                      certificated foreign
                                      repair stations'
                                      operations that directly
                                      impact FAA requirements
                                      are sent to FAA for
                                      approval.
9..................................  Modify procedures for        Yes...................  Yes.
                                      conducting sample
                                      inspections to permit FAA
                                      inspectors to: (a) Conduct
                                      the number of inspections
                                      necessary to gain
                                      assurance that foreign
                                      aviation authority
                                      inspections meet FAA
                                      standards during the
                                      initial implementation
                                      periods when foreign
                                      authorities conduct
                                      inspections on FAA's
                                      behalf; and (b) base the
                                      number of inspections in
                                      subsequent years on
                                      analysis of data collected
                                      from prior sample
                                      inspections.
----------------------------------------------------------------------------------------------------------------
Note: The recommendations from our 2003 security report are not listed in this exhibit because TSA, not FAA, is
  now responsible for those issue areas.


----------------------------------------------------------------------------------------------------------------
                                        Recommendations: 2005
                                     Review of Air Carriers' Use
                                      of Non-Certificated Repair   FAA  Propose  Action?   FAA  Complete Action?
                                              Facilities
----------------------------------------------------------------------------------------------------------------
1..................................  Inventory air carrier        No....................  No.
                                      vendor lists that include
                                      all maintenance providers
                                      working on air carrier
                                      aircraft and identify non-
                                      certificated repair
                                      facilities performing
                                      critical or scheduled
                                      maintenance.
2..................................  Determine whether it should  No....................  No.
                                      limit the type of work non-
                                      certificated facilities
                                      can perform.
3..................................  Expand its maintenance       No....................  No.
                                      oversight program to
                                      include non-certificated
                                      repair facilities if no
                                      limitations are placed on
                                      the type or scope of work
                                      they perform.
4..................................  Review air carrier training  No....................  No.
                                      programs as part of FAA's
                                      oversight of air carrier
                                      operations to ensure
                                      mechanics at non-
                                      certificated repair
                                      facilities: (a) Are
                                      qualified to maintain
                                      aircraft in accordance
                                      with FAA and air carrier
                                      requirements, and (b)
                                      receive training for
                                      critical repairs that is
                                      equivalent to the training
                                      provided to air carrier
                                      mechanics performing the
                                      same type of repairs.
5..................................  Review air carrier training  No....................  No.
                                      programs to ensure
                                      mechanics at non-
                                      certificated repair
                                      facilities have been
                                      adequately trained on
                                      preparing maintenance
                                      records in accordance with
                                      FAA and air carrier
                                      procedures.
6..................................  Review air carriers' audit   No....................  No.
                                      programs for non-
                                      certificated repair
                                      facilities as part of its
                                      oversight of air carrier
                                      operations to ensure each
                                      carrier has established a
                                      standard and in-depth
                                      process for evaluating
                                      these facilities.
7..................................  Determine whether air        No....................  No.
                                      carriers evaluate the
                                      background, experience,
                                      and qualifications of the
                                      temporary maintenance
                                      personnel used by
                                      contractors to ensure the
                                      work they perform is
                                      completed in accordance
                                      with FAA and air carrier
                                      requirements.
----------------------------------------------------------------------------------------------------------------
Note: FAA concurred with our 2005 report recommendations but has not proposed corrective actions.


----------------------------------------------------------------------------------------------------------------
                                        Recommendations: 2008
                                       Review of Air Carriers'
                                       Outsourcing of Aircraft     FAA  Propose  Action?   FAA  Complete Action?
                                             Maintenance
----------------------------------------------------------------------------------------------------------------
1..................................  Improve its maintenance      Yes...................  No.
                                      data reporting system by:
                                      (a) Revising its guidance
                                      to include all maintenance
                                      providers performing
                                      repairs of critical
                                      components, not just the
                                      top 10 substantial
                                      maintenance providers; and
                                      (b) developing procedures
                                      for inspectors to validate
                                      the accuracy and
                                      consistency of reports.
2..................................  Require CMO inspectors to    Yes...................  No.
                                      conduct: (a) Initial
                                      baseline inspections of
                                      substantial maintenance
                                      providers to assess
                                      whether the maintenance
                                      providers are in
                                      compliance with air
                                      carriers' procedures; and
                                      (b) follow-up inspections
                                      to determine whether this
                                      baseline assessment has
                                      changed.
3..................................  Reassess its definition of   Yes...................  No.
                                      substantial maintenance to
                                      include critical
                                      components and ensure that
                                      air carriers and FAA
                                      offices consistently apply
                                      the definition.
4..................................  Require inspectors to: (a)   Yes...................  No.
                                      Follow up to verify that
                                      deficiencies identified by
                                      air carriers have been
                                      corrected at repair
                                      stations; and (b) ensure
                                      that air carriers and
                                      repair stations have
                                      adequate processes for
                                      conducting audits,
                                      correcting identified
                                      deficiencies, and
                                      performing trend analyses
                                      of findings.
5..................................  Develop controls to ensure   Yes...................  No.
                                      inspectors are complying
                                      with inspector guidance to
                                      document their findings in
                                      FAA's inspection database
                                      and review the inspection
                                      database for previous
                                      findings.
6..................................  Ensure air carriers          Yes...................  No.
                                      document inspections
                                      conducted by air carriers'
                                      on-site technical
                                      representatives at heavy
                                      airframe maintenance
                                      providers.
7..................................  Encourage the industry best  Yes...................  No.
                                      practice of using
                                      airworthiness agreements
                                      between air carriers and
                                      repair stations that more
                                      clearly define maintenance
                                      procedures and
                                      responsibilities.
----------------------------------------------------------------------------------------------------------------

    Ms. Jackson Lee. Thank you for your testimony, and I now 
recognize Mr. Dalbey to summarize his statement for 5 minutes.

 STATEMENT OF DOUG DALBEY, DEPUTY DIRECTOR OF FLIGHT STANDARDS 
    FOR FIELD OPERATIONS, FEDERAL AVIATION ADMINISTRATION, 
                  DEPARTMENT OF TRANSPORTATION

    Mr. Dalbey. Chairwoman Jackson Lee, Congressman Olson, and 
Members of the subcommittee, thank you for inviting me here 
today to discuss the security of foreign repair stations. As 
you know, TSA has responsibility for oversight of repair 
station security.
    FAA's expertise is in aviation safety, and we have been and 
continue to be willing to coordinate with TSA with regard to 
our respective missions and provide any aviation safety 
expertise TSA may need to implement its security rules for 
repair stations.
    In keeping with the subject of today's hearing and at the 
request and direction of the subcommittee staff, I will focus 
my comments today on the FAA safety oversight of foreign repair 
stations.
    The FAA's responsibility for safety oversight means that we 
determine that the work accomplished at the repair stations is 
being performed in accordance with the Federal Aviation 
Regulations and the air carriers' approved maintenance program.
    Our oversight is based on risk analysis. This is our 
process where we examine detailed safety data to recognize 
important trends and spot potential safety problems in order to 
prevent them. Where we see the greatest safety risk is where we 
focus our oversight.
    Prior to issuing a certificate to a foreign repair station, 
the FAA must determine that the facility meets the same 
performance criteria that apply to domestic repair stations. 
Specifically, the FAA determines that the repair station 
possesses the appropriate housing, facilities, equipment, and 
trained personnel to perform according to the FAA safety 
standards.
    Currently, the FAA has certificated over 700 foreign repair 
stations. In order to ensure comparable safety standards 
despite geography, foreign repair stations must submit to 
recertification every 12 to 24 months, something not required 
of domestic repair stations. We require at least one 
comprehensive in-depth inspection prior to the renewal of a 
certificate.
    In the years that the FAA does not perform a renewal 
inspection, the FAA performs annual surveillance according to 
defined work program guidelines. Foreign repair stations also 
must show they have customers with U.S.-registered aircraft or 
customers with parts used on U.S.-registered aircraft for which 
an FAA certificate is required.
    In addition to FAA safety oversight, the foreign repair 
stations must undergo the safety oversight of their own 
National Aviation Authority. On top of that, the air carriers 
constitute a third layer of oversight. Ultimately, air carriers 
are responsible for overseeing all maintenance done on their 
aircraft by any maintenance provider.
    Air carriers are required to have a quality management 
system for monitoring and analyzing the performance and 
effectiveness of their maintenance programs. The air carrier's 
quality management system enables the carrier to track any 
problems with repair stations and check for similar maintenance 
errors throughout their fleet.
    While we are confident in the effectiveness of our 
oversight regime, our efforts to improve oversight are on-
going, and we are committed to maximizing our already robust 
safety oversight system. Our efforts have also included work to 
address specific areas where the IG has made recommendations.
    I understand and appreciate this subcommittee's concerns 
about the security of repair stations abroad. On that point, I 
reaffirm our willingness to lend our aviation safety expertise 
to assist the TSA. I want to assure you that we are committed 
to making advancements and adjustments in our safety oversight 
to ensure the highest standards of maintenance at foreign 
repair stations.
    Madame Chairwoman, Congressman Olson, Members of the 
committee, this concludes my prepared remarks. I would be happy 
to answer any questions that you might have.
    [The statement of Mr. Dalbey follows:]

                   Prepared Statement of Doug Dalbey
                           November 18, 2009

    Chairwoman Jackson Lee, Congressman Dent, Members of the 
subcommittee: Thank you for inviting me here today to discuss the 
security of foreign repair stations. As you are undoubtedly aware, the 
Department of Homeland Security (DHS) and the Transportation Security 
Administration (TSA) have responsibility for ensuring adequate security 
at repair stations, both foreign and domestic. Vision 100--Century of 
Aviation Reauthorization Act required the TSA, in consultation with the 
Federal Aviation Administration (FAA), to issue a final rule imposing 
security standards on all repair stations. Although the FAA's expertise 
is in aviation safety, not security, we have offered our comments and 
assistance when requested, and have worked with the TSA to facilitate 
their on-going pre-rule site visits. As always, we stand ready to 
provide any additional aviation safety expertise the TSA may need in 
its on-going effort to promulgate a rule that will ensure the highest 
levels of security.
    While the TSA is responsible for security oversight, the FAA is 
responsible for safety oversight--determining that the work 
accomplished at the repair station is being performed in accordance 
with the Federal Aviation Regulations and the air carrier's approved 
maintenance program. Previously, our oversight was based largely on 
inspector knowledge and information that was available as the result of 
individual inspections. As the business model for aviation maintenance 
has undergone changes, so has the FAA's approach to safety oversight--
we have added new methods of tracking and identifying safety risks to 
strengthen our oversight of both air carriers and repair stations.
    Instead of relying solely on information from individual 
inspections, we now perform a sophisticated analysis of anomalies 
identified and entered into our system. This analysis provides us with 
trend information that effectively targets our oversight. Specifically, 
the new Safety Performance Analysis System and Repair Station 
Analytical Model tools give safety inspectors the basis to evaluate a 
repair station, prioritize surveillance, and target our resources to 
the highest risk areas. We recognize that this risk-based approach can 
be successful only when our data is detailed and accurate. As a result, 
we are actively working to further refine our inspection and data-
gathering processes. This approach enables us to recognize important 
trends and spot potential problems in order to prevent them. The new 
surveillance system and accompanying analytical tools are not only a 
better use of FAA resources, they will enhance safety.
    In keeping with the subject of today's hearing and at the request 
and direction of the subcommittee's staff, I will briefly discuss the 
FAA's safety oversight of foreign repair stations. Currently, there are 
over 700 FAA-certificated foreign repair stations. Prior to issuing a 
certificate to a foreign repair station, the FAA must determine that 
the facility meets the same exacting performance criteria that apply to 
domestic repair stations. Specifically, the FAA determines that the 
repair station possesses the appropriate housing, facilities, equipment 
and trained personnel to perform repairs according to FAA standards.
    In order to ensure comparable safety standards, despite geography, 
foreign repair stations must submit to periodic recertification which 
is not required of domestic repair stations. Our current requirements 
mandate that every foreign repair station undergo at least one 
comprehensive, in-depth inspection prior to the renewal of its 
certificate. This inspection encompasses all of the repair station 
areas of responsibility under 14 CFR part 145, makes certain the 
original certification requirements continue to be met, and ensures 
that the station performs maintenance functions in accordance with the 
air carrier's FAA-approved program. In the years the FAA does not 
perform a renewal inspection, the FAA performs annual surveillance 
according to defined work program guidelines.
    Also, foreign repair stations must show they have customers with 
U.S.-registered aircraft or customers with parts used on U.S.-
registered aircraft, for which an FAA certificate is required.
    While the standards for inspections at foreign and domestic repair 
stations remain the same, the promulgation of international agreements 
has impacted FAA foreign repair station certification and surveillance 
activities. The Bilateral Aviation Safety Agreement with Maintenance 
Implementation Procedures (BASA/MIP) is a ``country-to-country 
agreement'' with primary focus on the harmonization of maintenance 
rules and requirements and safety standards for those entities 
performing maintenance activities. These agreements, which the United 
States has with France, Germany, and Ireland, remove duplicative 
efforts by the FAA and the national aviation authority and provide for 
each authority to perform certification and surveillance activities on 
behalf of the other, while reserving the right of each country to 
certificate or renew certification of the 174 relevant repair stations.
    In addition to FAA and foreign national aviation authorities, air 
carriers constitute a third layer of oversight. Ultimately, FAA 
regulations place responsibility for overseeing all maintenance done on 
their aircraft by any maintenance provider with the air carrier. Air 
carriers are required to have a quality management system, which we 
call the ``continuous analysis and surveillance system'' (CASS), for 
monitoring and analyzing the performance and effectiveness of their 
maintenance programs. If any repair station returns an aircraft to the 
air carrier with problems or the air carrier had to reject repair work 
for any reason, then the air carrier's quality management system would 
enable the carrier to track the problem and check for similar 
maintenance errors in its fleet.
    While we are confident in the effectiveness of our oversight 
regime, our efforts to improve oversight are on-going and we are 
committed to maximizing our already robust safety oversight system. In 
2003, we implemented revised regulations applicable to repair stations 
including improved equipment requirements, and more detailed criteria 
for the use of external maintenance providers by repair stations. Our 
efforts have also included work to address specific areas where the 
Department of Transportation Office of the Inspector General (IG) has 
made recommendations. In 2005, we issued guidance to enhance oversight 
of repair stations based on system safety requirements and risk 
assessment. In 2006, we developed and implemented software to further 
enhance our oversight, risk assessment, and risk management processes. 
We have also improved our Safety Performance Analysis System to provide 
enhanced information sharing. Additionally, we have strengthened the 
training requirements for certain repair station personnel.
    In September 2008, the IG's office issued its most recent report on 
repair stations, along with seven new recommendations. Some of our most 
recent actions include: (1) Implementing procedures to improve 
information sharing through FAA's newly integrated Safety Performance 
Analysis System; (2) modifying existing inspection documentation 
requirements with foreign aviation authorities to ensure the FAA 
receives sufficient documentation; (3) developing a process to capture 
results from foreign aviation authority inspections and FAA sample 
inspections of foreign repair stations in our Program Tracking and 
Reporting System; and, (4) modifying procedures for conducting sample 
inspections. We are committed to enhancing our essential oversight 
capabilities and will continue looking for ways to do so.
    Just as aviation safety is in no way compromised by allowing U.S. 
carriers to fly aircraft made in Europe, in Brazil, or in Canada, 
safety is in no way compromised by allowing other countries' facilities 
which perform to our safety standards, to conduct repair and 
maintenance on our aircraft. However, we fully embrace the crucial role 
oversight must play in ensuring quality maintenance operations--
regardless of where they are conducted. I understand and appreciate 
this subcommittee's concerns about the flying public and assure you 
that we are committed to making advancements and adjustments in our 
safety oversight to ensure the highest standards of maintenance at 
foreign repair stations. As always and in every aspect, the FAA is 
focused on finding ways to improve upon this historically safe period 
in U.S. aviation. I also understand and appreciate this subcommittee's 
concerns about the security of repair stations abroad. On that point, I 
reaffirm our willingness to lend our aviation safety expertise to 
assist the TSA.
    Madame Chairwoman, Congressman Dent, Members of the subcommittee, 
this concludes my prepared remarks. I would be happy to answer any 
questions that you might have.

    Ms. Jackson Lee. Thank you very much, Mr. Dalbey, and I 
would like to now recognize Ms. Farkus to summarize her 
statement for 5 minutes.

  STATEMENT OF CINDY FARKUS, ASSISTANT ADMINISTRATOR, GLOBAL 
STRATEGIES, TRANSPORTATION SECURITY ADMINISTRATION, DEPARTMENT 
                      OF HOMELAND SECURITY

    Ms. Farkus. Good afternoon, Chairwoman Jackson Lee, Mr. 
Olson, and distinguished Members of the subcommittee. Thank you 
for the opportunity to discuss the security of aircraft repair 
stations. I am pleased to appear on the panel with Mr. Scovel 
and Mr. Dalbey as we all work to protect the safety and 
security of our country's civil aviation network.
    I appreciate the subcommittee's attention to this issue as 
TSA has just this week proposed standards for security measures 
at FAA-certificated aircraft repair stations at home and 
abroad. Civil aviation remains a target of terrorist activity 
worldwide. With this proposed rule, the United States leads the 
way toward comprehensive repair station security standards.
    Throughout development of the proposed rule, TSA has 
adhered to the principles that the agency should, No. 1, listen 
carefully to the diversity of interest concerning the rule. No. 
2, ensure that the rule's proposed standards are risk-based. 
No. 3, provide appropriate flexibility to accommodate the range 
of repair station characteristics, and No. 4, complement FAA's 
safety regime.
    TSA is proposing that FAA-certificated repair stations 
carryout a security program that clearly defines access 
controls for facilities, as well as aircraft and components. 
The security program must also establish measures to identify 
employees and others with access and restrict access by 
unauthorized individuals.
    It must describe the means used by the repair station to 
provide security awareness training, employee background 
checks, and designation of a security coordinator. Importantly, 
the proposed rule would codify TSA inspection authority to 
examine repair station property, facilities, and records in 
order to assess security and enforce security regulations.
    Consistent with Vision 100, under the proposed rule TSA 
would notify a repair station and the FAA of there are 
deficiencies in the security program and provide 90 days for a 
repair station to correct deficiencies. If not corrected within 
90 days, TSA would notify the FAA that it must suspend the 
station's certificate until the deficiencies are resolved.
    A process would be provided so that a repair station could 
request further review of the deficiency determination. In 
addition, the rule addresses the process for revoking the 
certification of a repair station that is determined to pose an 
immediate risk to security.
    While developing the proposed rule, TSA collected 
information on repair stations through voluntary site visits 
and outreach efforts to assess the current state of aircraft 
repair station security measures around the world.
    Upon finalization of the rule, TSA will be prepared to 
quickly follow through with audits of foreign repair stations 
within 6 months as required by the 9/11 Act. TSA currently has 
13 international inspectors fully trained and deployed overseas 
to conduct repair station audits and has provided supplemental 
repair station inspection training to over 120 domestic 
transportation security inspectors.
    We had developed a comprehensive database with detailed 
repair station information that will help serve as an 
inspection scheduling and tracking tool. Scheduling of TSA on-
site inspections will be coordinated with FAA inspections.
    We have learned through joint visits that this maximizes 
inspection efforts and promotes the efficient use of resources 
for both the government and repair stations. These coordination 
efforts will apply to repair stations currently certificated, 
those waiting for certification and those that apply in the 
future.
    In closing, TSA is committed to working with our 
stakeholders, both foreign and domestic, in developing a rule 
that is flexible, viable, and takes into consideration the 
efforts already put forth at repair stations to secure their 
environment from the threat of terrorism.
    TSA strongly encourages all interested parties and 
stakeholders to review the proposed rule and welcomes public 
comment. Thank you for the opportunity to discuss our plans for 
ensuring the security of repair stations and our proposed 
regulations. I would be pleased to respond to your questions.
    [The statement of Ms. Farkus follows:]

                   Prepared Statement of Cindy Farkus
                           November 18, 2009

    Good afternoon Chairwoman Jackson Lee, Ranking Member Dent, and 
distinguished Members of the subcommittee. Thank you for the 
opportunity to appear today to discuss the security of aircraft repair 
stations. I appreciate the subcommittee's timely attention to this 
issue as the Transportation Security Administration (TSA) prepares to 
propose standards for security measures at aircraft repair stations and 
provide assistance to our international partners in meeting those 
standards. Today I will outline the steps we are taking to lay the 
foundation for the security of Federal Aviation Administration (FAA)-
certificated aircraft repair stations located in the United States and 
abroad.
    I am pleased to appear along with Calvin Scovel III, Inspector 
General of the U.S. Department of Transportation (DOT), and Doug 
Dalbey, Deputy Director of Flight Standards for Field Operations at the 
FAA. TSA coordinates with DOT officials across a broad spectrum of 
domestic and international transportation security matters.
    TSA, through both the Office of Global Strategies (OGS) and the 
Aircraft Repair Stations Program in the Office of Security Operations 
(OSO), works to develop and promote effective transportation security 
practices both domestically and around the world. Through diplomatic 
engagement and collaboration with our international partners, we are 
creating mechanisms to share information to help disrupt threats 
overseas, harmonize screening measures and practices, assess foreign 
carriers and airports, and build aviation security capacity.
    Repair stations are facilities certificated by the FAA to perform 
maintenance, repair, overhaul, or alterations on U.S. aircraft or 
aircraft components. Components may be engines, hydraulics, avionics, 
safety equipment, airframes, or interiors. More than 4,000 repair 
stations are certificated domestically, and 712 repair stations are 
certificated by FAA in foreign locations. More than two-thirds of 
certificated foreign repair stations are located in the European Union, 
followed in number by locations in the Asia-Pacific, South and Central 
America, the Middle East, Canada, Mexico, the Caribbean, and Africa. 
The vast majority of repair stations are owned by private companies, 
many of them headquartered in the United States.
    There is no ``typical'' repair station. They take many forms 
depending upon the type of maintenance performed, number of employees, 
and location. Some repair stations are on airport premises, but many 
are located in industrial parks nearby. Work can range from major 
aircraft overhauls to repairing radios or sewing seat cushions.
    This month TSA will propose regulations to enhance the security of 
both domestic and foreign aircraft repair stations as required by the 
Vision 100--Century of Aviation Reauthorization Act (Vision 100), Pub. 
L. 108-176. The proposed regulations are aimed at preventing 
unauthorized access to a repair station in order to prevent the 
sabotage, destruction, or theft of aircraft or aircraft components.
    The United States is leading the way in establishing repair station 
security standards, as this is an area not covered comprehensively by 
the International Civil Aviation Organization agreement. The proposed 
regulations will cover requirements for repair stations certificated by 
the FAA under 14 CFR part 145 to adopt and implement a standard 
security program and to comply with security directives. The proposed 
rule also will seek to codify the scope of TSA's existing inspection 
program and TSA authority to enter, inspect, and test property, 
facilities, and records concerning repair stations. Further, it will 
focus on procedures for TSA to notify repair stations of deficiencies 
in their security programs and determine whether there is an immediate 
risk to security. The proposal will also cover the process for a repair 
station to seek review of a determination that security deficiencies 
are not adequately addressed or that there is an immediate risk to 
security.
    TSA has spent considerable time assessing the types and varieties 
of repair station operations as well as the current state of aircraft 
repair station security measures around the world. TSA has established 
an aircraft repair station program office overseen by OSO, with the 
international outreach efforts performed by OGS, and the agency has 
hired and trained International Transportation Security Inspectors 
(ITSIs). With the collaboration of host countries and corporate 
offices, we have performed numerous voluntary site visits and outreach 
efforts to FAA-certificated foreign repair stations. The site visits 
provided valuable insight into the different types of facilities 
certificated by FAA, the variety of repair work conducted at the 
facilities, and the range of security measures used. During these 
visits, TSA discussed best practices for access control and other 
security measures. Worldwide, TSA found that aircraft repair stations 
take security seriously and voluntarily perform security measures that 
are consistent with the standards TSA is proposing. Aircraft repair 
stations are eager to protect the high-value products of the customer 
base they serve, which in itself is a substantial incentive to maintain 
security at a high level.
    The voluntary site visits have served the United States well in 
fostering collaborative relationships with our international partners 
as we break new ground in proposing comprehensive standards focused 
specifically on the security of aircraft repair stations. Through these 
visits, we established a dialogue on international security 
requirements and developed a wealth of information about security 
strategies that was useful in developing TSA's Aircraft Repair Station 
Security Notice of Proposed Rulemaking (NPRM).
    The Implementing Recommendations of the 9/11 Commission Act of 2007 
(9/11 Act), Pub. L. 110-53, requires TSA to complete audits of foreign 
repair stations within 6 months of issuance of the final repair station 
rule. TSA is prepared to swiftly perform these audits upon finalization 
of the rule. We have developed a comprehensive database with detailed 
repair station information that will help serve as an inspection 
scheduling and tracking tool. We have an implementation plan for 
completing all foreign repair station audits as required within the 6-
month timeframe.
    Throughout development of the Aircraft Repair Station Security 
NPRM, TSA has adhered to the principles that the agency should: (1) 
Listen carefully to the diversity of interests concerning the rule, (2) 
ensure that the rule's proposed standards are risk-based, (3) provide 
appropriate flexibility to accommodate the range of repair station 
characteristics, and (4) complement FAA's safety regime.
    TSA anticipates its aircraft repair station rule will provide an 
additional layer of security in the aviation domain. First, TSA will be 
in a position to ensure that repair stations across the board carry out 
a security program that clearly defines access controls for the 
facility as well as aircraft and components, lays out measures to 
identify employees and others with access, successfully restricts 
access by unauthorized individuals, provides security awareness 
training to all repair station employees, conducts employee background 
checks, and designates an appropriate security coordinator.
    Second, TSA will have inspection authority to examine repair 
station property, facilities, and records in order to assess security 
and enforce security regulations. Consistent with Vision 100, TSA would 
notify repair stations and the FAA if there are deficiencies in 
security programs and provide 90 days for the repair station to correct 
the deficiencies. If they are not corrected within 90 days, TSA would 
notify the FAA that it must suspend the station's certificate until the 
deficiencies are resolved. Importantly, a process would be provided to 
allow repair stations to request further review of the deficiency 
determination. In addition, the rule addresses the process for revoking 
the certification of a repair station that is determined to pose an 
immediate risk to security as identified on a case-by-case basis, as 
well as the opportunity to appeal such a determination.
    In closing, TSA strongly encourages all interested parties and 
stakeholders to review the proposed rule when published and welcomes 
public comment. Upon finalization of the rule, TSA will have the 
trained inspectors, logistical information, and plans to quickly follow 
through with the audits of foreign repair stations within 6 months as 
required by the 9/11 Act.
    Thank you for the opportunity to discuss our plans for ensuring the 
security of repair stations and our proposed regulations. I would be 
pleased to respond to your questions.

