Federal Register / Vol. 76, No. 195 / Friday, October 7, 2011 / Proposed Rules 62321 

cooperative agreement, or cooperative 

research and development agreement 

reserved, set aside, or otherwise 

classified as intended for award to 

women-owned small business concerns 

or economically disadvantaged womenowned small business concerns. 

(2) Submission of a bid proposal for 

a Federal grant, contract, subcontract, 

cooperative agreement or cooperative 

research and development agreement 

which in any way encourages a Federal 

agency to classify the bid or proposal, if 

awarded, as an award to a womenowned small business concern or 

economically disadvantaged womenowned small business concern. 

(3) Registration on any Federal 

electronic database for the purpose of 

being considered for award of a Federal 

grant, contract, subcontract, cooperative 

agreement, or cooperative research and 

development agreement, as a womenowned small business concern or 

economically disadvantaged womenowned small business concern. 

(c) Signature Requirement. Each 

solicitation, bid, or application for a 

Federal contract, subcontract, or grant 

shall contain a certification concerning 

the women-owned small business or 

economically disadvantaged womenowned small business status of a 

business concern seeking the Federal 

contract, subcontract or grant. An 

authorized official must sign the 

certification on the same page 

containing the women-owned small 

business or economically disadvantaged 

women-owned small business status 

claimed by the concern. 

(d) Limitation of Liability. Paragraphs 

(a)–(c) shall not apply in the case of 

unintentional errors or technical 

malfunctions that demonstrate that a 

misrepresentation of women-owned 

small business or economically 

disadvantaged women-owned small 

business status was not affirmative, 

intentional or willful. Consideration 

shall be given to the firm’s internal 

management procedures governing 

WOSB representation or certification, 

the clarity or ambiguity of the 

representation or certification 

requirement, and the efforts made to 

correct an incorrect or invalid 

representation or certification in a 

timely manner. In no case shall an 

individual or firm be liable for 

erroneous representations or 

certifications made by Government 

personnel. 

(e) Additional Penalties for 

Misrepresentation. 

(1) Suspension or debarment. The 

SBA debarring official or the agency 

debarring official may suspend or debar 

a person or concern for 

misrepresentation pursuant to the 

procedures set forth in 48 CFR subpart 

9.4. 

(2) Civil Penalties. Persons or 

concerns are subject to severe penalties 

under the False Claims Act, 31 U.S.C. 

3729–3733, and under the Program 

Fraud Civil Remedies Act, 331 U.S.C. 

3801–3812, and any other applicable 

laws. 

(3) Persons or concerns are subject to 

severe criminal penalties for knowingly 

misrepresenting the women-owned 

status of a concern in connection with 

procurement programs pursuant to 

section 16(d) of the Small Business Act, 

15 U.S.C. 645(d), as amended; 18 U.S.C. 

1001; and 31 U.S.C. 3729–3733. Persons 

or concern are subject to criminal 

penalties for knowingly making false 

statements or misrepresentations to SBA 

for the purpose of influencing any 

actions of SBA pursuant to section 16(a) 

of the Small Business Act, 15 U.S.C. 

645(a), as amended, including failure to 

correct ‘‘continuing representations’’ that 

are no longer true. 

18. Add new § 127.701 to read as 

follows: 

§ 127.701 What must a concern do in order 

to be identified as a Women-Owned Small 

Business concern in any Federal 

procurement databases? 

(a) In order to be identified as a 

Women-Owned business concern in the 

Online Representations and 

Certifications Application (ORCA) 

database (or any successor thereto) a 

concern must certify its Women-Owned 

small business status in connection with 

specific eligibility requirements at least 

annually. 

(b) If a firm identified as a WomenOwned small business concern in ORCA 

fails to certify its status within one year 

of a status certification, the firm will not 

be listed as a Women-Owned small 

business concern in ORCA, unless and 

until the firm recertifies its WomenOwned status. 

Dated: September 26, 2011. 

Karen G. Mills, 

Administrator. 

[FR Doc. 2011–25656 Filed 10–6–11; 8:45 am] 

BILLING CODE 8025–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2010–1204; Directorate 

Identifier 2010–NM–147–AD] 

RIN 2120–AA64 

Airworthiness Directives; Aviation 

Communication & Surveillance 

Systems (ACSS) Traffic Alert and 

Collision Avoidance System (TCAS) 

Units 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Supplemental notice of 

proposed rulemaking (NPRM); 

reopening of comment period. 

SUMMARY: We are revising an earlier 

proposed airworthiness directive (AD) 

for certain Aviation Communication & 

Surveillance Systems (ACSS) traffic 

alert and collision avoidance system 

(TCAS) units installed on but not 

limited to various transport and small 

airplanes. That NPRM proposed to 

require upgrading software. That NPRM 

was prompted by reports of anomalies 

with TCAS units during a flight test 

over a high density airport. The TCAS 

units dropped several reduced 

surveillance aircraft tracks because of 

interference limiting. This action revises 

that NPRM by proposing to require new 

updated software for certain TCAS 

units. We are proposing this 

supplemental NPRM to correct the 

unsafe condition on these products. 

Since these actions impose an 

additional burden over that proposed in 

the NPRM, we are reopening the 

comment period to allow the public the 

chance to comment on these proposed 

changes. 

DATES: We must receive comments on 

this supplemental NPRM by November 

7, 2011. 

ADDRESSES: You may send comments, 

using the procedures found in 14 CFR 

11.43 and 11.45, by any of the following 

methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov. Follow the 

instructions for submitting comments. 

• Fax: 202–493–2251. 

• Mail: U.S. Department of 

Transportation, Docket Operations, 

M–30, West Building Ground Floor, 

Room W12–140, 1200 New Jersey 

Avenue, SE., Washington, DC 20590. 

