ASSESSMENT OF FAA’S RISK-BASED 

SYSTEM FOR OVERSEEING AIRCRAFT 

MANUFACTURERS’ SUPPLIERS 

Federal Aviation Administration 

Report Number: AV-2008-026 

Date Issued: February 26, 2008 

 
U.S. Department of 

Memorandum

Transportation 

Office of the Secretary 

of Transportation 

Office of Inspector General 

Subject: ACTION: Assessment of FAA’s 

Risk-Based System for Overseeing 

Aircraft Manufacturers’ Suppliers 

Federal Aviation Administration 

Date: February 26, 2008 

Report Number AV-2008-026 

From: David A. Dobbs 

Principal Assistant Inspector General 

 for Auditing and Evaluation 

Reply to 

Attn. of: JA-1 

To: Acting Federal Aviation Administrator 

This report presents the results of our audit of the Federal Aviation 

Administration’s (FAA) oversight of aircraft manufacturers’ quality assurance 

systems for suppliers. Because aircraft and engine manufacturers are increasingly 

taking an international partnership approach to business, aircraft parts and 

component suppliers now produce significant parts of U.S.- and foreignmanufactured aircraft. For example, suppliers may ship a completed section of an 

aircraft body (fuselage), with much of the wiring already completed, to the 

primary manufacturer who assembles the final units together. U.S. and foreign 

aircraft and engine manufacturers have opted for this approach because it spreads 

risk and cost across a network of domestic and foreign partners, speeds up product 

development, and simplifies assembly procedures. 

The audit objective was to evaluate FAA’s oversight of aircraft manufacturers’ 

quality assurance systems for domestic and foreign suppliers. Although aviation 

manufacturers are ultimately responsible for the quality of their products, FAA’s 

Aircraft Certification Service personnel oversee manufacturers’ processes for 

ensuring that the products meet approved design specifications and are in a 

condition for safe operation. During this review, we worked with personnel from 

an international air transport consulting firm and performed supplier control audits 

at companies that supply parts to Boeing, Bombardier/Learjet, General Electric 
2

Aircraft Engines, Rolls-Royce, Pratt & Whitney, and Airbus.1 We also analyzed 

FAA’s process for identifying and selecting suppliers it audits to determine the 

effectiveness of manufacturers’ supplier oversight systems. Exhibit A details our 

scope and methodology. Exhibit B lists the entities we visited or contacted. 

BACKGROUND 

Inspectors in FAA’s Manufacturing Inspection District Offices (MIDO) oversee 

FAA-approved manufacturers2

 in their geographic areas. There are 23 MIDOs3 

and 1 Certificate Management Office,4

 with 195 inspectors to oversee the 

1,738 FAA-approved manufacturing facilities in the United States. Although FAA 

does not approve manufacturers in other countries, U.S. manufacturers use both 

domestic and foreign suppliers to build their products. FAA is to monitor these 

suppliers as part of its oversight of FAA-approved manufacturers’ quality 

assurance systems. 

Manufacturers are increasingly using domestic and foreign parts and system 

suppliers to reduce their manufacturing costs and spread risks among multiple 

partners. Suppliers provide investment capital and assume responsibility for the 

design and production of systems and sub-systems supplied to prime 

manufacturers. For example, Boeing’s risk-sharing partners in Japan, Italy, and 

the United States will build composite structures for the Boeing 787, which will 

include sub-systems that are already certified, tested, and ready for final assembly. 

According to a March 2005 study by the U.S. Department of Commerce,5

 the 

practice of subcontracting major portions of aircraft manufacturing also opens 

foreign markets for future aircraft sales. Major manufacturers develop agreements 

with foreign suppliers to produce major segments of their aircraft in exchange for 

large aircraft orders from the country’s carriers. These agreements can amount to 

billions of dollars in sales for the manufacturer. For example, in order for Boeing 

to sell Boeing 747s to Air China, at least part of the final product (no matter how 

small) must be manufactured or assembled in China. 

 

1

 FAA does not have direct oversight responsibility for Airbus aircraft because they are not produced in the 

United States. However, according to Boeing representatives, 70 percent of the suppliers used by Airbus are also 

used by Boeing. 2

 FAA-approved manufacturers are those manufacturers that hold an FAA certificate, such as a production certificate 

or a parts manufacturer approval. 3

 Five offices are Manufacturing Inspection Satellite Offices, which are extensions of nearby MIDOs. 4

 The Certificate Management Office is dedicated to oversight of the Boeing Company. The Certificate Management 

Office is located in Renton, Washington, with other offices in Everett, Washington (co-located with Boeing 

production facilities). 5

 “The U.S. Jet Transport Industry: Competition, Regulation, and Global Market Factors Affecting U.S. Producers,” 

U.S. Department of Commerce, International Trade Administration, March 2005. 

 
3

The evolution of Boeing aircraft over the last 40 years clearly illustrates how 

manufacturing business models have changed. As shown in figure 1, Boeing’s 

first aircraft were built almost exclusively in the United States. In contrast, the 

airframe parts for the new Boeing 787 will primarily be manufactured by foreign 

suppliers. 

 Figure 1. U.S.- Versus Foreign-Supplied Parts on 

Boeing Aircraft Models 

Part of 

Airframe 

727 

(1964) 

737 

(1967)

747 

(1969)

757 

(1982)

767 

(1982)

777 

(1995)

787 

(2008)

Wings 

Inboard Flaps 

Outboard Flaps 

Engine Nacelles 

Engine Strut 

Nose 

Front Fuselage 

Center Fuselage 

Center Wing Box 

Keel Beam 

Aft Fuselage 

Stabilizer 

Dorsal Fin 

Vertical Fin 

Elevators 

Rudder 

Passenger Doors 

Source: This information was obtained from multiple sources, including independent technical reviews 

and manufacturers’ and suppliers’ websites. 

RESULTS IN BRIEF 

Since 1998, FAA has worked towards implementing a risk-based oversight system 

for aviation manufacturers. However, this system was implemented in fiscal year 

(FY) 2003 and does not take into account the degree to which manufactures now 

use suppliers to make aviation products. FAA based the new system on historical 

manufacturing business models, in which manufacturers maintain primary control 

over the production of their aircraft rather than use suppliers to design and 

manufacture extensive portions of aircraft. 

 
4

We found that FAA needs to improve its risk-based oversight system as it does not 

ensure that manufacturers regularly audit their suppliers. FAA also does not 

perform enough audits of manufacturers’ suppliers (i.e., supplier control audits) to 

test how well manufacturers’ quality assurance systems are working. Rather, FAA 

requires its inspectors to conduct, at most, four supplier audits regardless of how 

many suppliers a manufacturer uses. This process is not adequate to determine the 

risk that a manufacturer will produce substandard parts. FAA’s process for 

supplier audits should be designed to address newer manufacturing business 

models, which have expanded the number of foreign suppliers, locations where 

parts are assembled, and the degree of independent manufacturing responsibility 

suppliers now have. 