    Ms. Jackson Lee. Let me thank you very much for your 
testimony, and we will proceed with questions. I do want to 
acknowledge the presence of Ms. Titus of Nevada and thank her 
for being here. I thank the witnesses for their testimony, and 
I will remind each Member that he or she will have 5 minutes to 
question the panel. I will now recognize myself for questions.
    Mr. Scovel, let me begin by framing the understanding or my 
understanding of this issue so that it is very clear. First of 
all, one report was issued in 2003 and one report was issued in 
2008. Congress acted in between but to this new administration 
this is an issue that has been on-going. It certainly raises a 
lot of questions because of the climate in which we live in 9/
11.
    The second premise or given that I would like to suggest is 
it would be untenable for any of us to think that airlines 
would not be dutiful and attentive to the issue of the repair 
status of their aircraft. It is the basis of their work 
product. It is the source of their income, and I would expect 
that they would be as dutiful as an industry could be expected.
    I will hear from their representative on the second panel, 
and I would imagine that there is a need for all of us to 
improve whatever we might do. But we have a higher 
responsibility here in Government, and that responsibility is 
to set the framework of security in this post-9/11 era.
    So if you would give me an assessment of the 
conflictedness, as I perceive it, between the working 
relationship between TSA and FAA, tell me what the gaping holes 
are. In your report, although it has been submitted into the 
record, articulate what you saw that gave rise to, and what the 
inspector general's office saw, that gave rise to these 
indicting reports?
    Mr. Scovel. Thank you, Madame Chairwoman. If I may, I would 
like to begin by clarifying, I hope, my role in this. As this 
committee well knows, TSA up until 2003 belonged to the 
Department of Transportation. It was my predecessor's 
responsibility while TSA belonged to DOT to conduct both an 
audit with regard to safety oversight by FAA of repair 
stations, as well as security measures that TSA was taking 
while it belonged to DOT.
    The 2003 report that you referred to, Madame Chairwoman, 
was issued literally on the eve of TSA's departure from my 
department and its move to the Department of Homeland Security. 
It was originally classified SSI because of the sensitive 
security information contained in it. It has been redacted by 
TSA itself, redacted copies have been provided to the 
committee. We posted it on my Web site just this week, and I 
have asked that it be inserted in the record.
    As part of that security review, we inspected 12 domestic 
repair stations and 10 foreign repair stations. Like TSA, we 
tried to analyze the security picture depending on where a 
particular repair station was located. Was it on commercial 
airport property, general aviation airport property or was it 
off airport property completely?
    If I could summarize, four repair stations that were 
located aboard commercial airports, and this was only 8 percent 
of the stations that we had occasion to examine, we found poor 
perimeter access controls, such as gaps in fencing, unmanned 
entrance points. Photos of those are contained in the report 
that has been provided to the committee.
    We found ineffective controls for monitoring individual 
movement once on airport property, for instance, repair station 
vehicles denoted simply with a magnetic placard while driving--
--
    Ms. Jackson Lee. Are you on the foreign soil or domestic 
soil?
    Mr. Scovel. That was at both, ma'am.
    Ms. Jackson Lee. All right.
    Mr. Scovel. Domestic and foreign. We also found 
insufficient procedures to ensure the safety and security of 
individuals performing repairs. In other words, lack of 
background investigations. Also, within--although it was well 
after a year after the September 11 attacks, we found written 
security procedures that had not yet been updated.
    Ms. Jackson Lee. This was found on foreign soil repair 
stations, foreign repair stations?
    Mr. Scovel. It was found on both, both domestic and foreign 
repair stations.
    Ms. Jackson Lee. And the report of 2008?
    Mr. Scovel. Our 2008 report focused primarily on FAA safety 
oversight of repair stations. Safety, as you pointed out in 
your opening statement, ma'am, has an integral link to 
security. Any safety vulnerability can be exploited and turned 
into a security threat.
    What we found primarily in our 2008 report was that FAA, 
despite its efforts beginning in 2007 to create a report that 
carriers could submit to it, to submit detailed data that would 
allow FAA to fulfill its safety responsibilities, those reports 
were incomplete and inadequate and what I have characterized as 
leaving FAA fundamentally ineffective in its safety oversight 
responsibilities.
    Ms. Jackson Lee. Since 2003 and when their departure moved 
them to DHS, can you just quickly--and I just have another 
question before I conclude to the other witnesses--quickly what 
have you seen as the oversight relationship that TSA has had 
dealing with the security question?
    Mr. Scovel. Well, again to clarify, my responsibility has 
not been to look at TSA after 2003. However, I can speak to 
FAA's----
    Ms. Jackson Lee. If you would look at it from that 
perspective then, FAA's coordination and their work product 
after 2003 on this issue.
    Mr. Scovel. Yes. FAA has been collaborating with TSA. 
Through the years, and as you pointed out, the current proposed 
rule is quite late, but FAA has been working with TSA to 
prepare that rule.
    I would like to point out that as important as that 
proposed rule may be, perhaps just as important and is 
contained in our 2003 report as well as in the Vision 100 
legislation, is the requirement for TSA and FAA to conduct a 
comprehensive security review and audit of all repair stations.
    That hasn't been done in the last 5 or 6 years. It won't 
get done until after the proposed rule becomes final. TSA and 
FAA will have to work carefully on that and to do it 
effectively FAA must have a report that will--from carriers--
that will show what type of maintenance, in what volume and 
where it is being conducted so that both TSA and FAA can target 
its limited inspector resources.
    Ms. Jackson Lee. Very quickly, Mr. Dalbey and Ms. Farkus, 
how do you plan to work together on the audits and for TSA to 
respond to the audits and for FAA to do the audits? How do you 
expect to do that? You have a notice of a rulemaking, but what 
are you doing now?
    Mr. Dalbey.
    Mr. Dalbey. Actually, I would like to defer to Ms. Farkus 
on this particular question.
    Ms. Jackson Lee. Ms. Farkus.
    Ms. Farkus. Well, during this time, we have not been 
waiting for the rule to become finalized. We have worked with 
FAA very closely to gain an understanding of the types of 
repair stations that are involved in this industry.
    So the time has given us a chance to understand the 
industry, to consult with partners via listening sessions and 
written comments and also make inroads with the foreign 
governments because since we do not have a legislation or a 
regulation to allow us to see these foreign repair stations, we 
negotiated with our partners and asked as part of our program 
that we already have in place where we inspect foreign airports 
and foreign air carriers.
    So because of the relationships we had with our foreign 
partners and with FAA with their relationships, we were able to 
go and pay site visits to several of the locations, as well as 
corporate headquarters and industry conferences where we could 
gain insights and understanding and work forward.
    So what our program office has been doing is taking the 
information from the FAA's databases to put that into our work 
plan so that as we are preparing what our work schedule is for 
the rest of the year, we are going to initiate those audits so 
that we can then feed that information back through FAA.
    Ms. Jackson Lee. Well, let me--I want to yield to Mr. 
Olson. I will just end on this comment and come back to you. I 
can only hear that as you are speaking, and as I will reach 
back to Mr. Dalbey in the second go-around that employees are 
still operating in foreign repair stations without the 
appropriate background checks.
    I have heard nothing on that. Perimeter issues, I have 
heard nothing on that. So let me just allow you at another 
point as I yield to Mr. Olson for his questioning. Thank you.
    Mr. Olson is recognized for 5 minutes.
    Mr. Olson. Thank you, Madame Chairwoman. Mr. Dalbey, in 
your testimony you indicate that before issue a certificate to 
a foreign repair station, the FAA must determine that the 
facility meets the same performance criteria as domestic repair 
stations. What specific requirements are necessary to issue a 
certificate to a foreign station?
    What would be the reason not to issue a certificate to a 
foreign station? As you mentioned, it seems like there is a 12 
to 24 month that foreigns have to get reapplied and re-
approved, but that doesn't apply to the domestic carriers. I 
would just like to elaborate on some of those issues, sir.
    Mr. Dalbey. Yes, sir. Thank you for the opportunity. The 
foreign repair stations and the domestic repair stations are 
identical in regards to they must have the same tools, 
facilities, equipment, the same kind of recordkeeping system 
program.
    Our sort of site for certification standards are the same 
whether you are looking at a foreign or domestic repair 
stations. As far as the type of work being performed, they must 
hold adequate facilities, for instance, for a certain type of 
or size of aircraft, they must be able to house whatever kind 
of equipment they are working on.
    Their personnel must be trained. They must have a roster of 
supervisory and inspection personnel. Those inspection and 
supervisory people must have the same level of knowledge. So 
from a performance standpoint, it makes no difference whether 
you are on foreign soil or domestic soil as far as the 
technical issues and the performance standards that we look at.
    Mr. Olson. Well, thank you very much for that answer, sir.
    Ms. Farkus, I would like to ask you, in your testimony you 
state that, ``TSA's proposed rule on repair station security 
will codify the scope of TSA's existing inspection program and 
TSA's authority to enter, inspect, and test property, 
facilities, and records concerning repair stations.''
    Can you tell us how TSA currently conducts inspections of 
foreign stations? Can you describe the collaboration between 
TSA and FAA on the inspection of foreign repair stations?
    Ms. Farkus. Thank you for the opportunity to address that 
question. Under the security regulations, as you noted, we 
would be emphasizing the access control identification of 
employees and ways to develop contingency plans in case there 
were an event. What would be done, the name of security 
coordinators so we that would have a 24/7 point of contact.
    Because we have not had any regulations to have the 
authority to go into these stations, we have done this on a 
collaborative basis with the foreign government. Because they 
are FAA-certificated stations that also gives us an inroad to 
be able to talk to them about their structures.
    For the foreign repair stations, there are over 700 of them 
and over 300 of them are located on an airport, which would 
then be subjected to the airport security program and many of 
the needs of the perimeter control, the access control 
identification badges would be covered under that airport 
security program.
    So what we have done in conjunction with FAA is to look at 
a risk-based approach and tier the highest threat areas, those 
stations that based on a known threat in the region or the 
country, based on using current intelligence information that 
tells us that there are bad things happening within an area.
    The type of work that is being done at the repair station 
because what we learned was you may have a three-person shop 
that does one small type of repair, if it is just seat cushions 
or to a small component of the aircraft.
    But you may have a big station where there are thousands of 
employees that are working on engines and are working airframes 
and there are the ones where we feel that they are more of a 
threat, the proximity to the airport. So it is an evolving 
process, it is constantly changing based on the intel threat 
that is out there and based on the changing nature of the 
information that we receive.
    Mr. Olson. Thank you very much for that answer.
    Mr. Dalbey, we have got one more for you. How do the safety 
inspectors decide which stations, which foreign stations to 
visit?
    Mr. Dalbey. That is a very good question, sir. Not too long 
ago we kind of went based on just raw numbers. In other words, 
we had so many requirements to go out and do so many 
observations. We have a requirement to do at least one repair 
station visit per year regardless of whether you are foreign or 
domestic.
    The past few years we have developed a risk-based system 
that basically categorizes based on several technical 
indicators of what kind of raw data we are seeing. It is called 
the Repair Station Assessment Tool. Those numbers are plugged 
into that tool and it tells the inspectors and the applicable 
regions which repair stations need more than one visit per year 
for instance.
    We have also enhanced a tool that we have had around for a 
long time, the Safety Performance Analysis System, which we 
call SPAS. That is data that all inspectors--that is a tool 
that all inspectors feed data into and it also has a lot of 
risk indicators that come up.
    It is really the way that a repair station inspector for 
instance that is assigned to repair stations solely in 
Singapore puts in data and every Airline Certificate Management 
Office, the FAA inspectors assigned to that are able to go in 
there and look at that kind of data to determine their risk.
    We really look at the two layers up-front as there is 
always a set of inspectors assigned to the repair station and 
there is another separate, dedicated group of inspectors that 
are assigned to the airline fleet that monitor the maintenance 
from that angle. So they determine hand-in-hand which ones need 
to be visited first through a very formal risk assessment 
process.
    Mr. Olson. It sounds like every one of them gets at least 
one visit a year and some of them based on a threat get more 
visits, you know, up to--what is kind of the high end? I mean, 
who gets five, six, seven, eight per year or?
    Mr. Dalbey. There are several that probably get four, five, 
six. We do some teamed inspections. For instance if you have 
three different airlines that are going into a large repair 
station someplace you many times have inspectors from all three 
of those airlines' FAA teams that will go at one time in 
conjunction with the repair station inspector that is assigned 
that duty from an FAA standpoint and they will do teamed visit.
    Another factor may be if you have an airline that operates 
four, five different fleets, if they are putting different 
seats of aircraft into a repair station, the person responsible 
from the FAA on that fleet will make that trip on his fleet and 
he may be followed the next week by somebody who is responsible 
for the other fleet for instance.
    So there is not a typical average, it really depends on the 
size of the repair station, the complexity of the repair 
station, the different type of work being performed, the 
numbers of fleets that go into that and also the risk 
assessment.
    Mr. Olson. Well, thank you very much for that answer.
    Madame Chairwoman, I yield back my time.
    Ms. Jackson Lee. Ms. Titus is recognized for 5 minutes, the 
gentlelady from Nevada.
    Ms. Titus. Thank you, Madame Chairwoman.
    As you may know, I represent southern Nevada, Las Vegas, 
and in my district tourism is the most important driver of the 
economy. So every day we are proud to welcome visitors from all 
around the world, we want them to come to Las Vegas and 
experience what all we have to offer.
    Because they are coming from all around the world, I am 
more interested in your relations with foreign governments. You 
mentioned, I think you said we are making inroads with foreign 
governments.
    But I wonder if Ms. Farkus, if you would elaborate how you 
plan to work with foreign governments once the rule is 
implemented. How the process will change after the rule is and 
give us some assurance this is going to be kind of a mutual 
relationship going forward that will be successful?
    Ms. Farkus. Thank you very much. TSA currently has TSA 
representatives, international industry representatives and 
transportation security specialists deployed around the globe. 
It is about 22 TSA representatives, about seven international 
industry representatives working with the airlines and with 
industry associations that are internationally based.
    Then the transportation security specialists are those who 
then inspect airports, air carriers, and will also be 
conducting the foreign repair station, so many of the 
relationships with the governments are developed between the 
government entities and the airport authorities in the civil 
aviation side and then the airline side. In some cases it will 
be a new person that we will dealing with as far as the foreign 
repair station is concerned because every country is kind of 
constructed a little different.
    In some cases, it may be part of the airport authority, the 
civil aviation factor and other--it may require us to build a 
relationship with another department within that government. We 
will work with State Department and with the embassy contacts 
to make those in-roads.
    As we have been doing that already over the--as the rule 
has been through the system, we have prioritized that approach, 
so it is based on that success we have had with our past 
foreign relationships with our representatives around the globe 
that we are just building another process in place.
    So we have a way that we have been able to develop these 
processes, harmonize efforts that way we have worked across 
with our European partners in particular. We have worked to 
kind of standardize things the way we operate so that we don't 
have to inspect as many times there because we are confident of 
the measures that they have put in place because of the 
information sharing that is done.
    That allows us to take those resources and then place them 
in areas where it is a higher risk or that we are doing 
something new like the foreign repair stations that gives us a 
chance to balance our resources and address the threats as they 
are developing around the world.
    Ms. Titus. Thank you.
    I would also just ask you, Mr. Dalbey, it took you 7 years 
to come up with this rule. I believe it was 7 years, and I 
understand there is a lot of frustration among many of the 
stakeholders, many of the people affected, many of the people 
who want to have a voice in this rulemaking process. Can you 
assure us going forward as this rule is considered and put into 
place that there will be more opportunity for that kind of 
input?
    Mr. Dalbey. Ma'am, are you referring to the TSA notice of 
proposal?
    Ms. Titus. Right, exactly.
    Mr. Dalbey. I really can't address the TSA's rule, madame.
    Ms. Titus. I am sorry. Well, maybe I should ask Ms. Farkus 
then.
    Ms. Farkus. You have our commitment that we will continue 
the outreach and expand efforts particularly now that the 
notice is out for comment. We are eager to work with others. We 
learned a lot through the time that this was being developed.
    We didn't just wait. We knew we had work to do. We were 
responding as was mentioned earlier. There were so many threats 
that kept kind of rising up that we had to put our resources to 
other things. But because we have placed those additional 
layers of security in place in other areas, we are now able to 
focus more fully on the foreign repair station. We look forward 
to the comments that we receive, and we will learn from 
industry and stakeholders in making this rule flexible and 
viable for all.
    Ms. Titus. Okay.
    Thanks, Madame Chairwoman.
    Ms. Jackson Lee. Thank you. Let me raise this point in 
conclusion, if I may, and refer to the opening statements that 
you made and my opening statement that I am really concerned 
about the coordination between TSA and FAA in establishing an 
effective security oversight program.
    In particular in the case of TSA, identifying incorrect or 
security discrepancies which is what my last final questionings 
was about, or worse, identifying the security problems that are 
of an immediate danger. The rule states that TSA will 
communicate in writing to FAA, which will then suspend or 
revoke the certification depending on the circumstances.
    I need to know that this interagency process will work 
quickly and without fail. I don't want a letter sitting on 
someone's inbox for 2 weeks before action is taken. So this is 
a question for Mr. Dalbey and Ms. Farkus.
    Mr. Dalbey will start first. Please tell me how this 
notification will occur, at what levels in the two agencies and 
if there is an interagency memorandum of understanding that 
will be required?
    Mr. Dalbey. Madame Chairwoman, as of right now there is no 
memorandum that exists but I can assure the FAA is very well 
practiced in issuing letters of suspension, letters of 
revocation. We will work closely with TSA to establish a 
process so there are no questions.
    We look at these types of actions as an emergency type of 
situation, and we need to go beyond the fact that it goes to 
somebody's inbox. I would say a very streamlined set of 
processes that when something of this nature occurs, we get 
people, a crisis team together and do that very quickly. We are 
very willing to work with TSA on having a very fast-tracked 
process for that.
    Ms. Jackson Lee. So you don't have a protocol for that 
right now?
    Mr. Dalbey. No, Madame Chairwoman.
    Ms. Jackson Lee. Do I understand that the foreign repair 
stations have doubled? Is that accurate, over the last--we were 
at 300, and we are at 700, is that right, Ms. Farkus?
    Ms. Farkus. The current number is a little over 700.
    Ms. Jackson Lee. What percentage of that as you indicated 
on the--contained in large airport facilities?
    Ms. Farkus. Three hundred.
    Ms. Jackson Lee. Where are the others located?
    Ms. Farkus. Some are located in industrial parks in nearby 
areas but I would have to get more details on----
    Ms. Jackson Lee. So they are off-site.
    Ms. Farkus. They are off-site.
    Ms. Jackson Lee. Do your inspectors or have your inspectors 
in this coordination before the rulemaking have made trips to 
those off-site facilities?
    Ms. Farkus. We have made trips to some off-site facilities.
    Ms. Jackson Lee. What is the difficulty for getting to 
them?
    Ms. Farkus. It depends on the country and the situation and 
the way the government is constructed in the country. I could 
give you some more specifics of particular regions if you would 
like.
    Ms. Jackson Lee. I would like that for the committee, 
please. The nexus that you use to inspect is where domestic 
airlines, U.S.-based airlines travel or utilize those 
facilities and or foreign airlines that fly to the United 
States? Is that how you make the assessment?
    Ms. Farkus. Any airport that is the last point of departure 
to the United States, we have the authority to----
    Ms. Jackson Lee. But on the foreign repair stations that 
are off-site, industrial buildings how do you assess inspecting 
them?
    Ms. Farkus. Until we get the rule in place, we really had 
no authority. It was done on a basis of----
    Ms. Jackson Lee. But you use as a criteria that those 
planes will be flying into the United States or flying 
anywhere?
    Ms. Farkus. That would be for the United States.
    Ms. Jackson Lee. Right.
    Ms. Farkus. So it would be--yes.
    Ms. Jackson Lee. So if they are off-site, your criteria 
would be that they are repairing flights coming in to the 
United States----
    Ms. Farkus. Yes, ma'am.
    Ms. Jackson Lee [continuing]. Whether they be a domestic-
based airline or foreign-based airline.
    Ms. Farkus. Yes, ma'am.
    Ms. Jackson Lee. Well, let me ask Mr.--let me let you 
comment on the question that I just raised about coordination, 
sitting on the desk because, again, I go back to the point that 
as we speak there are probably security breaches in terms of 
background checks and a number of others, and I would raise 
that as a concern.
    How would you address the communication, that TSA will 
communicate in writing and will then work with them--to FAA, 
excuse me, and how you will work with them and how 
communications will not languish?
    Ms. Farkus. We currently have a process that is in place 
for the notification when an airport does not meet security 
requirements. Our intention is to use that program to model how 
we would identify when a foreign repair station is not meeting 
the security standards.
    That is a process that I am committed to making sure that 
it moves through the system and doesn't languish. That we do 
everything we can to ensure that our organizations are working 
together. I have my administrator's commitment to facilitate 
that process as well.
    Ms. Jackson Lee. We do recognize, again, the role that each 
of you are playing in terms of working with departments of 
which you are still resourcing or structuring. I appreciate 
that. But I would like to know whether or not you expect that 
TSA will seek to increase its budget, which I would make the 
request for these inspections?
    Ms. Farkus. At this point we have worked within our budget 
and expect to work in our budget to address the threats and 
look at the risk-based model to then put the resources that we 
available to us to those highest threat areas.
    Ms. Jackson Lee. So would you recognize the fact that there 
is a sense of urgency and that you may need to increase the 
budget and increase the numbers of inspectors so to increase 
the number of inspections because you are talking about 700 
potential sites?
    Ms. Farkus. We are already training more inspectors that 
are domestically based so that we can then use them in 
international inspections. It is also part of their career 
development because this way when someone is a domestic 
inspector, they also get trained to do international work. It 
is a step up for them and an increase in their 
responsibilities.
    Continuing classes are on-going, so we will have several--
there are over 600 inspectors that are domestically-based so we 
can then use that to pool. So until we exhaust that resource, 
until we look at the actual model of how many times we can send 
somebody out, we are going to work within our existing 
President's program.
    Ms. Jackson Lee. This committee would like to have a report 
as you move forward in the rulemaking on your assessment of the 
utilization of the 600 inspectors and the need to increase the 
numbers as I, frankly, believe they may be overloaded. 
Inspections are required more than once and that means there 
will have to repeat visits and assessments and certification.
    Let me quickly just address these points to you, Mr. Dalbey 
and thank you. The report in 2008 said this, and I think I will 
do it in a way that you will be able to just comment on it.
    Specifically the report from the inspector general said, 
``The FAA did not have an adequate system for determining how 
much and where the most critical maintenance occurs, did not 
have a specific policy governing when CMO inspectors should 
visit repair stations performing substantial maintenance.''
    ``Did not require inspectors to validate that repair 
stations have corrected deficiencies identified in air carrier 
audits,'' which I think is one of the more indicting 
indictments. ``Four, did not have adequate controls to ensure 
that inspector document inspection findings in the national 
database and review related findings by other inspectors.''
    ``As a result FAA could not effectively target its 
inspection resources to those repair stations providing the 
highest volume of repairs, which caused deficiencies at repair 
stations to go undetected or reoccur and prevent inspectors 
from obtaining sufficient data to perform comprehensive risk 
assessments.''
    That could be in safety but it is certainly life or death 
in security. I might say safety as well, but our jurisdiction 
here is security. What have you done or do you intend to do or 
have you done on these issues?
    Mr. Dalbey. Thank you, Madame Chairwoman. First of all, we 
take the recommendations from the inspector general's office 
very seriously. We do appreciate their level of insight, and we 
go through these very succinctly and in the case of the 2008 
report, we agreed with every recommendation that the IG made.
    We have been doing a lot of work towards correcting those 
problems. We have recently drafted and are very close to 
publishing some internal FAA guidance to our inspectors that 
really showcases every one of those issues and makes it 
mandatory, for instance, on when a CMO Inspector, which is one 
who is assigned to an airline, has to go out and look at a 
repair station that we have identified as an essential 
maintenance provider, which was another thing in the IG's 
report that we could not figure out who was doing what type of 
work.
    By us classifying certain very high-risk work as essential 
maintenance, that is probably the biggest step we have taken to 
get in line with the recommendations. We have also in addition 
to the guidance that we are getting ready to give to our 
inspectors, are issuing two advisory circulars.
    Advisory circulars are documents that are information to 
inspectors as well as operators, which means they apply to 
repair stations and the air carriers. In those documents, we 
will outline very specifically how an air carrier has to list 
the essential maintenance providers in what part of their 
manual.
    We do that through a legal document called the ``Air 
Carriers Operation Specifications.'' We are very close to 
having all of those published, out on the street and have our 
inspectors, which is equally as important, trained on how to 
interpret and how to apply the policy that are in those 
documents.
    So we very much appreciate the comments and the 
recommendations from the inspector general. We have had a long-
standing dialogue with his office and the lead auditors. They 
have helped us along the path.
    We have had some bumps along the road where our first 
attempts at some of these did not work. We listened to the 
inspectors. We listened to the IG and came back and this is our 
course of action, and we really think it is going to close out 
every one of his recommendations in a very positive light.
    Ms. Jackson Lee. Mr. Olson, did you have anything 
concluding on this panel?
    Mr. Olson. Madame Chairwoman, thank you very much. I do 
note that we have a vote going on down there on the floor, and 
so I will be very brief. I just want to ask Ms. Farkus one more 
question because I know you feel neglected today. We haven't 
really talked to you very much.
    But in your testimony you stated ``TSA found that foreign 
repair stations take security seriously and voluntarily perform 
security measures that are consistent with the standards that 
TSA is proposing.'' So I just wanted to ask you, based on your 
inspections and site visits, can you tell us if the security 
standards vary from country to country and/or region to region?
    Ms. Farkus. Thank you very much. Yes. What we did learn 
though that they do take security seriously. It is a part of 
their business. It is ingrained in that because if they don't 
maintain security at their stations, they are not going to get 
the business and they are not going to stay in operation.
    It does vary by region. It does vary by country. We have 
not visited all of them yet but those that we have, we learned 
some best practices from them and that was one of the good 
results that we had out of these outreach visits was to create 
a list of best practices and procedures.
    What we found from many of the places where they were very 
interested and if there was something they could do better. So 
it is a wide range of issues, it is a wide range of 
characteristics, and we are looking forward to working with the 
partners to improve it across the board.
    Mr. Olson. Thank you very much for that answer, ma'am.
    Then thank all of you for testifying today; greatly 
appreciate your time and expertise.
    Ms. Jackson Lee. Thank you very much, Mr. Olson. Let me 
just finish--thank you, Mr. Olson----
    Mr. Olson. Thank you, Madame Chairwoman.
    Ms. Jackson Lee [continuing]. With this question. Mr. 
Scovel, do you think at this point with the 700 foreign repair 
stations that we are at a point where we know the background of 
all of the employees that may be utilized in this important 
task that these airlines have responsibility for and the 
Government has responsibility for?
    Mr. Scovel. Madame Chairwoman, I am certain we don't know 
that. In connection with our 2008 safety oversight report, we 
visited foreign repair stations. We know that background 
investigations are not being conducted on all employees at 
those locations.
    Ms. Jackson Lee. Do you sense a sense of urgency, Mr. 
Scovel?
    Mr. Scovel. Yes, absolutely. I understand TSA's resource 
restraints, the need to prioritize in terms of threat. Clearly 
though, as this committee and America knows, we remain a Nation 
at war. Our enemy is implacable.
    They have demonstrated the intent and capability to target 
U.S. civil aviation repair stations. As we noted in our 2003 
report based on an incident in Singapore in late 2001, repair 
stations are on their target list. We have to assume that, 
Madame Chairwoman.
    Ms. Jackson Lee. So quickly, if you had one task coming 
from your reports collectively, 2003, 2008 as an IG, 
recognizing the firewalls that you exist in but the committee 
is asking, what would you say the first charge will be? Now, we 
know we have a rulemaking going on, but what would be the first 
charge or an important list of charges to get started between 
FAA and TSA?
    Mr. Scovel. Ma'am, first item on the to-do list remains to 
FAA to structure a report from the carriers so that critical 
maintenance and the volume of it and the specific locations can 
be identified both so that FAA can satisfy its safety 
responsibilities and so that TSA can target its scarce 
inspector resources, which are quite limited right now, to 
those locations that need the most attention.
    Ms. Jackson Lee. So getting a report from our airline 
friends to FAA, the one that FAA secures, that establishes 
where these stations are so that a prioritization could be 
begin or it could go on. Then we would be able to use scarce 
resources and build a database to possibly ask for more 
resources for doing this important work. Is that my 
understanding?
    Mr. Scovel. That is correct, ma'am, thank you.
    Ms. Jackson Lee. Mr. Dalbey, do you have a sense of 
urgency?
    Mr. Dalbey. Madame Chairwoman, I would defer as far as the 
security question to the TSA. But I would like to comment that 
we have helped them in the past by providing our databases with 
them, and we will continue to do so.
    Ms. Jackson Lee. But do you have a sense of urgency on this 
matter?
    Mr. Dalbey. Yes, ma'am. As I----
    Ms. Jackson Lee. Is that the sense that--is that FAA--do 
you think that is a sense of--that they have established that 
this is important?
    Mr. Dalbey. Absolutely, Madame Chairwoman.
    Ms. Jackson Lee. So can you secure the document that the 
inspector general is asking, which I think is common sense in 
your partnership with TSA is to secure from the airlines a 
report on the existence of the foreign repair stations so that 
an analysis of resources could be named?
    Mr. Dalbey. We will actually have most of that I believe 
when we have the essential maintenance providers that is 
mandated through their operations specifications under 
maintenance----
    Ms. Jackson Lee. What time frame is that?
    Mr. Dalbey. I believe probably early next year we will 
have----
    Ms. Jackson Lee. Well, this committee is going to ask for 
you to report back on whether or not you could accelerate that 
time frame in light of the work that we expect TSA to do.
    Mr. Dalbey. Yes, ma'am, I will----
    Ms. Jackson Lee. Could you please provide us with that 
report?
    Mr. Dalbey. Yes, ma'am.
    Ms. Jackson Lee. Ms. Farkus, do you have a sense of 
urgency?
    Ms. Farkus. Yes, ma'am I do. This is one of our highest 
priorities to work through the rulemaking process and then 
implement. As I said, we had been conducting the outreach 
services, and we have those continued to plan through the 
months until the rule is final.
    I currently have a team in Switzerland looking at the 
stations there, and I have a team going to Mexico in December 
to look at some foreign repair stations there. So we will----
    Ms. Jackson Lee. You understand, however, that we, as we 
speak, have stations notwithstanding the good work of our 
airlines that are without inspection. You understand that?
    Ms. Farkus. Yes, ma'am.
    Ms. Jackson Lee. And that there are individuals working 
without background checks?
    Ms. Farkus. Yes, ma'am.
    Ms. Jackson Lee. What I would like for you to do as you do 
this rulemaking, which has a legal time frame, is I would like 
TSA to provide this committee with a report back on the 
potential increased number of inspectors and/or inspections and 
what approach TSA is going to take to assess that need.
    Ms. Farkus. Yes, ma'am.
    Ms. Jackson Lee. Let me thank all of you for your very 
thoughtful testimony and instructive testimony. This panel will 
be excused, and I look forward to your submissions in writing. 
Thank you so very much. We will start with the second panel 
after the votes. This committee is now in recess. Thank you.
    [Recess.]
    Ms. Jackson Lee. Call the hearing back to order and thank 
the witnesses for their patience. I welcome our second panel of 
witnesses. Our first witness is Mr. Robert Roach, general vice 
president of Transportation at the International Association of 
Machinists and Aerospace Workers. IAM represents 6,000 
machinists with several U.S. carriers.
    Our second witness is Mr. Robert Gless, assistant director 
at the Transport Workers Union of America. TWU represents 6,500 
American Airlines mechanics. That airline is the only air 
carrier that does not outsource aircraft maintenance to foreign 
repair stations.
    Our third witness is Mr. Chris Moore, chairman of the 
Teamsters Aircraft Mechanics Coalition. The Teamsters represent 
18,500 aircraft mechanics with 10 airlines.
    Our fourth witness is Mr. Basil Barimo, Barimo, excuse me. 
Mr. Barimo is vice president at the Air Transport Association 
of America. Mr. Barimo leads ATA's Operations and Safety 
Division.
    Our fifth witness is Mr. Christian Klein. He is the 
executive vice president, the Aeronautical Repair Station 
Association. He oversees its communications and industry 
outreach activities.
    Without objection, the witness' full statements will be 
inserted in the record, and I will now ask each witness to 
summarize his statement for 5 minutes. Let me also thank each 
of you for the time you have taken to come.
    Your input is a particularly important and strategic part 
of how we review the security risks and safety concerns of 
foreign repair stations.
    So again, we thank you, and we will begin with Mr. Roach, 
who is now recognized for 5 minutes.

