59932 Federal Register / Vol. 70, No. 197 / Thursday, October 13, 2005 / Rules and Regulations 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Parts 21, 121, 135, 145, and 183 

[Docket No. FAA–2003–16685; Amendment 

Nos. 21–86, 121–311, 135–97, 145–23, and 

183–12] 

RIN 2120–AH79 

Establishment of Organization 

Designation Authorization Program 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: This final rule establishes the 

Organization Designation Authorization 

(ODA) program. The ODA program 

expands the scope of approved tasks 

available to organizational designees; 

increases the number of organizations 

eligible for organizational designee 

authorizations; and establishes a more 

comprehensive, systems-based approach 

to managing designated organizations. 

This final rule also sets phaseout dates 

for the current organizational designee 

programs, the participants in which will 

be transitioned into the ODA program. 

This program is needed as the 

framework for the FAA to standardize 

the operation and oversight of 

organizational designees. The effect of 

this program will be to increase the 

efficiency with which the FAA appoints 

and oversees designee organizations, 

and allow the FAA to concentrate its 

resources on the most safety-critical 

matters. 

DATES: This amendment becomes 

effective November 14, 2005. Affected 

parties, however, do not have to comply 

with the information collection 

requirements of §§ 183.43, 183.45, 

183.53, 183.55, 183.57, 183.63, or 

183.65 until the control number 

assigned by the Office of Management 

and Budget (OMB) for this information 

collection requirement is published in 

the Federal Register. Publication of the 

control number notifies the public that 

OMB has approved this information 

collection requirement under the 

Paperwork Reduction Act of 1995. 

FOR FURTHER INFORMATION CONTACT: For 

technical issues, Ralph Meyer, 

Delegation and Airworthiness Programs 

Branch, Aircraft Engineering Division 

(AIR–140), Aircraft Certification 

Service, Federal Aviation 

Administration, 6500 S. MacArthur 

Blvd., ARB Room 308, Oklahoma City, 

OK, 73169; telephone (405) 954–7072; 

facsimile (405) 954–2209, e-mail 

ralph.meyer@faa.gov. For legal issues, 

Karen Petronis, Office of the Chief 

Counsel, Regulations Division (AGC– 

200), Federal Aviation Administration, 

800 Independence Avenue, SW., 

Washington, DC 20591; telephone (202) 

267–3073; facsimile (202) 267–7971; email karen.petronis@faa.gov. 

SUPPLEMENTARY INFORMATION: 

Availability of Rulemaking Documents 

You can get an electronic copy using 

the Internet by: 

(1) Searching the Department of 

Transportation’s electronic Docket 

Management System (DMS) Web page 

(http://dms.dot.gov/search); 

(2) Visiting the FAA’s Regulations and 

Policies’ Web page at http:// 

www.faa.gov/regulationspolicies; or 

(3) Accessing the Government 

Printing Office’s Web page at http:// 

www.gpoaccess.gov/fr/index.html. 

You can also get a copy by sending a 

request to the Federal Aviation 

Administration, Office of Rulemaking, 

ARM–1, 800 Independence Avenue 

SW., Washington, DC 20591, or by 

calling (202) 267–9680. Make sure to 

identify the amendment number or 

docket number of this rulemaking. 

Anyone can search the electronic 

form of comments received into our 

dockets by the individual’s name who 

sends the comment (or signs the 

comment, if sent for an association, 

business, labor union, etc.). You may 

review DOT’s complete Privacy Act 

statement in the Federal Register 

published on April 11, 2000 (Volume 

65, Number 70; Pages 19477–78) or you 

may visit http://dms.dot.gov. 

Small Business Regulatory Enforcement 

Fairness Act 

The Small Business Regulatory 

Enforcement Fairness Act (SBREFA) of 

1996 requires FAA to comply with 

small entity requests for information or 

advice about compliance with statutes 

and regulations within its jurisdiction. If 

you are a small entity and you have a 

question about this document, you may 

contact its local FAA official, or the 

person listed under FOR FURTHER

INFORMATION CONTACT. You can find out 

more about SBREFA on the Internet at 

http://www.faa.gov/avr/arm/sbrefa.cfm. 

Authority for This Rulemaking 

The FAA’s authority to issue rules 

about aviation safety is found in Title 49 

of the United States Code. 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. 

This rulemaking is promulgated 

under the authority described in 

Subtitle VII, Part A, Chapter 447—Safety 

Regulation, Section 44702—Issuance of 

Certificates. Under paragraph 44702(d), 

the FAA Administrator may delegate to 

a qualified private person a matter 

related to issuing certificates, or related 

to the examination, testing, and 

inspection necessary to issue a 

certificate he is authorized by statute to 

issue under § 44702(a). Under paragraph 

(d), the Administrator is empowered to 

prescribe regulations and other 

materials necessary for the supervision 

of delegated persons. This regulation is 

within the scope of that authority in that 

it establishes a comprehensive program 

for the designation of organizations in 

14 CFR part 183. 

Background 

History of Designation Programs 

Since at least 1927, the federal 

government has used private persons to 

examine, test and inspect aircraft as part 

of the system for managing aviation 

safety. The current system of 

delegations has been evolving since the 

need for assistance by private persons 

was recognized over 70 years ago. 

Beginning in the 1940s, the FAA’s 

predecessor agency, the Civil 

Aeronautics Administration (CAA) 

established programs to appoint 

designees to perform certain tasks for 

airman approvals, airworthiness 

approvals and certification approvals. 

These include the Designated 

Engineering Representative (DER), 

Designated Manufacturing Inspection 

Representative (DMIR), and Designated 

Pilot Examiner (DPE) programs. 

In the 1950s, the rapid expansion of 

the aircraft industry led to the adoption 

of the Delegation Option Authorization 

(DOA) program to supplement the 

agency’s limited resources for 

certification of small airplanes, engines 

and propellers. As the first program that 

delegated authority to an organization 

rather than an individual, DOA was 

intended to take advantage of the 

experience and knowledge inherent in a 

manufacturer’s organization. Currently, 

DOAs are authorized for certification 

and airworthiness approvals for the 

products manufactured by the 

authorization holder. 

The Federal Aviation Act of 1958 

established the Federal Aviation Agency 

and codified the authority of the 

Administrator to delegate certain 

matters in section 314 of that Act. When 

that statute was recodified in the 1990s, 

the delegation authority was placed in 

49 U.S.C. 44702(d) without substantive 

change to the authority of the 

Administrator. 

The 1960s saw the creation of the 

Designated Alteration Station (DAS) 

Federal Register / Vol. 70, No. 197 / Thursday, October 13, 2005 / Rules and Regulations 59933 

Program, which was intended to reduce 

delays in issuing supplemental type 

certificates (STCs) by allowing the 

approved engineering staffs of repair 

stations to issue STCs. As adopted, the 

DAS program allows eligible air carriers, 

commercial operators, domestic repair 

stations and product manufacturers to 

issue STCs and related airworthiness 

certificates. 

In the 1970s the FAA reviewed its 

delegated organization programs, which 

then allowed the approval of major 

alteration data by a delegated 

organization, but not approval of major 

repair data. This review lead to the 

adoption of Special Federal Aviation 

Regulation (SFAR) 36 in 1978 to allow 

eligible air carriers, commercial 

operators, and domestic repair stations 

to develop and use major repair data 

without FAA approval of the data. 

In the 1980s, the FAA established the 

Designation Airworthiness 

Representative (DAR) program to 

expand the airworthiness certification 

functions that individual designees may 

perform. At the same time, we allowed 

for organizations to serve as DARs, in a 

program known as Organizational 

Designated Airworthiness 

Representatives (ODARs). 

Since the formation of the first 

organizational designee programs, 

organizational designees have gained 

significant experience in aircraft 

certification matters, and the FAA has 

gained significant experience in 

managing these designee programs. We 

have found that the quality of the 

approvals processed by these 

organizations equals those processed by 

the FAA. Delegation of tasks to these 

organizations has allowed the FAA to 

focus our limited resources on more 

critical areas. 

Status of Designees 

In understanding these programs, we 

consider it essential to remember that 

designees have a unique status. While 

we refer to these persons and 

organizations informally as ‘‘designees’’, 

under part 183 they are referred to as 

‘‘representatives of the Administrator.’’

When acting as a representative of the 

Administrator, these persons or 

organizations are required to perform in 

a manner consistent with the policies, 

guidelines, and directives of the 

Administrator. When performing a 

delegated function, designees are legally 

distinct from and act independent of the 

organizations that employ them. The 

authority of these representatives to act 

comes from an FAA delegation and not 

a certificate. As provided by statute, the 

Administrator may at any time and for 

any reason, suspend or revoke a 

delegation. This is true even though 

some parts of the delegation regulations 

in part 183 and elsewhere refer to kinds 

of certificates that denote the authority 

granted. 

An ODA issued under this program is 

a delegation made under section 

44702(d), not a statutorily authorized 

certificate issued under section 

44702(a). The authority of the 

Administrator to suspend, revoke, or 

withhold ODA authorization is not 

subject to appeal to the National 

Transportation Safety Board. 

ODA Program Overview 

The FAA is adopting the ODA 

program as a means to provide more 

effective certification services to its 

customers. This final rule adopts the 

regulatory basis of the ODA program. 

Companion FAA orders, similar to the 

draft Order made available for review, 

will describe the specifics of the 

program and provide guidance for FAA 

personnel and for organizations to 

which we grant an ODA. These orders 

will also provide information to FAA 

personnel on how to qualify, appoint, 

and oversee organizations in the ODA 

program. 

As aviation industry needs continue 

to expand at a rate exceeding that of 

FAA resources, the need for the ODA 

program has become more apparent. 

