EICHENBERGER Q.ASSOCIATES ---- A legal professional association Federal Aviation Administration 800 Independence Avenue, S.W. Washington, DC 20591 Attn: Hearing Docket Clerk AGC-430, Wilber Wright Building Suite 2Wl000 June 1, 2015 RECElVED JUN082015 HEARING DOCKET Re: Motion for Decision DocketNo.: FAA-2014-0119 Case No.: 2012-GL-07-0056 To the Hearing Docket Clerk, Please find the enclosed Motion and corresponding exhibits for the above referenced matter. A

copy ofthe same has also been served by facsimile tothe FAA attorney and Judge Sullivan. If you have any questions, please do not hesitate to contact meatthe number below. EnclosuresCC: Kate Barber, Esq. Judge J.E. Sullivan**~~**j/ P/trick J. Moro 6037 Frantz Road, Suite 107l Dublin, Ohio 430171 TI 614-798-1600 IFI 614-798-1600 I www.eh1awyers.comIn The Matter Of: U.S. DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS WASHINGTON, D.C. RECEIVED JUN082015 HEARING DOCKET DOCKET NO. F AA-2014-0119 SPIRIT AVIONICS, LTD., ))))) CASE NO. 2012-GL-07-0056 Respondent. MOTION FOR DECISION Pursuant to14 C.P.R. § 13.218(f)(5) and Rule 56(c)of the Federal Rules of Civil Procedure, Spirit Avionics, Ltd. hereby moves fora decision inits favor. No genuine issues of material fact exist and the Respondent is entitled toa decision inits favor asa matter oflaw. As grounds for this motion, Respondent states as follows: I. FACTUAL BACKGROUND Onor about August of2010, Spirit Avionics, Ltd. (hereafter, the "Respondent") entered intoa contract with the Federal Aviation Administration (hereafter, the "FAA") to perform work

ona number of aircraft inits fleet (hereinafter referred toasthe "Contract" and attached hereto as "Exhibit A"). The terms of the Contract provided that Respondent, asa prime contractor, would make a variety of interior modifications tothe FAA's fleet of Beechcraft King Air 300 aircraft. In the course of performance of the Contract, Respondent utilized the services of Lane Aviation, Corp. (hereafter "Lane Aviation"). Lane Aviation was responsible for completing the

removal of old parts and hardware within the interior cabin ofthe aircraft, as well as completing the subsequent installation of new parts and hardware. Respondent also utilized the services of Tritex Corporation (hereafter, "Tritex") to provide fabric and other upholstery services.The involvement of both Lane Aviation and Tritex were necessary for successful completion ofthe work contemplated under the Contract becuase Respondent did not have the

necessary credentials under its Operations Specifications, as required under the Federal Aviation Regulations, to complete every function outlined under the contract. Therefore, Respondent utilized the services of reputable and qualified subcontractors; Lane Aviation and Tritex. On June 8, 2012, Respondent received a Letter oflnvestigation from Stanley B. Barnes, the Principal Avionics Inspector with the Flight Standards District Office in Columbus, Ohio. The Letter of Investigation was related toan inspection conducted by Mr. Barnes on the premises

of Lane Aviation on June 6, 2012. The Letter, authored by Mr. Barnes, asserted that certain undocumented parts were ona work table in the vicinity of N72, an aircraft belonging to

Complainant, and that similar parts were installed on other aircraft belonging to Complainant without airworthiness release documentation. According to Mr. Barnes, such activity was contrary to Federal Aviation Regulations. Complainant issued a Notice of Proposed Civil Penalty on February 21, 2013. In response tothe Notice, Respondent made an offer to settle, which was subsequently declined by Complainant. A Final Notice of Proposed Civil Penalty was issued on April 25, 2014 and

Respondent requested a hearing immediately thereafter. Upon Respondent's request fora hearing, Complainant filed the instant Complaint (attached hereto as "EXHIBIT B") against Respondent on May 8, 2014. Complainant alleges that Respondent sold twenty-two (22) brackets and twenty-two (22) lanyards to Lane Aviation Corp. Complainant further alleged that said "sale" was in violation of 14 C.F.R §21.9(b) and

that pursuant to49 U.S.C. §46301, Respondent is subject toacivil penalty totaling $11,000.00. 2II. APPLICABLE LAW A. Standard for MotionRespondent files the instant motion pursuant to14 C.F.R. § 13.218(£)(5) and Rule 56(c) ofthe Federal Rules of Civil Procedure. As per 14 C.F.R. § 13.218(£)(5), the administrative law judge shall grant a party's motion for decision if the pleadings, depositions, answers to interrogatories, admissions, matters that the administrative law judge has officially noticed, or evidence introduced during the hearing show that there isno genuine issue of material fact and that the party making the motion is entitled toa decision as matter of law. By filing this Motion, Respondent bears the burden of showing that there isno genuine issue of material fact disputed by the parties. Pursuant to14 C.F.R. § 13.218(£)(5), any motion fora decision on the merits prior toa testimonial hearing is reviewed under the same standard asa summary judgment motion (Civ. R. 56). The purpose of summary judgment is"to isolate, then terminate, claims, defenses that are factually unsupported." 1 Pursuant to Civ. R. 56(a),a summary judgment motion may be granted if "the movant shows that there isno genuine dispute asto any material fact and the movant is entitled to judgment asa matter oflaw." 2 A fact is "material" ifitis capable of affecting the substantial outcome ofthe litigation. 3 A dispute is genuine ifthe evidence is such thata reasonable trier of fact could return a verdict for the non-moving party. 4

1 Steven Baicker-McKee, et.a!, Federal Civil Rules Handbook, West Publishing (2012) (Rule 56). 'See, Anderson v. Liberty Lnbby, Inc., 477 U.S. 242, 247-48 (1986). 3 Liberty Lobby, Inc., 477 U.S. at 248. 4Id.at 248. 3Ona motion for summary judgment, all evidence and inferences aretobe viewed inthe light most favorable tothe non-moving party. However, a non-moving party may not rest upon mere denials or allegations inthe pleadings. A non-moving party who wishes to proceed to trial must respond tothe motion for summary judgment and set forth specific facts sufficient to show there isa genuine issue for trial. 5 B. Allegation against Respondent Complainant's sole allegation isthat Respondent violated 14 C.F.R §21.9(b ). This section provides as follows: § 21.9 Replacement and modification articles. (a)Ifa person knows, or should know, thata replacement or modification article

is reasonably likely tobe installed ona type-certificated product, the person may not produce that article unless itis- (1) Produced under atype certificate; (2) Produced under an FAA production approval; (3)A standard part (such asanut or bolt) manufactured in compliance with a government or established industry specification; (4)A commercial part as defined in§21.1 of this part; (5) Produced by an owner or operator for maintaining or altering that owner or operator's product; or (6) Fabricated byan appropriately rated certificate holder with a quality system, and consumed inthe repair or alteration ofa product or article in accordance with part 43of this chapter. (b) Except as provided in paragraphs (a)(l) through (a)(2) of this section, a person who produces a replacement or modification article for sale may not represent that part as suitable for installation ona type-certificated product.

(c) Except as provided in paragraphs (a)(l) through (a)(2) of this section, a person may not sell or represent an article as suitable for installation onan aircraft typecertificated under§§ 21.25(a)(2) or 21.27 unless that article--- (1) Was declared surplus by the U.S. Armed Forces, and (2) Was intended for use on that aircraft model by the U.S. Armed Forces. 6 5 Celotex Corp v. Catrett, 477 U.S. 317, 324 (1986). 614 C.F.R §21.9 4ill. ARGUMENT Respondent maintains that the instant action taken against itisa gross misapplication of facts and circumstances relating tothe Contract and relationships with its subcontractors under

the same. As such, Respondent requests thata decision be entered inits favor on the following grounds: A. Respondent's transaction with its sub-contractor was not, by definition, a "sale." Complainant alleges that on February 24, 2011, Respondent sold twenty-two (22) ofthe fabricated brackets and twenty-two ofthe fabricated lanyards to Lane Aviation as replacement or modification articles representing these parts as suitable for installation on the FAA aircraft. 7 Complainant further alleged that such activity violated Section 21.9 (b) ofthe Federal Aviation Regulations. 8

The offense alleged, 14 C.F.R 21.9 (b), provides: "Except as provided in paragraphs (a)(l) through (a)(2) of this section, a person who produces a replacement or modification article for sale may not represent that part as suitable for installation ona type-certificated product." Part 21ofthe Federal Aviation Regulations does not specifically defme the term "sale," however; this term is defined by other sources including: the Uniform Commercial Code,

Black's Law Dictionary, and Webster's Dictionary. The Uniform Commercial Code ("UCC") regulates a variety of commercial transactions and has been adopted by the State of0hio 9. Article IIofthe UCC regulates commercial sales and defines a "sale" as consisting ofthe passing of title from the seller tothe buyer fora price. 10 7 Complaint, Paragraph 7. 8 Complaint, Section II. 9R.C. 1302.0l(A)(ll) 10 U.C.C. § 2-106(1) 5Black's Law Dictionary defmes "sale" as"a contract between two parties, called, respectively, the "seller" (or vendor) and the "buyer" (or purchaser), by which the former, in consideration ofthe payment or promise of payment ofa certain price in money, transfers tothe latter the title and the possession of property." 11 Similarly, The Merriam- Webster Dictionary defines "sale" as "the act of selling; specifically: the transfer of ownership of and title to property from one person to another fora price." 12The common thread inthe definition from all the foregoing sources isthe requirement that there exist a "passing of title." Legal title is defined as "Ownership of property that is cognizable or enforceable ina court of law, or one thatis complete and perfect in terms ofthe apparent right of ownership and possession, but that, unlike equitable title, carries no beneficial

interest inthe property." 13 A "sale" clearly and unequivocally did not take place on February 24, 2011. Atno time throughout the course of performance ofthe contract did there exist in Respondent an intent to pass title of any part used by Lane Aviation inthe course of performing work asa subcontractor

for Respondent under the FAA Contract. Further, neither Lane Aviation nor Tritex assumed title

to the parts in question asall parts were exclusively consumed by the FAA aircraft in subcontractor's course of performance ofthe Contract.

Every single part, purchased or manufactured by Respondent, was done sofor the limited application tothe Beechcraft King Air 300 aircraft identified inthe Contract with theFAA. 14 Pursuant to company policy and the Contract, Respondent would obtain the necessary parts, 11 Blacks Law Dictionary 1200 (5th ed. 1979). 12 "sale." Merriam-Webster Online Dictionary. 2015. http://www.merriam-webster.com (20 May 2015). 13 legal title. (n.d.) West's Encyclopedia of American Law, edition 2. (2008). 14 Decl. Ochs**~**14 (attached hereto as "Exhibit C"). 6equipment, and materials required for the work under the Contract, receive them into their inventory quality management system, maintain such parts and materials ina secured area at Respondent's place of business, and then release them tothe appropriate subcontractor when the time came for such subcontractor to perform its portion ofthe Contract. 15 Thus, the twenty-two (22) brackets and the twenty-two (22) lanyards identified inthe allegations ofthe Complaint were specifically provided to Lane Aviation for performance ofits relative duty under the FAA Contract where Respondent was the prime contractor. In support ofits assertion that Respondent "sold" fabricated parts to Lane Aviation, Complainant identifies an invoice issued by Respondent toits sub-contractor, Lane Aviation, on February 24, 2011. 16 The invoice (attached hereto as "EXHIBIT D"), isfor the amount of $7,416.91 with the description "Lane Aviation portion of purchase and assembly of headliner install kits. Kits supplied tobe used for the 3rd FAA aircraft through the 18th aircraft." Exhibit D

does not illustrate a transaction contrary to14 C.F.R. §21.9(b). Rather, it illustrates the cost sharing obligations between a prime contractor and subcontractor, a relatively common phenomenon that occurs in prime/ subcontractor relationships. At some point after Respondent was awarded the Contract, but before performance had commenced, itwas determined between Respondent, Lane Aviation, and Tritex, that the cost ofa parts kit submitted inthe bid for the contract had been miscalculated. The specific parts kit was

for installation ofthe headliners inside the aircraft. All three parties acknowledged that this wasa mutual mistake and therefore decided to share the loss associated with sourcing and ordering the additional parts since each party would require the parts for completing their respective portions 15 Ochs Dec!., 17. 16The referenced invoices were provided to Respondent by way of discovery and are identified inthe document titled "Items of Proof (lOP) Index." 7ofthe Contract. 17 Tritex was also invoiced for this same amount and description as evidenced in the invoice attached hereto as "EXHIBIT E." Rather than expose any ofthe parties toa potential risk of breach under the Contract,

Respondent, Lane Aviation, and Tritex took a proactive measure to ensure to Contract was practical forall parties involved, especially its customer under the Contract, the FAA. After Respondent, Lane Aviation, and Tritex dealt with the miscalculation of the bid package, performance under the Contract commenced without issue. Respondent would source the parts, hardware, equipment and any materials with funds provided by the FAA, these parts would then be received through Respondents inventory and quality management procedures and would remain secured Respondent's premises until itwas necessary for Respondent to release

parts to either Lane Aviation or Tritex. Atno point did either Lane Aviation or Tritex issue purchase orders for any parts

required under the Contract. Further, neither Lane Aviation nor Tritex received any parts into their respective inventories or parts quality systems. Thus, any intent on behalf of either Lane Aviation or Tritext to purchase the parts in question is lacking. B. The terms ofthe contract with the FAA specifically address the FAA 's ownership of parts and equipment purchased inthe course of performance ofthe contract. The Contract, which was drafted by the FAA, is broken into multiple performance periods. Each performance period, contains specific clauses and bears the identifier CLIN and then a series of numbers corresponding toits place inthe Contract. In each performance period,

the Contract specifically addresses ownership of materials and equipment used in connection with the contract. This particular provision appears throughout the contract and reads as follows: 17 Ochs **Dec!.~** 9,10. 8CLIN 0004 - Materials Acquired by the Contractor for the Government-all materials and equipment acquired with government funding are property of the FAA and shall be maintained lAW Government Furnished Property (GFP) . . fth 18 provisiOns o e contract. The terms ofthe Contract required all parts tobe purchased with funds from the FAA and all parts, materials, and equipment were in fact purchased by Respondent with FAA funds. 19 The presence of this clause serves to bolster the fact that Respondent never sold any parts toits subcontractor. The parts in question were the property ofthe FAA and not the property of Lane Aviation. The parts were held inthe custody of Respondent, inits role asthe prime contractor, and issued to the respective subcontractor only when necessary to perform their role under the Contract. C. The activity complained ofis outside the scope of14 C.F.R. §21as contemplated by the FAA.