• Hand Delivery: U.S. Department of 

Transportation, Docket Operations, 

M–30, West Building Ground Floor, 

Room W12–140, 1200 New Jersey 

Avenue, SE., Washington, DC 20590, 


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between 9 a.m. and 5 p.m., Monday 

through Friday, except Federal holidays. 

For service information identified in 

this AD, contact Aviation 

Communication & Surveillance 

Systems, LLC, 19810 North 7th Avenue, 

Phoenix, Arizona 85027–4741; phone: 

623–445–7040; fax: 623–445–7004; 

e-mail: acss.orderadmin@L–3com.com; 

Internet: http://www.acss.com. You may 

review copies of the referenced service 

information at the FAA, Transport 

Airplane Directorate, 1601 Lind 

Avenue, SW., Renton, Washington. For 

information on the availability of this 

material at the FAA, call 425–227–1221. 

Examining the AD Docket 

You may examine the AD docket on 

the Internet at http:// 

www.regulations.gov; or in person at the 

Docket Management Facility between 9 

a.m. and 5 p.m., Monday through 

Friday, except Federal holidays. The AD 

docket contains this proposed AD, the 

regulatory evaluation, any comments 

received, and other information. The 

street address for the Docket Office 

(phone: 800–647–5527) is in the 

ADDRESSES section. Comments will be 

available in the AD docket shortly after 

receipt. 

FOR FURTHER INFORMATION CONTACT: 

Abby Malmir, Aerospace Engineer, 

Systems and Equipment Branch, ANM– 

130L, FAA, Los Angeles Aircraft 

Certification Office (ACO), 3960 

Paramount Boulevard, Lakewood, 

California 90712–4137; phone: 562– 

627–5351; fax: 562–627–5210; e-mail: 

abby.malmir@faa.gov. 

SUPPLEMENTARY INFORMATION: 

Comments Invited 

We invite you to send any written 

relevant data, views, or arguments about 

this proposed AD. Send your comments 

to an address listed under the 

ADDRESSES section. Include ‘‘Docket No. 

FAA–2010–1204; Directorate Identifier 

2010–NM–147–AD’’ at the beginning of 

your comments. We specifically invite 

comments on the overall regulatory, 

economic, environmental, and energy 

aspects of this proposed AD. We will 

consider all comments received by the 

closing date and may amend this 

proposed AD because of those 

comments. 

We will post all comments we 

receive, without change, to http:// 

www.regulations.gov, including any 

personal information you provide. We 

will also post a report summarizing each 

substantive verbal contact we receive 

about this proposed AD. 

Discussion 

We issued an NPRM to amend 14 CFR 

part 39 to include an AD that would 

apply to Aviation Communication & 

Surveillance Systems (ACSS) traffic 

alert and collision avoidance system 

(TCAS) units with part numbers 

identified in ACSS Technical 

Newsletter 8008359, Revision A, dated 

January 12, 2011, as installed on but not 

limited to various transport and small 

airplanes, certificated in any category. 

That NPRM was published in the 

Federal Register on December 28, 2010 

(75 FR 81512). That NPRM proposed to 

require upgrading software. 

That NPRM was prompted by reports 

of anomalies with TCAS units during a 

flight test over high density airports 

(Chicago, New York, and Atlanta). The 

TCAS units dropped several reduced 

surveillance aircraft tracks because of 

interference limiting. This action revises 

that NPRM by proposing to require new 

updated software for certain TCAS 

units. We are proposing this 

supplemental NPRM to correct the 

unsafe condition on some of these 

products (the TCAS II, TCAS 2000, and 

T2CAS) that have an issue on some 

installations on which the TCAS unit 

reverts to the standby (STBY) mode 

(TCAS OFF) when the active 

transponder senses an altitude miscompare between two Gilham altitude 

input or other possible air data source 

failure. This potential safety issue is 

dependent on the altitude interface to 

the transponder and the transponder 

used. 

Actions Since Previous NPRM Was 

Issued 

Since we issued the previous NPRM, 

we have determined that certain 

software referenced in the original 

NPRM may not adequately address the 

unsafe condition for certain affected 

airplanes. ACSS has revised the 

associated service bulletins, as 

described below under ‘‘Request to 

Delay AD Pending TCAS Validation.’’ 

We are issuing this supplemental NPRM 

to propose installing the new upgraded 

software via the revised versions of 

these service bulletins. The revised 

service bulletins provide instructions on 

how to accomplish the software 

upgrade; the specific software 

approvals, however, are still pending 

and are expected to be complete before 

the final rule is issued. 

Comments 

We gave the public the opportunity to 

comment on the previous NPRM. The 

following presents the comments 

received on the NPRM and the FAA’s 

response to each comment. 

Support for NPRM 

Boeing concurred with the contents of 

the original NPRM. 

Requests To Withdraw NPRM 

ACSS disagreed with certain 

information in the Discussion section of 

the original NPRM. 

The Discussion section stated that 

anomalies with ACSS TCAS units 

‘‘occurred during a flight test over a high 

density airport.’’ ACSS stated that it 

provided the initial report of the 

anomaly to the FAA in late 2009, and 

that the FAA reproduced that scenario 

during another flight test in early 2010. 

ACSS noted, however, that in over 35 

million flight hours of ACSS TCAS 

systems in field operation, no operator 

has ever reported to ACSS any such 

anomaly being observed. Moreover, 

ACSS is not aware of any such reports 

having been provided to the FAA. ACSS 

concludes that the probability of such 

an event is low enough that an AD to 

address the potential situation is 

unnecessary. 