According to a 1993 report by the 

General Accounting Office (GAO/ 

RCED–93–155), the FAA’s certification 

work has increased five-fold over the 

last 50 years. The ODA program is a 

consolidation and improvement of the 

piecemeal organizational delegations 

that have developed on an ‘‘as needed’’

basis over the last half century. As the 

FAA’s dependence on designees has 

increased, so has the need to oversee 

designated organizations using a single, 

flexible set of procedures and a systems 

approach to management. Using our 

experience with both individual and 

organizational designees, we have 

designed the ODA program with these 

criteria in mind. 

The ODA program improves the 

FAA’s ability to respond to our steadily 

increasing workload by expanding the 

scope of authorized functions of FAA 

organizational designees, and by 

expanding eligibility for organizational 

designees. One way this program 

expands eligibility is by eliminating the 

requirement that an organization hold 

some type of FAA certificate before it 

would qualify for designation 

authorization. 

The ODA program also allows the 

FAA to delegate any statutorily 

authorized functions to qualified 

organizations. Expansion of the 

available authorized functions will 

reduce the time and cost for these 

certification activities. 

While our current delegations are 

limited to such organizations as 

manufacturers, air carriers, commercial 

operators, and repair stations, this rule 

formalizes the delegation of functions to 

any qualified organization. Accordingly, 

an organization with demonstrated 

competence, integrity, and expertise in 

aircraft certification functions is eligible 

to apply for an ODA. 

Creation of the ODA program aids the 

expansion of the designee system by 

addressing the delegation of more 

functions related to aircraft certification, 

and new functions pertaining to 

certification and authorization of 

airmen, operators, and air agencies. For 

general aviation operations, the rule 

allows an ODA Unit member to issue 

airman certificates or authorizations 

under 14 CFR parts 61, 63, or 91. 

Additionally, the rule allows designated 

organizations to find compliance or 

conduct functions leading to the 

issuance of certificates or authorizations 

for any statutorily authorized function, 

including—

• Rotorcraft external load operations 

under 14 CFR part 133; 

• Agricultural operations under 14 

CFR part 137; 

• Air agencies operations under 14 

CFR part 141; and 

• Training centers operators under 14 

CFR part 142 (air carrier functions 

excluded). 

Nothing in the establishment of the 

ODA program changes any authority or 

responsibility for compliance with the 

certification, airworthiness or 

operational requirements currently in 

place, such as part 21 or part 121. No 

current safety requirements are being 

removed or relaxed. The ODA program 

does not introduce any type of selfcertification. 

An Organization Designation 

Authorization includes both an ODA 

Holder and an ODA Unit. The ODA 

Holder is the parent organization to 

which the FAA grants an ODA Letter of 

Designation. The ODA Unit is an 

identifiable unit of two or more 

individuals within the ODA Holder’s 

organization that performs the 

authorized functions. The regulations 

specify separate requirements for the 

ODA Holder and the ODA Unit. 

Because the ODA program eliminates 

the requirement that an applicant hold 

an FAA certificate, organizations 

consisting of consultant engineering and 

inspection personnel could be eligible 

for an ODA. Under such circumstances, 

it is possible the ODA Holder would 

59934 Federal Register / Vol. 70, No. 197 / Thursday, October 13, 2005 / Rules and Regulations 

have the same composition as the ODA 

Unit. 

ODA Program Policy 

As noted earlier in this preamble, 

FAA orders will outline the specifics of 

the ODA program and provide guidance 

for both FAA personnel and for 

organizations that obtain an ODA. These 

orders will describe the authorized 

functions for aircraft-related approvals, 

such as type certificates and 

airworthiness certificates, and certain 

operations-related approvals like airman 

certificates. While the regulations 

contain the general requirements of the 

ODA program, the orders will provide 

the administrative details. Providing the 

specifics in orders allows for flexibility 

to expand or revise the details of the 

ODA program without further 

rulemaking, especially since every type 

of delegated function that may be 

appropriate for an ODA Unit cannot be 

foreseen. 

In addition to approved delegated 

functions and the eligibility 

requirements for delegated functions, 

the orders address the specific selection, 

appointment, and oversight procedures 

the FAA will follow in managing ODA 

Holders. Additional ODA program 

details may be described in other FAA 

orders or policies. 

Application for ODA and Transition of 

Existing Delegation Holders 

This rule provides that existing 

Designated Alteration Station (DAS), 

Delegation Option Authorization (DOA) 

and Special Federal Aviation Regulation 

36 (SFAR 36) authorization programs 

will be phased out over three years 

beginning November 14, 2006. 

Additionally, Organizational Designated 

Airworthiness Representatives (ODARs) 

will no longer be appointed under part 

183 subpart A, and will have to apply 

for an ODA within the three-year 

phaseout period. The FAA’s priority 

during the phaseout period will be the 

transition of existing organizations to 

ODA. 

The FAA intends to appoint new ODA 

applicants based on the need for their 

services. The ability of a particular FAA 

field office to appoint new ODA Holders 

will depend on the number of existing 

delegated organizations in an office’s 

jurisdiction. During the three-year 

phaseout period of the current delegated 

organization programs, the only new 

applicants (those with no existing 

organizational delegation) the FAA 

expects to appoint are those with a 

significant history of certification work 

and whose workload could be better 

managed under an ODA. 

FAA Offices that manage existing 

delegated organizations will oversee the 

transition of those organizations using 

the following criteria: 

• A need to delegate the authorized 

functions. 

• An organization’s level of 

certification activity. 

• The number and need for new ODA 

organizations. 

Priority will be given to existing 

delegated organizations that have and 

are expected to maintain a significant 

workload in new areas authorized under 

the ODA regulations. For example, an 

existing DAS that desires to have both 

STC and Parts Manufacturer Approval 

(PMA) functions under an ODA would 

be a higher transition priority than a 

DAS that would not be adding any new 

functions. Similarly, the FAA may find 

it of greater benefit to appoint a new 

ODA with a heavier workload than 

transition of an existing organization 

with a lighter workload. 

Based on these considerations, each 

FAA field office will develop a strategy 

for managing the ODA applications it 

receives. We expect that existing 

delegated organizations will cooperate 

with their managing offices in 

submission of their ODA applications. 

The FAA managing offices will, to the 

extent possible, develop a transition 

schedule that meets the organization’s 

needs. The FAA will not accept ODA 

applications until November 14, 2006 in 

order to establish a smooth transition in 

prioritizing and processing applications. 

We are not able to predict how long it 

will take the agency to act on an 

individual application. Existing 

delegated organizations should apply 

for ODA as requested by their managing 

office, but not later than 18 months after 

the application period begins to ensure 

that its application may be processed 

and fully considered before the end of 

the three-year phaseout period. 

The FAA will provide transition 

training for existing DAS, DOA, and 

SFAR 36 administrators to address the 

differences between ODA and existing 

programs. This training is required for 

these organizations’ administrators 

before they may be appointed under 

ODA. The FAA is planning similar 

training for new ODA applicants that 

will more comprehensively address all 

aspects of the ODA program. Because of 

the substantial differences between 

ODA and ODAR requirements, ODAR 

administrators will have to complete 

this more comprehensive training prior 

to appointment as an ODA. 

It is expected that DAS, DOA and 

SFAR 36 organizations will be able to 

transition to an ODA program with 

minimal changes to their existing 

procedures. These organizations will 

have to submit an application and make 

minimal changes to their procedures 

manuals in order to receive an ODA. 

The certification activity of existing 

organizations will also be reviewed to 

determine whether it is still in the 

FAA’s interest to appoint the 

organization as an ODA. We expect that 

there will be greater impact to existing 

ODAR organizations, which will have to 

develop new procedures, such as 

internal evaluations and in-house 

training, which are not current ODAR 

requirements. Existing authorized 

representatives for all types of delegated 

organizations will be granted the same 

level of authority under the ODA 

program without additional review of 

their qualifications. 

Impact on Individual Designee 

Programs 

As noted in the NPRM, the FAA 

expects that a significant number of 

individual designees who work for 

larger organizations will become 

members of an ODA Unit and give up 

their individual designee status. The 

FAA may allow an ODA Unit staff 

member to remain a designee provided 

that there is a sufficient amount of 

designee work outside of his ODA 

activity to warrant continuation of the 

designee authority. The FAA applies 

this same philosophy to existing 

designees that are staff members for 

DAS, DOA, or SFAR 36 organizations. 

As commenters to the NPRM note, we 

do not expect that the ODA program 

will significantly reduce the number of 

consultant DERs, and the need for 

consultant DERs will remain dependent 

on their level of activity. 

ODA Program Final Rule 

In addition to establishing the ODA 

program, this final rule also includes 

revisions that standardize the duration 

of certificates for aircraft certification 

and flight standards individual 

designees; the designation of these 

individuals continues under part 183, 

subparts B and C. This final rule creates 

a new subpart D in part 183 that 

contains the regulations applicable to all 

types of organizational designees. This 

rule replaces existing DAS, DOA, SFAR 

36, and ODAR delegation programs with 

a single delegation program for 

organizations. The regulations 

governing those other programs, 

subparts J and M of part 21, and SFAR 

36, are being phased out under this rule 

by placing a suspension date of (Insert 

date 4 years after the effective date of 

this rule) for functions performed under 

those programs. 

Federal Register / Vol. 70, No. 197 / Thursday, October 13, 2005 / Rules and Regulations 59935 

Disposition of Comments 

The FAA received 40 comments to the 

NPRM from 36 commenters. Eleven of 

the 36 commenters, including the 

General Aviation Manufacturers 

Association (GAMA), Gulfstream 

Aerospace Corporation (Gulfstream 

Aerospace), the Aerospace Industries 

Association (AIA), and International 

Aero Engines (IAE), express general 

support for the rule. Fourteen 

commenters oppose the rule in general, 

with three of them adding specific 

comments, addressed below. Comments 

in opposition were received from 

United Airlines, the Professional 

Airways Systems Specialists, and the 

National Air Traffic Controllers 

Association. This discussion of 

comments is organized by each 

proposed rule topic or section for which 

we received comments. 

