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DOMESTIC AVIATION MANUFACTURING: 

CHALLENGES AND OPPORTUNITIES 

(113–77) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

AVIATION 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

JULY 23, 2014 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

BILL SHUSTER, Pennsylvania, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee, 

Vice Chair 

JOHN L. MICA, Florida 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

SAM GRAVES, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

LOU BARLETTA, Pennsylvania 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

DANIEL WEBSTER, Florida 

STEVE SOUTHERLAND, II, Florida 

JEFF DENHAM, California 

REID J. RIBBLE, Wisconsin 

THOMAS MASSIE, Kentucky 

STEVE DAINES, Montana 

TOM RICE, South Carolina 

MARKWAYNE MULLIN, Oklahoma 

ROGER WILLIAMS, Texas 

MARK MEADOWS, North Carolina 

SCOTT PERRY, Pennsylvania 

RODNEY DAVIS, Illinois 

MARK SANFORD, South Carolina 

DAVID W. JOLLY, Florida 

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

TIMOTHY J. WALZ, Minnesota 

STEVE COHEN, Tennessee 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

JOHN GARAMENDI, California 

ANDRE ́ CARSON, Indiana 

JANICE HAHN, California 

RICHARD M. NOLAN, Minnesota 

ANN KIRKPATRICK, Arizona 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

ELIZABETH H. ESTY, Connecticut 

LOIS FRANKEL, Florida 

CHERI BUSTOS, Illinois 

SUBCOMMITTEE ON AVIATION

FRANK A. LOBIONDO, New Jersey, Chairman 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

SAM GRAVES, Missouri 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

DANIEL WEBSTER, Florida 

JEFF DENHAM, California 

REID J. RIBBLE, Wisconsin 

THOMAS MASSIE, Kentucky 

STEVE DAINES, Montana 

ROGER WILLIAMS, Texas 

MARK MEADOWS, North Carolina 

RODNEY DAVIS, Illinois, Vice Chair 

BILL SHUSTER, Pennsylvania (Ex Officio) 

RICK LARSEN, Washington 

PETER A. DEFAZIO, Oregon 

EDDIE BERNICE JOHNSON, Texas 

MICHAEL E. CAPUANO, Massachusetts 

DANIEL LIPINSKI, Illinois 

STEVE COHEN, Tennessee 

ANDRE ́ CARSON, Indiana 

RICHARD M. NOLAN, Minnesota 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

CHERI BUSTOS, Illinois 

CORRINE BROWN, Florida 

ELIZABETH H. ESTY, Connecticut 

NICK J. RAHALL, II, West Virginia 

(Ex Officio) 

(III) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... iv 

TESTIMONY 

PANEL 1 

Margaret M. Gilligan, Associate Administrator for Aviation Safety, Federal 

Aviation Administration ...................................................................................... 5 

Gerald L. Dillingham, Ph.D., Director, Physical Infrastructure Issues, U.S. 

Government Accountability Office ...................................................................... 5 

PANEL 2 

Marion C. Blakey, president and chief executive officer, Aerospace Industries 

Association of America ......................................................................................... 28 

Peter J. Bunce, president and chief executive officer, General Aviation Manufacturers Association ............................................................................................ 28 

Joseph W. Brown, president, Hartzell Propeller Inc., and chief operating 

officer, Tailwind Technologies ............................................................................. 28 

Dave Cox, lead administrator, Air Washington project, and dean of instruction, Technical Education Division, Spokane Community College .................. 28 

PREPARED STATEMENT SUBMITTED BY MEMBER OF CONGRESS 

Hon. Elizabeth H. Esty, of Connecticut ................................................................. 46 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Margaret M. Gilligan ............................................................................................... 47 

Gerald L. Dillingham, Ph.D. ................................................................................... 59 

Marion C. Blakey ..................................................................................................... 87 

Peter J. Bunce .......................................................................................................... 99 

Joseph W. Brown ..................................................................................................... 112 

Dave Cox .................................................................................................................. 120 

SUBMISSIONS FOR THE RECORD 

Margaret M. Gilligan, Associate Administrator for Aviation Safety, Federal 

Aviation Administration, responses to questions for the record issued by 

Hon. Frank A. LoBiondo, a Representative in Congress from the State 

of New Jersey ....................................................................................................... 54 

Peter J. Bunce, president and chief executive officer, General Aviation Manufacturers Association, responses to questions for the record issued by Hon. 

Elizabeth H. Esty, a Representative in Congress from the State of Connecticut .................................................................................................................. 109 

ADDITION TO THE RECORD 

Ed Bolen, president and CEO, National Business Aviation Association, written statement ....................................................................................................... 123 

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(1) 

DOMESTIC AVIATION MANUFACTURING: 

CHALLENGES AND OPPORTUNITIES 

WEDNESDAY, JULY 23, 2014 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON AVIATION, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 10:01 a.m. in Room 

2167, Rayburn House Office Building, Hon. Frank A. LoBiondo 

(Chairman of the subcommittee) presiding. 

Mr. LOBIONDO. Good morning. The subcommittee will come to 

order. I would like to thank you all for being here. 

Before my statement, I would like—Ms. Gilligan, I would like 

you to think about possibly making some comments to us. We are 

all very concerned about the—some of the situations around the 

world, and the decisions that the FAA made, especially in respect 

to suspending for 24 hours the flights into Israel, and if you could 

give us a little bit of an update after my statement and Mr. 

Larsen’s statement, about how the FAA is looking at this, and 

what we may see in the future, and how you come to make a decision like that. 

So, again, I thank everyone for being here. 

The American aviation manufacturing is a critical sector of our 

Nation’s economy, contributing billions of dollars and supporting 

millions of jobs annually. We are the world leader in aviation safety, standards, and manufacturing, delivering thousands of aircraft, 

aircraft components, and systems worldwide every year. 

Today this subcommittee will look at the state of domestic aviation manufacturing and some of the challenges that it faces. Since 

recently encountering a hit during the economic downturn, our 

aviation manufacturing sector has seen positive growth, and key 

economic indicators support this. We in Congress want this vital 

component of the aviation sector to succeed and surpass where it 

was prior to 2008. However, despite the industry’s success, manufacturers continue to face some challenges as they work to bring 

products to the market. 

All aircraft, aircraft components, and aviation systems which operate and are manufactured in the United States must meet specific design and operational certification standards set by the Federal Aviation Administration. The role of the—that the FAA plays 

is absolutely critical and necessary to ensure our standards continue to be the gold standard, and provide for the safest air system 

in the world. 

2 

As manufacturers design and build to meet these standards they 

can experience delays in approval, both internationally and domestically. These delays can result in the loss of real dollars and jobs 

for our aviation manufacturing sector. And we have had some very 

specific instances that have pointed to that, which concern us a 

great deal. 

The previous FAA reauthorization bill required the FAA to develop and implement plans to address inefficiencies and inconsistencies in the certification process. Currently the FAA, along with 

industry, is working to implement these plans in a cooperative 

fashion. We look forward to hearing what progress is being made 

on this front. 

In regard to aviation certification, the FAA is truly the gold 

standard across the world. As the aviation industry continues to 

push technological boundaries, it is important that the FAA certification processes also adapt to accommodate for this innovation. 

Furthermore, as American manufacturers compete in a global market, it is vital that the FAA’s leadership is recognized and maintained globally, and we in Congress do all that we can to help ensure that it stays that way, and true. 

In addition to an effective and efficient certification process, the 

manufacturing industry relies upon a dedicated and well-trained 

aerospace workforce. Today we will hear from a witness who can 

speak directly to some of the important work that is being done to 

respond to the need for innovation and skilled aerospace workforce. 

In my own district, Atlantic Cape Community College has recognized the need for a well-trained workforce in the growing industry 

of unmanned aerial systems. Under the leadership of college president Peter Mora, they are currently working to develop a curriculum that will bring the next generation of an already technologically savvy youth into this growing industry. 

In addition, I have the privilege of representing the FAA’s Tech 

Center, which is the premier FAA facility in the Nation for research and development, and for safety and security. Through their 

important research, experts at the Tech Center assist manufacturers as they work to bring innovative products to the market. For 

instance, CSC and dozens of other companies utilize the expertise 

of Tech Center employees and laboratories as they develop their innovative technologies. 

I am interested in hearing what role the Government can play 

to promote the aviation manufacturing industry’s success. It is key 

we listen to the input of those in the real world, and what they 

have to offer to us. Today we are fortunate to have a company who 

has been part of America’s aviation manufacturing industry since 

the Wright Brothers first took flight, and who can speak to the day 

in and day out complexities of the industry and the challenges they 

face. 

I look forward to hearing from our witnesses on these topics, and 

thank them for joining us. 

Mr. LOBIONDO. Before I recognize Mr. Larsen, I would like to ask 

unanimous consent that all Members have 5 legislative days to revise and extend their remarks, and include extraneous material for 

the record. 

[No response.] 

3 

Mr. LOBIONDO. Without objection, so ordered. Now I would like 

to recognize Mr. Larsen. 

Mr. LARSEN. Thank you, Mr. Chairman, for calling today’s hearing to discuss domestic aviation manufacturing. 

U.S. aviation is vital to our economy. Domestic aviation manufacturing, the reason we are here today, is one of the major reasons 

why the aviation industry in this country is such a powerful economic engine. In 2012, U.S. aviation manufacturing generated a 

total output of over $150 billion. 

This topic, obviously, is close to home for me. In my home State 

of Washington, about 650 aerospace companies support as many as 

209,000 jobs. These companies range from Boeing to the many 

small businesses that are a critical part of the aviation supply 

chain. Aerospace is the State’s largest exporting sector, accounting 

for over 40 percent of the State’s exports in 2011. 

The issues we are exploring today are the ones we have explored 

before, and I want to thank Chairman LoBiondo for remaining focused on them. Last October we had a subcommittee hearing about 

FAA’s certification process, where we discussed opportunities to 

make these processes more efficient, and to bring more consistency 

to FAA’s interpretations of regulations. I look forward to an update 

today about the FAA’s progress from that hearing. 

The predictable and timely certification of aircraft and aircraft 

components is critical for domestic manufacturers to get their products to market. We must also ensure FAA does not cut corners so 

it continues its critical mission of ensuring the highest level of safety. The FAA reauthorization, enacted in 2012, included two provisions directing the agency to conduct an assessment of the aircraft 

certification and approval process, section 312, and addressing 

FAA’s personnel’s inconsistent regulatory interpretation, section 

313. 

As we continue to conduct our oversight of FAA’s implementation, I hope to learn more today about the progress FAA has made 

in these areas, and where the agency’s efforts have stalled. Specifically, I hope to hear about how the labor unions and affected FAA 

inspectors and engineers have played a part in FAA’s efforts, and 

if they have signed on to the agency’s certification reform efforts. 

Labor involvement is critical. FAA leadership can say one thing, 

but the people doing the day-to-day work need to be—need to buy 

in before moving forward with major changes. We also have to 

work to be sure that FAA has adequate staffing resources to do the 

job, and to keep pace with new technology. For example, I understand the workload of FAA’s 204 manufacturing inspectors continues to increase, while the size of its inspector workforce does 

not. 

And there is no question that FAA must streamline the process 

under its Organization Designation Authorization, or ODA program, because of growing workload and limited resources. But we 

must continue at all times to ensure that certification efforts are 

subject to thorough and proper oversight, so that the high level of 

safety the FAA maintains is not compromised. 

Another common theme I continue to hear from manufacturers 

is that our neighbors abroad are unnecessarily delaying their validations of FAA-certified products. We must make sure that other 

4 

countries do not question FAA’s gold standard, so that our manufacturers remain competitive in an increasingly crowded global 

market. 

More broadly, we must do all we can to avoid disadvantaging 

U.S. manufacturers, as they compete vigorously with foreign manufacturers. To this end, last year Chairman LoBiondo and I asked 

GAO to explore the FAA certification process in the U.S., as it compares with those of its counterparts around the world. And I look 

forward to reviewing that report when it is issued later this year. 

Global competitive demands depends on having a high—sorry, a 

robust pipeline of well-trained and highly skilled workers. A Government industry panel convened in 2010 by then-Secretary of 

Transportation LaHood recommended several measures to improve 

the training and development of the Nation’s aerospace workforce. 

To speak to this issue, I want to extend a special welcome to 

Dave Cox of the Air Washington project. Dave is on a later panel. 

The Air Washington project is a unique consortium of community 

colleges that are working together for the sole purpose of training 

and educating workers in a wide variety of aviation jobs, such as 

aircraft maintenance, manufacturing, and assembly. In Washington 

State we have made investments in the people that will keep our 

manufacturing base strong. And I look forward to Mr. Cox sharing 

those lessons with the panel. 

So, Mr. Chairman, I want to thank you for holding this hearing. 

I look forward to hearing from our witnesses. 

And, if I may, Mr. Chairman, just ask—perhaps ask unanimous 

consent—it is a little bit of a surprise—that Ms. Gilligan’s comments on the FAA’s decision with regards to air travel not be included in her 5 minutes, so she can brief us on that. Yes. 

Mr. LOBIONDO. Yes, that was not intended for you to be in your 

5 minutes. Good point, Mr. Larsen. 

Mr. LARSEN. Thank you. 

Mr. LOBIONDO. And we have Ms. Peggy Gilligan, Associate Administrator for Aviation Safety at the Federal Aviation Administration. And if you could, give us some comments on this crisis we are 

seeing around the world, and then get into your statement after 

that, please. 

Ms. GILLIGAN. Certainly, Mr. Chairman. First, let me just make 

a small comment on the Ukraine. As you know—— 

Mr. LOBIONDO. Can you pull your mic a little closer, please? 

Ms. GILLIGAN. Sure. As you know, there is an international effort 

underway to secure the site of the crash of the Malaysian Flight 

17. FAA does not have technical experts in Kiev at this time. The 

National Transportation Safety Board has sent an expert, and we 

remain ready to support any investigation, once—if necessary, once 

the site is secured. That airspace over eastern Ukraine continues 

to be closed to all operators, because the Ukrainians have actually 

closed that airspace. 

As to yesterday’s initiative, as you might imagine, this is a very 

fluid situation. We are in close contact, the FAA is in close contact 

with the civil aviation authority in Israel. We initiated the action 

after it was confirmed that there had been a rocket attack that occurred within just beyond a mile from the airport. 

5 

Obviously, our mission is to ensure the protection of our operators and the passengers on those operations. And it was determined that it was—and the appropriate action was to close access 

to Ben Gurion Airport for U.S. operators for a 24-hour period. And 

we continue to monitor the situation. 

The Administrator has been, again, in close contact with his own 

counterparts, with the State Department, with the U.S. Embassy 

in Israel. And we will monitor the situation and make a determination before 12:15 this afternoon, which is the 24-hour period, for 

the original Notice to Airmen concerning the airport. 

We have also been in close contact with our operators, the airlines, U.S. airlines that operate into Ben Gurion. There was a 

United aircraft on the ground after the NOTAM took effect. We did 

authorize that aircraft to be moved from there. As you know, most 

of the other aircraft that were in flight diverted and did not continue their flights into Israel. That continues to be the situation at 

this point. 