The Discussion section of the original 

NPRM also stated that dropped tracks 

by the TCAS units could lead to 

‘‘possible loss of separation of air traffic 

and possible mid-air collision.’’ ACSS 

noted that the calculated probability 

associated with such a possible event is 

very low. To support this assertion, 

ACSS referred to Section 2.3 of ACSS 

Continuing Operational Safety 

Probability Assessment of the 

Interference Limiting Function, 

Document 8008352–001, Revision C, 

dated January 6, 2011. ACSS reported 

that it has never received any report of 

such an operational anomaly from field 

operation. ACSS added that this 

analysis would indicate that the 

probability of such an event is low 

enough that an AD to address the 

potential situation is unnecessary. 

We infer that the commenter is 

requesting that we withdraw the NPRM. 

We disagree. While the commenter 

claims that the probability is low, 

information gathered from several flight 

tests at different regional airports, 

analysis of flight and other testing data, 

and various meetings and discussions 

among various FAA offices, ACSS, and 

an FAA TCAS contractor indicate that 

the risk from the identified condition is 

unacceptable, and it is necessary to 

proceed with this action. 

Request To Delay AD Pending TCAS 

Validation 

Dassault Aviation (Dassault) stated 

that the technical standard order (TSO) 


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for TCAS 2000, new part number (P/N) 

7517900–55001 (referenced in 

corresponding ACSS Service Bulletin 

8008229–001 (ATA Service Bulletin 

7517900–34–6040), Revision 01, dated 

September 30, 2010), has been 

approved, but the TSO for TCAS 3000, 

new P/N 9003000–55004 

(corresponding ACSS Service Bulletin 

8008235–001 (ATA Service Bulletin 

9003000–34–6006), Revision 02, dated 

February 3, 2011), was scheduled to be 

approved in June 2011. Dassault reports 

that, as an airplane manufacturer and 

system integrator, it must certify those 

TCAS units against airworthiness 

requirements and ensure that modified 

units still operate properly within their 

target system environment. Dassault 

proposed that we wait to issue the final 

rule until the new TCAS units can be 

validated within their hosting avionics 

environment. 

We agree, for the reasons provided by 

the commenter. We have reviewed the 

following revised service bulletins: 

• ACSS Service Bulletin 8008221– 

001 (ATA Service Bulletin 9003500–34– 

6014), Revision 01, dated February 4, 

2011. 

• ACSS Service Bulletin 8008222– 

001 (ATA Service Bulletin 9003500–34– 

6015), Revision 01, dated February 4, 

2011. 

• ACSS Service Bulletin 8008223– 

001 (ATA Service Bulletin 9003500–34– 

6016), Revision 01, dated February 4, 

2011. 

• ACSS Service Bulletin 8008229– 

001 (ATA Service Bulletin 7517900–34– 

6040), Revision 02, dated June 28, 2011. 

• ACSS Service Bulletin 8008230– 

001 (ATA Service Bulletin 4066010–34– 

6036), Revision 02, dated June 28, 2011. 

• ACSS Service Bulletin 8008231– 

001 (ATA Service Bulletin 7517900–34– 

6041), Revision 02, dated June 28, 2011. 

• ACSS Service Bulletin 8008233– 

001 (ATA Service Bulletin 9000000–34– 

6016), Revision 03, dated June 30, 2011. 

• ACSS Service Bulletin 8008234– 

001 (ATA Service Bulletin 9000000–34– 

6017), Revision 02, dated June 30, 2011. 

• ACSS Service Bulletin 8008235– 

001 (ATA Service Bulletin 9003000–34– 

6006), Revision 02, dated February 3, 

2011. 

• ACSS Service Bulletin 8008236– 

001 (ATA Service Bulletin 7517900–34– 

6042), Revision 03, dated June 30, 2011. 

• ACSS Service Bulletin 8008238– 

001 (ATA Service Bulletin 9000000–34– 

6018), Revision 02, dated June 30, 2011. 

These revisions provide procedures for 

installing new updated software. We 

have revised this supplemental NPRM 

to refer to the most recent service 

information, and provided credit for 

actions done before the effective date of 

the AD using previous service 

information as acceptable for 

compliance with the AD requirements. 

Request To Clarify Applicability 

Several commenters reported 

difficulty determining the applicability 

of the original NPRM. 

David Schober stated that the 

applicability of the original NPRM is 

defined in service bulletins that are not 

available to the general public, so some 

readers might not be able to determine 

which airplanes or components are 

affected. Mr. Schober added that a 

mechanic or repair station that does not 

have access to the service bulletins 

could return a noncompliant airplane to 

service. 

The European Aviation Safety Agency 

(EASA) requested that we revise the 

original NPRM to specify the affected 

part numbers or software version. 

ACSS noted that the applicability of 

the original NPRM did not identify 

specific TCAS part numbers associated 

with the referenced service bulletins. 

ACSS accordingly issued ACSS 

Technical Newsletter 8008359, which 

cross-references the service bulletins 

and specific TCAS part numbers. ACSS 

recommended that we revise the 

original NPRM to refer to this 

document. 

We agree with the request. This 

supplemental NPRM includes the 

information in table 1 of ACSS 

Technical Newsletter 8008359, Revision 

A, dated January 12, 2011, which 

provides additional information about 

affected TCAS part numbers. Following 

paragraph (c) of this supplemental 

NPRM, we have added new Note 1, 

which introduces new table 1 to list the 

service information and the 

corresponding affected parts. 

Request To Explain Effect of Revised 

Service Information on Applicability 

Mr. Schober expressed concern for the 

potential effect on the applicability if 

the referenced service information is 

revised. Mr. Schober asserted that 

revising the service information to 

include additional units not considered 

at this time would bypass the public 

comment required by the 

Administrative Procedure Act (APA) 

(Pub. L. 79–404, 5 U.S.C. 551, et seq.). 