Many of the general comments raise 

issues with material in the agency order 

that specifies certain details of the ODA 

program and application process. Most 

of those comments are considered 

outside the scope of this rulemaking 

since they do not address any part of the 

proposed rule language. A few of the 

comments regarding material in the 

draft order are addressed later in this 

section, but most will be addressed in 

the final version of the Order. 

Similarly, some comments make 

suggestions beyond the scope of FAA 

authority, such as an investigation of 

designee fees by the Internal Revenue 

Service. While we have reviewed all of 

the material submitted, comments such 

as these that transcend FAA authority 

and the issues of the proposed rule will 

not be addressed individually. 

General Comments 

Commenters that support the ODA 

rule state that it will result in more 

efficient and effective use of industry 

and FAA resources. They state that the 

ODA rule would lighten some of the 

FAA workload and allow the FAA to 

better meet industry demand for 

certification activities. General Electric 

Aircraft Engines (GE Aircraft Engines), a 

member of the Aviation Rulemaking 

Advisory Committee (ARAC) that 

developed recommendations for an 

ODA rule, noted that it was particularly 

satisfying to see that the FAA had left 

intact the spirit of the recommendations 

developed by the ARAC. Other 

commenters affirm that the ODA 

program will reduce the amount of FAA 

oversight needed for individual 

designees, while increasing the FAA’s 

capacity to issue approvals. 

Commenters also note that an expected 

benefit is the increased flexibility that 

will allow the FAA to establish 

additional delegation programs without 

needing to amend the rule. 

Several opposing commenters assert 

that previous problems with designees 

or delegated organizations indicate that 

delegation is not beneficial. They state 

general opposition to the idea of 

delegation, or of expanding delegation 

to make it available to more 

organizations, and they generally do not 

think it is the most efficient use of FAA 

resources. Most commenters expressing 

opposition did not provide comments to 

any specific part of the proposed rule. 

More than one commenter states that 

the FAA should be hiring more 

inspectors, not spending its limited 

resources creating an organizational 

designee system. Another common 

objection is that the proposed rule seeks 

to increase the number of designees 

used by the FAA. 

In proposing this program, the FAA is 

not spending money that could be 

transferred to other unspecified 

programs such as ‘hiring more 

inspectors’, as suggested by 

commenters. The proposed ODA 

program is, at its simplest, a restatement 

of how we will be approving and 

overseeing organizational designees. 

The ODA program was not designed to 

increase the overall number of 

designees, but to increase the functions 

available to organizational designees. By 

doing so, the FAA hopes to reduce the 

number of individual designees and 

concentrate its oversight resources more 

effectively. 

Many of the general opposing 

comments note a few specific instances 

in which the designee programs have 

experienced problems or been the 

subject of investigation. While the FAA 

does not dispute that some designee 

programs have experienced problems, 

we believe that the commenters are 

overstating their breadth because they 

are unfamiliar with the extent of the 

designee programs already in use 

compared to the number of problems 

reported. Today’s rule phases out the 

assortment of delegated organization 

programs we currently manage in favor 

of a single system, and both the FAA 

and the affected organizations will be 

operating under organizational 

procedures that are familiar and 

effective. This rule will make the 

benefits of organizational delegation 

available to more types of organizations. 

Further, the FAA is always seeking to 

improve its designee programs, an 

example of which is the August 2002 

implementation of new oversight 

processes that outline the participation 

of FAA offices involved in the oversight 

of delegated organizations. Included in 

the oversight program are routine 

evaluations of the delegated 

organization’s performance by FAA 

managing offices. This oversight feature 

is included in the ODA program. 

The FAA continues to seek input on 

improvements in oversight and 

management procedures for all of its 

designee programs. The Government 

Accountability Office (GAO) completed 

a review of the FAA designee system 

(GAO 05–40, ‘‘FAA Needs to Strengthen 

the Management of its Designee 

Programs’’) in October 2004. The FAA is 

taking steps to address the GAO’s 

recommended means of improving the 

designee programs. 

Additionally, the FAA is 

implementing an internal quality 

management system that will help 

assess the performance of the delegation 

programs and implement any needed 

corrective action. 

Specific Comments 

Comment: Chromalloy Gas Turbine 

Corporation opposes the rule because it 

has not been coordinated with foreign 

aviation authorities. The commenter 

notes that it worked with foreign 

authorities for years to gain acceptance 

of FAA-approved data (from designated 

engineering representatives (DERs)). 

Other commenters agree that it is 

important that foreign airworthiness 

authorities recognize approvals made by 

a designee. One commenter states that 

the FAA should pursue bilateral 

agreements to ensure mutual acceptance 

of FAA ODA and European Aviation 

Safety Agency Design Organization 

Approval (EASADOA) systems. 

Response: Bilateral agreements are 

negotiated with individual countries, 

and an agreement may or may not 

provide for mutual acceptance of 

designee programs. The creation of ODA 

should not change acceptance of 

designee approvals where they already 

exist in a bilateral agreement. Nor does 

the ODA system prevent the use of DER 

approvals for organizations that prefer 

the DER system to support their 

certification activity. The FAA expects 

that, at a minimum, foreign authorities 

will be more accepting of ODAapproved repair data than they are of 

data developed under SFAR 36 since 

SFAR 36 data is not considered ‘‘FAAapproved.’’

Changing a domestic regulatory 

program is not, however, a means to 

presume acceptance of approved data 

under bilateral airworthiness 

agreements. Coordination and 

acceptance of such issues is neither 

simple nor accomplished quickly. The 

FAA has determined that it is better to 

put the ODA program in place for use 

59936 Federal Register / Vol. 70, No. 197 / Thursday, October 13, 2005 / Rules and Regulations 

now and work out the more complex 

international acceptance issues over 

time. 

As noted, we expect no impact to 

existing agreements regarding approvals 

performed by an ODA Holder. However, 

we do not currently plan to allow 

approvals issued by an EASADOA 

holder to be used within an ODA 

Holder’s system (or vice-versa) without 

authority-to-authority coordination and 

agreement. No change to the rule has 

been made based on this comment. 

Comment: One commenter does not 

support the rule because it is too costly 

to maintain and that the cost to the 

public is ‘‘double taxation.’’ Another 

commenter notes that the public 

deserves the safest and not the cheapest 

service. 

Response: Neither commenter was 

specific in its criticism of the costs of 

the ODA program; most costs associated 

with the program will be borne by the 

ODA Holder, and may be passed on to 

its customers. No one is required to use 

the services of an ODA Holder; the FAA 

will continue to do approvals directly if 

requested. Nor is the goal of the ODA 

program to seek out the low bidder for 

services. The FAA will not make a 

decision to approve an ODA Holder 

simply because the applicant claims it 

can do the work cheaper. Those who 

use the services of an ODA Holder may 

incur costs that would not occur if the 

FAA did the approval. A user may 

nonetheless feel justified in incurring 

the cost of the service from the ODA 

Holder if, for example, the Holder can 

do it faster. The existence of ODA 

Holders is expected to free up more 

FAA resources by allowing non-critical 

tasks to be accomplished by the 

designee. None of the commenters gave 

any specific example of why the ODA 

program would be more costly to the 

agency than any of the current designee 

programs, and we have no reason to 

think it will be so. No change to the rule 

has been made based on this comment. 

Comment: One commenter says the 

proposed ODA program significantly 

modifies the current regulatory 

oversight system, deteriorating the 

established technical FAA oversight by 

going to a ‘‘systems’’ oversight approach 

that would provide less specific and 

technical FAA oversight and would, in 

time, reduce safety. 

Response: The FAA disagrees that a 

systems approach will provide less 

specific technical oversight, and 

believes it will increase safety. A 

systems approach is currently being 

used successfully to manage DAS and 

DOA organizations. The FAA has found 

that management of these organizations, 

rather than a number of individual 

employees that they might employ, is 

more efficient for both the FAA and 

industry and results in approvals that 

comply with the regulations. The FAA 

anticipates that these more effective 

delegation programs will increase safety 

by freeing up FAA resources for tasks 

more critical to safety. Additionally, 

Congress has shown support for systembased certification programs by 

mandating the issuance of Design 

Organization Certificates in the 2003 

reauthorization of the FAA. Design 

organization certificates would give the 

certificate holder privileges similar to 

delegated organizations, but would have 

the authority of a certificate rather than 

a delegation. No change to the rule has 

been made based on this comment. 

Comment: One commenter asserts 

that while the quality of approvals by 

designees may be comparable for 

aircraft certification functions, it is not 

true for designees such as examiners. 

The commenter points out problems 

with specific examiner programs, which 

resulted in the re-examination of a 

number of airmen. 

Response: The FAA acknowledges 

that problems have been identified in 

some designee programs. However, the 

FAA does not agree that this necessarily 

indicates that these approvals are not, as 

a whole, comparable to those performed 

by the FAA. Additionally, the FAA has 

taken steps to improve the oversight of 

its individual and organizational 

designees; the ODA program is expected 

to result in further improvements. By 

restructuring delegation programs 

toward organizations, oversight of 

individuals is reduced, allowing the 

FAA workforce to focus on individual 

designee oversight when needed. No 

change to the rule has been made based 

on this comment. 

Comment: Many of the commenters, 

including Piper Aircraft, AIA, and 

Boeing Commercial Airplanes (Boeing) 

say FAA review of individual ODA Unit 

members contradicts the intent of a 

systems approach. They also note 

current delegation rules are not based 

on a systems approach because the FAA 

must approve the individuals within the 

organization. 

Response: The FAA intends to allow 

ODA Holders that have had significant 

experience as a delegated organization 

to appoint ODA Unit members with a 

minimum level of FAA involvement. 

The process will require an ODA Holder 

to notify the FAA of the names of 

proposed staff members before the ODA 

Holder conducts a full internal 

evaluation. If the FAA has reason to 

object to the appointment of an 

individual, we will do so before the 

organization does its full evaluation. 