We also found that the risk assessments FAA inspectors use to evaluate a 

manufacturer’s potential for producing substandard products exclude pertinent 

information that would aid in evaluating risks. For example, inspectors do not 

routinely evaluate the results of manufacturers’ audits of their suppliers. In our 

view, manufacturers’ assessments of their suppliers, if properly conducted, would 

provide valuable information that FAA inspectors could use to assess risk and 

target inspection resources. Risk-based oversight is the right direction for FAA, 

but it needs to strengthen its system for overseeing aircraft and aircraft part 

suppliers so that its oversight is effective in today’s manufacturing environment. 

Finally, we determined that FAA’s inspections at supplier facilities were too 

focused on specific tasks rather than overall quality systems. Using a more 

uniform approach to supplier audits, our aviation consultants identified widespread 

deficiencies at supplier facilities used by major aviation manufacturers. We found 

that some aircraft manufacturers had not designed effective oversight systems for 

their aircraft part suppliers. Although manufacturers are ultimately responsible for 

the quality of parts used on their aircraft, three of the five manufacturers we 

reviewed did not have procedures in place to routinely visit all their critical6

suppliers and sub-tier suppliers. Consequently, neither manufacturers nor FAA 

inspectors have provided effective oversight of suppliers; this has allowed 

substandard parts to enter the aviation supply chain. 

We made a series of recommendations designed to enhance FAA’s oversight of 

manufacturers’ suppliers. Our full recommendations are listed on page 15. 

On December 6, 2007, we met with FAA officials to discuss our draft report 

issued on November 14, 2007. During this meeting, the manager of the 

Production and Airworthiness Certification Division stated that FAA generally 

 

6

 We considered critical parts as those included on FAA’s Category Parts List, or parts or part assemblies whose 

failure could prevent continued safe flight and landing, degrade performance, or cause loss of capability to conduct 

certain flight operations. 

 
5

agreed with our recommendations and considered them to be reasonable. In its 

December 18, 2007, written response to our report, FAA partially concurred with 

one recommendation and fully concurred with the remaining five. FAA also 

provided action plans to address each recommendation. FAA’s comments and our 

response are fully discussed on pages 15 through 17. 

FINDINGS 

We found weaknesses throughout FAA’s oversight system for manufacturers and 

their suppliers. First, FAA has not ensured that manufacturers are providing 

oversight of their suppliers. Manufacturers are the first line of defense in ensuring 

the products used on their aircraft meet FAA and manufacturers’ standards. Yet, 

during the 24 months preceding our review, manufacturers had not audited 6 of the 

21 critical part suppliers we visited. 

Second, FAA does not require inspectors to perform enough audits of suppliers to 

determine how well manufacturers’ quality assurance systems are working. 

FAA’s guidance for overseeing manufacturers’ quality assurance systems only 

requires inspectors to perform, at most, four supplier audits, regardless of how 

many suppliers the manufacturer uses. 

Third, the systemic deficiencies we identified at the 21 supplier facilities we 

visited indicate that manufacturers and FAA need to strengthen their oversight of 

these facilities. For example, nearly half (43 percent) of the suppliers had 

deficiencies in their tool calibration and employee training programs. Deficiencies 

in these areas could impact the quality of the parts these suppliers produce. 

FAA Oversight of Manufacturers’ Quality Assurance Systems for 

Suppliers Needs Improvement 

Manufacturers are responsible for ensuring that their aviation products are 

properly produced. Yet, three of the five major manufacturers we reviewed had 

not developed requirements to perform regular supplier audits. FAA regulations 

require manufacturers to have an FAA-approved quality control system. Further, 

FAA guidance states that this system should include procedures for initial and 

periodic supplier audits. Although all five manufacturers we reviewed had 

supplier oversight procedures in their quality assurance manuals, only two had 

developed requirements to perform regular supplier audits (e.g., once every 

2 years). For example, one manufacturer allowed mail-in surveys as an alternative 

to on-site audits. Another conducted initial supplier audits but established no 

timeframes for re-evaluation. FAA requires that manufacturers’ quality control 

systems provide a means to determine that supplier-produced components 

 
6

(e.g., materials, parts, and subassemblies) or services (e.g., special processes, 

calibration, etc.) conform to FAA-approved design standards and are in condition 

for safe operation. On-site audits permit manufacturers to verify that the suppliers 

they use produce parts according to these standards. 

FAA Needs To Strengthen Its Risk Assessment Process 

The second line of defense for ensuring that only safe aviation products enter the 

market is FAA’s oversight structure for manufacturers and their suppliers. FAA 

inspectors currently perform risk assessments of each manufacturer to determine 

how many supplier audits FAA will conduct to test the effectiveness of 

manufacturers’ quality assurance systems. In conducting these audits, FAA 

inspectors review the suppliers’ organizational management structure, procedures 

for product design control, software quality assurance, manufacturing processes, 

manufacturing controls (including calibration), and supplier control (how well the 

suppliers oversee the vendors that supply parts to them). 

The results of these audits provide inspectors with information on how well 

manufacturers are overseeing their suppliers. For example, a series of negative 

findings at multiple suppliers for a manufacturer would indicate the manufacturer 

needs to strengthen its quality assurance system or audit processes. Yet, when 

they perform risk assessments and determine how to target FAA inspections, 

inspectors do not consider the number of suppliers that manufacturers use or the 

level of responsibility that suppliers have in producing aviation products. 

Additionally, FAA inspectors are not required to evaluate the results of supplier 

audits conducted by manufacturers. In our view, these results would be a valuable 

source of information in assessing risk, identifying systemic weaknesses, and 

determining where to use inspection resources. For example, in one supplier audit 

we reviewed, a manufacturer found part inspections were not signed off by the 

supplier’s part inspection personnel, operations that were listed incorrectly, and 

gauges that were not calibrated. In another manufacturer’s audit, the auditor 

identified paperwork differences on the number of items shipped or scrapped and 

determined there was no evidence of any internal quality audits for a 2-year 

period. This information could aid inspectors in identifying problem suppliers as 

well as manufacturers’ quality assurance programs that work well and need less 

oversight. For example, an inspector responsible for engine manufacturing 

oversight stated that he only reviewed prior audits conducted by the manufacturer 

about 50 percent of the time. 

FAA’s risk indicators do not provide inspectors with an effective tool to 

consistently assess risk. FAA developed 21 risk-based indicators to aid 

inspectors in assessing manufacturers’ quality systems. For example, FAA 

 
7

determined that events such as key management changes, new manufacturing 

processes, and workforce reductions were integral to assessing the risk that 

manufacturers could produce substandard parts. 

Although the 21 indicators focused on areas within a manufacturer’s operation that 

might indicate risk, FAA did not consider how individual inspectors could apply 

those indicators. For example, “reduction in workforce” may or may not have an 

impact on safety and the potential for producing substandard parts, depending on 

how, when, and where the staff reduction occurred. Given their institutional 

knowledge and the room for subjectivity in the risk assessments, each inspector is 

prone to weigh the 21 criteria differently. To illustrate, we identified an engine 

manufacturer that was rated differently every year over 4 years by separate 

inspectors. Although the same 21 areas were evaluated each time, 1 inspector 

considered the manufacturer a high risk, while another did not. 