The factual allegations that Respondent violated any portion of the Federal Aviation Regulations are without merit. Further, the allegations by Complainant are outside the scope of 14 C.F.R. § 21.9(b) as articulated by the FAA. In 2009, the FAA proposed a variety of amendments toa cluster of sections of the Federal Aviation Regulations addressing Production and Airworthiness Approvals, Part Marking, and Miscellaneous Amendments; this included §21. The final rule relating to the proposed amendments sheds some light on the regulatory intent of§ 21asa whole. For example, inthe "Background," the FAA cites the globalization ofthe aviation industry asit relates tothe manufacture of replacement parts and articles that were once predominantly produced in 18 This clause appears under CLIN 0004, CLIN 1004, CLIN 2004, CLIN 3004, and CLIN 4004 of the Contract on pages: 3,6,8,10, and 12. 19 Ochs Decl. **~**14. 9controlled environments by U.S. aircraft manufacturers. 20At this time, a good portion of parts were now being produced in foreign countries, and the FAA hada strong concern for the quality of parts produced internationally, as well as those parts produced by less experienced domestic manufacturers. The FAA's description inthe Final Rule relating to "representations" under §21, an element ofthe charged offense, is particularly illustrative ofthe direction they were trying to position the rule. This portion reads as follows: Representation may include, butisnot limited to,a producer advertising its parts in aviation magazines; representing the part with statements such as "aviation quality" or "as previously installed on"; issuing aviation parts catalogs; or marketing at aviation trade shows and conferences. Owners, operators, producers, and maintenance providers rely on these representations to determine the airworthiness ofan aircraft, orthe acceptability of products and articles fora given application. Therefore, these representations must be truthful. 21

The Language used by the FAA suggests that the purpose of the rule isto prevent unqualified parts being installed on aircraft. This Final Rule, which is now in effect, isa preventative measure to quash an inevitable flood of bad parts into the marketplace. They simply did not want any run ofthe mill manufacturer making parts and holding them outtothe public as appropriate for installation on type certificated aircraft when they arein fact not. Atno point do they mention the fabrication of parts bya prime contractor who later provides those parts toits subcontractor for installation. In fact, itwas within this Final Rule that the FAA promulgated §21.9(a)(6), which allows appropriately rated certificate holders with a quality system to produce replacement and modification articles consumed inthe repair or alteration ofa product or article in accordance 20 Production and Airworthiness Approvals, Part Marking, and Miscellaneous Amendments, 74 Fed. Reg. 53368, (Oct. 16, 20009) (amending 14 C.F.R. pt.1,21, 43, 45) 21ld.at 53373. 10with14 C.P.R. §43. 22 Respondent isan appropriately rated certificate holder with a quality system and any parts fabricated under this Contract were solely consumed by the aircraft under that Contract in accordance with §43. IV. CONCLUSIONTo say that Respondent violated 14 C.P.R. § 21.9(b) is completely unsupported by the evidence. The invoices submitted herein as Exhibit Cand Exhibit D illustrate an effort to keep track of costs of performance between three contracting parties (Respondent, Lane Aviation, and Tritex). As established above, the invoices between Lane Aviation and Tritex were not, by defmition, a "sale." Lane Aviation never had possession or title tothe parts as Respondent

remained in sole custody ofthe parts until they were issued tothe appropriate subcontract as necessary. Respondent, Lane Aviation, and Tritex were acutely aware that all parts were tobe consumed inthe course of performance under the Contract and that any parts purchased were the solely the property ofthe FAA asthis was expressly contained within the Contract. Further, Lane Aviation and Tritex never issued purchase orders, request for quotes, or any other documentation typically issued bya company inthe course of business that would suggest an intent to purchase anything. Respondent submits that there are no genume issues of material fact. As such, Respondent is entitled to judgment asa matter of law on the grounds that the activity between Respondent and its subcontractor was nota "sale" and therefore did not violate 14 C.F .R. §21.9(b)."ld. at 53373. 11Respectfully submitted, :7 . ·erry A Eichenberger (0010855) Patrick J. Mora (0091934)EICHENBERGER & ASSOCIATES 6037 Frantz Road, Suite 107 Dublin, Ohio 43017

Phone 614-798-1600

Fax: 614-798-1620 jeichenberger@ehlawyers.com pmoro@ehlawyers.com Attorneys for Respondent 12I hereby certify that the foregoing Motion for Decision has been mailed this date by U.S. Mail and facsimile to: Hearing Docket

Federal Aviation Administration 800 Independence Avenue, S.W. Washington, DC 20591 Attn: Hearing Docket Clerk AGC-430, Wilber Wright Building Suite 2W1000

Fax: 202-267-1293Attorney Kate Barber Federal Aviation Administration

Great Laks Region, AGL- 7 2300 East Devon Avenue

Des Plaines, IL 60018 Fax: 847-294-7498 The Honorable J.E. Sullivan U.S. Administrative Law Judge Office of Hearings, M-20

U.S. Department of Transportation 1200New Jersey Avenue, S.E. (Ell-310) Washington, DC 20590 Fax: 202-366-7536 13. . . :·.·.•**-~~~;!!** . JiAR.tiO:secnoN.asl.Jt;!piJE$($ERVICES ....;.· ,. '.. '.··.... ,.,. '. ·JUN..08·Z015 HEARING QOCKE;TDTFAAC-10-D-00039 Mod 0003, 21 September 2010 Page 3of 35 Report and Drawin!ls Cockpit Curtain Design A008 Pilot/Co-Pilot Coolina Fan Design A009 Cockpit Downwash Master Switch Desian & Data A009a

Cabin Headliner Desian A010 Entryway Headliner Desicm and Data A010a Cabin Lower Side Panel Desicm A011 Cabin Upper Sidewall Panel Design A012 Cabin SeatinQ Desi!ln and Data A013

LED Liahting Desian and Data A014 Entrvwav LED Liahtin!l Desian and Data A014a

Oxygen Mask Dispensin!l Units Desi!ln and Data A015 Total CUN Price $431,830.74 Acceptance: Certification Documentation by the Approver Payment: upon delivery and acceptance

Delivery of Services: Annually Acceptance: Evidenced by approved data package The payment schedule is provided as follows: ··,) Preliminarv Design Review (PDR}: payment of 65% oftotal- $286.875.07 (paid),Vf__... Critical Design Review (PDR): payment of 15% of total- $66.201.94 (paid) **'I?~** Receipt of the final approved data package: $78.753.73 due at final approval:"'. ",.·! CLIN 0003 - Labor to complete restore, refurbish or replace assemblies, accessories, and miscellaneous equipment In the aircraft interior as described in the PWS Para. 8.0. The CO or designated CO representative shall provide authorization

to proceed in advance by task order. Billing and payment shall comply with authorized task order at the established Fixed Hourly Rate. FIXED HOURLY RATE

FAA Estimated Hours per aircraft= 110 hrs Estimated Aircraft= 3 (prototype and two Be-300 aircraft) Proposed Fixed Hourly Rate $84.00 per hour Estimated Not-To-Exceed= $27,720.00 CLIN 0004 - Materials Acquired by the Contractor for the Government -all materials and equipment acquIred with government funding are property of the FAA and shall be

maintained lAW Government Furnished Property (GFP) provisions of the contract. COST REIMBURSABLE A. Replacement parts or materials $5,000.00 supporting the refurbishment FAA Estimate of the Be-300 Aircraft interior enhancement

:..·_:

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to ·pr<>ceed·b'i affl$!'1C;e-l;ij;fask order.· Billiltg ancl:paym!!nt .. ···shalt**t:ii!J1PIYWi!h•~iitticiJ:'i;ef!t1ls!l** ortler atthe esf.\tilisll.ed .·.**Filli!!H:I!i@y8;at~~** ·;·>. .....·. . FIXED'HOURLYMTE ' --,--- .,.,, .'" .....,.,,___,___,_, ____ ,_ ..:**~-**_,.,:,:::-.·'.... ·..**~Af<~maieat!M&.~""t~@riift."** 110**·!OsUmate~;-"llmf<!lt ;.~**  ,'(@Qr:**El""~OP** .aircraft}**·RmPPSed'F!Xed·;l'l!!t.D'I¥R;3te~SZB1•_parhO\!f .~~~P~!~~~~:;=#dt]s~g:~o** **P11Y111en~** M.CinthiY lJl.\JVTijiik.Ord.erAu!horization**~uf.** 21itlol•**~ilt~ti~lii j\i:qJi~ed**  hy1:he Contradtor fprijle · Gillll!mment**;.e;alhnateiial~'andequlpmentacqtlln~dwi!h** · · govemmant fu!\d,jng'';liii p1"9peny of th<> FAA and**;.~all** be**ril<~inlioined ~AW**  Gc>ii<i!rlll\1erit Furnished Property**(GF~)** · · proYision!' ofthe**ci;ii))ra~** .· ·· · . CQST**~IMBURSA,BL!!;** ··. Toial estimated**no~~tq·ex®e1d:** $5,000.00 Payment. Monthly JAW Tl1!;lt Order aulhorizaiion
:.. ··-' ...·....

. . .. .,.. CLIMioo!i){EsERvEO•**·.iJ#.M~~ld-!l~nooas ':r~9d** **:_op~3. 1** 2i :s·e:Pteniher_**·2p~O­** .**~~~~** S ·air .35 CL;iN**~\10~ ~** **p~11lfi~cf ~300**  .i**i!tllriQ~ ~llF~i]celTI~~**  pefaiicnnt · .**lAW·~M !W\ftHl!!i:~;**  ?;fl, AJI't;r<JIJ**J;iol:ia~e?.P~nt.will ~il** **~rCI~rei!:** . .**,bytli~·.FM.ai>irequi~~q.** FIXEO·PHICE , ·.;..- :**Toiala~m~eitn6t"tq,ex~d:** $2o,ooo,oo P?YrnioiJt: iUpof! camplation lAW aulhoraad Task Ordar

TOTAL**E~TI~ATED** NOT-TOJ:XCEED**F~R** OPTION u: $948.561);84 . .-..-............. . .. .,.. ... . .··, ....,· OPTION ill- **t>~riolb"lf** Performance i**~ptil** io'li .·.:ifAprll2013 ITEM DESCRIPTiON . '·...'; Tolal estimated not!o exceed: $5,000.00 ,·... f'ayment: . Mof!ihlY lAW Task order au!ho.• i?;i!Jori CLIN **3005:~J;~E~'JE;D**

**Jl\l'!;'AJ?.Ccl·o~n~aooa!!** ·· · **-~Od ·rioo~-:,**  2!-. **S~ptetnliel:** 2.D:Li:J .Page.

**·1..~ --~~..:is**  ...:.·-...J;;$!jm;;>led not1:t> exceed**~-l!l20;QOO.OO** . A!;C!IP!iane?: Upon t:Omill$tf1Jn JAW 13\lthorlzed Task Or;der Payment: MqnthlY ······ ·

. .. . . .·.. . .**;D~AAC-J;D"D~00b3s** . ·-:-,.,oa. .uti.b::s, .-.2i**·Sep~e$~i·;2D10 ,~g~_--**  ;!l:i,.:o:e**_3~** .·_:;:-.:.. . .TOTAL ESTIMATEO .. NOT·TO,EXCEED FOROPTIONili: $ 976.'159,24 .**~.**... . ...'·-- .--- ..... . .'. ..,. . .-·· ·:oPTION IV.:,:PetidtiofPertorrO;;mce 7 Aprii2D14·-'oApriL2015
. ·'JJTFAllC"10"D-00039 **~qa o~o3,**  :,Z1.· **s~pi:·~-~:r** 2010 PagS-:

**i~** of 3·s --- -·-·---,... -- ...... -'··-. -.... --- .. ITEM•OESCRIP'rlci!N , **C~l~** 4Qtrl, **~l"iri9rlllll'M~iljjg\l!llen~. D~gfl'l'lltlteiilli**  **M~nageliJi.nt..afid** ·..... . MitiinJiitfiltloii requin:iiUii support t!te E5e¢.i:b fel'ur!liilft!nent, as··.·..•·•.• ..· **rrr~~~'f~fill~~~~:ilvt~~P<£rm~es;** Ji\e fllilriWingreppitS shaii. be.' · Total·esflmated·hot:toaxueetl: .$5,000,00 Payment: Montlily tAW Task Order aulln>rb:allori CUN. **49D!i:R$E~V,ED** ·,.,,.,.

. .·. **~.** -.:..·-.. • • <. •• • --= '-- . . . · CLiN 4006.**Certifle~** Be•3Dn**lntertorEri!tancem~rit** .**P11f~irc:riitt** lAW the PWs**paraia.il~** 1!iri:i'ilff ···· ·**t:;nn~~c;em~ritwitr·ti~****~ill~*i!.!l** !:iYtheF=Mas.