We agree to clarify the applicability of 

this supplemental NPRM. Where an AD 

refers to a service document for 

airplanes or components in the 

applicability, that service bulletin is 

specifically identified by its revision 

level. Only that revision level may be 

used to determine the applicability of 

the AD. Therefore, since the 

applicability of the AD cannot change in 

the future except by revising or 

superseding the AD, this supplemental 

NPRM does not violate the APA. We 

have not changed the supplemental 

NPRM regarding this issue. 

Request To Provide Additional 

Information 

ACSS asserts that the information 

provided under the Summary and 

Discussion sections in the original 

NPRM provides very limited detail 

regarding the interference limiting issue. 

To help operators fully understand and 

assess the operational aspects of the 

interference limiting issue, ACSS 

recommended that we provide ACSS 

Technical Newsletter 8008359, ‘‘Change 

7 Interference Limiting Airworthiness 

Directive FAQs,’’ Revision A, dated 

January 12, 2011. 

We agree. As explained previously, 

we have changed paragraph (c) in this 

supplemental NPRM to refer to this 

technical newsletter, which will be 

submitted to the Office of the Federal 

Register for approval of incorporation by 

reference in the final rule AD. 

Request To Delay AD Issuance 

Empire Airlines (Empire) reported it 

could not respond to the original NPRM 

because the necessary information was 

not available and the proposed 

modification had not been submitted for 

TSO approval yet. Empire suggested 

that we issue the NPRM when more 

information is available. 

We disagree with the request. As 

noted previously in ‘‘Actions Since 

Previous NPRM was Issued,’’ ACSS is 

upgrading the software of each TCAS 

model and submitting it one at a time 

to the FAA for review and approval. We 

anticipate that all necessary software 

will be FAA approved and released 

before we issue the final rule. In 

proposing the compliance time of 48 

months in the NPRM, we anticipated 

that the software would be released 

within the first year after the final rule 

was issued. Therefore, the compliance 

time proposed in the NPRM has been 

reduced from 48 months to 36 months 

in this supplemental NPRM. 

Request To Consider Effect of TCAS 

Certification 

Dassault showed concern about the 

detrimental effect the original NPRM 

will have on the airplane delivery 

process for aircraft manufacturers 

around the world. Dassault reported that 

on the production line many airplanes 

equipped with the old TCAS part 

numbers are awaiting completion and 

final delivery. As a result, Dassault will 

be unable to issue a statement of 


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conformity (per FAA Order 8130.2G, 

Airworthiness Certification of Aircraft 

and Related Products, dated August 31, 

2010) or a certificate of airworthiness 

(per EASA regulations) on these 

airplanes. Dassault requested relief in 

the form of two options: (1) Delaying 

issuance of the final rule for 12 months 

until ACSS can upgrade affected TCAS 

units currently installed so that Dassault 

can certify the interference limiting 

change and retrofit the equipment, or (2) 

excluding TCAS 3000 old part numbers 

currently on Dassault Falcon Jet and 

Dassault Aviation completion/ 

production lines that are waiting entry 

into service so that, once in the field, 

the equipment would be in compliance 

with the AD. 

We disagree that further revision of 

this supplemental NPRM is necessary. 

As stated previously, we anticipate that 

all necessary software will be approved 

and released before we issue the final 

rule. Therefore, Dassault will be able to 

install the required software in each 

airplane delivered after this AD’s 

effective date and issue statements of 

conformity for those airplanes. 

Request To Clarify Effect of the 

Supplemental Type Certificate (STC) on 

Applicability 

Mr. Schober stated that many affected 

TCAS units use an STC as the approved 

data, and most of those STCs identify 

equipment eligible for installation by 

part number. The commenter asserted 

that the referenced service information 

rolls the part numbers of the units, so 

those units would no longer be eligible 

for installation via the original STC. 

We agree to provide clarification. As 

indicated previously, we have added 

new table 1 in this supplemental NPRM 

to match each affected part number to 

its corresponding service document. 

Request To Correct Statement of Unsafe 

Condition 

ACSS noted an inaccuracy in the 

following text from the NPRM Summary 

section: 

The TCAS units dropped several reduced 

surveillance aircraft tracks because of 

interference limiting. We are proposing this 

AD to prevent TCAS units from dropping 

tracks, which could compromise separation 

of air traffic and lead to subsequent mid-air 

collisions. 

ACSS stated that the IL function—even 

the changed implementation approved 

by the FAA and proposed by the 

NPRM—will still result in dropped 

tracks, because that is the purpose of the 

IL function. ACSS agreed with the 

Relevant Service Information section of 

the NPRM, which stated that the change 

simply ‘‘improves tracking.’’ The 

commenter therefore suggested that we 

revise the NPRM to state that the AD 

will ‘‘minimize’’ rather than prevent 

dropped tracks. 

We disagree. The current ACSS 

implementation of TCAS is susceptible 

to dropping surveillance aircraft tracks 

because of interference limiting. This 

supplemental NPRM would require 

revising the current TCAS software to 

prevent dropping of TA and potential 

RA tracking cause by interference 

limiting.We have not changed this 

supplemental NPRM regarding this 

issue. The supplemental NPRM also 

corrects the altitude source issue in 

some of the ACSS TCAS product 

installations. 

Request for Information on the Incident 

J. Twombly asked whether the ACSS 

anomaly that prompted the NPRM had 

any effect on the operation of the 

aircraft’s transponder, or whether the 

transponder continued to operate in a 

normal manner, broadcasting and 

responding to interrogations, 

notwithstanding the ACSS anomaly. 

The commenter further questioned 

whether the transponder performance 

was verified during the investigation. 