A sound evaluation of the risk criteria when assessing risk with aviation 

manufacturers is critical because inspectors rely on the results of these 

assessments to determine how many supplier audits they will conduct to test the 

effectiveness of manufacturers’ quality assurance systems. That is, the level of 

risk determined by inspectors dictates the level of oversight inspectors are required 

to provide at a manufacturer and its supplier facilities. For example: 

• A high-risk manufacturer will be inspected every 3 months, and the inspector 

will have to perform audits of at least four of the manufacturers’ suppliers that 

year. 

• A low-risk manufacturer will be inspected once every 3 years, and the 

inspector will not have to perform any supplier audits. 

Other factors may also affect inspectors’ application of the risk indicator criteria. 

For example, because these determinations impact their workload, inspectors may 

have incentive to lower the risk assessment of the manufacturer for which they 

have oversight responsibility. The manager for one MIDO agreed that this was a 

possibility and advised us that his inspector workload had been cut almost in half 

under the new risk-based system. 

We also found that some inspectors’ application of the risk assessment process 

may have been hindered because of their resistance to change. For example, some 

inspectors disregarded FAA guidance on how to select suppliers for review 

because they believe the system removes the consideration of the “field 

knowledge” inspectors possess for the facilities they oversee. Inspectors at three 

of the five offices we visited judgmentally selected suppliers for review rather than 

using the prescribed risk-based methodology. Additionally, we identified a 

manager at one office that changed the results of the statistical sample because he 

 
8

did not have sufficient travel funds to complete audits of the selected foreign 

suppliers. The manager instructed inspectors to select suppliers in their local area 

in place of the foreign suppliers. 

FAA’s risk indicators overlook the increased role of suppliers. In assessing 

risks and determining how to target their inspection resources, inspectors do not 

consider the number of suppliers that manufacturers use and the level of 

responsibility suppliers have assumed. For example, at the time of our review, 

FAA had never inspected one critical parts supplier of major structural 

components, such as landing gear. Additionally, FAA does not maintain a 

complete universe of manufacturers’ foreign, domestic, and sub-tier suppliers to 

identify inspection priorities. 

The increased use of suppliers is not considered in FAA’s risk assessment process. 

This is particularly troubling because, since 2001, FAA has highlighted 

manufacturers’ oversight of suppliers as one of the top six areas in which the 

manufacturing industry must improve. For example, FAA determined in FY 2005 

that 10 percent of the quality assurance system violations inspectors identified at 

manufacturing facilities were related to supplier oversight. Therefore, FAA’s own 

internal reviews have determined that manufacturers are not providing sufficient 

oversight of their suppliers. 

We acknowledge that it is not FAA’s responsibility to provide oversight of 

manufacturers’ suppliers. However, in our view, it is counterintuitive to decrease 

the number of supplier audits that FAA performs when use of suppliers has 

steadily increased and FAA has consistently determined that supplier oversight is 

a problem. 

FAA Does Not Require Enough Supplier Control Audits To Assess 

Manufacturers’ Quality Assurance Systems 

FAA’s supplier selection process results in widely disparate and, in some cases, 

very limited audit coverage of manufacturers’ suppliers. To illustrate, based on 

FAA guidance, a manufacturer that has 2,000 suppliers and is assessed as a high 

risk will require the same number of supplier audits as a high-risk manufacturer 

that has only 20 suppliers. Inspectors are only required to perform, at most, four

supplier audits regardless of the size of the manufacturer, the number of suppliers 

used, or the criticality of the part produced. For example, for 2 consecutive years, 

FAA scheduled the maximum of four supplier audits for a manufacturer of 

agricultural aircraft (i.e., crop dusters). Conversely, for one of these years, another 

FAA inspector did not perform any supplier audits for a major engine 

manufacturer for commercial aircraft. 

 
9

Supplier control audits are a primary tool that FAA uses to assess how well 

manufacturers’ oversight systems are working. Equally important, these audits 

function as a second layer of control for preventing improperly produced parts 

from entering the market. However, as shown in the table below, in each of the 

last 4 years, FAA has inspected an average of 1 percent of the total suppliers used 

by the five manufacturers we reviewed. At FAA’s current surveillance rate, it 

would take inspectors at least 98 years to audit every supplier once. This is 

particularly troubling because, as discussed previously, manufacturers are not 

evaluating these suppliers frequently or comprehensively. 

Table. Number of Supplier Audits Completed by FAA 

for Five Major Manufacturers 

Supplier Audits Completed by FAA 

Manufacturer No. of 

Supplier 

Facilitiesa/

FY 2003 FY 2004 FY 2005 FY 2006 Avg. % 

Per FY 

A 4,012 2 1 7 4 1% 

 Bb/ 2,553 31 26 15 27 1% 

C 706 5 4 4 6 1% 

D 489 5 3 1 2 1% 

E 367 0 2 3 2 1% a/ Number of supplier facilities based on information obtained for 2004. b/ This manufacturer operates seven separate manufacturing divisions. As a result, FAA evaluated the seven divisions 

separately for risk assessment purposes, which resulted in more supplier control audits. 

Source: FAA's National Supplier Control Audit Schedules, FY 2003-2006 

Concerns about supplier oversight are even more serious given the number of 

countries around the world that produce parts for U.S. aircraft manufacturers 

without a bilateral agreement with the United States.7

 When entering into a 

bilateral agreement, the United States agrees to accept the oversight of 

manufacturers provided by that country’s aviation authority, among other things. 

A fundamental consideration in whether or not to enter into a bilateral agreement 

is the capacity and ability of the foreign civil aviation authority to oversee aviation 

manufacturing. 

Yet, suppliers in some countries that do not have bilateral agreements with the 

United States provide significant contributions to the production of U.S. aircraft, 

such as engine parts and aircraft doors. As shown in figure 2, 15 countries with 

which the United States does not have a bilateral agreement produce parts for U.S. 

aircraft manufacturers. For example, one U.S. engine manufacturer has eight 

suppliers in Mexico, but the United States does not have a bilateral agreement with 

 

7

 A bilateral agreement is a government-to-government agreement with other countries to provide for the reciprocal 

acceptance of aeronautical products. 

 
10

this country. Therefore, FAA has no assurance that these countries are providing 

adequate oversight of the operations of suppliers in their countries. 

Figure 2. Countries Without a Bilateral Agreement That 

Make Parts for U.S. Manufacturers 

Chile 

Mexico 

Portugal 

Costa 

Rica 

Tunisia 

Morocco 

Greece 

Luxembourg Ukraine 

Uzbekistan Turkey 

Pakistan 

UAE India 

S. Korea 

Source: Manufacturers’ supplier lists 

Effective oversight of suppliers is essential to ensure that substandard parts do not 

enter the aviation supply chain. For example, in February 2003, 1 supplier 

released approximately 5,000 parts that were not manufactured properly for use on 

landing gear for large commercial passenger aircraft. At least one of these landing 

gear parts failed while in service. While FAA became aware of this large-scale 

breakdown at this supplier in 2003, it has not performed a supplier audit at this 

facility in the last 4 years. 