···**reqi.ii~eq.** f'IX!=Q PRICt; .**F.IX~d·H~unyR$te** for**St\qplaJ~r-$1~i1** !i. '§'Umated omit! exceed**~:Jl15;oQo.oo** ·..·.. . .**·~~~B~~~::l:U~~[~~~t~rcer** ·.**riTl?MC~i~"D~iJOB39** "· :MQd c0003, 21.**S~p~!ll'b~.-.:~fbiO ~~e-:ia:**  _**,-o~**..**-~s •·.·.······,ii~i~tJ~~~~:}:&~~~t~~~g;~·!~~re~~~~::··**  ..·..... ··.•·· :Sactloli H. Clause**RB.Ov¢~.·;i~d.~olie.anrl** f!WS,fiaragrailbJI& ·**·.··~~~r~~:~t1~:;~~~~~~~~r::~~~:~vcl:~~~~~~~~~ts**f9r**~lie!l~ .~el'llicas**  shal!h!l**r•mue$t:l,l~:~ ~rltlng**  bythe F,A:Jl. · ·.**ConW!ctingam~nn·acnordanllewitli** PWS.proiigll!Ph!t1, ....... COS"(REIMBURSASLE' ... . . . ...•...• ' 'Estimatedtiotti:>exceed: $15,000•00 ····....... ··.•; Accepiimci!: Upon coin!lle#oil•!AWau!l11)nzed Task**Q~d;i(** .. · PayiiJent illlonihly .,,·.. •.•:<-': .-_\' ''**~**'-'

,,' .. PARTI•SEC'l'lONC ' :nE:sGfi,lPTlONISPECSIWORKSTATEMENT SCOPE OF **WOBK{j~ 1~~7;**  .....,,.....·......,'.·,.. 0.3, **m'l~erla!.;,** pomponentpartS, or Ft!ndsforWhichl:he· **"C!ol!lllililli.!ID.!1!!!k.\l!!!!~~.** AT ask **otd~rmay~keqne** oftwo basic **forfu~.,:;comple!!oh** or term (1) Jilt\ **oornpll'!lic;~n** t;Jsk i:!rdE!l" qescrjbes tlja l!!it!Pe iJfwor!Uiy stating a defimte >ioel or targi>t and specll'yinl! an 1:\fld ,Rr<?,di,Jp1.

**T~ls**form Cif **con.itl'!cfri<;~mialfy** requires !he contractor to complete and deliver l:he.:;p!J.Cl!lad and. .produot{e.g,. ailllaf reporJ:9f research aoocmpl!shfng l:he.goal Of target) Within lhe negR,fiate;:J <:o!i'\. :<Isa cpndillan for p;;iyfll,BQI<;Jf'\he entire firm·f!Xedi{rice. .. .·. **(J1''PerformanceWoik.Sta:tem~nt** The.documanttlratdesc;ribes the requirements. and: .· technical specifloalionswr$efvlces :to be.performed amf st!Jndards used to deteimlne lllat · requirements have been ti!EII. ·· · ···•··i.·...·.··...···.·.·...· .·**·~~~!,li!l~C:!~'~~ Pi"~~;;!~~;** **a~~~~**· < - 'l?a-e-isof-35**}!:1,-i::~~~~~!rut** thms!> <Jcltons**~!iln** by1J]e (3overnmin)ttq asJ!ureservTc!;ls**m~~f. ;~i~~~St~~~;~~!~i~~~S~~~tra,~·.or.**  loe<;Jolroltheprocesses**~~** , BIJ'UI"m· standards.**Atla.chm~~1ts• chaf1S~s**  lnG.4 SERVICEABLE AND IRREPARABLE ITEMS (JAN 1997) **DTFAAC-~0-D-00039** Mod 0001, 4 August 2010 Page l.!i of 35 GLA.1202 (a) Inthe event the contractor receives Government-owned unlts which are considered tobe either (1) serviceable as received or(2) Irreparable, he shall furnish a detailed recommendation tothe · Contracting Officer within 15 calendar days after receipt ofthe unit(s). The Contracting Officer will make a determination astofue condition ofthe unlt(s) based upon data furnished bythe contractor and/or a physical inspection ofthe unit(s} by authorized Government personnel. (b) The Contracting Officer will furnish disposition instructions for serviceable/irreparable units and the contraclor shall be entitled tobe paid only the appropriate fee for Inspection and/or testing as specified under PartI -Section B. (c) Failure to agree tothe condition ofthe units shall bea dispute concerning a question offact wlthln the meaning ofthe clause ofthis contract entitled Contract Disputes, AMS 3.9.1-1.

G.5 ADDITIONAL WORK {JAN 1997) CLA.1226 (a) The contractor shall furnish, when so directed bythe Contracting Officer, additional maintenance In Seclion B items which Isnot otherwise Included Inthe specifications herein. Such maintenance may include anyfuncUons defined as maintenance in Federal Aviation Regulations (FAR) ,145. 'Additional maintenance" also Includes the accomplishment of airworthiness directives, service bulletins, manual revisions, etc., issued after the date of solicitation issuance, and labor expended inthe teardown and Inspection of units deemed Irreparable in accordance with the article "Irreparable Contract

Items." (b) Paymentfor additional work willbe based onthe hourly composite rete shown In Section B,or, if there Isno hourly composite rate, the amountofreimbursementwnt be subject to negotiation. G.5 RESIDUAL CONTRACTOR INVENTORY (JAN. 1997) GLA.1313 If there are parts, material or supplies which are obtained bythe contractor but are not furnished, Installed, or consumed Inthe performance ofthis contract, such Items shall notbe paid forbythe Government. Such parts shall be kept separate from any Govemment-fumlshed property, atali times, and shall remain the property ofthe contractor. G.6 OVERHAUL MANUALS (JAN 1997) CLA.1316 The contractor shall possess, or obtain atIts own expense, all applicable manufacturer's manuals and other technlcel data, except for FAA-published technical data which wm be furnished bythe Government atno cost. 3.10.5-1 PRODUCT IMPROVEMEN.TTfECHNOLOGY ENHANCEMENT (April1996) (a)Atany time during the performance ofa contract, a Contractor may submit, orthe FAA may solicit product Improvement/technology enhancement proposals for FAA review. Contractors are encouraged to discuss product improvement! technology enhancement ideas with the FAA prior to

preparing and submitting a formal proposal. These proposals should suggest methods for performing more economically and/or methods for Incorporating emerging technology. Changes may be proposed to save money, to Improve performance or reliablllly, to save energy or space, to satisfy increased data processing requirements, to incorporate technologicel advances in software, orfor other technical or business reasons that the Contractor believes may be advantageous tothe FAA**DTFAAC-~O-D-00039** Mad **ooo~.** 4 August **20~0** Page **~7** of 35 Discontinuance of equipment Is subject to negotiations and tothe FAA's written approval prior tothe introduction ofa substitute product. . (b) The Government isnot liable for product improvement/technology enhancement proposal preparation costs or any delay In acting upon any proposal. The Contractor has the right to withdraw, in whole orin part, any proposal not accepted bythe FM within the period specified Inthe proposal. The decision ofthe Contractlng Officer astothe acceptance or rejection ofa proposed change isfinal and notsubjectto dispute. Proposals Will be valid fora reasonable period of time but not less than 30 days. · (c) The FAA may approve any proposed change either, In whole orin part, and, If approved, tha change willbe incorporated Into the contract by mutual agreement. The contract modiflca!lon will include an equitable adjustment for the resultant costs or savings, ifany, and modify any other affected provision ofthe contract, Ifany. Un!ll the effective date ofthe modlilcation, the Contractor shall perform In accordance With the exlstlng contract (d)Asa minimum, the following information should be submittad bythe Contractor with each proposal. The extent and detail provided should be propor!lonate tothe complexity ant:!/ or value ofthe proposed change. • (1)A description ofthe difference between the existing contract.requirement and the proposed change, and the comparal!ve advantages and disadvantages of each; (2)A discussion ofthe functions of systems, equipment, facilities, services and supplies for the purpose of achieving the essential functions atthe lowest life cycle cost and consistent with required periormance, reliability, quality, and safety; (3) Itemized requirements ofthe contract which must be changed Ifthe proposal is adopted, and the proposed revision tothe contract for each such change; (4)An estimate ofthe changes in performance and cost, Ifany, that will result from adoption ofthe proposal;(5)An evaluation ofthe effects the proposed change would have on collateral costs to the Government, such as FM-fumlshecl property costs, costs of related items, and costs of maintenance and operation; (6)A statement ofthe time by which work must begin on change soasto obtain the maximum benefits ofthe changes during the remainder ofthe contract; (7)A statement ofthe effect on the contract completion date or deliverY schedule; and {8)A reasonable method for sharing lhthe proposed savings, Ifany, ifthe proposed change would result Ina reduct! anInthe overall life cycle costs. · E.1 PART I ·SECTION D- PACKAGING AND MARKING NA PART I- SECTION E ·INSPECTION AND ACCEPTANCE INSPECTION AND ACCEPTANCE (JAN 1997} CLA.1901 (a) Source Inspection ofthe material byan authorized representative ofthe Federal Aviation Admlnlstratlon shall be made priorto shipment atthe contractor's plant in accordance with the contract terms end conditions. The contractor shall give the Contracting· Officer notice at least 15 working days prior to readiness for inspection. Such n!Jtlce shall include FAA deliverY order number, FAA contract number and date or proposed Inspection. The contractor shall indicate lnthe following space the location ofthe plant where the materiel Will be available far Inspection. Plant J...ane Aviation Location Columbus OH KCMH Airport**DTFAAC-~O-D-0003S** Mod 0001, 4 August 2010 Page 18 of 35 (b) Final inspection at desllnatlan sha!l be ONL Yfor damage In transit, quantity, Item substitution, and visual defects. (c) Anal acceptance shall beat destination. (d) The provisions ofthis clause shall inno way be construed to limit the rights ofthe Government

under the clause entitled: "inspection of Supplies-Cost Reimbursement" (AMS 3.10.4-3) April1996 '1nspectlon of Services- Fixed-Price and Cost Reimbursement (AMS.3.10.4-4) April1996 "inspectlon-11me-and-Matertal and Labor-Hour (AMS 3.10.4-5) Aprll1996 3.1·1 Clauses and Provisions Incorporated by reference (December 2005) This screening information request (SIR) or contract, as appilcable, incorporates by reference the provisions or clauses listed below with the same force and effect asIfthey were given infull text. Upon

request, the Contracting Offlcer will make the full text available, or offerors and contractors may obtain the full text **~a** Internet at • http://conwrlte.faa.gov (on this web page, select "Search and View Clauses"). 3.10.4-3 Inspection of Supplies-Cost Reimbursement (April1996) 3.10.4-4lnspection of Services-Both Flxed-F'rtce & Cost Reimbursement (Apn11996) 3.1 0.4-5lnspectlon -11me and Material and Labor-Hour {April 1996) PART I ·SECTION F ·DELIVERIES OR PERFORMANCE F.1 DELIVERY SCHEDULE (SUPPLIES) (JANUARY 1997) CLA.0118R(a) The Government desires and requires delivery ofthe supplies under this contract within the number of calendar days stated below beginning on the date of contractors recii'lpt of aircraft for installation at vendor's site: COLUMN 1 COLUMN2 COLUMNS COLUMN4 COLUMNS

Line Qtyto be Delivery Time DeUvery Time Delivery Time ltem(sl (a)Dellverecl Ib )_Desired (c)Prooosed (dl Required Certified Enhancement 1 180DaysARO 18DARO 210 DaysARO PrototypeFor the Aircraft*Delivery Order 1 45DaysARO 60ARO 70 DaysARO for CertifiedAircraft Enhancement Services(per aircraft) I .. •contmgent upon vendor successful completion and certification ofthe Prototype. (b) Ifthe offeror ls unable to meet the DESIRED delivery schedule set forth in column (b) above, he may enier in column {c) the delivery schedule heis prepared to meet. Specifically, should the Government determine such proposed delivery schedule tobe unacceptable the Government reserves the right to award toan offeror submitting other than the lowest offer asto price, if such action wtll provide**DTFAAC-10-D-0003~** Mod 0001 14 August 2010 , :Page **~9** of 35 an acceptable delivery andis determined tobeinthe best interests ofthe Government In addition, the Government reserves the right to award under either the REQUIRED delivery lime{s) orthe proposed delivery tlme{s), when an offeror offers an earlier delivery time than required In column {5) above. Ifthe

offeror proposes no other delivery time(s), the DESIRED delivery tlme(s) In column (3} wilr apply. F.2 AUTHORIZED PERFORMANCE (JAN 1997) CLA.0168 The execution ofa contract shall not constitute authority for the contractor to commence performance. Performance shall be ordered bythe Issuance ofa formal delivery order byan authorized

Contracting Officer ofthe Mike Monroney Aeronautical Center. Orders issued orally orby written telecommunications shall reference a formal delivery order number and shall be confirmed by issuance of the formal delivery order. F.3 CHANGE TO INDIVIDUAL DELIVERY ORDER SCHEDULE (JANUARY 1997) CLA.113T (a) The delivery schedule(s) ofall delivery orders Issued hereunder shall be established in accordance with the terms ofthe contract. (b) Inthe event that the Contractor falls to deliver in accordance with the established delivery schedule(s) andIf such failure isnot duetoan excusable delay as defined Inthe Default clause ofthis contract, the Government and the Contractor may atthe Government's option, negotiate a revised delivery sohedule(s) in exchange for adequate consideration tothe Government. A contract modification will notbe required, but the delivery order{s) shall be amended in writing accordingly. (c) A delivery order change or amendment made flUrsuant to this clause shall not affect the delivery schedule(s) of any other delivery order(s) issued under this contract. (d) This clause shall not limit the Government's rights underthe Default clause. F.4 CONTRACT PERIOD {JANUARY 1997) CLA.1604 The effective period ofthis contract Is date of award for one year. F.5 ACCELERATED DELIVERY {JANUARY 1997} CLA.1817 Any Schedule for delivery or performance may be expedited atthe contractor's option, If without additional expense tothe Government. 3.1·1 Clauses and Provisions Incorporated by reference (December 2.005) This screening Information request (SIR) or contract, as appUcable, Incorporates by reference the provisions or clauses llstad below wlth the same force and effect asIf they were given !nfull text Upon