The FAA anticipates that at some point 

experienced organizations may be able 

to select staff members without FAA 

review of the staff members’

qualifications and authority. However, 

the FAA will review the ODA Unit 

member selection decisions made by 

ODA Holders until they demonstrate 

that they are capable of selecting 

qualified personnel for the ODA Unit. 

No change to the rule has been made 

based on this comment. 

Comment: Several commenters, 

including IAE and United Technologies 

Corporation (United Technologies), 

recommend an additional ODA program 

type for airworthiness approvals. The 

commenters state that the programs, as 

defined, could restrict the ability of 

existing ODARs to obtain an ODA 

without obtaining additional 

engineering functions. 

Response: We do not plan to have an 

ODA program specifically identified for 

airworthiness approvals. Although this 

specific program was not described in 

the draft order, the proposed functions 

will continue to be available as a 

delegated function under the ODA 

program. The ODA program structure 

allows an existing ODAR to obtain an 

ODA without requiring the addition of 

new functions or capabilities. No 

change to the rule has been made based 

on this comment. 

Comment: IAE and United 

Technologies Corporation recommend 

that the FAA either set up an audit 

program that does not require an ODA 

Holder to report deficiencies that will 

result in enforcement actions, or create 

criteria for ‘‘safety-related’’ and ‘‘nonsafety related’’ audit findings. Under 

such a proposal, the organization would 

only have to report safety-related 

findings. 

Response: Under the FAA’s 

compliance and enforcement program, 

voluntarily disclosed violations may not 

be subject to legal enforcement action. 

Requiring periodic audits by an 

organization is consistent with similar 

requirements imposed on certificate 

holders. The FAA expects ODA Holders 

to take an active role in the 

identification and resolution of 

deficiencies, including, noncompliances. No change to the rule has 

been made based on this comment. 

Comment: GAMA, IAE, and United 

Technologies, among others, 

recommend that the FAA provide the 

public a chance to comment on whether 

a specific function should be delegated, 

and state that changes to the ODA 

program should be noted in the Federal 

Register. One commenter suggests that 

the public also be invited to comment 

on each applicant’s qualifications. 

Federal Register / Vol. 70, No. 197 / Thursday, October 13, 2005 / Rules and Regulations 59937 

Response: The FAA agrees that the 

public should be notified and given 

opportunity to provide input on 

proposed ODA programs. The FAA 

plans to continue its practice of 

publishing notice of proposed policies 

that implement new or changed 

programs such as ODA. 

The FAA does not agree that it is 

appropriate to publish the names of 

applicants and request public comment 

on their qualifications. We do not have 

such a process for other designee 

programs, and decisions are based on 

the FAA’s expertise and experience 

working with individual organizations. 

Public comment raises issues of bias 

against individuals and organizations 

and we would have to determine 

whether the person providing the 

comment was qualified to assess the 

applicant. The FAA is comfortable with 

its experience regarding determinations 

of an applicant’s qualifications. No 

change to the rule has been made based 

on this comment. 

Comment: IAE and United 

Technologies note that it would be a 

burden to industry if DMIRs and ODA 

Holders can’t perform functions on the 

same project. They reference language 

in the NPRM preamble, which states 

that organizations that currently have 

individual designees could operate 

under both systems (but not on the same 

project or program). 

Response: The FAA acknowledges 

that the NPRM language may have been 

confusing. The referenced language 

specifically applies to design approval 

projects, such as Type Certificate (TC) 

programs, issuing STCs, and developing 

PMA design approvals. For these types 

of projects, it is expected that all 

engineering and inspection functions 

related to the project would be 

performed under the ODA authority, 

rather than another designee program. 

ODA Holders with DMIRs could 

continue to use both ODA and DMIR 

approvals on FAA-managed projects. 

All authorities and capabilities available 

in the ODAR system are available under 

the ODA program. The FAA anticipates 

that the need for separate DMIRs will 

decrease, since all delegated inspection 

and production functions are available 

under the ODA program. No change to 

the rule has been made based on this 

comment. 

Comment: The United States 

Parachute Association (USPA) 

comments that parachute operations 

functions are not mentioned in the draft 

ODA order, but are provided for in the 

proposed rule language. The USPA fears 

that if the authority to issue parachute 

operations approvals is delegated, it 

could be held liable for issuing 

certificates of authorization currently 

issued by the FAA. The USPA does not 

believe this delegation is appropriate. 

Response: The FAA agrees that a 

delegation of the approvals could 

negatively impact the long-standing 

safety record of parachute operations by 

introducing less-experienced third 

parties into the process. Accordingly, 

the FAA has determined that 

authorizations or waivers related to 

parachute operations will not be 

delegated at this time. Based on this 

comment, we have changed the rule 

language to remove all references to part 

105 or parachute operations. 

Comments on Specific Proposed Rule 

Language 

Section titles are those from the 

proposed rule, and may differ from 

those in the final rule. 

Section 183.1 Scope 

Comment: Several commenters 

request clarification of the term ‘‘private 

organization’’ as used in § 183.1(b), 

since the introductory text of that 

section uses the term ‘‘private persons.’’

One commenter suggests including a 

definition of ‘‘private organization’’ in 

the introductory text of § 183.1 or in 

§ 183.41 (Applicability and definitions). 

Response: As defined in 14 CFR part 

1, ‘‘person’’ includes both an individual 

and an organization. Section 183.1 seeks 

to distinguish an individual from an 

organization for purposes of designation 

under part 183. Both individuals and 

organizations may receive a designation, 

but the ODA rule only applies to 

organizations. No change to the rule has 

been made based on this comment. 

Section 183.15 Duration of Certificates 

Comment: Two commenters, 

including IAE and United Technologies, 

ask if the duration and renewal of 

certificates as proposed under this 

section are applicable to individual 

ODA Unit members. 

Response: The language in § 183.15 

only applies to individual designees 

under other programs, not to the 

individuals within the ODA Unit. ODA 

Unit members are not considered 

appointed by the FAA and their 

appointment is not subject to renewal 

by the FAA. However, the ODA Holder 

will have to periodically assess the 

individuals within their ODA Unit. No 

change to the rule has been made based 

on this comment. 

Section 183.41 Applicability and 

Definitions 

Comment: IAE and United 

Technologies state that the current 

ODAR program only requires one focal 

point. They propose that ODA should 

also allow a single focal point. 

Response: The commenters 

misunderstood the proposed rule. 

Proposed § 183.41(b)(1) defines the 

authorized representatives within the 

ODA Unit. While there must be at least 

two authorized individuals within an 

ODA Holder’s organization, only one 

ODA administrator is required. No 

change to the rule has been made based 

on this comment. Section 183.41 has 

been reformatted, and the definition of 

‘‘ODA Unit’’ in paragraph (b) has been 

clarified. 

Section 183.47 Eligibility (Now Titled 

Qualifications) 

Comment: Many commenters, 

including GE Aircraft Engines, 

Gulfstream Aerospace, and Raytheon 

Aircraft Company (Raytheon Aircraft) 

recommend that the FAA permit foreign 

organizations located in foreign 

countries to obtain ODAs. They note 

that the FAA could use its ‘‘no undue 

burden’’ concept to determine eligibility 

for foreign organizations, and that such 

organizations would help enhance the 

relationship between the United States 

and foreign countries. 

Response: The FAA agrees in part. 

Although DERs currently must be 

located within the United States, the 

FAA has appointed a limited number of 

airworthiness and manufacturing 

designees that are located in foreign 

countries. We agree that the regulatory 

language should not prevent foreign 

eligibility, and we have removed the 

phrase, ‘‘located within the United 

States’’, from proposed § 183.47(a)(1). 

The regulations for the individual 

designee programs do not restrict 

eligibility to persons in the United 

States. The limitations for each designee 

type are included in the policies for 

managing these programs. Similarly, the 

FAA might place a limitation on 

appointing ODA Holders in foreign 

countries in the associated FAA policy. 

The rule has been changed as noted to 

reflect this comment. 

Comment: Texas Air Composites 

states that the FAA should revise 

§ 183.47(a) to state that the applicant 

has ‘‘personnel with sufficient 

experience’’, rather than the 

organization. Otherwise, it could be 

misconstrued that the organization must 

have the experience. This could result 

in start-up or recently formed 

companies with qualified personnel not 

being granted an ODA because the 

organization is new. 

Response: The experience 

requirement is meant to apply to the 

organization. Although an organization 

may have experienced individuals, that 

59938 Federal Register / Vol. 70, No. 197 / Thursday, October 13, 2005 / Rules and Regulations 

group of individuals must have 

experience working with each other and 

with the FAA as an organization. This 

is the only way for the FAA to 

determine that they are qualified, and 

whether there is a need for the 

authorization. Recently formed 

companies would not be eligible until 

they gain the necessary experience and 

demonstrate that, historically, they have 

sufficient workload to justify the 

authorization. No change to the rule has 

been made based on this comment. 

Comment: IAE and United 

Technologies state that the FAA must 

identify the criteria the agency will use 

to determine when a qualified 

organization will not be granted an 

ODA. Texas Air Composites further 

notes that not granting an ODA to a 

qualified applicant could result in a 

financial disadvantage. 

Response: A fundamental principle of 

delegation is the FAA’s discretion in 

appointing designees and delegated 

organizations. Even if qualified, an 

organization is not entitled to an 

authorization, and the FAA does not 

make delegation decisions based solely 

on an applicant’s desire to have an 

authorization. Authorizations will be 

based on the need for the functions 

requested. Thus, we expect to give 

priority to organizations with 

demonstrated expertise and a large 

workload. In some cases, we expect it 

may be beneficial for the FAA to 

manage an organization’s activity using 

individual designees. It is not possible 

to state all the reasons that the FAA 

might have to deny an application. The 

primary considerations will always be 

the need for the authorization and the 

ability of the FAA to oversee the 

organization’s activity. No change to the 

rule has been made based on this 

comment. 