Mr. LOBIONDO. OK, thank you. Now, if you would, proceed to 

your statement. 

TESTIMONY OF MARGARET M. GILLIGAN, ASSOCIATE ADMINISTRATOR FOR AVIATION SAFETY, FEDERAL AVIATION ADMINISTRATION; AND GERALD L. DILLINGHAM, PH.D., DIRECTOR, PHYSICAL INFRASTRUCTURE ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Ms. GILLIGAN. Thank you again, Mr. Chairman, Congressman 

Larsen, and members of the subcommittee. Thank you for the opportunity to appear before the subcommittee to discuss the FAA’s 

role in supporting domestic aviation manufacturing. Through our 

high safety standards, rigorous certification processes, and strong 

collaboration with industry stakeholders, the FAA operates the 

most complex and the safest airspace system in the world. 

Civil aviation manufacturing is vital to the U.S. economy. Last year, civil aviation supported 11.8 million jobs, accounted for $1.5 

trillion in total economic activity, and contributed 5.4 percent to 

the U.S. GDP. Civil aircraft manufacturing represents a top U.S. 

net export. Between 2009 and 2012, the growth in new civilian 

commercial aircraft sales in both domestic and overseas markets 

averaged 9.2 percent per year, outpacing the overall U.S. economic 

growth. That underlies the fact that people around the world buy 

and rely on U.S. aviation products because the FAA sets the gold 

standard for aircraft design and manufacture. 

For more than 50 years, FAA has certified all civil aviation aircraft, aircraft engines, propellers, and parts that operate in the 

U.S. airspace. FAA has played a key role in the safe operation and 

growth of the aviation industry. The FAA oversees the life cycle of 

an aircraft, from design and manufacture to the operation and 

maintenance of the aircraft, once it enters service. As the aviation 

industry continues to grow, it is incumbent upon us to improve our 

processes and make them as efficient and effective as possible, 

while maintaining the highest safety standards. 

The FAA Modernization and Reform Act of 2012 contained a provision, section 312, that required the FAA to work with industry 

and representatives—with industry representatives, and to develop 

6 

recommendations to reform the aircraft certification process. The 

FAA and industry agreed on six recommendations that we believe 

will streamline and re-engineer the certification processes. FAA developed an implementation plan that mapped the recommendations 

to 14 agency initiatives. 

Since the original release of the Implementation Plan in January 

of 2013, we have made progress on all of the initiatives. And to assure transparency on our progress, we post an update on the FAA 

Web site every 6 months. The next update will be published by the 

end of this month. 

FAA encourages and facilitates the growth of U.S. aviation manufacturers, both domestically and internationally. We continue to 

authorize expansion of production facilities in the U.S., and ensure 

that we have sufficient resources to oversee domestic manufacturing. 

We have bilateral aviation safety agreements with over 47 countries, including an agreement with the European Union that covers 

28 nations in Europe. These agreements allow U.S. manufacturers 

to export their products and expand their business all around the 

globe. 

The agreements also allow aircraft and components produced in 

other countries to be imported for use in U.S. products. But products manufactured in other countries must still meet FAA safety 

standards to operate in the U.S. We ensure the safety of all civil 

aviation components and aircraft that operate in our airspace, 

wherever they are produced. 

Bilateral agreements also allow foreign manufacturers to establish production facilities in the U.S., which creates additional jobs 

and stimulates local economies. FAA recently issued a U.S. production certificate to Embraer to establish a manufacturing facility in 

Florida. Airbus also recently opened a manufacturing facility in 

Mobile, Alabama, through an extension of its European production 

approval. 

In this era of growing technological sophistication and 

globalization, we collaborate with our industry partners to more efficiently oversee the certification and production process. We use a 

risk-based approach to improve aviation safety by focusing our resources on the areas of highest risk. 

And to leverage our workforce, we use the designee system, 

which was established by Congress in 1938, and is critical to the 

success and effectiveness of the certification process. The designee 

program plays a critical role in our ability to efficiently certify the 

wide range of aviation products designed and manufactured in the 

U.S. 

There are currently over 600 engineers in the aircraft certification service, and over 200 inspectors. But we have over 5,000 individual designees, and over 80 organizational designations. Without the designee program, we could not complete the volume of 

work we have today or in the future. Assuring that we have a robust and successful delegation system is imperative to the continued growth of domestic aviation. 

Aviation is a constantly evolving industry, and our certification 

process must evolve with that industry. We know that we cannot 

remain static. We continue to work with our industry partners to 

7 

foster innovation and economic development so the United States 

will remain the global leader in aerospace. 

Mr. Chairman, that concludes my testimony for today. I look forward to answering any questions. 

Mr. LOBIONDO. We thank you very much. Next we are pleased 

to welcome back Dr. Gerald Dillingham, Director of Physical Infrastructure Issues for the U.S. Government Accountability Office. 

Dr. Dillingham, you are recognized. 

Dr. DILLINGHAM. Thank you, Mr. Chairman, Ranking Member 

Larsen, Chairman Shuster, members of the subcommittee. 

We have conducted several reviews examining the efficiency of 

FAA’s aircraft certification and approval processes, and industry’s 

concerns about inconsistent regulatory interpretation. FAA has implemented several initiatives to address these longstanding issues, 

but they do persist. 

As the ranking member noted, Congress established requirements in sections 312 and 313 of the 2012 FAA Reauthorization 

Act to spur additional actions on these items. In response to those 

requirements, FAA chartered two rulemaking committees: one on 

the aircraft certification process, and another on the consistency of 

regulatory interpretation. Both committees produced a series of recommendations to assist FAA in addressing these issues. 

My statement today focuses on, one, FAA’s progress in implementing the certification process and regulatory consistency recommendations; and, two, the challenges affecting successful implementation, and how they might be addressed. 

Regarding the certification process recommendations, FAA has 

established 14 initiatives to address these recommendations. These 

initiatives include developing a comprehensive roadmap for major 

change initiatives; improving the project sequencing process; and 

updating the aircraft certification regulations. Most of these initiatives are scheduled to be completed within the next 3 years. 

However, FAA has established performance metrics for only 5 of 

the 14 initiatives, and has not developed metrics to measure the 

overall effectiveness of the collective efforts. These metrics are essential in helping FAA and the industry determine whether these 

initiatives are leading to improvements. 

Moreover, although several initiatives are said to be on track, we 

are concerned that FAA expects to miss interim milestones for two 

of the most critical initiatives, due to concerns raised by the unions 

representing inspectors and engineers. Missing these milestones increases the risk of delays in scheduled implementation of the initiatives. 

Turning to the regulatory consistency recommendations, FAA 

has begun implementing these recommendations. In its July 2013 

Report to Congress, FAA included a preliminary plan for implementing these recommendations. FAA has indicated that its final 

plan would include an implementation strategy, assign responsibilities to individuals and offices, and establish milestones and measures of effectiveness. The plan is now projected to be completed 

next month, which is about 8 months beyond the initial target 

date. 

Looking ahead to potential implementation challenges, FAA will 

likely be under increased pressure to establish more efficient procVerDate Aug 31 2005 10:20 Aug 12, 2015 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\AV\7-23-1~1\88817.TXT JEAN
8 

esses as new aircraft materials, aircraft types, and NextGen avionics are introduced into the National Airspace System. FAA could 

significantly increase its chances of improving its processes and 

successfully adapting to changes in the industry by working to address some key challenges. 

Specifically, FAA should focus on, one, identifying the necessary 

resources to sustain these efforts when faced with fiscal pressures. 

Two, making the cultural shift required to implement a risk-based 

approach in making certification and approval decisions. This shift 

necessitates buy-in, support, and accountability throughout the 

agency, from the highest FAA management levels, to the designees 

and safety inspectors in the field. Additionally, FAA must ensure 

early and continuous involvement of industry stakeholders, and establish and use performance metrics that measure outcomes, rather than outputs, to help show what is actually being achieved 

through these initiatives, and to hold those responsible for implementation accountable for the results. 

Thank you, Mr. Chairman. This concludes my statement. 

Mr. LOBIONDO. Thank you very much. Dr. Dillingham, what— 

you covered a lot of territory there, I am trying to sort of digest 

some of that. Pretty concerning. 

But what—can you sum up what you would say are the biggest 

challenges the FAA faces in implementation and recommendations 

related to sections 312 and 313 of the Modernization and Reform 

Act? 

Dr. DILLINGHAM. Yes, sir, Mr. Chairman. I think the recommendations that the two ARCs produced are basically a roadmap to making significant improvements in both the regulatory interpretation issues, as well as the approval issues. 

I think—leave aside—assuming that the resources are available—because it will take some resources to implement all of the 

things that FAA has on its plate—but a major issue is the cultural 

change that is involved in this. FAA is moving from the way it 

used to do business, where you had a more hands-on approach, to 

where they are using risk-based safety management system kinds 

of principles that—it is different for the inspectors, different for the 

designees. And that culture change takes time, and it is very, 

very—it is a tough thing to do. 

But I think, you know, implementation of the recommendations 

is the first step and to be consistent with implementing those recommendations over time. 

Mr. LOBIONDO. So when you talked about the FAA possibly missing these key milestones, what effect would these delays have? 

What is the downside to this? 

Dr. DILLINGHAM. I want to be clear that the issues that were 

raised by NATCA and PASS either have been resolved or are being 

resolved with collaborative discussions between FAA and the 

unions. But when FAA set their initial milestones, they set them 

without knowledge that they were going to need as much discussion as has been necessary with those two unions. 

So, the idea is that if, in fact, FAA does miss the milestones, or 

those interim milestones, the final completion date may be expanded, as well. But again, those issues have been worked, and are 

continuing to be worked with the two unions. 

9 

Mr. LOBIONDO. OK, thank you. Ms. Gilligan, the aviation manufacturing industry is constantly innovating and growing. What 

steps has the FAA taken to ensure that the certification process is 

able to respond to such innovation and growth, while maintaining 

safety? 

And I am asking this question because Mr. Larsen and I have 

heard from some stakeholders, where they are very concerned that 

the FAA is not keeping pace with what the real-world industry 

needs, and it is potentially costing us jobs and a downturn in economic activity. 

Ms. GILLIGAN. Yes, Mr. Chairman, we have certainly heard those 

same concerns, that the industry, as I noted in my testimony, and 

we are all well aware, the aviation industry in the U.S. is a very 

innovative industry. They are always looking for ways that they 

can improve their products. And we work with them hand in hand, 

in being able to support that. 

So, there are a couple ways that we approach staying up with 

that. First, on the technical side, obviously, our standards aren’t 

prepared to address every new innovation that comes along. And 

so, we have a process in place that allows our manufacturers to innovate and to document a way—working with FAA, to document a 

way that their new whatever it is will be able to be safely introduced into the system. 

So, we have always been mindful that we don’t want our regulations to be a hindrance to innovation, because innovation tends to 

improve safety. New concepts tend to enhance safety. So we do 

have a technical way of being able to do that. So, as we move toward composites, as they bring in new avionics systems, or whatever it might be, we have a process to document with the applicant 

what is the safety standard that will need to be met, and how they 

will go about demonstrating that they can actually meet it. So, 

technically, I think we are ready to do that. 

I think your—the bigger concern is, as has been highlighted in 

some of these recommendations, and as Dr. Dillingham highlighted, we need to look differently at the work we do. We need to 

think differently about what it is—FAA’s role, and what is the role 

of the manufacturer. And I think these recommendations and the 

plan that we have to implement the changes under section 312 recognize that. 

So, as you have highlighted, we do have a new plan for how we 

will sequence new applications. We are working with our unions to 

finalize that. But it is a tool that will allow our workforce to evaluate what is the safety value of this new product. How widely does 

it affect the system? Because those are important things. We want 

to get safety products in, we want to get in changes that affect the 

larger part of the system. 

So, it will give our employees a way to prioritize the work with 

nominal timeframes for when they, then, should take certain actions. In addition, we always enter agreements with our applicants, 

with the manufacturer. When they bring us a new product, we and 

they agree to a schedule. They tell us when they are going to 

present information or tests or data, and we tell them when we will 

be able to review that and return it. And we hold each other accountable to those schedules. 

10 

So, we have learned that the better planning we can do upfront, 

along with the manufacturer, the more successful we and they can 

be at managing those projects. So we are approaching it, I think, 

from a number of ways to just try to continually be more efficient. 

Mr. LOBIONDO. Mr. Larsen? 

Mr. LARSEN. Thank you, Mr. Chairman. Can you discuss a little 

bit about the inspectors’ workload increasing beyond their 

headcount, especially as it relates to managing the demand for that 

oversight, while accelerating the use of ODAs? Can you put it in 

that context? And then, maybe outside of that context, as well? 

Ms. GILLIGAN. No, I think that is exactly the context. So, again, 

as I said, this industry is very innovative. And the Federal workforce and the resources that we have will always be limited. I appreciate Dr. Dillingham putting aside the question of resources. 

But, unfortunately, we really can’t. 

So, given what we know to be the resources we have available, 

that is why the FAA is turning toward this risk-based approach. 

We want our employees working on and overseeing those elements 

of design and manufacture that have the highest safety risk, and 

we want to use our designees, the thousands of people who have 

been designated to work on behalf of the Administrator, to take 

care of those more—the more well understood, the more mundane 

activities that are a regular part of certifying products. We think 

that that is the right balance. 

So, the approach that we are taking is for our employees to focus 

on those high-risk elements, things like new applications of composites, for example. That is something that we, at the FAA, want 

to work with our manufacturers on closely. But the fundamental of 

physics for flight are very well understood. And approvals of systems and designs that meet those fundamentals can certainly be 

handled by designees on our behalf. 

Mr. LARSEN. You mentioned that—to Mr. LoBiondo, Chairman 

LoBiondo, a few examples. But can you just be just even more crystal clear about the specific actions that FAA has taken to provide 

more clarity on what activities would be delegated, specific activities would be delegated? 

Ms. GILLIGAN. Yes. The approach that we are putting in place is 

for our engineers, actually, to assume that the project can be delegated, and that then they must really look at what are the highrisk elements, and they must document why it is they—we, FAA— 

need to retain certain elements for our own approval. And I think 

it is—as Dr. Dillingham indicated, it is a different way to think 

about the process. There are many, many very highly skilled designees throughout the system. They have very much the same 

training as our engineers, and they are competent to make findings 

on our behalf. 

So, it is really up to the FAA to determine what are those unique 

characteristics, those particularly high-risk elements, the new and 

novel applications where the FAA needs to retain that determination. And, other than that, we should allow for designees to make 

findings on our behalf. 

Mr. LARSEN. Dr. Dillingham, in your testimony last October you 

explained FAA had not developed performance measures to track 

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cation process. Today you described that continued lack of performance measure as a missed opportunity. Why would you call this a 

missed opportunity? 

Dr. DILLINGHAM. Mr. Larsen, the reason we called it a missed opportunity, it relates to the adage of, you know, success builds upon 

success. And a couple of things are associated with that. 

As FAA moves forward and implements the various recommendations that are associated with approval and certification, and it has 

some success in improving those processes, that, to the extent that 

the industry is made aware of that, to the extent that FAA can 

point to, with metrics, that success is being achieved, that increases the likelihood, as FAA moves forward with what could be 

some more difficult changes along the change management chain, 

there is the idea that this can happen, this can make a difference, 

and you are more likely to get industry buy-in with—when you 

move towards that risk management, change management that 

would be necessary to overhaul the whole process. 

