[Senate Hearing 114-109]
[From the U.S. Government Publishing Office]


                                                       S. Hrg. 114-109

                 FAA REAUTHORIZATION: CERTIFICATION AND U.S. 
                  AVIATION MANUFACTURING COMPETITIVENESS

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

                                HEARING

                               BEFORE THE

                     SUBCOMMITTEE ON AVIATION OPERATIONS, 
                              SAFETY, AND SECURITY

                                 OF THE

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 21, 2015

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation
                             
                             
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                   JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi         BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri                  MARIA CANTWELL, Washington
MARCO RUBIO, Florida                 CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire          AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas                      RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska                BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas                  EDWARD MARKEY, Massachusetts
DAN SULLIVAN, Alaska                 CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin               TOM UDALL, New Mexico
DEAN HELLER, Nevada                  JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado               GARY PETERS, Michigan
STEVE DAINES, Montana
                    David Schwietert, Staff Director
                   Nick Rossi, Deputy Staff Director
                    Rebecca Seidel, General Counsel
                 Jason Van Beek, Deputy General Counsel
                 Kim Lipsky, Democratic Staff Director
              Chris Day, Democratic Deputy Staff Director
       Clint Odom, Democratic General Counsel and Policy Director
                                 ------                                

       SUBCOMMITTEE ON AVIATION OPERATIONS, SAFETY, AND SECURITY

KELLY AYOTTE, New Hampshire,         MARIA CANTWELL, Washington, 
    Chairman                             Ranking
ROGER F. WICKER, Mississippi         AMY KLOBUCHAR, Minnesota
ROY BLUNT, Missouri                  RICHARD BLUMENTHAL, Connecticut
MARCO RUBIO, Florida                 BRIAN SCHATZ, Hawaii
TED CRUZ, Texas                      EDWARD MARKEY, Massachusetts
DEB FISCHER, Nebraska                CORY BOOKER, New Jersey
JERRY MORAN, Kansas                  TOM UDALL, New Mexico
DAN SULLIVAN, Alaska                 JOE MANCHIN III, West Virginia
RON JOHNSON, Wisconsin               GARY PETERS, Michigan
DEAN HELLER, Nevada
CORY GARDNER, Colorado
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on April 21, 2015...................................     1
Statement of Senator Ayotte......................................     1
Statement of Senator Cantwell....................................     2
Statement of Senator Moran.......................................    34
Statement of Senator Daines......................................    36
Statement of Senator Udall.......................................    38
Statement of Senator Klobuchar...................................    39
Statement of Senator Sullivan....................................    41

                               Witnesses

Dorenda Baker, Director, Aircraft Certificaton Service, Federal 
  Aviation Administration (FAA)..................................     3
    Prepared statement...........................................     5
Gerald L. Dillingham, Ph.D., Director, Physical Infrastructure 
  Issues, U.S. Government Accountability Office..................     9
    Prepared statement...........................................    11
Peter J. Bunce, President and CEO, General Aviation Manufacturers 
  Association....................................................    21
    Prepared statement...........................................    23

                                Appendix

Response to written questions submitted to Dorenda Baker by:
    Hon. Dean Heller.............................................    47
    Hon. Cory Gardner............................................    47

 
                   FAA REAUTHORIZATION: CERTIFICATION
                    AND U.S. AVIATION MANUFACTURING
                            COMPETITIVENESS

                              ----------                              


                        TUESDAY, APRIL 21, 2015

                               U.S. Senate,
  Subcommittee on Aviation Operations, Safety, and 
                                          Security,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:30 p.m. in 
room SR-253, Russell Senate Office Building, Hon. Kelly Ayotte, 
Chairman of the Subcommittee, presiding.
    Present: Senators Ayotte [presiding], Cantwell, Wicker, 
Moran, Sullivan, Gardner, Daines, Klobuchar, Udall, and Peters.

            OPENING STATEMENT OF HON. KELLY AYOTTE, 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Ayotte. Good afternoon and welcome. Today's hearing 
is one of several we are holding in preparation for this year's 
Federal Aviation Administration's Reauthorization effort.
    Last week, the full committee heard from the FAA 
Administrator Huerta on a number of issues in relation to the 
FAA Reauthorization effort including some testimony on the 
certification process. Today, we will have the opportunity to 
discuss the certification process in more detail and explore 
any additional steps that need to be taken in order to best 
support and enhance the safety of our National Aerospace System 
and our nation's manufacturing competitiveness.
    The United States is uniquely situated as a leader in the 
global aerospace arena, and that is due to our innovative and 
forward-thinking aerospace industry. We must encourage and 
enable innovation so that we remain competitive. The government 
should not be a roadblock either real or perceived to a safer 
more efficient aerospace industry.
    Civil aviation has been and remains a critical sector to 
our Nation's economy. In fact, in Fiscal Year 2012, the FAA 
reports that the aviation industry supported 11.8 million 
American jobs and contributed $1.5 trillion in economic 
activity to our GDP. In addition, civil aircraft manufacturing 
continues to be the top net exporter in the United States and 
has an estimated $53.4 billion in positive impact on the trade 
balance for our country.
    The United States National Airspace System remains one of 
the safest in the world largely due to safety parameters 
required by the FAA and the certification of aircraft designs 
in reproduction. The certification process, however, remains 
subject to criticisms of inefficiency and inconsistency that 
can result in costly delays and ultimately reduce 
competitiveness.
    While safety is and must be the top priority, we need to 
find ways to make the process more efficient, more consistent, 
and more encouraging of new designs and products. New 
technology can often mean safer technology. We must find a way 
to encourage and enable the deployment of innovation and new 
technology for the safety and benefit of civil aviation 
customers and businesses.
    Several areas remain problematic including the issue of 
foreign civil aviation authority validation of FAA certificates 
and the underutilization of the Organization Design 
Authorization, or ODA, mechanism. In addition, inconsistent 
regulatory interpretations remain an issue. For example, 
different interpretations of regulations by different FAA 
offices has, unsurprisingly, resulted in costly time delays for 
new design approvals. I think this is something we can fix and 
we must fix.
    Today, we will hear from three witnesses and we very much 
appreciate your being here today. Ms. Dorenda Baker, Director 
of the Aircraft Certification Service at the FAA; Dr. Gerald 
Dillingham, Director of Civil Aviation Issues at the Government 
Accountability office--thank you, Doctor; and Mr. Pete Bunce, 
President of General Aviation Manufacturers Association.
    Thank you, Mr. Bunce.
    Thank you for being here and I look forward to your 
testimony. I'd like to now turn it over to my Ranking Member, 
Senator Cantwell, who I know has also been keenly interested in 
these issues.
    Thank you, Senator Cantwell.

               STATEMENT OF HON. MARIA CANTWELL, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Cantwell. Thank you, Madam Chair, and thanks for 
holding this important hearing. And thank you to the witnesses 
for testifying today. This hearing will cover a topic of 
critical importance to American manufacturing and certainly to 
the people in my state.
    Our nation's economy depends on civil aviation, which 
connects businesses and consumers around the globe. Here, in 
the United States, civil aviation supports 11.8 million jobs 
that account for $1.5 trillion in total economic activity. In 
my home state, Washington, the aerospace manufacturing 
industry, alone, supports 265,000 jobs, more than $69 billion 
in gross revenues.
    So aviation manufacturing is important to my state, but 
it's also vitally important to our Nation's economy. The world-
class equipment and technology that is developed and 
manufactured in this country continues to set the global 
standard for safety and performance. We have become world 
leaders in aviation manufacturing through innovation, 
investment, a highly skilled workforce, an adaptable supply 
chain, and a multifaceted export strategy.
    Civil aircraft manufacturing is the number one U.S. net 
exporter contributing $54 billion to our trade balance. Access 
to foreign markets has allowed U.S. manufacturers to thrive. In 
order to preserve this access to foreign markets, 
manufacturers, suppliers, and their customers need 
predictability and certainty in the Export-Import Bank. I hope, 
while not within the jurisdiction of this committee, that we 
get the Export-Import Bank reauthorized. This bank's charter is 
set to expire on June 30 of this year, and we must ensure that 
it is extended without interruption.
    Foreign aviation manufacturers have access to their own 
export credit agencies, and we should not put our manufacturers 
at a disadvantage and take away tools that they need. The 
government plays a critical role in support of manufacturers. 
In order to keep our manufacturers competitive, we must ensure 
that we have a regulatory regime that fosters innovation while 
instilling global confidence in the safety and quality of our 
products. This role also requires the FAA to actively engage 
regulatory bodies and other nations in order to make sure that 
the FAA certification will be accepted with minimal delays and 
to make sure that we continue to focus on markets outside of 
the U.S.
    The FAA certification process evaluates the design, 
production, and air-worthiness of all aircraft and aircraft 
components, everything from engines to seatbelts. In that way, 
the FAA serves as a regulator. It must ensure that every single 
part of an aircraft satisfies the strict safety standards 
before it enters the marketplace and national airspace. As the 
FAA performs that important safety function, it must also 
facilitate aviation design and manufacturing in the U.S. 
through a certification process that is predictable and 
efficient for business.
    The FAA has faced a backlog of certification requests over 
recent years, and, as a result, manufacturers have faced costly 
delays. With an increasing number of new products expected to 
be introduced over the next several years, the amount of 
certification work before the FAA will greatly increase. In the 
FAA Modernization Reform Act of 2012, we directed the FAA to 
work with aviation stakeholders to review the current process 
and to identify ways to increase efficiency and reduce cost. I 
understand that the FAA has received recommendations from 
industry and has set out to implement them.
    So Dr. Dillingham, your report about how we are doing on 
that will be very timely to this discussion this morning.
    So I look forward to hearing about the FAA's progress in 
reforming its certification process, improving its ability to 
work with manufacturing, and, above all, continuing our safety 
record. So I look forward to everyone's testimony today.
    Again, Madam Chair, thanks for holding this important 
hearing.
    Senator Ayotte. Thank you, Senator Cantwell.
    And now, we will hear from our witnesses. First, from Ms. 
Dorenda Baker, Director of Aircraft Certification Service at 
the FAA.
    Ms. Baker?

             STATEMENT OF DORENDA BAKER, DIRECTOR,

                AIRCRAFT CERTIFICATION SERVICE,

             FEDERAL AVIATION ADMINISTRATION (FAA)

    Ms. Baker. Thank you.
    Chairman Ayotte, Ranking Member Cantwell, members of the 
Subcommittee, thank you for the opportunity to speak with you 
today.
    As the Director of the FAA's Aircraft Certification 
Service, it is my responsibility to oversee the design, 
production, and continued operational safety of aircraft, 
engines, propellers, and articles. Overseeing the safety of the 
world's largest fleet of aircraft while simultaneously 
certifying innovative products and technologies is a challenge 
but one that we recognize is vital to ensuring U.S. economic 
growth.
    As such, we continuously strive to improve the 
certification process. Limited resources, advances in 
technology, new entrants into the marketplace, and the 
expanding globalization of aviation are all challenges that are 
driving us to reexamine how we conduct business.
    Since the 1920s, the FAA has relied on delegation to safely 
leverage the government workforce. We apply safety management 
principles and use risk-based decisionmaking to focus our FAA 
resources. Today, 90 percent of our certification activity is 
leveraged through delegation and we are working to streamline 
the remainder. For example, we are developing a policy to take 
advantage of the requirement for applicants to provide a 
statement certifying their product is compliant with Federal 
Aviation Regulations. This will allow us to further minimize 
FAA involvement in the applicant's critical path to 
certification and delivery of their products.
    As for FAA's implementation of the initiatives responsive 
to Section 312 of the FAA Modernization and Reform Act of 2012, 
we have completed ten of the 14 initiatives and have made 
significant progress on the remaining four. During 
implementation of the Section 312 initiatives, it became clear 
that not all of industry's concerns can be addressed at the 
national level. Therefore, the FAA initiated additional 
certification reform activities at the local, national, and 
international level.
    At the local level, we are reinvigorating concepts from the 
Certification Process Improvement Guide. This guide was 
developed in collaboration with industry over ten years ago to 
improve cooperation and communication. Each company works with 
their local office to define operating norms, develop an issue 
resolution process, and identify individualized certification 
priorities. Utilizing the same philosophy, the FAA will work 
with individual companies to establish short and long-term 
goals to help them to reach their vision for full utilization 
of the Organization Designation Authorization, or ODA. The FAA 
also collaborated with industry to create an ODA scorecard to 
collect qualitative and quantitative data related to safety, 
FAA involvement, and ODA holder compliance.
    On a local level, the purpose of the scorecard is to 
support constructive dialogue between FAA management and the 
ODA holders about compliance, timeliness, and performance. At a 
national level, the rollup of the scorecard metrics will allow 
us to monitor the effectiveness and efficiency of all ODAs, 
help differentiate between national and local issues, and point 
to areas where policy improvements are necessary. We are 
kicking off a pilot program for the ODA scorecard with select 
companies in the coming months.
    Internationally, the FAA is a respected leader in aviation 
safety. The aviation industry is made up of an international 
web of networks and complex business arrangements that are 
challenging our traditional regulatory model. Therefore, we are 
working with our global partners to leverage our bilateral 
agreements to facilitate the ever-changing needs of industry.
    I just returned from Hong Kong where I met with 
certification directors from ten aviation authorities in the 
Asia Pacific region. We discussed common issues such as limited 
resources and the velocity of change. We agreed that it is 
imperative to continue to work together and use safety 
management principles to support the global aviation industry.
    Next week, I have a bilateral meeting with my counterpart 
at the European Aviation Safety Agency. We are working toward 
mutually recognizing each other's Technical Standard Orders. 
This will allow for the sale of U.S. manufactured TSO articles 
in Europe without further approval by EASA. We are also moving 
to accept each other's classification and approval of low-risk 
Supplemental Type Certificates. We expect to finalize the 
agreement on both of these improvements by the end of this 
year. Eliminating duplicative processes will reduce cost and 
create time savings for both industry and the FAA.
    In conclusion, the FAA has made progress on implementing 
the requirements of Section 312; we are tracking the progress 
of implementing initiatives, performance outcomes, and global 
return on investment for the FAA and industry. We are conscious 
of the fact that certification reform is essential for economic 
growth of the United States, and we will continue our efforts 
to use meaningful metrics in a data-driven approach to 
continuously improve and streamline aircraft certification 
without sacrificing safety.
    This concludes my statement and I am happy to answer any 
questions you have.
    [The prepared statement of Ms. Baker follows:]

 Prepared Statement of Dorenda Baker, Director, Aircraft Certificaton 
             Service, Federal Aviation Administration (FAA)
    Senator Ayotte, Senator Cantwell, Members of the Subcommittee:

    Thank you for the opportunity to speak with you today about the 
Federal Aviation Administration's (FAA) role in the aircraft 
certification process. As Director of the FAA's Aircraft Certification 
Service (AIR), I am responsible for overseeing the design, production, 
and continued operational safety of aircraft, engines, propellers, and 
articles. Efficiently and effectively managing the safe oversight of 
the largest fleet of aircraft in the world, while continuing to support 
the innovation of new and novel technologies is a challenge, but one 
that we recognize is vital to the economic growth of our country. The 
U.S. aviation manufacturing industry provides the livelihood for 
millions of Americans and is a dynamic and innovative industry that we 
are proud to oversee.
    FAA certification is vital to the production of aircraft and 
aircraft components both domestically and internationally. Our 
certification means that the product was thoroughly reviewed, tested, 
and analyzed, and has been deemed to meet the stringent safety 
standards we require. Certification is a dynamic process with both 
industry and the FAA having important roles and responsibilities 
critical to success. We are constantly working to improve the process. 
Both in response to Congressional direction, and on our own initiative, 
the FAA is working closely with industry to understand and respond to 
their concerns in order to improve the efficiency and effectiveness of 
the certification process without compromising safety. Central to the 
success of this effort is transparency. All parties need to know what 
we are doing and why, as well as what is working and what is not. I 
would like to share the FAA's vision on reforming the certification 
process, what we have been doing in response to the 2012 FAA 
reauthorization, and our efforts to drive certification reform at the 
local, national, and international level.
Certification Reform Vision
    In order to support the safest, largest, most complex aviation 
system in the world, the FAA must continue to make our processes as 
efficient and effective as possible, while also maintaining high 
standards of safety. The future vision of AIR, or AIR:2018, aligns with 
the FAA's Strategic Initiatives and shows where we want to go and the 
type of work environment we want to create. Our vision is built around 
four key focus areas: safety, people, organizational excellence, and 
globalization. Certification reform is a key component of this vision. 
It includes initiatives in response to the requirements set forth in 
section 312 of the Federal Aviation Administration Modernization and 
Reform Act of 2012 (the Act), and internally driven activities to 
improve several components of the current certification process.
    As an organization, we are confronted with new challenges every 
day: limited finite number of resources, new technologies, new entrants 
to the marketplace, and the expanding globalization of aviation. In 
order to address these challenges and the expectations of our 
stakeholders and the general public, we are applying safety management 
principles and using risk-based decision making to leverage our 
partnerships and designees to make better decisions about where to 
focus FAA resources. As a result, we are creating an agile, 
collaborative organization that embraces technology and is a leader in 
developing the future of aerospace.
Section 312 Implementation
    Section 312 of the Act required the FAA to work with industry to 
develop consensus recommendations on ways to improve efficiency and 
reduce costs through streamlining and reengineering the certification 
process without compromising safety. In response to this direction, the 
FAA formed the Aircraft Certification Process and Review Aviation 
Rulemaking Committee (ARC), which developed six recommendations that 
resulted in 14 initiatives. To date, the FAA has successfully completed 
10 of the 14 initiatives and is making significant progress on the 
remaining four initiatives. Many of the initiatives are directly 
related to FAA's efforts to expand the use of delegated authority and 
implement a risk-based systems approach to the oversight of that 
delegation system.
    For example, as part of the FAA's ongoing commitment to improve 
responsiveness to industry as it certificates new products, the FAA 
replaced project sequencing with a new ``project prioritization'' 
process in September 2014. The new system prioritizes projects based on 
their safety benefits and complexity, and allows more efficient 
allocation of FAA's resources. In contrast to sequencing, project 
prioritization offers applicants a commitment to a response time for 
the review of compliance data based on the priority of the 
certification project. Now, applicants are able to initiate projects 
without delay. If an applicant is an Organization Designation 
Authorization (ODA) holder or is using an FAA-approved individual 
delegated representative, they can immediately move forward with much 
of the work required to certify the product.
    The FAA plans to develop and track the metrics related to 
implementing the 14 recommended initiatives in three phases: measuring 
(1) the progress of implementing the initiatives throughout FAA, (2) 
the outcomes of each initiative, and (3) the return on investment for 
the FAA and industry resulting from implementing the initiatives as a 
whole. The metrics for phase one have been developed and are contained 
in the latest revision of the Section 312 Implementation Plan posted on 
the FAA website.\1\ Transparency and accountability in FAA's 
relationship with industry and a data-driven approach will make the 
agency more effective and efficient, and drive certification reform.
---------------------------------------------------------------------------
    \1\ The Section 312 Implementation Plan is updated every 6 months 
and can be accessed at http://www.faa.gov/regulations_policies/
rulemaking/committees/documents/index.cfm/committee/browse/committeeID/
137.
---------------------------------------------------------------------------
    The initiatives recommended by the Section 312 ARC are helping us 
to identify and address national certification issues; however, we 
recognize that these steps may not solve the problems experienced by 
individual companies. Therefore, the FAA is reexamining how it conducts 
business and implementing internally driven initiatives at the local, 
national, and international levels.
Local Efforts
    ODAs and individual designees play a vital role in the effort to 
streamline the certification process. AIR currently oversees 71 ODAs 
and more than 2,900 individual designees. The FAA is working with 
individual companies to establish short-and long-term goals to help 
them reach their vision of full utilization of ODA by reinvigorating 
the Partnership for Safety Plans. These safety plans outline operating 
norms, define a process for issue resolution, and identify 
certification priorities; they are our foundation for setting common 
expectations when working with a company and ensure that both sides are 
held accountable. Revitalizing the safety plans will be a catalyst to 
drive positive change, reinforce expectations for the highest levels of 
regulatory performance, and reestablish the spirit of partnership for 
our mutual long-term success.
    In collaboration with the Aerospace Industries Association and the 
General Aviation Manufacturers Association, we are also creating an ODA 
scorecard that will collect qualitative and quantitative data related 
to safety, FAA involvement, and ODA holder compliance. The scorecard 
will facilitate constructive dialogue between FAA management and ODA 
holders about compliance, timeliness, and any performance improvement 
enhancements that may be needed. Once individual goals are established 
through the reinvigoration of the safety plans, AIR will monitor how 
ODAs are progressing towards individual company goals. A national 
rollup of the scorecard data will also track progress by measuring the 
overall efficiency and effectiveness of all ODAs.
National Efforts
    As the commercial aviation safety rate indicates, FAA continually 
strives to improve its performance in all areas, including 
certification. The Office of Aviation Safety (AVS) is an ISO 9000 
registered organization and requires a quarterly review of Quality 
Management System (QMS) measures to gauge the overall health of AVS. 
The QMS measures also monitor the efficiency and effectiveness of the 
certification process. Our goal is to efficiently certify products that 
meet the safety requirements that the world recognizes as a gold 
standard. QMS measures are designed to quantify our efforts to maximize 
efficiency and minimize risk areas associated with the issuance of 
domestic Type Certificates, Supplemental Type Certificates, and 
Production Certificates.
    The FAA is committed to continuous improvement, applying safety 
management systems principles and using risk-based decision making to 
determine the level of rigor necessary in each certification. For 
example, in support of the FAA's NextGen implementation goals, the 
agency issued a policy memo in March allowing ODA holders to conduct 
certain certification projects without notifying the FAA in advance. 
The policy contains criteria that, when met, alleviates the need for a 
Project Notification Letter (PNL). Relieving industry from the PNL 
requirement will result in time and cost savings to their design, 
manufacturing, and production processes.
    AIR also updated its training curriculum to improve training for 
personnel assigned to oversee ODAs in October 2014. The enhanced 
training includes an emphasis on auditing the ODAs to ensure they are 
compliant with their agreed upon procedures. While expanding the number 
of ODA holders is critical to the industry's view of how to streamline 
certification, in order for FAA's staff to expand delegation, the 
agency must be able to show that industry is compliant with its 
regulatory responsibilities.
International Efforts
    The FAA is a global leader in safety and efficiency. The global 
transportation network is changing, however, and the growth of the U.S 
aviation industry is expanding to global suppliers. We recognize the 
importance of working across geopolitical boundaries and have adapted 
our international efforts to maintain and enhance our leadership 
position.
    In FY 2014, the FAA launched the Asia Pacific training initiative 
at the Singapore Aviation Academy to deliver targeted training to the 
regional civil aviation authorities and industry with the delivery of 
two courses--Cabin Safety Workshop and Changed Product Rule. This 
regional training initiative is an efficient way of using the FAA's 
resources while promoting the FAA's policies and procedures globally. 
The training initiative helps achieve a consistent level of safety 
across geopolitical borders and facilitates the export of U.S. products 
and articles.
    We are also working with our global partners to leverage our 
bilateral agreements. This year we are working with the European 
Aviation Safety Agency (EASA) toward mutual recognition of European 
Technical Standard Order Authorizations (TSOA) and FAA TSOAs, and to 
accept classification of basic Supplemental Type Certificates without 
further review. This will allow manufacturers of TSOA articles to sell 
their products in Europe without further approval by EASA. The 
agreement is expected to be finalized at the end of this year and will 
eliminate duplicative processes, reducing costs through time savings 
for both industry and the FAA.
    The FAA also signed agreements with Transport Canada Civil Aviation 
and EASA to promote rulemaking cooperation. The activities between the 
U.S. and Canada under the Regulatory Cooperation Council encourage the 
sharing of rulemaking experiences to promote cooperation and align 
rulemaking requirements.
    The FAA is working to enhance global manufacturing by working with 
our global partners to provide reciprocal assistance in overseeing 
manufacturing facilities. For example, the FAA and the Mexican 
Direccion General de Aeronautica Civil (DGAC) are finalizing a Special 
Arrangement to allow the Mexican DGAC to perform certain types of 
certificate management activities on behalf of the FAA. A successful 
Special Arrangement is already in place in Brazil. The FAA will 
continue to leverage these arrangements as globalization of the 
aviation industry creates more complex business partnerships.
Section 313 Implementation
    The FAA is also making progress in response to section 313 of the 
Act, which focused on the consistency and standardization of regulatory 
interpretation. In an effort to remain transparent with our 
stakeholders, the FAA posted an implementation plan for section 313 on 
the FAA website.\2\ We have taken several steps to implement the 
recommendations and we have closed two of the six initiatives in the 
plan with the support of industry.
---------------------------------------------------------------------------
    \2\ The Section 313 Implementation Plan can be accessed at http://
www.faa.gov/regulations_policies/rulemaking/committees/documents/
index.cfm/committee/browse/committeeID/239.
---------------------------------------------------------------------------
    The highest priority initiative is to develop a single master 
source for guidance organized by regulation. We are making progress in 
reviewing our existing databases to assure the information is up to 
date. In January, I participated in a demonstration of the proof of 
concept for a tool that will link documents from multiple sources. I 
was impressed with the system's capabilities; it will link the 
regulatory material not only by regulation as requested by industry, 
but also by concept in case the user does not know the regulatory 
citation.
Unmanned Aircraft Systems
    The FAA is also working tirelessly to safely integrate Unmanned 
Aircraft Systems (UAS) into the National Airspace System (NAS). The 
2012 Act established the framework for this effort and tasked the FAA 
with safely integrating civil UAS into the system by September 2015. We 
have worked together with government partners and industry stakeholders 
to complete milestones put forward by the Act. This includes long-term 
planning for the future integration, collaborative research and 
development with interagency partners and industry, and the 
establishment of test sites and airspace for UAS research and 
development and testing. As of April 9, the FAA has issued 137 
exemptions under section 333 of the Act and is working to decrease 
processing time for future exemptions.
    In February, the FAA issued a Notice of Proposed Rulemaking that 
would allow routine use of certain small UAS in the NAS. The proposed 
rule would cover many potential small UAS operations and would offer a 
flexible framework for the safe use of small unmanned aircraft, while 
accommodating future innovation in the industry. Under the new 
authority provided in section 333, it contains operational limitations 
that will allow the entire category of small UAS to avoid airworthiness 
certification and be subject to the least burdensome level of 
regulation that is necessary to protect the safety and security of the 
NAS. As proposed, the United States would have one of the most flexible 
UAS regulatory frameworks in the world.
    The FAA has successfully issued four UAS type certificates using 
existing FAA certification processes and is currently working with five 
other companies to type certificate their UAS using the FAA 
certification process available for Special Class aircraft. This 
process has sufficient flexibility to evaluate designs of aircraft of 
various size, speed, intended use, and area of operation. The same 
process is utilized for the certification of airships, gliders, and 
very light aircraft, and enables the FAA and applicants to collaborate 
together on appropriate certification requirements. It utilizes a risk-
based classification and certification approach to identify the 
expected level of safety to determine FAA involvement and oversight. 
The FAA is currently developing advisory material to assist applicants, 
industry stakeholders, and the general public in understanding this 
process. As the FAA gains experience in certificating UAS products, it 
will continue to mature its policies and procedures to balance the 
needs of our applicants and UAS owners and operators with its 
responsibility to maintain safety in the NAS.
Conclusion
    The FAA has made significant progress in implementing the 
requirements in section 312 of the Act and the initiatives recommended 
by the ARC to expand the use of delegated authority and establish a 
risk-based, systems approach to safety oversight. The FAA shares the 
Subcommittee's desire to streamline aircraft certification and will 
continue to implement internally driven reform activities at the local, 
national, and international levels.
    To become more effective and efficient while maintaining and 
improving aviation safety, the FAA must collaborate with industry and 
improve transparency with stakeholders. When it comes to working 
together with industry, we need to respect each other's goals. For the 
FAA, the goal is a product that is compliant with the regulations. 
Industry wants to find ways to get new and safer products to market 
efficiently. For both of us, the safety of the aviation system is 
paramount. We are working to find ways to be more sensitive and 
responsive to industry's schedules without sacrificing compliance.
    The FAA is tracking the progress of implementing the initiatives, 
and will develop means to measure the performance outcomes and the 
global return on investment for the FAA and industry as a whole. The 
FAA will continue efforts to develop meaningful metrics and a data-
driven approach that promotes open, constructive dialogue, facilitates 
positive change, and keeps both sides accountable for certification 
reform.
    This concludes my statement. I will be happy to answer your 
questions at this time.

    Senator Ayotte. Thank you, Ms. Baker.
    We will now hear from Dr. Gerald Dillingham, Director of 
Civil Aviation Issues at the Government Accountability Office.
    Thank you, Dr. Dillingham.

 STATEMENT OF GERALD L. DILLINGHAM, Ph.D., DIRECTOR, PHYSICAL 
            INFRASTRUCTURE ISSUES, U.S. GOVERNMENT 
                     ACCOUNTABILITY OFFICE

    Dr. Dillingham. Thank you, Madam Chair, Ranking Member 
Cantwell, distinguished members of the Subcommittee.
    My statement today focuses on two areas. First, FAA's 
reported progress in addressing congressional and industry 
concerns about the certification process and the varying 
interpretations of its own regulations. And second, the 
challenges that U.S. companies face in obtaining foreign 
approvals of their products and FAA's efforts to help address 
these challenges.
    As you are aware, in response to Sections 312 and 313 of 
the 2012 FAA Reauthorization, FAA chartered two rulemaking 
committees. One to address issues with the aircraft 
certification process and another to address regulatory 
consistency. Each committee produced six recommendations to 
assist FAA in address the longstanding concerns in both cases.
    Regarding the certification process recommendations. As Ms. 
Baker has just testified, our review found that most of the 14 
initiatives that FAA established to address the certification 
process recommendations have been completed or are on track to 
be completed within the next three years. The notable exception 
to this progress is the initiative that is aimed at 
reorganizing the regulation for certifying small aircraft. FAA 
plans to issue a final rule in September 2017. This will be 
about 2 years later than the original mandate.
    And further, although FAA has established performance 
metrics for all 14 initiatives, the agency has not developed 
metrics to measure the overall effectiveness of its collective 
efforts. These individual and overall metrics are essential in 
helping the FAA and the industry determine whether these 
initiatives are leading to improvements.
    Turning to the regulatory consistency recommendations. FAA 
recently published a detailed implementation plan for 
addressing the six recommendations. According to the plan, FAA 
closed two of the recommendations and plans to complete the 
remaining four by July 2016. And although FAA has made progress 
in this area, it is too soon to determine whether FAA's planned 
actions adequately address the recommendations.
    One of the longstanding challenges in this area has been 
industry's concern about a lack of adequate communication and 
involvement of stakeholders. However, more recently, FAA 
officials told us that they plan to regularly brief the 
stakeholders on their progress addressing the four remaining 
recommendations.
    Turning to the foreign approval of FAA certified aviation 
products. The U.S. has historically been viewed as the gold 
standard for approval of aviation products, with some countries 
accepting FAA's approval as sufficient evidence that the 
product is safe for use in their country. Some other countries, 
however, do not accept FAA's certification, and these countries 
are increasingly applying their own processes for approving 
U.S. products.
    Stakeholders told us that this practice often creates 
uncertainty and costly delays for U.S. aviation companies in 
delivering their products to foreign markets. Stakeholders also 
pointed out that some of FAA's processes also contributed to 
delays and increased costs in getting their products to foreign 
markets. For example, stakeholders said they didn't think that 
FAA gave high enough priority to assist in foreign approvals 
and FAA sometimes lacks adequate resources and staff expertise 
to effectively facilitate approvals unique to export approvals, 
such as intellectual property concerns or export control laws. 
Although FAA has several initiatives aimed at addressing these 
and other challenges related to foreign approvals, FAA must 
operate with due regard for national sovereignty and its own 
resource limitations.
    In summary: Although we can say that progress is being 
made, some of the desired improvements to both the 
certification and foreign approval processes will likely take 
years to implement and requires sustained FAA and industry 
commitment as well as continued congressional direction and 
oversight.
    Thank you, Madam Chair.
    [The prepared statement of Dr. Dillingham follows:]

                                                     April 21, 2015
                             GAO Highlights
Aviation Certification
Issues Related to Domestic and Foreign Approval of U.S. Aviation 
        Products
Why GAO Did This Study
    FAA issues certificates for new U.S.-manufactured aviation 
products, based on Federal aviation regulations. GAO has previously 
reviewed the efficiency of FAA's certification process and the 
consistency of its regulatory interpretations. As required by the 2012 
FAA Modernization and Reform Act, FAA chartered two aviation rulemaking 
committees in April 2012--one to improve certification processes and 
another to address regulatory consistency--that recommended 
improvements in 2012. FAA also assists U.S. aviation companies seeking 
approval of their FAA-certificated products in foreign markets. FAA has 
negotiated BASAs with many FCAAs to provide a framework for the 
reciprocal approval of aviation products. However, U.S. industry 
stakeholders have raised concerns that some countries conduct lengthy 
processes for approving U.S. products.
    This testimony focuses on (1) FAA's reported progress in 
implementing the aviation rulemaking committees' 2012 recommendations 
regarding its certification process and the consistency of its 
regulatory interpretations and (2) the challenges that selected U.S. 
companies reported they have faced when attempting to obtain foreign 
approvals of their products, and how FAA is addressing some of the 
reported challenges. It is based on GAO products issued from 2010 to 
2015, selectively updated in April 2015 based on FAA documents and 
information from FAA officials and selected industry stakeholders.
What GAO Found
    The Federal Aviation Administration (FAA) has made progress in 
addressing the Certification Process and the Regulatory Consistency 
Committees' recommendations, but as GAO reported in January 2015, 
challenges remain that could affect successful implementation of FAA's 
planned actions.

   FAA is implementing 14 initiatives for addressing 6 
        certification process recommendations. According to an April 
        2015 FAA update, 13 initiatives have been completed or are on 
        track to be completed, and 1 will not meet planned milestones.

   In January 2015, FAA published a detailed implementation 
        plan for addressing six regulatory consistency recommendations. 
        According to the plan, FAA closed two recommendations--one as 
        not implemented and one as implemented in 2013--and plans to 
        complete the remaining four by July 2016.

    While FAA has made some progress, it is too soon for GAO to 
determine whether FAA's planned actions adequately address the 
recommendations. However, industry stakeholders indicated concerns 
regarding FAA's efforts, including concerns about a lack of 
communication with and involvement of stakeholders as FAA implements 
the two committees' recommendations. Since GAO reported in January 
2015, FAA has been addressing these concerns.
    In January 2015, GAO also reported that representatives of 15 
selected U.S. aviation companies that GAO interviewed reported facing 
various challenges in obtaining foreign approvals of their products, 
including challenges related to foreign civil aviation authorities 
(FCAA) as well as challenges related to FAA.

   Reported FCAA-related challenges related to (1) the length 
        and uncertainty of some FCAA approval processes, (2) the lack 
        of specificity and flexibility in some of FAA's bilateral 
        aviation safety agreements (BASA) negotiated with FCAAs, (3) 
        difficulty with or lack of FCAA communications, and (4) high 
        fees charged by some FCAAs. Although FAA's authority to address 
        some of these challenges is limited, FAA has been addressing 
        many of them. For example, FAA created a certification 
        management team with its three major bilateral partners to 
        provide a forum for addressing approval process challenges, 
        among other issues. FAA has also taken action to mitigate the 
        challenges related to some BASAs by holding regular meetings 
        with bilateral partners and adding dispute resolution 
        procedures to some BASAs.