Comment: Regarding proposed 

§ 183.47(b)(1), IAE and United 

Technologies state the FAA should 

include Production Certificate and 

Technical Standard Order Authorization 

to the list of certificates used to 

establish eligibility. Also, regarding 

proposed § 183.47(d), a commenter 

believes the proposed regulatory 

language could be interpreted to deny 

an ODA to a company that holds a type 

certificate that was transferred into the 

company. The commenter suggests the 

FAA revise the language to clarify that 

those companies holding a transferred 

type certificate are eligible for an ODA. 

Response: The FAA agrees that the 

proposed language of this section could 

be misinterpreted. Section 183.47 has 

been significantly modified to clarify 

that eligibility is based solely on 

experience performing the functions 

sought, and the title of the section 

changed to Qualifications. The proposed 

language identified many different 

certificate holders as eligible for ODA, 

but did not specify the authority 

available for each type of certificate 

holder. 

Holding a certificate is not an 

eligibility requirement for ODA. 

However, most functions authorized 

under the ODA program require the 

applicant to have been issued and hold 

a certificate related to the function. The 

only aircraft certification functions 

currently anticipated for non-certificate 

holders are the approval of major 

alteration and major repair data. Our 

draft order states that functions such as 

issuing STCs or PMA supplements 

require the applicant to have previously 

obtained such certificates from the FAA. 

The language in § 183.47 has been 

revised to require only experience 

performing the desired function and 

experience with related FAA procedures 

and policies. The list of certificates has 

been removed from the rule language. 

The specific eligibility requirements for 

the available programs and functions are 

described in the associated FAA policy. 

Comment: Several commenters, 

including IAE, United Technologies, 

Matsushita Avionics System 

Corporation and Gulfstream Aerospace 

recommend that the FAA make holders 

of PMAs that were granted by license 

eligible for an ODA. They state that 

PMA holders seeking production 

approval functions should not be 

required to have experience in both 

design and production approval to 

obtain an ODA. This would be an 

additional requirement from the ODAR 

system. The commenters recommend 

proposed § 183.47(c) be reworded as 

follows: ‘‘An applicant seeking function 

in the area of production must have for 

the product, components, parts, or 

appliances for which the applicant is 

seeking designation authorization, a 

current PC, TSOA or PMA issued under 

Part 21 of this chapter.’’

Response: The FAA agrees. A PMA 

holder may apply for an ODA to 

perform production and airworthiness 

functions even if it does not have any 

engineering design experience. As noted 

above, the qualification requirement has 

been revised to require only experience 

performing the desired function and 

experience with related FAA procedures 

and policies. The details of the specific 

eligibility requirements for the available 

programs and functions will be more 

fully described in the associated policy. 

Section 183.49 Authorized Functions 

Comment: Electronic Cable 

Specialists comments that the preamble 

language indicates that the FAA is not 

considering delegation of PMAs. The 

commenter states that design approvals 

for PMAs should be a part of the ODA 

program. 

Response: The FAA agrees that an 

ODA Holder may issue PMA 

supplements. However, the FAA has 

never delegated the issuance of an 

original PMA, and we do not intend to 

do so under ODA. No change to the rule 

has been made based on this comment. 

Comment: One commenter states that 

proposed § 183.49(c)(1) and (c)(3) 

appear to duplicate the provisions of 

§ 183.29. The commenter believes that 

allowing DERs and ODA Unit members 

to perform the same functions would 

double the FAA’s oversight workload. 

Response: The FAA disagrees. The 

commenter presumes that a DER and 

ODA Unit member would be performing 

the same function. Although these 

proposed sections provide for functions 

similar to those performed by a DER, the 

performance of a function under an 

ODA is separate and distinct from a 

function performed by an individual 

designee. As such, oversight of ODA 

functions is separate from any 

individual designee oversight. No 

change to the rule has been made based 

on this comment. 

Comment: One commenter 

recommends that the rule should have 

a subparagraph to denote inherently 

governmental functions that may not be 

delegated. 

Response: Listing inherently 

governmental functions is not consistent 

with accepted regulatory drafting, or 

with the intent of this rule. The FAA’s 

delegation regulations define only those 

functions that may be accomplished by 

designees. We have revised proposed 

§ 183.49 by removing any reference to 

specific functions. The ODA rule allows 

the delegation of any function allowed 

by 49 U.S.C. 44702(d). No change to the 

rule has been made based on this 

comment. 

Comment: AIA and Boeing note that 

the proposal does not indicate whether 

the ODA program will apply to part 34 

(emissions) or part 36 (aircraft noise) 

standards. The commenters state that 

delegation in these areas would be a 

significant opportunity to gain 

efficiency in the certification process 

with no associated safety risk. They 

request that the rule state that parts 34 

and 36 are included. 

Response: The FAA does not agree 

that the rule should specifically note 

application to parts 34 and 36. As 

revised, the rule allows designees to 

make findings of compliance with any 

FAA requirements. The FAA anticipates 

that ODA Holders may perform noise 

Federal Register / Vol. 70, No. 197 / Thursday, October 13, 2005 / Rules and Regulations 59939 

and emission-related functions to the 

extent currently performed by DERs, but 

does not expect an expansion of the 

authorized functions under the ODA 

program. No change to the rule has been 

made based on this comment. 

Section 183.51 ODA Unit Personnel 

(Proposed § 183.51 Personnel) 

Comment: Piper Aircraft recommends 

a provision in the rule or FAA policy 

requiring that ODA Unit members 

receive training similar to that of FAA 

personnel. 

Response: The FAA disagrees that 

ODA Unit members need the same 

training as FAA personnel. Training 

requirements may not be appropriate for 

all types of ODA Unit members that may 

exist under an ODA program. For 

example, engineers may perform limited 

functions of a repetitive nature, such as 

burn test approvals, for which there is 

no associated FAA training. When 

appropriate, the training requirements 

for ODA Unit members will be defined 

in the FAA policy, but they are not 

appropriate to include in the rule 

language. No change to the rule has 

been made based on this comment. 

Comment: One commenter states that 

the rule should specify that ODA staff 

members and ODA Unit Members must 

be United States citizens, must be 

subjected to the same background check 

as FAA employees, and must live in the 

United States. 

Response: The FAA disagrees. Neither 

United States citizenship nor a federal 

employee background check are 

qualifications currently imposed on 

individual designees. Further, staff 

members of delegated organizations are 

not required to be United States 

citizens, nor are they subject to 

background checks by the FAA. The 

FAA expects that some ODA Holders 

will have staff members in foreign 

countries performing functions for 

them. The associated FAA orders will 

include any limitations regarding staff 

members in foreign countries. No 

change to the rule has been made based 

on this comment. 

Comment: IAE and United 

Technologies state that the experience 

for determining conformity and issuing 

airworthiness approvals should be in 

inspection, not aircraft certification. 

Response: The FAA agrees that 

inspection and related experience is 

appropriate for conformity and 

airworthiness approvals. Accordingly, 

we have removed the phrase ‘‘in aircraft 

certification’’ from § 183.51(b). 

Comment: One commenter notes that 

the terms ‘‘qualified’’ and 

‘‘experienced’’ are subject to many 

interpretations. The rule should be more 

specific in explaining what these terms 

mean. 

Response: The FAA disagrees. 

Specifying what qualified and 

experienced means in the many possible 

types of administrators and personnel 

that might be needed in an ODA 

organization is inappropriate for 

regulatory standards. The language is 

consistent with other designee rules 

currently used by the FAA, and 

delegation remains at the discretion of 

the FAA. More detail regarding 

qualifications for ODA positions can be 

found in the associated FAA orders. No 

change to the rule has been made based 

on this comment. 

Section 183.53 Procedures Manual 

Comment: IAE and United 

Technologies state that the continued 

airworthiness requirements in proposed 

§ 183.53(n) (revised as § 183.53(b)(13)) 

should be applicable only to 

engineering functions, and not to 

production approval holders. 

Response: The FAA disagrees. The 

procedures manual requirement applies 

to ODA Holders performing either 

engineering design or manufacturingrelated approvals. Manufacturing issues 

not specifically related to the 

engineering or type design functions 

may lead to service difficulties and 

require investigation by an ODA holder. 

While no change to the rule has been 

made based on this comment, the 

proposed requirement is now contained 

in § 183.53(c)(13) referencing continued 

responsibilities. 

Comment: IAE and United 

Technologies recommend rewording the 

last sentence of the introductory text of 

§ 183.53 regarding changes to the 

procedures manual, stating that there 

may be instances when the FAA will 

authorize an ODA Holder to implement 

minor changes to the manual without 

FAA approval. They suggest revising the 

sentence to state ‘‘Changes may be 

implemented prior to FAA approval in 

accordance with the change procedure 

in the manual.’’

Response: The FAA agrees that 

certain minor changes to the manual 

may be made without prior approval. 

However, the procedures manual must 

specify the types of changes that may be 

adopted without FAA approval. 

Proposed § 183.53 has been revised and 

its paragraphs redesignated. Section 

183.53(b) allows certain changes to be 

made to the manual, and to require that 

the manual describe the types of 

changes that may be incorporated 

without specific FAA approval. 

Comment: IAE and United 

Technologies state that the regulation is 

too detailed regarding the content of the 

procedures manual. The commenters 

fear that stating the content as a 

minimum requirement will discourage 

the adoption of industry practices that 

exceed the requirements in the 

regulation. They note that the details of 

procedures manuals are usually in 

Orders and advisory circulars. 

Response: The FAA has determined 

that it is appropriate to specify 

procedures manual requirements in the 

regulation. Since this section of the rule 

defines only the required content of the 

manual, rather than how to perform 

authorized functions, ODA Holders will 

still be free to introduce good practices 

that satisfy the requirements. No change 

to the rule has been made based on this 

comment. 

Section 183.55 Limitations 

Comment: IAE and United 

Technologies Corporation suggest 

changing § 183.55(b) to add the term 

‘‘significant,’’ since minor changes 

within an ODA Unit may not affect the 

Unit’s qualifications. 