   STATEMENT OF ROBERT ROACH, JR., GENERAL VICE PRESIDENT OF 
   TRANSPORTATION, INTERNATIONAL ASSOCIATION OF MACHINISTS & 
                       AEROSPACE WORKERS

    Mr. Roach. Thank you, Chairwoman Jackson Lee, and Members 
of the committee for the opportunity to speak to you today. My 
name is Robert Roach, Jr., General Vice President of 
Transportation for the Machinists Union.
    I am appearing at the request of International President R. 
Thomas Buffenbarger. The Machinists Union is the largest 
aviation union in North America, representing 180,000 airline 
and aerospace workers in almost every classification, including 
mechanics, flight attendants, ramp service workers, passenger 
service employees, and production workers.
    I would like to say on behalf of the 25,000 members that we 
have in Texas, thank you for calling this hearing and 
especially our Continental flight attendants which are based in 
Houston, Texas.
    Each year, U.S. airlines increase their use of overseas 
aircraft repair facilities. I don't know of anyone who has ever 
said that maintenance is outsourced to overseas facilities to 
improve safety.
    The first step in securing an aircraft is restricting the 
people who have access to it. Criminal background checks in the 
United States. None are required in the overseas repair 
stations. An al Qaeda member was employed at the Singapore 
repair station that performed maintenance on U.S. aircraft at 
the time he was arrested in 2001.
    Pre-employment and on-going random drug and alcohol testing 
is another employment requirement for U.S. aircraft 
technicians. It makes no sense that the FAA does not require 
the same people working at overseas repair stations.
    Aircraft maintenance manuals, which technicians are 
required to have with them when making repairs are printed in 
English. The personnel at overseas repair stations are not 
required to read English, creating a major safety problem.
    IAM members regularly report aircraft returning from heavy 
maintenance performed overseas with dangerous malfunctions. 
Recent reports including mis-wired engine indicators, critical 
sensors covered up, and parts installed backwards.
    I would like to say at this point that many of the aircraft 
was indicated earlier that these, there were checks on these 
aircraft before they are put back in service, and I will say 
that I have an expert with me, Dave Supplee, from US Airways 
that can indicate that these planes are in service when many of 
these things are detected by our mechanics after they are back 
in service.
    There is a danger of bogus parts making their way on to the 
U.S. aircraft without proper oversight. There is no uniform 
facility security requirements. There is a potential for 
sabotage, the smuggling of weapons on-board aircraft without 
proper security practices.
    FAA inspectors do not inspect foreign repair stations on a 
regular basis. When they do, they must announce their 
inspections in advance. In the United States, surprise 
inspections are allowed. Non-certified FAA stations are 
utilized by many airlines but the FAA has no oversight and does 
not monitor these stations at all.
    U.S. airlines have increased their outsourced maintenance 
from 29 percent in 2000 to 45 percent today, with much of it 
going overseas. But FAA oversight has not kept pace 
jeopardizing our aviation system.
    There was indication about loss of employment, one facility 
in Indianapolis was the most modern facility in the world and 
that is now operating at 25 percent because United Airlines 
chose to take their work out of that location and farm that 
work out, to subcontract that work, much of it going overseas.
    Since 9/11, we have tightened up the physical security at 
U.S. airports and require airline employees to pass stringent 
background checks but allowing U.S. aircraft to be maintained 
in unsecure facilities by unqualified, often unknown personnel 
creates a gaping hole in the security of our air transportation 
system.
    The lowest cost and not the highest safety standards is a 
driving force when airlines choose maintenance repair stations. 
The Machinists Union believes that there should be only one 
level of safety and security, the highest, for the U.S. 
aircraft regardless of where they are maintained.
    If overseas repair stations and their employees cannot meet 
the same requirements as airlines based in the United States, 
Congress should mandate this work be performed without our 
borders or where there is more FAA regulation oversight.
    Thank you again, and we look forward to answering any 
questions you may have.
    [The statement of Mr. Roach follows:]

                Prepared Statement of Robert Roach, Jr.
                           November 18, 2009

     Thank you Chairman Thompson, Subcommittee Chairwoman Jackson Lee, 
and Members of this committee for the opportunity to speak to you 
today. My name is Robert Roach, Jr., General Vice President of 
Transportation for the International Association of Machinists and 
Aerospace Workers (IAM). I am appearing at the request of International 
President R. Thomas Buffenbarger. The Machinists Union is the largest 
aviation union in North America, representing 180,000 airline and 
aerospace workers in almost every classification, including mechanics, 
fight attendants, ramp service workers, passenger service employees and 
production workers.
    Each year U.S. airlines increase their use of overseas aircraft 
repair facilities. As a result, major airlines have closed U.S. 
maintenance bases leaving thousands of people out of work, and in the 
case of United Airlines closing its Indianapolis maintenance facility, 
taxpayers on the hook for the construction bill.
    I don't know of anyone who has ever said that maintenance is 
outsourced to overseas facilities to improve safety. The true reason is 
undeniable--airlines send maintenance work overseas because they can 
get the minimum maintenance performed for the least amount of money. 
Although an airline may experience immediate cost savings from sending 
maintenance work overseas, the long-term cost to our Nation can be 
devastating. There has never been room for error in the aviation 
industry.
    I have been asked to discuss the security aspect of overseas 
maintenance operations, but a discussion of facility security must 
include their personnel, maintenance track record, and FAA oversight.
    The first step in securing an aircraft is restricting the people 
who have access to it. Technicians working at U.S.-based aircraft 
maintenance facilities are required to undergo FBI criminal background 
checks. In fact, technicians with a criminal infraction that is in no 
way indicative to being a potential security risk can be rejected for 
an airport security pass, thereby denying them employment.
    However, neither the FAA nor the airlines require people working at 
overseas facilities to undergo criminal background checks. No security 
clearance is required. U.S. airlines contract with overseas facilities 
that do not vet their employees, yet allows them unfettered access to 
the most critical parts of an aircraft.
    There is no way for the FAA or individual airlines to know if the 
person performing critical safety maintenance on U.S. aircraft at 
overseas facilities are qualified technicians or al Qaeda operatives. 
This is not as far-fetched as it sounds, as an al Qaeda member was 
employed at a Singapore repair station that performed maintenance in 
U.S. aircraft at the time he was arrested in 2001. In the United 
States, passengers go through more stringent security checks than the 
people overseas repair stations hire to maintain our aircraft.
    Pre-employment and on-going random drug and alcohol testing is 
another employment requirement for U.S. aircraft technicians. The 
reason behind this is clear--we don't want impaired people maintaining 
our aircraft. It makes no sense that the FAA does not require the same 
of people working at overseas repair stations.
    English is the language of aviation. Pilots and air traffic 
controllers at all major international airports are required to speak 
English for safety reasons. Aircraft maintenance manuals, which 
technicians are required to have with them when making repairs, are 
printed in English. But personnel at overseas repair stations are not 
required to read English, creating a major safety problem. Imagine how 
difficult it is repair a machine as complex as a modern jet aircraft 
with instructions written in a language you do not understand.
    IAM members regularly report aircraft returning from heavy 
maintenance performed overseas return with dangerous malfunctions. 
Recently, US Airways aircraft 444, a 737-400, had heavy maintenance 
performed in El Salvador. It returned with its engine indication wires 
crossed. This meant that if there was an emergency in the No. 1 engine 
there would have been an indication in the cockpit that the problem was 
with the No. 2 engine. If the pilots shut down the No. 2 engine 
thinking the problem was there, it would have left the aircraft with 
only one engine operating--the one with the malfunction. This 
potentially catastrophic mistake was corrected by US Airways mechanics 
in Tampa on September 30, 2009. Pilots are trained to trust their 
instruments. When the instruments lie, the lives of everyone on board 
are at risk.
    On October 1, 2009, a warning light in the cockpit of US Airways 
aircraft number 0316 indicated the forward entry door was open at an 
altitude of 1,000 feet. When IAM mechanics investigated they found an 
El Salvador repair station left modeling clay covering the door's open/
close sensor target. Another US Airways aircraft recently lost pressure 
because the same El Salvador repair station installed a door snubber 
backwards. Both aircraft had been deemed airworthy by the repair 
stations in El Salvador.
    Additionally, if overseas repair stations do not have the same 
strict oversight as domestic facilities, we cannot know if the parts 
they install are genuine FAA- and manufacturer-approved parts, or 
inferior bogus parts. This problem has been growing in recent years.
    The system is broken, and we look toward Congress to fix it.
    There are no uniform requirements for securing overseas facilities 
where U.S. aircraft are maintained. Securing the aircraft means 
securing the facility. Access to U.S. aircraft operating areas is 
strictly controlled by local, State, and the Federal requirements. But 
the measures enacted in the United States to secure our aircraft do not 
apply when they are sent overseas. Major maintenance checks performed 
overseas sometimes last for weeks, providing ample opportunity for 
sabotage or the planting of contraband.
    The terrorist bombing of a Pan Am 747 over Scotland was the result 
of an altitude-sensitive bomb placed aboard the aircraft on an earlier 
leg of the flight. It is not hard to imagine how a similar device can 
be hidden on an aircraft that has been stripped for heavy maintenance 
in an unsecure facility by unknown personnel.
    Additionally, illegal drugs have been smuggled into this country 
hidden on-board aircraft bound for the United States. If that can 
happen, a bomb or other weapon can similarly be placed on-board an 
aircraft for retrieval by accomplices in flight or on the ground.
    Airlines can utilize both FAA-certified and non-certified 
facilities to perform maintenance. The FAA's oversight of overseas-
certified repair stations is insufficient to ensure compliance with 
what limited regulations there are. On-site visits are few and far 
between. When an FAA inspector does plan to visit an overseas facility, 
the visit is announced months in advance, allowing the facility to 
prepare for the inspection. This is in contrast to the unannounced 
inspections of U.S. repair stations.
    While oversight of FAA-certified stations is inadequate, regulation 
of non-certified stations is non-existent. A December 2005 DOT 
Inspector General report \1\ found that non-certificated facilities 
operate without the same regulatory requirements as certificated repair 
stations and operate with no limit on the type or scope of work they 
can perform. The report also verified that the FAA does not monitor the 
maintenance performed at non-certificated facilities and the air 
carriers' training and oversight of these facilities are inadequate. 
The report further revealed that the FAA did not know the extent of 
maintenance performed at non-certificated repair facilities.
---------------------------------------------------------------------------
    \1\ DOT Inspector General Report Air Carriers' Use of Non-
Certificated Repair Facilities, December 15, 2005 (AV-2006-031).
---------------------------------------------------------------------------
    U.S. airlines have increased their outsourced maintenance from 29 
percent in 2000 to 45 percent today \2\ with much of it going overseas. 
But FAA oversight has not kept pace, jeopardizing our aviation system.
---------------------------------------------------------------------------
    \2\ Bureau of Transportation Statistics, Change in Passenger 
Airline Maintenance Employees Per Aircraft and Percent of Maintenance 
Spending Outsourced* 2007-2008, http://www.bts.gov/press_releases/2009/
bts026_09/html/bts026_09.html.
---------------------------------------------------------------------------
                               CONCLUSION

    Since 9/11 we have tightened up the physical security at U.S. 
airports and required airline employees to pass stringent background 
checks. But allowing U.S. aircraft to be maintained at unsecure 
facilities by unqualified, and often unknown, personnel creates a 
gaping hole in the security of our air transportation system.
    The lowest cost, not the highest safety standards, is the driving 
force when airlines choose maintenance repair stations. The Machinists 
Union believes there should be only one level of safety and security--
the highest--for U.S. aircraft, regardless of where they are 
maintained.
    Having strict requirements for U.S. operations is meaningless if 
they can be avoided by an airline flying their planes to another 
country with lesser requirements and little or no FAA oversight. Less 
oversight means less money. If overseas repair stations and their 
employees cannot meet the same requirements as the airlines' U.S.-based 
operations, Congress should mandate that work be performed within our 
borders where there is more FAA regulation and oversight.
    Thank you. I look forward to your questions.

    Ms. Jackson Lee. Thank you very much, Mr. Roach, for your 
testimony.
    Mr. Gless, you are now recognized for 5 minutes.