   Reported FAA-related challenges primarily involved (1) FAA's 
        process for facilitating approval applications, which sometimes 
        delayed the submission of applications to FCAAs; (2) limited 
        availability of FAA staff for facilitating approval 
        applications; and (3) lack of FAA staff expertise in issues 
        unique to foreign approvals, such as intellectual property 
        concerns and export control laws. FAA has initiatives under way 
        to improve its process that may help resolve some of these 
        challenges raised by U.S. companies. For example, FAA has 
        initiated efforts to improve the robustness of its approvals-
        related data to better evaluate its relationships with 
        bilateral partners, i.e., countries for which FAA has a BASA in 
        place. FAA is also addressing its resource limitations by 
        taking actions to improve the efficiency of its process.
                                 ______
                                 
 Prepared Statement of Gerald L. Dillingham, Ph.D., Director, Physical 
      Infrastructure Issues, U.S. Government Accountability Office
    Chairwoman Ayotte, Ranking Member Cantwell, and Members of the 
Subcommittee:

    I am pleased to be here today to testify on the status of the 
Federal Aviation Administration's (FAA) efforts to improve its 
processes for certifying new aviation products for domestic use, and 
the challenges faced by U.S. aviation companies seeking product 
approvals in foreign countries. The 2012 FAA Modernization and Reform 
Act required FAA to work with industry to resolve issues related to the 
efficiency of FAA's certification processes and varying interpretations 
and applications of its regulations in making compliance decisions 
during certification.\1\ In response to the mandated provisions in the 
2012 FAA Modernization and Reform Act, in April 2012, FAA chartered two 
aviation rulemaking committees--one to address certification processes 
(the Certification Process Committee) and another to address regulatory 
consistency (the Regulatory Consistency Committee)--which recommended 
improvements in 2012. FAA also assists U.S. aviation companies in 
getting their U.S.-certificated products approved for sale and export 
to foreign countries. However, some U.S. industry stakeholders have 
raised concerns that some countries do not accept the FAA certification 
and conduct their own approval processes for U.S. products, which can 
be lengthy and provide no additional safety benefit.
---------------------------------------------------------------------------
    \1\ Pub. L. No. 112-95, Sec. Sec. 312 and 313, 126 Stat. 11, 66, 67 
(2012).
---------------------------------------------------------------------------
    My statement today discusses (1) FAA's reported progress in 
implementing the aviation rulemaking committees' 2012 recommendations 
regarding its certification process and the consistency of its 
regulatory interpretations and (2) the challenges that selected U.S. 
companies reported they have faced when attempting to obtain foreign 
approvals of their products, and how FAA is addressing some of the 
reported challenges. This testimony is based on several GAO products 
issued since 2010,\2\ and selected updates of this work on FAA's 
progress in implementing the committees' recommendations and addressing 
foreign approval challenges, based on FAA documents and information 
from FAA officials and selected industry stakeholders. Each of these 
products contains detailed information on our objectives, scope, and 
methodology for performing this work. The work on which this statement 
is based was performed in accordance with generally accepted government 
auditing standards. Those standards require that we plan and perform 
the audit to obtain sufficient, appropriate evidence to provide a 
reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a reasonable 
basis for our findings and conclusions based on our audit objectives.
---------------------------------------------------------------------------
    \2\ GAO, Aviation Safety: Issues Related to Domestic Certification 
and Foreign Approval of U.S. Aviation Products, GAO-15-327T 
(Washington, D.C.: Jan. 21, 2015); Aviation Manufacturing: Status of 
FAA's Efforts to Improve Certification and Regulatory Consistency, GAO-
14-829T (Washington, D.C.: July 31, 2014); Aviation Safety: FAA's 
Efforts to Implement Recommendations to Improve Certification and 
Regulatory Consistency Face Some Challenges, GAO-14-728T (Washington, 
D.C.: July 23, 2014); Aviation Safety: Status of Recommendations to 
Improve FAA's Certification and Approval Processes, GAO-14-142T 
(Washington, D.C.: Oct. 30, 2013); Aviation Safety: Certification and 
Approval Processes Are Generally Viewed as Working Well, but Better 
Evaluative Information Needed to Improve Efficiency, GAO-11-14 
(Washington, D.C.: Oct. 7, 2010).
---------------------------------------------------------------------------
FAA Has Made Progress in Addressing the Certification Process and 
        Regulatory Consistency Committees' Recommendations
FAA Reports that Most of the Initiatives to Improve Its Aircraft 
        Certification 
        Processes Have Been Implemented, but It Is Too Early to Assess 
        Whether 
        Expected Outcomes Will Be Achieved
    As you know, among its responsibilities for aviation safety, FAA's 
Aircraft Certification Service (Aircraft Certification) grants 
approvals (called type certificates) for new aircraft, engines, and 
propellers. Certification projects, which involve the activities to 
determine compliance of a new product with applicable regulatory 
standards and to approve products for certificates, are typically 
managed by one of Aircraft Certification's local offices (generally 
known as aircraft certification offices, or ACOs).\3\ Figure 1 lists 
the key phases in FAA's process for issuing certificates for aviation 
products. As depicted in the figure, both the applicant company and 
Aircraft Certification staff are involved in each phase.
---------------------------------------------------------------------------
    \3\ Aircraft Certification has local offices that serve geographic 
areas across the United States for aircraft certification-related 
activities: Anchorage, AK, Atlanta, GA; Boston, MA; Chicago, IL; 
Denver, CO; Fort Worth, TX; Los Angeles, CA; New York, NY; Seattle, WA; 
and Wichita, KS.


---------------------------------------------------------------------------
    Source: FAA. GAO-15-550T

    Note: FAA staff involved may include managers, engineers, 
inspectors, flight test pilots, chief scientific and technical 
advisors, as well as an aircraft evaluation group from FAA's Flight 
Standards Service. The aircraft evaluation group is responsible for 
evaluating aviation products for conformance to operations and 
maintenance requirements.

    Studies published since 1980,\4\ our prior work,\5\ industry 
stakeholders, and experts have long raised questions about the 
efficiency of FAA's certification processes and varying interpretations 
and applications of its regulations in making compliance decisions 
during certification. Over time, FAA has implemented efforts to address 
these issues, but as we reported in July 2014,\6\ they persist as FAA 
faces greater industry demand and its overall workload has increased. 
In 2013, FAA published a detailed implementation plan for addressing 
the six certification process recommendations, and, in January 2015, 
published a detailed implementation plan for addressing the six 
regulatory consistency recommendations.
---------------------------------------------------------------------------
    \4\ See National Academy of Sciences, Improving Aircraft Safety: 
FAA Certification of Commercial Passenger Aircraft, National Research 
Council, Committee on FAA Airworthiness Certification Procedures 
(Washington, D.C.: June 1980); Booz Allen & Hamilton, Challenge 1000: 
Recommendations for Future Aviation Safety Regulations (McLean, VA: 
Apr. 19, 1996); RTCA Task Force 4, Final Report of the RTCA Task Force 
4 ``Certification'' (Washington, D.C.: Feb. 26, 1999; and Independent 
Review Team Appointed by Secretary of Transportation Mary E. Peters, 
Managing Risks in Civil Aviation: A Review of FAA's Approach to Safety 
(Washington, D.C.: Sept. 2, 2008).
    \5\ GAO-11-14 and GAO, Aircraft Certification: New FAA Approach 
Needed to Meet Challenges of Advanced Technology, GAO/RCED-93-155 
(Washington, D.C.: Sept. 1993).
    \6\ GAO-14-829T and GAO-14-728T.
---------------------------------------------------------------------------
    As of April 2015, FAA has made progress in addressing the 
Certification Process Committee's recommendations, but as we reported 
in January 2015, challenges remain that could affect successful 
implementation of the recommendations. FAA is implementing its plan for 
addressing the 6 certification process recommendations, which involves 
completing 14 initiatives. According to an April 2015 update that FAA 
provided to us, 13 initiatives were completed or were on track to be 
completed, and one will not meet planned milestones.\7\ Figure 2 
illustrates the evolving status of the 14 initiatives based on the 
update reported by FAA.
---------------------------------------------------------------------------
    \7\ The one initiative that will not meet planned milestones is 
reorganizing the regulations for certificating small airplanes, 14 
C.F.R. Part 23. FAA plans to issue the final rule by September 2017.


---------------------------------------------------------------------------
    Source: GAO presentation of FAA information. GAO-15-550T

    Note: Future completion shown in the figure indicates when an 
initiative is planned to be completed.

    a FAA delegates authority to organizations under the 
organization designation authorization program to carry out certain 
functions on behalf of the agency. 14 C.F.R. Part 183, Subpart D.

    b Instructions for continued airworthiness include such 
things as maintenance manuals and inspection programs for maintaining 
operational safety of aviation products.

    c Aircraft products and parts are certificated under 14 
C.F.R. Part 21.

    d The approval (i.e., validation) process is a form of 
certification to establish compliance for aviation products designed 
outside the country for which the products are being developed in order 
to issue a type certificate for these products.

    e Small airplanes are certificated under 14 C.F.R. Part 
23.

    As figure 2 above indicates, 5 of the 14 certification process 
initiatives are related to improving FAA's organization designation 
authorization (ODA) program.\8\ As of April 2015, FAA had completed 
three of the five ODA-related certification process initiatives, while 
the remaining two are expected to be completed by the end of 2015. In 
January 2015, we noted that industry stakeholders had emphasized the 
need for FAA to expand its use of the ODA program to better leverage 
its available resources in other needed areas (e.g., staff and other 
resources for processing foreign approval applications--which will be 
discussed later in this statement). For example, one aircraft 
manufacturer told us it is a practical necessity for FAA to expand its 
ODA program to (1) better utilize private sector expertise to keep pace 
with the growing aviation industry, (2) allow more aerospace products 
to reach the market sooner, and (3) increase the efficiency of the 
agency's scarce resources. According to the General Aviation 
Manufacturers Association (GAMA),\9\ the key strength of ODA is FAA's 
ability to delegate, at its discretion, certain certification 
activities and test data reviews to qualified individuals or specific 
manufacturers' employees. In doing so, FAA can leverage its resources 
by delegating more of the lower priority work during the certification 
process, thereby enabling FAA to better concentrate its limited staff 
resources on the most pressing aspects of certification projects. 
Another manufacturer noted that without expanded use of the program by 
FAA, the additional cost associated with maintaining an ODA has begun 
to outweigh the benefits of having the authorization.
---------------------------------------------------------------------------
    \8\ FAA's ODA process is used to authorize organizations 
(designees) to act on behalf of FAA in conducting some safety 
certification work.
    \9\ GAMA represents leading global manufacturers of general 
aviation airplanes and rotorcraft, engines, avionics, and components.
---------------------------------------------------------------------------
    As we found in July 2014, industry union representatives we spoke 
to also reported concerns about the lack of FAA resources to 
effectively expand the program.\10\ While one labor union agreed with 
the concept of ODA, representatives had concerns related to expanding 
the program in other areas because they contended that oversight of the 
program required significant FAA resources. Furthermore, the 
representatives told us that due to staffing shortages and increased 
workload, FAA did not have enough inspectors and engineers to provide 
the proper surveillance of the designees who had already been granted 
this authority. However, as we reported in January 2015, it is too soon 
for us to determine whether FAA's initiatives adequately address the 
recommendations as intended, and in this case, specifically for 
expanding the use of the ODA program.
---------------------------------------------------------------------------
    \10\ GAO-14-829T and GAO-14-728T.
---------------------------------------------------------------------------
FAA Has Developed Plans to Address Recommendations to Improve the 
        Consistency of Its Regulatory Interpretations, but Progress Has 
        Been Slow
    According to the January 2015 regulatory consistency implementation 
plan, FAA closed two recommendations--one as not implemented and one as 
implemented in 2013--and plans to complete the remaining 4 by July 
2016. Table 1 provides a summary of the recommendations and FAA's plans 
for addressing them.

 
 
------------------------------------------------------------------------
 


   Table 1.--Summary of the Federal Aviation Administration's Planned
        Actions to Address the Regulatory Consistency Committee's
                   Recommendations, as of January 2015
------------------------------------------------------------------------
     Recommendation         Planned FAA action(s)   Estimated completion
------------------------------------------------------------------------
(1) Master Source          Flight            March 31,
 Guidance System           Standards and Aircraft    2016
In its top priority        Certification officials
 recommendation, the       plan to map or link
 Committee recommended     identified guidance
 that FAA:                 documents to the
(a) review all guidance    appropriate section of
 documents to identify     the Code of Federal
 and cancel outdated       Regulations where
 material and              possible, with the
 electronically link the   eventual goal of
 remaining materials to    creating a document
 its applicable rule,      management framework
 and                       that encompasses all
(b) consolidate            Aviation Safety
 electronic guidance       regulatory guidance
 libraries into a master   documents. Based on the
 source guidance system,   results of the document
 organized by rule, to     mapping process, Flight
 allow FAA and industry    Standards and Aircraft
 users' access to          Certification plan to
 relevant rules and all    determine the
 guidance materials.       requirements for an
                           electronic platform
                           that would accommodate
                           the search parameters
                           emphasized by external
                           stakeholders.
------------------------------------------------------------------------
(2) Instructional Tools    FAA plans to      October 31,
 for FAA Personnel for     implement this            2015
 Applying Policy and       recommendation by
 Guidance                  evaluating current
Noting multiple            government best
 instances where FAA       practices and
 guidance appeared to      transitioning to a
 have created              comprehensive document
 inconsistent              management framework
 interpretation and        for drafting, revising,
 application and           and reviewing
 confusion, the            regulatory guidance
 Committee recommended     documents.
 that FAA develop a
 standardized decision-
 making methodology for
 the development of all
 policy and guidance
 material to ensure such
 documents are
 consistent with adopted
 regulations.
------------------------------------------------------------------------
(3) FAA and Industry       FAA plans to      July 31,
 Training Priorities and   conduct a gap analysis    2015
 Curriculums               of existing training to
The Committee              identify any
 recommended that FAA,     deficiencies. As part
 in consultation with      of this analysis, FAA
 industry stakeholders,    plans to review current
 review and revise its     available training to
 regulatory training for   ensure that it meets
 applicable agency         the needs of aviation
 personnel and make the    safety inspectors and
 curriculum available to   aviation safety
 industry.                 engineers in applying
                           regulations in the
                           field and for safety
                           inspectors and
                           engineers with their
                           responsibilities for
                           rulemaking and policy
                           development/revision.
                           FAA plans to develop a
                           plan of action to
                           address any
                           deficiencies found
                           during the gap
                           analysis. This plan of
                           action is expected to
                           include appropriate
                           performance measures.
------------------------------------------------------------------------
(4) Regulatory             To address        Recommendat
 Consistency               recommendation 4, FAA     ion 4: June 30,
 Communications Board      plans to establish an     2016. 
 (RCCB) and (5)            RCCB to begin             Recommendation 5:
 Regulatory Operations     documenting, and          Closed and not
 Communication Center      tracking policy           implemented.
The Committee made two     application and intent
 similar recommendations   questions in a
 for FAA to consider:      consistent manner. The
(1) establishing a         RCCB is planned to be
 Regulatory Consistency    responsible for
 Communications Board      developing a policy
 comprising various FAA    question tracking
 representatives that      process that will be
 would provide             introduced internally
 clarification on          at the outset, with the
 questions from FAA and    goal of expanding the
 industry stakeholders     process to external
 related to the            industry stakeholders.
 application of             FAA does not
 regulations and           plan to address
(2) determining the        recommendation 5.
 feasibility of            According to FAA
 establishing a full-      officials, the agency
 time Regulatory           has addressed the
 Operations                intent of this
 Communication Center as   recommendation with its
 a centralized support     plan to establish an
 center to provide real-   RCCB.
 time guidance to FAA
 personnel and industry
 certificate/approval
 holders and applicants.
------------------------------------------------------------------------
(6) Clarity in Final       According to      Closed and
 Rules                     officials, FAA            implemented in 2013
The Committee              considers this            through a separate
 recommended that FAA      recommendation closed     initiative,
 improve the clarity of    through the               according to FAA.
 its final rules by        implementation of a
 ensuring that each        rulemaking
 final rule contains a     prioritization process
 comprehensive             and tool in 2013.
 explanation of the        Officials noted that
 rule's purpose and how    FAA rulemaking includes
 it will increase          other process elements
 safety.                   that help ensure
                           clarity in final rules.
                           These elements include
                           the development of
                           rules by subject matter
                           experts as well as
                           multiple rounds of
                           review within FAA and
                           by the Department of
                           Transportation and the
                           Office of Management
                           and Budget.
------------------------------------------------------------------------
Source: GAO presentation of FAA information. GAO-15-550T

    As we found in January 2015, while FAA has made some progress, it 
is too soon for us to determine whether FAA's planned actions 
adequately address the recommendations.\11\ However, in that report, we 
also found that challenges remain that could affect the successful 
implementation of FAA's planned actions. Industry representatives 
continued to indicate a lack of communication with and involvement of 
stakeholders as a primary challenge for FAA in implementing the 
committees' recommendations, particularly the regulatory consistency 
recommendations. However, FAA noted that the processes for developing 
and updating its plans for addressing the certification process and 
regulatory consistency recommendations have been transparent and 
collaborative, and that FAA meets regularly with industry 
representatives to continuously update them on the status of the 
initiatives and for seeking their input. We also reported in January 
2015 that several industry representatives told us that FAA had not 
effectively collaborated with or sought input from industry 
stakeholders in the agency's efforts to address the two sets of 
recommendations, especially the regulatory consistency recommendations. 
For instance, some stakeholders reported that FAA did not provide an 
opportunity for them to review and comment on the certification process 
implementation plan updates, and did not provide an opportunity for 
them to review and offer input on the regulatory consistency 
implementation plan. However, FAA reported meeting with various 
industry stakeholders in October 2014 to brief them on the general 
direction and high-level concepts of FAA's planned actions to address 
each regulatory consistency recommendation.
---------------------------------------------------------------------------
    \11\ GAO-15-327T.
---------------------------------------------------------------------------
    Since we reported in January 2015, FAA officials met with 
stakeholders of the Regulatory Consistency Committee in March 2015 to 
brief them and further clarify the plan to implement the regulatory 
consistency recommendations. According to FAA, they are planning to 
conduct quarterly briefings with the Committee stakeholders, starting 
in June 2015, to provide updates on the progress for addressing the 
four remaining recommendations. FAA officials also noted that while the 
implementation plan lists a completion date of March 2016 for the 
recommendation for developing the Master Source Guidance System--which 
FAA calls the Dynamic Regulatory System--this completion date is 
specifically for FAA's efforts to determine the feasibility of 
including Office of Chief Counsel letters in the system.\12\ In terms 
of completing the development of the system, the officials told us they 
are currently ahead of the schedule outlined in the implementation plan 
and are working on finalizing the design concept for the new system. 
Once this process is completed, they would be able to provide a more 
accurate completion date for deployment of the system. According to one 
Committee stakeholder, it is important that FAA remain committed to 
creating the Master Source Guidance System, which was the Committee's 
primary recommendation.
---------------------------------------------------------------------------
    \12\ FAA plans to develop a master source guidance system with the 
capability to consolidate information from Aircraft Certification's and 
Flight Standards' electronic guidance libraries as well as legal 
interpretations from the Office of Chief Counsel into a master guidance 
system to allow FAA and industry users access. Specifically, the 
Regulatory Consistency Committee recommended that this system be 
searchable so that FAA and industry users can easily access relevant 
rules and find the relevant guidance for the rule.
---------------------------------------------------------------------------
Selected U.S. Companies Reported Challenges in Obtaining Foreign 
        Approvals, Which FAA Has Taken Steps to Address within 
        Sovereignty Constraints
    In January 2015, we reported that, according to GAMA, the U.S. has 
historically been viewed as setting the global standard for the 
approval of aviation products internationally. Once U.S. aviation 
companies obtain a type certificate from FAA to use an aviation product 
in the United States, the companies often apply for approvals for the 
same products for use in other countries.\13\ In 2012, the U.S. 
aerospace industry contributed $118.5 billion in export sales to the 
U.S. economy, with this sector remaining strong in the European markets 
and growing in the emerging markets of Asia and the Middle East. Some 
countries accept the FAA approval outright as evidence that the product 
is safe for use in their country. Some other countries, however, do not 
accept the FAA certification and conduct their own approval processes 
for U.S. products, which can be lengthy, according to some U.S. 
industry stakeholders. These stakeholders have raised concerns that 
such practices provide no additional safety benefit and result in U.S. 
companies facing uncertainty and costly delays in delivering their 
products to foreign markets. FAA has taken steps to address these 
concerns, but FAA's authority to address some of the challenges is 
limited because each country retains control of its basic regulatory 
framework for approving aviation products and ensuring the safety of 
those products for use in their countries--effectively a recognition of 
the sovereignty of each country.
---------------------------------------------------------------------------
    \13\ FAA also approves foreign aviation products that are 
manufactured in other countries for use in the United States as a 
result of sales to U.S. customers.
---------------------------------------------------------------------------
    As counterparts to FAA, other countries' civil aviation 
authorities--which we will refer to as foreign civil aviation 
authorities (FCAA)--approve domestically-manufactured aviation products 
for use in their respective countries. FCAAs also approve U.S. aviation 
products for use in their respective countries. These approvals are 
typically conducted within the parameters of bilateral aviation safety 
agreements (BASA), which are negotiated between FAA and other 
FCAAs.\14\ BASAs represent bilateral partnership agreements that 
provide a framework for the reciprocal approval of aviation products 
imported and exported between the U.S. and other countries.\15\ Figure 
3 outlines the general steps for obtaining approvals of U.S. aviation 
products from FCAAs.
---------------------------------------------------------------------------
    \14\ According to FAA, it has 21 BASAs that affect 47 countries, 
including one BASA with the European Aviation Safety Agency that covers 
the European Union (EU) member nations.
    \15\ It is important to note that a BASA with another country may 
not include a technical agreement that would allow for the reciprocal 
approval, or acceptance, of an aviation product between the two 
countries. Thus, a BASA without a technical agreement would mean that 
an FCAA would likely have to conduct its own certification of a new 
U.S. product to approve it for use in that country. For more 
information, see GAO-15-327T.


