U.S. Department of Transportation Office of the Secretary of Transportation GENERAL COUNSEL 

### FEB 1 2 2010 1200 New Jersey Avenue, SE Washington, DC 20590

Certified Mail

- Return Receipt Requested Mr. Kris E. Durmer General Counsel U.S. General Services Administration 1800 F Street, NW Washington, D.C. 20405

Dear Mr. Durmer: Re: CSI Aviation Services

I am writing to bring to your attention a matter currently pending in the Department of Transportation (DOT) Docket (DOT-OST-2009-0311) that arises out of a General Service Administration (GSA) schedule, Special Item Number (SIN) 599.5, Air Charter ServicesBrokers, and to obtain information from GSA that would be helpful in our resolution of that matter. As background information, in order to engage directly or indirectly in air transportation, citizens ofthe United States must hold economic authority from DOT, either in the form ofa certificate of public convenience and necessity (certificate) issued pursuant to 49 U.S.C. §§ 41101 and 41102, or in the form ofan exemption from the certificate requirement. Air charter brokers that do not have economic authority may not, as principals, enter into contracts with direct air carriers for air transportation and, in effect, re-sell that air transportation pursuant to separate contracts with charterers. Air charter brokers that engage in such activity and that lack a certificate or an exemption would be unauthorized indirect air carriers in violation ofsection 41101. Violations of section 41101 also constitute unfair and deceptive practices and unfair methods ofcompetition in violation of49 U.S.C. §41712. In early 2009, the DOT Office ofAviation Enforcement and Proceedings (Enforcement Office) initiated an investigation of the activities of the air charter brokers listed under SIN 599.5 in order to determine whether those brokers were acting as indirect air carriers. In October 2009, the Enforcement Office concluded that they were in fact acting as indirect air carriers. Since none of the brokers at any time relevant to this matter held a certificate or exemption, the Enforcement Office sent letters to all seven ofthe brokers then listed under SIN 599.5, including CSI Aviation Services, informing them of its beliefthat they were engaging unlawfully in air transportation and warning them that enforcement action could be taken if such activity continued beyond 180 days after the dates ofthe letters. On November 30, 2009, CSI Aviation Services filed an application with the Department in the above-listed docket for an emergency exemption from section 41101 to the extent necessary forit to engage lawfully in indirect air transportation under SIN 599.5. 1 In response, several air charter brokers, direct air carriers, and other interested parties have submitted answers, some in support, others in opposition to the CSI application. (The application and all responsive pleadings can be consulted online at www.regulations.gov, by entering "2009-0311" under "Keyword" and pressing "Search.") Additionally, on December 17,2009, GSA's Office ofAcquisitions Operations for the Office of Travel, Motor Vehicles and Card Services (OAO) submitted an answer that expressed its "support for the general principles upon which CSI premises its application

..." but that expressed no position on whether we should proceed to grant or deny the application. (I am attaching a copy ofthat comment.) Given the centrality ofthe GSA process to CSI's pending exemption application, we want to be certain that our decisional record contains a clear and definitive formal statement of GSA's position on that application. Furthermore, given that whatever decision we might reach could have implications beyond the CSI application before us, we would ask that you address the broader question ofwhether broker services are essential to GSA's mission ofprocuring airlift for the Federal government or whether GSA has other means to accomplish this mission. Finally, we would of course welcome any other comment that you believe is pertinent to our decision making in this case. We would appreciate your response within 10 days ofreceipt of this letter. Ifyou have any questions or concerns, please feel free to contact me. Finally, as required by our rules, a copy ofthis letter and any reply will be placed in Docket DOT-OST-2009-0311, where they will be available for public inspection at www.regulations.gov. Sincerely,

General Counsel

Enclosure

On December 14, 2009, CSI also filed a Petition for Review with the U.S. Court of Appeals for the District of Columbia Circuit alleging that the Enforcement Office's letter warning CSI ofpossible future enforcement action violated the Administrative Procedure Act and should be amended, modified, or set aside, so that CSI could continue to pursue its activities under the GSA Schedule. This matter is pending.BEFORETHE DEPARTMENT OFTRANSPORTATION WASHINGTON, DC

) Applicationof ) ) CSI Aviation Services, 

### Inc. ) ) For

### anemergencyexemptionpursuantto ) 49 U.S.C. §40109 and 14 C.F.R. § 302.11 ) To continue to perfonn underGeneral ) Services Administrationcontract ) GS-33F-0025V SIN 599-5, AirCharter ) Services

- Brokers ) ) 

# ------------------------) DocketOST

- 2009

- 0311

U.S. GENERAL SERVICES ADMINISTRATION REPLY IN SUPPORTOF CSIAVIATION SERVICES, INC. REQUEST FOREMERGENCY EXEMPTION

The U.S. General ServicesAdministration, Federal Acquisition Service, Office of Acquisition Operations for the OfficeofTravel, MotorVehicles and Card Services (GSA), withoutcommenton the action ofthe DepartmentofTransportation, Office of General Counsel, Aviation Enforcement andProceedings, directingCSI Aviation Services, Inc. (CSI) to cease performanceofGSA MultipleAward Schedule contractGS33F-0025V, herebyexpresses it support for the generalprinciples upon which CSI premises its application for an exemptionfrom 49 U.S.C. §41101 and 14C.F.R. Part212 and 380.GSA
- ReplyIn Supportof Application ofCSI Aviation ServIces, Inc. Foran Emergencyexemption December 17, 2009 Page2of2 GSA is providing this Replybecauseit appears to betheposition ofthe Departmentof Transportation that such an exemption isrequired in orderfor CSI to continueits performance ofGSA Multiple Award Schedule contract GS-33F-002SV Special Item Number (SIN) 599-5, AirCharterServices

- Brokers, and any follow-on contracts, blanketpurchase agreements, and task ordersrelated thereto.

Shouldthe DepartmentofTransportation, Office ofGeneral Counsel, Aviation Enforcement and Proceedings desireto discussthis matterfurther. itmaycontact the GSA Office ofGeneral Counsel (personal Property Division).

# ~~~ R aA. Koses Ie)

### /1 7/.;;)cc., Date Director Office ofAcquisition Operations Office ofTravel. MotorVehicles and Card Services