Mr. LARSEN. Yes, good. That is fine. Thank you very much, and 

I yield back. 

Mr. LOBIONDO. Chairman Shuster, thank you for joining us. 

Mr. SHUSTER. Thank you very much, Mr. LoBiondo. I am confused. The FAA comes before us and says they are moving in a certain direction. Mr. Dillingham tells us that this risk-based approach, for instance, that they are not moving fast enough, or you 

are not moving in that way. Industry tells me that they don’t 

sense—there is no sense of urgency they see moving towards this, 

and that is where they want to move to. 

So, Mr. Dillingham, are they moving to a risk-based approach, or 

is it just so slow that it is going to take years and years to get 

there? 

Dr. DILLINGHAM. They are absolutely moving towards a riskbased approach, not only in this area, but in many other areas that 

FAA has oversight over. Data-based risk management, safety management systems, all those things are the new FAA. 

I think what you hear, and what we hear, is that it may not be 

happening fast enough, or, in some cases, what we just talked 

about a moment ago is that communications can be improved so 

that industry and others can see that this is going on. And I think 

it is important to recognize that—and we have said this a number 

of times, and others have said it—that cultural change is not an 

overnight thing. It is going to take some time. We know it has been 

some time—— 

Mr. SHUSTER. How long, 20 years? 

Dr. DILLINGHAM. Well, I can’t put a date on it, Mr. Chairman. 

But change is taking place. But, as we just said, sometimes it 

is—— 

Mr. SHUSTER. Well, that is my concern, that we are going to lose 

our lead in the industry if we don’t make these changes. 

The other thing that I have heard over and over again is an inconsistency throughout the country of the FAA. So people shop the 

different regions to find somebody that is going to be easier to deal 

with, not sacrifice safety, but just be able to move through the 

process. 

12 

The other thing that I heard just recently, a small rebuild firm, 

they take small aircraft and they rebuild them, they get it done 

quicker and cheaper, or less expensive, in other countries. Now, I 

can get my head around why Brazil may be faster, because they 

are an emerging economy. Or Canada has to deal with a giant 

right next door to them, so they are nimble and fast. But when 

they tell me they are taking their planes to Germany because it is 

easier to deal with, less expensive, more efficient, I can’t understand that. Germany is a country that is loaded with regulations. 

But they are able to do it. 

So can you talk to me about—you said the FAA is working with 

their partners. But why would an American firm go to Germany to 

do a rebuild on a plane, when it should be doing it right here, in 

America? 

Ms. GILLIGAN. Mr. Chairman, I am not familiar with that example. And, if you would, I would ask that we talk to your staff, because I would like to look at that one, in particular, because we 

and the Germans have exactly the same standards. We have a bilateral agreement. And through that agreement, they accept when 

FAA has certified a product, and we accept when the Europeans 

have certified a product. 

So, it is an example I am not particularly familiar with, and will 

definitely be glad to look into it, and get back to you with what 

those specifics might be. 

Mr. SHUSTER. Right, and I am pretty confident we can get a 

number of those. But, again, if we have the same standards, it has 

to come down to the process and the people, as they apply the 

standards, it seems to me. You know, and that is something I 

talked about. Throughout the United States I hear that they shop 

around to the different regions, where they know that it is a more 

efficient process. Can you talk about standardization across the 

FAA regions? 

Ms. GILLIGAN. Yes, sir. We also, as you know, from the reauthorization bill, we did have a direction to look at how to improve 

standardization. The recommendations that came from that committee are really quite all-encompassing, and they are much more 

robust, much broader, than the recommendations that came, as it 

related to aircraft certification process. 

Standardization is an important initiative, and we have focused 

on that. And, actually, I think we have made good improvements 

over time. We have put in place opportunities and tools to elevate 

issues or questions if at a particular field office there is a disagreement between the applicant and our inspector. We have a process 

in place to elevate that to get an accurate and consistent answer. 

That can take time, and so we are looking at how we can refine 

that. 

The recommendations on improving consistency, the fundamental 

one is to start with a much broader database that will allow us to 

integrate all of the information about a particular regulation, for 

example, so that our inspector or engineer, and the industry, can 

go to a single source and find out what is all the information to 

help them understand how to implement or how to apply that regulation. 

13 

We have a prototype program under—that will be underway in 

the fall, which I find very exciting, that is a—you know, new technology has allowed us to find ways that we can search the many 

databases that we already have to start to address that particular 

concern. And I think you are going to see us starting to make real 

headway on some of those initiatives. 

But it is an issue that is well known to us at the FAA, and that 

we are constantly working with industry to bring those to our attention. If there is inconsistency, we will—we want to work with 

them, and we want to get to a single solution. 

Mr. SHUSTER. Well, and then I will just finish up by saying, you 

know, we really got to move fast on these things. Because I have 

a great concern that we are going to lose our lead in the industry 

across the board, and all the aviation industry. And we need to do 

things differently. And on my watch, and on Mr. LoBiondo and Mr. 

Larsen’s watch, I don’t want to sit here and watch our aviation industry go the way of the textiles and the auto industries, and every 

other industry that we put these hurdles and these burdens on 

that they are not able to move forward and be innovative. 

So, again, we need to consider things differently. And, you know, 

one of the things I sit here today and think about is, it has been 

customary for as long as I have been in Congress, we always let 

the administration come up and testify first, and industry goes second. I think we need to take into consideration letting industry go 

first to help the Members here understand the problems, so we can 

have example after example, so that the administration comes before us and then defends itself, and hears these problems firsthand. 

So, that is something we need to take and consider. We need to 

do a different approach across the board on everything we do when 

it comes to aviation. And again, we are going to be doing that here 

in the next months and years. Thank you. 

Mr. LOBIONDO. Well, Mr. Chairman, with your permission, this 

is going to be a big focus of what we do with the reauthorization 

bill, to try to understand how all this is coming together, and then 

with very specific language make sure that we can keep ourselves 

on the cutting edge of things. So thank you. 

Ms. Johnson? 

Ms. EDDIE BERNICE JOHNSON OF TEXAS. Thank you very much, 

Mr. Chairman, and thanks to both of our witnesses for being here. 

As I have listened to the dialogue, it appears to me that you 

could easily say that staffing resources and funding necessary to 

both maintain safety and make these ambitious improvements 

could be a problem. Has the agency grasped the fact that you 

might have to do more with less? 

Ms. GILLIGAN. Congresswoman, absolutely. We believe—and Congress has always been very supportive of the aviation safety program, and we appreciate that. But we are also realistic, and we 

read the newspaper, and we know there are pressures on the Federal budget. And that is exactly why we are pursuing some of the 

initiatives that we have been talking about. We want to make sure 

that our technical experts are focused on those areas of highest 

risk, and that we at the FAA are overseeing the safety of those programs. 

14 

And it is important to keep in mind it really is the manufacturer’s responsibility to assure that they are designing and building a 

safe product. It is the airline operator’s responsibility to provide 

safe transportation. The role for FAA is to set the standards that 

allow them to do that, and then make sure that they are meeting 

those standards. And we believe that we can manage our resources 

to effectively continue to build on our safety mission. I think our 

record is clear. We are very good at what we do now, and we intend 

to maintain that. 

Ms. EDDIE BERNICE JOHNSON OF TEXAS. Are you current with 

the reports that you are supposed to send to Congress on your 

progress? 

Ms. GILLIGAN. Yes, ma’am. I believe at this point we are. The followup reports are not required to be submitted to Congress. That 

is why we are posting them on our Web site, so that we and the 

industry can track our progress. 

But as—the reports related to certification, I believe, have been 

properly submitted. 

Ms. EDDIE BERNICE JOHNSON OF TEXAS. What would you consider your major handicap right now in trying to get up to par? 

Ms. GILLIGAN. Well, I think the challenges are as we have been 

discussing. Bringing all of our workforce along on this change is 

something that, as leaders, we are required to do. But, as Dr. 

Dillingham has suggested, it is a challenge. 

Employees are comfortable doing work as they have done it in 

the past, and as they understand it. And it is up to us to make sure 

they are properly trained and have the tools ready to be able to 

make these changes. We believe we are putting those kinds of tools 

and training in place, and that, in fact, the employees, our engineers and inspectors, will be able to focus on those higher risk 

areas, and allow designees to perform other activities on our behalf. 

Ms. EDDIE BERNICE JOHNSON OF TEXAS. Thank you very much. 

Dr. Dillingham, prior GAO studies dating back to 2004 raised 

some concerns about the strength of FAA’s oversight of designers, 

including FAA’s staff workload. Can you provide us some of the 

specifics of those concerns, and how you see the progress being 

made? 

Dr. DILLINGHAM. Yes, ma’am. When we first looked at the designees and the organizational delegation issues, our concerns were 

that FAA may not have enough resources to adequately oversee the 

actual designees, and that, in fact, some of the designees were not 

actually trained as they should have been to do the job that they 

were being asked to do. And it was a question of whether—how difficult it was for FAA to remove those designees when it was determined that they were not meeting the standards. 

Since that time, those issues have been addressed by FAA, and 

they are continuing to be addressed by FAA and industry as well. 

So those issues are on the wane. 

Ms. EDDIE BERNICE JOHNSON OF TEXAS. Thank you very much. 

Thank you, Mr. Chairman. 

Mr. LOBIONDO. Mr. Meadows is not back yet. Mr. Ribble? 

15 

Mr. RIBBLE. Thank you, Mr. Chairman. Thank you both for being 

here this morning. I just really have one question I wanted to address to Ms. Gilligan. 

Thank you for being here. The FAA air certification service—I 

am quoting out of page 3 on your written testimony—the FAA aircraft certification service has both a high volume and wide range 

of certification applications under review at any given time. In fiscal year 2013 alone, the FAA approved 189 revisions to aircraft 

type certificates, 440 new supplemental type certificates, STCs, for 

aircraft components, and an additional 397 amended STCs, and 

over 2,200 parts manufacturer approvals for replacement parts on 

aircraft. 

I am curious. Do you know how many of these approvals were 

done with the ODA certification process? 

Ms. GILLIGAN. I don’t offhand, sir, but I am sure we can get you 

that data. 

Mr. RIBBLE. Could you give me your take on how the ODA is 

working? 

Ms. GILLIGAN. Yes. We are very encouraged by how it is working. 

We think that there are some that have been very successful. Certainly the larger manufacturers that we see are able to implement 

them more effectively so far. 

I think one of the concerns you may have heard is that it needs 

to be a scalable process, and we agree with that. So we are looking 

at how we can continue to improve the use of the organizational 

delegation, because we do see it as a tool in the future that allows 

us to delegate even more of the decision—of the findings of compliance. 

So, I think we are learning as we go. I think we have seen some, 

again, that have been very successful, and there are still improvements that can be made. 

Mr. RIBBLE. In your opinion, is the ODA pretty much fully implemented now? 

Ms. GILLIGAN. I think—— 

Mr. RIBBLE. And why wouldn’t you use it, if it is not? 

Ms. GILLIGAN. Well, again, I think it is fully implemented at 

some of the larger manufacturers, when they have applied for it, 

and they have put in place the process that is necessary for it. 

I know we have heard concerns raised by some of our smaller 

manufacturers, that it is overwhelming for them to put in place, 

and so they are not pursuing it. And that, I think, is something we 

need to continue to work with, those manufacturers, to scale it so 

that it is appropriate for their needs, so that we and they can take 

better advantage of it. 

Mr. RIBBLE. OK. Thank you very much. 

And, Mr. Chairman, I yield back. 

Mr. LOBIONDO. Mr. Nolan? 

Mr. NOLAN. Thank you, Mr. Chairman. I just got a short statement and a couple of things. 

One is I want to add my concern to the concern expressed by 

other members of this committee, with regard to the need to expedite the certification process, the need to find—I am not sure it was 

addressed, but, you know, better training and education programs 

for the workforce that is necessary for this industry, and express 

16 

my concern about the FAA workforce and the workload that is required to meet this incredibly rising demand. 

My question is this committee and the Congress here this past 

year passed a new regulatory regime for the manufacturers of 

small aircrafts. And, Ms. Gilligan, I would appreciate if you would 

kind of update us on how that is progressing. That is very important to many of us, including those up in Duluth, Minnesota, where 

Cirrus Manufacturing exists, and it is doing a remarkably good job 

in creating a new aircraft, both for the domestic and the international market. Thank you, please. 

Ms. GILLIGAN. Yes, sir. Part 23, the rewrite of part 23, is an extremely important initiative for the Administrator and our Deputy 

Administrator. It is also a first of its kind project, to take an entire 

part of our regulations and rewrite all of it. 

As you might imagine, there is a lot of interaction among all the 

parts. And as we do this, we want to be certain that we are improving the certification process, and not losing any of the safety requirements that we have in place. We have a very dedicated team 

led by one of our executives in Kansas City, who is responsible for 

small aircraft certification. He brings a personal dedication to this 

project. 

The schedule is somewhat slower than the legislation had envisioned. But going through notice and comment rulemaking, and 

then through final rulemaking, it does take a period of time. But 

we monitor this project on a monthly basis at our executive level. 

I keep the Administrator informed, as well. 

We are meeting our internal schedule. We are identifying and 

solving issues that come along, so the team can continue to make 

progress. And we will be glad to keep you and your staff informed 

of the progress as we proceed. 

Mr. NOLAN. Thank you. Can you give us a date as to when you 

project—— 

Ms. GILLIGAN. Yes, sir. The final rule is right now planned for— 

I believe it is December of 2017. That is later than the statute, 

which called for a final rule by the end of 2015. But again, first, 

the complexities of writing the rule, and then getting it published 

for notice and comment, and considering those comments, and finalizing the project, will take a considerably longer period of time 

than was anticipated in the statute. 

We are—we have a detailed schedule. We are meeting that 

schedule at this point. And, again, we will be glad to keep you informed about that schedule. 

Mr. NOLAN. Well, thank you for that. And, please, I know it 

means a lot to all the members of this committee to have that 

whole process be a focus of important attention for your agency to 

get that done as soon as possible. Thank you. 

Mr. LOBIONDO. Thank you, Mr. Nolan. 

Mr. Rodney Davis? 

Mr. DAVIS. Thank you, Mr. Chairman. Ms. Gilligan, thank you 

again for being here. It is great to follow the chairman and Mr. 

Nolan, because they took my two questions for you. 

Ms. GILLIGAN. I appreciate their efforts on my behalf. 

Mr. DAVIS. But I do want to also let you know I too am concerned 

with the section 313 implementation, or lack thereof in many cases. 

17 

And I am also concerned, as Mr. Nolan was, with getting the Small 

Airplane Revitalization Act, you know, implementation moving 

along much more quickly. 

So, I will move to Dr. Dillingham. Welcome again, sir. It is good 

to speak with you again. Your testimony reinforces that change is 

tough, and the FAA’s workforce seems to be a little reluctant to implement some significant changes to the way business is currently 

being done there. The GAO usually provides good recommendations. But what can you recommend to change the culture of an 

agency? 