**reques~** the Contracting Officer will make the full text available, or offerors and contractors may obtain the full text via Internet at: http:Uconwrlte.faa.gov (on thls web page, select "Search and View Clauses"). 3.10.1-9 3.10.1-11 3.10.1-24 3.11-53 1999) STOP-WORK ORDER (OCTOBER 199S) GOVERNMENT DELAY OF WORK (APRll 1996) NOTICE OF DELAY (NOVEMBER-1997} FOB POtNT FOR DELIVERY OF GOVERNMENT FURNISHED PROPERTY (APRIL**DTFAAC-~0-D-00039** Mod **DOD~,** ' August **20~0** Page 20 of 35 PART I· SECTION G ·CONTRACT ADMINISTRATION DATA G.1 OPTION TO EXTEND SERVICES (JANUARY 1997) CLA.0116 The Government may unilaterally exercise its option to extend the term ofthe contract for performance of specified services pursuant to Sec!lon I, AMS Clause 3.2.4-34, Option to Extend Services, by written notice tothe contractor not later than the expiration date ofthe current contract

period.G.2 RESERVED G.3 IDENTIFICATION/DELIVERY OF GOVERNMENT PROPERTY CLA.1401 (JANUARY 1997} Within 30 calendar days after award an aircraft (Government-owned property) will be furnished to the contractor for useinthe performance ofthis contract. Miscellaneous equipment may beon each aircraft. The miscellaneous equipment Is listed on Appendix B. The FAA Be-300 fleet tobe serviced with enhancement/refurbishment Is listed below. ldenlificallon Number Description Quantity N-66 Be-300 aircraft 1 each N-67 Be-300 aircraft 1 each N-68 Be-300 aircraft 1 each 1'!-69 Be-300 aircraft 1 each N-70 Be-300 aircraft 1 each N-71 Be-300 aircraft 1 each N-72- Be-300 aircraft 1 each N-73 Be-300 aircraft 1 each N-74 Be-300 aircraft 1 each N-75 Be-300 aircraft 1 each N-76 Be-300 aircraft 1 each N-77 Be-300 aircraft 1 each N-78 Be-300 aircraft 1 each N-79 Be-300 aircraft 1 each N-80 Be-300 aircraft 1 each N-81 Be-300 aircraft 1 each N-83 Be-300 aircraft 1 each N-84 Be-300 aircraft 1 each G.4 GOVERNMENT PROPERTY REPORTS {JANUARY 1997) Acquisition Cost $3,140,025'.oo $3,140,025.00 $3,140,025.00 $3,140,025.00 $3,140,025.00 $3,140,025.00 $3,140,025.00 $3,140,025.00 $3,140,025.00 $3,140,026.00 $3,140,025.00 $3,140,025.00 $3,140,025.00 $3,140,025.00 $3,140,025.00 $;3,140,025.00 $3,140,025.00 $3,140,025.00 CLA.4528r (a) The contractor shall prepare a quarterly report of Government property inlts possession and the possession ofIts subcontractors. . (b) The report shall be submitted tothe Contracting Officer not later than the 15th day of January, Aprn, July, and October on Form DOT F 422.0.43, ContractorReportofGovernmentProperty.**DTP~2\C-~O-D-00039** Mod **ooo~.** 4 August **20~0** . Page **2~** of 35 G.5 WARRANTY· COMMERCIAL PRODUCTS AND SERVICES (JUN 2006) CLA.4529 The contractor's standard commercial warranty shall be deemed tobeapart ofthis contract unless otherwise specified. Ifthe contractor does not havea standard warranty, the warranty provisions of UCG Article 2. shall apply. G.6 INVOICING PROCEDURES· GENERAL (JAN 2002) CLA.0135R1 (a) In addition to the requirements set forth at AMS Clause 3.3,1-17. Prompt Pavment, for the submission ofa proper invoice. the contractor shall submit for (1) each month of performance of services, and/or (2) those items of supplies furnl§hed, and/or (3) travel expenses. (b) Op the face of the Invoice, the vendor shall inclutle the contract number and applicable task/delivery order number. In addition. the following level of information istobe attached per the type of contract Corder}: {1) Level1: Sum[!llirysheet only as follows: (i) ProJect tltle and description (li} Current amount Invoiced (2.) Level 2: Details supporting the Information shown on Level 1as follows: (i) Labor listed by hours, rates, and amounts. {ii) Travel breakdown ofall actual travel and per diem expenses by trip and employee name and project {if multiple}. {iii) Over and Above Materials split-out by proJect, type and/or items purcha§ed. (3) Level 3: Back up documentation as follows; (i) Receipts (travel. equipment purchases, etc.) (c) The following additional data must be submitted with the final invoice regardless of contract type:(1) Contractor's assignment of refund, rebates, and credits. (2) Contractor's release. {d) All contractors invoicing services to the FAA in labor hours shall majntaln on file, and submit when required for verification or audit, certified time logs, the dally total of productive

hours charged to the contract. a daily entry for anv non-productive work·hours and cumulative totals for each pav period. · (f) Pavrnent Address: FAA, Financial Operations Division !AMZ·(g) The vendor shaD send copies of the invoice as follows: One copy to:F88, Mike MonronEOy Aeronautical Center Contract Management Team (AMQ·34Cl P.O. Box 25082Oklahoma City, OK 73125

orvfa email to the Contracting Officer One copy to: or via email to the Program Manager

_ DTFAAC·10-D-OOD3lt Mod 0001, 4 August 2010 Page 22 of 35 3.1·1 Clauses and Provisions Incorporated by reference (December 2005} This screening information request (SIR) or contract, as applicable, Incorporates by reference ihe provisions or clauses listed below with.the same farcE> and effect asif they were given Infull text Upon

request, the COn!Jacting Officer will make the full text available, or offerors and contractors may obtain the full text Via Internet at: ht!p:l/conwrlte.faa.gov (on this web page, select "Search and VIew Clauses"). 3.10.1·22 CONTRACTING OFFICER'S TECHNICAL REPRESENTATIVE (JANUARY 200R)**DT~AAC-~0-D-00039** Mod OOOI, **~** Ausust **20~0** !1aga 23 of 35 PART I -SECTION H ·SPECIAL CONTRACT REQUIREMENTS H.1 DESIGN REVIEWIACCEPTANCE AND MODIFICATION APPROVAL The requirements for !he design are described inthe PWS and Appendix Technical Specification. Any devlatlon from FAA written approval ofthe design shall require !he submittal ofa change proposal

by the Contractor tothe FAA Contracting Officer. The proposed change Is subject tothe review and approval by FAA AJW-300, and discussions and negotfatlon by the Contracting Officer. The agreed upon change will be Incorporated by contract modification Issued bythe Contracting Officer.

H.2 CONTRACTOR QUALIFICATION

In order tobe ocnsidered quallfled to furnish !he required services, each offeror shall meet the applicable requirements ofthe Federal Aviation Regulations for return to servic!o ofthe Items serviced. This Includes a quallly control system which conforms to Federal Avlatlon Regulations Part 145. H.3 AGREEMENT TO PARTICIPATE IN ALTERNATIVE DISPUTE RESOLUTION {APRIL 1998) CLA.4540 (a) Tne Federal Aviation Administration encourages direct communications and negotiations between the contractor and the contracting officer inan attempt tc resolve contract disputes. In those situations where the parties are not able to achieve resolution atthe contracting officer level, the agency favors tne use of altematlve dispute resolution (ADR) techniques to reso\lie disputes. (b) The parties hereby agree that, priorto referring a contract dispute to {c) the Office of Disputes Resolution as described in contract clause 3.9.1-1 "Contract Disputes", the parties will discuss whether they are willing to utilize ADR techniques such as mediation or nonbinding evaluation ofthe dispute bya neutral party. Upon receipt ofa contract dispute from the contractor, the contracting officer will explore with the contractor whethertl:le useof ADR techniques would be appropriate to resolva the dispute. Both parties must agree that the use of such techniques is appropriate, and agree to fairly share the associated expenses. Ifthe parties do not mutually agree to utilize ADR to resolve !he dispute, the dispute will be processed In accordance with the procedures set

forth in clause 3.9.1-1. H.4 NOllCE OF CONTRACTOR TESiiMONY {SEPTEMBER 2006) CLA.4555 (a} The contractor shall notifY the Contracting Officer promptly In writing ofits intention, orthe

Intention ofIts employees, subcontractors ofany tier, or subcontractor employees, either voluntarily or under compulsion of competent authority, to provide swam testimony on any matter related tcor anslng under the work required by and/or performed under, this contract. Such written notlflcation at a minimum shall consist ofthe date and time ofthe testlrncny, Identification ofthe court, board, or other body before which the testimony is made, the nature ofthe testimony tobe given tothe extant it Is known atthe time of this report, the nature ofthe ocntractor's involvement inthe proceeding and any other circumstances related tothe work performed under or related tothe contract and the proceeding in which the testimony will be taken. (b) The ocntractor shall include the substance ofthis clause, including this paragraph {b),inall subcontracts executed under this contract and shall require all subcontractors to provide the required report tothe contractor.D'rFAAC-10-D-00039 Mod 0001, 4 August 2010 Page 24 cf 35 H.5 STRIKES OR PICKETING AFFECTING TIMELY COMPLETION OF THE CONTRACT WORK (SEPTEMBER2006) CLA.4557 Notwithstanding any other provision hereof, the Contractor is responsible for delays arising out of labor disputes, including but not limited to strikes, If such strikes are reasonably avoidable. A delay caused bya strike orby picketing which constitutes an unfair labor practice isnot excusable unless the Contractor takes all reasonable and appropriate action to end such a strike or picketing, such as the filing ofa charge with the National Labor Relations Board, the use of other available Govemment procedures, and the usaof private boards or organizations for the setllement of disputes. H.6 OVER AND ABOVE Over and above actions are not covered by the specified support actions provided in the

FFP CLIN for the refurbishment (CLINs ono2, 1002, 2002, 3002, 4002). The fol!owlng tasks have been identified as necessary to provide additional support of the 'FAA Beech

300 fleet to maintain operational and airworthy aircraft and are examples of over and above tasks:a. FOREIGN OBJECT PAM AGE {FOOl-Repair of damage resulting fmm foreign objects, i.e. hail, bird strikes, rocks, or other debris •.

b. DAMAGE/LOSS-Repair/replacement of parts or components either damaged or lost because Of negligence or acci!lent on the part of Government. c. THEFT··Replacement of parts because of theft of Pt:Uts or components from aircraft. (Other than when in control of the contractor) d. ACTS OF GOD ··Repairs due to flood, earthquake, lightening strikes, tornadoes, hurricanes, other local emergencies, etc. e. COMPONENT REPAIR OR REPLACEMENT COSTS- attributable to damage caused by corrosion, erosion or sulphidation. f. SERVICE BULLETINS-Cost of aircraft component required by Service Bulletins. g. ROUTINE LINE MAINTENANCE··Cost for Contractor performance of field level routine or periodic maintenance and inspections as required.

These over and above tasks shall be billed under GUNs 0008, 0009, 1008, 1009, 2008, 2009, 3008,

3009, 4008, and 4009.DTFAAC-kO-D-00039 Mod COOl, 4 August 2010 Page 25 of 35 PART H-SECTION I CONTRACT CLAUSES 1.1 CEILING PRICE {JAN 1997} CLA.0120 Notwithstanding the provisions of AMS 3.3.1-5, Payments under Tune-and-Materials and LaborHour Contracts, incorporated by reference in Section l,the ceiling price required therein is applicable to

and will be established for each delivery order issued hereunder and wm vary depending onthe work to

be perfonned. 1.2 SAVE HARMLESS ANO INDEMNITY AGREEMENT (JANUARY 1997} CLA.3211 The contractor shall save and keep harmless and indemnify the Government against any and aU

liability, claims, and costs of whatsoever kind and nature of injury toor death of any person or persons and for loss or damage to any property (Government or otherwise) occurring In connection with orIn any way Incident toor arising out ofthe occupancy, use, service, operations, or performance of work

In connection with this contract, resulting from the negligent acts, fault or omissions ofthe contractor, any subcontractor, or any employee, agent, or representative ofthe contractor or any subcontractor. AMS 3.2.4·16 ORDERING {OCTOBER 1996) (a) Any supplies and services tobe furnished under this contract shall be ordered by issuance of delivery orders or task orders by the IndiViduals or actlv\f!es designated inthe Schedule. Such orders may be issued from date of contract award for one year, and through option periods if exercised. (b) All delivery orders or task orders are subject tothe terms and conditions of lhls contract In the event of confilot between a deUvery order or task order and this contract, the contract shall control. (c)If mailed, a delivery order or task order Is considered "issued• when the Government deposits the order inthe mail. Orders may be issued orally, by facsimile, orby electronic commerce methods onlyif authorized inth_e Schedule. AMS 3.2.4;17 ORDER LIMITATIONS (OCTOBER 1996) (a) Minimum order. When the Government requires supplies or services covered by this contract inan amount of less than $350,000.00 the Government isnot obligated to purchase, noristhe Contractor obligated to furnish, those supplies or services under the contract (b) Maximum order. The Contractor isnot obllgated to honor- (1) Any order fora single item In excess of NAalrcraft; (2) Any orderfor a comblnatlon of Aircraft In excess of5 aircraft; or (3)A series of orders from the same ordering offlce within 365 calendar days that together call for quantities exceeding the limitation In subparagraph (i)or{2) above. {c)Ifthistsa requirements contract, the Government Isnot required to **<;~rder** apart ofany ana requirement from the ContractOr Ifthat requirement exceeds the maximum-order limitations in pare graph (b} above. (d) Notwithstanding paragraphs (b) and (c} above, the Contractor· shall honor any order exceeding the maximum order limitations In paragraph (b), unless that order (or orders) Is returned to the arderlng office within 15 days after Issuance, with wrltren notice stating the Contractor's intent not

to ship the Item (or items) called for and the reasons. Upon receiving this notice, the Government may acquire the supplies or services from another source.AMS 3.2.4-19 REQUIREMENTS (OCT 1996) **DTFAAC-~0-D-0003~** Mod 0001, 4 August 2010 Page 25 of 35 {a) This Isa requirements contract for the supplies or services specified, and effective for the period stated, inthe Schedule. The quantities of supplies or services specified Inthe "Schedule" are estimates only and are not purchased by this contract. Except as thfs contract may otherwise provide, If the Governmenfs requirements do not result in orders inthe quantities described as "estimated" or

. "maximum" inthe Schedule, tnatfact shall not constitute the basis foran equitable price adjus!menl (b) Delivery or performance shall be made only as authorized by orders issued in accordance with the Ordering clause. Subject to any limitations Inthe Order Umltations clause or elsewhere Inthis contract, the Contractor shall furnish tothe Government all suppfJes or services specllled inthe "Schedule" and called furby orders Issued in accordance with the Ordering clause. The GovernmerJt may Issue orders requiring delivery to multlple destinations or perfonnance at multiple locations.