To obtain assurance that manufacturers’ quality assurance systems are operating 

properly, FAA must develop a system of supplier oversight in which the number 

of suppliers audited more closely correlates to the number of suppliers used and 

ensure its inspectors follow this system. Given the trend toward increased use of 

suppliers, FAA must adjust its oversight approach so that its surveillance occurs 

where the majority of aviation manufacturing takes place: foreign and domestic 

supplier facilities. 

Systemic Weaknesses Identified at Supplier Facilities Indicate That 

Manufacturers and FAA Must Strengthen Supplier Surveillance 

To test manufacturers’ and FAA’s oversight of supplier facilities, our aviation 

consultant reviewed operations at 21 foreign and domestic suppliers used by major 

U.S. and foreign aircraft manufacturers. The suppliers we selected produced key 

parts for these major manufacturers but had not been inspected by FAA in the 

 
11

2 years preceding our review. The checklist we used to conduct these audits 

addressed the same areas that FAA inspectors review when conducting supplier 

control audits. Our on-site audits covered the supplier’s quality system—from the 

contracts with the manufacturer to the actual parts production, part inspections, 

facility and production line safety, and shipping. 

We identified widespread discrepancies at 20 of the 21 suppliers we reviewed, 

such as suppliers’ inadequate oversight of the part and component suppliers they 

use (i.e., sub-tier oversight), use of out-of-date tools and equipment, and failure to 

complete all product testing before shipping parts to the manufacturer. The 

pervasive nature of the discrepancies we identified indicates that manufacturers 

and FAA must improve their oversight processes. 

While we found incidents of non-compliance in every area audited, we found 

widespread non-compliance in sub-tier supplier oversight, tooling calibration, 

employee training, and inspection (see figure 3). 

Figure 3. Percentage of Supplier Facilities Where 

Deficiencies Were Found 

Product Conformity

Follow

Mfg. Directions

Mfg. Oversight

Product Inspection

Sub-Tier Oversight

FAA Oversight

Quality System

Records/ Documentation

Employee Training

Tooling Calibration

Valid Contract

0

3

6

9

12

15

18

21

Category of Deficiency 

Number of Facilities .

10%

24% 29%

38% 43% 43%

62%

67% 67%

24% 19%

Source: DOT-OIG FAA OEM Oversight 

Audit, Simat, Helliesen and Eichner, Inc. 

(SH&E)

Of the 21 facilities audited, 6 had little or no recorded oversight by the 

manufacturer during the 24 months preceding our visit. During the same period, 

five of the six supplier facilities that had not received oversight by the 

manufacturer also had not received any oversight by FAA. These six facilities 

manufacture critical parts, such as aircraft lighting systems, cockpit voice 

 
12

recorders, and pressure switches and controls. The specific weaknesses we 

identified are detailed below. 

Suppliers did not provide adequate oversight of their part and component 

sub-tier suppliers. Manufacturers were not verifying that their suppliers were 

providing effective oversight of the sub-tier suppliers they used to produce parts. 

This is a critical safety issue, as demonstrated by four engine failures that occurred 

in FY 2003 due to faulty speed sensors on fuel pumps obtained from a supplier. 

Three of the engine failures occurred on the ground and one occurred in flight. 

The part failures were traced to unapproved design changes made by a sub-tier 

supplier. In all, 152 parts were manufactured in the suspect population. 

Examples of the problems we identified in this area include the following: 

• For the 2 years prior to our review, 14 of 21 suppliers (67 percent) did not 

perform regular, on-site evaluations of their sub-tier suppliers. These suppliers 

relied on mail-in self-evaluations provided by their sub-tier suppliers or relied 

on an industry standard quality system certification (e.g., ISO 9001) in place of 

an on-site audit. 

• A supplier of passenger service units (the panels above a passenger’s seat with 

the reading light and the panels that open to reveal the emergency oxygen 

masks) relied on mail-in self-evaluations for its sub-tier suppliers. Any subtier supplier that makes the supplier’s “10 worst suppliers” list (based on the 

number of parts rejected during receiving inspections) would receive an on-site 

audit. 

Suppliers did not have effective tool calibration programs. Manufacturers 

were not ensuring that their suppliers’ tools were calibrated accurately. Proper 

tool calibration ensures that equipment used to perform measurements on parts 

corresponds to universal industry standards (i.e., tools measure accurately). 

Examples of problems we identified include the following: 

• Nine of 21 suppliers (43 percent) used improperly calibrated tooling in 

manufacturing and inspection operations. 

• One supplier’s calibration tracking system showed that approximately 

94 percent of the tools were past due for calibration. Some of the tools were 

out of date for 3 to 4 years. There was no procedure to follow up on 

out-of-date calibrations and no well-defined procedure to address a product 

that may be inspected or manufactured using improperly calibrated tooling. 

• An employee at another supplier checked the oxygen door on the passenger 

service unit with an uncalibrated tool that was even marked “uncalibrated.” 

 
13

We found no evidence that these dimensions were checked anywhere else in 

this production operation. 

• At another supplier, an employee used a piece of paper, scotch-taped to the 

work surface, as a measuring device for a length of wire on an oil and fuel 

pressure transmitter. 

Suppliers’ employee training programs were inadequate. We found that 

manufacturers’ suppliers did not always properly train their employees to perform 

their assigned tasks or document the training in employees’ training records. We 

found the following deficiencies in this area: 

• Nine of 21 suppliers (43 percent) did not have adequate control over employee 

training and training records. We found that (1) employees were inadequately 

trained for their responsibilities or (2) records proving their training were never 

created. 

• One supplier allowed new, untrained employees to manufacture several 

components. We witnessed one new employee improperly inspecting a 

product. A later review of his training record showed that he had not received 

any formal training in the proper inspection method. This was the same 

supplier mentioned previously that used a piece of paper as a measuring device 

for an oil and fuel pressure transmitter. 

Suppliers did not have adequate procedures in place to inspect the parts they 

produced. Suppliers were not properly inspecting their product to ensure they 

were following the requirements provided by the prime manufacturer. For some 

suppliers, this is even more critical when they are given the authority to ship the 

parts they supply directly to another supplier. We identified a failure to follow 

proper procedures during either the parts in-process or final part inspections at 8 of 

the 21 suppliers (38 percent). 

• We observed one supplier performing unauthorized, undocumented re-work of 

parts. The supplier had experienced problems with panels that allowed 

emergency oxygen masks to deploy. The quality manager asserted that the 

panels were manufactured according to the engineering drawings but 

sometimes did not open properly. To remedy this problem, the supplier used a 

small grinder to remove some of the material on the panel. This process had 

not been approved by the prime manufacturer. 