Dr. DILLINGHAM. Thank you, sir. What we have found from our 

work is that it—although change takes time, if in fact there is commitment and accountability for that change from the top all the 

way through to the field locations that have to implement it, that 

is helpful. If that change is incentivized, that is also helpful. 

It is, in fact, a tough thing to do. But what we said earlier this 

morning is that when FAA has some successes, those successes 

need to be communicated broadly and widely. And FAA is also currently working with major industry partners to implement that cultural change, which is also very critical. 

So, we are guardedly optimistic that, although it may take some 

time, it will, in fact, happen. 

Mr. DAVIS. OK. My next question. Industry is concerned about 

the FAA’s lack of performance measures. Nine out of fourteen of 

those measures have yet to be developed. What is the overarching 

factor holding the FAA back from establishing these performance 

measures? 

Ms. GILLIGAN. I would be glad to answer that one. I think, as Dr. 

Dillingham has identified, first of all, performance metrics are very 

difficult. And so, we are working with industry to try to develop 

what are the right ways to measure this. 

I understand there was a discussion within the last 2 weeks between our aircraft certification leadership and industry leaders. 

And, again, what we tend to come down to are counting things. 

How many of these did we do, or how many of that did we do? And 

I think, as Dr. Dillingham’s testimony makes clear, that is not a 

measure of your performance, or the effectiveness of your changes. 

It is simply a number. And what we are trying to do is understand 

how do you really measure that if we make this change, it has effectively made the process more efficient. 

So, we will continue to work with industry so that we and they 

can reach an agreement on these are the right measures. You 

know, if you implement this thing, and you get to this outcome, we 

will know we were successful. And that is what we are struggling 

with. 

Mr. DAVIS. Well, and that is what we are struggling with, too, 

as policymakers. We want to see the performance measures put in 

place, but I don’t want to create a new bureaucracy that discusses 

performance measures and how to measure performance measures, 

and et cetera, et cetera. So that is our concern, too. 

And, Dr. Dillingham, issues with the FAA certification approval 

process has obviously resulted in delays and higher costs for the 

aviation industry. And as a policymaker, I want to push the FAA 

to become more efficient more quickly. What are some recVerDate Aug 31 2005 10:20 Aug 12, 2015 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\AV\7-23-1~1\88817.TXT JEAN
18 

ommendations you have for future FAA reauthorizations that 

would get us this result? 

Dr. DILLINGHAM. I think the—probably the most important thing, 

and probably the most efficient thing that could be done, is to make 

sure that those recommendations that have been made, those initiatives that have been identified to address those recommendations, that there is actual implementation of those, that there is accountability associated with them. 

The recommendations that are on the table from the 2012 reauthorization are pretty robust, and cover most, if—cover most of all 

the issues that have been brought to the Congress over the last few 

years, and have been identified by our study. So that is the first 

thing, is do what is already on the table. Accountability and oversight, as this hearing is doing. 

Mr. DAVIS. Well, thank you both for being here, and thank you 

for your testimony. 

I yield back, Mr. Chairman. 

Mr. LOBIONDO. Thank you. Ms. Titus? 

Ms. TITUS. Thank you, Mr. Chairman. When you go last you get 

to hear all the questions, so you can kind of look for themes. And 

it seems to me that every question kind of has the same theme: 

FAA is understaffed, it is too slow, it is too old fashioned, it can’t 

keep up with the industry, and it just needs more time. 

Well, the industry doesn’t have a lot of time. They are moving 

rapidly. And one of the areas where you see this that impacts domestic aviation is in the unmanned aircraft development. Nevada— 

I represent Las Vegas—was one of the six States, as you know, 

chosen as a test site for the integration of these UAVs, and we are 

no stranger to that. We have Creech Air Force Base, we have the 

Predator, we have the Reaper, we are ready to go. But it doesn’t 

seem like a lot of people are starting to test, because of the uncertainty. They don’t know what the rules are, or what is going to 

happen. 

So, Ms. Gilligan, could you kind of update us on how the test site 

program is progressing, and the—what is happening with the development of the UAV small vehicle rule that you all were going 

to develop? Tell us where we are with that, so we can kind of go 

back and give folks some reassurance that we are moving forward 

in this area. 

Ms. GILLIGAN. I would be glad to, Congresswoman. As you know, 

four of the test sites are already up and operational, and we are 

working closely with them to understand what research and development initiatives they are undertaking, and how we can learn 

from and take advantage of that data. 

As you know, we will be sharing the data that they collect. We 

will be using the Technical Center up in New Jersey to help us do 

the analysis of all of that data. And all of that will help inform 

what standards, both for operation and as well as for design and 

manufacture, that we need to put in place. 

On the manufacturing side, or the design side, we actually have 

approved two aircraft systems already. They are operating up in 

Alaska. They started last summer. They are operating this summer. Obviously, that is a low-risk environment. But they are—we 

are learning a lot about the design requirements that we had for 

19 

those systems that can help us better understand how to set the 

design standards for sort of a more robust operation. 

And the small UAS rule is making—I will tell you—making great 

headway. We have completed our review at the FAA. It is in the 

executive review process now. It is a top initiative for our Administrator. And so, I think we will see some—we are hoping to see 

strong support in getting it through the process and published, so 

we can begin to get comments. And I think that will begin to answer a lot of the questions that I know some of the applicants at 

the test sites are concerned about. 

Ms. TITUS. And will that be this year? Next year? By Christmas? 

What—— 

Ms. GILLIGAN. Our schedule calls for it to be—for the notice to 

be published by the end of this year. And, as I said, the Administrator is pushing hard to see if we can beat that schedule. 

Ms. TITUS. I appreciate that. And my second part of the question 

is this is going to open up a whole new industry, new myriad of 

products and procedures that will fall under your domain. How do 

you see this affecting the other work that you do that we have been 

talking about this morning? Have you got the personnel and the resources to take this part of the industry on, and still keep up with 

these other things that have been asked about? 

Ms. GILLIGAN. Well, certainly, in future budget years we will 

need to look at whether this is driving a new need for resources, 

both in numbers and in skill sets. We may need a different kind 

of skilled employee, as well. And so that will be addressed in the 

budget process. 

But in the meantime, yes, I think we are confident, as you know, 

I believe, at the test centers we are arranging four designations 

there, for us to be able to designate representatives to be able to 

make safety findings at the test sites, so that those operations can 

be determined to meet the appropriate safety standard without additional FAA oversight. So we are looking at how we can take advantage of the designee system to begin the support for UAS systems right now, from the ground up. 

Ms. TITUS. I hope that will be some kind of standardization, and 

we won’t see a problem of shopping the test sites, like we heard 

earlier about shopping the different areas because different regional offices do different quality of work. 

Doctor, were you going to say something? 

Dr. DILLINGHAM. Yes, I wanted to just note that this subcommittee has asked us to conduct a pretty comprehensive review 

of UAS integration into the NAS. And, as a part of that review, a 

lot of focus is on research and development. So we are going to be 

looking at the issues and concerns of the test sites, and how that 

process is going. We are going to be looking at what are going to 

be the resource needs and timelines involved in integrating UAS 

into the NAS. 

So, hopefully, by the end of the year or early next year, we will 

have that comprehensive report for this subcommittee. 

Ms. TITUS. Thank you. Would you keep our office updated as you 

move forward with that study? 

Dr. DILLINGHAM. Absolutely. 

Ms. TITUS. Thank you. Thank you, Mr. Chairman. 

20 

Mr. LOBIONDO. Mr. Hanna? 

Mr. HANNA. Thank you. Thank you, Ms. Titus. I have Griffiss Air 

Force Base, which is one of the 6, and the 174th, and of course, 

Watertown. 

But I have a different question. Correct me if I’m wrong, Ms. 

Gilligan, but you stated that you have adequate resources. And 

Mr.—Dr. Dillingham has said that there are cultural issues. We 

have heard from the FAA director of flight standards that there is 

a backlog of over 1,000 certifications and authorizations for the national airspace. And then we go on to find—to hear from the manufacturers the FAA has made some progress towards addressing— 

this is Mr. Dillingham’s statement, but we are hearing—but this 

committee is hearing the absolute opposite from interested parties 

and stakeholders. So, if you have adequate resources, maybe I 

misheard you. 

The other problem—the other thing I want to ask you, just fundamentally, is there a difference between a risk-based approach 

that you talk about, and the outcome-based approach that Dr. 

Dillingham talks about? You both use a different language, but it 

isn’t clear to me that you mean the same thing. So I am kind of 

curious. 

Ms. GILLIGAN. I think actually, Congressman, there are two 

parts of the process. 

When we talk about a risk-based approach, we mean that we 

want to make sure that we are focused—we a the FAA, the limited 

resources that we have are identifying where a manufacturer may 

be adding a new element to their process, or a new product that 

might introduce risk into the system that we haven’t fully understood and analyzed. And that is the project that our inspectors or 

our engineers should be focused on. That is how we determine 

what work we should take on and determine what work can be left 

to the designees who work on our behalf to make certain findings. 

That is kind of at the front end of the process. 

Mr. HANNA. Dr. Dillingham, would you like to comment about 

that? Am I reading something into this that doesn’t exist? You talk 

about the cultural issues. And, of course, Ms. Gilligan admitted 

that there were cultural changes going on that present some issues, 

which are, I guess, understandable. But how big a barrier to getting this whole thing moving forward is there between those two 

elements? 

Dr. DILLINGHAM. It is hard to put an exact percentage on it. But 

let me talk a little bit, and see if I can add some clarity to what 

we said before. 

The resource issue for FAA is—it is there. There is a resource 

issue. And that—I think that is why the designee program, which 

has been going on for, you know, many years now, and now being 

expanded to organizational designees, is there to supplement those 

resources and to address that resource constraint. 

When we talk about culture change, we are talking about the difference between what FAA has traditionally done, where they had 

the inspectors who could go out and touch each wheel, touch each 

cert that it needed to, that was a part of its portfolio, as well as 

do its other surveillance activities. That day has long since passed. 

21 

And the idea now is to move towards, you know, delegating more 

of those kinds of things to the industry with FAA oversight. 

The outcome versus output that we were talking about referred 

more to—or at least in part to the metrics, that when FAA talks 

about, you know, ‘‘We are implementing various and sundry recommendations,’’ and—or, ‘‘We are installing certain amounts of 

equipment,’’ we are saying that that is not the measure. The measure is what difference does it make in the certification process. 

How much more efficient—what are the gains for industry? 

And so, all of those concepts are sort of—— 

Mr. HANNA. So you are kind of saying to me that—correct me if 

I am wrong—that they have lost their ability to be practical in 

their work process, that they have become excessively bureaucratic. 

Is that close, or—— 

Dr. DILLINGHAM. I wouldn’t say that. I think they are being practical by recognizing that they can’t do everything that is required 

of them, and moving towards this ODA process in concert with industry. I think I would say it that way. 

Mr. HANNA. Thank you. My time has expired. 

Mr. LOBIONDO. Thank you. Mr. Meadows? 

Mr. MEADOWS. Thank you, Mr. Chairman. 

Dr. Dillingham, I want to come to you with regards to the certification process. And if you could help me understand a little bit better, I guess, sequencing and why that has worked or has not 

worked. 

Dr. DILLINGHAM. I think the—one of the major concerns with the 

project sequencing was that it was—— 

Mr. MEADOWS. Now you are saying ‘‘was.’’ It probably should be 

‘‘is.’’ 

Dr. DILLINGHAM. Yes, is. 

Mr. MEADOWS. OK. 

Dr. DILLINGHAM. Is. 

Mr. MEADOWS. All right. 

Dr. DILLINGHAM. That—or at least the concern has been expressed is that it took a—it came from headquarters, or was centrally located, whereas another—an alternative would be to be 

more locally based, where the decisions could be made quicker and 

more efficiently. 

Mr. MEADOWS. So, do you see the prioritization program as being 

an improvement? 

Dr. DILLINGHAM. I would say it is an improvement. And although 

it is early on in the process, I think the efforts that FAA has made 

to work with the unions and work with industry will make it get 

better in the future, as we go on. 

Mr. MEADOWS. So right now, though, in terms of if I were a civil 

aerospace company, would I know with certainty whether I was 

going to get a certification or not, based on either first come first 

served—how do I plan? I mean can I properly plan? Because it 

doesn’t appear that I could. 

Ms. GILLIGAN. If I may, Congressman, I think you have identified 

exactly what we have seen, as well. 

The issue is not—it is a little less about timing, and much more 

about predictability. So the process that we had in place notified 

the applicant every 30 or 60 days—I forget what the interval was— 

22 

whether we could or could not begin their project until we could. 

And so, the dilemma for the manufacturer was they didn’t know if 

it was going to be in 60 days or 6 months. 

The new process—— 

Mr. MEADOWS. So you are telling me there is no certainty whatsoever, and we are investing millions and millions of dollars, and 

they have to hope that one day they get a letter and say, ‘‘Oh, by 

the way, we are going to certify you,’’ or start the process? 

Ms. GILLIGAN. So that was the way we were doing it. And we 

were also trying—we had a metric to approve projects within, I believe, a 90-day timeline. And for most of the projects, we actually 

made that. But the applicant may not know that that was what the 

measure was. 

What the new process will do is allow for that predictability. 

When we receive the application, the engineer involved will analyze 

how—what the value of the project is, from a safety perspective, 

and some of the other criteria that we have in place, and determine 

when that project can be turned on. The applicant will be given a 

project number, which means that the project is underway. And 

they can use their designees in the interim. We can enter the 

agreement for what the schedule will be. 

What we are trying to address is that concern about predictability, so that the applicant, the manufacturers, can know when 

they can expect that the project will move forward. We believe that 

that will go a long way to improving—or to addressing the concerns. 

Mr. MEADOWS. OK. You identified this—am I correct, Ms. 

Dillingham? You identified this back in—Gilligan, I apologize—in 

2011. Is that correct? The FAA recognized that this was a problem, 

and then again in 2012. 

Ms. GILLIGAN. Well, we had the sequencing program in place for 

a number of years. And throughout all that time we were always 

trying to find ways to improve it and enhance it. So we moved it 

away from where the local office would say, ‘‘No, we don’t have the 

technical skills so we have to delay your project,’’ to a national approach, where we could see does the—do we have the appropriate 

skills somewhere around the country, so that we can get the project 

started more quickly? 

So, over time we have made improvements. And this will be the 

next—— 

Mr. MEADOWS. OK. Tell me why you are not going to meet your 

milestone. I think that is—according to testimony, it looks like— 

that you are not going to meet the milestone for implementation 

this year. Is that correct? 

Ms. GILLIGAN. No, sir. We actually disagree with Dr. Dillingham. 

It is true we had interim milestones in order to get this in place 

by the end of the year. One of the interim milestones has been delayed because of additional consultation with our unions. But we 

are still focused on implementing this by the end of this calendar 

year. 

Mr. MEADOWS. Yes, but the milestone was July. So we have got 

8 more days. So that milestone, you are going to meet that milestone, as well? 