The Mode S transponder of the 

airplane was verified to be performing 

in normal status operation during the 

flight test, despite the TCAS operational 

issue of the interference limiting 

anomaly. This anomaly in TCAS has no 

effect on Mode S transponder operation. 

We have made no change to this 

supplemental NPRM in this regard. 

Request To Revise FAA’s Determination 

ACSS requested that we revise the 

following sentence from the ‘‘FAA’s 

Determination and Requirements of 

This Proposed AD’’ section of the 

original NPRM: 

We are proposing this AD because we 

evaluated all relevant information and 

determined the unsafe condition described 

previously is likely to exist or develop in 

other products of these same type designs. 

ACSS clarified that the operation of the 

IL function in question was not the 

result of an error in implementation. 

The IL function was specifically 

implemented to operate as it does in 

order to comply with the requirements 

of the TSO MOPS for Change 7 (i.e., 

TSO–C119b), as ACSS interpreted those 

requirements. As such, ACSS 

considered the NPRM misleading in its 

statement that the unsafe condition was 

likely to exist or develop in ‘‘other 

products of these same type designs.’’ 

ACSS had already implemented the 

FAA-directed change in all current and 

future versions (e.g., TSO–C119c; 

Change 7.1-compliant systems). ACSS 

recommended that we revise the 

statement to indicate that the unsafe 

condition ‘‘exists in various ACSS TCAS 

systems.’’ 

We disagree with the request. We 

have determined that the identified 

unsafe condition exists in the affected 

TCAS products, and might develop in 

products with the same type design, 

unless the actions proposed in this 

supplemental NPRM are done. We have 

not changed the supplemental NPRM 

regarding this issue. 

Request To Revise Certain Assertions 

Made in Original NPRM 

ACSS questioned the accuracy of the 

following statement from the Discussion 

section of the NPRM: ‘‘When the TCAS 

unit interrogated aircraft in a high 

density airport area, some of the targets 

disappeared from the cockpit display or 

were not recognized.’’ ACSS asserted 

that this claim is incorrect, and added 

that the TCAS system continues to 

monitor the airspace and receive Mode 

S squitter information from all aircraft 

within detection range, even when the 

interrogation power is being limited by 

the IL function. ACSS therefore 

suggested that we revise the statement 

to remove the words ‘‘or were not 

recognized.’’ 

Although the Discussion section from 

an NPRM is not repeated in a 

supplemental NPRM, we agree to 

provide clarification. The statement 

quoted by the commenter appears to be 

taken out of context from a more 

complete document. As long as 

information is within detection range 

and is being processed, MODE S 

recognition exists. But when tracking 

power is not available as a result of IL, 

not only will tracks disappear from the 

display, those targets will not be tracked 

because the lack of power does not 

permit maintenance of tracks. Therefore 

the tracks are dropped and will not be 

recognized and may result in loss of 

separation of own aircraft with other 

target aircraft. We have not changed the 

supplemental NPRM regarding this 

issue. 

Request To Revise Proposed Cost 

Estimate 

Mr. Schober noted that the Costs of 

Compliance section of the original 

NPRM considered only the actual 

updating of the unit—not the time to 

remove the unit, package and ship the 

unit to a repair station, return the unit 

to the aircraft owner, and re-install the 

unit, or the down time for the airplane 

for this maintenance evolution and the 

associated lost revenue. 

Empire asserted that it would be 

necessary to read each ACSS service 


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document listed in the original NPRM to 

determine the applicability, and 

wondered whether we included this 

research time in our calculations for 

determining the financial impact of the 

original NPRM. 

We infer that the commenters want us 

to revise the estimated costs to account 

for those variables. We disagree. The 

cost information in this supplemental 

NPRM describes only the direct costs of 

the specific required actions. Based on 

the best data available, the manufacturer 

provided the number of work-hours 

necessary to do the proposed actions. 

This number represents the time 

necessary to perform only the actions 

actually proposed by this supplemental 

NPRM. We recognize that, in doing 

actions required by an AD, operators 

might incur incidental costs in addition 

to the direct costs. But the cost analysis 

in AD rulemaking actions typically does 

not include incidental costs such as the 

time necessary for planning, airplane 

down time, or time necessitated by 

other administrative actions. Those 

incidental costs, which might vary 

significantly among operators, are 

almost impossible to calculate. We have 

not changed the supplemental NPRM 

regarding this issue. 

FAA’s Determination 

We are proposing this supplemental 

NPRM because we evaluated all the 

relevant information and determined 

the unsafe condition described 

previously is likely to exist in other 

products of these same type designs. 

Certain changes described above expand 

the scope of the original NPRM. As a 

result, we have determined that it is 

necessary to reopen the comment period 

to provide additional opportunity for 

the public to comment on this 

supplemental NPRM. 

Proposed Requirements of the 

Supplemental NPRM 

This supplemental NPRM would 

require upgrading software. 

Costs of Compliance 

We estimate that this proposed AD 

affects 9,000 airplanes of U.S. registry. 

We estimate the following costs to 

comply with this proposed AD: 

ESTIMATED COSTS

Action Labor cost Parts cost Cost per 

product 

Cost on U.S. 

operators 

Software upgrade ............................................ 2 work-hours × $85 per hour = $170 ............. $2,870 $3,040 $27,360,000 

Authority for This Rulemaking 

Title 49 of the United States Code 

specifies the FAA’s authority to issue 

rules on aviation safety. Subtitle I, 

section 106, describes the authority of 

the FAA Administrator. ‘‘Subtitle VII: 

Aviation Programs’’ describes in more 

detail the scope of the Agency’s 

authority. 