STATEMENT OF ROBERT GLESS, ASSISTANT DIRECTOR OF THE TRANSPORT 
        WORKERS UNION OF AMERICA, AIR TRANSPORT DIVISION

    Mr. Gless. Thank you. There we go. The Transport Workers 
Union of America, members of the AFL-CIO, on behalf of our 
200,000 active and retired members in the transportation 
industry including aircraft mechanics at American Airlines and 
American Eagle--roughly about 15,000--appreciate the 
opportunity to appear before the committee.
    Now, today I would like to speak on the issue of aircraft 
maintenance and the need to strengthen security to help ensure 
safety at overseas aircraft repair stations. There are three 
major concerns that we have with regard to repair work 
performed at foreign aircraft repair stations.
    First, we have long held that our belief is that the same 
standards should be applied to repair work being performed on 
U.S.-bound aircraft regardless of work being done in the United 
States or abroad.
    Second, the loss of thousands of American jobs to 
outsourced foreign repair mechanics further weakens our U.S. 
economic security and finally, we have a concern regarding 
security breaches within and around the perimeters of 
facilities which can lead to sabotage.
    Thus we have four recommendations regarding aircraft 
maintenance that we see as necessary to ensure safe and secure 
air travel for the American public. No. 1, require that all 
maintenance on aircraft used in domestic United States service 
be done in FAA-certified repair facilities.
    No. 2, require as a condition of the FAA certification that 
all repair stations meet the same standards. That would 
include, not limited to, the drug and alcohol testing and the 
Part 65 Mechanic Certification.
    No. 3, reconfigure the FAA inspection and oversight to 
place a greater scrutiny on those repair stations whose order 
to terminate pose the greatest risk to safety and security.
    No. 4, require as a condition to FAA certification that all 
repair stations be subject to unannounced FAA inspections. The 
FAA shall be prohibited from certifying and repairing any 
repair station in any countries that prohibit unannounced 
inspections and shall immediately revoke any existing 
certifications in such countries.
    Ironically, in-house work performed by the carriers has 
received the greatest scrutiny and FAA oversight but it poses 
the least risk because of the following factors. The carriers 
have shouldered the responsibility to monitor themselves and 
are mindful of the in-house regulations that they are required 
to meet.
    In addition, the FAA regulations hold the domestic station 
aircraft mechanics to a high standard including having all 
aircraft mechanics being subject to the drug and alcohol 
testing, to pass the criminal background checks and undergo the 
unannounced inspections by FAA inspectors at any time and at 
any place.
    Additionally, the mechanics who work on aircraft are 
usually certified under Part 65 and those that sign off the 
work on the aircraft, this certification is required. If all 
the aircraft flown in domestic U.S. service was serviced by the 
aircraft mechanics, then our concern of the lack of oversight 
would be null.
    American Airlines, the prominent carrier of the mechanics 
that the TW represents does not outsource their work. Instead, 
American has been a trend setter and brought in additional 
income by in-sourcing work. Our mechanics employed by American 
Airlines are held to a standard unlike workers at overseas 
repair stations that have no background checks, are not subject 
to alcohol and drug testing, or to the unannounced inspections 
by the FAA.
    The 2003 Homeland Security mandate that resulted from the 
attacks on September 11 set in place that security rules for 
foreign and domestic repair stations to ensure they would be 
equally applied. Much to our dismay, 6 years later the security 
rules still have not been implemented. We feel that this is 
simply unacceptable given the security risks at hand.
    The suggestion is not that foreign countries must adapt and 
change their laws to institute widespread drug and alcohol 
testing and criminal background checks. However, to achieve the 
highest level of safety and security, we ask the Federal 
Government and Congress to require those that work on U.S. 
aircraft to meet the same standards that the FAA imposes on the 
U.S. domestic stations.
    From a security standpoint, it is not hard to imagine how 
certified foreign aircraft repair stations could supply 
terrorists with an opportunity to sabotage U.S. aircraft that 
will eventually re-enter the U.S. air space.
    On July 14, 2009, Senator Claire McCaskill issued a press 
release stating information that indicates that a 2003 DOT IG 
report revealed that the United States has found a member of al 
Qaeda working at a foreign aircraft repair station in 
Singapore.
    This example provides a demonstrated risk to our National 
security due to the weakened oversight of foreign aircraft 
repair stations. This kind of clear and direct risk of our 
National security must be enough to prompt action.
    We call on TSA to consult with stakeholders regarding 
implementation of a robust and effective security program that 
will begin to build the firewall to protect the American flying 
public against any future aviation-related attacks.
    Such a security program would need to include protocols 
dealing with background checks of workers, drug and alcohol 
testing, and overall perimeter safety and security measures for 
all repair stations working on U.S.-bound aircraft.
    The alternative of double standards, strict scrutiny where 
already layers of protection are applied versus the lack of 
oversight where layers of protection are absent, is merely a 
roadmap for disaster and a direct impact to the integrity of 
the American worker.
    Thank you for this opportunity to testify before you today. 
I am available to answer any questions you may pose regarding 
my testimony. Thank you.
    [The statement of Mr. Gless follows:]

                   Prepared Statement of Robert Gless
                           November 18, 2009

    The Transport Workers Union of America, AFL-CIO (TWU) on behalf of 
its 200,000 active and retired members in the transportation industry, 
including airline mechanics at American Airlines and American Eagle, 
appreciates the opportunity to appear before this committee.
    In particular, I thank the committee for its diligence in passing 
H.R. 2200, the Transportation Security Administration Authorization. We 
look forward in the second half of this 111th Congress to the 
successful passage in the Senate of an FAA Reauthorization Bill that 
will end the double standard that is applied to aircraft maintenance at 
outsourced stations, as opposed to that performed at the carriers 
themselves.
    Specifically today I would like to speak on the issue of aircraft 
maintenance and the need to strengthen security to help ensure safety 
at overseas aircraft repair stations. We represent some 15,000 workers 
who fall within this category of interest. Since the number of 
maintenance that is done overseas has increased greatly since 2003 we 
feel that we should do all that we can to close any security gap.
    There are three major concerns that we have with regard to repair 
work performed at foreign aircraft repair stations. First, we have long 
held that our belief is that the same standards should be applied to 
repair work being performed on U.S.-bound aircraft regardless if the 
work is done in the United States or abroad. Second, the loss of 
thousands of American jobs to outsourced foreign repair mechanics 
further weakens our U.S. economic security. And finally, we have a 
concern regarding security breaches within and around the perimeters of 
facilities which can lead to sabotage. Thus, we have four 
recommendations regarding aircraft maintenance that we see as necessary 
to ensure safe and secure air travel for the American public:
    1. Require that all maintenance on aircraft used in domestic U.S. 
        service be done in FAA-certified repair facilities.
    2. Require, as a condition of Federal Aviation Administration (FAA) 
        certification, that all repair stations meet the same 
        standards. This would include, but not be limited to, drug and 
        alcohol testing and Part 65 aircraft mechanic certification.
    3. Reconfigure FAA inspection and oversight to place the greatest 
        scrutiny on those repair stations whose audits determine to 
        pose the greatest risk to safety and security.
    4. Require, as a condition of FAA certification, that all repair 
        stations be subject to unannounced FAA inspections. The FAA 
        shall be prohibited from certifying any repair station in any 
        countries that prohibit unannounced inspections and shall 
        immediately revoke any existing certifications in such 
        countries.
    We understand that the committee shares jurisdiction with some of 
these issues and that the FAA Reauthorization Bill addresses them as 
well.
         aircraft used in domestic united states/in-house work
    Ironically, in-house work performed by the carriers has received 
the greatest scrutiny and FAA oversight, but it poses the least risk 
because of the following factors:
    1. The carriers have shouldered the responsibility to monitor 
        themselves and are mindful of the in-house regulations that 
        they are required to meet.
    2. The Federal FAA regulations hold domestic station aircraft 
        mechanics to a high standard, including having all aircraft 
        mechanics being subject to random drug and alcohol testing, all 
        aircraft mechanics passing criminal background checks and all 
        aircraft mechanics being subject to unannounced inspections by 
        FAA inspectors at any time and any place.
    Additionally, mechanics who work on aircraft are usually certified 
under Part 65 and for those that sign off on work done on the aircraft, 
this certification is required. If all of the aircraft flown in U.S. 
domestic service was ``serviced'' by a domestic aircraft mechanic, then 
our concern of the lack of oversight would be null.
    However, as reported in the FAA's report AV-2008-090, ``Air 
Carriers Outsourcing of Aircraft Maintenance'' issued September 30, 
2008, out of the nine air carriers that were reviewed (AirTran Airways, 
Alaska Airlines, America West Airlines--aka US Air, Continental 
Airlines, Delta Air Line, JetBlue Airways, Northwest Airlines, 
Southwest Airlines, and United Airlines), 71 percent of their heavy 
airframe maintenance check work was outsourced to a foreign repair 
station. Since 2003, this trend of sending aircraft maintenance work 
out of the in-house domestic stations has more than doubled in 
statistical data from 34 percent in 2003 to 71 percent in 2007.
    American Airlines, the predominant air carrier of mechanics that 
TWU represents, does not outsource their work. Instead, American has 
been a trendsetter and brought in additional income by insourcing 
maintenance work. Our mechanics employed by American Airlines are held 
to a high standard unlike workers at overseas repair stations that have 
no background checks, are subject to no alcohol and drug testing and 
are not subjected to unannounced inspections by that FAA.

           OUTSOURCING OF REPAIR WORK POSES AN ECONOMIC RISK

    We believe that there are many issues related to physical security 
and National security that relate directly to the outsourcing of 
aircraft repair work, but an often ignored aspect is the serious trend 
that this kind of outsourcing has created and the results that trend 
has had on us all. The United States continues to recover from what 
many economists refer to as ``The Great Recession.'' As of October 
2009, the Bureau of Labor Statistics reported that the unemployment 
rate was 10.2 percent. The United States has lost millions of jobs and 
we have seen what effect job losses have on our economic stability and 
economic security. Just recently, TWU local 530 learned that several 
hundred of its members who perform maintenance work for American 
Airlines would be laid off, as the Airline is forced to consolidate and 
downsize its fleet. This kind of job loss, whether as a result of our 
current economic condition or the increasingly common practice of 
outsourcing repair work, has the potential to extend this period of 
economic weakness for the United States.

                    FOREIGN AIRCRAFT REPAIR STATIONS

    Irresponsible regulatory changes in 1988 have allowed the FAA to 
certify foreign aircraft repair stations to work on U.S. aircraft not 
engaged in international travel and to do so under different standards 
than that applied to domestic stations. The concerns stemming from the 
aftermath of September 11, 2001, with the safety and security of U.S.-
flagged aircraft, demands that we take seriously the lack of oversight 
of aircraft maintenance being performed outside the reach of domestic 
in-house stations, which is being performed without having the same 
rigorous and demanding standards applied.
    The 2003 FAA Authorization, pursuant to 2003 homeland security 
prescriptions that resulted from the attacks on September 11, 2001, set 
in place that security rules for foreign and domestic repair stations 
should be changed to ensure that security protocols are applied 
equally. Much to our dismay, 6 years later, the security rules still 
have not been implemented. As it stands, as of November 16, 2009 the 
security rules were finally released. We feel that this is simply 
unacceptable given the security risks at hand.

                   DRUG AND ALCOHOL TESTING STANDARD

    Most, except for a handful of foreign aircraft repair stations, do 
not require personnel who work on aircraft destined for U.S. domestic 
air service to pass a drug and alcohol test. The U.S. Congress has 
determined that drug and alcohol impairment is an unacceptable risk for 
airline passengers, and has deemed domestic airline mechanics as 
``safety-sensitive personnel,'' which requires that they are subject to 
robust drug and alcohol testing.
    The Supreme Court has since upheld the requirement of drug and 
alcohol testing on the grounds of safety for persons deemed ``safety-
sensitive personnel.'' Yet, even though domestic airline mechanics have 
been deemed as ``safety-sensitive personnel,'' mechanics at foreign 
repair stations continue to evade this label. It is our belief that 
those who work on U.S.-bound aircraft, whether in the United States or 
abroad, must be deemed ``safety-sensitive personnel.''
    Presently, in-house air carrier mechanics are held to the highest 
safety standards and receive the majority of FAA inspection oversight. 
However, foreign aircraft repair station air carrier mechanics are less 
scrutinized, held to a lower standard, and receive almost no FAA 
inspection oversight. It is our belief that at least the same safety 
guidelines should be followed at foreign aircraft repair stations and 
domestic in-house repair stations.
    The suggestion is not that foreign countries must adapt and change 
their laws to institute wide-spread drug and alcohol testing and 
criminal background checks. However, to achieve the highest level of 
safety and security, and to ensure that we are meeting the safety 
standards that the U.S. flying public believes that they are receiving, 
the Federal Government-Congress must require those that work on U.S. 
flag-flying aircraft to meet the same safety and security standards 
that the FAA imposes on U.S. domestic stations.

                         CERTIFICATION STANDARD

    Obtaining a Part 65 mechanic's license is a time-consuming and 
demanding process that ensures the mechanic's level of expertise. The 
FAA requires mechanics that perform a number of jobs on U.S. aircraft 
at domestic aircraft repair stations to go through it. However, there 
is no similar requirement on the mechanics who perform maintenance at 
foreign aircraft repair stations and we feel that this is a critical 
area of concern. If the FAA feels that American workers at domestic 
repair stations must have a Part 65 mechanic's license, then we believe 
they must view this certification as necessary to safely do the job and 
thus it should be required of all mechanic's working U.S.-bound 
aircraft.

                           SECURITY STANDARD

    Since the horrific events of September 11, 2001, layer upon layer 
of security has been deemed the norm of protecting our aircraft and 
preventing another attack. Additional layers of protections and 
restrictions were imposed on domestic aircraft mechanics and other 
airline workers. These rules were put into place because policymakers 
believed that it was important to maintain security.
    Limiting and controlling access areas to aircraft, imposing 
criminal background checks, and checking terrorist watch lists are all 
rules that were imposed on aircraft mechanics working domestically in 
the United States by Congress and the Transportation Security 
Administration (TSA). Rules were also issued that would revoke airman 
certificates, which include a Part 65 mechanic certification of any 
individual determined by the TSA to pose a threat to aviation security.
    Yet no entity of the U.S. Government, the FAA, TSA, or any other 
agency requires any type of background check for workers at foreign 
repair stations who repair or maintain U.S. aircraft. At least at 
domestic contract repair stations, Part 65 mechanics are covered by the 
TSA/FAA rule. While in theory the TSA/FAA rule applies to Part 65 
mechanics located overseas, foreign stations are allowed to work on 
U.S. aircraft without having any certified mechanics; as such, from a 
practical standpoint, this rule does not apply to foreign stations.
    Loose or nonexistent security at foreign aviation facilities 
provides a window of opportunity for terrorists with designs on U.S. 
air travel. From a security standpoint, it is not hard to imagine how 
certified foreign aircraft repair stations, working on U.S. aircraft, 
could provide terrorists with an opportunity to sabotage U.S. aircraft 
or components that will eventually re-enter the United States. On July 
14, 2009, Senator Claire McCaskill issued a press release stating 
information that indicates that a 2003 DOT IG report revealed that the 
United States had found a member of al Qaeda working at a foreign 
aircraft repair station in Singapore. This example provides a 
demonstrated risk to our National security due to the weak oversight of 
foreign aircraft repair stations. If this kind of clear and direct risk 
to our National security is not enough to prompt action, then I'm not 
sure what is.
    We call on TSA to consult with stakeholders regarding 
implementation of a robust and effective security program that will 
begin to build the firewall to protect the American flying public 
against any future aviation related attacks. Such a security program 
would need to include protocols dealing with background checks of 
workers, drug and alcohol testing, and overall perimeter safety and 
security measures for all repair stations working on U.S.-bound 
aircraft.

                  STANDARD OF OVERSIGHT AND INSPECTION

    The standard of scrutiny of oversight and inspection of foreign 
repair stations is not only inadequate, it is somewhat non-existent.
    A 2003 report by the Department of Transportation Inspector General 
found that though foreign repair stations were widely used by U.S. 
carriers, some FAA-certified foreign repair stations are not inspected 
at all by FAA inspectors because civil aviation authorities review 
these facilities on behalf of the FAA. The consequence of such is that 
sufficient data to determine what was inspected is lacking.
    Foreign repair stations that the FAA inspected fare about the same. 
One reason is that the law only requires a recertification inspection 
every 2 years. Since 1988, when the rules were loosened, there were 
only 200 such stations; as of September 30, 2008, there were 709 such 
stations. With this rapidly increasing amount of stations, oversight 
has not kept pace with the amount of FAA inspectors needed to inspect 
them.
    Therefore, whether it is because: (1) Civil aviation authorities 
review foreign repair stations instead of FAA inspectors or (2) there 
are too many foreign repair stations for the relatively few FAA 
International Field Officers to maintain a consistent inspection 
standard or (3) that foreign repair stations are not subjected to the 
same unannounced visits which ensure around the clock adherence to the 
standards. As a result, no true oversight and inspection exists for the 
majority of foreign repair stations or mechanics.
    The Gap must be closed. The U.S. Government must ``mind the gap'' 
and close loopholes that continue to jeopardize the safety of those 
that depend on the industry. This lack of oversight has consequences.

               BACKGROUND ON TWU AND AIRCRAFT MAINTENANCE

    In 1989, the TWU testified against the FAA's rule change. 
Unfortunately, we were right in predicting that the elimination of 
limits on movement of maintenance would result in the outsourcing and 
loss of tens of thousands of jobs to overseas facilities. And, we were 
also right in predicting that the FAA would not have the capacity to 
give proper oversight on the work and that the work and workers who 
performed it would not be subject to the same regulatory requirements 
the U.S. mechanics function under. We were labeled ``exaggerators.''
    The work that TWU managed to secure at American happens not to be 
the norm. In ``Air Carriers Outsourcing of Aircraft Maintenance,'' the 
FAA report of September 30, 2008, American Airlines, which was the 
largest U.S. air carrier, ``was not included in outsourcing data since 
it retained its heavy maintenance as opposed to making a significant 
shift to outsourcing.'' Thus, it is clear; including American Airlines 
in the data would have skewed the results.
    The 18 heavy checks performed at American Airlines are all done in-
house at bases in Tulsa, and Alliance Fort Worth, and until recently, 
Kansas City. Being the only major carrier that still does the majority 
of its own maintenance, at a time when other carriers are outsourcing 
their maintenance, has its issues.
    The alternative of double standards, strict scrutiny where already 
layers of protection are applied vs. the lack of oversight where layers 
of protection are absent, is merely a roadmap for disaster. That is 
disastrous for the American flying public as well as disastrous for the 
integrity of the American worker.
    Thank you for the opportunity to testify before you today. I am 
available to answer questions that you may pose regarding my testimony 
today.

    Ms. Jackson Lee. Mr. Gless, thank you for your testimony.
    Mr. Moore, you are recognized for 5 minutes and welcome.

    STATEMENT OF CHRIS MOORE, CHAIRMAN, TEAMSTERS AIRCRAFT 
  MECHANICS COALITION, INTERNATIONAL BROTHERHOOD OF TEAMSTERS

    Mr. Moore. Okay, let us hit the on button this time, sorry. 
Madame Chairwoman, thank you for the opportunity to testify 
today on this vital issue of security at foreign repair 
stations.
    My name is Chris Moore, and I am the Chairman of the 
Teamsters Aviation Mechanics Coalition. We represent 18,500 
mechanics across 10 airlines. I hold an A&P license and have 
been a mechanic at Continental Airlines' IAH facility since 
1986.
    Recently I had the opportunity to tour the Aeroman facility 
in El Salvador about 30 miles south of San Salvador. One of the 
Teamsters' major concerns regarding the foreign outsourcing of 
aircraft maintenance is that the work is being done in 
facilities located in developing nations where security, 
safety, and quality standards are lax and inadequately 
enforced.
    In June, Southwest Airlines decided to offshore four lines 
of heavy maintenance to the Aeroman facility. The labor unions 
that represent workers at that airline were invited to send 
representatives to El Salvador for the validation flight.
    I was asked to represent the Teamsters Union on the trip. 
We were required to travel with an armed escort and there were 
armed guards patrolling outside many of the businesses in town 
and then this raises a serious question to me about the 
security in this Central American country.
    We spent approximately 12 hours at the airport over a 2-day 
period. My overall impression of this operation is that Aeroman 
is a large line maintenance operation and not the overhaul 
facility it is portrayed to be. Although Aeroman claims to have 
machining, sheet metal fabrication, and composite repair, what 
they actually have is limited capabilities in these areas.
    For instance, the machine shop that I was shown only had a 
couple of milling machines and a lathe, an odd saw here and 
there. The sheet metal shop consisted of about 10 bending and 
rolling machines located on the mezzanine between two tail 
docks in the hangar. You get the picture of where I am going 
with this.
    Aeroman and its airline customers would have you believe 
this is a first-class MRO. That was not my observation. So the 
question begs to be asked, what else is an exaggeration? With 
limited equipment, does work get outsourced to other facilities 
and how is that tracked? So are they subcontracting?
    Where is the U.S. oversight on background checks and drug 
testing in this country that has very little infrastructure? At 
the entrance to the facility, security personnel traded our 
I.D.s for visitor badges. The guard shack was staffed with 
armed guards. There was no electronic card reader to verify 
that even the escort badges were valid.
    The airport is located in a tropical rainforest. It is 
surrounded by a perimeter chain-link fence with barbed wire on 
top. It does not appear to be patrolled and there is no access 
area cut around the outside of the fence. During my 2 days on 
the property, I observed no perimeter patrols at all.
    Aviation safety and security are built on layer upon layer 
of redundancy. Those layers are being removed one by one. Is 
there real control over who is actually working on our aircraft 
in a developing economy? When the aircraft is stripped bare and 
there are literally thousands of places where explosives and 
other contraband can be hidden, are we willing to take that 
chance?
    The average wage in El Salvador is about US$350 a month. An 
Aeroman mechanic can make as much as US$1,200 per month. What 
will a man or woman do to keep this job?
    Witness the NPR report by Dan Zwerdling on Aeroman that ran 
last month where he reported an Aeroman mechanic was forced by 
his supervisor to install the wrong fasteners in a critical 
part of the aircraft structure.
    This speaks volumes about how easily these workers can be 
manipulated. What kind of pressure can a terrorist group, for 
example, bring to bear on one of these workers if they decide 
to use a U.S. aircraft as a weapon once it is back in the U.S. 
air space?
    While touring the facility, the DEA and local police did a 
K-9 narcotics and explosive sweep of the Southwest aircraft we 
were taking back home. Southwest officials advised me that this 
would happen with all of their aircraft prior to the plane's 
return to the United States.
    However, there are no rules requiring this and it is 
significant to note that the Aeroman rep claimed that Southwest 
Airlines is the first of their customers to request such 
searches. It should be noted at the time of my visit, US 
Airways had four aircraft in various stages of overhaul and 
JetBlue had one and to my knowledge, neither of these airlines 
conduct similar drug or explosives sweeps.
    Finally, the only way to ensure security is to raise the 
standards of all foreign repair stations to that of the United 
States. The proposed rulemaking goes a long way towards this 
goal. However, checks of workers at foreign repair stations 
need to be equivalent to U.S. standards.
    In light of the DOT's inspector general is finding that 21 
non-certified repair stations were performing work critical to 
airworthiness, the TSA should consider extending security 
standards to those facilities.
    The FAA, TSA, DSA, or DEA should work closely together to 
eliminate overlapping inspections but should ensure that both 
safety and security inspections are carried out on a no-notice 
basis as is the case in the United States.
    U.S. aviation safety is recognized as the best in the 
world. We should not allow any further degradation of that 
proud and expected record in a quest to shore up the bottom 
line or increase profits. Aviation security and safety is not 
about money. It is about preventing accidents, protecting the 
flying public, and saving lives.
    Thank you again for the opportunity to express our views.
    [The statement of Mr. Moore follows:]