23 

Ms. GILLIGAN. No, the final milestone for implementation has 

been the end of the—— 

Mr. MEADOWS. The milestones are exactly that, they go—— 

Ms. GILLIGAN. Yes—— 

Mr. MEADOWS [continuing]. One step at a time—— 

Ms. GILLIGAN. Yes. 

Mr. MEADOWS [continuing]. So you don’t have to wait until the 

end. 

Ms. GILLIGAN. I agree. 

Mr. MEADOWS. So you are not meeting your milestones. So he 

would be correct. 

Ms. GILLIGAN. There is the interim milestone that has been delayed. We acknowledge that, and we agree. We are now working, 

though, to assure that we have it—the program in place by the end 

of the year. 

Mr. MEADOWS. We will be waiting for those results. I appreciate 

the patience of the Chair. 

Mr. LOBIONDO. Mr. Williams? 

Mr. WILLIAMS. Thank you, Mr. Chairman. I want to thank both 

of you for being here today, as always. 

I am from Texas. And Texas is home to two major rotorcraft 

manufacturers, Bell Helicopter and Airbus Helicopters. My question today concern the challenges in the certification. We have 

talked about that, installation of equipment and safety-enhancing 

technology to rotorcraft, compared to large transport airplanes and 

small airplanes. 

So, Dr. Dillingham, my question would be to you. In the course 

of your review of the certification process, have you found any particular concerns or frustrations expressed by rotorcraft manufacturers? And if so, can you discuss the concerns and why they are happening? 

Dr. DILLINGHAM. I think, to the extent that we have looked at 

certification and had a chance to do some interviews, the rotorcraft 

manufacturers had similar concerns as did the regular aircraft 

manufacturers, in terms of delays or different regulatory interpretations. 

I think the thing—the example that I remember was more on the 

international front, in which an approval was granted by FAA 

here, but when that rotorcraft was taken overseas, the time that 

it took, and the cost, was similar to what the original cost and time 

was for the FAA certification. And the concern was expressed that 

this was sort of duplicating and having a very negative effect on 

that manufacturer. 

We propose to look at that issue for rotorcraft manufacturers and 

others, as we pursue the committee’s request to look at international issues and how international certification is going. 

Mr. WILLIAMS. I know they would appreciate that. And just one 

additional question. Are there any initiatives that could help address some of these things we are talking about, like making 

progress on reducing regulatory inconsistency, which we talked 

about? Are there any best practices that could be learned from directorates like transport or small airplane? 

Dr. DILLINGHAM. I think the key initiative that we have heard 

from, you know, almost unanimously, is the idea of setting up this 

24 

automated database that brings all of the regulations and all of the 

guidance under one umbrella, where it can be searched by both industry and FAA inspectors, so that that inconsistency will start to 

go away. 

When an inspector can punch up, you know, the various and sundry ways that certifications and approvals have been made in the 

past, and they don’t have to start anew, or impose their own particular interpretation on something, and the next move up is if 

there is a disagreement, then there is a procedure being developed 

that will address that. We think that that is the most critical element necessary to move forward on regulatory interpretation. 

Mr. WILLIAMS. New concept. Make it easier, right? 

Dr. DILLINGHAM. Yes, sir. 

Mr. WILLIAMS. I appreciate you being here, and I yield back, Mr. 

Chairman. 

Mr. LOBIONDO. Mr. Lipinski? 

Mr. LIPINSKI. Thank you, Mr. Chairman. I want to thank you for 

holding this hearing on domestic aviation manufacturing. And very 

pleased that our subcommittee continues to remain active in monitoring of the work to improve FAA’s regulatory process, and also 

the domestic manufacturing sector. 

I am a big promoter of American manufacturing. Aircraft manufacturing is also especially important to me, and maybe it goes 

back to 35, 40 years ago, when I played little league baseball at 

Aircraft Gear Field in Bedford Park. I know how important—especially aviation aircraft manufacturing is to the American economy. 

Now, we are all mindful that the FAA reauthorization is coming 

up. We need to get that done next year, and welcome this opportunity to learn more about what has been done and what is being 

done. 

And one of the biggest issues that I focused on during my time 

on this subcommittee is streamlining the FAA’s certification process to make sure that manufacturers can move innovative, safetyenhancing ideas from the design table to assembly line into the 

cockpit without months of delays and unnecessary costs. I was the 

lead Democrat cosponsor of the Small Airplane Revitalization Act, 

which requires the FAA to streamline its certification process of 

small aircraft by December 2015, and I hope to learn how Congress 

can continue to support other parts of the aviation manufacturing 

sector. 

Whether it is implementing this bill, developing regulatory certainty under section 312, or finalizing the competition to develop a 

new aviation gas, progress in this area is absolutely necessary to 

improve aviation efficiency, enhance safety, and help support 

America’s status as a global leader in aviation, which leads me into 

a question for Ms. Gilligan. 

As you know, the American aviation industry, the FAA included, 

has set the standard for innovation, quality, and safety. But there 

are always challenges to our leadership on this. You noted that the 

FAA facilitates the import and export of aircraft components in a 

global economy, and cited the establishment of bilateral agreements with 47 countries. I am interested to learn what efforts the 

FAA has made to advance the reputation and standing of its standVerDate Aug 31 2005 10:20 Aug 12, 2015 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\AV\7-23-1~1\88817.TXT JEAN
25 

ards in American aviation products generally, and how our bilateral partners view the FAA’s type certifications. 

So, how do the FAA’s efforts measure up in comparison to those 

of its bilateral agreement partners? Are there ways this can be improved? And also, you know, what constraints in improving this 

does the FAA face? I think this is all vitally important that we 

make sure that America remains the gold standard here. So just 

interested in what the FAA is doing right now in this area. 

Ms. GILLIGAN. Thank you, Congressman. First, I think it is quite 

widely accepted that the actual standards for design and manufacture of aircraft originated in the United States, and in only a few 

other countries around the world. And they—we—continue to lead 

the world in setting what is the safety standard against which one 

designs and builds an aircraft. So I don’t think there is really a 

question about whether the U.S. standards for design are the gold 

standards. 

I do think what we are seeing is a phenomena around the world, 

where other countries are expanding, trying to build their own 

technical expertise in aviation safety. And we have seen countries 

where they are taking a more active part in the review of product 

certification before they allow that product into their country. 

Those authorities have the same responsibility we in the FAA have 

of determining that a product that is coming into their country is 

safe. 

Now, we believe that that will change with time, and that those 

emerging economies will understand that it can be much more efficient for them to take advantage of the expertise of the U.S., or if 

it is a European product, of the Europeans. Now, just as we and 

the Europeans have already made that—come to that realization. 

So, when the U.S. certifies a—a product, rather, it is not at all uncommon for the Europeans to issue their approval the very same 

day, or the next day, because we and they have worked together 

with the manufacturer throughout that project to determine compliance with the appropriate safety standards. 

Now, we continue to work with the bilateral partners, who are 

at times, we believe, interposing or asking for more than is necessary for them to accept a U.S. approval. And we are making 

headway. 

Mr. LIPINSKI. Not to interrupt you, I am just running out of time. 

I just want to ask one other question. Why is there going to be a 

2-year delay? What is the cause of the 2-year delay in the implementation of the Small Airplane Revitalization Act? 

Ms. GILLIGAN. Yes, sir. The deadline that was given in the statute, in our opinion, was not—was just too difficult to meet. The 

part 23 is a very big, complex part of our rules. And a complete 

rewrite is—this is really the first time we have ever taken on a 

project like this. 

So, what we want to make sure is that we are, in fact, streamlining the process, but that we are not reducing the level of safety 

in those standards. We have a dedicated team that is working hard 

to keep this project moving forward. But we do need to do the rewrite, we need to put it out for comment. We do expect that the 

industry will want a fair amount of time, because it is such a complex project. And then we need to consider those comments, and 

26 

make whatever changes are necessary to the final rule. And that, 

we believe, will take an additional 2 years. 

Mr. LIPINSKI. And I want to—I am over time. I thank the chairman for letting me go here. But I just want to say I would like to 

follow up later on, you know, what we can do here, so that we can 

move this process forward more quickly. Thank you. 

Ms. GILLIGAN. We will be glad to follow up with you, sir. 

Mr. LOBIONDO. OK. Mr. Bucshon? 

Dr. BUCSHON. First of all, thank you both for being here. It is 

very much appreciated. I have—you know, most of my questions 

have been answered, except for the—what I am hearing a lot of is 

that part of the delay process is a ‘‘cultural change’’ that is required at the FAA, at a Federal agency. And almost every Federal 

agency I have ever had testify in front of Congress, they have said 

the same thing. 

And so, at some point, you know, my question basically is, you 

know, the leadership at the FAA knows what needs to be done, 

Congress has mandated it, put it into law. And so, what are the 

cultural impediments to change? I mean if you were at a private 

company—and I know I am not naive enough to think that it is not 

a totally fair comparison—and a new CEO came in, and there was 

going to be a cultural shift, it doesn’t happen overnight, first of all. 

But people that are working at the company that don’t feel comfortable with that working environment leave or—and, at the end 

of the day, ones that are impediments to that cultural shift are 

fired. 

So, what is the real—I mean what is the impediment? You mentioned, you know, you are in discussions with your unions about, 

you know—discussions with the unions about what? I mean there 

needs to be a cultural change at the FAA. It is mandated by Congress. It is put into law. What is the discussion? 

So, yes or no, is that the main impediment to a cultural change 

at the FAA? 

Ms. GILLIGAN. No, sir. I think that the reality is change is always difficult. But I can assure you that the Administrator has, as 

one of his significant initiatives, that FAA will move to a risk-based 

decisionmaking process. The leadership at FAA understands that, 

and the workforce is actually coming to understand what that 

means for them. 

So, we have, I think, taken—we have made good steps in bringing this change. And we just need—I think Dr. Dillingham’s point 

is we need to manage it actively. We need to not assume this will 

just work its way out. And that is why the action plans that we 

have, for example, with the milestones are a way that we can continue to measure that we are making progress at bringing about 

this change. 

Some of the recommendations are that we need to change the 

training we provide to our inspectors, or to our engineers, so they 

can better understand what it means to identify risk, and how to 

mitigate it, and those kinds of things. We agree. That training is 

under development. And that will be provided. That will begin—excuse me. That will support this continued move forward toward 

this kind of approach. 

27 

I can tell you, broadly, the workforce wants to make this move. 

They believe that there are risks that they can understand and 

mitigate, and they want to focus on that. They are a conservative 

workforce, in that when you are a safety professional, change introduces risk. And you want to make sure, before you make the 

change, that you are doing the right thing. So that is what we have 

to—we have to bring them along to be confident that they have the 

skills to make this—to take this kind of an—— 

Dr. BUCSHON. And I am not criticizing the workforce at all. I am 

just saying that, you know, that—themselves, but maybe the leadership of the workforce maybe I am slightly criticizing. But, you 

know, how long is this type of thing—because we—I do hear almost 

every Federal agency say the same thing. When Congress has put 

something in the law, set a deadline, and the deadline is not met, 

they say it is because there is this big, difficult cultural shift that 

has to happen, and we have to make all these changes. 

And then, frequently, hide behind safety issues. Well, it is a safety issue because if we quickly change this process, you know, it 

might impair safety, and there might be something—I mean this 

is a common narrative. And frankly, I think, you know, Congress 

gets frustrated by that, both political parties, sometimes, when, you 

know, when you have an issue like this. 

And, clearly, when industry is frustrated—and, honestly, when 

American competitiveness is at risk, not only in aviation, but 

across our manufacturing sector, when—you know, when we can’t 

quickly change—I mean just use FDA as an example. I was a medical doctor before. Businesses in Indiana, in my district, are introducing their new products in foreign markets before they are in the 

United States. Why? Because they can’t get approval fast enough 

to introduce them here. It is a travesty when you have American 

manufacturers can’t produce their own products and release them 

in their own country because a Federal agency, you know, has cultural changes that have to be made, and that are—I think somebody mentioned might be 20 years ago. 

For example, Cessna is building planes in China. You know? And 

so I would just implore the FAA to do everything they can to comply with what Congress has asked FAA to do. Let’s help American 

manufacturing and continue to make America the best place in the 

world to manufacture. I yield back. 

Mr. LOBIONDO. Thank you. Ms. Gilligan, you touched on this 

with, I think, Ms. Titus, but I would like you to try to expand a 

little bit. Given the many different types of small, unmanned aircraft, will each need to be certified, each platform need to be certified? Or how are you going to—I know you started this in Alaska, 

but this is an area where technology is moving very quickly. Can 

you shed any light on this for us? 

Ms. GILLIGAN. Yes, sir. I think, as you know in the reauthorization bill, you provided us some guidance on how to address small 

UAS, up to 55 pounds. Those will be covered in the small UAS rule 

that we expect to publish by the end of the year. And I think you 

will see there that we have hit a good balance in terms of what the 

safety standards or determinations need to be for the operation of 

those small systems. 

28 

For larger systems—and, as you know, these systems can be as 

large as any of our standard aircraft—we believe that there will be 

safety design requirements and manufacturing requirements that 

will be appropriate. The two certifications that we issued for the 

aircraft systems up in Alaska gave us an opportunity to look at our 

standards and to identify those that would seem appropriate to 

apply to this kind of system. 

So, for example, we have a number of design standards that 

apply to making the aircraft safe for people or crew who are in the 

aircraft. Obviously, those standards don’t need to apply in this setting. So that is what we are really working on. 

We have three other applicants for certification right now in our 

L.A. office. We believe that there may be another one or two that 

will come along. And we will work through that process to identify 

what are the applicable standards, and what are standards that 

they don’t need to meet in order to demonstrate that the system 

is safe, both in design and for manufacture. 

Mr. LOBIONDO. OK. I would like to thank you, Ms. Gilligan, Dr. 

Dillingham. We will recess briefly while the first panel moves out, 

and welcome the second panel. 

[Recess.] 

Mr. LOBIONDO. I would like to welcome our second panel today. 

And our second panel includes Ms. Marion Blakey, president and 

CEO of Aerospace Industries Association of America; Mr. Pete 

Bunce, president and CEO of General Aviation Manufacturers Association; Mr. Joe Brown, president of Hartzell Propellers; and Mr. 

Dave Cox, lead administrator of Air Washington project. 

Ms. Blakey, you are now recognized. 

TESTIMONY OF MARION C. BLAKEY, PRESIDENT AND CHIEF 

EXECUTIVE OFFICER, AEROSPACE INDUSTRIES ASSOCIATION OF AMERICA; PETER J. BUNCE, PRESIDENT AND CHIEF 

EXECUTIVE OFFICER, GENERAL AVIATION MANUFACTURERS ASSOCIATION; JOSEPH W. BROWN, PRESIDENT, 

HARTZELL PROPELLER INC., AND CHIEF OPERATING OFFICER, TAILWIND TECHNOLOGIES; AND DAVE COX, LEAD ADMINISTRATOR, AIR WASHINGTON PROJECT, AND DEAN OF 

INSTRUCTION, TECHNICAL EDUCATION DIVISION, SPOKANE 

COMMUNITY COLLEGE 

Ms. BLAKEY. Thank you, Mr. Chairman. And I do want to thank 

not only our chairman, but Ranking Member Larsen. I am delighted to see Congressman Lipinski here, and others that I know 

we have worked very closely with, in terms of aviation safety and 

manufacturing issues. 