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    Source: GAO presentation of FAA information. GAO-15-550T

    Note: This figure outlines the general steps for a sequential 
approval process in which the company first seeks a type certificate or 
supplemental type certificate from FAA. However, applicants may opt for 
a concurrent approval process in which its aviation product undergoes 
an FCAA's approval at the same time it undergoes the FAA certification 
process. In fact, according to FAA, a number of foreign approvals are 
issued the same day as the FAA certification.
U.S. Companies Reported that they Experienced FCAA-Related Process, 
        Communications, and Cost Challenges and FAA is Attempting to 
        Address These Challenges
    Representatives of the 15 selected U.S. aviation companies we 
interviewed for our January 2015 statement reported that their 
companies faced challenges related to process, communications, and cost 
in obtaining approvals from FCAAs. The processes involved included 
FCAAs' individual approval processes as well as the processes spelled 
out in the relevant BASAs. In our January 2015 statement, we identified 
some efforts FAA is making to address these challenges, such as holding 
regular meetings with some bilateral partners--i.e., countries for 
which FAA has a BASA in place--and setting up forums in anticipation of 
issues arising.

   Reported FCAA process challenges. Of the 15 companies we 
        interviewed, representatives from 12 companies reported mixed 
        or varied experiences with FCAAs' approval processes, and 3 
        reported positive experiences. Thirteen companies reported 
        challenges related to delays, 10 reported challenges with 
        approval process length, and 6 reported challenges related to 
        FCAA staffs' lack of knowledge or uncertainty about the 
        approval processes, including FCAA requests for data and 
        information that, in the companies' views, were not needed for 
        approvals. FAA has taken actions aimed at alleviating current 
        and heading off future challenges related to foreign approval 
        processes. For example, in September 2014, FAA--along with 
        Brazil, Canada, and the EU--established a Certification 
        Management Team to provide a forum for addressing approvals and 
        other bilateral relationship issues. FAA also recently 
        established a pilot program that allows a U.S. company to work 
        concurrently with multiple FCAAs for obtaining approvals and to 
        identify key FCAA approval needs and ensure adequate FAA 
        support.\16\
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    \16\ According to FAA, this is a pilot program in which all of the 
FCAAs to which Boeing submitted approval applications will meet jointly 
with Boeing rather than each having separate meetings with Boeing. 
Therefore, Boeing would be able to identify common needs from all of 
the FCAAs for their approvals.

   Reported issues related to some BASAs. Although 
        representatives from 11 of the 15 U.S. companies and the 3 
        foreign companies we interviewed reported being satisfied with 
        the overall effectiveness of having BASAs in place or with 
        various aspects of the current BASAs, representatives of 10 
        U.S. companies reported challenges related to some BASAs 
        lacking specificity and flexibility, 2 raised concerns that 
        there is a lack of a formal dispute resolution process, and 1 
        noted a lack of a distinction between approvals of simple and 
        complex aircraft. Companies suggested several ways to address 
        these issues, including updating BASAs more often and making 
        them clearer. FAA has taken action to improve some BASAs to 
        better streamline the approval process that those countries 
        apply to imported U.S. aviation products. For instance, 
        according to FAA officials, they meet regularly with bilateral 
        partners to address approval process issues and are working 
        with these partners on developing a common set of approval 
        principles and to add specific dispute resolution procedures in 
        the agreements with some countries. FAA officials also 
        indicated that they are working with longstanding bilateral 
        partners--such as Brazil, Canada, and the EU--to identify areas 
---------------------------------------------------------------------------
        where mutual acceptance of approvals is possible.

   Reported Challenges in Communicating with FCAAs. 
        Representatives from 12 U.S. companies reported challenges in 
        communicating with FCAAs. Representatives from six U.S. 
        companies reported, for example, that interactions with 
        developing countries can be confusing and difficult because of 
        language and cultural issues. Representatives from two 
        companies noted that they hire local representatives as 
        consultants in China to help them better engage the Civil 
        Aviation Administration of China (CAAC) staff with their 
        approval projects and to navigate the CAAC's process. One 
        company's representative also reported having better progress 
        in communications with FCAAs in some Asian countries, such as 
        India Japan, and Vietnam, when a local ``third-party agent'' 
        (consultant) is involved because it provides a better 
        relationship with the FCAAs' staff. Representatives from three 
        companies also reported that, in general, some FCAAs often do 
        not respond to approval requests or have no back-ups for staff 
        who are unavailable. They noted that potential mitigations 
        could include a greater FAA effort to develop and nurture 
        relationships with FCAAs. According to FAA officials, they are 
        working with the U.S.-China Aviation Cooperation Program to 
        further engage with industry and Chinese officials.

   Reported Challenges Related to Foreign Approval Costs. 
        Representatives from 12 of the 15 U.S. companies and 2 of the 3 
        foreign companies indicated challenges with regard to approval 
        fees charged by FCAAs. They specifically cited EASA--the EU's 
        counterpart to FAA--and the Federal Aviation Authority of 
        Russia. For example, they noted that EASA's fees are very high 
        (up to 95 percent of the cost of a domestic EASA 
        certification)\17\--especially relative to the amount levied by 
        other FCAAs \18\--are levied annually, and are unpredictable 
        because of the unknown amount of time it takes for the approval 
        to be granted. The fees are based on the type of product being 
        reviewed for approval and can range from a few thousand dollars 
        to more than a million dollars annually. Representatives from 
        two companies also noted that EASA lacks transparency for how 
        the work it conducts to grant approvals aligns with the fees it 
        levies for recovering its costs.\19\ FAA officials indicated to 
        us that a foreign approval should take significantly less time 
        and work to conduct than the work required for an original 
        certification effort--roughly about 20 percent--and that they 
        have initiated discussions with EASA officials about making a 
        significant reduction in the fees charged to U.S. companies. 
        However, recently, FAA indicated that it is more important to 
        work with EASA to ensure its fees are commensurate with the 
        actual costs of the services being provided and those incurred 
        by EASA.\20\
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    \17\ EASA's March 2014 proposal to amend the Agreement between the 
U.S. and the EU on cooperation in the regulation of civil aviation 
safety notes that in principle, the EASA process for approval of 
certificates issued by a country with which the EU has an appropriate 
agreement should result in a different workload from the process 
required for certification activities by that certifying country. 
However, in the approval of U.S. products, EASA currently charges U.S. 
companies up to 95 percent of the cost of conducting a domestic 
certification of a similar European-manufactured aviation product.
    \18\ For example, according to media reports citing information 
obtained from Robinson Helicopter Company, EASA charged Robinson about 
$1 million to approve the R66 helicopter while other FCAAs' charges 
ranged from $2,709 (Argentina) to $178,000 (Russia). According to one 
report, Robinson also noted that Canada--where it stated that the team 
size and depth of review of the FAA certification was very similar to 
that of EASA--levied a total fee of about $80,000 to certify the R66.
    \19\ Pursuant to the regulation establishing EASA--Regulation (EC) 
No 216/2008 of the European Parliament and of the Council of 20 
February 2008--EASA is financed primarily through fees paid for 
certificates issued by the agency and charges for publications, 
training, and other services.
    \20\ According to FAA, this change in approach is based on Article 
14 of the EU-U.S. BASA that states, in part, that each party shall try 
to ensure that fees imposed by their ``technical agents'' on applicants 
and regulated entities for certification and approval related services 
under the agreement are just, reasonable, and commensurate with the 
services.
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U.S. Companies Also Reported FAA-Related Challenges, Which FAA Is 
        Taking 
        Actions to Address
    As mentioned previously, FAA provides assistance to U.S. companies 
by facilitating the application process for foreign approvals of 
aviation products. Although FAA seeks to provide an efficient process, 
companies we interviewed for our January 2015 statement reported 
challenges that they faced related to FAA's role in this process. FAA-
related challenges cited by the companies we interviewed fell into 
three main categories: process, resources, and staff expertise.

   Process for facilitating foreign approvals. Most of the U.S. 
        companies in our selection (12 of 15) reported challenges 
        related to FAA's process for handling foreign approvals. These 
        included concerns about foreign approvals not being a high 
        enough priority for FAA staff, a lack of performance measures 
        for evaluating BASAs, and an insufficient use of FAA's 
        potential feedback mechanisms. For example, representatives of 
        three companies told us that sometimes FAA is delayed in 
        submitting application packets to FCAAs because other work 
        takes priority; one of these companies indicated that sometimes 
        FAA takes several months to submit packets to FCAAs. In another 
        example, representatives of four companies cited concerns that 
        BASAs do not include any performance measures, such as any 
        expectations for the amount of time that it will take for a 
        company's foreign approval to be finalized. With regard to FAA 
        using feedback mechanisms to improve its process for supporting 
        foreign approvals, representatives of one company told us that 
        applicant companies are not currently asked for post-approval 
        feedback by FAA, even though it would be helpful in identifying 
        common issues occurring with foreign approvals.

   Available resources. Most of the U.S. companies in our 
        selection (10 of 15) reported challenges related to the 
        availability of FAA staff and other resources. These include 
        limited FAA travel funds and limited FAA staff availability to 
        process foreign approval applications. According to FAA 
        officials, FAA is responsible for defending the original type 
        certification and, more broadly, for handling any disputes that 
        arise with FCAAs during the foreign approval process.\21\ In 
        doing so, FAA is also responsible for working with an FCAA in 
        an authority-to-authority capacity, and communications should 
        flow through FAA to the applicant company. However, 
        representatives of five companies noted that due to a lack of 
        FAA travel funds, FAA staff are generally not able to attend 
        key meetings between U.S. companies and FCAAs conducted at the 
        beginning of the foreign approval process. These 
        representatives noted that this can complicate the process for 
        companies, which then have to take on a larger role in 
        defending the original type certificate issued for a product. 
        Representatives of two companies also noted that when there is 
        limited FAA staff availability at the time a foreign approval 
        application is received, it contributes to delays in obtaining 
        their approvals. In fact, the Certification Process Committee 
        made recommendations to encourage FAA to include the expansion 
        of delegation in its efforts for improving the efficiency of 
        its certification process. As previously discussed, FAA does 
        have initiatives under way related to expanding the use of 
        delegation, but concerns continue to exist about the lack of 
        FAA resources to effectively do so.
---------------------------------------------------------------------------
    \21\ According to FAA guidance, the implementing procedures for 
BASAs are signed by the authorities (FAA and the respective FCAA), and 
therefore the applicant should work through FAA if disputes occur with 
the FCAA during the foreign approval process.

   Staff expertise. Some of the U.S. companies in our selection 
        (7 of 15) reported issues related to FAA staff expertise. These 
        issues cited included limited experience on the part of FAA 
        staff in dispute resolution as well as limited expertise 
        related to intellectual property and export control laws. For 
        example, representatives of three companies told us that FAA 
        staff sometimes lack technical knowledge due to having little 
        or no experience with some aviation products, while a 
        representative of another company argued that increased 
        training for FAA staff in dispute resolution could be very 
        helpful, especially for disputes involving different cultural 
        norms. In another example, representatives of two companies 
        described situations in which FAA staff were ready to share 
        information with an FCAA that the applicant company considered 
        proprietary, until the company objected and other solutions 
---------------------------------------------------------------------------
        were found.

    In January 2015, we found that FAA has initiatives under way aimed 
at improving its process for supporting foreign approvals that may help 
address some of the challenges raised by the U.S. companies in our 
review. Specifically, FAA's current efforts to increase the efficiency 
of its foreign approval process could help address reported challenges 
related to FAA's process and its limited staff and financial resources. 
For example, FAA is planning to address its resource limitations by 
focusing on improving the efficiency of its process with such actions 
as increasing international activities to support U.S. interests in 
global aviation, and by implementing its 2018 strategic plan, which 
includes the possibility of allocating more resources to strengthening 
international relationships. FAA has also initiated efforts to improve 
the robustness of its data on foreign approvals, to further improve the 
efficiency of its process for supporting these approvals. With more 
complete data, FAA aims to track performance metrics, such as average 
timeframes for foreign approvals, and to better evaluate its 
relationships with bilateral partners.
    As we concluded in January 2015, to its credit, FAA has made some 
progress in addressing the Certification Process and Regulatory 
Consistency Committees' recommendations, as well as in taking steps to 
address challenges faced by U.S. aviation companies in obtaining 
foreign approvals of their products.\22\ It will be critically 
important for FAA to follow through with its current and planned 
initiatives to increase the efficiency and consistency of its 
certification processes, and its efforts to address identified 
challenges faced by U.S. companies in obtaining foreign approvals. 
Given the importance of U.S. aviation exports to the overall U.S. 
economy, forecasts for continued growth of aviation exports, and the 
expected increase in FAA's workload over the next decade, it is 
essential that FAA undertake these initiatives to ensure it can meet 
industry's future needs. It is also important that FAA continue to 
demonstrate that it is making progress on these important initiatives, 
as well as enhance its data tracking for monitoring the effectiveness 
of its bilateral agreements and partnerships.
---------------------------------------------------------------------------
    \22\ GAO-15-327T.
---------------------------------------------------------------------------
    Going forward, we will monitor FAA's progress, highlight the key 
challenges that remain, and identify potential steps that FAA and 
industry can take to find a way forward on the issues covered in this 
statement as well as other issues facing the industry. As we noted in 
our October 2013 statement, however, some improvements to the 
certification processes will likely take years to implement and, 
therefore, will require a sustained commitment as well as congressional 
oversight.\23\ We are hopeful that our findings in these areas will 
assist this Subcommittee as it develops the framework for the next FAA 
reauthorization act.
---------------------------------------------------------------------------
    \23\ GAO-14-142T.
---------------------------------------------------------------------------
    Chairwoman Ayotte, Ranking Member Cantwell, and Members of the 
Subcommittee, this concludes my prepared remarks. I would be happy to 
answer any questions you or other members of the Subcommittee may have.

    Senator Ayotte. Thank you, Dr. Dillingham.
    We will now here testimony from Mr. Pete Bunce, President 
of the General Aviation Manufacturers Association.
    Mr. Bunce?

    STATEMENT OF PETER J. BUNCE, PRESIDENT AND CEO, GENERAL 
               AVIATION MANUFACTURERS ASSOCIATION

    Mr. Bunce. Chairman Ayotte, Ranking Member Cantwell, and 
other members of the Committee, thank you for the opportunity 
to be able to come and testify before you today.
    The General Aviation Manufacturers Association represents 
88 global manufacturers of general aviation products, all the 
way from the original equipment manufacturers for the aircraft 
itself; engines; avionics; as well as down to third-tier 
suppliers. In addition, the major repair, maintenance, and 
overhaul facilities, globally, are members of GAMA.
    We just recently commissioned PriceWaterhouseCoopers along 
with several of our other general aviation's sister 
associations to be able to do a study reading into this 
reauthorization year of just what economic impact general 
aviation has to the U.S. economy. And the recent numbers come 
in are very telling: 1.1 million jobs and $219 billion annual 
economic contribution here. So it is significant.
    And as you both pointed out in your opening statements, 50 
percent of the marketplace is overseas. Exports are huge to 
this industry, and we want to keep that going. And your 
interest in a lot of the export issues are very vital to us.
    There is great challenges for us to be able to get through 
the regulatory structure. As you know, we are one of the most 
heavily regulated industries within the country, and that's why 
we are so appreciative to be able to leadoff this hearing cycle 
with being able to talk about certification because it is very 
important. The process needs to be effective.
    When the FAA worked with industries several years ago to 
set up this Organization Designation Authorization (ODA), the 
promise was if industry invested in it than we would get a 
return in being able to apply a risk-based approach to be able 
to do the standard routine things that manufacturers have done 
for years in building aircraft; and then we could free up 
resources to focus on the new and novel technologies out there. 
To date, we have not fully realized the advantages of this ODA 
and that is why your focus on this, both in the last 
reauthorization bill and here at this hearing today, are 
vitally important to us.
    Now, to Ms. Baker's credit, her staff--and I know that the 
senior leadership at the FAA is very much committed to driving 
this change within the bureaucracy. But cultural change is 
difficult. And, when you've got this ship and you've got to 
start to steer it another way, this focus by this committee on 
certification really, I think, gives the tools to Ms. Baker and 
her leadership team at the FAA to tell the workforce we have 
got to do business differently. Because, resources and 
additional dollars are not going to keep flowing to the agency 
so we've got to apply a risk-based approach and do business in 
a different manner. And that gets to Dr. Dillingham's comments 
about the Small Aircraft Revitalization Act.
    In 2012, unanimous passage from the United States Congress, 
not a single dissenting vote. Now, as Dr. Dillingham said, 
2017, it is too long a time to get this rulemaking through the 
cycle. The rulemaking process has broken down; it's not working 
efficiently. Just two weeks ago, EASA, the European equivalent, 
rough equivalent, of the FAA, announced their Advance Notice of 
Proposed Amendment. So they're ready to move forward. And so, 
we are behind on being able to realize the ability to get 
safety-enhancing technology into light general aviation 
products.
    To help with the certification process, there are a lot of 
things that we can do within this reauthorization. We can drive 
the effective use of ODA; we can provide workforce with the 
ability to strengthen their career path. If they're systems 
engineering managers and they can look at overall safety 
systems, we can help with training and ensure that the 
workforce is effectively overseeing our products through safety 
management oversight. We can have a constructive feedback 
mechanism to this committee and other members of the Congress 
from industry and from the FAA; being able to say, ``How's 
industry doing on strengthening and streamlining the 
certification process? How is the FAA doing?''
    And I think, also, as we look toward the international 
realm, as both Ms. Baker and Dr. Dillingham mentioned, getting 
through the validation process, whether it's the FAA validating 
other goods that are coming in here or other authorities being 
able to validate our products, the system is not working the 
way it should, especially when we have bilateral agreements.
    And finally, I truly appreciate the leadership that both 
the Chairman and the Ranking Member have paid toward Ex-Im Bank 
reauthorization. A lot of people look at Ex-Im Bank and they 
think, right away, they think Boeing and the tremendous 
thousands of suppliers out there. But it effects everyone that 
is producing general aviation products.
    In Olney, Texas, there is this small company named Air 
Tractor. They are the major employer in that town. Last year, 
seven out of the eight aircraft they were producing for crop 
dusting were all Ex-Im Bank financed, and I know Senator Moran 
knows, the only place that two of the major aviation companies 
in Kansas could make it in the last economic downturn is to get 
financing for their products was Ex-Im Bank. So this is vitally 
important to us.
    So thank you very much for your support in that effort.
    [The prepared statement of Mr. Bunce follows:]