                   Prepared Statement of Chris Moore
                           November 18, 2009

    Madam Chairman, Ranking Member Dent, and Members of the 
subcommittee: Thank you for the opportunity to testify today on this 
vital issue of security at foreign repair stations. My name is Chris 
Moore, and I am chairman of the Teamsters Aircraft Mechanics Coalition. 
I hold an A and P license and have been a mechanic at the Continental 
Airlines IAH facility since 1986.
    The Teamsters Union Airline Division represents more than 43,000 
airline employees, including 18,500 mechanics across 10 airlines, 
customer service agents, reservationists, simulator technicians, ramp 
agents, stock clerks, dispatch personnel, flight attendants, and 
pilots. As such, our members are very concerned about the maintenance 
and repair of aircraft that they and their families fly on every day. 
The rapid growth of foreign repair stations can be partly attributed to 
the economic turmoil that has embroiled the airlines in the last 
decade.
    The United States airline industry has been in a constant state of 
financial turmoil since the Fall of 2000, when the decline in the 
technology industry caused a precipitous decline in business travel 
demand. The September 11, 2001 terrorist attacks greatly exacerbated 
the industry's financial troubles, as airlines incurred significant 
losses resulting from the temporary shutdown of the Nation's airspace 
and passengers' apprehension about flying following the attacks.
    Congress sought to alleviate the airline industry financial crisis 
shortly after the September 11 attacks, when it passed the Air 
Transportation Safety and System Stabilization Act, Pub. L. No. 107-42, 
115 Stat. 230 (2001). Through that statute, Congress provided $5 
billion in direct emergency assistance/grants to compensate air 
carriers for their losses stemming from the attacks. Congress also 
authorized the Department of Transportation to reimburse air carriers 
for increases in their insurance premiums and provided billions of 
additional dollars for loan guarantees.
    Nevertheless, in the wake of record high fuel prices earlier this 
year and the Depression-era crash of the Nation's financial markets, 
the airline industry is still in economic tatters, and is projected to 
lose $5.2 billion this year. Despite passenger capacity reductions and 
recent cuts in fuel costs, the turbulent economic markets may continue 
to wreak havoc upon and potentially further destabilize the industry.
    While Congress has provided significant public assistance to the 
airline industry over the last several years and may have to provide 
even more next year, many of the carriers that benefited from such 
taxpayer assistance have increasingly outsourced critical airline 
maintenance jobs to foreign repair stations. Indeed, according to the 
DOT Inspector General's September 30, 2008 report on the outsourcing of 
aircraft maintenance, airlines have more than doubled the amount of 
repairs and heavy maintenance work they outsource, from 34 percent in 
2003 to 71 percent in 2007.
    This huge increase in outsourcing of aircraft maintenance is 
alarming for a number of safety, security, and economic reasons. First, 
the Federal Aviation Administration simply is not equipped to audit the 
work that is performed at foreign repair stations with the same level 
of intensity as they can within our borders. Second, the outsourcing of 
aircraft maintenance to foreign repair stations has set in motion a 
dynamic in which workers in developing nations will do what is required 
of them in order to stay employed, thus diminishing the safety and 
security of the flying public. My testimony today will concentrate on 
the security issues involving this increasing use of foreign repair 
stations in providing maintenance and repairs to U.S. aircraft.
    Foreign repair stations are not held to the same security standards 
as domestic repair stations. Despite several mandates by Congress--the 
earliest of which dated to 2003--to establish a security standard for 
repair stations and audit foreign stations, the Transportation Security 
Administration (TSA) has yet to issue a proposed rule. Foreign repair 
stations, certificated by the FAA, are covered by FAR Part 145, as are 
domestic repair stations, but critical exceptions are made in personnel 
and security standards. Airline-owned maintenance bases are held to the 
most stringent standards under Part 121 of the Federal Aviation 
Regulations. Mechanics employed directly by airlines are subject to 
drug and alcohol testing and criminal background checks as a condition 
of employment; their hours of work are regulated by duty-time 
limitations; and most must hold an FAA repairman certificate or an 
Airframe and/or Powerplant (A&P) certificate. No person deemed a 
terrorist threat by the TSA may hold any type of certificate.
    Even if some foreign facilities claim they background check their 
workers and utilize a drug and alcohol testing protocol, those programs 
can only be as good as their government's systems allow. For example, 
in the case of Mexican truck drivers being permitted to travel beyond 
the currently permitted commercial zones, the United States has 
required that Mexican truck drivers be subject to a random drug testing 
program just as U.S. drivers are. While this was first proposed in 
1995, to date, there is no lab in Mexico that has been certified to 
test these specimens. The Department of Transportation's Inspector 
General, in several audit reports, has continually cited chain of 
custody problems as well. One might argue that drug and alcohol testing 
is a pure safety issue, as it deals with the possibility of faulty 
workmanship due to impairment, but in countries where drug cartels are 
prevalent, the use of drugs may speak volumes about the vulnerability 
of a person working at a foreign repair station.
    In the matter of issuing Free and Secure Trade (FAST) credentials 
to Mexican drivers to take advantage of that program, the TSA, not the 
Mexican government, conducts the background checks on those drivers. 
Does the Mexican Government lack the capability and or the databases to 
do so? Canada conducts its own background checks for the FAST program. 
While the Teamsters Union strongly supports a background check for 
workers at foreign repair stations who provide maintenance or repair 
services on U.S. aircraft, we are equally concerned about the process 
for doing so.
    I recently had the opportunity to visit a Maintenance Repair 
Overhaul (MRO) facility in a developing economy. That facility is 
Aeroman, located at the El Salvador International Airport, about 30 
miles south of the city of San Salvador. It is surrounded by a tropical 
rain forest. According to FAA data, Aeroman employs a total of 1,200 
people, including 712 non-certificated mechanics and 167 certified 
mechanics. The mechanics reportedly hold Salvadoran licenses that are 
recognized by the European Union Safety Agency. As you may know, one of 
the Teamsters' major concerns regarding the foreign outsourcing of 
aircraft maintenance is that the work is being done in facilities 
located in developing nations where security, safety, and quality 
standards are lax and inadequately enforced. Aeroman's facility 
definitely fits this description.
    In June of this year Southwest Airlines made the decision to 
offshore four lines of heavy maintenance to the Aeroman facility in El 
Salvador. Southwest airlines is known for its good employee relations 
and in that spirit invited all of the labor unions that represent 
workers at the airline to send a representative to El Salvador for the 
``Validation Flight''. As Chairman of the TAMC, I was asked to 
represent the Teamsters Union on the trip. Once in country we split in 
to a couple of groups. I stayed with the maintenance reps and toured 
the facility while the others went to the U.S. Embassy to work out the 
logistics of Southwest's new venture. I was a bit taken aback by the 
fact that we were required to travel with an armed escort and that 
there were armed guards patrolling outside many of the businesses in 
town. This raises serious questions in my mind about the security in 
this Central American country.
    We spent approximately 12 hours at the airport over a 2-day period. 
We were given a tour of the facility that allowed us to walk through an 
aircraft that was in work, although no one was working it at the time 
and it was completely gutted. Throughout the tour of the facility, we 
were escorted by a representative of Aeroman. This made it difficult to 
approach the workers to ask them questions about their working 
conditions and to obtain their perspectives.
    My overall impression of the operation is that Aeroman is a large 
``Line Maintenance'' operation and not the overhaul facility it is 
portrayed to be. If you walk the floor at the United Airlines SFO base 
you will understand what a true MRO should look like. Although Aeroman 
claims to have machining, sheet metal fabrication, and composite 
repair, what they actually have is limited capability in these areas. 
In fact if you read their repair station certificate, it states that 
they only have limited capability in these areas. For instance, the 
machine shop I was shown had only two milling machines, a lathe, and 
the odd saw here and there. The sheet metal shop consisted of about 10 
bending, rolling, and shearing machines located on the mezzanine 
between two tail docks in one of the hangars, essentially on the floor. 
The emergency evacuation slide shop is an empty room! The composite 
repair area is much the same. Aeroman and its airline customers would 
have you believe that this is a first class MRO. That was not my 
observation. So the question begs to be asked--what else is an 
exaggeration? When the Aeroman representative was asked about drug 
testing the answer came back, absolutely. Where is the oversight? At 
Continental the specimen is collected on-site and FAA drug abatement 
protocol is followed to the letter. To what standards are foreign MRO's 
being held? On the subject of background checks, in a country that has 
very little infrastructure, how can you validate a background check? 
Again, where is the oversight and what procedures are followed?
    The only security I saw was at the gate coming into the facility 
where we traded our ID for a visitor badge. There was a guard shack 
manned by armed guards. There was no electronic card reader to verify 
that even the escort badges were valid. In the United States, the 
escort must have a valid ID in order to bring visitors onto the 
facility. You must pass the background check to obtain this badge. In 
Houston, the background check to obtain your security clearance goes 
back to age 16. The airport is surrounded by a perimeter fence of chain 
link with barbed wire and/or razor wire topping it. It is, from the 
looks of it, rather dated. I could only see the fence in areas that I 
toured and along the highway. It does not appear to be patrolled, as 
there is no access area cut around the outside of the fence as you have 
in the United States. During my 2 days on the property, I never 
observed any perimeter patrols.
    My concern is this. Aviation safety and security are built on layer 
upon layer of redundancy. We are seeing those layers being removed one 
by one. Is there real control over who is actually working on our 
aircraft in a developing economy? When the aircraft is stripped bare 
and there are literally thousands of places where explosives or other 
contraband can be hidden, are we willing to take that chance? The 
average wage in El Salvador is US$350.00. An Aeroman mechanic can make 
as much as US$1,200.00 per month. What will a man or woman do to keep 
this job? Witness the NPR report by Dan Zwerdling on Aeroman that ran 
in October 2009, where he reported that an Aeroman mechanic was forced 
by his supervisor to install the wrong fasteners in a critical part of 
the aircraft structure. These Hy-Shear fasteners are designed to fail 
under stress, thus protecting the actual structure from failure. This 
speaks volumes about how easily these workers can be manipulated. El 
Salvador is a country where the Mexican drug cartel can bug not only 
the presidential offices but also his personal residence. The U.S. Drug 
Enforcement Agency is woefully undermanned--only one agent for the 
entire country at the time of my visit. What kind of pressure can the 
cartel bring to bear on one of these workers if they decide to make a 
point to the United States by destroying an aircraft once it is back in 
service in U.S. airspace?
    While touring the facility, the DEA and local police did a 
narcotics and explosives K-9 sweep of the Southwest Airlines aircraft 
that was our transportation back to the States. The dogs belonged to 
the local police force, and it was not stated what type of training the 
dogs or handlers received. Southwest officials advised me this would 
happen with all of their aircraft prior to those planes returning to 
the United States. Again, as is the case with representations that were 
made regarding background checks and drug testing, I have no way of 
verifying the accuracy of this statement as there is no rule in place 
to mandate it. It is significant to note that Aeroman claims that 
Southwest Airlines is the first of their customers to request such 
searches and tests. Even if this is true, Aeroman's comment underscores 
and validates the Teamsters Union's argument that maintenance work 
outsourced to foreign countries raises serious safety concerns because 
the work is not subject to the same stringent safety and security 
standards and oversight that apply in the United States. (It should be 
noted that at the time of my visit, US Airways had four aircraft in 
various stages of overhaul and Jet Blue had one). To my knowledge, none 
of those airlines conducts the drug and explosives sweep as Southwest 
Airlines had done, before returning planes to the United States.
    Finally, the only way to ensure security is to raise the standard 
of any foreign repair station to that of the United States regardless 
of any trade agreements. Regulations to ensure the security of foreign 
repair stations, to every extent possible, should closely mirror the 
standards established in 49 CFR Chapter XII that govern air carriers 
and airports, regarding worker background checks, access to aircraft 
and facility perimeter security. Worker security awareness training 
should also be part of a required security plan submitted to the 
Department of Homeland Security and the Federal Aviation Administration 
for approval. Those agencies should work closely together to eliminate 
overlapping inspections, but should ensure that both safety and 
security inspections are carried out at least twice yearly without 
notice given to the facility. There must be ``24/7/365'' oversight 
available. That would require coordinated deployment of FAA/TSA/DEA 
manpower in such a way that inspections can be performed and records 
checked with the ``no notice'' capability.
    At least 21 non-certificated repair stations in foreign countries 
have been identified by DOT's Inspector General as performing 
maintenance ``critical to the airworthiness of the aircraft.'' Because 
of the level of work involved, those facilities should fall under the 
same security requirements as certificated foreign repair stations. 
Foreign repair stations receive work from both U.S. and other foreign-
owned airlines. If regulations applying drug and alcohol testing and 
background checks would apply only to workers who service U.S. 
aircraft, then access rules need to be developed within the facility to 
segregate those workers from others who may be on the property.
    U.S. aviation safety is recognized as the best in the world. We 
should not allow any further degradation of that proud and expected 
record in a quest to shore up the bottom line or increase profits. 
Aviation security and safety is not about money; it is about preventing 
accidents, protecting the flying public, and saving lives.
    Thank you again for the opportunity to express our views on this 
important issue of security of foreign repair stations. I am pleased to 
answer any questions you may have.

    Ms. Jackson Lee. Thank you very much.
    Mr. Barimo, you are recognized for 5 minutes.

 STATEMENT OF BASIL J. BARIMO, VICE PRESIDENT, OPERATIONS AND 
       SAFETY, AIR TRANSPORT ASSOCIATION OF AMERICA, INC.

    Mr. Barimo. Good afternoon. I am Basil Barimo. I am the 
vice president of Operations and Safety for the Air Transport 
Association of America.
    I appreciate the opportunity to join you this afternoon as 
we consider the role of aircraft repair stations in air carrier 
maintenance programs. Our experience confirms that contract 
maintenance can, in fact, be both safe and secure. This 
afternoon, I want to focus on three points.
    First, that maintenance contracting does not compromise 
safety or security. Secondly, that maintenance contracting 
enables U.S. airlines to compete globally. Finally, that 
maintenance is good business for the United States and any 
nearsighted efforts to limit access to foreign repair stations 
will cost us jobs.
    Safety is the constant overriding consideration of our 
members' activities. They understand their responsibilities and 
they act accordingly. The U.S. industry's stellar safety record 
demonstrates that unflagging commitment.
    So, let us talk about facts. Maintenance contracting has 
increased over the last decade, but as the chart on page six of 
my written testimony clearly shows, the U.S. airline industry's 
maintenance safety record is the best it has ever been.
    In fact, no ATA member airline has experienced a 
maintenance-related fatal accident in nearly a decade, and that 
is while operating over 100 million flights. If there were a 
systemic problem with contract maintenance, the data would have 
exposed it.
    Contract maintenance is common and commonly accepted in the 
industry. Virtually every airline to some degree relies on 
contract maintenance.
    Whether it is in the form of line maintenance, heavy 
maintenance, component, or engine maintenance, aircraft 
operators with demanding and highly sophisticated maintenance 
needs, including various branches of the U.S. military, 
contract for maintenance services. It is not an exotic practice 
regardless of where it is done.
    That multilayered and continuous oversight of contract 
maintenance does more than ensure a safe aircraft, it enhances 
what is already a robust security system, a complex system with 
checks and balances originally designed with safety in mind, 
are interwoven with comprehensive security and asset protection 
systems to mitigate risks regardless of their nature.
    Keep in mind that we are talking about assets worth 
hundreds of millions of dollars. It is clearly in the airline's 
and the repair station's interest to protect aircraft as they 
are being maintained.
    I must also note that the ATA welcomes the NPRM issued 
Monday by the TSA. It will establish security regulations for 
repair stations, and we look forward to working closely with 
TSA to further enhance today's robust security system.
    Continued access to high quality, cost-effective 
maintenance is one ingredient in airlines' efforts to remain 
competitive both here and abroad. Maintaining a competitive 
cost structure is critical to the health and sustainability of 
U.S. airlines.
    For this reason, we oppose efforts to limit the ability of 
U.S. airlines to obtain necessary services consistent with the 
highest degree of safety and security as economically as 
possible.
    Maintenance is good business for the United States. The 
search for quality, efficiency, and value has meant that some 
airlines have shifted where their maintenance is done. Some 
have consolidated in-house facilities.
    Other times, it has meant contracting with a third party, 
sometimes overseas, to perform some of that airline's 
maintenance. Neither type of change is pleasant. Both can 
adversely affect employees, their families, and their 
communities.
    It has, however, meant new job opportunities for some and 
new benefits for some communities. Far from resulting in the 
export of the majority of U.S. maintenance jobs overseas, it 
has meant that we have been able to retain them in the United 
States.
    The United States is a major exporter of maintenance 
services and enjoys a $2.4 billion positive balance of trade in 
this area. The over 4,000 FAA-certificated repair stations 
employ about 200,000 people, and keep in mind that 85 percent 
of those repair stations qualify as small businesses. Efforts 
to limit U.S. airline access to foreign repair stations will 
certainly trigger retaliatory actions by other countries.
    In closing, let me reiterate that maintenance contracting 
is done safely and securely round the world. It is important to 
the health and viability of U.S. airlines, and finally it 
creates American jobs. Madame Chairwoman, thank you for 
allowing me to share our views, and I look forward to your 
questions.
    [The statement of Mr. Barimo follows:]

                 Prepared Statement of Basil J. Barimo
                           November 18, 2009

                              INTRODUCTION

    The Air Transport Association of America, Inc. (ATA), the trade 
association of the principal U.S. passenger and cargo airlines,\1\ 
appreciates the opportunity to submit these comments for the record on 
safety and other issues affecting the U.S. airline industry. ATA member 
airlines have a combined fleet of more than 4,000 airplanes and account 
for more than 90 percent of domestic passenger and cargo traffic 
carried annually by U.S. airlines.
---------------------------------------------------------------------------
    \1\ ABX Air, Inc.; AirTran Airways; Alaska Airlines, Inc.; American 
Airlines, Inc.; ASTAR Air Cargo, Inc.; Atlas Air, Inc.; Continental 
Airlines, Inc.; Delta Air Lines, Inc.; Evergreen International 
Airlines, Inc.; Federal Express Corp.; Hawaiian Airlines; JetBlue 
Airways Corp.; Midwest Airlines; Southwest Airlines Co.; United 
Airlines, Inc.; UPS Airlines; and US Airways, Inc.
---------------------------------------------------------------------------
    Safety is the constant, overriding imperative in our members' 
activities. They understand their responsibilities and they act 
accordingly. The U.S. airline industry's stellar safety record 
demonstrates that indisputable commitment.

                   AIRLINES FUEL OUR NATION'S ECONOMY

    The U.S. airline industry is not simply an important sector of the 
National economy; its services fuel our entire economy. Air 
transportation is an indispensable element of America's infrastructure 
and our Nation's economic well-being. Individuals, businesses, and 
communities depend on the National air transportation system. U.S. 
airlines transport more than 2 million passengers on a typical day and 
directly employ 557,000 persons to do so; they provide just-in-time 
cargo services; they are the backbone of the travel and tourism 
industry; and airlines link communities throughout our Nation and to 
the world.
    Moreover, the airline industry is the foundation of the commercial 
aviation sector, which comprises airlines, airports, manufacturers, and 
associated vendors. U.S. commercial aviation ultimately drives more 
than $1.1 trillion in U.S. economic activity and 10.2 million U.S. 
jobs.\2\ By any measure, the U.S. airline industry is a valuable 
National asset and its continued economic health should be a matter of 
National concern.
---------------------------------------------------------------------------
    \2\ Federal Aviation Administration, ``The Economic Impact of Civil 
Aviation on the U.S. Economy'' (October 2008).
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                    THE SAFEST AIRLINES IN THE WORLD

    Despite the unprecedented travails of the U.S. airline industry 
throughout this decade, its safety record has continued to improve. The 
airlines' commitment to safety, even in the face of unprecedented 
financial adversity, has been unflagging and will remain so.
    The U.S. airline industry continues to be confronted by a systemic 
inability to cover its cost of invested capital. From 2001 through 
2008, U.S. passenger and cargo airlines reported a cumulative loss of 
$55 billion. Debt levels remain high, leaving the airlines vulnerable 
to fuel spikes, recession, or exogenous shocks (e.g., terrorism, 
pandemics, natural disasters), let alone ill-advised public policy 
decisions. The challenge we face is to achieve meaningful and 
sustainable profits, and to improve credit ratings to the point where 
airlines can weather normal economic turbulence while simultaneously 
investing in the future.
    Notwithstanding these financial challenges, airline safety has 
remained rock solid. While the Colgan Air tragedy earlier this year 
ended a 2-year period without a fatal accident, the United States 
continues to lead the world in airline safety. Without question, 
scheduled air service is incredibly safe and getting safer; maintenance 
certainly plays a role in that remarkable achievement. 



    The preceding chart clearly depicts the remarkable improvement in 
airline safety that has occurred over time. U.S. air carrier accidents 
are rare and random. A prominent reason for this is the extraordinary, 
long-standing collaboration among the Federal Aviation Administration 
(FAA), National Transportation Safety Board (NTSB), NASA, 
manufacturers, airlines and their unions, and of course, maintenance, 
repair, and overhaul service providers (MROs). That collaborative 
relationship is firmly entrenched in the aviation community; indeed, it 
has strengthened over the years. Programs such as the joint Government-
industry Commercial Aviation Safety Team (CAST), Flight Operational 
Quality Assurance (FOQA) programs, Aviation Safety Action Programs 
(ASAP) and Line Operations Safety Audit (LOSA) programs are important, 
tangible results of that on-going collaboration. In fact, CAST was 
awarded the prestigious 2009 Collier Trophy for reducing the fatal 
accident risk by 83 percent since its creation in 1997.
    These collaborative safety-improvement efforts have created a 
safety management system that is data-driven and based on risk 
analysis. That undistracted focus on data enables safety-related trends 
to be identified, often before they emerge as problems, and properly 
resolved. This objective and measurable approach means that we apply 
our resources where the needs actually are, not where conjecture or 
unverified assumptions might lead us. We can and do spot these trends, 
whether they are operational or maintenance-related. With respect to 
the long-standing practice in the airline industry of using the 
expertise of regulated contractors to perform maintenance services, the 
data quite clearly tell us that safety doesn't suffer.

              MAINTENANCE CONTRACTING IS NOT A NEW CONCEPT

    In simple terms, contract maintenance is the process explicitly 
allowed by FAR 121.363(b),\3\ where airlines hire experts to perform 
maintenance tasks. The type of maintenance involved can range from 
minor servicing to major overhaul of components, engines, or the 
airframe itself.
---------------------------------------------------------------------------
    \3\ FAR 121.363 Responsibility for Airworthiness states that: (a) 
Each certificate holder is primarily responsible for: (1) The 
airworthiness of its aircraft, including airframes, aircraft engines, 
propellers, appliances, and parts thereof; and (2) The performance of 
the maintenance, preventive maintenance, and alteration of its 
aircraft, including airframes, aircraft engines, propellers, 
appliances, emergency equipment, and parts thereof, in accordance with 
its manual and the regulations of this chapter; (b) A certificate 
holder may make arrangements with another person for the performance of 
any maintenance, preventive maintenance, or alterations. However, this 
does not relieve the certificate holder of the responsibility specified 
in paragraph (a) of this section.
---------------------------------------------------------------------------
    Airlines exist to transport people and goods. In order to survive, 
they must do it safely, but to thrive in a fiercely competitive, global 
environment, they must also do it efficiently. Safety need not be 
compromised because of considerations of efficiency; in fact, it can be 
significantly advanced in an environment where a focus on efficiency 
spurs a willingness to reexamine time-worn practices and encourages 
innovation that embraces newer--and improved--practices.
    The maintenance of commercial airliners is a complex, capital-
intensive business requiring specialized equipment and facilities along 
with highly skilled personnel. One implication of this is that using a 
maintenance facility or facilities with specialized skills is likely to 
be considered. Complexity inevitably will lead a carrier to examine 
dividing maintenance functions; some airlines will elect to do so while 
others will not. Either way, examining alternative sources in this type 
of environment is entirely reasonable.
    Moreover, current airline business models demand continual scrutiny 
of costs, commonly with a bias to shed non-core activities. In the case 
of maintenance, there are many incentives to utilize contract 
maintenance providers, including:
   Access to specialized repair facilities when and where they 
        are needed;
   Avoidance of major capital investments (equipment and 
        facilities);
   Increased utilization of existing facilities;
   Improved employee focus on core airline activities;
   Optimization of flight schedules around customer demand, 
        instead of maintenance infrastructure availability;
   Exceptional quality at a reduced cost.
    As expected, the level of contract maintenance utilized by 
individual airlines varies significantly based on factors such as the 
type(s) of aircraft used, geographic region of operation, business 
philosophy, labor agreement limitations, internal cost structure, and 
commercial relationships with airframe, engine, and component 
manufacturers. Without exception, all airlines rely to some extent on 
contract maintenance providers. This is a point that should not be 
obscured: Contract maintenance is a commonly accepted practice in this 
industry. The extent to which it is utilized may vary from airline to 
airline but there is nothing out of the ordinary about its use.
    Further, airlines are by no means unique in their reliance on 
contract maintenance. In fact, many industries rely heavily on contract 
maintenance providers for a broad range of services. Trains, buses, and 
cruise ships are predominantly maintained by companies other than those 
who operate them. The United States Department of Defense contracts 
with private companies for the maintenance of aircraft, in many cases 
the same companies utilized by commercial airlines. As this widespread 
pattern of relying on contract maintenance suggests, operators with 
very demanding and sophisticated needs routinely and successfully 
outsource maintenance.