I am also very pleased to be able to discuss our views, from the 

standpoint of the Aerospace Industries Association on the state of 

domestic aircraft manufacturing and, frankly, the challenges that 

we face in an increasingly competitive global market. 

We are proud that commercial aviation manufacturing remains 

the leading contributing sector to U.S. net exports, and that domestic aircraft sales continue to climb. Last year, we had a positive 

trade balance of $72 billion, our best in history. This healthy export 

record underscores our industry’s deserved reputation for both safety and quality. 

29 

But it is also a testament to an industry that invests billions of 

dollars in R&D in order to keep our competitive edge. The use of 

higher strength, lighter weight materials, nano technologies, 3D 

printing, and cleaner biofuels all help to make our aircraft more 

durable and efficient, and illustrate our commitment to being second to none. 

But as much as the United States leads the pack, we face stiff 

competition in a global market, often by foreign firms that are 

highly subsidized by their governments. However, if we have the 

support of strong U.S. Government policies to streamline the regulatory environment, provide equitable financing terms, and invest 

in the modernization of our air transportation infrastructure, our 

industry can then continue to do what it does best: innovate, compete, and create jobs for literally hundreds of thousands of highskilled workers. 

Let me discuss some of the challenges our industry faces. First, 

we appreciate this committee’s strong support for streamlining 

FAA’s aircraft certification processes. Now it is imperative that the 

FAA follow through and ensure, at the working level, that their organization designation authorization, ODA, is used as intended. 

This will allow the FAA to take advantage of industry expertise, 

and increase the collaboration and partnership that leads to improved aviation safety. 

Secondly, we are concerned by the millions of dollars it costs our 

manufacturers to get other nations to certify equipment that the 

FAA has already certified. We are eager to work with the FAA to 

improve the acceptance of FAA-approved beyond our own borders. 

Let’s turn to the big issue before Congress right now, and that 

is the reauthorization of the Export-Import Bank of the United 

States. I can’t stress enough that our industry counts on Ex-Im 

guarantees and credit assistance to compete with international 

sales on a level playing field. Thousands of U.S. workers who build 

our wide-body and general aviation aircraft and helicopters at companies up and down the supply chain owe their very jobs to that 

support. If Congress fails to reauthorize Ex-Im by September 30th, 

there will be fewer workers at plants across our country, and more 

at the plants of foreign countries. It is just that simple. 

The future of our aviation infrastructure is another major concern. As this committee well knows, because you all have worked 

on this a great deal, our Nation’s air transportation system is experiencing serious capacity challenges. Ongoing NextGen modernization efforts are making a huge difference in helping to reduce congestion, delays, and improve safety. But to be fully effective, 

NextGen must be fully funded. 

Unfortunately, FAA’s NextGen budget request for the coming 

year is $200 million below the administration’s request of only 2 

years ago. If sequestration returns in fiscal year 2016, we urge the 

Congress to take a hard look at needed investments for the future, 

and ensure that NextGen doesn’t fall behind. 

We also hope to see additional progress toward the integration 

of the beneficial use of unmanned aircraft systems in the domestic 

airspace. The FAA has taken initial steps on UAS integration, but 

more needs to be done. For example, the agency needs to ensure 

that the proposed rule for the development of equipment and operVerDate Aug 31 2005 10:20 Aug 12, 2015 Jkt 000000 PO 00000 Frm 00039 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\AV\7-23-1~1\88817.TXT JEAN
30 

ating standards for small UAS remains on track for later this year, 

and isn’t further delayed. 

Finally, for our industry to meet future market demand, we need 

to address an aging workforce with a major commitment to STEM 

education and customized workforce training. 

In conclusion, we believe that U.S. aviation manufacturers are in 

a strong competitive position today. With appropriate policies to 

spur innovation, improve air transportation infrastructure, and replenish the workforce, our industry can continue to lead the world 

in aviation progress. Thank you. 

Mr. LOBIONDO. Thank you. 

Mr. Bunce, you are recognized. 

Mr. BUNCE. Thank you, Chairman LoBiondo, Mr. Lipinski. I just 

want to again commend this committee for the deep dive that you 

continue to do into certification, and our ability to be able to get 

product to market. It is vitally important to us, as manufacturers, 

and for the jobs that we provide in the Nation. 

It is a lot of jobs, 1.2 million jobs. And the world has really 

changed since the economic downturn. We now export 50 percent 

in virtually every segment of general aviation. So even piston aircraft, 50 percent of those aircraft are going overseas, because it is 

an expanding market. It is a growing pie. The rest of the world is 

waking up to general aviation, as well as commercial aviation. And 

that is why I would like to start with just voicing my extreme frustration in what we heard in the first panel today. 

The United States Congress unanimously last year passed the 

Small Airplane Revitalization Act. Both chambers, unanimously. 

The President signed into law the Small Airplane Revitalization 

Act Thanksgiving last year. It requires that the FAA have this rule 

done by December of next year, 2015. And yet, we have the Associate Administrator come up here this morning and say, ‘‘No, we 

are going to be 2 years late.’’ 

Now, we have worked on this whole initiative since back in 2007. 

So it is nothing new. And the FAA coined the term, ‘‘Twice the 

safety at half the cost.’’ So think about that. We are talking about 

doubling the amount of safety in the light end of general aviation 

and reducing the cost by half to both the Government and industry, 

and yet the bureaucracy is saying, ‘‘We don’t care what you, Congress, say. We don’t care what the President says. We are going to 

get it done when we want to get it done, and it is going to be 2 

years late.’’ And that is exactly what we have to put up with with 

industry. 

One of the questions earlier today was predictability. We have no 

predictability. And when you are in a development program that 

you are trying to certify aircraft, and your burn rate in a large aircraft program is $10 million a month, and yet you don’t have any 

predictability of when it is going to get done, how are you going to 

be profitable in this industry? How are you going to continue to 

employ folks in this industry? We have got to make this change. 

And to Chairman Shuster’s comment about 20 years for cultural 

change, we don’t have that amount of time. And we heard about 

this continually in the last panel, cultural change. We have got to 

be able to give tools to managers to drive this change. This is the 

31 

new world. We are not going to get more resources for the FAA. 

We have got to let managers manage. 

We have got to measure the workforce. There is resistance within 

the workforce to be individually measured. We have got to 

incentivize these different offices, so that those that underperform 

and are not allowing industry to use their delegation authorities 

don’t get the same bonuses that those that are at the other end of 

the scale, that are allowing us to use those. 

And we have to be able to force the FAA to do things that they 

tell industry that they are going to do, such as sequencing, as you 

heard this morning. Again, they are well behind, after talking 

about it for 2 years. 

Now, on the consistency of regulatory interpretation, the 313 portion that you all wrote into the law in the last reauthorization. Our 

frustration is very high there, too. A thousand authorizations and 

certifications are awaiting through the flight standards portion of 

the FAA right now. Think about that. A thousand road blocks are 

in place. Now, this is for new charter operators, it is for new flight 

schools to be able to go and train more pilots. And it is for repair 

stations. Each one of those is directly translatable to jobs. 

And now you put that in the context of the fact that you have 

an FAA that duplicates expertise in many offices around the country. And if you have one inspector that says, ‘‘OK, it is all right to 

do it,’’ another inspector in another office can say, ‘‘No, I don’t accept what that FAA inspector said, that is not good enough for me, 

this is the way I look at it,’’ how are we in industry supposed to 

do business in an environment like that? 

So it is vitally important to us of the work that this committee 

is doing, the great questions that you all ask in the previous panel, 

and we ask you to continue the pressure, because it is only through 

pressure from the United States Congress that is going to drive the 

change that we need for industry to be able to keep moving in aviation. Thank you, Mr. Chairman. 

Mr. LOBIONDO. Thanks. I wish next time you could be a little 

more clear about how you feel on this whole thing. 

[Laughter.] 

Mr. LOBIONDO. Very well done, sharing a lot of our frustrations, 

capsulizing it. That is part of what we are continuing to attempt 

to do here. 

Mr. Brown, you are recognized. 

Mr. BROWN. Thank you, Mr. Chairman. Thank you, Mr. Lipinski. 

I am delighted to be here today. It is an honor. Frankly, let me 

start—— 

Mr. LOBIONDO. Could you pull your mic just a little closer, 

please? 

Mr. BROWN. I will. 

Mr. LOBIONDO. Thank you. 

Mr. BROWN. So I said some thank-yous, and that it was an 

honor. And I would like to start by saying I really think we are 

talking about the right things. I am a small manufacturer in Ohio, 

and this subject matter resonates with me perfectly, and I find that 

very encouraging. 

So, the company that I am representing here primarily today is 

called Hartzell Propeller. It has a storied history. It was founded 

32 

to furnish propellers to the Wright Brothers. Our first recorded 

sale is 1917. We are approaching 100 years of manufacturing in 

Piqua, Ohio. We have high-tech jobs, engineers and machinists, 

machinists who bring home $75,000 a year in income, own Harleys, 

have fishing camps, live pretty well. 

We are a global leader, and our business in the last 5 years has 

really, really had to reposition, as a global exporter. Sales retracted 

tremendously during the recession, North American sales. And we 

have filled that in with sales to foreign countries. We have about 

the same revenues today that we had at the peak, but our export 

sales have gone from 30 percent to 50 percent of total revenue. And 

that means that we are competing in a much more complex environment than what we have been accustomed to over almost a century of business. 

Why is it complex? Because we have to go make markets for ourselves in over 30 different countries. We have to engage with customers there. We have to engage with civil authorities there. We 

have to develop product support, systems, and propeller shops 

there. Much more complicated. In a little company in Ohio with 

300 people, we have two native Chinese speakers on our payroll to 

help us make a market, and to help us engage with the civil aviation authorities. 

We travel to about 30 countries a year, and export to all of them. 

And significantly, in order to make those exports, we need foreign 

validations. Since 2007, we have gotten approximately 300 foreign 

validations, 150 in the last 2 years. So we are fully invested and 

growing our sales internationally. We are all in. 

I would like to just say I am a big proponent of Ex-Im financing 

for our customers. We don’t engage it directly, but I have these 

validations because I am following my customers to market, and 

my customers appreciate Ex-Im. It levels the playing field, and it 

creates great jobs in the States. 

I would like to turn quickly to the fact that, in order to get to 

market, whether it be in the United States or in a foreign country, 

we must get some form of certification. In the United States we get 

a type certificate, just like an air frame or an engine manufacturer. 

And then, to sell internationally, that type certificate needs to be 

validated. So we are engaged regularly with the FAA and civil authorities across the world, and we have an ODA to do that. 

I think the ODA subject was very interesting today, particularly 

from the first panel. I think ours is about 7 years old. We were 

asked to adopt the ODA system, and we traded one delegation system for another. And after 7 years, I think the main point for me 

is that we have about the same level of service, which was good to 

begin with, but it costs us more to get the job done. ODAs are more 

expensive. So, if you don’t get better efficiency, it is a net loss to 

the business. And I think that we can make ODAs more efficient. 

And in Q&A I hope I will have a chance to opine on that some 

more. 

Let me talk also about foreign validations. It takes an enormous 

amount of time to have a foreign country tell us that the FAA did 

a good job. We have put 300 validation requests in, we have gotten 

300 affirmatives. FAA’s bat 1,000 with their type certificates. But 

it takes us, on average, 21 weeks to receive that validation letter. 

33 

Now, our design cycles are often 8 to 9 months. So think about a 

5-month additional delay to follow a customer into a foreign market. It is very, very significant. And some of the longest validation 

processes come from bilateral countries. So I think this is a wonderful opportunity; I would appreciate your help. 

Let me just finish with the AVGAS initiative. I make propellers. 

We put a lot of them on piston aircraft. This Congress, this committee, and the FAA have been super in driving a transition process for a fuel that does not use lead. We have lots to do, but we 

are making great progress. And in Q&A it is my hope that I could 

encourage us to stay on point. It is critical to the light end of general aviation. Thank you. 

Mr. LOBIONDO. Thank you, Mr. Brown. 

Mr. Dave Cox, you are on. 

Mr. COX. Thank you, Mr. Chairman. Thank you, Congressman 

Larsen, for inviting me here today. Very anxious to talk to—— 

Mr. LOBIONDO. Could you pull the microphone up a little bit, 

please? Thanks. 

Mr. COX. Very anxious to talk to the committee today about a 

very exciting project that we have been a part of for the last 3 

years, going on our fourth year now, the Air Washington project. 

And if you look at the screen, I will use three short slides—will not 

create death by PowerPoint here today—to illustrate what the 

project is, and hopefully answer some interesting questions that 

the committee might have for me. 

[Slide] 

First of all, in—next slide—in early 2011, the college system in 

the State of Washington recognized a need to look for a method to 

train our workforce, specifically in aerospace. The slide on the 

screen right now illustrates the scope of the Air Washington 

project. It is a project awarded through the U.S. Department of 

Labor. For us it is a $20 million, 3-year initial project, focused on 

the aerospace industry and aerospace workforce in the State of 

Washington. What is not on this slide—and I won’t read it to the 

committee, but what is not on this slide is Washington State actually produces 25 percent of all aerospace exports for this country. 

So it is a pretty big deal for us in the State of Washington. Next 

slide, please. 

[Slide] 

In preparation for my testimony, I understood that—and I am 

happy to talk about why we have had such a successful project 

with this grant. And I am going to zero in on five different points 

that myself and my staff and managers have identified universally 

as the reasons why this project has been so well received by both 

business industry and our workforce. 

First of all, the fingerprint business. We matched, in this case, 

a significant grant opportunity to the fingerprint of the State of 

Washington. Again, I mentioned that 25 percent of all U.S. exports 

come from—in aerospace—come from the State of Washington. 

This was a form-fit, square peg-square hole of a project to a need. 

Second was industry connection. We did not move forward with 

this project, we didn’t even start thinking about this project, without being closely connected with all of our industries in our area, 

in our State. And that is from large, from the Boeings, all the way 

34 

down to the small Unitechs, even stretching over the border to 

Idaho. 

Number three, State government connection. This is one of the— 

what I will claim is one of the advantages of working in the State 

of Washington. In the community college system we have an organized community college system for the State. It was a relatively 

easy process for us to get a consensus of the colleges that needed 

to—wanted to and needed to be a part of the consortium for this 

project, and work within that construct. So State government and 

the organization of the State community college system really facilitated us getting off to a good start. 

Fourth, project management. This is something we have learned 

over time, how to manage a project of this size and this scope. A 

consortia of colleges is somewhat like cat herding, depends on the 

day, sometimes there is more cats, sometimes there is fewer. But 

we learned how to do this pretty effectively, and we are pretty 

happy to share those lessons learned and best practices with anybody who is willing to listen to us. 

And finally, navigation services. This is really a connection with 

the WIBs, our workforce development centers in the State. They 

are critical functions for the project that have, quite frankly, validated to business and industry what we are doing, how we are 

doing it, and the successes we are having, so that the buy-in, if you 

will, or the trust level of business and industry is extremely high 

with this project and what we are doing. 

So, those are the five points that I would be happy to expand on 

in Q&A, when we get a chance. And at this point I would like to 

finish my spoken testimony. 