       Prepared Statement of Peter J. Bunce, President and CEO, 
               General Aviation Manufacturers Association
Introduction
    Chairman Ayotte, Ranking Member Cantwell, distinguished members of 
the Subcommittee; my name is Pete Bunce and I am the President and CEO 
of the General Aviation Manufacturers Association (GAMA). Thank you for 
allowing me to testify on behalf of GAMA and its member companies 
today. GAMA represents over 85 companies that are the world's leading 
manufacturers of general aviation (GA) airplanes, rotorcraft, engines, 
avionics, and components and businesses that manage maintenance repair 
stations, pilot training, and fixed-based operations facilities 
worldwide. I applaud the leadership of the Subcommittee, as well as the 
Commerce, Science and Transportation Committee, for focusing on the 
importance of aircraft certification activities. I look forward to 
sharing with you our perspective on the current regulatory environment, 
including ways that it can be strengthened to improve safety and 
enhance efficiency in a globally competitive marketplace. With the 
collective leadership of this Committee as well as the Federal Aviation 
Administration (FAA) and industry, I strongly believe that we can 
sustain and grow valued GA manufacturing jobs that I'm so proud to 
represent here today.
Why the GA Marketplace Matters
    General aviation is vital to the fabric of our economy and plays an 
important role in the Nation's transportation network and commerce. To 
highlight the industry's total impact on the U.S. and individual state 
economies, GAMA and seven other GA associations hired renowned auditing 
firm PricewaterhouseCoopers to determine the overall contributions of 
GA to the United States economy. The study found that GA provides 1.1 
million in jobs (direct, indirect, induced, and enabled impacts) in the 
U.S. and $219 billion in total economic output in the U.S. annually.\1\
---------------------------------------------------------------------------
    \1\ Contributions of General Aviation to the U.S. Economy in 2013, 
PricewaterhouseCoopers, February 11, 2015
---------------------------------------------------------------------------
    Much of this information, as well as illustrative stories of what 
this means in communities of all sizes across the U.S., are provided in 
``The Wide Wings and Rotors of General Aviation,'' which I've included 
with my testimony. The narrative that accompanies the study shows 
firsthand the many ways that GA is an integral part of our national 
transportation system and its important role in our Nation's commerce. 
But GA also provides an important lifeline for communities of all sizes 
and scope in terms of lifesaving emergency medical flights, providing 
connectivity to areas that are only accessible by air, fulfilling 
humanitarian roles that are often crucial in nature, and economic 
development.
    General aviation manufacturing is a significant contributor to this 
narrative. However, the marketplace for general aviation products is a 
very competitive one globally, and certification and regulatory 
processes and decisions can impact sales, revenue, and jobs. We need to 
ensure that the wide wings and rotors of general aviation remain broad.
The Complex, Complicated Regulatory Environment We Face
    As members of this Subcommittee know well, manufacturers cannot 
bring any new aviation products to market without FAA certification 
approval. FAA has previously stated it expects continuing challenges 
associated with staffing, management of programs, and infrastructure 
investment while at the same time manufacturers continue to invest in 
the development of new aviation products and technologies. This reality 
is exacerbated by recent fiscal pressures, including the 2013 
government shutdown and the continued impact of budget sequestration. 
Yet FAA and its employees have been slow to fully implement FAA-and 
industry-endorsed recommendations. When fully implemented, these 
process improvements will use FAA certification resources more 
effectively and enhance industry's ability to complete certification of 
their products in a more timely and predictable fashion. I'd like to 
provide you with some tangible examples of how this can collectively 
impact the ability of companies of all sizes and scope in bringing 
their products to the marketplace.
    While FAA management is fully committed to the development and 
implementation of Organization Designation Authorization (ODA), which 
strengthens and expands the effectiveness of the delegation program, 
key benefits have been slow to be fully realized by many in industry 
and the FAA. Manufacturers and the FAA have invested significant 
resources in establishing and qualifying ODA organizations, including 
the personnel, training, approved procedures manuals, and oversight 
system. However, the practical implementation and use of ODA 
authorizations have been inconsistent from one region to another and 
even from project to project for the same manufacturer. Our members 
regularly experience situations where their companies have obtained 
full FAA ODA authorization to conduct specific technical compliance 
activities but, on a project-by-project basis, the FAA engineers and 
specialists choose to be directly involved and retain these activities 
themselves and not utilize the available FAA-authorized ODA resources. 
This inefficiency adds significant delay and cost to certification 
programs--not only for those manufacturers that have an ODA, but also 
for other standard certification projects that are waiting for FAA 
support that rely on these same FAA resources. One of our companies has 
calculated that a delay on a major aircraft certification project costs 
it approximately $10 million each month.
    Another issue is the ability to efficiently deliver FAA-certified 
and U.S.-manufactured products to the international marketplace. This 
is crucial given GA manufacturing exports have grown to as much as 50 
percent of deliveries in any given year.\2\ The process by which 
foreign aviation authorities issue validations of FAA Type Certificates 
has become increasingly important, yet can be equally complex. Many of 
our member companies have said that getting a validation in time to 
meet an aircraft sale or fleet order is a white-knuckle experience that 
is costly and impacts the ability of U.S. businesses to compete in the 
global marketplace. Our member companies often pay a fee and in some 
cases will spend tens of thousands of dollars satisfying a foreign 
authority's review of the FAA approval. One manufacturer has shared 
that of over 300 different projects that have needed foreign authority 
approval, the average time for a validation has been 21 weeks where the 
FAA's original certification took less than a year.
---------------------------------------------------------------------------
    \2\ 2014 General Aviation Statistical Databook and Industry 
Outlook, GAMA, 2015
---------------------------------------------------------------------------
    Given this track record, there should be an opportunity for FAA to 
work with foreign authorities to reduce validation times substantially. 
In addition, the effectiveness of bilateral agreements also varies 
widely. For instance, one company experienced a range of 6 to 40 weeks 
for validations with bilateral countries. These countries have the same 
basic agreement with the FAA, but one takes almost seven times longer 
to do the same job as another. At 40 weeks, that is sometimes longer 
than it took for this company to develop and certify its product with 
the FAA.
    These examples are meant to provide illustration of the complex, 
complicated global regulatory environment that GA manufacturers face in 
getting their products to the marketplace. And they provide a tangible 
example of why it is critical to the economic health of our country to 
understand, address, and improve the current certification process.
The Current Flight Plan
    As this Committee knows, the type certification process is 
basically a verification review of thousands of individual discreet 
compliance activities the manufacturer is required to undertake to show 
that the design meets the safety standards established by the FAA. To 
leverage its limited resources, and supplement them with the best 
expertise available, the FAA can appoint and oversee industry 
individuals or organizations authorized by the FAA as qualified to 
support the FAA's verification review and issuance of product design 
certificates and approvals.
    One of the leading FAA initiatives, the ODA program, builds on 
experience with past delegation activities that have been in place 
since the FAA's beginning in the 1950s. FAA established ODA in 2005 to 
improve the safety, quality, and effectiveness of delegation programs 
and expand the use of organizational delegation to all type-
certificated products. This has the potential to significantly reduce 
the FAA's administrative workload by appointing organizations with the 
required qualification, experience, and management systems to supervise 
the day-to-day activities of expert individuals authorized to perform 
certification compliance verification activities. By shifting to a 
systems safety oversight approach of these organizations, the 
certification process can be more effective because the same FAA 
resources can now focus less on routine detailed design reviews and 
administrative supervision of individual designees and more on 
effective safety oversight and safety-critical activities. This will 
also enable the FAA to better support a continuously growing level of 
aviation industry activity in an efficient and timely manner, reducing 
delay and cost.
    With this Committee's strong and essential support, progress is 
being made to improve efficiencies and streamline the FAA's 
certification process. There has been tremendous effort by FAA 
leadership, industry, and Congress to better focus FAA resources on 
safety-critical activities and system oversight, and better leverage 
industry resources to improve the efficiency and effectiveness of the 
certification process. We greatly appreciate the inclusion of Section 
312, entitled Aircraft Certification Process Review and Reform, in the 
FAA Modernization and Reform Act of 2012 (P.L. 112-95). Even now, over 
three years after its enactment, this section is helping drive 
implementation of several recommendations to improve the certification 
process. We applaud you for your initiative in this area, and the clear 
and consistent message that has been conveyed to stakeholders about the 
importance of this reform.
    Another example is the Small Airplane Revitalization Act (P.L. 113-
53), enacted into law because of the strong leadership of Senators 
Klobuchar, Ayotte, Cantwell, Murkowski, and other members of this 
Committee. This law is a critical first step to regulatory reform of 
general aviation airplane design requirements to further streamline the 
FAA certification process and enable real-world safety improvements in 
general aviation. We can have the best research programs and the most 
innovative technology, but if products cannot get to market, it is of 
no benefit to manufacturers, users, or the cause of safety. We would 
not have gotten this far without the support and leadership of the 
members of this Subcommittee, as well as the leadership of the FAA and 
other aviation authorities. With your support and continued oversight, 
we are on the precipice of reforming the standards for certifying Part 
23 airplanes throughout the world. Notably, the European Aviation 
Safety Agency (EASA) recently announced an Advanced Notice of Proposed 
Amendment, which solicits public input into a rulemaking proposal to 
achieve this objective. We are hopeful that as we approach 
reauthorization, similar progress is forthcoming from the FAA in terms 
of issuing a Notice of Proposed Rulemaking (NPRM) sometime this summer 
which is harmonized with EASA.
    Although these FAA and industry initiatives and activities are 
progressing, much more needs to be done to meet the necessary goal of 
improving the overall effectiveness and efficiency of the certification 
process and enhancing the competitiveness of aviation manufacturing and 
exports.
The Way to Reach New Heights
    As we approach the reauthorization of FAA programs, GAMA and our 
member companies have worked diligently to identify ways that we can 
continue to improve certification processes and the regulatory 
environment and better leverage FAA safety resources. We've also 
discussed and are currently working with FAA on concepts in these 
areas. It is our belief that FAA is at a critical tipping point in 
implementing successful reform of the certification process and this 
Subcommittee has a crucial role to play in supporting meaningful, 
constructive change at the agency. We strongly encourage policymakers 
to work to reauthorize these policies and reforms in an expeditious 
manner that avoids the extension delays of the past. I'd like to 
briefly outline our priorities as you begin to reauthorize FAA programs 
and policies. They include:
Full Utilization of Organizational Designation Authorization (ODA)
    Although there continues to be progress, we hear from our 
membership that they are not consistently experiencing the full benefit 
or utilization of their ODA which means FAA is also not securing the 
full benefits. To address this, we encourage policymakers to support 
initiatives that will enable more effective use of ODA and government 
resources. Specifically, we believe there needs to be a clearly defined 
risk-based approach for FAA oversight of both ODA and certification 
project activities. As stated earlier, companies with an ODA invest 
time and capital to establish an ODA and obtain FAA approval and 
authorization. In doing so, they are understandably frustrated when 
individual FAA employees have complete discretion, without appropriate 
rationale, to retain compliance activities on a project in an area 
where the ODA has been granted authorization. This duplicative action 
costs the company, as well as the government, time and resources that 
could be better utilized elsewhere. We would support efforts that would 
limit individual discretion to re-litigate ODA authorizations once 
those authorizations have been approved by FAA. Simply put, the FAA 
needs to stand by its approval of the ODA and allow the holder to 
utilize its authorities to the fullest extent.
    In addition, we believe that an improved issues resolution process 
for significant certification process milestones will enable better 
outcomes for both industry and FAA by ensuring that they are addressed 
in a timely manner. This will provide needed predictability and 
certainty.
    As a final point, I want to underscore that full utilization of ODA 
for individual projects still requires that FAA conduct its system 
safety oversight of the ODA and its project activities to whatever 
level the FAA deems appropriate, and to mandate corrective action as 
necessary. FAA also still retains full discretion to be directly 
involved in critical safety areas and novel technologies. Additionally, 
FAA will continue to directly manage certification projects and oversee 
individual designees for companies that do not establish an ODA due to 
their size and scope of activities. In fact, ensuring ODAs are fully 
utilized enables the FAA to devote resources and management to key 
safety issues and the significant majority of applicants and companies 
that do not hold an ODA. More effective use of these resources will 
ensure better outcomes for both large companies that hold an ODA and 
smaller companies in their need to get products to the marketplace in a 
timely and predictable manner.
Supporting the Workforce
    To successfully implement certification reforms, there will need to 
be some changes to the skills mix of the FAA workforce. FAA has a 
committed and capable workforce, but changes in training and job 
opportunities are critical. We believe a focus in this area would help 
facilitate this transition, provide the right incentives for employees, 
and offer clear guidance and direction.
    In this regard, we encourage the Committee to consider initiatives 
that promote a more successful workforce by preparing FAA employees for 
new and evolving roles and responsibilities in a systems safety 
approach to certification and oversight. Job descriptions, training, 
and performance objectives should be better aligned to support those 
employees who conduct ODA oversight audits or participate in 
organizational management teams. Additionally, we believe the 
development within FAA of a systems engineering discipline with 
appropriate training, compensation, grade level, and emphasis in 
auditing will enhance the overall certification process by promoting a 
system oversight area of emphasis within the workforce and the agency.
    In this regard, we look forward to working with FAA, Congress, and 
labor to ensure that appropriate training for new and existing 
workforce is provided and that it meets the regulatory and fiscal 
challenges of the future. We also believe that Congress should 
encourage FAA and industry to develop knowledge-sharing exchanges and 
other opportunities.
Recognizing Good Performance
    Building on workforce initiatives, industry has supported the idea 
of creating metrics to assess FAA and industry certification project 
performance and ODA utilization, and provide feedback that could 
benefit all stakeholders. When implemented, FAA could periodically 
report to Congress on the data generated from these metrics. This would 
enable FAA, and industry, to evaluate progress and meet improvement 
goals and targets. Industry has also promoted the concept of a survey 
of all certification project applicants that would provide objective 
feedback on the overall performance and success of FAA certification 
activities, including the use of available delegation and the timelines 
and efficiency of the certification process. This will allow both 
industry and the FAA to gain constructive, objective feedback in areas 
where both parties are succeeding and also areas that need improvement.
International Engagement
    Another priority for our membership is facilitating acceptance of 
U.S.-manufactured and FAA-certified aircraft abroad. As mentioned at 
the outset, increasingly countries are challenging the FAA 
certification of aircraft and delaying the ability of manufacturers to 
deliver their products by conducting redundant evaluations to verify 
the safety of the design, even in cases where the U.S. has a bilateral 
safety agreement. This can be a significant problem as we work to grow 
exports because it causes further delays in the ability to deliver 
products. FAA must actively engage internationally with other aviation 
authorities to facilitate global acceptance of U.S. products type-
certificated by the FAA, which will significantly reduce industry and 
regulator costs. We believe Congress can facilitate this objective by 
encouraging FAA to exert strong, aggressive leadership in educating and 
defending its certification policies and processes in the international 
marketplace. In doing so, it will facilitate the acceptance of U.S. 
products in the international marketplace.
Piston Aviation Fuels Initiative
    Another critical certification challenge is transitioning the 
piston aviation fleet operating today from leaded to an unleaded 
aviation fuel. The general aviation community collectively recognizes 
this is necessary to ensure aviation safety and the utility of the 
significant U.S. fleet of general aviation aircraft, as well as address 
the environmental challenges of lead emissions. With the support of 
this Committee, as well as congressional appropriators, the FAA, and 
the Administration, the collaborative government/industry Piston 
Aviation Fuels Initiative (PAFI) is making great progress in assessing 
and qualifying candidate replacement unleaded fuels. Critical to this 
transition is developing a pathway to certify the use of a replacement 
fuel by the existing piston fleet in an effective and innovative 
manner, and we look forward to working with the Committee on this 
important initiative in FAA reauthorization.
Inconsistent Interpretation of Regulations
    As a final point, our membership continues to experience problems 
with the inconsistent interpretation of FAA regulations. For example, 
in the flight standards arena one of our companies worked with the FAA 
for more than two years to address an issue that resulted from the 
reinterpretation of a long-held FAA policy. While trying to implement 
the change, the company received inconsistent messages from the FAA 
field personnel working to authorize, support, and oversee this new 
requirement. After two years of frustration and inefficiency for this 
company, FAA decided to return to the original policy that was 
initially proposed for change.
    GAMA also believes there are tremendous redundancies that must be 
addressed. In the repair stations arena, companies receive multiple 
paper and on-site audits on an annual basis. A company can receive four 
or five paper audits a week from customers and then be visited by FAA 
and other international authorities multiple times during the year. FAA 
has taken recent steps at International Civil Aviation Organization to 
raise the profile of these redundant and wasteful oversight activities, 
but more must be done.
    Notably, inconsistent regulatory interpretation was an area of 
focus during the last reauthorization, as evidenced by Section 313 of 
the FAA Modernization and Reform Act of 2012 (P.L. 112-95), but only 
recently has it become clear that progress on this issue may be 
possible with additional Congressional direction. We encourage 
policymakers to focus on two main areas, both of which were included in 
the Section 313 Aviation Rulemaking Committee (ARC) recommendations.\3\ 
The first is establishment of a Regulatory Consistency Communications 
Board to promote constructive dialogue between the FAA and applicants 
for the timely resolution of issues. As noted previously, finding ways 
to mitigate and resolve issues is something we believe would be 
beneficial and moreover promote safety. Second, we believe that 
establishment of a Master Electronic Database Resource to provide FAA 
and stakeholders searchable access to all relevant rules and related 
policy and guidance would alleviate a lot of the inconsistencies in 
interpretation found today and provide a basis for more timely 
resolution of issues.
---------------------------------------------------------------------------
    \3\ FAA Section 313 ARC Report--http://www.faa.gov/about/
plans_reports/modernization/media/Sec.313.pdf
---------------------------------------------------------------------------
    Too often, FAA and industry resources are wasted because of a 
breakdown in communications. These two initiatives will help address 
this, and we are pleased that FAA recently indicated that it was 
beginning to move toward implementation in these areas, as well as 
others identified in the Section 313 ARC. In the context of the FAA 
reauthorization, we want to ensure these objectives are fulfilled in a 
comprehensive and timely manner.
Global Leadership for the Next Century
    The aforementioned priorities are meant to outline ways we can move 
forward to improve safety, better leverage resources, and increase 
competitiveness in a complicated global marketplace. Maintaining global 
competitiveness and leadership of both the FAA and industry is critical 
for our Nation's aviation system and continued contribution to economic 
strength.
    Aviation safety, National Airspace System (NAS) efficiency, and 
environmental progress depend on the success of aviation manufacturers 
and aircraft operators. As manufacturers try to take advantage of more 
markets, issues like trade and policy become even more important. It is 
critical for the U.S. government and industry to advocate for policies 
that will help underpin aviation growth in the global environment.
    Growing international exports have helped sustain the GA industry 
through the past five or six years. A decade ago, the U.S. typically 
accounted for four out of five airplane sales, but in 2014 the market 
was split: half of the U.S.-manufactured airplanes produced by GAMA's 
members went to North American customers, and the other half went to 
customers in other parts of the world.\4\ While Europe was our lead 
market outside North America in 2014 at 16.4 percent of total unit 
deliveries, the Asia-Pacific region is a close second at 13.7 
percent.\5\ We have also seen the Latin American market grow strongly; 
it now accounts for over 10.8 percent of the world's airplane sales.\6\ 
The helicopter market is leveraged even more outside the U.S., with 
customer demand over the next five years accounting in Europe for 24 
percent of projected deliveries, Latin America 19 percent, and the 
Asia-Pacific region 14 percent, according to Honeywell.\7\
---------------------------------------------------------------------------
    \4\ 2014 General Aviation Statistical Databook and Industry 
Outlook, GAMA, 2015
    \5\ Ibid
    \6\ Ibid
    \7\ Honeywell Press Release--Honeywell Forecasts Steady Global 
Helicopter Demand For Next Five Years--March March 1, 2015--http://
honeywell.com/News/Pages/Honeywell-Forecasts-Steady-Global-Helicopter-
Demand-For-Next-Five-Years.aspx
---------------------------------------------------------------------------
    Given the obvious importance and interest in the international 
marketplace, GAMA strongly supports the reauthorization of the Export-
Import Bank of the United States (the Bank), which expires June 30, 
2015. Failure to reauthorize the Bank would harm our companies by 
taking away a valuable financing tool in the global marketplace. The 
broad spectrum of GA manufacturing depends on Ex-Im, including 
agricultural aviation.
    The Bank is increasingly important to general aviation 
manufacturing given that the export of general aviation aircraft has 
increased significantly in recent years. Since 2012, the Export-Import 
Bank of the United States has provided at least $1.9 billion \8\ in 
financing guarantees for U.S.-based general aviation manufacturers to 
facilitate the sale of their aircraft. If the Bank is not reauthorized, 
we believe this will hamper our companies' ability to compete in the 
international marketplace. While other countries' relevant agencies 
will continue to finance aircraft sales for manufacturers in their 
countries, U.S. companies would be without this support, thus creating 
a competitive disadvantage.
---------------------------------------------------------------------------
    \8\ Source: Export-Import Bank
---------------------------------------------------------------------------
    The Bank's work also supports small businesses that are aircraft 
manufacturers and suppliers. Air Tractor, which is a small, employee-
owned company in Olney, Texas, manufactures agricultural and 
firefighting aircraft and leverages the Bank as part of its export 
transactions. Air Tractor has been able to increase its exports over 
the past decade with the help of the Bank, and the company reached 
record production in 2012.\9\ Its aircraft are delivered to customers 
in Argentina, Brazil, China, Australia, and Spain through joint export 
guarantees between the Bank and the Canadian equivalent, Export 
Development Canada.
---------------------------------------------------------------------------
    \9\ Ickert: Growing small business through exports, David Ickert, 
Star-Telegram, March 20, 2012
---------------------------------------------------------------------------
    GAMA is open to constructive changes to improve the operation of 
the Bank, but these changes must recognize the critical role the Bank 
plays in maintaining domestic manufacturing jobs and decreasing our 
trade deficit as we expand into emerging markets. To that end, we 
applaud those on this Committee who have supported legislation that 
will enable the Bank to continue to support businesses of all sizes and 
scope that compete in the international marketplace and level the 
playing field.
Conclusion
    Chairman Ayotte and Ranking Member Cantwell, thank you for 
providing me the opportunity to provide the Subcommittee an overview of 
the importance of certification reform in maintaining and growing our 
industry and U.S. competitiveness. GAMA companies are passionate about 
these reforms because this is an area where, working together, we can 
improve safety, become more competitive, and expand U.S. manufacturing 
jobs. I appreciate the opportunity to outline these critical areas and 
look forward to working with you on these issues in the context of FAA 
reauthorization. I've been the President and CEO of GAMA for a decade 
this year. While our focus continues to evolve, at the core we've 
always worked to promote policies that benefit general aviation 
manufacturers and their employees by striving to achieve the timeliness 
and certainty needed to get their products to the marketplace. 
Collectively, with the leadership of Congress as well as the FAA, we 
have made significant strides, but there is much work ahead of us to 
ensure this vital and important part of our economy can be sustained 
and grow. Ten years later, I believe we are on the cusp of enabling our 
industry to soar to new heights with the support of policymakers, 
regulators, and industry.
    Thank you. I would be glad to answer any questions that you may 
have.