• At another supplier, a receiving clerk showed us a part that did not conform to 

specifications but then placed the non-conforming part back into the original 

box and forwarded it to inspection. The non-conforming part was not 

 
14

documented, segregated, tagged, or otherwise communicated to the receiving 

inspection department. 

• At one supplier, records for a weld operation had not been properly approved 

by the operator. The operator proceeded to sign the records in front of us 

without conducting the inspections. 

The systemic nature of the issues we identified suggests that manufacturers and 

FAA inspectors are overlooking key areas when they conduct supplier audits. We 

found that FAA inspectors individually determine how and what to inspect at each 

supplier facility. FAA inspectors we observed focused on task-specific items, 

such as the calibration of one tool, rather than on processes or systems in place at 

the facility. Additionally, inspectors did not follow a standardized inspection 

process when conducting supplier audits. To supplement their institutional 

knowledge, FAA inspectors could benefit from additional training on how to 

conduct comprehensive quality assurance system reviews. 

FAA must enhance its oversight of manufacturers’ quality assurance systems both 

for the selection and execution of supplier audits as well as for the number of 

audits conducted. FAA must also ensure that manufacturers enhance their 

oversight of suppliers and sub-tier suppliers so that defective parts do not escape 

supplier facilities for subsequent installation on aircraft. 

 
15

RECOMMENDATIONS 

We recommend that FAA: 

1. Require manufacturers to establish criteria for conducting on-site audits for 

initial supplier approval and conduct periodic audits of suppliers to ensure 

that quality assurance systems are followed throughout the supply chain. 

2. Develop a risk assessment process that emphasizes suppliers of flight-critical 

parts (e.g., those that manufacture critical and high-volume parts or use large 

numbers of suppliers, etc.) for passenger aircraft. 

3. Develop a risk assessment process that reduces the level of subjectivity in 

evaluating manufacturers so that inspectors’ risk assessments will be more 

consistent. 

4. Require inspectors to review prior manufacturers’ audits of suppliers as part 

of their analysis of risk and determination of resource targeting. 

5. Modify its supplier audit requirements so that the number of audits that 

inspectors are required to conduct more directly correlates with the number 

of suppliers used by the prime manufacturer. 

6. Provide inspectors with training on (a) auditing systems or processes in 

addition to individual or task-specific elements of a supplier’s operations and 

(b) processes for documenting the results of their reviews. 

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

On December 6, 2007, we met with FAA officials to discuss our 

November 14, 2007, draft report. In its December 18, 2007, written response, 

FAA partially concurred with the first recommendation and fully concurred with 

the remaining five recommendations. FAA provided action plans to address each 

recommendation. In its response, FAA also stated that it respectfully disagreed 

with certain statements in our draft report. We incorporated FAA’s suggested 

changes as appropriate. FAA’s entire response is included as an appendix to this 

report. 

FAA partially concurred with our recommendation to require manufacturers to 

perform on-site audits for initial supplier approvals and conduct periodic audits of 

suppliers thereafter. FAA stated that there is no regulation to implement this 

 
16

recommendation as a requirement. However, FAA did agree that additional 

supplier selection criteria would be appropriate. 

FAA agreed to revise its manufacturers’ guidance on supplier surveillance 

procedures. The revised guidance would include a process for manufacturers to 

evaluate and select suppliers for audit based on suppliers’ (1) capability to perform 

all manufacturing activities, inspections, and tests necessary to determine whether 

parts conform to design data and (2) ability to meet specified requirements. 

FAA’s proposed criteria for selection, evaluation, re-evaluation, and disapproval 

of suppliers would include initial, ongoing and periodic evaluations of suppliers 

based on risk. 

While FAA’s response partly addresses recommendation 1, FAA’s proposed 

changes to Advisory Circular 21-20 appear to be minimal and are not specific 

enough for us to determine whether the changes will fully address the systemic 

problems we identified. For example, we question how effectively a new supplier 

could be evaluated for risk without the manufacturer visiting the supplier’s 

facility. The fact that it is termed an “initial evaluation” would seem to indicate 

that the manufacturer would not have historical data to use in assessing risk. 

While we agree that manufacturers cannot visit every supplier every year, the 

range of problems we found at suppliers indicates that manufacturers need better 

FAA guidance to develop an effective quality control system. This system must 

ensure that suppliers conform to design data and meet specified requirements. 

To fully address our recommendation, we believe FAA needs to emphasize on-site 

reviews of suppliers. The nature and number of discrepancies found at suppliers 

we visited would not have been identified through records reviews only. For 

example, a supplier of fuel system parts for a major manufacturer had no record of 

the manufacturer ever completing an on-site audit of their facility. We found 

numerous deficiencies at this facility, including problems with the calibration 

program, employee training, and product inspection. 

Until FAA can provide more specific information on how it will revise its 

Advisory Circular, we consider recommendation 1 to be unresolved. 

FAA concurred with recommendations 2 through 5. In response, FAA agreed to 

take the following actions: 

• Develop and include as a risk indicator the manufacturer’s use of suppliers 

of flight-critical parts. 

• Create and implement metrics to monitor changes to its resource targeting 

output. 

 
17

• Develop less subjective risk indicator questions and specific instructional 

material and incorporate the new questions into its risk based oversight 

system and database. 

• Develop and issue Directive material that will require the review of a 

sample of manufacturers’ supplier audits and use the results of the audits as 

input for the following year’s risk assessment of the manufacturer. 

• Develop a supplier control audit quantity approach, develop and implement 

new Directive material on the approach, and train inspectors on the new 

Directive. 

With the exception of recommendation 1, we consider FAA’s planned actions to 

be responsive. When properly implemented, FAA’s actions should significantly 

enhance its surveillance of manufacturers’ quality assurance systems for suppliers. 

However, the final implementation dates for FAA’s proposed actions are projected 

from 2009 to 2010. We therefore consider recommendations 2 through 5 resolved 

but open until FAA completes its proposed actions. 

ACTIONS REQUIRED 

We request that FAA provide additional information detailing the specific changes 

the Agency will incorporate into the revised Advisory Circular on Supplier 

Surveillance Procedures. We are satisfied with FAA’s planned actions to address 

recommendations 2 through 5. According to the provisions of DOT Order 

8000.1C, we will follow up with FAA to ensure that its corrective actions are 

consistent with our recommendations. 

We appreciate the courtesies and cooperation of Federal Aviation Administration 

representatives and manufacturers’ suppliers during this audit. If you have any 

questions concerning this report, please contact me at (202) 366-1427 or 

Lou E. Dixon, Assistant Inspector General for Aviation and Special Program 

Audits, at (202) 366-0500. 

# 

cc: FAA Associate Administrator for Safety 

 Director, Aircraft Certification Service 

 Ron Gill, AVR-1 

 
18

EXHIBIT A. OBJECTIVE, SCOPE, AND METHODOLOGY 

The objective of this audit was to evaluate FAA’s oversight of aircraft 

manufacturers’ quality assurance systems for domestic and foreign suppliers. We 

conducted this audit between February 2004 and November 2007 in accordance 

with Government Auditing Standards prescribed by the Comptroller General of 

the United States. We included such tests as necessary to provide reasonable 

assurance of detecting abuse or illegal acts. 