(c) EltCept as this contract otherwise provides, the Government shall order from the Contractor allthe supplies or services specified inthe "Schedule" that are required tobe purchased bythe Government

activity or activities specified Inthe "Schedule." (d) The Government !snot required to purchase from the Contractor requirements in excess ofar1y limit on total orders under this contract.

(e)Ifthe· Government urgently requires delivery of any quantlty ofan Item before the earliest date that delivery may be specified under this contrant, andlfthe Contractor will not accept an order providing · for the accelerated deiTvery, the Government may acquire the urgently required goods or services from another source.

(f) Any order Issued during the effective period ofthis contract and not completed within that period shall be completed bythe Contractor within the time specified inthe order. The contract shall govern

the Contractor's and Government's rights and obligations with respect to that order tothe same extant asifthe order were completed during the contracrs effective period; provided, thatthe Contractor shall netbe required to make any deftverles under this contract after 1 year from date of award (unless exercised by option).

AMS 3.2.4·35 OPTION TO EXTEND THE TERM .OF THE CONTRACT (APRIL 1996} (a) The Government may extend the term ofthis contract by written notic!'! tothe Contractor within30 days ofthe end ofthe contract order period; provided, that the Government shall give the Contractor a preliminary written notice ofIts intent to extend at least 60 days before the contract expires. The preliminary notice does net commlt the Govemmentto an extension. (b)Ifthe Government exercises this option, the extended contract shall be co11sldered to Include this option provision. {c) The total duration of this contract, including the exercise of any options under this clause, shall not exceed 5 years and6 months . . AMS 3.3.1·11 AVAILABILITY OF FUNDS FOR THE NEXT FISCAL YEAR (APRIL 1996) Funds are not presently available for performance under this contract beyond 09/30/2010. The FAA's obligatioll for perfonnance ofthls contract beyond that date is contingent upon the availability of appropriated funds from which payment for contract purposes can be made. No legaiiiabllity on the**DTFAAC-~0-D-00039** Mod 0001, 4 August 2010 Page 27 of 35 part ofthe FAA for any payment may ariss for performance under this contract beyond 09/30/2010, until fUnds are made available tothe Contracting Officer for performance and until the Contractor receives notice of availablilty, tobe confirmed In writing bythe Contracting Officer. AMS 3.3.1-14 LIMITATION OF FUNDS (April1996} {APPLICABLE TO ALL COST REIMBURSABLE CLINS) {a) The parties estimate that performance ofthis contract will not cost the FAA more than: (1) the estimated cost specified inthe "Schedule" or, (2)ifthisIsa cost-sharing contract, the FAA's share ofthe estimated cost specified Inthe "Schedule".The Contractor agrees to use its best efforts to perform the Work specified inthe "Schedule" and all obligations under this contract within the estimated cost. which, IfthisIlla cost-shaling contract, !ncludss both the FAA's and the Contractor's share ofthe cost. {b) The "Schedule" specifies the amount presently available for payment bythe FAA and allotted to this contract, thsltems covered, the FAA's share ofthe costifthisisa cost-sharing contract, and !he period of performance Itis estimated the allotted amount will cover. The parties contemplate that the

FAA will al!otadd!Uonal funds incrementally to the contract uptothe full estimated cost tothe FAA speclfled inthe ".Schedule", exclusive of any fee. The Contractor agrees tc perform, or have performed, work onthe contract uptothe point at which the totel amount paid and payable bythe FAA under the contract approximates but does not exceed the total amount actually allotted bythe FAA tothe contract

(c) The Contractor shall notify the Contracting Officer In writing whenever itHas reason to believe that the costs It expects to incur under this contract inthe next 60 days, when added toall costs previously Incurred, wlll exceed 75 percent of: (1)tha total amount sofar allotted tothe contract bythe FAA or, {2)ifthisisa cost-sharing contract, the amount then allotted totha contract bythe FAA pius the Contractor's con-espondlng share. The notlce shall state the estimated amount of addlllonal fllnds required to oontinue performance for the period spectfled Inthe "Schedule". {d) Sixty days before the end ofthe period specified inthe "Schedule", the Contractor shall notiJY the Contracting Officer In wliting ofthe estimated amount of additional funds, ifany, required to continue timely periormance under the contract orfor any further period specified inthe "Schedule" or otherwise agreed upon, and when the funds will be required, (e)If, after nottflcation, additional funds are not allotted bythe end ofthe period specified Inthe "Schedule" or another agreecJ..upon date, upon the Contractor's written request the Contracting Officer will terminate this contract on that date in accordance with the provisions ofthe **"Termine~on"** clause ofthis contract. lfthe Contractor estimates that the funds available will allow Itto continue to discharge Its obligations beyond that date, Itmay specify a later date InIts request, and the Contracting Officer may terminate this contract onthat later date. (f) Except as required by other provisions ofthis **contrac~** specifically citing and stated tobean exception tothis clause-**DTFAAC-~0-D-00039** Mod **000~,** 4 August **20~0** Page 2B of35 (1) The FAA isnot obligated to reimburse the Contractor for costs Incurred In excess ofthe total amount anotted bythe FAA to this contract; and

(2) The Contractor Isnot obligated to continue performance under this contract {including actions under the "Termination• clause ofthls contract) or otherWise incur costs In excess of(I)the amount

then allotted tothe contract by the FAA or,{II)ifthisIsa cost-sharing contract, the amount then allotted bythe FAA tothe contract plus the Contractor's corresponding share, until the Contracting Officer notifies the Contractor in Writing that the amount allotted by the FAA has been increased and speclfles an Increased amount, which shall then constitu1e the total amount allotted bythe FAA tothis contract.{g) The estimated cost shall be increased tothe extent that; (1) the amount allotted by the FAA or, (2.)IfthisIsa cost-sharing contract, the amount then allotted bythe FAA tothe contract plus the Contractor's oorrespondlhg share, exceeds the estimated cost specified Inthe "Schedule." IfthisIsa cost-sharing contract, the Increase shall be allocated in accordance with the formula specified Inthe "Schedule. • (h) No notice, communication, or representation Inany form other than that speclfled In subparagraph (f)(2) above, or from any person other than the Contracting Officer, shall affect the amount allotted by

the FAAtothis contracl Inthe absence ofthe specified notice, the FAA Isnot obligated to reimburse the Contractor for any costs In excess ofthe total amount allotted by the FAA tothis contract, whether incurred durtng the course ofthe contract orasa result ofiermlnatlon. (I) When andtothe extent that the amount allotted bythe FAA tothe contract Is increased, any costs the Contractor incurs before the Increase that arein excess of {1) the amount previously allotted bythe FAA or, (2)ifthisIsa cost-sharing contract, !he amount previously allotted bythe FAA tothe contract plus· the Contractor's corresponding share, shall be allowable tothe same extent asif incurred afte!Ward, unless the Contracting Officer Issues a termination or other notice and directs that the Increase Is solely to cover termination or other specified expenses. 0) Change orders shall not be considered an authorization to exceed the amount allotted bythe FAA specified inthe "Schedule", unless they contain a statement Increasing the amount allotted. (k) Nothing Inthis clause shall affect the right ofthe FAAto terminate this contract Ifthis contract Is terminated, the FAA am! the Contractor shall negotiate an equitable distribution ofall property

produced or purchased under the contract, based upon the share of costs incurred by each. (I)Ifthe FAA does not allot suflldentfunds to allow completion ofthe work, the Contractor is entitled toa percentage ofthe fee speci!ied Inthe 'Schedule" equaling the percentage of completion ofthe work contemplated by this contract AMS 3.3.1-33 CENTRAL CONTRACTOR REGISTRATION (JANUARY 2008)

(a} Dellnltlons ..As used inthis clause**DTFAAC-~0-D-00039** Mod 0001 14 August **20~0** Page 29 of 35 "Central Contractor Registration (CCRl database" means the primary Government repository for Contractor information required for the conduct of business with the Government "Data Universal Numberlng System {DUNS) number" means the 9-dlglt number assigned by Dun and Bradstreet, Inc. (D&B) to ldentlfy unique business entities. "Data Universal Numbering System +4 (DUNS+4} number" means the DUNS number assigned by

D&B plusa 4-character suffiX that may be assigned bya business concern. (D&B has no affiliation with this 4-character suffix.) This 4-character suffix may be assigned atthe discretion ofthe business concern to establish additional CCR records for identifying alternative Electronic Funds Transfer

(EFf) accounts for the same parent concern. "Registered Inthe CCR database" means that the Contractor has entered all mandatory Information, including the DUNS number orthe DUNS+4 number, Into the CCR database. (b) (1)By submission ofan offer, the offeror acknowledges the requirement thata prospective awardee shall be registered lnthe CCR database prior lD award, during performance, and through final payment ofany contract, basic agreement, basic ordering agreement, or blanket purchasing agreement resulting from this soU citation. (2) The offeror shall enter, In Representations, Certifications and Other Statements of Offerors Section ofthe solicitation, ihe DUNS or DUNS +4 number that ictentifles the offeror's name and address exactly as slated Inthe offer. The DUNS number will be used bythe Contracting Officer

to verlfythatthe offeror Is registered Inthe CCRdatabase. (c)Ifthe offeror does not have a DUNS number, it should contact Dun and Bradstreet directly to

obtain one. (1)An offeror may obtain a DUNS number (I)If located within the United States, by caU!ng Dun and Bradstreet at 1-866-705- 5711 orvla the Internet at http:!lfedgov.c!nb.com/webfomn; or (10If located outside the United States, by contacting the local Dun and Bradstreet office. (2) The offeror should be prepared to provide the following Information: recognized.street address). (1} Company legal business. . (li) Tradestyle, doing business, or other name by which your entity Is commonly (liij Company Physical Street Address, City, State, and ZIP Code. (lv) Company Malllng Address, City, State and ZIP Code (if different from physical (v) Company Telephone Number. (vi) Date the company was started. (vii} Number of employees at your location. (vlll) Chief executive officer/key manager. (lx) Line of business (industry). (x} Company Headquarters name and address (reporting relationship within your entity). . (d)Ifthe offeror does not become registered inthe CCR database inthe time prescribed bythe Contracting Officer, the Contracting Officer may proceed to award tothe next otherWise successful

registered offeror.

(e) Processing lime, which normally takes 48 hours, should be taken into consideration when registering. O!fercrs who are not registered should consider applying for registration immediately upon receipt ofthis solicitation. (f) The Contractor is responsible for the accuracy and completeness ofthe date within the CCR database, and for any liability resulting from the Government's reliance on Inaccurate or incomplete data. To remain registered Inthe CCR database after the Initial registration, the Contractor ls required to review and update on.an annual basis from the data of Initial registration or subsequent updates its infomnation inthe CCR database to ensure itis current. accurate and complete. Updating information inthe CCR does not alter the terms and condltlons ofth!s contract andIsnota substitute fora properly executad contractual documentDTFAAC-l.O-D-00039 Mod 0001., 4 Auguat 201.0 Page 30 of 35 (g) (1) (!)Ifa Contractor has legally changed Its business name, "doing business as" name, or division name (whichever Is shown on the contract), or has transferred the assets used In performing the contract. but has not completed the necessary requirements regarding novation and change-ofname agrsements In AMS Procurement Guidance T3.10.1.A-8, the Contractor shall provide the responsible Contracting Officer a minimum of one business day's written notlficalion ofIts Intention to: {A) change the name inthe CCR database; (B) comply with the requirements ofT3.10.1.A-8; and (C) agree in writing tothe tlmellne and procedures specified bythe responsible Contracting Officer. The Contractor must provide the Contracting Officer with the notification, sufficient documentation to support the legally changed name. (n)Ifthe Contractor falls to comply with the requirements of paragraph (g)(1 ){i)ofthis clause, or falls to perform the agreement at paragraph {g)(1 }O](C) ofthis clause, and, Inthe absence ofa properly executed novation or change-of-name agreement, the CCR information that shows the Contractor tobe other than the Contractor indicated inthe contract will be considered tobe Incorrect information within the meaning ofthe "suspension oF Paymene' paragraph ofthe electronic funds transfer (EFT) clause ofthis contract (2) The Contractor shall not change the name or address for EFT payments or manLtal payments, as appropriate, Inthe CCR record to reflect an assignee for the purpose of assignment of claims. Assignees shall be separately registered Inthe CCR database. Information provided tothe Contractor's CCR record that Indicates payments, Including those made by EFT, toan ultimate recipient other than that Contractor will be considered tobe Incorrect Information within the meaning ofthe "Suspension **ofpaymen~·** paragraph ofthe EFT clause ofthis contract. (h) Offerors and Contractors may obtain Information on registration and annual confirmation requirements via the internet at http://www.ccr.gov/ orby calling 1-BBB-227·2423, or 2e9-ll61-5757. AMS 3.3.1-34 PAYMENT BY ELECTRONIC FUNDS TRANSFER/CENTRAL CONTRACTOR REGISTRATION (OCTOBER 2005) (a) Method of payment (1)All payments bythe Government under this contract shall be made by electronic funds transfer (EFT), except as provided in paragraph (a){2) ofthis clause. As used inthis clause, the term