    Senator Ayotte. Thank you, Mr. Bunce.
    And let me just say, you know, I am glad to cosponsor this 
effort. I was just at a New Hampshire company, New Hampshire 
Ball Bearing, recently and, you know, they are a supplier who 
benefits from Ex-Im Bank financing. And I think this is really 
important. So hopefully we can have a long-term reauthorization 
for this important financing mechanism for the industry.
    And in my home state of New Hampshire, by the way, you know 
36 companies over the last several years that have used it and 
most of them are small. These are small businesses that are 
using this kind of financing.
    But let me focus on why we are here today, which is----
    Ms. Baker, in listening to the testimony about the, from 
Dr. Dillingham and now Mr. Bunce, on the small business 
certification process and the fact that it is delayed until 
2017 which really is not what we intended in the Congress in 
terms of the passing with overwhelming support the Small 
Business Revitalization Act; where is that and why is it going 
to take so long? And can you tell us how we are going to get 
that done sooner?
    Ms. Baker. So Part 23 is the part for the smaller planes. 
That rule is in process. It is very, very important to both the 
administrator and myself. We have a lot of people that are very 
anxious to get it out, just as Peter Bunce is and Dr. 
Dillingham. We have to go through a particular process that is 
governed by the Administrative Procedures Act and we have to 
assure that we have a rule that is enforceable. We are going to 
rewrite the entire regulation, which is really unprecedented 
and we are going to change from the way that we write the rules 
today, which are very, very prescriptive to performance-based 
rules. So our attorneys are working really closely with us to 
assure that we do this right.
    We have to assure that there is not a lot of ambiguity in 
the rules when we put them into performance-based regulations. 
So right now, it is making its way through the process and is 
expected to go out as a Notice of Proposed Rulemaking at the 
end of this year. And that schedule is on the significant 
rulemaking notice on the OST website.
    Senator Ayotte. Well, we hope you guys can move it as fast 
as you can because 17 seems a long way away given what we hoped 
and how quickly this would happen.
    One of the issues, you know, in hearing from what Mr. Bunce 
had to say--at our hearing last week, Administrator Huerta 
indicated that FAA culture may be a barrier to truly moving to 
a risk-based decisionmaking system. Would you agree and what 
efforts will you take to change this?
    Ms. Baker. I think culture is a factor in almost any change 
that you make.
    What we are doing is trying to introduce tools so that the 
employees are comfortable with understanding how you can assess 
something from a risk perspective and we are having a lot of 
outreach with training. And I do a telecon with my managers 
every month and send out electronic mail to everyone in the 
organization explaining that this is the direction that we are 
going, that safety management systems are essential to the 
direction that this government is actually going; and that we 
can do this and it will be safe. And we'll just continue to 
work with the employees so that we ensure that they understand 
why it is we are moving in this direction.
    Senator Ayotte. Can we get a sense on, in terms of ODAs, 
exactly how, you know, how many companies are actually have 
ODAs and are you planning to expand that list?
    Ms. Baker. Yes. I was trying to get the actual counts. 
Around 80 right now. There are a number of Organization 
Designation Authorizations that aren't overseen by the aircraft 
certification office because it is broad authority and some of 
them are headed by the Flight Standards Service. They are 
working well. There is room for improvement, as Peter said. And 
we will continue to expand if the applicants that come in for 
an Organization Designation Authorization are qualified. That 
means they have to have experience with the regulations and are 
set up in a manner that they can carry out the duties on our 
behalf.
    Senator Ayotte. So Dr. Dillingham and Mr. Bunce, what are 
your thoughts on how we can expand the number of ODAs and move 
forward?
    And, you know, I know that, Dr. Dillingham, for you, this 
is a little bit like Groundhog Day because we have been talking 
about certification now for a number of series of hearings. And 
so, any thoughts you have not only on the expansion of ODAs and 
how we could better utilize that opportunity and meet the 
objectives for it but what about just ideas so that we don't 
have to keep coming back here to really make this a better 
process?
    Dr. Dillingham. Thank you, Madam Chair.
    I want to go back to a couple of things that you said and 
what Ms. Baker said. The idea of, one, going to risk management 
as opposed to our old system of doing inspections. And what 
that means is FAA is a risk averse culture and I think we all 
want that, but there has to be some flexibility in there. But 
what we are talking about now is moving from a time when 
inspectors went out and kicked each tire to a place where they 
are willing to step back and oversee the industry kicking those 
tires and make sure those tires are kicked correctly. That is 
what everyone is talking about as a culture change, and it 
takes time. But I think, as I listened to everyone's statement 
this morning, I think we are all saying that we are on that 
path now, that the things that the Congress has put in place 
through Sections 312 and 313 are the direction that we need to 
go.
    The fact that we have a certain number of ODAs, the first 
way to expand their use other than add to the numbers is to 
allow the ODAs to act. And that has been one of the big 
drawbacks, is that, although people are designated ODA, FAA in 
some cases still is doing the kick-the-tire thing and not 
letting somebody else kick the tire. And not from the top, but 
more from the middle management. Those who are actually out 
there kicking the tires rather than the managers here in 
Washington.
    Mr. Bunce. Madam Chairwoman, I couldn't agree more with Dr. 
Dillingham and Ms. Baker here. The Holy Grail right now is to 
be able to make the ODAs work efficiently. And you have to have 
a certain level of expertise, as Ms. Baker said, to be able to 
have an ODA. But, once you've done this, you've demonstrated 
that expertise, you should be able to use it.
    So a lot of our industry right now--take for instance fly-
by-wire, you're very familiar with how that has been pioneered 
in military aircraft. We've had it for many years now. Dating 
back in, actually, to the 1970s with the F-16. As we 
incorporate that into a rotorcraft and in fixed-wing, that's 
new and novel to civil aviation. So we needed to free up 
resources to be able to go and look at things like that. We 
shouldn't be having a bunch of folks look into basic structure 
or wing design or how you do the landing gear. Let's focus on 
the new and novel and make that safe. And that's what ODA does. 
It frees up resources, FAA resources, to be able to focus on 
that.
    The other big benefit of that too is that, as we make ODAs 
efficient for the companies that have demonstrated that 
capability, you free up resources for startup companies. We 
don't want huge barriers to entry for the next person that has 
a great idea or if we think about all the unmanned vehicles 
that are going to be out there and the companies that are going 
to producing those. We want them to have FAA resources to help 
them along as they get their manufacturing processes up to 
speed. So when we have a traditional company that has been 
doing this for years and years and the FAA says, ``You have the 
competency to do it, let's be able to use that ODA 
effectively.''
    Senator Ayotte. Thank you.
    Senator Cantwell?
    Senator Cantwell. Thank you, Madam Chair.
    Mr. Bunce, I appreciate your focus on the Ex-Im Bank and 
the export market in general. I also appreciate your statements 
about the distribution of these jobs throughout America because 
they are everywhere. I have a question related to that. I'm 
seeing the business jet market increase $3.9 billion from 2012 
to 2013 on a worldwide basis. My sense is we are seeing great 
growth in this market as the rest of the world develops. Is 
that correct?
    Mr. Bunce. Senator, if you take it in the aggregate, that 
is what it would appear to be. But a lot of those sales are for 
a large cab in long-range aircraft because, as the world 
becomes more interconnected, people in China want to be able to 
do business in the U.S. or Europe or down in Africa. So that is 
where the largest margins are; the bigger the airplane the 
larger the margin is.
    We still don't see the full recovery, as Senator Moran well 
knows in his state, with those in the light to mid-market of 
business jets and with turbo props. We have got gradual growth 
there as well as in pistons. We were down last year on 
rotorcraft. So although we are seeing the growth at the top and 
it isn't across the board, and that's why certification is so 
vital to us.
    Senator Cantwell. Well, the point that I was going to make 
is that this is a great market opportunity. But, if we think we 
are alone in chasing it, other countries, other companies are 
going to chase it. So our process here we want it to be right, 
we want it to be safe, but we should spend as much time to get 
it right. I don't know anything else that has that many jobs 
attached to it that we are a lead exporter of those jobs. I 
mean of those planes. So very important for us to get it right.
    Why do you think there are regional differences because of 
these organizational development authorities? Why do you think 
there are differences? Is it expertise?
    Mr. Bunce. It is very true. There are differences in 
regions. I think it is the way our personnel system is set up. 
I think that having the programs that Ms. Baker is putting in 
place, again, with the backing of the United States Congress, 
puts gravitas to trying to implement that change. But, still, 
we have too many folks up there that have differing opinions on 
how to administer whether it is an ODA or the importance of the 
consistency in regulatory interpretation that you put in the 
last bill, in 313, we're still seeing to much of that.
    There's not consolidated guidance so a lot of times it 
allows people to come up with their own option; this is their 
own interpretation. And we, in industry, instead of fighting 
that interpretation, we just say, ``Time is money. We got to 
get this certified.'' So we just say, ``OK, we'll go ahead and 
do it.'' Because there is also that fear that if you challenge 
a regulator on this one, they are going to bite you on the next 
one. And so, I know Ms. Baker----
    Senator Cantwell. But aren't these the same issues? I mean 
aren't they issues that each region could come up with the same 
issues, because you are talking about the same, relatively 
same, product? Right?
    Mr. Bunce. Exactly. And that is why the plan that we are 
working on cooperatively with the FAA allows for dispute 
resolution. So if you have the industry and the regulator 
deciding they have a difference of opinion, let's be able to 
kick it up to a headquarters level and say, ``OK, here is what 
the dispute is and there is no punishment or reciprocity in 
being able to kick it up.''
    If you have a disagreement, that is acceptable to raise an 
issue. Also, a central repository of guidance. Right now, if 
you try to go through all the advisory circulars and the 
regulations and everything else, it is a mess. And it leads to 
different interpretations by the workforce. It is not their 
fault. It is just that there is a million places to look for 
things and you don't always have it at your beck-and-call. So, 
if we are able to get this central repository and be able for 
all of us, on the certification side but also on the flight 
standards side, to be able to reference, it helps the regulator 
and helps----
    Senator Cantwell. How much of this is driven by new 
technology, new manufacturing techniques, or new product?
    Mr. Bunce. It is driven a lot.
    If the FAA doesn't have any more resources, and we know in 
this environment it's very difficult for them to have more 
bodies out there, technology is moving so quickly and that's 
why this educational piece in the FAA reauthorization, if we 
could get that passed and even to have an ability to have this 
cooperative internship or sharing, and I know you have talked 
about that where we've got an apprenticeship-type of 
opportunity, that becomes very critical. Because we have got to 
be able to have the regulator, knowing what this latest 
technology is out there, to be able to regulate us properly.
    So technology and the pace of change only exacerbates the 
problem.
    Senator Cantwell. Yes. I guess I look at this, and I see 
big market opportunity, lots of jobs, lots of technology 
integration, big culture to try to change. So you have two big 
forces pitted against each other. I think we should spend as 
much time as it takes to get this right.
    But, you're right. The regional nature of it should be 
pretty consistent, so if that is sharing data across ODAs or 
something of that nature, but we should be able to answer this. 
I'm a big proponent of bringing in anything we need to from the 
academic side or other areas to answer these questions because, 
as we try to keep pace ahead of innovation, we know we have to 
figure out what are the ways at the FAA. I'm also a big 
supporter of the centers of excellence, but you are not going 
to have a center of excellence on every aspect of civil 
aviation. So we need to figure out a way to help the pressure 
here of keeping fast pace and yet keeping the FAA up to speed. 
Thank you.
    Mr. Bunce. Senator, if I just might add, in February Ms. 
Baker allowed us to come in with many of our CEOs and we are 
launching a test program, which is basically a scorecard. And 
it was developed by a lot of her managers and regional 
directors in the certification process along with industry 
giving input. And we are actually going to have the FAA and 
industry score how we are doing. Ms. Baker is launching the 
pilot program now. And there are some subjective portions where 
we can each rate how each other is doing but then, there is 
very objective measurements to be able for us to look at and 
allow this and then got up to FAA headquarters, and for us to 
focus on and say, ``OK, these ODAs are working, these aren't. 
What's wrong? What isn't working; and let's address those.''
    Senator Cantwell. Thank you.
    My time has expired. Thank you.
    Thank you, Madam Chair.
    Senator Ayotte. Absolutely. Thank you, Senator Cantwell.
    Senator Moran?