Response: The FAA disagrees. The 

addition of the term ‘‘significant’’ would 

have no impact on the requirements of 

this paragraph. If changes within the 

ODA Unit or ODA Holder do not affect 

the qualifications of the ODA Unit or 

Holder, or the ability of the ODA Unit 

to perform authorized functions, then 

they do not have to be reported. No 

change to the rule has been made based 

on this comment. 

Section 183.57 Responsibilities of an 

ODA Holder 

Comment: Raytheon Aircraft and 

GAMA comment on the language of 

proposed § 183.57(c), which specifies 

that the ODA Holder must ‘‘Ensure that 

no interference or conflicting restraints 

are placed on the ODA Unit or on the 

personnel performing the designated 

functions while complying with this 

part and the approved procedures 

manual.’’ They state that the proposed 

language is not consistent with existing 

wording used in FAA Order 8100.9, 

paragraph 3–3(a). The commenters 

question why this section is different 

from the language of the existing order. 

Since the intent is the same, one 

commenter recommends that the FAA 

adopt wording similar to that in Order 

8100.9. That Order states ‘‘The 

authorization holder must ensure that 

the administrator and ARs [Authorized 

Representatives] remain free of any 

restraints that would limit the DOA’s, 

DAS’s, or SFAR 36’s ability to ensure 

that authorized functions are performed 

in compliance with FAA regulations.’’

Response: The FAA agrees that the 

intent of the proposed language is 

59940 Federal Register / Vol. 70, No. 197 / Thursday, October 13, 2005 / Rules and Regulations 

similar to that stated in Order 8100.9. 

However, we have determined that the 

language used in the rule is preferable 

for the purpose of regulation since it 

also prohibits interference with the 

ODA Unit by the ODA Holder. No 

change to the rule has been made based 

on this comment. 

Section 183.63 Records and Reports 

(Proposed § 183.61) 

Comment: Two commenters state that 

the requirement to submit data in the 

proposed § 183.63(b)(3) should not 

apply to airworthiness certificates, 

export approvals, the production 

limitation records or ‘‘any other 

approval authorized under this 

subpart.’’ One commenter points out 

that production limitation record 

requirements are already addressed in 

the proposed § 183.63(b)(2), and that the 

retention requirements for airworthiness 

certificates and approvals should be 

consistent with record retention 

requirements imposed on other 

designees. The commenters recommend 

deletion of proposed § 183.63(b)(6) for 

the same reasons. The same commenters 

recommend conformity inspection 

records and airworthiness approvals be 

maintained for two years rather than 

indefinitely as proposed. 

Response: The FAA agrees in part. 

Airworthiness certificates or approvals 

are generally maintained for two years 

by most types of designees. The final 

rule adopts a two-year requirement for 

those ODA Holders that only issue these 

types of certificates or approvals. 

However, ODA Holders that perform 

type design approvals, such as TC and 

STC programs, are required to maintain 

records typically submitted to and 

maintained by the FAA as part of 

standard certification projects. The 

airworthiness certificates or approvals 

associated with such design approval 

projects must be maintained 

indefinitely. As revised, § 183.61(a)(2) 

requires indefinite retention of 

airworthiness certificates or approvals 

performed as part of type design 

programs, and revised § 183.61(c) 

requires retention of other airworthiness 

approvals or certificates for two years. 

The FAA agrees that reference to 

production limitation record data in the 

proposed section § 183.63(b)(3) 

duplicated the requirement for the 

production certificate in the proposed 

§ 183.63(b)(2). The requirement for 

production related records has also been 

incorporated in revised 183.61(a)(2). 

The retention requirement of proposed 

§ 183.63(b)(6) is also incorporated in the 

revised 183.61(a)(2) as a general 

requirement for all approvals, rather 

than a stand-alone requirement. 

Comment: Two commenters 

recommend retaining the periodic audit 

and records of corrective action required 

under proposed § 183.63(b)(9) for two 

years rather than indefinitely. 

Response: The FAA agrees that these 

records need not be retained 

indefinitely. However, we consider 

periodic audit records an important 

means to document an organization’s 

continued compliance with the 

requirements for the authorization. Two 

years may not be adequate in all cases, 

since the planned oversight evaluation 

interval of two years could result in the 

development and destruction of these 

records before review of the corrective 

action by the FAA. To ensure adequate 

documentation for oversight of the ODA 

Holder, § 183.61(b) requires these 

records be maintained for five years. 

Comment: IAE and United 

Technologies state that the two year 

record retention requirements in 

proposed § 183.63(c)(1) should not be 

applied to a production approval holder 

(PAH) that holds an ODA since it is not 

required for an FAA inspector or 

designee. They add that part 21 already 

specifies the inspection data 

requirement for PAHs. 

Response: The FAA agrees. While 

such requirements are not imposed on 

individual designees, the requirement is 

contained in the existing DOA rules. 

While necessary under the DOA rule, 

the FAA agrees that it is not necessary 

under the ODA program since the other 

production approval holder 

requirements in part 21 apply. The 

requirement proposed in § 183.63(c)(1) 

has been removed. 

Comment: IAE and United 

Technologies state that the requirement 

of proposed § 183.63(b)(4) for an ODA 

Holder to maintain a list of products on 

which it has performed an authorized 

function should apply only to 

‘‘authorized engineering functions.’’ The 

commenter points out that records 

retention for manufacturing functions 

should be the same as for other 

designees. 

Response: The FAA disagrees that the 

list requirement should apply only to 

engineering functions. The purpose of 

this requirement is to maintain a list of 

the specific products for which the ODA 

holder issues approvals. For example, a 

manufacturer authorized to issue 

airworthiness certificates is required to 

maintain a list of the aircraft for which 

it issued airworthiness certificates, and 

a repair station authorized to approve 

alteration data is required to maintain a 

list of the aircraft for which it has 

approved alteration data. We have 

removed the proposed language 

specifying the means of identification, 

but no change to the rule has been made 

based on this comment. 

Section 183.65 Data Review and 

Service Experience (Now § 183.63 

Continuing Requirements: Products, 

Parts or Appliances) 

Comment: AIA states that proposed 

§ 183.65(b) would require an ODA Unit 

to submit information necessary for the 

FAA to implement corrective action. 

The ODA Unit is the interface between 

the ODA Holder and the FAA. A 

certificate holder’s obligation to develop 

and submit information under § 21.99 

and § 21.277(b) remains in effect. 

Several commenters note that the 

responsibility to investigate safety 

concerns should be directed toward the 

ODA Holder, not the ODA Unit. 

Response: The FAA agrees that 

§ 21.99 applies, but only to certificate 

holders. Further, § 21.277(b) applies 

only to Delegation Option Authorization 

holders, which are being phased out as 

part of this rulemaking. The language of 

proposed § 183.65(b) was intended to 

impose similar requirements on ODA 

Holders. We note that while the 

proposed rule would have imposed the 

information submission requirement on 

the ODA Unit, we agree that 

investigation of service problems is a 

responsibility of the ODA Holder. An 

ODA Unit would be involved only in 

determining whether any proposed 

solution or design change is in 

compliance with the regulations. 

Accordingly, the language in § 183.63 

has been revised to indicate that it 

applies to the ODA Holder rather than 

the ODA Unit. We also note that in 

those cases where the ODA Holder is 

not the certificate holder, this section 

requires the ODA Holder to conduct 

investigation into potentially unsafe 

conditions or non-compliant conditions 

for those certificates they issued to 

another holder. Unlike § 21.99, this 

section introduces the requirement for 

investigating non-compliant conditions, 

while § 21.99 applies only to unsafe 

conditions. The rule has been revised as 

noted above as a result of this comment. 

Comment: AIA states that § 183.65(a) 

requires that investigations into 

potentially unsafe conditions must take 

priority over all other delegated 

activities. The commenter is concerned 

that this text may be misinterpreted or 

misapplied in practice. The commenter 

states that organizations may have the 

capability to perform parallel activities 

on different projects, and does not want 

the requirement misapplied to affect 

ongoing projects. The commenter would 

like the preamble of the final rule to 

clarify the priority clause and the two 

purposes it says the clause serves. 

Federal Register / Vol. 70, No. 197 / Thursday, October 13, 2005 / Rules and Regulations 59941 

Response: The FAA agrees that the 

text regarding priority of investigation 

into unsafe conditions may be 

misinterpreted, and that the language in 

the proposed rule is not appropriate. 

The investigation into unsafe conditions 

is an activity that is inherent upon the 

ODA Holder and not something the 

FAA delegates. We agree that it might be 

feasible for an ODA holder to 

adequately perform an investigation 

while certification activity continues. 

Since the FAA will continue to manage 

the ODA Holder’s delegated activity, the 

FAA will determine whether an ODA 

Holder is placing sufficient emphasis on 

the investigation of service problems. 

We could restrict the ODA Holder’s 

authority until its performance 

improves. The language regarding 

priority of the investigation has been 

deleted. 

Comment: IAE and United 

Technologies state that the proposed 

rule would require an ODA Unit to 

investigate safety concerns that it or the 

FAA identifies. This is not a 

responsibility of current ODAR holders, 

and should not be imposed on ODA 

Holders that only have manufacturing 

inspection responsibilities. An ODA 

Unit may not have personnel with the 

expertise to conduct these 

investigations. If imposed, this 

requirement should be on the ODA 

Holder. The commenter also states that 

the responsibility to investigate is 

already covered under § 21.3. The 

language in the proposed rule would 

limit the FAA’s ability to conduct 

investigations. 

Response: The FAA agrees that an 

ODA Holder is responsible for 

investigation of service difficulties, and 

has revised the rule language 

accordingly. However, while the 

requirement may be redundant to § 21.3 

for an ODAR, some ODA Holders might 

issue certificates to other persons, and 

the requirement to investigate safety 

concerns does not duplicate the 

requirements of part 21. The FAA does 

not agree that the proposed language 

would limit our ability to conduct 

investigations. The rule has been 

revised as noted above as a result of this 

comment. 