"EFT" refers tothe fUnds transfer and may also Include the payment information transfer. (2)Inthe event the Government Is unable to rslease one or more payments by EFT, the Contractor agrees toe llher: {i) Accept payment by check or some other mutually agreeable method of payment; or (li) Requestthe Government to extend the payment due date until such time asthe Government can make payment by EFT (but see paragraph (d)ofthis clause). (b) Contractor's EFT Information. The Government shall make payment tothe Contractor using the EFT Information contained lnthe Central contractor Registration {CCR) database. inthe event that the EFT information changes, the Contractor shall be responsible for providing the updated Information to the.CCR database. {c) Mechanisms for EFT payment. The Government may make payment by EFT through either the Automated Clearing House (ACH) network, subject tothe rules ofthe National Automated Clearing House Association, orthe Fedwlre Transfer System. The rules governing Federal payments through· the ACH are contained In31 CFR Part 210. (d) Suspension of payment. Ifthe Contractor's EFT information inthe CCR database Is incorrec:t, then the Government need not make payment tothe Contractor under thls contract until

correct EFT Information is entered into the CCR database; and any Invoice or contractflnenclng request shall be deemed notto bea proper Invoice for the purpose of prompt payment under this contract. The prompt payment terms ofthe contract regarding notice ofan improper invoice and

delays in accrual of interest penalties apply. (e) Llablllty for uncompleted or erroneous transfers.**DTFAAC-~0-D-0003~** Mod 0001, 4 **~ugust** 2010 Page 31 of 35 (1)1f an uncompleted or erroneous transfer occurs because the Government usee! the Contractor's EFT information Incorrectly, the Government remains responsible for: (i) Making a correct payment; (ii) Paying any prompt payment penalty due; and (01) Recovering any erroneously directed funds. (2)lf an uncompleted or erroneous transfer occurs because the Contractors EFT information was incorrect, or was revised within 30 days of Government release ofthe EFT payment transaction instrucllon io!he Federal Reserve System, and: (i)Ifthe funds are no longer under the control ofthe payment office, the Government Is deemed to have made payment and the Contractor Is responsible for recovery of anY erroneously directed funds; or (li)lfthe funds remain under the control ofthe payment office, the Government shall not make payment, and the provisions of paragraph (d)ofthis clause shall apply. (f) EFT and prompt payment. A payment shall be deemed to have been made ina timely manner In accordance with the prompt payment terms ofthis conlrac:t if,Inthe EFT payment transaction instruction released to the Federal Reserve System, the date specified for settlement of the payment isonor before !he prompt payment due date, provided the speclfletl payment date isa valid date under the rules ofthe Federal Reserve System. (g) EFT and assignment of claims. Ifthe Contractor assigns the proceeds ofthis contract es provided farInthe assignment of claims terms ofthis contract, the contractor shall require asa condition of any. such assignment, that the assignee shall register separately inthe CCR dalabase and shall be paid by EFT In accordance with-the terms ofthis clause. Notwithstanding any other requirement ofthls contract, payment toan ultimate recipient other than the Contractor, ora financial Institution properly recognized under an assignment of claims, isnat permitted. Inall respects, the requirements ofthis clause shall apply to the assignee asifit were the Contractor. EFT Information that shows the ultimate recipient ofthe transfer tobe other than the Contractor, inthe absence ofa proper assignment of claims acceptable tothe Government, is incorrect EFT information within the meaning of paragraph {d)of this clause. ·· {h) Llablllly for change of EFT information by financial agent. The Government Isnot liable for errors resulting from changes to EFT Information made by the Contractor's financial agent. (!)Payment Information. The payment or disbursing office shall forward tothe Contractor available payment Information that Is suitable for transmission asofthe date of release ofthe EFT lns!ructlon tothe Federal Reserve System. The Government may request the Contractor to designate a desired format and method(s) for delivery of payment lnformation from alistof formats and methods the payment office is capable of executing. However, the Government does nat guarantee that any particular format or method of delivery Is available at any particular payment office and retelns the

latitude to use the format and delivery method most convenient to the Government. Ifthe Government makes payment by check ln accordance with paragraph (a)of this clause, the Government shall mall the payment Information tothe remittance address contained inthe CCR database.AMS 3.3.1-36 AVAILABIUTV OF FUNDS· OPTION PERIODS UNDER A CONTINUING RESOLUTION {APRil2008) Due tothe posslbillly ofthe enactment ofa continuing resolution In lieu ofan annual appropriation, full fiscal year funding may not be available foran entire contract option period. Inthe event ofa continuing resolution, FAA will only be liable foran amount based on the time period specified by the continuing resolution. The amount of funds made available by the continuing resolution will be

specllied by subsequent modification. Ifthe contractor provides services in excess ofthe funded -

amount or beyond the covered period, the contractor does soatIts own risk.AMS 3.6.2·39 TRAFFICKING IN PERSONS (JANUARY 2008) (a) Definitions: "Coercion," as used inthis clause, means:
**DTFAAC·l0·D-UU03~** Mod 0001, 4 August 2010 Page 32 of 35 (I) Threats of serious harm toor physical restraint against any person; (li) Any Scheme, plan, or pattern Intended to cause a person to believe that failure to perform an act would result In serious harm toor physical restraint against any person; or (iii) The abuse or threatened abu.se ofthe legal process. "Commercial sex Act," as used Inthis clause, means any sex acton account of which anything of value Is given toor receiVed by any person. "Debt bondage," as used Inthis clause, means the status or condition ofa debtor arising from a pledge by the debtor ofhisorher personal services or those ofa parson under hisor her c:ontrol asa security for debt, ifthe value of those services as reasonably assessed isnot applied toward the liquidation ofthe debt orthe length and nature ofthose services are not respectively limited and defined. 'Employee," as used inthis clause, means an employee ofa contractor or !ijUbcontraolor directly engaged inthe performance ofwor!l under a FAA contract. • - "involuntary servitude," as used Inthis clause, means a ciondltlon of servitude induced by means of: (I) Any scheme, plan, orpattem Intended to cause a person to belleve thatifthe person did not enter Into or c:ontlnue In such condttlons, that person or another person would suffer

harm or physical restraint; or (II) The abuse or threatened abuse ofthe legal process.

"Severe trafficking of persons," as used inthis clause, means: (I) Sex: trafficking in which a commerclal sex actIs induced by force, fraud, coercion, orin which the person induced has not attained 18 years of age; or (I!) The recruitment, harboring, transportation, provision, or obtaining ofa person for labor-or services through force, fraud, or coercion for the purpose of involuntary servitude, peonage, debt bondage, or slavery.'Sextrafficklng," as used inthis ciause, means the recruitment, harboring, transportation, provision, or obtaining ofa person for the purpose ofa commercial sex act (b) The contractor will establish policies and p10cedures for ensuring that its employees do not engage Inor support severe forms of trafficking of persons, procurement of sexual acts, or use forced

labor inthe performance ofthis contract (o) The contractor will take action to ensure that all contractor and subcontractor employees are aware of laws, regulations, and pollees, to include actions taken by the contractor if violated, regarding severe forms of trafficking of persons, p10curement of sexual acts, or use offorced labor: (d) The contractor must notify the contracting officer of: (1) Any information it receives that alleges an employee or subcontractor employee has engaged In conduct that violates this policy; and (2) Any actions taken against the employee or subcontractor employee. (e)In addition to other remedies available tothe FAA, the contractor's failure to comply with the requirements ofthis clause may render the contractor subject to: (1) Required removal ofa c:ontractor or subcontractor employee from the performance ofthe contract; (2) Suspension of contract payments; (3) Loss of award fee for the period of noncompllance; (4) Termination for default; or (5) Suspension or debarment (f) The contractor must Include the substance ofthis clause Inall subcontracts for performance of work under a FAA contract 3.1-1 Clauses and Provisions Incorporated by reference (December 2005)DTFAAC-10-D-00039 Mod 0001, 4 Ausust 2010 Page 33 of 35 This screening lnfonnalion request (SIR) or contract, as applicable, incorporates by reference the provisions or clauses listed below with the same force and effect asif they were given Infull text Upon

request, the Contracting Officer will make the full text al(al!able, or o!ferors and contractors may obtain the full text via Internet at http://cgnwrlte.faa.gov (on this web page, select "Search and View Clauses"). 3.1.7-2 **~ ~~"-'~.1~** .. **7.=---5---1~~** HY'l Of I3.1.a1 rlreQal or" I 3.1.8-2 Price or Fee ? 1•""' )rder ? ·75 ;for ;of ;of·•Iand Reoovel)l ofFUildS for ·u1eaa1 or '} !.2.: 7-6 Io. Ill,) the IHHO **"~ "I'W~** w' vvnen )r "'". **~d,~r** with '"" w **"~** Debarred, Suspended,

**Aun11~t** 1!1!<7 •2009 ""f"" IIU"I' 2000 Julv200•Julv 200·l\pril199 :2.000 ofTearn Ani **l_gQ!l~i** ___ _ )ptlon to IAPI l200i -3.3. 3.3.1-103.3..•'15 .9.3.5-13.5-2 13.5-13
Ic;notto IAo1 11991 r-.,t.,ll!"o; or Gifts , IJanuarv 1999 'ees n '1996 1for,.., C ·Code ofBu Ethics and r.nnrli 1M 'of'':"Y"'"""' Unaer 11me and, ... ,"""';; and Labornour

;for Extras .tyafFmds taf IFAA CostInsurance ·Travel and !'11 **lo,,o~** lfnU,S . ill,_ State_. and Local T '""or .Bid and

**~~96_---l**\nr 1996 '2009 -r 1996 Ail ,-201 Jiii 199! 1996April1996 I f"L.IL\1VI\LC"vd and **VVII~dlll** I Notice and -t>· **-,~2009** "" r-a<ent and Copyn!,IIIL I u<liiU"IJI 2009 1 Rights In "'" .h•'luary 2009 3.5-13 ALTV Rights in Data JanuaJY 2009 3.6.1-1 Notice of Total Small Business Set-Aside January 20103.6.1-3 Utilization of Small Disadvantaged and WomanOwned, and Service-Disabled Veteran OWned Small Business Concerns 3.6.1-4 Small, Small Disadvantaged Women-Owned and Service Disabled Veteran OM"!ed Small Business Subcontracting Plan 3.6.1-7 Limitations on Subcontracting 3.6.1-9 Mentor P rote1:1e Prooram 3.6.1-11 Mentor Reoulrements and Evaluation 3.6.1-16 Post-Award Small Business Program Representation

3.6.2-4 Walsh-Healey Public Contracts Act 3.6.2-9 Eoual Oooortunitv 3.6.2-12 Affirmative Action for Special Disabled and Vietnam Era Veterans 3.6.2-13 Affirmative Action for Workers With Disabilities 3.6.2-14 Employment Reports on Special Disabled Veterans and Veterans of Vietnam Era 3.6.2-28 Service Contract Act of 1965, As Amended 3.6.2-30 Fair Labor Standards Act and Service Contract Act- Price Adjustment (Multiple Year and. Option Contracts) 3.6.2-35 Prevention of Sexual Harassment 3.6.2-37 Notification of Employees Rights Concerning Payment of Union Dues or Fees ' 3.62-41 Emp!oyinent Eligibility Verfflcatlon . 3.10.3-1 Definitions 3.10.3-2 Government Proper tv Basic Clause 3.10.3-2alt 1 Government Proper '¥ Basic Clause Alternate 3.10. 3-2alt II Government Proper tv Basic Clause Alternate 3.10.6-1 Termination for Convenience ofihe Government (Fixed Price) 3.10.6-3 Termination for Convenience ofthe Government (Fixed Price) 3.10.6-4 Default (Fixed Price Supply and Service) 3.13-13 Raduce Test Messaging While Driving_

DTFAAC-lO-D-00039 Mad 0001, 4 August **~010** Page 3.11 of 35 - September 2001 Aptil2007July 2008October 2006

October 2.006 January 2010 APril1996 Auaust 1998Aprtl2007 APRIL2000 APRIL2007 APRIL 1996.Aprll1996 AUGUST1998 APRIL2007 SEPTEMBER 2009 Aorll2004 Aorll2004 Aorll2004April 2004October 1996

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**~--**-:-.:**··<J~~~a~~~~1¢**U.S, Department of TransportationFederal Aviation AdministrationIn Reply Refer to: AGL-7B Great Lakes **Re<Jioll>>'.·•'f'~~~~** 2300 E. Devon

Des Plaines, IL Area Code 847/294-7313 CERTIFIED MAIL May 8, 2014 Hearing Docket, Federal Aviation Administration 800 Independence Avenue, S.W. Washington, DC 20591

Attention: Hearing Docket Clerk, AGC-430 Wilber Wright Building - Suite 2Wl000 Re: Spirit Avionics, Ltd. FAA Case No.: 2012-GL-07-0056 Enclosed herewith please find a copy of the Respondent's Request for Hearing, dated April 30, 2014, which was received by our office

on May 2, 2014. Also, please find enclosed the original and one copy of the Complaint in the above-referenced proceedings.