To evaluate FAA oversight of manufacturers’ quality assurance systems for 

suppliers, we visited FAA Headquarters, three Directorates, four FAA 

Manufacturing Inspection District Offices (MIDO), and the Certificate 

Management Office that oversees Boeing. In addition, we contacted 

5 manufacturers and 21 suppliers to manufacturers, both domestic and foreign. 

Exhibit B lists the entities we contacted or visited during our review. 

We contracted with Simat, Helliesen and Eichner, Inc. (SH&E), an international 

air transport consulting firm, to assist us in reviewing supplier oversight at 

17 domestic and 4 foreign facilities. Additionally, the contractor accompanied us 

on an FAA supplier control audit of a foreign supplier. To evaluate FAA’s 

oversight, we tracked the number of supplier control audits that FAA performed 

and determined whether there were trends in the amount of supplier control audits 

performed from year to year. We also reviewed FAA’s resource targeting model 

and inspectors’ ability to use it to perform oversight. 

To evaluate manufacturers’ quality assurance systems, our contractor compared 

five manufacturers’ quality system manuals with quality system industry standards 

(e.g., ISO 9001) to determine compliance with FAA guidance. Also, the 

contractor performed 21 supplier control audits in order to test the quality of FAA 

and manufacturers’ oversight. 

To select the suppliers to visit, we compiled a universe of common suppliers 

among major aircraft and engine manufacturers based on the best information 

available at that time. We obtained supplier listings from the manufacturers as we 

visited the various MIDOs overseeing them. From the common universe, we 

determined which of those suppliers had not been visited by FAA in the 2 years 

prior to our audit as part of its supplier control audit program. An OIG statistician 

assisted us in selecting the suppliers. 

Exhibit A. Objective, Scope, and Methodology 
19

EXHIBIT B. ENTITIES VISITED OR CONTACTED 

FAA

Headquarters: 

Aviation Safety (AVS) Washington, DC 

Aircraft Certification Service (AIR) Washington, DC 

Directorates: 

Engine and Propeller Directorate Burlington, MA 

Small Airplane Directorate Kansas City, MO 

Transport Airplane Directorate Renton, WA 

Manufacturing Inspection District Offices in: 

Renton, WA 

Vandalia, OH 

Wichita, KS 

Windsor Locks, CT 

Certificate Management Office for: 

The Boeing Company Renton and Everett, WA 

MANUFACTURERS

The Boeing Company Seattle, WA 

Pratt & Whitney East Hartford, CT 

General Electric Aircraft Engines Cincinnati, OH 

Bombardier Aerospace/Learjet Wichita, KS 

Rolls-Royce8

 Indianapolis, IN 

 

8

 We did not visit the Rolls-Royce facility. Our consultant reviewed Rolls-Royce’s quality manuals and interviewed 

the FAA inspector. 

Exhibit B. Entities Visited or Contacted 
20

Suppliers to Manufacturers 

ALCOA Fastening Systems Torrance, CA 

C.A. Spalding Company Croydon, PA 

Corru-Seals, Inc. Wallingford, CT 

Custom Control Sensors, Inc. Chatsworth, CA 

Eaton Aerospace Glenolden, PA 

Eldec Corporation Lynnwood, WA 

Frisby Aerospace LLC Clemmons, NC 

Goodrich Hella Aerospace Lighting 

Systems GmbH Lippstadt, Germany 

Honeywell Aerospace Electronic Systems Redmond, WA 

Honeywell International Engines 

and Systems Tucson, AZ 

Howmet Castings Dover, NJ 

Howmet Corporation Wichita Falls, TX 

Messier-Bugatti Molsheim Cedex, 

Snecma Group France 

Messier-Bugatti Velizy-Villacoublay, 

Snecma Group France 

Peco Manufacturing Co. Inc. Portland, OR 

Radial Bearing Corporation Danbury, CT 

Saint Gobain Performance Plastics Garden Grove, CA 

Shultz Steel Company South Gate, CA 

Vibro-Meter, Inc. Manchester, NH 

Vibro-Meter SA Fribourg, Switzerland 

WGI Inc. Southwick, MA 

Industry Associations 

National Transportation Safety Board Washington, DC 

General Aviation Manufacturers Association Washington, DC 

Aerospace Industries Association Arlington, VA 

International Association of Machinists and 

 Aerospace Workers Seattle, WA 

Exhibit B. Entities Visited or Contacted 
Appendix. Management Comments 

21

APPENDIX. MANAGEMENT COMMENTS 

Federal Aviation 

Administration 

Memorandum

Date: December 18, 2007

To: Robin Hunt, Acting Assistant Inspector General for Aviation and Special Program 

Audits 

From: Ramesh K. Punwani, Assistant Administrator for Financial Services/CFO 

Prepared by: Anthony Williams, x79000 

Subject: OIG Draft Report: Assessment of FAA’s Risk-Based System for Overseeing Aircraft 

Manufacturers’ Suppliers Federal Aviation Administration 

Thank you for providing us with the draft report of "Assessment of FAA's Risk-based System for 

Overseeing Aircraft Manufacturers' Suppliers." We also recognize the ever-changing nature of 

aircraft manufacturing and we will continue to effectively oversee Production Approval Holder's 

compliance with the regulations that govern manufacturing of aircraft and related product. As with 

any system, continuous improvement is essential, and the FAA appreciates your recommendations. 

The FAA partially concurs with recommendation 1, and concurs with recommendations 2 through 6. 

Our responses to the recommendations are listed below. Additionally, we respectfully disagree with 

certain statements in the draft report, and have previously provided our comments to you. 

Recommendation 1: Require manufacturers to establish criteria for conducting on-site audits for 

initial supplier approval and conduct periodic audits of suppliers to ensure that quality assurance 

systems are followed throughout the supply chain. 

FAA Response: Partially concur. There is no regulation to implement this recommendation as a 

requirement. However, the FAA agrees that additional supplier selection criteria are appropriate. 

FAA Action: Publish criteria in the next revision to Advisory Circular 21-20, Supplier Surveillance, 

including a process that evaluates and selects suppliers based on their capability to perform all 

manufacturing activities, inspections, and tests necessary to determine conformity of parts or appliances 

to the applicable design data and their ability to meet the specified requirements. 
Appendix. Management Comments 

22

The process should include criteria for selection, evaluation, reevaluation, and disapproval of suppliers. 

These would include the following: 

• Initial evaluation of suppliers to determine their capability to meet requirements. The need to 

conduct initial onsite evaluations to be determined based on risk. The Production Approval 

Holder (PAH) should make this determination before permitting the supplier to furnish any parts 

or services. 

• Ongoing evaluations to ensure continued adherence to the requirements. 

• Periodic onsite evaluation, process reviews, document reviews, or independent product 

evaluations based on risk. 

o June 2008: Create draft material. 

o September 2009: Publish Advisory Circular 21-20. 