We are issuing this rulemaking under 

the authority described in Subtitle VII, 

Part A, Subpart III, Section 44701: 

‘‘General requirements.’’ Under that 

section, Congress charges the FAA with 

promoting safe flight of civil aircraft in 

air commerce by prescribing regulations 

for practices, methods, and procedures 

the Administrator finds necessary for 

safety in air commerce. This regulation 

is within the scope of that authority 

because it addresses an unsafe condition 

that is likely to exist or develop on 

products identified in this rulemaking 

action. 

Regulatory Findings 

We determined that this proposed AD 

would not have federalism implications 

under Executive Order 13132. This 

proposed AD would not have a 

substantial direct effect on the States, on 

the relationship between the national 

Government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. 

For the reasons discussed above, I 

certify this proposed regulation: 

(1) Is not a ‘‘significant regulatory 

action’’ under Executive Order 12866, 

(2) Is not a ‘‘significant rule’’ under the 

DOT Regulatory Policies and Procedures 

(44 FR 11034, February 26, 1979), 

(3) Will not affect intrastate aviation 

in Alaska, and 

(4) Will not have a significant 

economic impact, positive or negative, 

on a substantial number of small entities 

under the criteria of the Regulatory 

Flexibility Act. 

List of Subjects in 14 CFR Part 39 

Air transportation, Aircraft, Aviation 

safety, Incorporation by reference, 

Safety. 

The Proposed Amendment 

Accordingly, under the authority 

delegated to me by the Administrator, 

the FAA proposes to amend 14 CFR part 

39 as follows: 

PART 39—AIRWORTHINESS 

DIRECTIVES 

1. The authority citation for part 39 

continues to read as follows: 

Authority: 49 U.S.C. 106(g), 40113, 44701. 

§ 39.13 [Amended] 

2. The FAA amends § 39.13 by adding 

the following new airworthiness 

directive (AD): 

Aviation Communication & Surveillance 

Systems, LLC: Docket No. FAA–2010– 

1204; Directorate Identifier 2010–NM– 

147–AD. 

(a) Comments Due Date 

We must receive comments by November 

7, 2011. 

(b) Affected ADs 

None. 

(c) Applicability 

This AD applies to Aviation 

Communication & Surveillance Systems 

(ACSS) traffic alert and collision avoidance 

system (TCAS) units with part numbers 

identified in ACSS Technical Newsletter 

8008359, as installed on but not limited to 

various transport and small airplanes, 

certificated in any category. 

Note 1: Table 1 of this AD also provides 

a cross-referenced list of part numbers with 

associated service bulletins to help operators 

identify affected parts. 

TABLE 1—SERVICE BULLETIN AND LRU CROSS-REFERENCE

ACCS product— Affected LRU part Nos. (P/Ns)— ACSS Service Bulletin— 

TCAS 3000SP .............................. 9003500–10900, –10901, –10902, –55900, –55901, 

–55902, –57901, –65900, –65901, –65902.

8008221–001, Revision 01, dated February 4, 2011 

(ATA Service Bulletin 9003500–34–6014). 


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62326 Federal Register / Vol. 76, No. 195 / Friday, October 7, 2011 / Proposed Rules 

TABLE 1—SERVICE BULLETIN AND LRU CROSS-REFERENCE—Continued 

ACCS product— Affected LRU part Nos. (P/Ns)— ACSS Service Bulletin— 

TCAS 3000SP .............................. 9003500–10001, –10002, –10003, –10004, –55001, 

–55002, –55003, –55004, –65001, –65002, 

–65003, –65004.

8008222–001, Revision 01, dated February 4, 2011 

(ATA Service Bulletin 9003500–34–6015). 

TCAS 3000SP .............................. 9003500–10802 .......................................................... 8008223–001, Revision 01, dated February 4, 2011 

(ATA Service Bulletin 9003500–34–6016. 

TCAS 2000 .................................. 7517900–10003, –10004, –10006, –10007, –10011, 

–55003, –55004, –55006, –55007, –55009, 

–55011, –71003, –71004, –71006, –71007, 

–71011.

8008229–001, Revision 02, dated June 28, 2011 

(ATA Service Bulletin 7517900–34–6040). 

TCAS II ........................................ 4066010–910, –912 .................................................... 8008230–001, Revision 02, dated June 28, 2011 

(ATA Service Bulletin 4066010–34–6036). 

Military TCAS 2000 ...................... 7517900–56101, –56102, –56104, –56105, 56107 .... 8008231–001, Revision 02, dated June 28, 2011 

(ATA Service Bulletin 7517900–34–6041). 

T2CAS .......................................... 9000000–10002, –10003, –10004, –10005, –10006, 

–10008, –10204, –10205, –10206, –10208, 

–20002, –20003, –20004, –20005, –20006, 

–20008, –20204, –20205, –20206, –20208, 

–55002, –55003, –55004, –55005, –55006, 

–55008, –55204, –55205, –55206, –55208.

8008233–001, Revision 03, dated June 30, 2011 

(ATA Service Bulletin 9000000–34–6016). 

T2CAS .......................................... 9000000–10110, –11111 ............................................ 8008234–001, Revision 02, dated June 30, 2011 

(ATA Service Bulletin 9000000–34–6017). 

TCAS 3000 .................................. 9003000–10001, –10002, –10003, –55001, –55002, 

–55003, –65001, –65002, –65003.

8008235–001, Revision 02, dated February 3, 2011 

(ATA Service Bulletin 9003000–34–6006). 

Military TCAS 2000 MASS .......... 7517900–20001, –20002, –65001, –65002 ................ 8008236–001, Revision 03, dated June 30, 2011 

(ATA Service Bulletin 7517900–34–6042). 