The FAA requests that the hearings in these matter be held in Columbus, Ohio, and expects that the hearing will last one day. Please address all communications for the FAA to the undersigned at:Kate BarberFederal Aviation Administration, AGL-7 2300 East Devon Avenue

Des Plaines, IL 60018-4696 Phone (847) 294-7862 Fax (847) 294-7498 Email Kate .Barber@faa. gov Kate BarberAttorney Enclosures: Request for Hearing Complaint cc: Respondent (w/copy of Complaint) RECEIVED JUN082015 HEARING DOCKETCERTIFICATE OF SERVICE I hereby certify that I have, this date, served the foregoing Complaint by mailing copies, as indicated below, via Certified Mail, to the following: Original and one copy to: One copy to: Hearing Docket Federal Aviation Administration BOO Independence Avenue, S. W. Washington, DC 20591 Attn: Hearing Docket Clerk AGC-430, Wilber Wright Building Suite 2W1000 Jerry A. EichenbergerEICHENBERGER & ASSOCIATES

6037 Frantz Road, Suite 107 Dublin, OH 43017 Dated this gth day of May, 2014. **~**

..· **~.·~~** Yola a Quiles

Leg l Technician FAA, Great Lakes Region

2FEDERAL AVIATION ADMINISTRATION Hearing Docket Administrator, Federal Aviation Administrati9n, Complain:tant, v. Spirit Avionics, Ltd., Respondent. FAA File Numbers: AGL-7B 2012-GL-07-0056 REQUEST FOR HEARiNG Now comes Respondent, Spirit Avionics, Ltd., by and through the undersigned counsel, and hereby requests a hearing pursuant tothe provisions ofPart 13, Code ofFederal Regulations. ichenbe er(001 55) EICHENBERGER & ASSOCIATES 6037 Frantz Road, Suite 107 Dublin, Ohio 43017 614-798-1600/614-798-1620 (fax) Attorney for Respondent-...; **~.** CERTIFICATE OF SERVICE I hereby certify thatatrue copy ofthe foregoing has been forwarded tothe following by. Ordinary U.S. Mail, postage pre-paid, this 30th day of April, 2014. Kate Barber, Attorney Office of Regional Counsel Federal Aviation Administration

Great Lakes Region 2300 E. Devon Avenue

Des Plaines, IL 60018U.S. DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGSWASHINGTON, D.C. IN THE MATTER OF Spirit Avionics, Ltd. FAA DOCKET NO. (not assigned) (Civil Penalty Action) DMS NO. (not assigned) FAA CASE NO. 2012-GL-07-0056 COMPLAINT The Federal Aviation Administration (FAA) ,by counsel, hereby files its Complaint, pursuant to Rule 208 of the Rules of Practice (14 C.F.R. 13.208), and states as follows: I 1. On April 25, 2014, Respondent was advised through a Final

Notice of Proposed Civil Penalty that the FAA proposed to assess a

civil penalty in the amount of $11,000. On April 30, 2014, Respondent submitted a written request for a hearing. 2. At all times hereinafter-mentioned Spirit, was the holder of Repair Station Certificate UOKR250X. 3. Spirit was hired to perform maintenance ona number of type certificated aircraft owned and operated by the Federal Aviation Administration (FAA).

4. Spirit subcontracted major portions of this work to Lane Aviation, holder of Repair Station Certificate DYCR407D.2 5. At some time prior to February 24, 2011, Spirit fabricated or had fabricated at least twenty-two (22) brackets and twenty-two (22) lanyards that eventually would be used on the FAA aircraft.6. The brackets and lanyards were replacement or modification parts for use on the FAA aircraft. 7. On February 24, 2011, Spirit sold twenty-two (22) of the fabricated brackets and twenty-two (22) of the fabricated lanyards to Lane Aviation as replacement or modification articles representing these parts as suitable for installation on the FAA aircraft. II By reason of the foregoing facts and circumstances, Respondent violated Section(s) 21.9(b) of the Federal Aviation Regulations.

1. Pursuant to Title 49 of the United States Code, Section 46301 (49 U.S.C. §46301), Respondent is subject toa civil penalty not to exceed $1,100 for each violation alleged. 2. Under the facts and circumstances of this case, a civil penalty of $11,000 is appropriate. ' WHEREFORE, the Agency, by counsel, respectfully requests that the

Administrative Law Judge enter an Order that Respondent be assessed a civil penalty in the amount of $11,000.Respectfully submitted this 8th day of May, 2014. Attorney Federal Aviation Administration Great Lakes Region, AGL-7

2300 East Devon Avenue

Des Plaines, IL 60018 (847) 294-7313

FAX: (847) 294-7498 AGL-7B 3I hereby certify that the foregoing Complaint has been mailed this date by Certified Mail, Return Receipt Requested, to: Original and One Copy: One Copy: Hearing Docket Federal Aviation Administration 800 Independence Avenue, S. W. Washington, DC 20591 Attn: Hearing Docket Clerk AGC-430, Wilber Wright Building Suite 2W1000 Jerry A. EichenbergerEICHENBERGER & ASSOCIATES

6037 Frantz Road, Suite 107 Dublin, OH 43017 Dated this 8th day of May, 2014. Great Lakes

4In The Matter Of: U.S. DEI'ARTMENT OF TRANSI'ORTATION OFFICE OF HEARINGSWASHINGTON, D.C. DOCKET NO. FAA-2014-0119 SPIRIT AVIONICS, LTD. ))))) CASE NO. 2012-GL-07-0056 Respondent. JUDGE SULLIVAN DECLARATION m- ERIC C. OCHS NOW COMES the Declarant, Eric C. Ochs, and for his declaration states as follows: 1. Iam over the age of18, under no disability, competent to testify, andI understand the obligations ofan oath. 2. Iam currently the CEO of Sprit Avionics, Ltd. ("Spirit Avionics") and have held this position since its creation in 2000. 3. On or around August of 2010, Spirit Avionics submitted abid package and was subsequently awarded a contract (the "Contract") to perform work on aircraft belonging tothe Federal Aviation Administration ("FAA"). 4. The terms of said Contract were to provide a variety of modifications tothe interior cabin of18 Beech craft King Air 300 aircraft then owned and utilized bythe FAA. 5. Due toa combination of both limitations ofthe certificate belonging to Spirit Avionics, Ltd. and lack of equipment and/or specialization needed to perform every task contemplated under the tenus ofthe Contract with the FAA, Spirit Avionics utilized the experience and expertise of two highly respected and qualified sub-contractors; Lane

Aviation Corporation ("Lane Aviation") and Tritex Corporation ("Tritex") in carrying out the work contemplated bythe Contract. 6. Lane Aviation Corporation was utilized to complete the removal of old parts and hardware and to complete the subsequent installation of new parts and hardware contained inthe Beechcraft King Air 300 aircraft. 7. Tritex Corporation, a company that specializes in fabric and upholstery work for the aviation and other industries, was utilized to provide fabric and other upholstery work for the interior ofthe Beech craft King Air 300 aircraft. 8. Prior to submission ofthe bid package and subsequent award ofthe FAA contract, I wo_rked in **co~junction ~h~~~Y'\n**  **/~~on** and Tritex Corporation to estunate potential costs **aMl~~'!!rlovat::!** ue Contract. JUN082015 HEARING DOCKET9. After Spirit Avionics was awarded the Contract with the FAA, during communications with Lane Aviation and Tritex regarding planning ofthe performance ofthe contract, it was determined that there was an oversight in estimating the cost of parts and hardware relating to installation of the headliner ofthe interior cabin. 10. Because itwas determined that this wasa mutual oversight, and all parties would require said parts and hardware while petfonning their respective roles under the Contract, Spirit Avionics, Lane Aviation, and Tritex agreed to share the cost of ordering the parts that would be necessary to perfonn the Contract. Each party's respective share was inthe amount of $7,416.91 and was invoiced to each party on the invoices attached as Exhibits AandB attached hereto. 11. After navigating this minor hurdle, performance under the Contract commenced without **~m~** . 12. Following the award ofthe contract to Spirit Avionics and prior to commencement ofany work pursuant tothe contract, the FAA forwarded funds tobe used for the purchase of patts, hm·dware, equipment, and materials exclusively to Spirit Avionics as the sole named contractor. 13. During negotiations and after commencement ofthe Contract, itwas clearly articulated in the Contract between Spirit Avionics and the FAA that all parts, hardware, materials, and equipment purchased for performance ofthe contract were solely the property ofthe FAA. 14. All parts, hardware, and material that were tobe used on at1y aircraft under the Contract were purchased with funds provided solely to Spirit Avionics by the FAA as per the terms ofthe Contract. 15. All parts, hardware, and material were either purchased or fabricated pursuant to engineering data approved bya Designated Engineering Representative. 16. All parts fabrication activities by Spirit Avionics were performed in accordance with FAR 21.9(a)(6). 17. As per Spirit Avionics policy and as articulated inthe Contract, all patts, hardware, and materials that were tobe used in connection with the performance ofthe Contract were received through the Spirit Avionics quality management system, stored atld secured on siteat Spirit Avionics, and issued tothe respective sub-contractor as necessary atthe time work wastobe perfom1ed by either Lane Aviation or Tritex. 18. Atno time did Lane Aviation or Tritex purchase and assume possession to any parts, hardware, or materials from Spirit Avionics that were used in connection with their role under the Contract with the FAA.19. Atno time did Lane Aviation or Tritex issue any purchase orders to Spirit Avionics regarding any parts, hardware, or materials used in connection with their role under the

Contract with the FAA. 20. Atno time did Lane Aviation or Tritex receive any parts from Spirit Avionics tobe accepted into their respective inventories, as Spirit Avionics was the sole custodian of any parts used in connection with the performance of the Contract until such time as these parts were required tobe consumed inthe interior installation activities. Further Declarant sayeth naught. I, Eric C. Ochs, declare this 22nd day of May, 2015, under penalty of petjury that the above statements are true and correct. Eric C. Ochs, CEO Spirit Avionics, Ltd.. .r· ...· .(j) roP **-~. -i~'t:;;j?** ..:=;,7 Spirit Avionics Ltd. **·1<!~**sNru± 4808 E.5th Avenue **#~! ~¥~\f~~::i~-@~]-'.,,**  Columbus, OH 43219Ph:614.237.4271 Fax:614.237.1i387 FIN: 31·1699563 www.spirftavionics.com Lane Aviation Corp Atten: Accts Payable 4389 International Gateway Columbus, OH 43219 WORK ORDER#11027DESCRIPTION Invoice DATE INVOICE# 2124/2011 515449 TERMS CUSTOMER P.O.# AIRCRAFT N# Net 30 QTY RATE AMOUNT Lane Aviation portion of purch-ase and assembly of headliner install kits. Kits supplied· tobe used for the 3rd 1 7,416.91 7,416.91T FAA aircraft thmu9h the 18th airctaft. .•. Subtotal 7.416.91 CMK Fee 0.30% 22.25 ' **~** . frifAi_uJA,,}.\'[; Subtotal $7,439.16 Sales Tax (0.00) $0.00 Make ail checks payable to: E'vE0 Solrlt Avionics Ltd. BaEQ Total $7.439.16 Past Due lnvolces are subJect to 1, oaeee per Payments/Credits $0.00 month. 2015 JUN08 Balance Due $7,439.16 . HEARING DOCKET./". ' **'~1C~7·** Spirit Avionics Ltd. ST'IRIT 4808E.5th Avenue **!.\t}ff:SiL~·Jr.::~"' Columbus~**  OH 43219 ••·•···",,.. Ph:£14.237.4271 Fax:£14.237.6387 FIN: 31-16e9563www .spiritavionlcs .e-om T ritex Corporation 4389 International Gateway Suite 184Columbus, OH 43219 WORK ORDER#11027DESCRIPTION Tri-tex Corporation portion of purch-ase afld assembly of headliner install klts.

3rd through 18th aircraft. SubtotalCMH f=ee **-~-** ,<•"" \**,\~** I1('\ 'J**~**\1P\ Make aH checks payable to: Spirit Aviontcs Ltd Past Due Invoices are subject toa 1.50% !ate fee per month.

invoice DATE INVOICE# 2124/2011 515450 TERMS CUSTOMER P.O.# AIRCRAFT N# Net30 I QTY RATE AMOUNT K.tts supplied tobe used for the! 1 7.416.90 7.416.90T 7,416.90 0.30%1 22.25 '! Subtotal 57,439.15 Sales Tax (0.00) :moo Total $7,439.15 • Payments!Credits $0.00 Balance Due $7,439.15RECElVED JUN082015 HEARING DOCKET

Friday, October 16, 2009 Part m Department ofTransportation Federal Aviation Administration 14 CFR Parts 1, 21, 43, etal. Production and Airworthiness Approvals, Part Marking, and Miscellaneous Amendments; Final Rule53368 Federal Register/Val. 74, No. 199/Friday, October 16, 2009/Rules and Regulations DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Parts 1,21, 43, and 45 [Docket No. FAA-2006-25877; Amendment Nos. 1-64, 21-92, 43-43, and 45-26] RIN 2120-AJ44 Production and Airworthiness Approvals, Part Marking, and Miscellaneous Amendments AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule. SUMMARY: The FAA is amending its certification procedures and identification requirements for

aeronautical products and articles. The amendments will update and

standardize those requirements for production approval holders (P AHs), revise export airworthiness approval requirements to facilitate global manufacturing, move all part marking

requirements from part 21to part 45, and amend the identification requirements for products and articles. The intent of these changes isto continue to promote safety by ensuring that aircraft, and products and articles designed specifically for use in aircraft, wherever manufactured, meet appropriate minimum standards for design and construction. Asa result of this action, the FAA's regulations now better reflect the current global aircraft

and aircraft products and articles manufacturing environment. DATES: This rule is effective April 14,

2010.FOR FURTHER INFORMATION CONTACT: For

that contribute to providing fast, safe, efficient, and convenient transportation (49 United States Code, Subtitle 1,

§ 101). The Federal Aviation Administration (FAA or "we/us/our") is an agency of the Department. The FAA has general authority to issue rules regarding aviation safety, including minimum standards for articles and for the design, material, construction, quality of work, and performance of aircraft, aircraft engines, and propellers (49 U.S.C. 106(g) and 44701). We may also prescribe regulations in the interest

of safety for registering and identifying an aircraft engine, propeller, or article (49 u.s.c. 44104). The FAA is amending its regulations governing the certification procedUTes for products and articles and its requirements for identification and

registration marking. These changes will improve the quality standards applicable to manufacturers, which help ensure that products and articles are produced as designed and are safe to

operate. We are also relocating and standardizing our requirements for marking articles intended for use in aviation. These changes will make it easier to determine whether the correct articles are installed, which will contribute toa greater degree of safety. For these reasons, this rule will bea reasonable and necessary exercise of our rulemaking authority and obligations. Table of Contents I. Background II. Discussion ofthe Final Rule A. Summary of Amendments B. Miscellaneous Requirements C. Compliance Dates