Recommendation 2: Develop a risk assessment process that emphasizes suppliers of flight-critical 

parts (e.g., those that manufacture critical and high-volume parts or use large numbers of suppliers, 

etc.) for passenger aircraft. 

FAA Response: Concur. In 2007 the FAA developed a new risk assessment tool, Risk Based Resource 

Targeting (RBRT), which is designed to assign resources based on risk. RBRT will replace the existing 

Resource Targeting process. The RBRT tool will be applied to several Aircraft Certification Service 

work processes. The tool has been recently prototyped and is being finalized for deployment. The use of 

RBRT for the certificate management process (manufacturers with a production approval) is scheduled 

for FY09. The risk assessment indicator questions, used for determining the number and frequency of 

supplier control audits, are currently being developed. 

FAA Action: Develop and include as a risk indicator the production approval holder’s use of suppliers 

of flight-critical parts (e.g., those that manufacture critical and high-volume parts or use large numbers 

of suppliers, etc.). 

o June 2008: Develop a risk indicator. Coordinate with Field offices. 

o September 2008: Incorporate risk indicator into RBRT tool (IT Contractor) 

o March 2009: Integrate RBRT into the Certificate Mgt. Information System (IT Rehost). 

Recommendation 3: Develop a risk assessment process that reduces the level of subjectivity in 

evaluating manufacturers so that inspectors’ risk assessments will be more consistent. 

FAA Response: Concur. The RBRT tool discussed in Recommendation 2 uses a methodology that is 

standardized across all FAA directorates. Each risk assessment indicator question, used for determining 

the number and frequency of surveillance activities, is accompanied by instructional material to aid the 

inspector in answering the questions consistently and correctly. The material is very specific and will 

reduce the level of subjectivity. 

In September 2006 the FAA Aviation Safety organization (A VS) achieved IS09001-2000 Quality 

Management System Registration. Each trimester an analysis of data, including work process metrics, is 

conducted from the local office level to the AVS executive level. To further ensure objectivity beyond 

the new RBRT tool the Aircraft Certification Service will create a new metric to monitor field office 

changes to the current Resource Targeting output followed by RBRT output. 
Appendix. Management Comments 

23

FAA Action: 

o December 2007: Create QMS metrics to monitor changes to Resource Targeting output. 

o February 2008: Implement QMS metrics to monitor changes to Resource Targeting output. 

o June 2008: Develop less subjective RBRT questions and specific instructional material. 

o September 2008: Incorporate questions into RBRT tool (IT Contractor) 

o March 2009: Integrate RBRT into the Certificate Mgt. Information System (IT Rehost). 

Recommendation 4: Require inspectors to review prior manufacturers' audits of suppliers as part of 

their analysis of risk and determination of resource targeting. 

FAA Response: Concur. 

FAA Action: The FAA will develop and issue Directive material that will require the review of a 

sample of PAH’s supplier audits during Aircraft Certification System Evaluation Program (ACSEP) 

and Principal Inspector (PI) evaluations. The review results will be used for two purposes: (1) as a key 

indicator on how to proceed with the ACSEP or PI evaluation and (2) as input into the following year 

resource targeting (or RBRT) assessment of the PAH. 

o December 2008: Develop new Directive material. 

o December 2008: Develop new P AH supplier audit results risk indicator. 

o December 2008: Modify resource targeting tool or RBRT. 

o January 2009: Implement. 

Recommendation 5: Modify its supplier audit requirements so that the number of audits that 

inspectors are required to conduct more directly correlates with the number of suppliers used by the 

prime manufacturer. 

FAA Response: Concur. The FAA will develop and issue Directive material that will require the 

number of supplier control audits to more directly correlate with the number of PAH suppliers. 

FAA Action: 

o March 2008: Develop supplier control audit quantity approach. 

o September 2008: Develop new Directive material. 

o March 2009: Implement. 

Recommendation 6: Provide inspectors with training on (a) auditing systems or processes, (b) 

individual or task -specific elements of a supplier’s operations, and (c) processes for documenting the 

results of their reviews. 

FAA Response: Concur. 

FAA Action: The ACSEP training course is scheduled for a thorough content review in FY08. In 

addition, the AIR Aviation Safety Inspector (ASI) Job Functions course is scheduled for a thorough 

content review in FY09. This recommendation will be central to the review and follow-on updates of 

both courses. 

o September 2008: Complete ACSEP course content review. 

o April 2009: Create new ACSEP Directive material if required. 
Appendix. Management Comments 

24

o September 2009: Include changes into the ACSEP Directive. 

o September 2009: Include changes into the ACSEP course. 

o September 2009: Complete ASI Job Functions course content review. 

o April 20 I 0: Create new Certificate Management Directive material if required. 

o September 2010: Include changes into the Certificate Management Directive. 

o September 2010: Include changes into the ASI Job Functions course. 
The following pages contain textual versions of the graphs and charts found in this 

document. These pages were not in the original document but have been added 

here to accommodate assistive technology. 
Assessment of FAA’s Risk-Based System for 

Overseeing Aircraft Manufacturers’ Suppliers 

Section 508 Compliant Presentation 

Figure 1. U.S.- Versus Foreign-Supplied Parts on Boeing Aircraft Models 

Parts produced for the Boeing 727 introduced in 1964 are listed below. Note: 

the parts for this model in 1964 were only produced in the United States; 

none of these parts were supplied by foreign countries. 

The following parts for the Boeing 727 were produced in the United States in 

1964: wings, inboard flaps, outboard flaps, engine nacelles, engine strut, nose, 

front fuselage, center fuselage, center wing box, keel beam, aft fuselage, stabilizer, 

dorsal fin, vertical fin, elevators, rudder, passenger doors. 

Parts produced for the Boeing 737 introduced in 1967 are listed below with 

their domestic and/or foreign suppliers. 

• The following parts for the Boeing 737 were produced in the United States: 

wings, engine nacelles, engine strut, nose, front fuselage, center fuselage, 

center wing box, keel beam, aft fuselage, stabilizer (also produced in China), 

dorsal fin, vertical fin (also produced in China). 

• The following parts for the Boeing 737 were produced in China: stabilizer and 

vertical fin. 

• The following parts for the Boeing 737 were produced in Japan: inboard flaps 

and elevators. 

• The following part for the Boeing 737 was produced in Australia: outboard 

flaps. 

• The following part for the Boeing 737 was produced in the United Kingdom: 

rudder. 
Parts produced for the Boeing 747 introduced in 1969 are listed below with 

their domestic and/or foreign suppliers. 

• The following parts for the Boeing 747 were produced in the United States: 

wings, engine nacelles, engine strut, nose, front fuselage, center fuselage, keel 

beam, aft fuselage, stabilizer, dorsal fin, vertical fin, elevators, rudder, 

passenger doors. 

• The following parts for the Boeing 747 were produced in Japan: inboard flaps, 

outboard flaps. 

• The following part for the Boeing 747 was produced in Canada: center wing 

box. 