Section 183.67 Transferability and 

Duration 

Comment: Several commenters, 

including GE Aircraft Engines, 

Gulfstream, and Boeing, state that the 

authorization should not have an 

expiration date and should remain 

effective until the FAA revokes it or the 

applicant surrenders it. The commenters 

state that renewing authorizations is an 

unnecessary step and will only increase 

the FAA’s workload. They also note that 

the rule does not specify the maximum 

duration of the ODA or how the FAA 

will determine individual expiration 

dates. 

Response: The FAA disagrees; all 

FAA individual designee programs have 

expiration dates. The FAA determines 

expiration dates based on the 

experience and history of the 

organization and the functions they 

perform. Renewal of the authorization 

allows the FAA to periodically assess an 

organization’s performance and 

determine whether the workload of the 

organization justifies continuing the 

authorization. No change to the rule has 

been made based on this comment. 

Comments on the Proposed Regulatory 

Evaluation 

Comment: United Airlines, which 

holds current DAS and SFAR 36 

authorizations, opposes the rule because 

it would have to reapply under ODA to 

continue using its current authority. 

United Airlines comments that as 

proposed, an ODA would increase its 

administrative workload when 

compared to the current delegation 

program. 

Response: As noted in the Initial 

Regulatory Evaluation, the FAA expects 

that the initial administrative burden 

will be slightly greater than that under 

the current programs. However, we 

expect that the annual administration 

costs will be about the same as the 

annual administration costs under its 

existing designation programs. As other 

commenters noted, the ODA program 

will provide organizations with greater 

work scheduling flexibility and the 

overall cost of their work will decrease 

because they can use their resources 

more efficiently. The ODA is also 

designed to streamline the process when 

an organization seeks to add to its 

designated functions. No change to the 

rule has been made based on this 

comment. 

Comment: Boeing comments that our 

estimated ODA costs were an order of 

magnitude too low. In a telephone 

conversation (a summary of which is in 

the docket), a Boeing representative 

clarified that its written comment was 

based on the total cost to move from a 

DOA, DAS, or SFAR 36 designation to 

an ODA and not based on the 

incremental cost to move from a DDS to 

an ODA. The Boeing representative 

reported that the cost of going from a 

DDS to an ODA would be about 10 

percent of the total cost that it had 

included in its comment. He concluded 

that FAA estimates in the Initial 

Regulatory Evaluation of the unit costs 

of moving from a DDS to an ODA (an 

initial cost of $13,480 for a large 

organization and $7,980 for a small 

organization and an annual cost of 

$13,450 for a large organization and 

$6,850 for a small organization) were 

reasonable. 

Response: We agree and use those 

same unit cost values in the Final 

Regulatory Evaluation. 

Comment: In the Initial Regulatory 

Evaluation, we estimated that the initial 

cost to obtain an ODA would be $7,320 

for a large ODAR and $5,780 for a small 

ODAR. The IAE comments that its large 

manufacturing ODAR initial cost would 

be $7,260. Pratt and Whitney 

commented that its large manufacturing 

ODAR initial cost would be $12,020. 

Response: Based on these responses, 

the Final Regulatory Evaluation uses an 

average of these costs resulting in an 

initial cost of $9,640 for the typical large 

ODAR that transitions to an ODA. 

Comment: In the Initial Regulatory 

Evaluation, we estimated that the 

average annual cost for a large ODAR 

would be $6,410 and the annual cost for 

a small ODAR would be $5,310. In its 

comment, IAE reports that it currently 

spend $29,870 every two years for the 

oversight/audit for their ODAR. 

International Aero Engines estimates 

that the total cost of this annual 

requirement would be $56,660 over two 

years. Thus, their annual incremental 

compliance costs for an ODA would be 

$26,790 more (over two years) than their 

current ODAR costs, or $13,395 in 

additional annual costs. 

Response: We used the IAE estimate 

of $13,395 as the annual cost in the 

Final Regulatory Evaluation for a large 

ODAR annual cost. 

Comment: Pratt and Whitney 

estimated an annual cost of $138,900 for 

their ODA. 

Response: It was not clear whether 

this estimate is the incremental cost of 

going from its current authorization or 

whether it is the total cost of operating 

an ODA. Consequently, in light of the 

Boeing and IAE comments, we 

determined that the IAE estimate was 

the appropriate estimate of the annual 

cost of a large ODAR. 

Discussion of Changes and 

Clarifications to the Proposed 

Requirements 

As noted above, we have significantly 

changed the format of the final rule 

language to simplify it and increase its 

readability. In some cases, text has been 

moved or regrouped into more intuitive 

sections and paragraphs, and the 

heading changed to better reflect the 

content of the section. Any substantive 

changes, of which there were few, are 

noted here. This section will not discuss 

59942 Federal Register / Vol. 70, No. 197 / Thursday, October 13, 2005 / Rules and Regulations 

language changes made to clarify the 

intent or format of the rule. 

Section 21.230 Compliance Dates 

Proposed § 21.230 has been 

eliminated; it did not contain 

compliance dates as the title suggested. 

The expiration of DOA has been added 

to § 21.235. No reference to part 183 is 

included since a reference to ODA is not 

necessary. The proposed phrase ‘‘no 

person may apply for’’ is incorrect and 

has been revised to read ‘‘the 

Administrator will no longer accept.’’

Section 21.430 Compliance Dates 

Proposed 21.430 has been eliminated; 

it did not contain compliance dates as 

the title suggested. The expiration of 

DAS has been added to § 21.435. No 

reference to part 183 is included since 

a reference to ODA is not necessary. The 

phrase ‘‘no person may apply for’’ is 

incorrect and has been changed to ‘‘the 

Administrator will no longer accept.’’

SFAR 36 

The proposed revision to SFAR 36 

section 4 has been revised to 

incorporate language from the current 

rule regarding the certificate holding 

district office that was inadvertently left 

out of the proposed rule revision. The 

language addressing application for an 

ODA under part 183 has been removed, 

since it is outside the scope of SFAR 36 

and is not regulatory in nature. 

A new expiration date for SFAR 36 

has been incorporated into the text. 

Section 183.1 Scope 

The word ‘‘private’’ has been deleted 

from paragraphs (a) and (b) because it is 

unnecessary. The introductory text of 

this section contains the term ‘‘private 

person,’’ while paragraphs (a) and (b) 

are intended to distinguish designations 

granted to individuals from those 

granted to organizations. 

Section 183.15 Duration of Certificates 

Proposed paragraph 183.15(b) used 

the term ‘‘Certificate of Authority;’’ we 

have replaced it with the more generic 

term ‘‘proof of authorization.’’

Certificates of Authority are specific to 

certain types of designees, while the 

expiration date described in this section 

will be included on all types of 

documentation used to identify 

representatives of the Administrator. 

Section 183.41 Applicability and 

Definitions 

Proposed paragraph (a)(2) has been 

removed. The definitions in § 183.41(b) 

have been reordered in a more logical 

sequence. The definition of ODA Unit 

has been revised to prevent an 

interpretation that unit members are 

performing functions on ‘‘behalf of the 

administrator.’’ This definition implied 

that the ODA Unit members were the 

‘‘designees,’’ when, in fact, the ODA 

Holder is the designated organization 

that is authorized to perform the 

functions on behalf of the 

Administrator. The ODA Unit is defined 

as the identified individuals within the 

ODA Holder who perform the functions. 

Section 183.45 Issuance of 

Organization Designation 

Authorizations 

The description of the contents of the 

Letter of Designation in paragraph (a) 

has been removed since it was nonregulatory in nature. 

Section 183.47 Qualifications 

(Proposed § 183.47 Eligibility) 

Section 183.47 has been extensively 

revised and re-titled ‘‘Qualifications.’’

The proposed section listed a number of 

FAA certificates and presumed that a 

holder of any such certificate was 

‘‘eligible’’ for an ODA. In fact, the 

primary requirement to become an ODA 

Holder is sufficient experience 

performing the authorized functions. 

The certificates listed appeared to be 

requirements to perform certain 

functions, rather than eligibility 

requirements to be granted an ODA. The 

section has been revised to require only 

that an applicant have adequate 

facilities, experience performing the 

functions sought, and experience with 

FAA policies and procedures related to 

the functions sought. Based on 

comments received, we have deleted the 

proposed requirement that the ODA 

Holder have facilities located within the 

United States. 

Section 183.49 Authorized Functions 

Section 183.49 has been extensively 

revised. The list of specific authorized 

functions has been removed, as 

identification of these functions was not 

necessary. This section now provides 

the authority for the Administrator to 

delegate any statutorily authorized 

function. 

Section 183.51 Personnel 

Section 183.51 has been re-titled 

‘‘ODA Unit Personnel’’ to more 

accurately describe its content. 

Paragraph 183.51(b) has been revised 

based on comments submitted. As 

proposed, the language inferred that 

experience and expertise ‘‘in aircraft 

certification’’ is required to make 

conformity determinations, or issue 

airworthiness certificates. What is 

required is experience and expertise in 

the function requested. The phrase ‘‘in 

aircraft certification’’ has been removed. 

Section 183.53 Procedures Manual 

Section 183.53 has been revised and 

its paragraphs redesignated. Based on 

comments received, the language has 

been revised to allow for an ODA 

Holder to make minor changes to the 

procedures manual without FAA 

approval. A description of the minor 

changes allowed must be defined in the 

approved procedures manual. 

Proposed paragraph 183.53(c) has 

been clarified to require definition of 

the organizational structure and 

responsibilities of both the ODA Holder 

and ODA Unit. The proposed rule was 

unclear whether the requirement to 

define the organizational structure 

applied to the ODA Unit, ODA Holder, 

or both. 

Proposed paragraph 183.53(e) has 

been revised to clarify that the ODA 

Holder must perform periodic audits of 

both the ODA procedures and the ODA 

Unit. 