Mr. DAVIS [presiding]. Thank you to each of you for your testimony. I will start with my questions. 

And I enjoyed your lively testimony, Mr. Bunce. I do share some 

concern, as you saw with the last panel, with Chairman LoBiondo, 

and I think the rest of my colleagues here, on what you have to 

go through as an industry. 

Ms. Blakey, I enjoyed reading in your testimony about an example of a 50-year-old regulation that your folks have to make 

changes to a configuration, just to pass the test, and then have the 

configuration put back in its normal state. I am interested, Ms. 

Blakey. What recommendation do you have, besides the fact that 

we have—I have cosponsored legislation to—called the Bipartisan 

Regulatory Improvement Act. Is anything short of a new law to go 

through these outdated regulations—can you give us a recommendation that can fix this now? 

Ms. BLAKEY. Well, certainly, the work that is being done on the 

small aircraft regulations is something that we all have great energy behind, and we think this kind of comprehensive overhaul is 

a great thing. 

You also heard how much time it is taking, and how complicated 

it is. 

Mr. DAVIS. Yes. 

Ms. BLAKEY. So I think we, as industry, need to also call to your 

attention specific areas, specific regulations and problems that we 

think need to be addressed, where FAA does not seem to be able 

to do this on their own. 

35 

I will say, though, that the FAA, through the CAST program and 

others, does collaborate. And the ARCs that they set up with industry can be highly effective. So I would call attention to that, because I think there is a great deal of incentive on both sides to try 

to set aside regulations that are simply no longer valid in this day 

and age. 

Mr. DAVIS. So quicker implementation of 313 is obvious. 

Ms. BLAKEY. Absolutely. 

Mr. DAVIS. All right. Mr. Bunce? 

Mr. BUNCE. Mr. Davis, just to reiterate Ms. Blakey’s point, so 

what the Small Airplane Revitalization Act did was, in this instance that you spoke of, where we had to modify an engine and 

make it do something it physically is not able to do, to be able to 

meet a test point that is for engines that were built 20 years ago 

that don’t have sophisticated electronic controls and software, it is 

just crazy. 

So what this new method of doing business allows for is it lets 

international regulators sit down with industry and keep regulations fresh. So if there is new technology, or new engines, or new 

composites that come online, all the regulators get together with 

industry and say, ‘‘This is the method of compliance that you can 

use here.’’ 

So that is why this is so important to get it right and get it out 

on the small airplane side, because the next step is to expand it 

to rotorcraft. And, as Ms. Blakey just said, we want to extend it 

to the commercial side, because it is the right way to do it, and we 

can keep regulations fresh, and we don’t have to rule-make continually, which we all know takes way too long. We can keep them 

fresh this way, and it will be tremendously helpful for regulator 

and for the industry. 

Mr. DAVIS. Thank you. And, Mr. Brown, you said in your testimony you would like to expand on your frustrations with the ODA 

process. Feel free to do so. 

Mr. BROWN. Well, I would say that our relationship with the 

FAA is pretty healthy. We have a great relationship with the folks 

in our ACO. They understand what we are trying to do. 

But we put in an ODA because we were asked to. And I think 

my issue is that approximately 7 years later we should not be talking about the hard-to-gain efficiencies because of culture change. 

Had somebody said to me, ‘‘If you put this system in and spend 

more annually to manage it, but 7 years from now we will be talking about whether we can make an efficiency 3 years forward,’’ I 

would have said, ‘‘No, thanks. I will stick with my current program.’’ 

So, you know, I consider them allies, but I also consider them 

with a narrative that doesn’t quite work, and that is that there is 

no culture change problem. It is a will to apply the delegation authorization, as written. And I will just give you some quick examples. 

I think Ms. Gilligan hit it on the head when she said the assumption is a project is delegated. That should be the governing 

theme. 

I would also suggest that if a company has an ODA project 

whose testing qualification methods are the typical way to take a 

36 

product to market for that company, then by nature the project 

cannot be new and novel. We have had occasions where we are 

going to use exactly the same test and qual methods that we normally use to get a product to market, but we have been told that 

our product is new and novel. And that makes no sense to me. And 

we could be very specific in that regard. 

And then, last and finally, I guess I would say that there has to 

be a passionate advocate, or more than one, in the FAA who is likely to say something like, ‘‘ODAs are a competitive advantage for 

our leading manufacturers. They are winning in the world, and 

ODAs are part of that strategy. They will be efficient, offices will 

deploy them effectively, and the measurements will say so.’’ But I 

don’t hear that language. The language I hear is, ‘‘We are working 

on culture change.’’ And that leaves me feeling uncertain whether 

or not the payoff is to be found. 

Mr. DAVIS. The gentleman from Illinois is recognized for 5 minutes. 

Mr. LIPINSKI. Thank you, Mr. Chairman. Since everyone enjoyed 

Mr. Bunce’s comments earlier, I think I will give you an opportunity to expand on that, and see if anyone, any of the other witnesses want to speak to this. The frustration is obvious amongst 

all of you and all of us here, up on the dais, with some of the issues 

with the FAA. 

So I want to just ask, as I said, Mr. Bunce first, and see if anyone else has a comment. What is the issue that—what is going on 

at the FAA, from your perspective? What can we do as a legislative 

body here, besides, you know, maintaining our oversight? Is there 

anything else that can be done? We have the FAA reauthorization 

coming up, as I mentioned. You see anything else that we can do 

to help the FAA—I will put it nicely—help the FAA work better on 

some of these issues? And certainly the 2-year delay is really unacceptable. But what do you think can be done? What do you recommend? 

Mr. BUNCE. Thank you, Mr. Lipinski. Industry has delivered everything that is required for the FAA to issue a notice of proposed 

rulemaking by the end of this year, beginning of next year, for part 

23. This would mean that the rule actually could be out by December of next year. 

What we are hearing is delaying this process are the lawyers 

with—inside the FAA. It is not—this has nothing to do with the 

other issue, the cultural change and the certification. This has to 

do with the legal entities within the FAA that think this is major 

sweeping change. 

And, in fact, because the process had stalled so much was one 

of the reasons why we were so encouraged that Congress took up 

the issue of passing the law, versus allowing just the rulemaking 

process to trudge along, or go through this long slog. 

So, I think it would be particularly helpful for us to—in response 

back to the answers that the Associate Administrator gave in the 

first panel, was to ask the questions why. What is the delay? Because industry has delivered our first portion enough to be able to 

give the notice of proposed rulemaking. And I actually think that 

we, industry, will be able to provide very valuable feedback if they 

37 

got the NPRM out, to be able to meet the intent of the law and 

get it out by the end of next year. 

As far as the larger cultural change issue with certification is 

concerned, again, trying to drive the workforce and the managers 

to be managers. We had—one of our aircraft manufacturers from 

Olney, Texas, that builds crop dusters was in here yesterday. And 

it was great to see. We had over 100 staffers show up for a briefing 

on Ex-Im Bank, and how important—6 of the 7 aircraft on his line 

are all Ex-Im-financed. So, right now, with seven airplanes being 

built, six of them are Ex-Im-financed. And the point he was making 

is he will go and submit a program to his aircraft certification office, and the manager, instead of managing it and saying, ‘‘This is 

the risk-based approach we want to take,’’ just throws it over to the 

engineers and says, ‘‘What do you think?’’ 

So, basically, there isn’t this process of trying to drive change, 

and trying to give them an overall direction and goal of how can 

we get this program through quickly, and how can we improve 

safety as we go through it. It is just, OK, what do you guys think? 

And then, what that encourages is it encourages the engineers 

to go down with the sharp pencil and do what they have always 

done, which is be down there in every little minute detail, instead 

of using resources productively and saying, ‘‘I am going to be a 

safety manager of systems,’’ and when a company has demonstrated its capability, as Mr. Brown’s company has, with their 

ODA, to say they know how to do it, let’s overall manage their safety processes to make sure that they can consistently do that, but 

not be down in that level of detail. And I think that will really help 

us. 

Mr. LIPINSKI. Ms. Blakey? 

Ms. BLAKEY. May I add to this just a moment? Because the ODA 

was put in place in 2005 on my watch, when I was FAA Administrator. I believe in it tremendously, and our manufacturers believe 

it can be highly effective, if fully implemented. So please understand that. We also experience a tremendous amount of frustration 

at the fact that it is not being fully implemented. 

I give as an example we met just the other day with the Secretary of Transportation, with several of our manufacturers. One of 

them has experienced 200 days of delay on a rotorcraft project, and 

said that if the decision were before him again, he would have contacted the manufacturer, taking the jobs and the certification outside the country, because this is the failure of ODA in actual fact. 

So this is real. 

I do want, though, to point out, having been in that position, and 

understanding some of the dynamics, that when we talk about culture change we have to remember that the FAA is a highly unionized workforce, with highly effective unions. And leadership there 

matters, as well as leadership within the FAA’s own management 

team. Trying to put in place incentives and accountability is something that has to be worked on both sides. And at this point I do 

think that we, as an industry, are advocating metrics, we are advocating specific measurements as to whether things are moving forward, and we are also advocating a gated approach so that everyone says that there are gates to be passed through, and both manVerDate Aug 31 2005 10:20 Aug 12, 2015 Jkt 000000 PO 00000 Frm 00047 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\AV\7-23-1~1\88817.TXT JEAN
38 

agement and the team that is working on it recognizes that those 

are incentives, to hit those gates. 

So, there are mechanisms, and I do think there are things that 

you all can do in the reauthorization to help address this. 

Mr. LIPINSKI. Thank you. I will yield back. 

Mr. RIBBLE. Thank you, Mr. Chairman. Thanks for being here. 

Mr. Brown, I am going to go ahead and start with you. Give you 

a word of caution. Ten years ago I owned a commercial roofing 

company just outside of Appleton, Wisconsin, and I was invited to 

come and testify before a House subcommittee, and now here I am. 

[Laughter.] 

Mr. RIBBLE. Just a word to the wise here. You never know where 

frustration can lead you. 

I want to read something out of your testimony, because you 

didn’t do it, and I appreciate that, but I think it deserves to be 

heard. On page 1, ‘‘In addition to Hartzell Propeller, we own three 

other aviation manufacturing businesses and employ about 1,000 

people in total. Joining Hartzell Propeller and our family of companies, Hartzell Aerospace is based in Valencia, California, and manufactures cabin environmental control products and subsystems for 

business, military and commercial aircraft. Mayday Manufacturing 

is located in Denton, Texas, and produces specialty bushings for 

the entire aviation industry. Hartzell Engine Technologies is located in Montgomery, Alabama, and manufactures aircraft starters, alternators, turbochargers and fuel pumps for general aviation 

aircraft. In all of our companies, we sell globally but manufacture 

all of our products in the U.S. and buy all of our materials from 

U.S. producers.’’ Thank you for doing that. 

I don’t think—in many cases, I don’t think American business 

people hear it often enough from Members of Congress and from 

their Government, the appreciation that they deserve for what they 

do. 

I am concerned when I sense your frustration, Mr. Bunce. You 

and I have spoken a number of times, and your frustration was so 

eloquently presented here this morning, without even notes. You 

came well prepared. We get frustrated because Congress meets and 

laws are passed, and Presidents even sign them, and then sometimes they just get ignored. 

But you mentioned something, and Ms. Blakey mentioned something regarding the Export-Import Bank. Could you tell me, if you 

know, approximately what percent of your business, your customers—what percent of your customers who are purchasing from 

your companies here in the U.S. are using some form of Export-Import financing? Is it a large percent? Is it a small percent? 

Mr. BROWN. The answer is I don’t know with the specificity that 

would be helpful to this conversation, in part because, until a few 

months ago, I would have never imagined this would have been an 

issue in my business. Ex-Im is very, very old. It is an established 

way to incent exports. And the idea that it may not be reauthorized 

is new to me. 

What I can tell you is that when the reauthorization came under 

question, 3 or 4 of my top 10 customers told me that this was a 

big deal, and that a lot of my sales in my export growth was, in 

fact, flowing through their products, which were getting Ex-Im fiVerDate Aug 31 2005 10:20 Aug 12, 2015 Jkt 000000 PO 00000 Frm 00048 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\AV\7-23-1~1\88817.TXT JEAN
39 

nancing, particularly in the agricultural aircraft market, where two 

of my customers are the leaders. 

And they called to tell me that, in part, so I was aware, but in 

part to tell me that the forecast after 2013, the month-by-month 

unit forecast for their build rate is in question. And they wanted 

me to understand that my assumptions for 2014—I am sorry, for 

2015—may not be founded. We heard from Air Tractor that six of 

their seven aircraft on the line right now are bound for foreign 

market with Ex-Im financing attached. 

So, going into 2015 we have taken a totally defensive position on 

hiring, and we have cut our capital budget plan in half, project by 

project. And not to be alarmist, but to be prudent. And so, I guess 

my best answer for you is it is significant enough that my customers called me and said, ‘‘Watch your forecast. Let’s be a little 

bit more cautious here, because I don’t want you investing in 

things I can’t deliver on as your aircraft manufacturing partner.’’ 

Mr. RIBBLE. Thank you. Ms. Blakey, do you have any idea, industrywide, what role the Export-Import Bank plays? 

Ms. BLAKEY. It has an enormous role to play, because essentially 

it is what fills the gap, if you will, between what the commercial 

banks are able to do and what, in fact, is needed. When you are 

exporting, as we all are, more and more, to a wide variety of countries, some of which there simply is not available good commercial 

financing—in the developing world sometime the risk factors are 

considered to be too high. In some cases, those customers need to 

diversify their financing. And so, across the board, we find, whether it is parts manufacturers or it is full aircraft, rotorcraft, et 

cetera, that it is very critical. 

And remember that also, when Export-Import Bank financing 

helps make a sale possible, there is the whole aftermarket, which 

really isn’t even calculated into the figures that are now being 

used. But that keeps us selling U.S. products out there. 

So, it is enormously important, and something that I could not 

agree with Mr. Brown more. None of us imagined that we would 

find ideological rhetoric somehow coloring what should be a very 

straightforward support for America’s competitiveness and our 

business community. And it is taking a while, frankly, for the business community to even realize that this is in jeopardy. 

So, we are very worried about this, because September 30th is 

coming very quickly. 

Mr. RIBBLE. Thank you for your testimony, thank you for being 

here. I yield back. 

Mr. HANNA [presiding]. Ms. Blakey, we have—referring to the 

Export-Import Bank for a moment longer, it has been referred to 

here widely as somehow corporate cronyism. I would like you and 

Mr. Brown and Mr. Bunce to—if you quickly could—respond to 

that. It is not something I necessarily agree with, and even understand, frankly. The phrase doesn’t exactly strike me as meaningful. 

But the idea, I guess, behind it is that it helps larger companies 

more than smaller companies, and that—maybe you would like to 

talk about that. Because my personal opinion is—and I am a pilot, 

owned a small airport, I have waited years for certifications on 

planes that I have ordered. So—and I am watching the industry 

that I care about die on the vine in this country, but yet we know 

40 

that it is growing in other countries. And we have the most open 

airspace in the world. We are lucky for that. 

But maybe you would like to speak to any part of that. 