III. Regulatory Notices and Analyses IV dments technical questions concerning this rule, '<:.:::;=:e.:.::.:;::::_....-

contact Barbara Capron and/or Robert Over the last several decades, the

Cook, Production Certification Branch, aircraft manufacturing industry has AIR-220, Federal Aviation evolved significantly. Years ago, most Administration, 800 Independence transport category aircraft were Avenue, SW., Washington, DC 20591; manufactured in the United States. A telephone (202) 385-6360 or (202) 385- typical business model consisted ofa 6358; e-mail: barbara.capron®faa.gov or production certificate (PC) holder with robert.cook@faa.gov. For legal questions a relatively small number of suppliers. concerning this rule, contact Angela Today, the number of aircraft Washington, AGC-210, Office ofthe manufacturing suppliers has increased Chief Counsel, Federal Aviation dramatically. Conversely, through the Administration, 800 Independence years, the aircraft industry has seen a Avenue, SW., Washington, DC 20591; steady decline in the number ofU.S.- telephone (202) 267-7556; e-mail: based transport category aircraft angela. washington@faa.gov. manufacturers. Those manufacturers, SUPPLEMENTARY INFORMATION: who once predominantly oversaw the production of replacement articles for Authority for this Rulemaking their aircraft, now witness the ever

Under the laws ofthe United States, increasing production of replacement the Department of Transportation has and modification articles by the responsibility to develop independent parts manufacturers. transportation policies and programs Suppliers, including parts

manufacturers, were located mainly in the United States decades ago; now, they are located all over the world. Suppliers are manufacturing greater percentages of aircraft products and articles. Asa result, aircraft are now manufactured inan increasingly global environment. The FAA did not envision such an expansion in aircraft manufacturing when the certification rules were first promulgated in 1964. The industry has been the subject of burgeoninginternationalization in the last several decades. Evidence of this fact is that now, more than ever before, the United States has more bilateral agreements

with foreign civil airworthiness authorities addressing the production, import, and export of aircraft. The old certification rules are too restrictive to accommodate today's manufacturing paradigm. Removing some of those restrictions will greatly improve our

regulatory efficiency. This final rule is the FAA's response to the changing dynamics ofthe aircraft manufacturing industry, and this final rule contains requirements that reflect the current global environment. The evolution of the manufacturing industry prompted the FAA to publish inthe Federal Register a notice of proposed rulemaking (NPRM) on "Production and Airworthiness

Approvals, Parts Marking, and Miscellaneous Proposals" (71 FR 58914, October 5, 2006). In that notice, we proposed comprehensive changes to certification procedures and identification requirements for

aeronautical products and articles. In general, we proposed to:(1) Standardize quality system requirements for all Production Approval Holders (PAH); (2) require PAHs, including those producing under Type Certificate, to mark all articles, including subassemblies and components; (3) require PAHs to issue airworthiness approvals for aircraft engines, propellers, and other aviation articles; (4) require PARs to create a certifying staff to issue those approvals; and (5) revise export airworthiness approval requirements to facilitate global manufacturing. The

NPRM contains the background and rationale for this final rule, and except where we have made revisions to the proposal in this document, you should refer to the NPRM for that information. Commenters to the NPRM represented aircraft and parts manufacturers; repair stations; the U.S. Small Business Administration, Office of Advocacy (SEA's Office of Advocacy); industry groups; and other civil aviation authorities and individuals. While there was much support for the general intentFederal Register/Val. 74, No. 199/Friday, October 16, 2009/Rules and Regulations 53369 ofthe proposed rule changes, the largest percentage ofthe commenters opposed the following four specific proposals:

1. Identification Requirements for Parts, Appliances, and Technical Standard Order Articles The NPRM proposed to require manufacturers to mark each component ofan aircraft engine or propeller, each part and component thereof, and each appliance and component thereof. Until now, the FAA has only required marking ofthe part; not the individual components ofthe part. Over forty commenters rejected the proposal, stating that the requirement to mark

each component would be cost prohibitive. Also, the proposal would necessitate a change inall associated

drawings and design data to reflect the marking requirement. 2. Mandatory Issuance of Airworthiness Approvals for Each Aircraft Engine, Propeller, and Article The NPRM contained a proposal that would have required PAHs to issue an airworthiness approval for each aircraft engine, propeller, or article produced

under the production approval that conforms toits approved design and is ina condition for safe operation. Currently, and under the old rules, an airworthiness approval is mandatory for products and articles only when those products and articles are being exported. The FAA has never required that airworthiness approvals be issued domestically. Commenters stated that because a disproportionately larger number of aircraft engines, propellers, and articles are shipped domestically than are exported, mandatory issuance

of airworthiness approvals would impose a substantial cost burden on manufacturers.3. Creation of Certifying Staff To Issue Airworthiness Approvals We proposed in the NPRM to require PAHs to develop procedures for establishing and maintaining certifying staff that would be responsible for issuing airworthiness approvals for aircraft engines, propellers, and articles, including the issuance of export airworthiness approvals. Presently, only the FAA orits designees issue airworthiness approvals. Commenters opposed this requirement, arguing that it would necessitate additional staff training and implementation of new procedures for manufacturers, thus unnecessarily escalating the cost of manufacturing.

4. Standardized Quality System RequirementsInthe NPRM, we proposed to

standardize quality system requirements for PAHs so that all PAHs comply with the same setof quality system requirements, regardless ofthe product or article produced. We received over 65 comments (including those from the SEA's Office of Advocacy; industry groups representing manufacturers, airlines, and pilots; and aircraft, aircraft engine, and aircraft parts manufacturers). An overriding concern ofthe commenters was that the quality system requirements, if adopted, would be burdensome to implement, particularly for small businesses. Commenters asserted that the requirements would impose substantial additional costs on industry with no measurable increase in safety. In addition to the commenters noted above, there were commenters on other proposals in the NPRM. We received over 100 comment letters (with over 500 comments) in response tothe NPRM. After evaluating all comments received,

we proceeded with this rulemaking action.II. Discussion of Final Rule A. Summary of Amendments 1. Identification Requirements In response tothe concerns and issues raised, the FAA has reconsidered some ofits proposals and made several substantive changes to the proposed

regulatory text. Our most significant change pertains tothe proposal to require marking ofall component parts and appliances. Fifty-two commenters (including SEA's Office of Advocacy;

industry groups representing manufacturers, airlines, and pilots; and aircraft, aircraft engine, and aircraft parts manufacturers) asserted the proposed requirement to mark detail parts would be cost prohibitive and would provide no verifiable safety benefit. Commenters pointed out some products or articles consist of hundreds or sometimes thousands of detail parts, arguing that the costs associated with changing the drawings and design data could cost small businesses over one billion dollars to implement. When we performed our initial regulatory flexibility assessment (IRF A) for the NPRM, we did not recognize the extent to which design data would have tobe changed in order to accommodate the proposed marking of detail parts. Given that each product or article consists of hundreds or thousands of sub-tiered drawings, allof which would have tobe changed, we agree with the

commenters that we put forth a costprohibitive proposal. Accordingly, the final rule does not contain this requirement.Asa result ofthe many comments in

opposition to our marking proposal, we revised the proposed rule to provide for methods of identification more flexible than marking. PAHs must mark the product or article that they have been granted a certificate or approval forin accordance with part 45. However, the**sub~assemblies** and component parts of that product or article do not have tobe marked or identified unless they leave the PAR's facility asa separate article (e.g., replacement or modification part).**Sub~assemblies,** component parts, or replacement articles that leave the PAH's facility as FAA-approved must include the manufacturer's part number and name, trademark, symbol, or other FAA-approved PAH identification (e.g., the production approval number, cage code, or Federal supply code for manufacturers (FSCM)). A manufacturer or person producing under subparts F, G,K,or0 may choose any method to meet this requirement. Methods include, but are not limited to, marking the article, attaching atagtothe article, placing the article ina container, or providing a document with the article with the information previously mentioned. This identification requirement codifies current industry practice and is less stringent than the proposed requirement. This identification requirement is not driven bya history of aviation accidents where inadequate marking or identification was necessarily found to bea primary cause; rather, itis part of

a systemic approach to safety. Accident investigations and safety management system analyses show that accidents are

rarely caused by one event. Accidents are the result ofa chain of events. If any ofthe events had not occurred, an accident may have been prevented. This requirement assists in the traceability of articles and helps reduce the installation of incorrect articles, thereby preventing accidents. Because identification of articles is simply a byproduct ofthe marking proposal, the FAA has determined that itis within the scope of this rulemaking. The economic effects of this requirement have been evaluated and determined tobe**cost~neutral** (i.e., having no economic impact).

In the NPRM, we proposed to revise § 45,15 to specify particular marking requirements for parts manufacturer approval (PMA) and technical staudard order (TSO) articles. In doing so, we removed the former requirements for producers of PMA articles to mark thoseFederal Register/Val. 74, No. 199/Friday, October 16, 2009/Rules and Regulations 53373 suggested the meaning ofthe term "internal" is relative toa PAH's quality system; therefore, audits of suppliers would fall within the scope of internal audits because a supplier is under the PAH's quality system. The commenter requested a clarification ofthe definition of "internal audits" asit

pertains to suppliers.

The concept of what constitutes "internal" for the purposes ofan audit is relative to the PAR's quality system. We think the regulation is sufficiently clear. Suppliers are controlled through

thePAH's quality system, and procedures for suppliers' audits are dictated in§ 21.137(c), Supplier controL Conversely,§ 21.137(1) denotes

procedures for the conduct of internal audits ofthe effectiveness ofthe PAR's Supplier Control System. 4. Replacement and Modification Articles Former§§ 21.303(a) and (b) addressed production requirements for replacement and modification parts to ensure that only articles that conform to

their approved design and arein condition for safe operation are installed in type-certificated aircraft. With certain exceptions, the former rule prohibited the production of such parts for sale for installation ona type-certificated product, unless those parts were produced pursuant toa PMA. Exempted from this requirement were parts produced under aTCor PC, parts produced byan owner or operator for maintaining or altering his own product, parts produced under an FAA TSO, and standard parts. This final rule consolidates those former requirements in newly established§ 21.9(a), with some revisions. Under today's rule, the FAA will now prohibit the production

ofa replacement or modification article ifthe producer knows, or should know, that the part is reasonably likely tobe installed ona type-certificated product

unless the article part is: • Produced under aTC; • Produced under an FAA production approval;•A standard part; •A commercial part, as defined in

§ 21.1;• Produced byan owner or operator for maintaining or altering that owner or operator's product; or • Fabricated byan appropriately rated certificate holder with a quality system and consumed in the repair or alteration ofa product in accordance with part 43, The provisions of§ 21.9 apply tothe producer of any part that may be used asa replacement or modification article, not just parts that were produced

specifically as replacement or person knew or should have known that modification articles. In determining apart he produced was reasonably whether a violation has occurred, one likely tobe installed ona typefactor the FAA will consider is whether certificated product. the article was represented as suitable Numerous commenters (including for installation ona type-certificated Aircraft Electronics Association (AEA), product. Producers of replacement or Aviation Suppliers Association (ASA), modification articles who represent and repair stations) stated our proposed those articles as suitable for installation rule no longer contained language ona type-certificated product may bein prohibiting the production of parts "for violation of§ 21.9 unless the articles sale for installation ona typewere produced under one ofthe above certificated product." In addition, the**captions.** SEA's Office of Advocacy asked the Representation may include, butis FAA to clarify and confirm that the ot limited to,a producer advertising its existing ability ofa repair shop to parts in aviation magazines; produce apart during maintenance representing the part with statements activities remains in place. Since the such as "aviation quality" or "as NPRM proposed to remove that previously installed on"; issuing language, several repair stations asked aviation parts catalogs; or marketing at usto clarify whether they will still be aviation trade shows and conferences. able to produce articles that will be Owners, operators, producers, and consumed inthe course ofa repair maintenance providers rely on these**t:~thout** violating§ 21.9(a). representations to determine the W Itisnot our intent to preclude that

airworthiness ofan aircraft, orthe activity. To address that concern and acceptability of products and articles for clarify our intent, we established an a given application. Therefore, these exception in§ 21.9(a)(6). This representations must be truthful. exception, which was not proposed in Assessing representation ofapart is just the NPRM, allows for the production of one means of determining whether a articles without benefit ofa production violation of§ 21.9(a) has occurred. approval when articles are fabricated by

Absent any such representation, the an appropriately rated certificate holder

FAA may still finda violation has with a quality system and consumed in occurred if evidence can be established the repair or alteration ofa product or that the producer knows or should article in accordance with part 43. know that the part is reasonably likely Maintenance providers who do not have tobe installed ona type-certificated a quality system may continue to product. fabricate owner-produced articles for Finally, newly established§ 21.9(c) installation on type-certificated aircraft would allow a person to represent an using the guidelines set forth in Policy article as suitable for installation ona Memorandum, Definition of "Owner type-certificated aircraft ifthe article Produced Part," Section 21.303(b)(2), was declared surplus by the U.S. Armed August 5, 1993, Forces and was intended for use on that SEA's Office of Advocacy asked the model of U.S. Armed Forces aircraft. FAA to clarify how the rule would

We received thirty-seven comments impact the distribution of parts and on this section. SEA's Office of existing inventories based on small Advocacy requested additional business concerns that the proposed clarification on how the provisions of rules will forbid anyone from selling this section ofthe rule would apply. In civil aircraft parts unless they are the addition, two individuals stated the rule manufacturer ofthe part, essentially language "ifa person knows, or should forcing current parts distributors out of know, that the part is reasonably likely business. This phrase was used in tobe installed ona type-certificated former§ 21.303(a). We disagree. Section product" is very subjective, and it will 21.9 governs the production, not the be difficult to properly and consistently sale, of articles and does not prohibit enforce. It believed distributors, owner/ distributors from selling articles. operators, and manufacturers could be SEA's Office of Advocacy was also subject to legal action due to concerned that the regulation does not misunderstandings ofthe rule. The contain express provisions concerning expected misunderstandings would inventories of existing articles. That arise from the likelihood of this final commenter recommended we clarify rule affecting parts manufacturers not that any new production requirements subject to FAA regulation before its on articles or products apply only to issuance. However, we believe the new articles manufactured after a certain rule is clearly stated, objective, and date and that the requirements do not enforceable. As we apply the standard, render current articles or products in we will examine all relevant facts and inventory unusable. Like the Office of circumstances to determine whether a Advocacy, ASA believed the rule would