                STATEMENT OF HON. JERRY MORAN, 
                    U.S. SENATOR FROM KANSAS

    Senator Moran. Madam Chairman, thank you very much.
    Perhaps a question to all three of you and whoever would 
like to address it, but I want to highlight the importance of 
this certification issue, particularly the ODA aspect of it. 
But certification, in general, is a way that we are able to 
have the latest technologies, the greatest advancements, and 
also to compete in the global economy. We see this clearly in 
the airplane manufacturing sector in Kansas. We are competing 
in a global economy and we are delayed in getting our latest 
products to market because certification is so cumbersome and 
slow.
    ODA was created, I think it came into existence about 2005 
and it was seen, I think, as the savior, the solution to this 
problem. I remember we had Secretary LaHood in Wichita; I don't 
remember what year that was but it has been a number of years 
ago, and this was the topic. And the Secretary, of course, 
listened to Kansas manufacturers, American aviation, general 
aviation industry and said, ``We are going to go back and solve 
this problem.''
    And it is the same explanation today as it was then when 
Secretary LaHood was there and in every hearing or conversation 
I've had with FAA officials, and it's something called 
``culture'' or ``mentality.''
    What is it? I mean what is the mentality? What's the 
culture? Why can't we solve this problem? And perhaps the 
question is, is there something in FAA reauthorization that we 
are supposed to do that eliminates the ability for the culture 
or mentality to thwart what we, as Congress, believe is a good 
idea for the advancement of safety as well as innovation, as 
well as the U.S. economy in the manufacturing of airplanes?
    Ms. Baker. I will start.
    I wanted to point out that the past reauthorization 
actually added a few things that I think will eventually, or I 
should say will show, some progress because one of the things 
that we had to do was to change the order that governs 
Organization Designation Authorizations. And it requires the 
employees to document why they are retaining items where the 
company is authorized to do the finding. And with the 
scorecard, we'll be tracking that and then we'll be able to 
have a get-well plan, per se. So if an employee is retaining it 
for a valid reason, then the company and the employee can agree 
to that and move on. If it is because of a personal preference, 
it's going to be identified because they are going to have a 
conversation about it. And, if it's something that we just need 
to build a performance plan to get well so that we can grant it 
to the organization, then we can do that too.
    So I feel that the reauthorization that asked us to change 
the order to cause the employee to document why they were 
retaining, combined with the scorecard and the discussion that 
we are going to have, is going to effectively move that culture 
forward.
    Senator Moran. When you use the word ``culture,'' what is 
it that you are describing?
    Ms. Baker. What I am describing is really a generalization, 
as you probably guessed. There are people that have bought in. 
They are ready to move forward. And then there are those that 
are kind of living in the past. When I came into the 
organization, we were literally looking at drawings, and 
working with the company, we retained pretty much all of the 
findings. We had individual designees that we would work with. 
We had personal relations with them and we would delegate to 
them on an as-needed basis. And so, it is moving the people 
from the way of doing business in the past to the way we are 
going to be doing business in the future.
    Senator Moran. This is something more than concern that if 
we utilize, if we, in a sense, outsource certification, that we 
have less need for our jobs. It is something more than that?
    Ms. Baker. Well, I think that is an underlying fear, but 
what we are trying to convey is that there should not be a fear 
of that. As Peter said, there is so much to be done. And 
really, the things that our people will be working on, if we 
delegate to the organizations, they'll be working on the more 
exciting things anyway. They are going to be working on the new 
technology; not the mundane test of a galley or, you know, just 
basic engineering. They'll be looking at the new and novel 
technology.
    Senator Moran. Anything else, Mr. Bunce or anybody else, 
about what needs to be included in reauthorization? If anything 
additional to solve this issue?
    Dr. Dillingham. Senator, I'm not sure exactly what may need 
to be included in the reauthorization, but something that would 
facilitate, maybe guarantee, that the path that the agency is 
on now with industry, as Peter subscribed, and FAA working 
together. I mean we are at a point of being sort of guardedly 
optimistic, that we are at a tipping point that--we are at the 
point now where, if what is onboard is in fact implemented, we 
won't be here the next time in the same position that we are in 
now.
    Senator Moran. That's encouraging, I guess. After a number 
of years, it's encouraging.
    Mr. Bunce. And Senator, I would just add that I think we 
can do some things in reauthorization of looking at career 
development within the FAA. If you spent your whole life as an 
engineer and you're this expert on aluminum structures and 
that, you want to get into the weeds. It's human nature; you 
want to do that.
    What Ms. Baker and what we are trying to do is say, ``OK, 
if you're managing an ODA, you should be a systems engineer.'' 
You should be able to look at the broad picture of a company 
and say, ``OK, are they working effectively together?'' To be 
able not only to produce a safe product but is everyone talking 
to one another? Are we able to provide the right type of 
oversight there so that that safety is never compromised? But 
you do that in a systems approach. If that individual has as 
good or better career this as the traditional engineer out 
there and we provide the training to all those that are doing 
this oversight, I think we can make a significant contribution.
    Senator Moran. Chairwoman, thank you very much.
    I'd just say that it's encouraging to hear somewhat 
optimistic unanimity among the three witnesses today, that this 
is changing and, as Dr. Dillingham says, we won't have this 
question in the hearing a year from now.
    I think that's what you said.
    Dr. Dillingham. Yes, sir.
    Senator Moran. All right. Thank you.
    Senator Ayotte. Senator Daines?

                STATEMENT OF HON. STEVE DAINES, 
                   U.S. SENATOR FROM MONTANA

    Senator Daines. Thank you, Madam Chair.
    We are proud in Montana to have a Boeing manufacturing 
facility. We manufacture 737, 747, 767, 787 parts and 
assemblies there. Great jobs, high-paying jobs. But I want to 
elevate this discussion for a moment back to global 
competitiveness and speed.
    I understand Boeing right now has a $440 billion backlog. 
We are competing directly now with Airbus and others. So this 
is about American jobs. As someone who came from the private 
sector, spent 28 years in business, speed is a comparative 
advantage.
    Ms. Baker, first question. How many people report through 
to you? I mean you have a very big job as Director of 
Certification. How many people do you have in your 
organization?
    Ms. Baker. Well, let's see. Right now, we have about 1,319.
    Senator Daines. Plus or minus?
    Ms. Baker. Total authorized. We don't have that many 
onboard there is----
    Senator Daines. Sure.
    Ms. Baker.--1,290.
    Senator Daines. And so, you are at the top of that----
    Ms. Baker. Yes.
    Senator Daines. 1,319 people.
    Ms. Baker. Yes.
    Senator Daines. So as the head of certification, what two 
or three metrics do you look at that measure speed of 
certification?
    Ms. Baker. Well, that is what we are challenged by, as 
Gerald has said. What we have done is worked with a number of 
different types of metrics and we've always found that they 
tend to----
    Senator Daines. But let me just ask you. Do you have one 
right now? Do you measure speed?
    Ms. Baker. We measure speed by turn, turn times of 
individual programs and individual cert plans, et cetera, 
assuring that we are turning it back to the organization that 
needs the information so that they can move forward. A lot of 
the program is actually dictated by the speed at which the 
company can move forward because they have got a lot of work to 
do too. And they've got flight tests and a lot of things that 
they have to complete. So we look----
    Senator Daines. So are those measures, are they going down, 
are they going up, or staying flat?
    Ms. Baker. We are probably about flat. I think Peter may 
agree with that. The reason being is that things are moving 
faster but they are getting more complex. So we are getting 
better at moving some things forward faster, but the problem is 
is that the complexity of the designs has been increasing every 
year.
    Senator Daines. So my concern, of course, is that Airbus 
has a backlog right now, Boeing has a backlog right now. 
Ultimately, whoever can deliver those orders the fastest will 
win the business. And I'm more concerned even going forward now 
over the next three to 5 years, I think we're going to see a 
good demand out there for these good American jobs.
    So what steps are taking to ensure that these new aircraft 
certifications will be done in a more timely manner?
    Ms. Baker. Back to the scorecard. We are trying to ensure 
that we delegate as much as we possibly can to the Organization 
Designation Authorization; give them autonomy. And when we're 
looking at the statistics, we do give them quite a bit of the 
work. Much of the work now doesn't even come through the FAA. 
The more that we can eliminate ourselves from that path-flow, 
eliminate ourselves from the critical paths, the delivery of 
the aircraft, the better it will be for industry.
    Senator Daines. So as you look at your 1,319 employees, are 
they held accountable at the individual performance level for 
speed and turnaround time?
    Ms. Baker. There are metrics in our--we are a quality 
management system, we're EASA registered. And yes, they are.
    Senator Daines. But I mean individuals. I mean, if I went 
to one of your employees and said, ``Show me your last 
performance review.'' And was one of your key measures there, 
how quickly you turn around the process on your desk?''
    Ms. Baker. Individually? Probably not as far as, you know, 
you have to meet this 30 day metric. But of course, we would be 
taking that into account to assure they are moving the projects 
forward quickly and their organization or their office is 
looked at and collected.
    Senator Daines. Yes, and I don't pretend to want to come in 
and manage your business. But having spent time having to do 
cultural change in large organizations, I think it comes down 
to holding individuals accountable; put what's most important 
and, certainly, it's going to be safety and thoroughness of 
these certifications. But it's not a trade up, I don't think, 
between safe and thorough and speedy with the right approaches.
    Mr. Bunce, given the response, does this alleviate or 
address your concerns from the aviation manufacturing industry?
    Mr. Bunce. Well, the proof will be in the pudding. We've 
got to be able to see these initiatives that Ms. Baker is 
putting forward that she's been cooperatively working with us 
to be able to implement.
    We had a lot of companies sign up for this to be able to 
test out the scorecards. So as Ms. Baker said, between 70 and 
80 ODAs out there, I think it's about 20 have signed up to be 
able to look at the test program because they said, ``Let's get 
at this, it can't happen soon enough.''
    So that's, as Dr. Dillingham said, I hope that we won't 
have to keep addressing this issue. But I do believe we are at 
that tipping point. If we're going to drive change, we are at 
the best place, and support of this committee is critical to 
make----
    Senator Daines. And if there are one or two recommendations 
to boil it down and the most important thing that FAA can do 
now to improve and speed up the certification process in terms 
of changing this culture, what would they be?
    Mr. Bunce. To be able to go and actualize the ODA, to be 
able to allow it to function the way it was designed, and then 
to be able to get this word out through training to the 
workforce so that they say this is the way the U.S. Congress, 
this is the way the FAA leadership, and this is the way 
industry wants to go; we need to go ahead and make this change 
and drive that cultural change to happen sooner than later.
    Senator Daines. OK, thank you.
    Thanks, Madam Chair.
    Senator Ayotte. Thank you.
    Senator Udall?

                 STATEMENT OF HON. TOM UDALL, 
                  U.S. SENATOR FROM NEW MEXICO

    Senator Udall. Thank you very much, Madam Chair. Really 
appreciate it and good to be here with the panel, and thank you 
all for being here.
    In New Mexico, the aviation industry, like the rest of the 
economy, is working to recover and is in a struggling phase in 
many cases. Thankfully, I think they are doing a little bit 
better today than they were a couple of years ago. We continue 
to be a mix of big and small business, everything between Aspen 
Avionics, Eclipse Aerospace, and Honeywell. So you have a real 
variety there. And my concern when agencies implement new 
processes is always the change; how that change will impact 
small business.
    Ms. Baker, in working to improve the process, have you 
looked at the impact of these changes on small business? Do you 
believe that small business will be able to easily adapt to the 
changes that you are making?
    And I apologize if I'm repeating what others have already 
asked, but thank you.
    Ms. Baker. That's quite okay.
    I think that the changes that we're making are going to 
benefit small industry. And like Peter said, the thing is is 
that if we can get a lot of the work delegated to these 
larger--we'll have more time to spend with the smaller or 
startup industries.
    Senator Udall. Great.
    Colonel Bunce, do you think everything has been covered in 
terms of your smaller members of your association? Do you feel 
from her testimony that they are looking out for these smaller 
members that are out there?
    Mr. Bunce. Well, Senator, I think if you take the two 
companies you mentioned and the other company that we have in 
New Mexico, obviously the Small Aircraft Revitalization Act is 
important to them. And we are frustrated that the process is 
taking longer than we believe it should. We would very much 
like to see a Notice of Proposed Rulemaking this summer. We 
think it's possible.
    Just last week, all the technical standards were set up so 
that an NPRM, a Notice of Proposed Rulemaking, could be 
published. And this is significant. Take a company like Aspen.
    Right now, if we get this right on the small aircraft, the 
next step is to revitalize rotorcraft and Aspen plays a key 
role in that. Right now, the way we're regulating the 
rotorcraft industry is still in that old thought. It's not 
efficient, and the sooner we get this in place for small 
aircraft we can then use this new innovative-type of regulatory 
structure for rotorcraft and then go to transport category 
aircraft. Because this is the right way to go and it's global 
rulemaking. We've got partnerships with all these other 
authorities and Ms. Baker and her staff have been extremely 
helpful for us.
    So on the technical side, that work is complete. Now, it's 
getting it through this rulemaking and the lawyers and that, 
and we hope that through emphasis from this committee that we 
can go and speed that process.
    Senator Udall. Yes.
    Ms. Baker, why can't we move the process along as he has 
described? What's holding this up there?
    Ms. Baker. Like I said, the actual rulemaking process is a 
very deliberative process to make sure that it is done right. 
So we do follow the Administrative Procedures Act, we have to 
assure that the rule is not only technically accurate but 
legally enforceable, it doesn't have ambiguity in it, and then 
we have to do the economic analysis. And then, it goes through 
a process of review. So like I said, we can get to the 
technical result relatively quickly, but we do have a process 
which we have to follow.
    Senator Udall. Thank you.
    Dr. Dillingham, you have any comments on this?
    Dr. Dillingham. No, sir. Thank you.
    Senator Udall. Thank you.
    Thank you, Madam Chair. I really appreciate it.
    Senator Ayotte. Senator Klobuchar?

               STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. Well thank you, Madam Chair. Thanks for 
holding this hearing and to our Ranking Member Cantwell, as 
well. This is really important. We care a lot about this in my 
state. We have a hub, and we also make some planes in 
Minnesota. So it means a lot, and I continue to push, as all of 
you know, for the timely implementation of the Small Airplane 
Revitalization Act, which I introduced with Senator Markowski 
and it was signed into law in 2013. I know Senator Udall and 
the Chairwoman asked some questions about the FAA's 
certification process for new and replacement aircrafts and 
parts. I just want to follow up with one question.
    Mr. Bunce, in your testimony you indicated that the 
European Aviation Safety Agency has published an Advanced 
Notice of Rulemaking to rewrite the Part 23 regulations for the 
light end of General Aviation Aircraft. Is Europe getting ahead 
of the FAA on this initiative? How have the coordination 
efforts been between these two regulators?
    Mr. Bunce. Senator, again, thank you for your leadership on 
being able to make the Small Aircraft Revitalization Act work. 
And also, I appreciate your communications with Secretary of 
Transportation because, as Ms. Baker said, to be able to get 
this rule through we got go through DOT and then we got to get 
it over to OMB and get it out.
    Senator Klobuchar. A lot of initials. Sounds kind of scary. 
OK.
    Mr. Bunce. My impression, because Europe was part of this 
whole rulemaking structure, that they are more nimble. As Ms. 
Baker said, our process is a laborious to be able to get a rule 
through the system, and I believe they are more nimble.
    The Administrative Procedures Act, I can understand, 
restricts the communication between the regulator and industry 
when they get in this critical time. But one thing we're 
hearing from the European side is that communication, they 
called it ``going dark on the backside of the moon,'' that they 
are isn't communication between the regulators right now 
because of an interpretation of this act, which we don't think 
it really makes sense. If we're going to try to do this 
rulemaking and keep everybody connected in lock, step, and 
harmonize, that we aught to have the regulators be able to 
communicate with one another. We expressed that to the Deputy 
Administrator and that but, so far, as of last week, we hadn't 
heard that we are joined back up and working this together.
    So I think that----
    Senator Klobuchar. OK. I guess it's another, as my 
colleagues have said, it's another reason to push the 
publication of these proposed rules.
    I cut you off though. Did you want to say something?
    Mr. Bunce. No. And so, if you look at it in total, I think 
Europe is ready to move out and they could do so. We're just 
hoping that the FAA, if they get the Notice of Proposed 
Rulemaking out this summer, it brings them back in line and 
then we have a chance of trying to get the final rule out by 
the end of 2016 versus the later part of 2017.
    Senator Klobuchar. Maybe I'll just continue on with that 
global competition issue with you, Ms. Baker. What's the FAA 
doing to ensure that we stay ahead of the game, not will go 
beyond this rule now in terms of aircraft innovation and 
manufacturing as well as safety?
    Ms. Baker. Well, I think we're doing a lot of different 
outreach. And one of the things we're doing is training in 
Singapore. We set up an academy in Singapore to do training so 
that we could convey to the authorities in that particular 
region our rules and how we've developed them so that they will 
then start to adopt ours.
    When we look at new technology, we can work with the 
authorities around the world and we come together to determine 
how it is we are going to be regulating things like additive 
manufacturing. You might have seen that coming. That was a 
discussion item at our Asia bilateral partners meeting. We 
talked about UAS. Those are all things that we are talking 
collectively with the other authorities but taking leadership 
roles where we can in organizations like ICAO or in groups like 
RTCA or ASTM, where they are building the standards.
    Senator Klobuchar. And is there currently a backlog within 
the Aircraft Certification Service? Just, again, getting back 
to some of these innovations and trying to move ahead in 
America.
    Ms. Baker. There's no backlog in the Aircraft Certification 
Service's certification applications. One of the things in 
Section 312 of the FAA Modernization Reform Act was to put in 
place something other than the sequencing process, which had a 
queue. We now have a prioritization process, which has no 
weight. You can start your project immediately as soon as you 
make application.
    Senator Klobuchar. So, yes. So what you mean is you're 
adjusting the process for reviewing certifications from some 
kind of--what is it? Sequence prioritization? Is that right?
    Ms. Baker. Well, yes. What we had originally was 
sequencing. And so, you couldn't start your project until there 
were resources available to work the project. The change that 
we made, we realized that there was a lot of different things 
that can be done in any one project. And really, the only time 
that you need a specific resource from the FAA, if there's new 
or novel technology, and there's a particular person with the 
technical expertise that you need. So now we're prioritizing 
based on that. So we give a commitment on when we will deliver 
that resource to the individuals.
    Senator Klobuchar. How is that being received across the 
country?
    Ms. Baker. We're going to have a review of it. It has been 
in place for about 9 months now, and it appears to be working 
really well.
    Senator Klobuchar. It is just an interesting concept that 
could maybe be used in other areas as well, not just within the 
FAA.
    All right, well very good. Thank you very much.
    Thank you, Madam Chair.
    Senator Ayotte. Thank you.
    I think we just have a few follow-up questions here. One is 
about the--oh. I just saw Senator Sullivan come in. So we'll 
let him ask his questions.