                          STATISTICS DON'T LIE

    Commercial airlines have utilized contract maintenance for decades. 
The industry's reliance on contract maintenance providers increased 
since 2001 as airlines restructured their business models. The 
implications of this change have been misunderstood. It does not signal 
a diminution in safety or a ``slippery slope.'' Critics of contract 
maintenance argue that ``If airlines don't perform all of the 
maintenance themselves, then they can't be safe.'' Independent data 
from the National Transportation Safety Board (NTSB) proves them wrong.
    Based on data compiled by the NTSB, maintenance-related accidents 
account for just 7 percent of all Part 121 accidents over the last 
decade. Furthermore, ATA member airlines have not had a fatal accident 
attributable to maintenance since 2000.



    The preceding chart clearly illustrates that U.S. airlines' use of 
contract maintenance has not been a detriment to safety. In fact, 
maintenance-related safety performance is the best it's ever been. It 
is simply not reasonable, based on the data available, to consider the 
practice of maintenance contracting to be unsafe.
    Mechanical dispatch reliability is another indicator of the 
effectiveness of maintenance programs. It is important to note that the 
U.S. commercial airline fleet is maintained to impeccable standards, 
which are reflected in mechanical reliability performance. As shown in 
the chart below for Boeing models (and noting that Airbus and other 
models perform comparably), airline maintenance programs are yielding 
unprecedented levels of mechanical reliability, which in turn, 
contribute to overall safety performance.



                     EFFECTIVE OVERSIGHT IS THE KEY

    Air carriers understand that aircraft maintenance is vital to 
continued operational safety. Likewise, safe operations are essential 
to compliance with regulatory requirements and, ultimately, to an 
airline's existence. Over time, the industry has developed a 
comprehensive, multilayered approach to oversight that ensures the 
highest levels of quality and safety, regardless of who does the work 
or where that work is performed. This point cannot be overstated: 
Safety is what counts, first and foremost.
    Initial levels of protection are contained in the FAA regulations, 
which provide a basic framework to ensure competence among those 
certificated to perform aircraft maintenance.\4\ Prior to granting 
certification, the FAA confirms that an entity or individual has 
fulfilled specific regulatory requirements.
---------------------------------------------------------------------------
    \4\ See, for example, 14 CFR parts 121, 145, and 65.
---------------------------------------------------------------------------
    Part of this approval process involves the issuance of Operations 
Specifications (OpSpecs) by the FAA. Air carrier OpSpecs contain a 
specific section to address aircraft maintenance, and repair station 
OpSpecs delineate the ratings and limitations of the maintenance that 
can be performed. In FAA Order 8300.10, Volume 2, Chapter 84, it is 
stated, in part, that:

``OpSpecs transform the general terms of applicable regulations into an 
understandable legal document tailored to the specific needs of an 
individual certificate holder. OpSpecs are as legally binding as the 
regulations . . .'' (Citations omitted).

    Once certificated, air carriers and repair stations are inspected 
and monitored by the FAA to verify their continued conformity with the 
rules. This on-going surveillance process can be viewed as the second 
layer of safety.
    Additionally, certificated air carriers acquire the nondelegable 
responsibility for the airworthiness of the aircraft in their fleet.\5\ 
The backbone of any air carrier's airworthiness is its Continuing 
Analysis and Surveillance System (CASS). CASS is a quality-assurance 
system required by FAR 121.373, consisting of surveillance, controls, 
analysis, corrective action, and follow-up. Together, these functions 
form a closed-loop system that allows carriers to monitor the quality 
of their maintenance. In a structured and methodical manner, the CASS 
provides carriers with the necessary information to enhance their 
maintenance programs.
---------------------------------------------------------------------------
    \5\ See 14 CFR  121.363, which provides that: (a) Each certificate 
holder is primarily responsible for: (1) The airworthiness of its 
aircraft, including airframes, aircraft engines, propellers, 
appliances, and parts thereof; and (2) The performance of the 
maintenance, preventive maintenance, and alteration of its aircraft, 
including airframes, aircraft engines, propellers, appliances, 
emergency equipment, and parts thereof, in accordance with its manual 
and the regulations of this chapter; (b) A certificate holder may make 
arrangements with another person for the performance of any 
maintenance, preventive maintenance, or alterations. However, this does 
not relieve the certificate holder of the responsibility specified in 
paragraph (a) of this section. (Emphasis added.)
---------------------------------------------------------------------------
    Aircraft maintenance is the primary ingredient of airworthiness and 
FAA regulations contain detailed maintenance program and manual 
requirements,\6\ which validate the related air-carrier processes and 
procedures. When work is sent to a repair station, it must follow the 
maintenance program of the air carrier with whom it has contracted.\7\ 
Combined, these duties comprise the third level of protection.
---------------------------------------------------------------------------
    \6\ See 14 CFR  121.365; 121.367; 121.369.
    \7\ See 14 CFR  145.205 which states, in part, that: (a) A 
certificated repair station that performs maintenance, preventive 
maintenance, or alterations for an air carrier or commercial operator 
that has a continuous airworthiness maintenance program under part 121 
or part 135 must follow the air carrier's or commercial operator's 
program and applicable sections of its maintenance manual. (Emphasis 
added.)
---------------------------------------------------------------------------
    Apart from external FAA surveillance, and in line with their 
ultimate responsibility for airworthiness, airlines conduct in-depth 
initial and frequent follow-up maintenance vendor audits. As a rule, 
these audits are performed by air carrier quality, compliance, or 
inspection department employees, but oftentimes may include outside 
counsel and/or consulting firms who specialize in air-carrier 
maintenance. These audits create a robust fourth level of oversight.
    Industry protocol for conducting and substantiating independent 
audits of air carriers and repair stations is established by the 
Coordinating Agency for Supplier Evaluation (C.A.S.E.). In addition, 
guidance materials and inspection checklists created for FAA inspectors 
are frequently used.
    Typically, preliminary investigation of a potential repair station 
vendor by an air carrier would include:
   Review of repair station performance and quality metrics;
   Feedback from past and current repair station customers;
   Verification of repair station capabilities (OpSpecs);
   Review of FAA-mandated Repair Station Manual, Quality 
        Manual, and Training Manual.
    If this repair station examination is satisfactory, it is normally 
followed by an on-site visit to verify compliance with applicable 
regulations, C.A.S.E. requirements and adherence to the repair 
station's own manuals. Some areas of investigation include:
   Validation of FAA certificates held by persons directly in 
        charge of maintenance and/or those who perform maintenance;
   Inspection of training records of inspectors, technicians, 
        and supervisors;
   Examination of procedures for technical data, documentation, 
        and maintenance record control;
   Examination of procedures for work processing, disposal of 
        scrap parts, tool calibration, and handling material with a 
        limited shelf life;
   Review of repair station internal inspection, quality, and 
        security programs;
   Review of previous inspection program results and corrective 
        actions.
    If the repair station is selected to perform maintenance for the 
air carrier, similar on-site audits would be conducted on a regular 
basis.
    Finally, a fifth layer of oversight is provided by on-site air-
carrier representatives. These individuals monitor the day-to-day 
operations and coordinate the activities of the repair station related 
to the air carrier's equipment. Final inspections and, ultimately, air 
carrier approval for service are normally accomplished by these on-site 
airline personnel.
    In essence, there are two separate but mutually reinforcing 
oversight schemes, one regulatory and one independent, both effective 
in ensuring satisfaction of applicable FAA regulations. However, air 
carriers have further incentive to provide adequate oversight through 
the potential negative impact--real or perceived--of safety-related 
issues. Without question, air carriers continue to make safety their 
top priority. Safety is ingrained in our culture.

               SAFETY AND SECURITY LAYERS ARE INTERWOVEN

    Security of repair station activities is a constant consideration. 
As in other areas of civil aviation security, the response to this 
issue is a layered, risk-based approach.
    The subject of foreign repair station security measures continues 
to attract attention. We wish to clarify a few points about those 
measures. As a preliminary matter, we support the Congressional 
instruction to the Transportation Security Administration to issue 
foreign repair station security regulations. It is imperative that 
those regulations recognize that repair stations vary in size, 
location, and scope of work performed, and tailor security measures 
commensurate with the level of risk they present. We plan to thoroughly 
review the TSA proposed rule, published Nov. 16, 2009, with our member 
airlines, and to submit detailed comments to the docket.
    Mutually reinforcing U.S. and host-country regulatory requirements 
and carrier practices produce the layered security regime at foreign 
repair stations. This begins with a U.S. air carrier's evaluation of a 
potential service provider before it enters into a contract for 
maintenance, repair, or overhaul services. This is an important first 
step for the carrier; it is looking to entrust an aircraft or high-
value components to a vendor. The carrier obviously wants to prevent 
unauthorized access to such equipment and to be confident that the 
potential vendor can do so. Beyond that very basic business concern, 
are the security requirements that the country's civil aviation 
authority and the airport authority impose. These are based on 
International Civil Aviation Organization (ICAO) standards contained in 
Annex 17 and mirror TSA regulations. They require National, airport, 
and operator-level security programs with continuous threat monitoring, 
background checks, and periodic ICAO audits. Those requirements are 
further reinforced by periodic TSA inspections. Coupled with those 
requirements, is the typical presence of representatives of the U.S. 
carrier at the foreign facility. Weaved into this array of measures is 
the FAA requirement that repaired or overhauled items be inspected when 
they are returned to the U.S. carrier, and before they are returned to 
service aboard an aircraft. This means that multiple sets of trained 
eyes inspect a part that has been at a foreign repair station. Finally, 
before an aircraft is returned to passenger service from a foreign 
location, it must complete the aircraft security inspection procedures.
    These complementary procedures yield a layered approach, which is 
the hallmark of how aviation security is achieved today. We appreciate 
the issuance by TSA of the proposed rule and look forward to continuing 
to work with U.S. and foreign regulators on these measures.

                   GLOBAL COMPETITION, LOCAL POLITICS

    U.S. airlines continually lead the world in virtually every 
performance metric, including safety. Their ability to compete 
effectively on a global scale is due, at least in part, to their 
ability to evolve with changing market conditions. Airlines across the 
United States and around the world have formed alliances that extend 
beyond their networks to many aspects of airline operations, including 
maintenance. These complex relationships involve airlines, aircraft 
manufacturers and a host of service providers.
    The loss of some 150,000 airline jobs since 9/11 has been well-
documented. As airlines downsized to meet a reduced demand for air 
travel, it became even more difficult for them to efficiently utilize 
their exhaustive maintenance infrastructure. Fleet reductions targeted 
older, maintenance-intensive aircraft, leaving too few aircraft being 
maintained at too many facilities, and airlines looked to contract 
maintenance providers as a way to secure quality maintenance while 
shedding the expensive infrastructure costs. It is the subsequent 
impact on maintenance employees that draws attention to the issue of 
maintenance contracting.
    The debate surrounding the issue of contract maintenance is best 
understood when broken down into several key points:
   Most statistics relating to the amount of maintenance 
        contracted are based on the amount an airline spends. The 
        amount ``outsourced'' is derived by dividing the amount spent 
        on contract maintenance by the total maintenance cost for the 
        airline. These include all costs associated with the 
        maintenance of airframes, engines, and components.
   Engine maintenance is much more expensive per event than 
        airframe maintenance, due largely to the replacement of 
        expensive parts within the engine. The fact that virtually all 
        engine maintenance is performed outside the airline can skew 
        the numbers.
   Even the largest engines are readily transportable, enabling 
        access to repair centers around the world. Engine manufacturers 
        such as GE, Pratt & Whitney, and Rolls-Royce rely on their 
        subsidiaries worldwide for maintenance of their products, 
        although much of that work is performed domestically. Large 
        U.S. airline MROs also maintain engines for foreign and 
        domestic customers.
   Heavy airframe maintenance performed by MROs outside of 
        North America is limited primarily to wide-body aircraft. 
        Regularly scheduled operations enable these long-range aircraft 
        to routinely transit locations abroad that offer best-in-class 
        maintenance for these aircraft types. Asia and Europe do much 
        of this work.
   The majority of narrow-body aircraft maintenance work 
        contracted out in the past few years has stayed within North 
        America. MROs in Washington, North Carolina, Florida, New York, 
        Georgia, Tennessee, Arizona, Texas, Alabama, and Indiana are 
        among those now performing the work. Large airlines with 
        available capacity have also captured a portion, and the 
        remainder is performed by experts in Central/South America and 
        Canada.

                               CONCLUSION

    U.S. airlines have logged an exceptional safety record while 
steadily expanding their use of contract maintenance. And while critics 
charge that maintenance contracting undermines safety and security, 
independent Government figures simply do not support that conclusion. 
When considered objectively, it is evident that the practice helps U.S. 
airlines compete effectively with their global counterparts. The 
ability to optimize maintenance practices to produce safe, reliable, 
customer-worthy aircraft at a competitive cost is essential to 
airlines' long-term health. Healthy airlines grow, adding service to 
new destinations and increasing service to existing ones. That growth 
requires new aircraft, creating new jobs within the airline for pilots, 
flight attendants, ramp, and customer-service personnel, and a wide 
range of support staff. Beyond the airline, the impact grows 
exponentially and is felt Nation-wide by manufacturers, ATC service 
providers, airports, caterers, fuelers--the list goes on and on. 
Contract maintenance has played and continues to play an important role 
in improving the health and competitiveness of the U.S. airline 
industry--in a way that is entirely consistent with our fundamental 
commitment to safety.

    Ms. Jackson Lee. Thank you very much.
    Mr. Klein, you are recognized for 5 minutes.

  STATEMENT OF CHRISTIAN A. KLEIN, EXECUTIVE VICE PRESIDENT, 
            AERONAUTICAL REPAIR STATION ASSOCIATION

    Mr. Klein. Thank you very much, Chairwoman Jackson Lee, and 
it is a pleasure to be with you today. I appreciate the 
opportunity to participate in this important discussion on 
behalf of ARSA's members around the country and around the 
world.
    There are three major points I would like to make this 
afternoon. First, I want to start by answering the basic 
question posed by this hearing: Is the flying public safe?
    The answer is yes. The use of contract maintenance 
facilities, whether they are in the United States or overseas 
do not add any additional security or safety risks for airline 
passengers. In fact, the increased use of contract maintenance 
has coincided both with a period of greatest of terrorism in 
the Nation's history and also with the safest period of U.S. 
civil aviation.
    We believe this correlation suggests, at a minimum, that 
the increased use of repair stations has not negatively 
affected safety or security. There is a simple reason and, to 
be quite frank, it has nothing to do with Government. For 
repair stations, good safety and good security practices are 
good business.
    Airlines simply will not risk the lives of passengers, nor 
will they risk losing aircraft which are multimillion-dollar 
business assets, by using maintenance providers that evidence a 
strong commitment to safety and security. So even in the 
absence of a long-awaited TSA repair station rules, maintenance 
companies already have security policies and procedures in 
place.
    For example, as part of our model repair station manual, 
ARSA recommends a number of best security practices. A highly 
reliable ARSA member survey conducted just last week found that 
the majority of our members currently have the following 
measures in place, limited access to a single-locked entrance, 
criminal background checks on new employees, a prohibition on 
unescorted visitors, customer products are kept in segregated, 
locked, limited-access areas, locked doors, security alarm, a 
visitor sign-in log and perimeter fencing.
    A large percentage of our member companies also use video 
surveillance and require employees to wear badges. In other 
words, a lot of the things that are contemplated by the TSA 
rule that came up last week are already being done by industry 
on its own.
    Of course, all those practices are in addition to the 
existing TSA regulations regarding access to aircraft at 
airports, in addition to ICAO security standards, and in 
addition to laws requiring pre-employment citizenship 
verification. All the foregoing have combined to create a safe 
and secure system, even in the absence of the TSA repair 
station rules.
    The second point that I have asked the Members of this 
committee to keep in mind is that although the public focus of 
the new TSA rules has been on foreign repair stations, 
thousands of small businesses throughout the United States are 
also going to have to comply with the TSA rules, and they could 
therefore, have enormous consequences for the U.S. economy.
    When most people think of aviation maintenance, they 
probably think of a big airplane in a massive hanger with 
scores of mechanics swarming around it. While heavy air 
framework is certainly a big part of the maintenance equation, 
most aviation maintenance work is done off the aircraft, away 
from airports, at smaller, specialized engine and component 
shops. In fact, of the 4,122 repair stations Nation-wide, 85 
percent are small or medium-sized entities.
    Just as an aside if you are curious about the industry's 
footprint in your State, we have attached a breakdown of the 
number of repair stations and total employment in each State as 
Appendix A of our written testimony. There are 419 FAA-
certificated repair stations in Texas. They collectively employ 
more than 25,000 people.
    Although industry in the United States is dominated by 
small companies, we have a massive economic footprint. The 
annual maintenance, repair, and overhaul market in North 
America is estimated at $19.4 billion, and when induced and 
related economic effects are considered, the MRO industry's 
impact on the U.S. economy is $39 billion per year.
    Thanks to these small companies, the United States also has 
a strong and favorable annual balance of trade in the market 
for aviation maintenance services to the tune of $2.4 billion.
    My point is that it won't just be the HEICOs and Lufthansa 
Techniks of the world that will be affected by the new rules. 
Companies like High Tech Finishing, which a 65-employee company 
in Houston that does specialized plating work, is also going to 
have to comply.
    So I caution the Members of the subcommittee to be careful 
what you wish for when it comes to the new security rules 
because you have got constituents who are going to have to 
divert time and resources away from serving customers to comply 
with yet another regulation.
    You had asked your opening statement for our 
recommendations about what should be in the TSA rule, and I, 
you know, based on our initial read, they seem to have 
recognized the diverse nature of the industry which is a good 
thing. They seem to have allowed some flexibility for 
compliance. So, you know, based on the preamble, they seem to 
be headed in the right direction.
    But of course, the devil will be in the details. We are 
certainly looking forward to TSA and crafting a good rule that 
going to work for the industry, because if TSA doesn't get it 
right, it is a good bet that you are going to hear about it 
when you are back home.
    Madame Chairwoman, I see that my time is about to expire, 
and I wonder if I could have just 1 more minute to make a final 
point. Thank you.
    My third point is that in mandating the new security rules, 
Congress has set a very dangerous precedent of punishing 
industry for the failings of Government. Because TSA hasn't 
completed the rulemaking on time, Congress has barred the FAA 
from issuing new foreign repair station certificates.
    While Congress likely intended foreign companies to bear 
the brunt of this sanction, the reality is that it is putting 
U.S. companies at a competitive disadvantage because they can't 
open new facilities to service international customers in 
emerging markets. That means American companies risk losing 
market share to foreign competitors.
    As one respondent to our recent survey commented, ``We have 
been unable to support a market that was very heavily into our 
business plan, and the situation could likely cause a closure 
of the facility if the ban is lifted impacting employment both 
in our United States station and in Europe.''
    ARSA therefore urges that since the TSA has demonstrated 
significant progress in crafting new security rules, and 
because of the security practices already in place in the 
industry, Congress should lift the ban on new foreign repair 
station certificates and remove this impediment to U.S. 
companies competing abroad.
    Thank you, Chairwoman Jackson Lee, for the opportunity to 
participate. I look forward to answering any questions you may 
have.
    [The statement of Mr. Klein follows:]

                Prepared Statement of Christian A. Klein
                           November 18, 2009

    Thank you, Chairwoman Jackson Lee and Ranking Member Dent. It is a 
pleasure and privilege to appear before the subcommittee today on 
behalf of the Aeronautical Repair Station Association (ARSA) to discuss 
the question of foreign repair station security.
    ARSA believes that the answer to the fundamental question posed by 
this hearing is that, yes, the flying public is protected and does not 
face any unusual or heightened security risk due to foreign or domestic 
repair stations. Even in the absence of the long-awaited Transportation 
Security Administration (TSA) repair station security rules, existing 
Government regulations, industry practices, and the strong interest 
repair stations have in ensuring the airworthiness of their work and 
protecting their customers' property create a high level of safety and 
security.
    As the TSA rulemaking process moves forward, the subcommittee 
should work with the agency to ensure that the new rules do not a take 
a ``one size fits all'' approach to repair station security. 
Additionally, the agency must not impose new and unnecessary costs on 
the thousands of small U.S. aviation maintenance companies and thereby 
undermine the competitiveness of a vibrant sector of the U.S. economy.