Military T2CAS MASS .................. 9000000–30006, –40006, –60006 .............................. 8008238–001, Revision 02, dated June 30, 2011 

(ATA Service Bulletin 9000000–34–6018). 

(d) Subject 

Joint Aircraft System Component (JASC)/ 

Air Transport Association (ATA) of America 

Code 34, Navigation. 

(e) Unsafe Condition 

This AD was prompted by reports of 

anomalies with TCAS units during a flight 

test over a high density airport. The TCAS 

units dropped several reduced surveillance 

aircraft tracks because of interference 

limiting. We are issuing this AD to prevent 

TCAS units from dropping tracks, which 

could compromise separation of air traffic 

and lead to subsequent mid–air collisions. 

(f) Compliance 

Comply with this AD within the 

compliance times specified, unless already 

done. 

(g) Upgrade Software 

Within 36 months after the effective date 

of this AD, upgrade software for the ACSS 

TCAS, in accordance with the 

Accomplishment Instructions of the 

applicable ACSS publication identified in 

table 1 of this AD. 

Note 2: ACSS Service Bulletin 8008233– 

001 (ATA Service Bulletin 9000000–34– 

6016), Revision 03, dated June 30, 2011, 

contains three part numbers (P/Ns 9000000– 

10007, –20007, and –55007) that were never 

produced. 

(h) Actions Done in Accordance With 

Previous Service Information 

A software upgrade done before the 

effective date of this AD in accordance with 

the applicable service bulletin identified in 

paragraphs (h)(1) through (h)(13) of this AD 

is acceptable for compliance with the 

requirements of paragraph (g) of this AD. 

(1) ACSS Service Bulletin 8008221–001 

(ATA Service Bulletin 9003500–34–6014), 

dated May 27, 2010. 

(2) ACSS Service Bulletin 8008222–001 

(ATA Service Bulletin 9003500–34–6015), 

dated May 27, 2010. 

(3) ACSS Service Bulletin 8008223–001 

(ATA Service Bulletin 9003500–34–6016), 

dated May 27, 2010. 

(4) ACSS Service Bulletin 8008229–001 

(ATA Service Bulletin 7517900–34–6040), 

Revision 01, dated September 30, 2010. 

(5) ACSS Service Bulletin 8008230–001 

(ATA Service Bulletin 4066010–34–6036), 

Revision 01, dated February 1, 2011. 

(6) ACSS Service Bulletin 8008231–001 

(ATA Service Bulletin 7517900–34–6041), 

Revision 01, dated October 15, 2010. 

(7) ACSS Service Bulletin 8008233–001 

(ATA Service Bulletin 9000000–34–6016), 

Revision 02, dated February 1, 2011. 

(8) ACSS Service Bulletin 8008234–001 

(ATA Service Bulletin 9000000–34–6017), 

Revision 01, dated February 1, 2011. 

(9) ACSS Service Bulletin 8008235–001 

(ATA Service Bulletin 9003000–34–6006), 

dated June 4, 2010. 

(10) ACSS Service Bulletin 8008236–001 

(ATA Service Bulletin 7517900–34–6042), 

dated May 27, 2010. 

(11) ACSS Service Bulletin 8008236–001 

(ATA Service Bulletin 7517900–34–6042), 

Revision 02, dated February 1, 2011. 

(12) ACSS Service Bulletin 8008238–001 

(ATA Service Bulletin 9000000–34–6018), 

dated June 4, 2010. 

(13) ACSS Service Bulletin 8008238–001 

(ATA Service Bulletin 9000000–34–6018), 

Revision 01, dated February 1, 2011. 

(i) Alternative Methods of Compliance 

(AMOCs) 

(1) The Manager, Los Angeles Aircraft 

Certification Office (ACO), FAA, has the 

authority to approve AMOCs for this AD, if 

requested using the procedures found in 14 

CFR 39.19. In accordance with 14 CFR 39.19, 

send your request to your principal inspector 

or local Flight Standards District Office, as 

appropriate. If sending information directly 

to the manager of the ACO, send it to the 

attention of the person identified in the 

Related Information section of this AD. 

(2) Before using any approved AMOC, 

notify your appropriate principal inspector, 

or lacking a principal inspector, the manager 

of the local flight standards district office/ 

certificate holding district office. 

(j) Related Information 

(1) For more information about this AD, 

contact Abby Malmir, Aerospace Engineer, 

Systems and Equipment Branch, ANM–130L, 

FAA, Los Angeles ACO, 3960 Paramount 

Boulevard, Lakewood, California 90712– 

4137; phone: 562–627–5351; fax: 562–627– 

5210; e-mail: abby.malmir@faa.gov. 

(2) For service information identified in 

this AD, contact Aviation Communication & 

Surveillance Systems, LLC, 19810 North 7th 

Avenue, Phoenix, Arizona 85027–4741; 

phone: 623–445–7040; fax: 623–445–7004; email: acss.orderadmin@L–3com.com; 

Internet: http://www.acss.com. You may 

review copies of the referenced service 

information at the FAA, Transport Airplane 

Directorate, 1601 Lind Avenue, SW., Renton, 

Washington. For information on the 

availability of this material at the FAA, call 

425–227–1221. 


pmangrum on DSK3VPTVN1PROD with PROPOSALS-1
Federal Register / Vol. 76, No. 195 / Friday, October 7, 2011 / Proposed Rules 62327 

Issued in Renton, Washington, on 

September 29, 2011. 

Ali Bahrami, 

Manager, Transport Airplane Directorate, 

Aircraft Certification Service. 

[FR Doc. 2011–26084 Filed 10–6–11; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–125949–10] 

RIN 1545–BJ64 

Retail Inventory Method 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: This document contains 

proposed regulations relating to the 

retail inventory method of accounting. 