                STATEMENT OF HON. DAN SULLIVAN, 
                    U.S. SENATOR FROM ALASKA

    Senator Sullivan. Thank you, Madam Chair.
    I think the panel is familiar with some of the issues that 
we have in Alaska. Some of our unique issues with regard to 
different communities that exclusively rely on air travel: 403 
general aviation airports; 5,700 general aviation aircraft; 
8,000 registered pilots. So I know that many of you are 
familiar with some of these challenges, opportunities, 
certainly that we see in Alaska both with regard to aviation.
    Mr. Bunce, can you provide an update. I know that you're 
familiar with the AvGas and the Piston Aviation Fuels 
Initiative. This is something that, as you can imagine, we have 
several concerns about with over 10,000 piston engine aircraft 
registered in Alaska. This is the kind of rule that, you know, 
has an enormous, enormous impact on particular states like mine 
when it might not impact other states. I think 96 percent was 
the last number I had of the Commercial Aircraft Fleet in 
Alaska is piston-engined, aircraft that burn leaded fuel. Can 
you give an update on this? This is a really important issue 
for my state.
    Mr. Bunce. Yes, Senator.
    So we have had great support from the United States 
Congress in this, what we call the ``PAFI Initiative,'' the 
Pistons Aviation Fuels Initiative. And so, basically, right now 
there is one distributor of lead in the world. Everybody is 
relying on that one. And we use lead in the gas to be able to 
go and make sure there's not, what's called ``detonation.'' Now 
if you have that in your automobile, the engine block is very 
robust. And when you hear knocking, that's detonation and 
that's survivable on the road. And if something catastrophic 
happened, you'd pull over. In aviation, the engine blows up. 
That's a bad thing. So we have to have a very deliberate 
process and that's what the PAFI is.
    And so, we've got support from the FAA. They've gone in 
each year in the last three budget cycles to be able to fund 
it. Actually, the Congress has been very generous to be able to 
go ahead and boost that because we know how important it is. So 
we're doing a lot of that testing up at the tech center in New 
Jersey. And right now, it is going well. Industry is providing 
the fuels to test; also the engines to test them on.
    The next step in that process is now to see whether we can 
produce and in larger and larger quantities. The goal is to be 
able to have this now unleaded fuel that, as we start to 
produce it, we can go and comingle it with existing leaded fuel 
until we get all the lead out of there.
    The other good part of this process is the EPA, despite all 
of the pressures that they get on it from the different groups, 
has said because of the safety factor, let's let industry and 
FAA work on this PAFI process, find a solution, and then, when 
we have this solution, then we can go and implement the 
regulatory whether it's an endangerment finding or whatever 
that would be. Then to drive the whole industry to this new 
fuel. It'll be kind of a, OK, now time is set. We have the 
solution. Let's move forward.
    So I feel very confident with your help that we'll be able 
to have the solution of an unleaded fuel.
    Senator Sullivan. So you think that's striking the balance 
between, again, unique needs of states like Alaska and our 
economy, the issue of safety that you mentioned, and the 
environmental issues?
    Mr. Bunce. Absolutely, sir.
    And Alaska, as you said, is very unique. I fly up there. 
When I'm on the ramp, you have these big round radial engines 
still out there. And still, it is one we always, through this 
testing program, we want to make sure we take into 
consideration these large reciprocating engines out there to be 
able to make sure they test without any problem in no matter 
what type of temperature regimes, especially cold, to make sure 
that we don't have any problem with this.
    Senator Sullivan. Right.
    I appreciate your knowledge on that issue and my office 
will be following up with you for a little bit more detail on 
those matters. Thank you.
    I yield back my time, Madam Chair.
    Senator Ayotte. Thank you very much.
    I just had a couple of follow up questions. One was about, 
to follow up on Senator Klobuchar question, I've heard from 
stakeholders that this, the European version, EASA, if I 
pronounce it correctly, could be actually exceeding our 
standard in terms of being the gold standard and how quickly 
and how effectively they're acting. In terms of approaching 
certification. And so, I just wanted to get a thought.
    What's your perspective, Mr. Bunce? Is it easier to deal 
with the European regulators and are we falling behind overall 
with this?
    Mr. Bunce. Madam Chairman, I think we work very closely 
with EASA. And actually, Patrick Ky, who is the Executive 
Director of EASA, has exactly the same budget problems that Mr. 
Huerta has. He's got constraints; the European Parliament is 
trying to cut his budget. So many of the same issues that we 
deal with. Their approach is a little bit different, their 
rulemaking approach is different, and it's not as regimented or 
in flexible as, I think, what we find here.
    One of the things that does concern us as manufacturers is 
the validation process. And we've talked a lot about certifying 
product here in the U.S., but one of the other key things is, 
when we go and now take that process over, let's say to Europe, 
and you want to have an aircraft registered within the European 
registry, that aircraft has to be certified by EASA. And so, 
they basically take the work that the FAA has done and they 
``validate'' it.
    Unfortunately, that validation is taking way too long. And 
in some cases, it's almost as long as it was in the 
certification process here. And that's unacceptable especially 
because we have a bilateral agreement that says, basically, we 
trust each other's competencies. The same thing that if a 
product is produced in Europe comes over here. The FAA uses 
resources, but it should be a relatively fast process to be 
able to go ahead and trust each other there.
    And so, that is something that is very concerning to us. I 
know that Ms. Baker, in fact, this conference that she met at 
last week, they are trying to address that because it's wasting 
too many resources. And there are four states of design: 
Brazil, the U.S., EASA as the group for Europe, and transport 
Canada. They all have bilaterals with each other. And we need 
to leverage those better. And that is for commercial aircraft, 
general aviation, fixed wing, and rotorcraft; and will be for 
unmanned vehicles as well.
    Senator Ayotte. So it's really on their end. We've already 
certified and they just need to validate.
    Mr. Bunce. Correct.
    Senator Ayotte. So are they delaying that for competitive 
reasons?
    Mr. Bunce. I don't believe that it's for competitive 
reasons. I believe that it is resources constraint but it's 
also not a focused ability to realize the bilateral. And to say 
the FAA did the work, our work should be just minor to check if 
there are differences, let's say, in the regulation. That goes 
for the FAA as well. If a European product comes this way, they 
shouldn't be wasting a whole lot of resources to be able to 
check that because we have an agreement that basically trusts 
each other's competencies. And that's something that we do hope 
we were able to put some focus on because it's important.
    Senator Ayotte. Ms. Baker, do you have any thoughts on 
this?
    Ms. Baker. I think he has covered it well. It's kind of the 
same problem that we have when our engineers are relying upon 
an Organization Designation Authorization to do the work. You 
go to Europe and they have engineers like we do that want to 
double check what we're doing. So again, that too----
    Senator Ayotte. Engineers checking the engineers?
    Ms. Baker. Engineers checking the engineers, yes. And we 
all know if you get engineers in the room, you can probably 
have more questions than answers than you ever imagined.
    So what we're doing, though, is through validation and 
improvement processes, we're setting agreements between the two 
authorities. And with this certification management team that 
he's talking about, where Brazil and Canada are working, we're 
setting up ways to work together so that we can do the similar 
things as we're doing nationally; is measure how well we're 
performing, how well we are doing at relying upon the other 
authority.
    As I said, when I was in Asia, we're all recognizing that 
we're resource-limited. It doesn't make any sense to look at 
someone else's work when you have a competent authority that's 
already made the finding. And that's why we're starting out 
small. With the TSO items, the Technical Standard Orders that I 
talked about. At the end of this year, we hope to just 
recognize each other's Technical Standard Order findings. 
Meaning that we don't even look at them. We just accept it. We 
don't even have to issue another approval. That'll save time 
and it'll be really great for those that produce those types of 
articles.
    And then, for this, basically, little low-complexity STCs, 
we will accept the determination made by the other authority 
and then we will just sign off the approval without further 
showing. So those are two really big steps towards this future 
that we hope will alleviate the burden that he's discussing.
    Senator Ayotte. Good.
    And we both, obviously, have a mutual interest in our 
industries thriving. So hopefully, we can leverage that to get 
to a place where we're both recognizing each other's work more 
quickly.
    Senator Cantwell?
    Senator Cantwell. Thank you, Madam Chair.
    Ms. Baker, in the first round I didn't get your thoughts 
deep enough on this evolving technology and innovation 
challenge. What are some of the things that you think we need 
to do, to try to do, besides the structure that we've already 
discussed, right now with the ODA? What are some of the other 
ways that you think the FAA can make investment so that they 
keep better pace with innovation?
    Ms. Baker. First, we need to focus on the fact that the 
ultimate responsibility of having a safe product and compliant 
product is the manufacturers. So we need to work with them to 
produce the regulations that they will certify the aircraft to. 
We have a flexible system. We have something called ``special 
conditions'' that will allow us to develop rules if they 
present us something that isn't already reflected in the 
regulations. And when we do that, it benefits us to go to 
entities like Volpe or MITRE, work with RTCA or ASTM, 
communities that have the expertise----
    Senator Cantwell. You're talking, for everybody who may not 
know, you're talking about standards setting bodies, so to 
speak, loosely or structurally----
    Ms. Baker. Right.
    Senator Cantwell.--that help set standards for these parts 
or certifications.
    Ms. Baker. Right.
    And they have a community that has the expertise. So what I 
see us doing is being involved with them so that we get the 
benefit of the expertise in industry.
    We also found, when we were going through the lithium 
battery issue, that we need to look outside of aviation, 
because there's a lot of technology that's now coming into 
aviation that has been in other aspects; other modes of 
transportation, other IT applications. And we should be able to 
go to organizations that have that expertise and have them work 
along side us.
    Senator Cantwell. And so, do we need to do more with those 
organizations?
    Ms. Baker. I think we do quite a bit already. And I think 
just continuing to work with them to move forward. One thing 
that is really important is communication. The industry comes 
up with good ideas and they all want to keep them pretty much 
to themselves until they bring them to market because it's 
going to be a competitive advantage against their competitors. 
So the earlier we can get involved at setting up the standards 
that they'll have to comply with, the better. So the more 
communication that occurs up front, the better off we all are.
    Senator Cantwell. What about that, Mr. Bunce? You mentioned 
your variety of companies that are part of your association.
    Mr. Bunce. They are very competitive but at the same time, 
when they meet in our association settings, they all recognize 
that if they go and work with the authorities, all boats rise 
at a high tide. So I think that's important.
    One of the bottlenecks we're seeing is software. Both sides 
of the Atlantic, we see that a lot. And the safety improvements 
we can make with software is tremendous. There were a couple 
high profile accidents that you're both familiar with last year 
were where people were flying and they go hypoxic up at 
altitude. They didn't realize that they loss conscientiousness 
and the airplane just kept going. The fighters intercepted them 
and they saw folks slumped over.
    We have technology now that's able to do--it sends messages 
to the pilots and if they don't respond, the airplane 
automatically starts a fly down profile to get down where the 
oxygen is available to them and hopefully can revive them. It's 
not major changes, and actually the autopilot system, it's all 
software driven. Those kinds of things are examples are really 
safety-enhancing technologies that, if we could get through the 
system fast, we reduce the price and then somebody can afford 
to be able to buy this new software upgrade to be able to go 
and have this new safety feature available. And there are many 
examples.
    And so, we're working with Ms. Baker's office on all of 
these to be able, across the spectrum of aviation, to have this 
rapid process where it reduces cost and we can retrofit older 
aircraft with this technology and then include it in new 
production.
    Senator Cantwell. And you think there are participants from 
these organizations in the standard-setting organizations to 
have that kind of discussion?
    Mr. Bunce. Absolutely.
    And the Small Aircraft Revitalization Act is an example of 
that. They all met last week in Europe and they provided the 
technical standards. And when we can expand that to rotorcraft 
and to transport category aircraft, they are able to keep, 
refreshed, they technology as it comes but it doesn't restrict 
them from having something proprietary and go through the old 
process. And so, they actually have two ways, two avenues to do 
it but we get world regulators and experts in industry all 
together on a periodic basis to be able to review these 
standards.
    Senator Cantwell. Well, there's a little publishing thing 
called the Internet so you can have a lot of discussion of 
these issues in real time, which I think is very helpful.
    Dr. Dillingham, how do we approach this, you know, some of 
this as, again, the advent of technological changes happening 
and then the certification process with another big effort by 
the FAA of NextGen? So how do we integrate these two things?
    Dr. Dillingham. I think the issue that you raise is a key 
one--how can the U.S. proceed with innovations such as NextGen 
and UAS integration? Both the NextGen and UAS situations 
suggests that we move to a risk management approach to 
technology and innovation so that we are not constrained by old 
rules and regulations.
    And when I say UAS, what comes to mind is Amazon. Amazon, 
you know, is a bit of a technology leader, as far as UAS. 
However, because of the way we operate here in the U.S., it 
forced or pretty much forced Amazon to do some of its research 
on UAS off-shore. Getting to a risk management approach and 
looking at things differently is the way we're going to bring 
innovation such as UAS more quickly into the marketplace. 
NextGen is the same thing. We have to move to a performance-
based approach as opposed to a prescriptive kind of orientation 
for ATC modernization.
    Senator Cantwell. Well, I think these are big tasks and I 
think we should, Madam Chair, continue to pay a lot of 
attention to this because I think, as we were talking earlier, 
these are big opportunities. Lots of jobs and, yet, our 
competitiveness is going to depend on us getting this right. We 
like the advent of these improvements to aviation. We want the 
improvements but we certainly want the certification process to 
be thorough but when we can learn from it, implement it across 
the country in a more unified way. So anyway, I thank the 
witnesses and I thank the Chair for this important hearing.
    Senator Ayotte. I want to thank all of you. I agree with 
Senator Cantwell. This is so important to our competitiveness 
and our ability to innovate going forward. This was a very 
helpful hearing from all of you as we work on the 
reauthorization together. So I appreciate your being here today 
and taking the time to help us with this issue.
    The hearing record will remain open for two weeks. During 
this time, Senators are asked to submit any questions for the 
record. Upon receipt, the witnesses are requested to submit 
their written answers to the Committee as soon as possible.
    Again, thank you. And this hearing today is adjourned.
    [Whereupon, at 3:48 p.m., the hearing was adjourned.]

                            A P P E N D I X

    Response to Written Questions Submitted by Hon. Dean Heller to 
                             Dorenda Baker
    Question 1. What ability does the FAA possess in terms of conflict 
resolution between FAA approved Designated Engineering Representatives 
(DERs) and applicants?
    Answer. A DER acts on behalf of the FAA to find that design data 
complies with FAA regulations. In a dispute with an applicant, it is 
the responsibility of the FAA to determine if the DER's decision to not 
approve a design was made in accordance with FAA policy (reference FAA 
Order 8110.37E, Designated Engineering Representative Handbook, 
sections 2-2 and 2-3). If the FAA determines the DER's decision is not 
according to published policy, the FAA may override the DER and approve 
the design.

    Question 2. Are Designated Engineering Representatives required to 
perform continuing annual proficiency evaluations similar to those 
continuing evaluations required of pilots and mechanics?
    Answer. Unlike pilots and mechanics, where proficiency evaluations 
are conducted in the form of a practical examination, a DER's 
performance is evaluated annually on work done over the past year. FAA 
orders give specific instructions on what the DER must provide to the 
FAA to verify their activity, and what the FAA must consider during the 
formal evaluation (reference FAA Order 8100.8D, Designee Management 
Handbook, Section 904). In addition to the annual performance 
evaluation, the DER's FAA advisor conducts oversight and interacts with 
the DER throughout the year on a continuing basis. Performance concerns 
with a DER are often identified by FAA oversight and addressed as they 
occur. In addition, DER's are required to attend training specific to 
their discipline every two years.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Cory Gardner to 
                             Dorenda Baker
    Question 1. Wait Times--Denver Regional Office:

    In June 2014, at the request of my House office, the USDOT 
Inspector General issued a report surrounding significant issues with 
the FAA Denver Regional Office's processing of certifications. At that 
time, the report stated that Denver had one of the longest waitlists in 
the country with 42 applicants on the waitlist. The report outlines 
that some applicants have waited three years on the FAA to complete the 
certification process. The report notes that the Denver office had 
issued only 6 certifications to new applicants over 4 years.
    In conclusion, the Inspector General made four recommendations to 
the FAA:

   Clarify and disseminate Agency guidance that allows field 
        offices to establish priorities and pass over applicants when 
        specific resources are not available to perform the 
        certification.

   Require the Northwest Mountain Regional Office to evaluate 
        resources across its district offices and determine whether 
        certification services can be shifted to other offices with 
        greater resource availability and assess the extent to which 
        this applies to other offices.

   Develop a tracking number and sequencing system with CSOP to 
        enhance reporting and visibility of certification activities to 
        Flight Standards management.

   Develop a standardized approach for District Offices to 
        continually monitor and evaluate whether resources are adequate 
        to initiate new certifications.

    Can you explain why the Denver office has such poor performance 
compared to some other regional offices?
    Answer. The Office of Inspector General (OIG) cited a number of 
issues in its report regarding the performance of the Denver office in 
new operator certifications. The office had difficulty in determining 
how many inspectors it needed to perform certification work and did not 
request assistance from the regional office. The FAA also lacked a 
standardized approach to prioritize and track new certificate 
applications for air operators and repair stations. Instead, the FAA 
utilized a first come-first served approach to performing 
certifications, resulting in significant delays for many applicants if 
more complex certifications were ahead of them in the queue. The OIG 
also noted the FAA's guidance did not include a process that managers 
could use to re-evaluate resources and initiate the certification of 
waitlisted applicants. Finally, competing priorities and frequently 
changing guidance from FAA headquarters and regional offices regarding 
the Agency's certification policy resulted in workflow interruptions 
and delay of new certifications.
    Some of these concerns could be attributed to the uncertainty of 
staffing and budget resources, and a focus on continued operational 
safety. In addition, Denver has a greater and more diverse 
concentration of activity compared to many field offices, particularly 
within the Northwest Mountain Region.
    The FAA concurred with the four recommendations proposed in the OIG 
report. The OIG considered three of the FAA's responses to the issues 
resolved, pending completion of planned actions. The FAA response to 
one recommendation resulted in a request for additional information, 
which the FAA provided. The actions the FAA committed to are now 
complete.

    Question 2. While the report did note that the FAA swiftly acted on 
some of the recommendations made by the IG, at the time of printing, 
not all had been addressed. Has the FAA acted on the recommendations 
laid out in the Inspector General's report?
    Answer. FAA's Flight Standards Service has completed action on all 
four OIG recommendations. FAA sent a description of the actions taken 
to the OIG for close out.
    Standard Operating Procedure (SOP) AFS-002-900-S1, effective April 
9, 2015, addresses and provides requirements to field offices and 
regional offices that comprehensively respond to all of the OIG 
recommendations. This document is applicable to all regions. Northwest 
Mountain Region aggressively implemented the requirements of the SOP in 
addressing the OIG concerns.
    The Denver ``waitlist'' decreased from 42 to 12. Moreover, FAA's 
Flight Standards Service instituted a reporting system toward 
certification accomplishment, which all regions report to the Director 
of Flight Standards weekly.

    Question 3. What is the current status of the processing of 
certifications, wait times and total numbers, at the Denver FAA office?
    Answer. Currently there are 12 applicants on the Denver waitlist. 
The oldest of these has a wait time of approximately 9 months. In 
addition, there are 3 completed certifications, 7 certifications in 
progress, 6 certifications pending formal application, and 5 
certifications which were transferred to another field office for 
certification. 18 applications were terminated, either because the 
applicant failed to successfully meet certification standards or 
because the applicant no longer wanted to pursue certification.

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