                                OVERVIEW

    ARSA is a 500 member-strong international trade association with a 
distinguished 25-year record of representing certificated aviation 
maintenance facilities before Congress, the Federal Aviation 
Administration (FAA), the European Aviation Safety Agency (EASA), and 
other civil aviation authorities (CAAs).
    ARSA's primary members are companies holding repair station 
certificates issued by the FAA under part 145 of Title 14 of the Code 
of Federal Regulations, informally referred to as the Federal Aviation 
Regulations (FARs). These certificates are our industry's ``license to 
do business.'' They authorize companies to perform maintenance and 
alterations on civil aviation articles, including aircraft, engines, 
and propellers, and on components installed on these products. Repair 
stations perform maintenance for airlines, as well as for general 
aviation owners and operators.
    In addition to its advocacy efforts on behalf of the industry, ARSA 
has a strong commitment to regulatory compliance and industry 
education. Among other things, our association conducts regulatory 
training courses for aviation industry professionals, provides 
compliance materials (such as our Model Repair Station Manual), and 
staffs a hotline to answer member questions about aviation regulations.
    The repair station industry is a vibrant part of the U.S. and world 
economies. A recent study by AeroStrategy for ARSA determined that 
spending in the global maintenance, repair, and overhaul (MRO) market 
exceeded $50 billion in 2008, with North America (the United States and 
Canada) accounting for $19.4 billion of the total. When induced and 
related economic effects are considered, the industry's impact on the 
U.S. economy is $39 billion per year. The 4,122 repair stations in the 
United States--85 percent of which are small and medium-size 
companies--collectively employ more than 196,000 individuals.
    The United States also has a strong and favorable balance of trade 
in the aviation maintenance services market. AeroStrategy determined 
that North America is a major net exporter of aviation maintenance 
services, enjoying a $2.4 billion positive balance of trade in this 
arena. While North America is a slight net importer of heavy airframe 
maintenance services, it has $1.4 billion and $1.2 billion trade 
surpluses in the engine and component maintenance services markets, 
respectively. The U.S. competitive advantage in these two areas has 
important economic benefits because $1 of spending on airframe heavy 
maintenance generates just $1.38 in additional monetary activity, while 
a dollar spent on engine and component maintenance services generates 
$1.85 and $1.67, respectively.
    The following are the key themes of our testimony before the 
subcommittee today:
   Foreign repair stations are an essential element of the 
        global aviation system. Without them there would be no 
        international air travel or commerce.
   Despite the fact that TSA has yet to issue the repair 
        station security regulations mandated by VISION 100, security 
        standards do exist for repair stations based on their location. 
        Such standards emanate from the FAA, TSA regulations, and the 
        International Civil Aviation Organization (ICAO).
   Repair station security is not only dependent on Government 
        oversight. In the aviation maintenance industry, ``good 
        security is good business.'' Repair stations have a strong 
        pecuniary interest (not to mention a legal responsibility) in 
        protecting their customers' property from theft and improper 
        access, just as they have both a regulatory obligation and 
        business interest to ensure the airworthiness of their 
        maintenance work.
   A one-size-fits-all approach to repair station security is 
        not the solution to perceived risks. Aviation maintenance is 
        conducted in a wide variety of settings, ranging from heavy 
        airframe work at large facilities on airports to component work 
        in industrial parks many miles from airports. Risk may vary by 
        location and the type of maintenance work being performed. As 
        TSA works to develop the new regulations, the subcommittee must 
        monitor the process and ensure that small businesses around the 
        country are not unfairly burdened with new regulatory 
        obligations that drive up costs with no added public benefit.
   Requiring TSA to artificially speed up the rulemaking 
        process threatens to divert the agency's limited oversight 
        resources from areas where the threat is greatest and could 
        result in a poorly-crafted rule.
   Punishing private companies for TSA's inaction on the repair 
        station security front sets a dangerous precedent and is unfair 
        to the industry.
foreign repair stations are critical to international aviation commerce
    Foreign repair stations are an integral part of the international 
aviation system. U.S. and foreign airlines, charter companies, and 
general aviation operators, as well as aircraft manufacturers located 
around the world depend on maintenance facilities for everything from 
repairing aircraft and components to supporting supply chains. Aircraft 
manufacturers and maintenance companies establish overseas repair 
stations to service international customers and U.S.-based air carriers 
(airlines, charter companies, and general aviation) operating 
internationally.
    To operate in the civil aviation maintenance industry, certificated 
repair stations must demonstrate to the FAA, or other CAAs if 
applicable, that they possess the housing, facilities, equipment, 
trained personnel, technical data, and quality systems necessary to 
perform work in an airworthy manner. Based upon satisfactory showings 
in these areas, a repair station is rated to perform certain types of 
maintenance or alteration. Both U.S. and foreign repair stations are 
overseen and audited by the FAA, other CAAs, airline customers, and 
third-party auditing organizations, as well as the repair station's own 
quality assurance staff.
    Regardless of the location of the repair facility, the regulatory 
requirements are the same. Each item goes through a series of checks 
required by FAA and other civil aviation authority regulation before 
being placed on an aircraft. (Indeed, this system of checks by the 
maintenance providers and airline customers itself acts as a further 
protection against security risks and ensures that it is highly 
unlikely that any intentional act of sabotage would go unnoticed.)
    Not all repair stations look alike and their capabilities vary 
significantly. Some provide line maintenance--the routine, day-to-day 
work necessary to keep an aircraft or an airline's fleet operating 
safely. Some perform substantial maintenance, which includes more 
comprehensive inspection and repairs on airframes and overhauls of 
aircraft engines. Others offer specialized services for their customers 
such as welding, heat treating, and coating on a variety of aircraft 
parts. However, the vast majority of repair stations perform 
maintenance on components (e.g., landing gear, radios, avionics, etc.) 
Component maintenance usually occurs off the aircraft, typically away 
from an airport in industrial parks and similar facilities.
    The International Convention on Civil Aviation (i.e., the Chicago 
Convention) of 1944 and ICAO standards require that the State of 
Registry (i.e., the country in which an aircraft is registered) oversee 
the maintenance performed on that aircraft and related components, 
regardless of where the work is performed. Consequently, maintenance on 
a U.S. registered aircraft must be performed by an FAA-certificated 
maintenance provider. Similarly, when an aircraft of foreign registry 
requires maintenance (e.g., while in the United States), only a repair 
station certificated or validated by the aircraft's CAA of registry may 
perform the work. For example, only an EASA-certificated repair station 
may perform maintenance on an aircraft of French registry.
    Limiting the use of appropriately certificated repair stations 
overseas would make international travel and commerce difficult because 
aircraft always need some level of maintenance when they land at their 
destination. In other words, if there were no foreign FAA-certificated 
repair stations, U.S. air carriers would effectively be unable to 
operate internationally. The economic ramifications of this prohibition 
on the U.S. aviation industry are too obvious and vast to discuss in 
this statement.
    It is for all the foregoing practical, legal, and economic reasons 
that ARSA opposes any restrictions on the use of FAA-certificated 
foreign repair stations by U.S. operators and air carriers. If new 
restrictions are imposed, foreign authorities will retaliate against 
the U.S. industry. For example, the United States and the European 
Union (EU) are on the verge of concluding a new bilateral aviation 
safety agreement (BASA) that deals directly with the reciprocal 
certification of aviation maintenance facilities. Restrictions on the 
certification and use of foreign repair stations could cause the BASA 
to collapse and threaten years of work by FAA, State Department, and 
EASA negotiators to craft the new international agreement to allow U.S. 
companies easier access to European customers. The collapse of the 
U.S.-EU BASA would have devastating consequences for the 1,237 U.S. 
repair stations approved by EASA to perform maintenance on EU-
registered aircraft and related components. Indeed, in response to a 
recent ARSA member survey, more than 60 percent of respondents said 
that the collapse of the BASA and resulting costs and complexities 
would have either a ``major'' or ``devastating'' impact on their 
companies, and 18 percent said it would threaten their ability to stay 
in business. This would significantly threaten the positive balance of 
trade (referenced above) that the United States enjoys in aviation 
maintenance services.
    The past decade has seen an increase in the use of contract 
maintenance providers and maintenance facilities located abroad. This 
same period has also seen U.S. commercial aviation enjoy its safest 
period ever. At a minimum, this correlation suggests that the increased 
use of foreign and domestic repair stations is not negatively impacting 
aviation safety.

EVEN IN THE ABSENCE OF NEW TSA RULES, EXISTING STANDARDS ENSURE A HIGH 
  LEVEL OF SECURITY AT REPAIR STATIONS IN THE UNITED STATES AND ABROAD

    The absence of a formal TSA repair station security rule has not 
created a security vacuum in the aviation maintenance industry. The 
basic nature of the aviation industry demands that safety and security 
be the top priorities for our member companies. Operators and airlines 
will simply not do business with companies that put their passengers 
and valuable business assets (i.e., aircraft) at risk. Put simply, for 
ARSA members, good safety and security are good business.
    In the United States, repair stations located on a commercial 
airport are required to subject personnel to criminal background checks 
pursuant to TSA regulations when the employees have unescorted access 
to the designated airport security identification display area (SIDA). 
Therefore, a repair station employee that performs line maintenance for 
an air carrier has the same 10-year criminal background check 
requirement as an airline mechanic.
    Internationally, each country must implement security procedures 
based on ICAO Annex 17 standards, which means that rules similar to 
TSA's SIDA regulations are in place around the world. At a minimum, 
ICAO requires:
   A National civil aviation security program with continuous 
        threat monitoring and mandatory quality control procedures;
   Airport security programs for each airport serving 
        international carriers;
   Air operator security programs;
   Background checks for persons implementing security control 
        measures and persons with unescorted access to restricted 
        security areas; and
   Periodic ICAO security audits.
    However, many repair stations are located miles away from airports 
and perform specialized work on component parts. These companies may 
not be subject to SIDA requirements, but that does not mean they do not 
have security procedures in place to protect their customers' property 
and their employees. As part of its model regulatory compliance manual 
for repair stations, ARSA recommends the following as best security 
practices for the industry:
   The facility should be monitored by an electronic security 
        device and secured by deadbolts and locks.
   Only current employees should be provided with keys, and 
        those keys should be retrieved upon termination or change of 
        employment. If the keys are not retrieved, the locks and 
        deadlocks should be changed.
   There should be adequate lighting around the perimeter of 
        the building.
   Customers and other persons that are not employed by the 
        repair station should be escorted when provided access to areas 
        of the company where maintenance, preventive maintenance, or 
        alteration activities are performed.
    The results of an ARSA member survey conducted last week further 
illustrate the extent to which security practices are widely employed 
by U.S. and foreign repair stations even in the absence of TSA rules. A 
majority of the survey respondents reported having the following 
security practices in place:
   Limited access through a single locked entrance;
   Criminal background checks on new employees;
   Prohibition on unescorted visitors;
   Customer products kept in segregated, locked/limited access 
        area;
   Security alarm;
   Visitor sign-in log;
   Perimeter fencing;
   Locked doors.
    Many ARSA members also require employees to wear badges and have 
video cameras installed to monitor the premises. Of course, all the 
foregoing security practices are in addition to laws and regulations 
applicable to all U.S. employers requiring citizenship verification for 
new hires and, for repair stations working on air carrier aircraft, 
random drug testing.
    It is significant that none of the ARSA survey respondents reported 
having a security breach in the past 2 years that, if undetected, would 
have compromised the airworthiness of the products the company was 
working on at the time. The survey results are highly reliable and have 
a margin of error of just 8 percent for the entire population of U.S. 
FAA part 145 certificate holders. While this does not by itself prove 
that security is not a problem, at a minimum it suggests that the 
industry's current security practices are working.
    In sum, aviation safety and security do not begin and end with the 
TSA, FAA, or any other regulatory body. Government inspectors will 
never be able to oversee every facility or employee all the time. The 
industry has clearly recognized that it has the ultimate obligation to 
ensure that the civil aviation system is secure. All evidence suggests 
that it is fulfilling that responsibility even in the absence of the 
long-awaited repair station security regulation.
tsa rules must not take ``one size fits all'' approach to security and 

 THE SMALL BUSINESS-DOMINATED AVIATION MAINTENANCE INDUSTRY MUST HAVE 
                  ADEQUATE TIME TO REVIEW AND COMMENT

    The majority of entities that will be impacted by the TSA repair 
station security rule are small businesses. The laws adopted to govern 
the rulemaking process, namely the Administrative Procedure Act and the 
Regulatory Flexibility Act, are designed to protect the Nation's small 
businesses from onerous and excessively burdensome regulations. 
However, by rushing the rulemaking, Congress threatens to deny affected 
companies the opportunity to fully comment, which could have 
devastating consequences for repair stations and their employees. 
Additionally, as described above, the aviation maintenance industry is 
very diverse. A ``one size fits all'' rule would inevitability impose 
unnecessary regulatory burdens and costs on small businesses. 
Understanding the varying degrees of access to aircraft and sensitive 
areas, the location of facilities, and additional factors is essential 
to crafting a rule that targets the areas that pose the greatest 
security risk.
    With the foregoing complexities of the repair station industry in 
mind, in order to ensure that the TSA's new security regulation 
achieves the goals intended by Congress, affected parties must have 
adequate time to comment. However, by mandating the August 3, 2008 
``due date,'' the law effectively gave the TSA and industry two bad 
options: Support a hurried rulemaking to avoid penalty or ensure a 
deliberate rulemaking process but risk missing the mandated due date. 
This far-reaching rule requires adequate time for TSA deliberation, 
industry comment and agency response. It is better to do the process 
right rather than fast.
    ARSA appreciates Congress' frustration with the fact that TSA has 
not yet issued its repair station security rule. However, we attribute 
this delay at least partially to the agency's desire to direct its 
scarce resources at the areas that pose the greatest risk to the 
traveling public. Forcing TSA to direct its attention to a segment of 
the aviation industry where there is no demonstrated safety risk means 
that the agency has fewer resources to focus on high-risk areas. By 
forcing the reallocation of resources in this manner, Congress could 
inadvertently make travel less safe.
    In testimony before the Senate Committee on Commerce, Science, and 
Transportation on Oct. 16, 2007, former TSA Administrator Kip Hawley 
discussed several of the initiatives TSA was pursing to increase safety 
across transportation modes ranging from highways and rail to aviation 
and cargo shipments. During the hearing, Hawley testified that the TSA 
currently is committed to focusing its resources on ``high priority 
items'' facing National security interests and said that the agency 
must be allowed to act on its risk determinations. Administrator Hawley 
stated in his written testimony that:

``[M]any of the rulemaking requirements mandated in the 9/11 Act do not 
adequately recognize the obligations that TSA must give the many 
stakeholders affected by proposed regulations and the general public . 
. . These requirements are time consuming but are time well spent to 
assure that our regulations achieve their objective in a way that is 
transparent to stakeholders and the public and does not adversely 
affect travel and commerce.''

          INDUSTRY SHOULD NOT BE PUNISHED FOR AGENCY INACTION

    Despite the full cooperation of industry, the TSA has failed to 
promulgate a final rule in a timely manner. However, rather than 
punishing TSA, Congress is instead punishing the aviation maintenance 
industry with a ``freeze'' on initial certification of foreign repair 
stations. The ban is having a significant impact on the ability of 
American companies to expand and service international markets. As one 
respondent to ARSA's recent member survey stated, ``We were very close 
to complete with licensing our source and were just performing the 
demonstration phase of the EASA certificate at the time of the 
moratorium. We have been unable to support a market that was very 
heavily into our business plan and the situation could likely cause 
closure of the facility if the ban isn't lifted impacting employment 
both in our United States Station and Europe.''
    Punishing industry for the failure of an Executive agency to act 
sets a dangerous precedent. U.S. aviation industry companies and the 
thousands they employ do not have the power to compel TSA to issue the 
repair station security final rule, yet they pay the price for the 
agency's inaction.

                               CONCLUSION

    In sum, even without the new TSA repair station security rules, 
foreign and domestic repair stations are safe. Existing domestic and 
international laws and regulations, customer requirements, company 
policies, and industry best practices ensure that security is a 
priority at repair stations throughout the world.
    ARSA looks forward to working with TSA and the members of this 
panel to craft new rules that improve repair station security. However, 
as the rulemaking process moves forward, both Congress and TSA must be 
mindful of the diverse nature of the aviation maintenance industry and 
the fact a ``one size fits all'' approach to security will not be 
successful. Congress must give TSA adequate time to consider the impact 
that the rules will have on the small business-dominated aviation 
maintenance industry and ensure that the regulations will not undermine 
the competitiveness of a thriving sector of the U.S. economy.
    In the end, no Government or agency can by itself ensure aviation 
safety and security. Both depend on a commitment from aviation industry 
companies and their employees who are operating the system on a day-to-
day basis. In the same way that ARSA works with civil aviation 
authorities around the world to improve the quality of regulation and 
oversight, so too will we continue to work with our domestic and 
foreign members to improve safety and security practices.
    Chairwoman Jackson Lee, thank you again for the opportunity to 
participate in this hearing. I look forward to answering whatever 
questions you and the Members of your subcommittee have.

                        APPENDIX A.--FAA REPAIR STATIONS BY STATE (INCLUDING TERRITORIES)
   Prepared by the Aeronautical Repair Station Association (ARSA) Based on FAA Air Agency Data Dated 11/09/09
----------------------------------------------------------------------------------------------------------------
                                                                    Number of Repair
                             State                                      Stations           Number of Employees
----------------------------------------------------------------------------------------------------------------
AK............................................................                       52                      482
AL............................................................                       57                    5,760
AR............................................................                       45                    3,334
AZ............................................................                      143                    5,460
CA............................................................                      651                   30,597
CO............................................................                       69                    1,136
CT............................................................                       99                    7,330
DC............................................................                        1                        6
DE............................................................                        7                      952
FL............................................................                      508                   16,290
GA............................................................                      118                   10,599
GU............................................................                        1                        6
HI............................................................                       13                      141
IA............................................................                       35                    3,006
ID............................................................                       29                      484
IL............................................................                      104                    4,057
IN............................................................                       67                    2,976
KS............................................................                      111                    6,372
KY............................................................                       37                      728
LA............................................................                       37                    2,096
MA............................................................                       56                    1,743
MD............................................................                       25                    1,445
ME............................................................                       13                      864
MI............................................................                      113                    4,044
MN............................................................                       55                    2,091
MO............................................................                       52                    2,022
MS............................................................                       20                      834
MT............................................................                       22                      315
NC............................................................                       70                    2,930
ND............................................................                       13                      199
NE............................................................                       13                    1,365
NH............................................................                       23                      569
NJ............................................................                       65                    2,763
NM............................................................                       20                      465
NV............................................................                       28                      689
NY............................................................                      121                    5,781
OH............................................................                      129                    4,774
OK............................................................                      140                   12,989
OR............................................................                       49                    1,536
PA............................................................                       93                    2,702
PR............................................................                       14                      121
RI............................................................                        7                      294
SC............................................................                       36                    2,331
SD............................................................                       15                       66
TN............................................................                       55                    2,018
TX............................................................                      419                   25,688
UT............................................................                       28                      331
VA............................................................                       45                    1,191
VI............................................................                        1                        1
VT............................................................                       11                      154
WA............................................................                      114                    9,038
WI............................................................                       48                    1,648
WV............................................................                       15                    1,460
WY............................................................                       10                       82
                                                               -------------------------------------------------
      Total...................................................                    4,122                  196,355
----------------------------------------------------------------------------------------------------------------