Parts produced for the Boeing 757 introduced in 1982 are listed below with 

their domestic and/or foreign suppliers. 

• The following parts for the Boeing 757 were produced in the United States: 

wings, engine nacelles, engine strut, nose, front fuselage, center fuselage, 

center wing box, keel beam, aft fuselage, stabilizer (also produced in China), 

vertical fin (also produced in China). 

• The following parts for the Boeing 757 were produced in China: stabilizer and 

vertical fin. 

• The following part for the Boeing 757 was produced in Australia: rudder. 

• The following part for the Boeing 757 was produced in Israel: dorsal fin. 

• The following part for the Boeing 757 was produced in Japan: elevators. 

• The following part for the Boeing 757 was produced in Spain: outboard flaps. 

• The following part for the Boeing 757 was produced in Poland: passenger 

doors. 

• The following part for the Boeing 757 was produced in the United Kingdom: 

inboard flaps. 
Parts produced for the Boeing 767 introduced in 1982 are listed below with 

their domestic and/or foreign suppliers. 

• The following parts for the Boeing 767 were produced in the United States: 

wings, engine nacelles, engine strut, nose, center wing box, keel beam, 

stabilizer. 

• The following parts for the Boeing 767 were produced in Italy: inboard flaps, 

outboard flaps, vertical fin, elevators, rudder. 

• The following parts for the Boeing 767 were produced in Japan: front fuselage, 

center fuselage, aft fuselage, dorsal fin, passenger doors. 

Parts produced for the Boeing 777 introduced in 1995 are listed below with 

their domestic and/or foreign suppliers. 

• The following parts for the Boeing 777 were produced in the United States: 

wings, inboard flaps, engine nacelles, engine strut, nose, stabilizer, vertical fin. 

• The following part for the Boeing 777 was produced in Brazil: dorsal fin. 

• The following parts for the Boeing 777 were produced in Australia: elevators 

and rudder. 

• The following part for the Boeing 777 was produced in Italy: outboard flaps. 

• The following parts for the Boeing 777 were produced in Japan: front fuselage, 

center fuselage, center wing box, keel beam, aft fuselage, passenger doors. 

Parts produced for the Boeing 787 to be introduced in 2008 are listed below 

with their domestic and/or foreign suppliers. 

• The following parts for the Boeing 787 are being produced in the United 

States: inboard flaps (also being produced in Cocos Islands), outboard flaps, 

engine nacelles, engine strut, nose, aft fuselage (also being produced in Italy), 

dorsal fin (also being produced in China), vertical fin (also being produced in 

China). 

• The following parts for the Boeing 787 are being produced in China: dorsal 

fin, vertical fin, rudder. 
• The following part for the Boeing 787 is being produced in Australia: inboard 

flaps. 

• The following parts for the Boeing 787 are being produced in Italy: center 

fuselage, aft fuselage, stabilizer, elevators. 

• The following parts for the Boeing 787 are being produced in Japan: wings, 

front fuselage, center wing box, keel beam. 

• The following part for the Boeing 787 is being produced in France: passenger 

doors. 

Source: This information was obtained from multiple sources, including 

independent technical reviews and manufacturers’ and suppliers’ websites. 

Table. Number of Supplier Audits Completed by FAA for Five Major 

Manufacturers (for fiscal years 2003 through 2006) 

The table data show that in each of the last 4 fiscal years, FAA has inspected an 

average of 1 percent of the total suppliers used by the five manufacturers we 

reviewed (these are listed as A through E below). 

• Manufacturer A had a total of 4,012 supplier facilities. In FY 2003, FAA 

completed 2 supplier audits. In FY 2004, FAA completed 1 supplier audit. In 

FY 2005, FAA completed 7 supplier audits. In FY 2006, FAA completed 4 

supplier audits. 

• Manufacturer B had a total of 2,553 supplier facilities. In FY 2003, FAA 

completed 31 supplier audits. In FY 2004, FAA completed 26 supplier audits. 

In FY 2005, FAA completed 15 supplier audits. In FY 2006, FAA completed 

27 supplier audits. (Note: This manufacturer operates seven separate 

manufacturing divisions. As a result, FAA evaluated the seven divisions 

separately for risk assessment purposes, which resulted in more supplier 

control audits.) 

• Manufacturer C had a total of 706 supplier facilities. In FY 2003, FAA 

completed 5 supplier audits. In FY 2004, FAA completed 4 supplier audits. In 

FY 2005, FAA completed 4 supplier audits. In FY 2006, FAA completed 6 

supplier audits. 

• Manufacturer D had a total of 489 supplier facilities. In FY 2003, FAA 

completed 5 supplier audits. In FY 2004, FAA completed 3 supplier audits. In 
FY 2005, FAA completed 1 supplier audit. In FY 2006, FAA completed 2 

supplier audits. 

• Manufacturer E had a total of 367 supplier facilities. In FY 2003, FAA 

completed 0 supplier audits. In FY 2004, FAA completed 2 supplier audits. In 

FY 2005, FAA completed 3 supplier audits. In FY 2006, FAA completed 2 

supplier audits. 

Note: The number of supplier facilities listed for each manufacturer is based on 

information obtained for 2004. 

Source: FAA’s National Supplier Control Audit Schedules, FY 2003-2006 

Figure 2. Countries Without a Bilateral Agreement That Make Parts for U.S. 

Manufacturers 

• Chile 

• Costa Rica 

• Greece 

• India 

• Luxembourg 

• Mexico 

• Morocco 

• Pakistan 

• Portugal 

• South Korea 

• Tunisia 

• Turkey 

• Ukraine 

• United Arab Emirates 

• Uzbekistan 
Figure 3. Percentage of Supplier Facilities Where Deficiencies Were Found 

We identified widespread discrepancies at 20 of the 21 suppliers we reviewed, 

such as suppliers’ inadequate oversight of the part and component suppliers they 

use (i.e., sub-tier oversight), use of out-of-date tools and equipment, and failure to 

complete all product testing before shipping parts to the manufacturer. 

• 10 percent of the 21 facilities had product conformity deficiencies. 

• 24 percent of the 21 facilities had deficiencies involving the ability to follow 

management directions. 

• 29 percent of the 21 facilities had management oversight deficiencies. 

• 38 percent of the 21 facilities had product inspection deficiencies. 

• 62 percent of the 21 facilities had FAA oversight deficiencies. 

• 67 percent of the 21 facilities had sub-tier oversight deficiencies. 

• 67 percent of the 21 facilities had records and documentation deficiencies. 

• 43 percent of the 21 facilities had tooling calibration deficiencies. 

• 43 percent of the 21 facilities had employee training deficiencies. 

• 24 percent of the 21 facilities had deficiencies involving valid contracts. 

• 19 percent of the 21 facilities had quality system deficiencies. 

Source: Department of Transportation Office of Inspector General, Federal 

Aviation Administration Original Equipment Manufacturer Oversight Audit, 

Simat, Helliesen and Eichner, Inc.