The regulations restate and clarify the 

computation of ending inventory values 

under the retail inventory method and 

provide a special rule for certain 

taxpayers that receive margin protection 

payments and similar vendor 

allowances. The regulations affect 

taxpayers that are retailers and elect to 

use a retail inventory method. 

DATES: Written or electronically 

generated comments and requests for a 

public hearing must be received by 

January 5, 2012. 

ADDRESSES: Send submissions to: 

CC:PA:LPD:PR (REG–125949–10), room 

5203, Internal Revenue Service, P.O. 

Box 7604, Ben Franklin Station, 

Washington, DC 20044. Submissions 

may be hand delivered Monday through 

Friday between the hours of 8 a.m. and 

4 p.m. to: CC:PA:LPD:PR (REG–125949– 

10), Courier’s Desk, Internal Revenue 

Service, 1111 Constitution Avenue, 

NW., Washington, DC. Alternatively, 

taxpayers may submit comments 

electronically via the Federal 

eRulemaking Portal at http:// 

www.regulations.gov (IRS REG–125949– 

10). 

FOR FURTHER INFORMATION CONTACT: 

Concerning the proposed regulations, 

Natasha M. Mulleneaux, (202) 622– 

3967; concerning submission of 

comments and requests for a public 

hearing, Richard Hurst at 

Richard.A.Hurst@irscounsel.treas.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

This document contains proposed 

amendments to 26 CFR part 1 relating 

to the retail inventory method under 

§ 1.471–8 of the Income Tax 

Regulations. 

Section 471 provides that a taxpayer’s 

method of accounting for inventories 

must clearly reflect income. Section 

1.471–2(c) provides that the bases of 

inventory valuation most commonly 

used and meeting the requirements of 

section 471 are (1) cost and (2) cost or 

market, whichever is lower (LCM). 

Section 1.471–8 allows retailers to 

approximate cost or LCM by using the 

retail inventory method. A last-in, first 

out (LIFO) taxpayer that elects to use the 

retail inventory method must 

approximate cost. 

Under the retail inventory method, 

the retail selling price of ending 

inventory is converted to approximate 

cost or approximate LCM using a costto-retail ratio, or cost complement. The 

numerator of the cost complement is the 

value of beginning inventory plus the 

cost of purchases during the taxable 

year, and the denominator is the retail 

selling prices of beginning inventories 

plus the initial retail selling prices of 

purchases. The cost complement is then 

multiplied by the retail selling price of 

ending inventory (multiplicand) to 

determine the ending inventory value. 

Section 1.471–3 provides that, for 

inventory valuation purposes, the cost 

of purchases during the year generally 

includes invoice price less trade or 

other discounts. A discount may be 

based on a retailer’s sales volume (salesbased allowance) or on the quantity of 

merchandise a retailer purchases 

(volume-based allowance), or may relate 

to a retailer’s reduction in retail selling 

price (markdown allowance or margin 

protection payment). A vendor may 

provide a retailer with a markdown 

allowance or margin protection payment 

when the retailer temporarily or 

permanently reduces the retail selling 

price of its inventory to sell it. A 

markdown allowance or margin 

protection payment differs from other 

types of discounts because it is intended 

to maintain the retailer’s profit margin 

and therefore is directly related to the 

inventory selling price. 

Under proposed § 1.471–3(e) (75 FR 

78944), the amount of an allowance, 

discount, or price rebate a taxpayer 

earns by selling specific merchandise (a 

sales-based vendor allowance) is a 

reduction in the cost of the merchandise 

sold and does not reduce the inventory 

cost or value of goods on hand at the 

end of the taxable year. 

Explanation of Provisions 

1. Overview 

The proposed regulations restructure 

and restate the regulations under 

§ 1.471–8 in plain language. The 

proposed regulations also add rules 

addressing the treatment of sales-based 

vendor allowances and of vendor 

markdown allowances and margin 

protection payments in the retail 

inventory method computation. 

2. Sales-Based Vendor Allowances 

The proposed regulations clarify the 

interaction of proposed § 1.471–3(e) 

with the retail inventory method by 

excluding from the numerator of the 

cost complement formula the amount of 

a sales-based vendor allowance. 

3. Computation of Cost Complement 

Under the Retail LCM Method 

The retail inventory method 

determines an ending inventory value 

by maintaining proportionality between 

costs and selling prices. Under the retail 

LCM method, a reduction in retail 

selling price reduces the value of ending 

inventory in the same ratio as the cost 

complement. 

If a taxpayer earns an allowance, 

discount, or price rebate, the inventory 

cost in the numerator of the cost 

complement declines, resulting in a 

reduction of ending inventory value 

computed under the retail inventory 

method. If the allowance, discount, or 

price rebate is related to a permanent 

markdown of the retail selling price (as 

in the case of a markdown allowance or 

margin protection payment), ending 

inventory value is further reduced as a 

result of the decrease in ending retail 

selling prices (the multiplicand in the 

formula). This additional reduction of 

ending inventory value caused by 

reducing both the numerator of the cost 

complement and the multiplicand (1) 

Generally results in a lower ending 

inventory value for a retail LCM method 

taxpayer than for a similarly situated 

first-in, first-out (FIFO) taxpayer that 

values inventory at LCM, and (2) does 

not clearly reflect income. 

To address this distortion, the 

proposed regulations provide that a 

retail LCM method taxpayer may not 

reduce the numerator of the cost 

complement for an allowance, discount, 

or price rebate that is related to or 

intended to compensate for a permanent 

markdown of retail selling prices. Thus, 

in the case of markdown allowances and 

margin protection payments, the value 

of ending inventory as computed under 

the retail LCM method is reduced solely 

as a result of the reduction in retail 

selling price, avoiding an unwarranted 


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