    Ms. Jackson Lee. Let me thank the witnesses for their 
thoughtful testimony and emphasize again the importance of 
Congress both being an entity for oversight, and as well, to 
correct what we see has a detrimental impact on securing of the 
homeland.
    I might say in response to witnesses' testimony that the 
status of FAA certification was a bipartisan decision made in 
2007 during the Bush administration. So I hope that we can 
establish that this is a bipartisan desire to ensure the 
security of this Nation.
    With that, let me begin my questioning with Mr. Roach and 
Mr. Gless and Mr. Moore.
    I would like your perspective on the overall differences 
between security protocols at foreign repair stations compared 
to security systems we have here in the United States, some of 
which you have heard from your fellow colleagues, or some you 
may have first-hand knowledge.
    Mr. Roach, what is the difference security protocols you 
think are here versus in foreign repair stations?
    Mr. Roach. In the United States, the people that work with 
aircraft are subject to very strict background checks. There 
are--excuse me. They are treated--people who work with aircraft 
are treated just as an worker at an airport, background checks, 
drug and alcohol testing, so you will never have somebody who--
a known terrorist to be working in a facility within the United 
States.
    In addition, we believe that it is a security fact that 
they hire people that really don't have much knowledge about 
aircraft who can work on aircraft without being able to read 
logbooks or read the maintenance manuals.
    So we think that there is a distinct difference between 
what happens here in the United States versus what happens 
every place else and without the inspections that we are 
subject to, surprise inspections, one really does not know what 
happens over there because when you have an inspection that you 
have to tell somebody 60 days ahead of time that you are 
coming, then a lot of things can happen and for a short period 
of time and though once the inspectors leave, if and when they 
can get there, then they go back to business as usual.
    Ms. Jackson Lee. Thank you, Mr. Roach.
    Mr. Gless. On any given day on our largest maintenance base 
being the one in Tulsa, Oklahoma, we could turn around and have 
a fleet of FAA inspectors show up, come in and dig through 
everything from a simple piece of paperwork to the actual work 
being done.
    On any given day, my individuals working on the fields and 
on the airports and in the hangers are confronted by Customs, 
TSA, Homeland Security, any of the different individuals 
checking security. They must wear their badges. Their 
background checks go in some locations until their 16th 
birthday.
    Those checks are not being accomplished in other places. 
There may be a few out there that are now looking into it. Some 
of the airlines that are contracting out are starting to 
mandate it as, you know, some of the brothers have said, but it 
is not the norm that takes place here every day.
    The individuals are required to have these credentials. 
They are required to have the knowledge and understanding to 
read the manuals like has been stated, and they are watched 
daily.
    The individual overseas in these other locations, as was 
said, they have to notify them prior to inspection, and we know 
how that goes. When someone tells you they are coming to look 
at something, you prepare for it. We are treated differently 
here in this county than they are treated overseas, and you 
know, just the security and the background and the covering of 
the employees is not equal.
    Ms. Jackson Lee. So workers that you represent are those 
that are working for one particular airline?
    Mr. Gless. The large bulk of my employees, we have them in 
multiples but the large bulk of them are at American Airlines. 
We are the last larger major in-sourcing airline left.
    Ms. Jackson Lee. So even on domestic soil, American 
Airlines at this point is not using contractual repair shops?
    Mr. Gless. We use for certain items, of course, you know, 
not everything is built inside. There are things that have to 
be sent out. We have a joint venture with Rolls Royce where my 
mechanics work on the Rolls Royce engines of other aircraft.
    That is shown as contracting out. They are my mechanics, 
Rolls Royce's facility, but it is still viewed as a contracting 
out. So as it was said by another panelist that everybody does 
some level of contracting out, yes, everybody has to send 
something out at some point. But we primarily do all of our 
heavy maintenance in-house.
    Ms. Jackson Lee. The contracting out that is done and most 
of the people you are--not your workers?
    Mr. Gless. The contracting outside of our joint ventures, 
yes, they are done with other facilities in other locations and 
other companies.
    Ms. Jackson Lee. Mr. Moore. Do you remember the question, 
what is the difference between the security protocols in 
domestically and then overseas to your knowledge?
    Mr. Moore. Yes, and I concur with both of the gentlemen 
here and I won't repeat their testimony. I will speak to the 
facility itself.
    I can do a compare and contrast as I read in my testimony 
about what I saw in El Salvador. You fly out of IAH, I am sure, 
occasionally. When I talked about the electronic badge readers, 
if you swipe a badge to get on the property at IAH and your 
badge is not active at that time or it has been suspended for 
any reason, and you will have the Houston Airport Authority at 
that gate within minutes.
    You have a huge visibility with Homeland Security and TSA 
all over the facility no matter where you go, whether they 
are--if you are driving across the airport you are going to see 
Homeland Security. You are going to see TSA.
    I go back to the perimeter fencing as there is a--I believe 
it is 10-foot rule--and don't quote me on that, but I believe 
at one point we were told we had to move all of our equipment 
that far back from either side of the fence, so those are some 
of the things that I see along with what these gentlemen spoke 
to.
    But again, I mean, you have much more stringent controls in 
the United States. Another good example, just for a mechanic to 
go upstairs for lunch, TSA may have a random checkpoint set up 
at the top of the elevator on what you are bringing into the 
terminal even you are on duty. So those are the kinds of 
security protocols and measures that we have in place.
    Ms. Jackson Lee. Thank you.
    Mr. Barimo, you can sense the line of my questioning is 
with the full recognition of the asset that this industry 
represents, repair stations, domestic repair stations, foreign 
repair stations and the attentiveness in which airlines address 
these crucial issues.
    However, the issue of security and securing the homeland is 
not a predictable job. Incidences of terrorism, unfortunately, 
are not predictable and it causes one to have to be prepared 
all the time.
    So the question goes to you in terms of the distinction in 
the security protocols that you may have or your companies, 
your members, may have in the United States versus in the 
foreign repair. Comment on the fact that there has to be notice 
given for, if you will, inspections versus the spot checks that 
are going on here in the United States.
    Mr. Barimo. Thank you, Madame Chairwoman. I--let me first 
say that we support surprise inspections. We think they are 
very effective, and we believe that there is a way to conduct 
those inspections in a way that doesn't compromise security. We 
are looking forward to having TSA and FAA work together to 
develop ways to do that.
    It is certainly a great idea. We understand some of the 
challenges in conducting some of those surprise audits. We 
think those challenges can certainly be overcome, and we think 
as part of the rulemaking process we will see that happen.
    Regarding the security aspect and the differences 
domestically versus foreign facilities, we have to keep in mind 
that we are talking about facilities--at least when we are 
talking about ATA member airlines using facilities abroad, we 
are talking about large airports that have security 
requirements that conform to ICAO, the international standards.
    So there is a standard out there for security. It is driven 
by an ICAO guideline and these MROs, these repair stations, 
that are located on an airport are subject to the same 
requirements. So there are, in fact, background checks and 
other requirements in place for facilities that, in fact, are 
located at an airport.
    Ms. Jackson Lee. You are talking about foreign repair 
stations?
    Mr. Barimo. Yes.
    Ms. Jackson Lee. That are located at an airport?
    Mr. Barimo. Yes.
    Ms. Jackson Lee. What protocol are you speaking of? Is it 
based on the foreign country's protocol or based on TSA's or 
U.S. protocol?
    Mr. Barimo. It is based in the international standard 
protocol that is driven by ICAO up to the individual countries 
to implement those protocols and----
    Ms. Jackson Lee. It is optional.
    Mr. Barimo. No, it is not optional and I will--if I may, 
let me defer to Christian. He is well-versed in this area.
    Mr. Klein. Or between the two of us, right? The answer is 
that I believe it is any signatory to the Chicago Convention 
which is the international treaty that created ICAO--would have 
to--if they didn't accept Annex 17, which was the one that 
implements or mandates these security standards at 
international airports, they would have to file an exemption 
with ICAO. So we would be on notice who doesn't have the higher 
security regulations.
    Also if I can just go back to one point, this question of 
the surprise inspections, to try to alleviate some of your 
concern there. You know, when you can--if you have notice of an 
inspection, you can certainly sweep the floors. You maybe put a 
fresh coat of paint up on the walls, but the reality is if the 
FAA is going in and looking at systematic deficiencies at an 
organization, systematic security deficiencies, systematic 
safety deficiencies. That is not something you can cover up in, 
you know, 30 days.
    That is something that is going to be evident in the way 
the work is being done. Also, again, just a reminder here, it 
is not just the FAA that is overseeing these foreign 
facilities. There are literally scores of audits happening 
every year at foreign Part 145 certificate holders.
    It is not just the FAA. It is the other civil aviation 
authorities that supervise the other repair station 
certificates that facilities might have. It is the airlines 
that are going in and actually conducting audits, and it is 
third-party audit organizations.
    Then any repair station that is doing work air carrier 
aircraft also has to have a quality assurance system in place 
that has to have its own auditors in place. So again, it is not 
just a matter of the FAA coming in and conducting surprise 
inspections. It is also, again, there are multiple layers of 
inspection happening at these foreign facilities.
    Ms. Jackson Lee. Included in the international agreement, 
are there requirements for background checks? Can you detail 
what occurs?
    Mr. Klein. I am not an expert, unfortunately, on ICAO Annex 
17. It is my understanding that they are, but I can't 
absolutely confirm that, unfortunately.
    Ms. Jackson Lee. Do you not think it is important for the 
United States to have a framework that has a consistent 
approach to reviewing the backgrounds of individuals who are 
working on airplanes that American passengers, and others, are 
utilizing to travel to the United States?
    Mr. Klein. You mean, the TSA, what the TSA is basically 
proposing as a design here? Or beyond what the TSA is talking 
about doing?
    Ms. Jackson Lee. Just leave out agencies and should we, the 
United States, have a security scheme that addresses the 
questions of foreign repair stations to protect Americans who 
are traveling on these airplanes?
    Mr. Klein. I certainly think that there is, you know, that 
consistency from place is an important goal. You know, one of 
the things you get into obviously are issues of sovereignty, 
but to the extent that, you know, we can coordinate 
internationally and have common standards, absolutely, I think 
that should be a goal.
    Ms. Jackson Lee. Well, when you finally gave a yes, which 
is that we do need to have a structure on security that is 
consistent which is what I think----
    Mr. Klein. Well, absolutely.
    Ms. Jackson Lee [continuing]. We are attempting to secure 
during this hearing. Outsourcing of foreign repair stations has 
increased over the decade. To the witnesses do they think this 
trend is going to increase or level off? What is the trend for 
our domestic repair stations? Can they maintain their presence 
and volume of work in the face of increasing outsourcing trend?
    Mr. Roach.
    Mr. Roach. Well, if nothing else changed, yes, more work 
will be going overseas. Like I indicated previously, the most 
modern, efficient facility in the United States in 
Indianapolis, was closed. Then United Airlines fly 777 aircraft 
to China to be repaired.
    So these trends, because they can cut the cost of 
maintaining these aircraft, they are going to continue to fly 
those planes. Now, United Airlines used to employ some 14,000 
mechanics. They employ now 4,000 or 5,000 mechanics. The 
numbers keep going down.
    The same thing with Continental Airlines, the mechanic 
numbers were once twice as high as they are today. US Airways, 
a lot of work is being subcontracted out and the level of 
employment in this country has gone down.
    The people who used to fix and maintain aircraft in this 
country are decreasing while more work is going overseas to 
people, again, who cannot read and write English, who cannot 
read the maintenance manuals. That is a safety and security 
hazard within itself that somebody is working on an aircraft 
that can't read or write English, and therefore, somebody else 
has interpret what they are supposed to do.
    In terms of security, nobody cares, and that is the bottom 
line. They keep saying, well, it is for this reason and that 
reason, there is no uniform policy or background checks. There 
are no uniform policies on drug and alcohol testing. There are 
no uniform policies on anything and anything that happens.
    Let me just say one other point, is that aircraft today are 
built much better than they were years ago. What happens is 
these aircraft come back with a little defect here, a little 
defect there, and they can continue to fly because these 
aircraft were built in such a high-tech way that they are okay.
    There comes a point in time that as these aircraft with 
these defects, these small items continue to build up, we are 
headed for a catastrophe because as these aircraft get older 
and they continue to fly these planes overseas without the 
safeguards that we have been talking about this afternoon, 
little defects keep creeping up on these aircraft.
    Luckily, because some of them have been detected by 
mechanics when these planes are back in service--such as US 
Air--US Airlines aircraft that were back in service when our 
mechanics were able to detect these defaults, but it cannot 
continue to go in the long term. Sooner or later, we will pay 
the price.
    Ms. Jackson Lee. Mr. Gless.
    Thank you, Mr. Roach.
    Mr. Gless. Could you repeat the question again?
    Ms. Jackson Lee. The question is regarding the utilization 
of domestic repair places and foreign repair. Do you think they 
are going to increase? Is there going to be continued 
outsourcing? How do you see the future?
    Mr. Gless. Well, the future, I mean, we speaking from where 
I come from, you know, we are on an in-sourcing kick. We are 
trying to show that we can do it in-house. We have a better 
product that we are able to keep control of. We don't have to 
wait for somebody else to give us our aircraft back. We have 
efficiencies in place, and we have actually jointly together 
figured out ways to do it faster and better than the 
outsourcers.
    Right now, unfortunately, there is a trend of all of the 
airlines--as we race to the bottom, as we call it--to 
outsource. It is a cheaper way for people to not worry and it 
comes down to people. They are removing their people problem. 
They are going to a pay problem. They are just going to take 
their aircraft, ship it overseas and pay someone else and not 
worry about it.
    We would like to see more in-house. With the constricting 
of the airline industry right now, I believe there is more 
facilities than aircrafts to be repaired so there is a race to 
the bottom again for cheaper maintenance.
    That is even within this county. There are companies out 
there who are looking to do it cheaper and cheaper to get the 
work in. As long as somebody offers a product for cheaper and 
gives a product that will make their flight from A to B, it 
doesn't matter if there is as Mr. Roach says, you know, some 
small flaws as it comes out of check. There are redundancies in 
the systems to make sure the aircraft can continue on.
    So as long as, you know, the outsourcing continues and the 
cheaper fare is more important than the quality, the 
outsourcing will continue.
    Ms. Jackson Lee. Do your employees go overseas to work on 
planes on behalf of your company or the company that you work 
for?
    Mr. Gless. There are locations where we would ferry 
aircraft, where there is an aircraft down where there is not 
people. We have unionized workers in Europe who work for 
American Airlines who work on the aircraft. We have workers in 
South America and locations----
    Ms. Jackson Lee. But they are American Airlines employees.
    Mr. Gless. They are American Airlines employees. They are--
--
    Ms. Jackson Lee. So it is not outsourced, so they have a--
--
    Mr. Gless [continuing]. But there are some locations where 
there is contract maintenance as it was stated. You can't have 
people in every location of the world. But primarily they are 
American Airlines employees in these locations.
    Ms. Jackson Lee. Are they background-checked?
    Mr. Gless. They are through the company.
    Ms. Jackson Lee. Mr. Moore.
    Mr. Moore. The simple answer is yes. I believe, as long as 
this is a bottom-line driven industry, the race to reduce costs 
will continue. Unfortunately, and my feeling, and I have said 
this before is until we dig a big smoking hole in the ground, 
it is going to continue. Unless it is directly attributed to 
something that happened at an outstation, or excuse me, at a 
foreign repair station or a repair station, again, the 
statistics will hold as Mr. Barimo said.
    But think of this. Mr. Roach brought a point up about the 
facility up there in Indianapolis. So you have outsourcing, 
right? So now you have a repair station in there where United 
used to work--same guys working on United's airplanes.
    But because they can't find enough skilled labor, they 
actually contract again. So you have got airline contracting to 
a vendor who is now contracting to a labor supplier. So the 
chain keeps getting diluted.
    If you understand what I said earlier about the layer upon 
layer being taken away, this is what I am talking about. You 
keep looking for ways to go even further or closer to the edge 
and that is the fear.
    But yes, as long as this industry is bottom-line driven, 
they will continue to find ways to outsource more maintenance.
    Ms. Jackson Lee. Mr. Barimo, why don't you comment and Mr. 
Klein on this increasing inclination to outsource repair both 
domestically but in particular this hearing is on foreign 
repair. Is that what is the bulk of the structure for airlines 
is the outsourcing on foreign soil?
    Mr. Barimo. Madame Chairwoman, what I would say is that the 
domestic trend has been increasing. It has been centered around 
aircraft heavy maintenance checks and it has stabilized in 
the--depending on how you measure it, in the 40 percent to 50 
percent range.
    We think it will continue to creep up slowly but will 
remain in the 40 percent to 60 percent range for the 
foreseeable future. Regarding jobs----
    Ms. Jackson Lee. Wait--a 60 percent outsource?
    Mr. Barimo. Yes, based on total dollars spent. We are 
around 40 percent, 45 percent today. Regarding jobs going 
overseas, I would point out that other countries have 
recognized the value of the MRO business to their economy.
    We believe that there is an opportunity here in the United 
States to reinvigorate the MRO industry. We have no shortage of 
skilled people across the United States, many displaced auto 
workers that would love to enter into a thriving industry that 
in fact attracts more work to the United States and grow that 
industry.
    There are opportunities. There are facilities that could be 
modernized. We can retrain individuals. We can invest in some 
new technologies that would make us more competitive in that 
industry. So there are opportunities to in fact to grow that 
positive balance of trade beyond where it is today.
    Then finally I would just, you know, I feel obligated to 
counter something that Mr. Roach said and it was about small 
defects being tolerated on airplanes and it will eventually 
bite us.
    What I would point to is another chart in my testimony, and 
again, I want to take us back to data, if we look at mechanical 
reliability for airplanes, and I acknowledge that they are 
complex pieces of machinery. They are much more reliable than 
they historically were decades ago.
    But today we see reliability levels, mechanical reliability 
levels at the highest level we have ever seen. So something is 
happening that is right in the maintenance world and it is 
indicated not just by the absence of accidents, but by the 
reliability data.
    Ms. Jackson Lee. Let me ask the question. Are you, Mr. 
Klein, do you see outsourcing increasing and particularly with 
respect to the foreign repair stations?
    Mr. Klein. I think it will. A couple points, first of all, 
you know, the way we look at contract maintenance is that 
contract maintenance is helping airlines become more 
competitive. Airlines--the contract maintenance companies, 
quite frankly, get better returns on their investment in 
training and equipment and facilities et cetera than airlines 
can get because these repair stations are specialized companies 
that do specialized types of work.
    So the way we look at it is that these airlines are 
contracting out work that is helping the airlines reduce costs 
so they can be more efficient. Yes, it is cheaper but cheaper 
doesn't necessarily mean it is worse.
    They are able to see efficiency gains, reduce costs, and 
make themselves more competitive which means that there are 
going to be pilot jobs, flight attendant jobs, mechanic jobs in 
the future at those airlines because those airlines will 
survive as they become more competitive.
    I would also point out that, I mean, we hope that the 
outsourcing trend is consistent because contract maintenance 
makes a huge contribution to the U.S. economy. As I said 
earlier, we have a $2.4 billion balance, positive balance of 
trade in the market for contract maintenance services.
    So for, you know, for Air France, a U.S. repair station in 
Houston is a foreign repair station. So, you know, again, yes, 
we are sending some work overseas but the reality is that we 
are keeping a lot more here, and we are getting a lot more here 
from the rest of the world and it is a positive balance of 
trade.
    It is an industry thing--a really positive contribution to 
the U.S. economy and growing jobs in small businesses all 
around the country. So again, I think that it is a trend that 
is here to stay, again, because we are helping airlines we do 
serve to improve their efficiency.
    Ms. Jackson Lee. Let me ask these final questions and thank 
the witnesses and try to frame again that this is homeland 
security and the key is securing the Nation. I have listened to 
Mr. Barimo and Mr. Klein on the economic aspect and the 
goodwill of the airlines, and I agree.
    But I started out by saying that terrorism is 
unpredictable. Being able to secure a Nation requires this 
Nation to be at the top of its game. In the report that I am 
looking at, and you listened to the testimony before, it 
specifically notes ``FAA needs to improve its system for 
determining how much and where outsource maintenance is 
performed.''
    That is probably a domestic issue but certainly it is an 
international issue. That gives me reason for concern that we 
have a Federal agency that cannot get their hands around what 
is being outsourced.
    When we talk about the economy, I think the economy also 
deals with how many Americans we can hire. I didn't hear 
anything from my two friends indicating that we transport 
American workers over to these foreign repair stations, 
individuals who have been vetted, who have security clearances, 
because that is the question.
    The announcement that the senator made about an al Qaeda 
person being on site at a Singapore repair station is the kind 
of unpredictable action that could be occurring around the 
world. So I would indicate and ask for your comment on the FAA 
needs to insure carriers and repair stations and have a strong 
oversight system--two points--make it clear FAA needs to ensure 
carriers and repair stations have strong oversight systems, and 
FAA needs to improve the system for determining how much and 
where outsource maintenance is.
    In your answer--and that is, of course, in the backdrop of 
TSA in the midst of its rulemaking. I am prepared to discuss 
with TSA as to whether or not they need to narrow the focus on 
repair stations that are overseas because Mr. Ellis made a 
point--Mr. Klein, excuse me, made a point concerning the impact 
it might have on domestic U.S. companies if they had to subject 
themselves to burdenous rulemaking.
    But the key here is to intertwine the utilization of 
already checked American workers with clearances and who we 
know have an understanding of the concept of what we are doing 
to be working in this field for security purposes versus what I 
sense is a unchecked system of foreign repair stations.
    So Mr. Roach, would you answer that long question please? 
You can summarize in however you desire to do. This is the last 
question.
    Mr. Roach. Okay. I think you are right on target. I think 
that from all the discussions that we have had more work is 
going to be sent overseas. Again, we are flying very expensive 
aircraft, the Boeing 777 to Red China, so there is no 
restriction on where planes go and they could be being 
maintained any place in the world.
    Anybody can work on them, and I think we briefly read the 
rulemaking that was posted in the registry today, and we think 
that goes a long way in correcting the problems. But the FAA 
needs to have a better control on where maintenance is done. 
They need to have a better control on inspections. Do we need 
the inspections? We need to know who is working on these 
aircraft.
    We don't need aircraft that could--things can be put on 
these aircraft and flown back to the United States to destroy 
the lives of people. We don't need aircraft that is being 
maintained in places where they are smuggling cocaine and 
heroin back into this country.
    So we think they need to know who is working on the plane. 
We need to know where they are working on this plane. We need 
the background checks that we are required to do. The majority 
of the mechanics that are working on aircraft for the United 
States airframe and power plant licensed mechanics.
    The mechanics or the people that are working on these 
aircrafts from foreign countries are just anybody that can get 
to work on aircraft. They only need one person to sign the 
logbook and everybody else--they can get anybody wandering down 
the street to work on aircraft, no background checks.
    So I think yes, that we need better oversight, and we need 
better control on where these planes go, especially those that 
are going to be flown back into the United States and carry 
thousands and thousands of people.
    Ms. Jackson Lee. Would you be comfortable if the rulemaking 
was limited or directed at foreign repair stations in 
particular? It is the broad rulemaking now for all stations.
    Mr. Roach. We, again, I haven't been able to read it and we 
are reading, in the process, and we will comment on that and at 
the appropriate time we will take your comments into 
consideration.
    Ms. Jackson Lee. Mr. Gless.
    Mr. Gless. Well, let me start by saying that the workers 
here in the United States are monitored. The locations and the 
larger facilities outside the small little mom-and-pop shops 
that may be working on a coating or something of specific value 
to a covering of a table or something like that are monitored.
    They are on facilities that are certified by the FAA. They 
are on facilities that are inspected regularly by certain, you 
know, FAA inspectors. I believe it was Mr. Dalbey from the FAA 
stated that they are up to 709 foreign certified stations right 
now, 709.
    Ms. Jackson Lee. So would you welcome the rulemaking to be 
focused on the security conditions in foreign repair stations?
    Mr. Gless. Yes, it would be a great start.
    Ms. Jackson Lee. Thank you.
    Mr. Moore.
    Mr. Moore. Yes. Simply, yes. The single standard----
    Ms. Jackson Lee. Yes, that the rulemaking focus on foreign 
repair stations?
    Mr. Moore. Yes.
    Ms. Jackson Lee. Thank you.
    Mr. Moore. I say that simply because you should have the 
same standard. If you work in the United States at registered 
aircraft in the United States, why would you expect any 
different standards if you were working outside the United 
States and it is still the same aircraft. It is still the same 
people.
    Ms. Jackson Lee. Thank you very much.
    Mr. Barimo, excuse me.
    Mr. Barimo. Thank you.
    Ms. Jackson Lee. I want to call you Barrymore, but I will 
not do that again.
    Mr. Barimo. You had it right the first time with Barimo.
    Ms. Jackson Lee. Okay.
    Mr. Barimo. Let me just say, airlines are willing to 
provide information about where work is performed to the FAA. 
We provide data today. If that needs to change, if the format 
of that, if the scope of that needs to change, we are 
absolutely willing to support that effort because we agree that 
they need to know. We believe that people know within FAA 
today. I think it is a matter of them being able to take 
advantage of that information.
    Regarding the TSA rulemaking, I would say no. I don't think 
it is too broad. I think if it is a risk-based rule, that the 
risk analysis will focus us where we need to look. If that 
focus turns out to be foreign repair stations, then by all 
means we focus on foreign repair stations.
    But I think it is premature to jump there, and I think we 
need to let the experts do the analysis. It is great to have 
TSA on board now, and we look forward to working with them to 
develop a rule that is effective and does address your 
concerns.
    Ms. Jackson Lee. So you take some issue with the fact that 
it will be too much of a burden to put a general rule out that 
impact the domestic and foreign repair stations?
    Mr. Barimo. Yes. I think it skips a step and that step is 
the risk analysis. I think that has been so critical for us on 
the safety side and it has helped us channel our resources to 
where they could really be effective and they have been. I 
think we need to take the same approach with the security side 
and not skip that all-important risk analysis step. We may end 
up at the same place, but I think we need to follow the path.
    Ms. Jackson Lee. It has come to my attention that not all 
countries have signed the international agreement so let me 
pose this question: Do you recognize the importance of having 
security background checks for individuals in foreign repairs 
shops that work on airlines that are headed toward the United 
States?
    Mr. Barimo. Absolutely.
    Ms. Jackson Lee. Mr. Klein, your comment on the idea of 
narrowing the focus of the rulemaking and the importance of the 
FAA having greater oversight and responsibility for the 
security of these foreign--not just the security but the 
oversight joined with TSA on the securing of these foreign 
repair stations and domestic repair stations.
    Mr. Klein. Yes, thank you. A couple of points, first of 
all, ARSA has a long history of working very, very closely with 
the FAA on regulatory compliance and to try to push out 
regulatory compliance information to our members, so we take 
this very, very seriously.
    In fact, we have been on the record for years as coming to 
Congress to beg for more oversight resources for the FAA 
because when the FAA doesn't have the money to do its job from 
an oversight standpoint, that directly impacts our members' 
bottom line.
    In fact I reference a survey that we conducted last week. 
Thirty percent of our members reported losing business 
opportunities because the FAA didn't have the resources to 
approve applications and changes to operation specifications 
and things like that. So again, FAA resource is absolutely 
critical again, and we would certainly support that. On the 
question of the extending or limiting the scope of the TSA 
rulemaking to small companies, I think----
    Ms. Jackson Lee. No, you didn't hear me. Not limiting to 
small companies.
    Mr. Klein. All right, so foreign repair stations.
    Ms. Jackson Lee. Foreign repair.
    Mr. Klein. I think if you go back and check Vision 100, as 
I recall it was drafted to apply to both foreign and domestic 
repair stations. So I don't think it is a question necessarily 
for the TSA. I think it is a question that Congress has already 
mandated this, that they be applicable to both U.S. and foreign 
companies.
    I can--I will double--that is my understanding of the law. 
I am sorry.
    Ms. Jackson Lee. You are now speaking to Congress, so I am 
asking your input on whether or not you believe it should be 
narrowed to foreign repair stations?
    Mr. Klein. Yes, I would----
    Ms. Jackson Lee. You are absolutely right. I am just asking 
a question, do you think it should be narrowed?
    Mr. Klein. I would agree with Basil's comment that if you 
have, you know, again, we have to do some risk analysis and see 
where the risk is greatest. I mean, I certainly, you know, I am 
not saying that we want to impose a bunch of new regulatory 
burdens on our small member companies around the country.
    I think if the rule is drafted in such a way that it 
reflects the realities of the industry, the fact that many of 
these are small companies where you have two or three 
employees, you know, maybe you don't need to have badging at a 
company with two or three employees, that we can craft a rule 
that is going to work for everybody.
    Ms. Jackson Lee. Do you believe that it is important and 
imperative to have background checks for all individuals in 
foreign repair stations that are working on airplanes destined 
for the United States?
    Mr. Klein. I think that it is appropriate to have rules 
that are equivalent to the background investigations that we 
have here. Again, I mean, it is not every airline employee in 
the United States gets background investigations.
    As I understand the rule, the STA rules, it is if you 
require unescorted access to the aircraft at the ramp, you have 
a criminal background investigation through TSA so again, 
equivalency, absolutely.
    Ms. Jackson Lee. Well, that is why we are in the midst of a 
rulemaking. Obviously, if you were in the midst of working on a 
aircraft that could be carrying passengers, whether you are in 
the area that is on the ramp or near the ramp, you could be in 
the repair shop and have the ability to undermine the viability 
of an aircraft.
    So my question is do you think it is important when 
airplanes are repaired on foreign soil, to have those who have 
access to that airplane have a background check?
    Mr. Klein. If they are doing safety sensitive work and have 
unescorted access to the aircraft or the ramp, sure. Are you--I 
guess I am not understanding the question. Are you saying 
should every single person working at a foreign repair station 
have a background check?
    Ms. Jackson Lee. That is working on the aircraft.
    Mr. Klein. On the aircraft, again, if it is consistent with 
the U.S. rules, absolutely.
    Ms. Jackson Lee. Well, let me thank you for all of your 
testimony and your patience in the questioning. I think this 
has been instructive and constructive as it relates to the FAA 
and TSA moving forward on, I think, an important loophole that 
is growing.
    I hope as we have had this discussion with our fine members 
from America's workforce and also of the business community 
that we find an opportunity to come together. I think it is 
important again that we look a second time around about the 
utilization of American workers to continue to ensure the 
security of this Nation.
    So let me thank you again for your testimony and the value 
of your testimony is most important, and I believe that this 
hearing will help to inform the final rule for the security of 
foreign repair stations. The Members of the subcommittee may 
have additional questions for the witnesses, and we ask that 
you respond to them expeditiously in writing.
    Hearing no further business, the subcommittee stands 
adjourned. Thank you.
    [Whereupon, at 5:07 p.m., the subcommittee was adjourned.]

                                 
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