Ms. BLAKEY. It is a phrase that isn’t at all apropos or relevant, 

and obviously works on talk radio. It seems to pick up a little popularity here and there. But when you think about the fact that ExIm’s support is going 90 percent to small businesses—70 percent of 

Boeing aircraft, to use our largest manufacturer, in fact, comes 

from suppliers. It is not as though there is some giant entity out 

there that doesn’t have enormous dependence upon a lot of small 

companies all over this country. 

And when you look at the fact that they are trying to sell abroad 

to other countries who are providing massive amounts of not just 

loans, but real subsidy out there, the amount of money that Ex-Im 

is providing is very meager, relative to the competitive landscape 

that we face worldwide. 

And it is about small businesses. The idea that we are talking 

about some sort of cronyism of enormous corporations—— 

Mr. HANNA. What you are really saying is there are thousands 

of people like Mr. Brown’s company, Hartzell, who contribute to 

these massive and hundreds of millions of dollars airplanes that 

trickle all the way down the food chain, so that the basic notion 

is wrongheaded. Is that fair? 

Ms. BLAKEY. That is fair. The 787 stands on the shoulders of 

thousands of small businesses. 

Mr. HANNA. Mr. Brown? 

Mr. BROWN. I wear the hat of Hartzell Propeller in one respect, 

and there is no question in my mind Ex-Im generates pull-through 

sales for my company. 

But I also serve as COO of Tailwind Technologies, which has 

these other aviation concerns, and we are deep in the supply chain 

for companies like Bell Helicopter and Boeing. And when they win, 

we win, period. And that is about 700 employees who did not understand how much the Ex-Im Bank was facilitating our local jobs 

until it came into question. And those companies are not walking 

around with their hand out. 

For example, to be ready to sell to the 787 in our small businesses, we had about a million-and-a-half dollars’ worth of nonrecurring R&D. We paid for it. We grew our workforce and our capacity and our machining business ahead of the curve, so we were 

in for about 7 multihundred-thousand-dollar machine tools, and we 

hired about 15 people. We did that so that when the 787 went to 

market, we could meet their schedule. That is investment. That is 

market risk. That is not walking around with your hand out. 

Mr. HANNA. Can I ask you, Mr. Bunce, and Mr. Cox, too? It is 

implicit that the extra cost associated with this approval process, 

which you have indicated is—the cost has grown, even though the 

process is somewhat satisfactory—how does that—kind of self-answered a question here—but how does—how do you see that impacting our ability to grow our aviation industry abroad? 

And, Mr. Cox, in Washington State how many of the people that 

you are training are working for companies—not Boeing, but all 

other smaller companies? 

Go ahead, Mr. Bunce. 

41 

Mr. BUNCE. Well, Mr. Hanna, when we go and invest in the 

ODA, and get it stood up, as Mr. Brown mentioned, it cost the companies money. But the reason they did it was on the promise that 

they would be able to be more efficient to get product to market, 

to have that predictability that they could control their destiny, but 

when they have new and novel technology that they bring on 

board, they can still go in to the FAA, have the expertise come 

over, in some cases train that expertise on the project that they are 

working on, and then collectively the FAA and industry go and 

work this together. 

And it is absolutely essential for us to be able to meet the demands of time in the market to be able to make the ODA work, 

because there are no more resources available to add engineers, 

like we had—— 

Mr. HANNA. So you are paying more and getting nothing more. 

Mr. BUNCE. We are paying more and, as Mr. Brown said, it is 

static, at best. But in some cases, actually less. 

And then, imperative in that calculation is also that training for 

the workforce. The workforce at the FAA, they are good people. 

They want to do the right thing. But, by nature of the fact that 

they are in a bureaucracy, they are risk-averse. So they are going 

to take the path that is the most conservative. 

So, if we give them training to be able to say, ‘‘This is what it 

means in a risk-based approach,’’ we think they can produce for us. 

But that training is the key, and to let them know that they have 

the backing to make the change, and that the risk doesn’t fall on 

each and every one of their careers, that they have the backing of 

FAA management and, of course, the Congress. 

Mr. HANNA. Mr. Cox? Thank you. 

Mr. COX. Thank you. So, as I remember the question, it is kind 

of the ratio of—— 

Mr. HANNA. Yes, that is right. 

Mr. COX [continuing]. Big employer to small employer. We have 

trained through this project a little over 3,500 folks at this point 

in time. At—breaking that down, probably 500 or less are employed 

by the Boeing Company in our service areas. And the vast majority 

are employed by tier 1, tier 2 suppliers like Mr. Brown’s company, 

the vast majority. That is where we find our real traction in our 

State. It is not to minimize the impact of the big manufacturer, of 

Boeing—— 

Mr. HANNA. I understand. 

Mr. COX. But it is—really is a driven-by-the-small-company kind 

of an industry. 

Mr. HANNA. OK, good. Thank you. Thank you. Thank you for 

your indulgence, Ranking Member Larsen. I think that might have 

even been one of your questions. 

Mr. LARSEN. But I have a few more. First off, I want to commend 

the panel for its—their comments on the Export-Import Bank. Obviously, it is important in Washington State, but—and it is very 

important beyond aviation manufacturing, as well. And I can go 

through a myriad of examples in Washington State with companies 

with no relation to aviation that need Export-Import Bank because 

their local bank that, you know, lives on deposits, has no idea how 

to do export financing. But they have these small businesses who 

42 

increasingly have their—a lot of their business model dependent 

upon export. 

Mr. Cox, I have a few questions for you. So, you know, we have 

talked Export-Import, and we have talked certification, all these 

very important roles that they play in supporting domestic aviation. But the workforce and workforce training is important, which 

is why we have asked you here. And I wanted to ask you kind of 

specifically over these last 3 years, how has the demand signal for 

specific kinds of aviation work changed? Or are you still doing 

mainly maintenance, or mainly assembly, or mainly this, or mainly 

that over the last 3 years? 

Mr. COX. Probably the most significant change that I think I 

have observed is in the area of composites technology. We have 

seen that, we started out knowing that it was going to be important, and it has kind of proven itself—that is, increasing in importance for what we train inside the project, and for our workforce. 

So, that would be the big change. 

We are probably seeing pretty stable, as compared to before need 

for our aircraft, air frame, and power plant mechanic side of 

things—general aviation, specifically. however, there has been an 

increase in demand for assembly, for instance, with the major manufacturer, Boeing as a great example. 

And then, probably a smaller but growing piece that we identified early in the development process of our proposal to the DOL 

that has been a little bit surprising to me is the avionics and fiber 

optics piece. Now, we kind of—back in the day, when myself and 

my three colleagues put this proposal together, we kind of looked 

at that and said, ‘‘Yes, I think we can see something, a glimmer 

of something coming on the future,’’ or on the horizon. It turns out 

that there is a pretty significant demand for those two pieces of 

what we have been doing. 

Mr. LARSEN. Yes, right. I don’t have the exact numbers with me, 

but we have looked at this in Washington State, in terms of the 

supplier network, and the percentage of work they provide to the 

major manufacturers of Boeing, Airbus, Embraer, and Bombardier, 

and when you add up the percentage of work, it adds up to over 

100 percent. The point being that suppliers are not just supplying 

to one manufacturer in the State. They are supplying, many of 

them, to all four—a few of them to all four, certainly many of them 

to at least two of the major manufacturers. So there is a real ecosystem of aviation manufacturing in the State. 

Do you run into any issues with training for a—one company 

over the next? Or is it generalized and you let them, the employer, 

do what they need to do with that employee that you provide? 

Mr. COX. Less so one company over another. I mean we get fairly 

specific in assembly, because that really is centric to the one company. However, in the other areas that are a focus of the project, 

we really are pretty diverse, I think, in the population of businesses that we serve. 

And something that you mentioned, I would also illustrate or 

highlight one of the things we have seen as an indirect outcome of 

this project has been an increase in the number of companies in 

the State of Washington to have AS 9100 certification, and now can 

43 

get into the market of being suppliers to—you know, tier 1 suppliers, or sub-tier 1 suppliers. 

All of that kind of gets us more into staying tuned in to the general market, and identifying where we might need specific or point 

issues addressed, whether it is a specific composites company, or 

specific avionics company. We can kind of dive into that on a local 

level. But that is the beauty of the project, the project is statewide 

and it gives real flexibility to the 11 colleges that do this, to kind 

of jump in and do point issue addressing, rather than a one-sizefits-all kind of an approach. 

Mr. LARSEN. Yes. I see my time is up. But if you will indulge me, 

Mr. Chair, I have one more question for Mr. Cox. 

The subtitle of the hearing is ‘‘Challenges and Opportunities.’’ 

What is your number one challenge, going forward, other than the 

grant runs out at the end of the year and you need to re-up it? 

Mr. COX. And even that is less of a challenge, because, again, 

part of our winning strategy is the fact that the State of Washington internal government has picked up the mantle on this thing, 

and is moving it forward with independent State funding to keep 

it going into the future. And that was never a requirement of the 

DOL, as a continuation or sustainment piece. 

Our biggest challenge, I honestly think, is going to be in the navigator role. We have found that to be so, so important to building 

trust, building confidence in the businesses and industries that are 

going to work with us as higher education. And that is not built 

in to our sustainability piece that the State is looking at. They are 

looking at sustaining our—basically, our capacity expansion that 

we have created. 

So, if I can figure a way out to get my navigators at my 11 colleges—and actually, quite frankly, it is larger than that in our 

State—I would say that is our biggest challenge. 

Our win, going forward, is we have set a great example. We 

have, I think, in the case of this project, shown not only our State, 

but nationally, how to do one of these projects correctly. And I say 

that pretty humbly, actually. But I think it is very true. Our results are proof of that. And I think, if anything, it will give confidence to law-makers like yourselves to positive consider those 

types of projects—— 

Mr. LARSEN. Sure. 

Mr. COX [continuing]. In the future, and balance that against 

maybe some that aren’t working so well. 

Mr. LARSEN. All right. Great, good. Thank you. Thank you, Mr. 

Chairman. 

Mr. HANNA. Dr. Bucshon? 

Dr. BUCSHON. Thank you. We have talked about the regulatory 

climate, but I want to just take this opportunity for your industry 

to discuss other impediments to American competitiveness in manufacturing. 

So, Mr. Bunce, I mean, do you have any comments about maybe 

what your members think in the area of taxation, and how maybe 

that is having some impact on your ability to be competitive? Or 

other issues, you know, other than we have talked—I think we 

have talked about the regulatory impediments, but there are other 

44 

big issues, right, out there that are making American manufacturers not as competitive as they could be? 

Mr. BUNCE. Absolutely, Mr. Bucshon. Something that we have 

been paying attention very closely is the accelerated depreciation, 

or bonus depreciation issue that Congress just dealt with, so we 

were very gratified to see that. The R&D tax credit, huge for us. 

I think when you look at other nations out there, and the amount 

of money that they provide or incentivize their industry to do research and development for aviation absolutely is so essential to 

us. And anything that we can do to make that permanent, to be 

able to go and get folks to invest in R&D, that directly translates 

to new technology and new jobs out there. 

And then, I think also, from the nontaxation area, just also keeping pressure on the FAA to make sure that validation programs, 

as Mr. Brown mentioned, are very important. You know, obviously, 

in Indiana you have got a producer of engines that is a global producer. It is very important that nations that we have a bilateral 

relationship with, where we have recognized their competencies to 

be able to regulate, they have recognized ours, that that is very efficient across the ocean, so that if they have a product coming in, 

that we don’t waste a whole bunch of FAA resources looking at it, 

and vice versa, that if Mr. Brown’s company were to go over there, 

that he very quickly can get his validation, because that delay in 

time in the market has significant impact. 

Dr. BUCSHON. Ms. Blakey, do you have any comments, anything 

to add on other impediments to American manufacturers? 

Ms. BLAKEY. Well, I would certainly foot-stomp the R&D tax 

credit, which, of course, the House has supported and passed. But 

we desperately need that to be in place. Corporate tax reform is 

certainly a big part of what we would like to see. 

But let me turn also to the need for this body and the Congress 

as a whole to be supportive of areas where America’s industry really does exceed. And I do have in mind the unmanned aircraft systems. You know, we sometime get distracted by issues that surround these things when you are introducing new and disruptive 

technology. But this is an area right now where this country has 

an enormous lead. And we should look at it as something that is 

going to bring tremendous public benefit. And I am talking about 

in all sorts of areas that really matter, you know, search and rescue, firefighting, public law enforcement. There is a lot to this. 

But when we realize that this technology, right now, we actually 

could export as well as—we could see it grow dramatically in this 

country. And we have got some pretty artificial clamps on introducing it into the NAS at this point, and also in being able to export. And we need your help and support. I will be very straight 

up. 

Dr. BUCSHON. Thank you. Mr. Brown, you want to comment? I 

mean you have obviously tried to—you have an export market. 

What do you see as some of the impediments out there? There are 

some obvious ones, too, American manufacturing. 

And I will make these comments before I have you answer, because I am very concerned about this. When you have companies 

in Indiana like Cook Medical Group, that need to expand, and unfortunately are—have so many impediments that they decide not to 

45 

expand in Indiana or neighboring States, that is a big problem. 

And, you know, we hear this all the time, that companies right 

now, as you know, are buying smaller foreign companies and then, 

you know, the merged company will be based not in the United 

States. This is a growing trend. It is accelerating quickly because 

of our tax code. Your comments? 

Mr. BROWN. I think they have largely been made. I like your 

phrase, ‘‘foot-stomp.’’ I will foot-stomp the validation issue. It is 

very, very significant to us. And I think putting it on the radar 

today sets the stage for more discussion during reauthorization. 

And I think the FAA would be very inclined to focus on the speed 

with which their TCs are validated. Because, eventually, there is 

a quid pro quo. And so, I think that they can be more demanding 

of foreign partners. 

I am a big fan of the R&D tax credit. I look at my income statement, and I make investment decisions in part because I know the 

Government is incenting me to do that. Very important. 

I would add, at a higher level, not just with export sales, but 

with all of my sales, it would help a lot if there was greater clarity 

in Washington rhetoric. In the past couple of years there have been 

a number of times where what is going on here ends up in my conference room on Mondays with staff. Are we going to have an FAA 

during the sequester, or are they going to be shut down? Can we 

get type certificates out and validation support letters out, or not? 

Can my customers sell those six airplanes out of seven with ExIm financing or not? Are we going to do accelerated rate of depreciation, or are we going to talk about jets as fat cat transport 

equipment? And I guess I would say, somehow or another, we have 

lost sight of the fundamental thing, which is that the U.S. aviation 

industry is winning. We are the world leaders. We generate a surplus in trade. We are the good guys. 

Dr. BUCSHON. I would agree with that. I just would say I personally support Ex-Im, and I realize the importance to jobs in Indiana 

and in our country. And with that I yield back. 

Mr. HANNA. Thank you. So we have a situation where we have 

the largest exporter in our country, the biggest net beneficiary to 

our balance of trade, and we are hamstringing it. If there are no 

further questions, I thank the witnesses for being here today, and 

for your participation. This committee stands adjourned. 

[Whereupon, at 12:30 p.m., the subcommittee was adjourned.] 

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