Proposed paragraph 183.53(h) has 

been revised to clarify that the 

procedures manual must contain only a 

description of the training required for 

ODA Unit members. As proposed, it 

appeared that the actual training 

material was required to be included in 

the manual. 

Proposed paragraph 183.53(j) has 

been revised to require position 

descriptions and required qualifications 

only for the ODA Unit members. 

A new procedures manual 

requirement has been added in revised 

paragraph 183.53(c)(15) requiring ‘‘Any 

other information required by the 

Administrator necessary to supervise 

the ODA Holder in the performance of 

its authorized functions.’’ This is 

intended to allow the FAA to revise 

future procedures manual requirements 

in policy materials without amending 

the rule language. 

Section 183.55 Limitations 

The substance of proposed paragraph 

183.55(a) has been moved to § 183.49, 

and the remaining sections redesignated 

accordingly. Proposed paragraph 

183.55(b) has been revised to require 

notification of any change that may 

affect performance of an authorized 

function, rather than only changes 

within the ODA Unit or ODA Holder. 

For example, changes that are not 

within the Unit or Holder, such as 

changes in facilities, may require 

reporting. Additionally, proposed 

paragraph 183.55(d) was revised to 

make the ODA Holder, rather than the 

ODA Unit subject to limitations 

specified by the Administrator. 

Federal Register / Vol. 70, No. 197 / Thursday, October 13, 2005 / Rules and Regulations 59943 

Limitations are actually imposed on the 

ODA Holder, and flow down to the ODA 

Unit. 

Section 183.57 Responsibilities of an 

ODA Holder 

New paragraph 183.57(e) contains the 

requirement from proposed § 183.59 to 

notify the FAA of a change that may 

affect the ODA Holder’s ability to meet 

the regulations requirements. 

Section 183.59 Continued Eligibility 

The provisions of proposed § 183.59 

have been moved to § 183.57, and 

subsequent sections redesignated 

accordingly. 

Section 183.61 Inspection 

This section has been redesignated as 

§ 183.59. 

Section 183.63 Records and Reports 

This section has been redesignated as 

§ 183.61, and extensively revised based 

on comments received. The description 

of the content of records has been 

revised for clarity. Based on comments 

received, most airworthiness certificates 

and approvals must be maintained only 

for two years, rather than indefinitely as 

proposed. However, airworthiness 

certificates and approvals supporting 

type design approval projects must be 

maintained for the duration of the 

authorization. Based on comments 

received, the requirement to maintain 

inspection records proposed in 

§ 183.63(c)(1) has been removed and 

periodic audit and corrective action 

records must be maintained for five 

years, rather than indefinitely, as 

proposed. Service difficulty records 

must also be maintained for five years 

rather than for two years as proposed in 

§ 183.63(c)(2). These retention 

requirements are intended to allow 

access to a greater amount of service 

history information if an investigation is 

required. 

Section 183.65 Data Review and 

Service Experience 

This section has been redesignated 

183.63, and retitled ‘‘Continuing 

Requirements: Products, Parts or 

Appliances.’’ Proposed paragraphs 

183.65(a) and (b) have been revised to 

clarify the requirements on the ODA 

Holder. A new requirement has been 

added to require the ODA Holder to 

actively monitor service difficulties. 

This is now done by current delegated 

organizations and is appropriate for 

inclusion in the regulatory text. Based 

on comments received, the notification 

and investigation requirements now 

apply to the ODA Holder rather than the 

ODA Unit. 

The intent of proposed § 183.65(c) 

regarding operational approvals has 

been moved to new § 183.65 and titled 

‘‘Continuing Requirements: Operational 

Approvals.’’ The section has been 

revised to clarify that the ODA Holder 

must notify the FAA of problems with 

operational approvals and investigate 

those matters. This section requires that 

the ODA Holder inform the 

Administrator of any error in issuance 

of an operational approval (certificate or 

authorization), and when instructed by 

the Administrator, suspend issuance of 

any similar approval until corrective 

action is implemented. This section also 

requires that the ODA Holder 

investigate any problem. 

Paperwork Reduction Act 

As required by the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

3507(d)), the FAA submitted a copy of 

the information collection 

requirements(s) in this final rule to the 

Office of Management and Budget for its 

review. An agency may not collect or 

sponsor the collection of information, 

nor may it impose an information 

collection requirement unless it 

displays a currently valid Office of 

Management and Budget (OMB) control 

number. 

This rule contains information 

collections that are subject to review by 

OMB under the Paperwork Reduction 

Act of 1995 (Pub. L. 104–13). OMB has 

not yet approved the collection of this 

information. 

This rule was proposed in the Federal 

Register on January 21, 2004. At that 

time the FAA requested public 

comments on the proposed information 

collection requirements. Based on 

comments received, the proposed 

requirement for respondents to maintain 

aircraft inspection records has been 

removed, and periodic audit and 

corrective action records must be 

maintained for five years, rather than 

indefinitely. Additionally, service 

difficulty information must be retained 

for five years, rather than the proposed 

two years, to ensure adequate 

information is available in the event 

safety issues require investigation. See 

the disposition of comments and 

discussion of changes and clarifications 

to the proposed language for more 

information. No comments addressed 

recordkeeping or reporting cost or 

burden estimates. 

Annual Burden Estimate: We estimate 

the proposed rule imposes an annual 

public reporting burden of $235,840 

based on 4288 hours at $55.00 per hour. 

The estimated recordkeeping costs are 

$161,700, based on 2940 hours at $55.00 

per hour. Both of these cost estimates 

are based on clerical, technical, and 

overhead expenses. 

Estimates of the burden created by the 

rule are based on the following: The rule 

will phase out over three years the 

existing DAS and DOA rules contained 

in Subparts J and M of part 21, as well 

as SFAR No. 36. The collection and 

recordkeeping requirements imposed by 

those rules will transition to the 

requirements contained here over the 

initial three-year period. In addition, 

existing ODARs that are currently 

managed under part 183 will also be 

converted to ODA over the initial threeyear period. As a result, the initial threeyear burden will be large, with a smaller 

burden over the life of the program. It 

is expected that about 180 applications 

will be processed within the first three 

years of the program, with an estimated 

10 more applications being submitted 

per year over the life of the program. 

The annual cost to the Federal 

Government to analyze and process the 

information received is estimated to be 

$69,300 per year. This estimate is based 

on 1260 hours at $55.00 per hour. 

International Compatibility 

In keeping with U.S. obligations 

under the Convention on International 

Civil Aviation, it is FAA policy to 

comply with International Civil 

Aviation Organization (ICAO) Standards 

and Recommended Practices to the 

maximum extent practicable. The FAA 

has determined that there are no ICAO 

Standards and Recommended Practices 

that correspond to these regulations. 

Economic Assessment, Regulatory 

Flexibility Determination, Trade Impact 

Assessment, and Unfunded Mandates 

Assessment 

Preamble Summary 

This portion of the preamble 

summarizes our analysis of the 

economic impacts of the rule. We 

suggest readers seeking greater detail 

read the full regulatory evaluation, 

which is in the docket. 

Changes to Federal regulations must 

undergo several economic analyses. 

First, Executive Order 12866 directs that 

each Federal agency shall propose or 

adopt a regulation only upon a reasoned 

determination that the benefits of the 

intended regulation justify its costs. 

Second, the Regulatory Flexibility Act 

of 1980 requires agencies to analyze the 

economic impact of regulatory changes 

on small entities. Third, the Trade 

Agreements Act (19 U.S.C. 2531–2533) 

prohibits agencies from setting 

standards that create unnecessary 

obstacles to the foreign commerce of the 

United States. In developing U.S. 

59944 Federal Register / Vol. 70, No. 197 / Thursday, October 13, 2005 / Rules and Regulations 

standards, the Trade Act requires 

agencies to consider international 

standards and, where appropriate, to 

use them as the basis for U.S. standards. 

Fourth, the Unfunded Mandates Reform 

Act of 1995 (Pub. L. 104–4) requires 

agencies to prepare a written assessment 

of the costs, benefits, and other effects 

of proposed or final rules that include 

a Federal mandate likely to result in the 

expenditure by State, local, or tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

annually (adjusted for inflation). 

In conducting these analyses, we 

determined this rule: (1) Has benefits 

that justify its costs, is not a ‘‘significant 

regulatory action’’ as defined in section 

3(f) of Executive Order 12866, and is not 

‘‘significant’’ as defined in DOT’s 

Regulatory Policies and Procedures; (2) 

does not have a significant economic 

impact on a substantial number of small 

entities; (3) has a neutral international 

trade impact; and (4) does not impose 

an unfunded mandate on State, local, or 

tribal governments, or on the private 

sector. These analyses, available in the 

docket, are summarized as follows. 

Total Benefits and Costs of This 

Rulemaking 

The aviation industry reported that 

the conversion to an ODA system allows 

them to schedule their manufacturing, 

modification, and repair activities more 

efficiently than they can under the 

current designee system. It also allows 

us to more effectively monitor the 

organizational designee system. Under 

certain assumptions discussed in detail 

in the Regulatory Evaluation, we 

estimate that the aviation industry could 

annually save about $3.445 million in 

opportunity costs and a total present 

value savings of $24.9 million between 

2006 and 2015. We calculate that the 

total initial costs for the ODA program 

will be $1.725 million spread over three 

years. The incremental annual costs of 

operating ODA programs between 2006 

and 2015 will be $17.4 million. The 

average annual cost will be $2.175 

million. The present value of the total 

costs for the ODA program will be $12.3 

million. 

Who Is Potentially Affected by This 

Rulemaking 

Aircraft manufacturers, air carriers, 

commercial operations, repair stations, 

and aircraft parts manufacturers may be 

affected by this rule. 

Alternatives We Considered 

We did not consider other alternatives 

to this final rule because the proposed 

rule had been developed in conjunction 

with the ARAC recommendations. We 

received positive industry responses to 

the proposed rule and we received no 

suggested alternatives other than to 

maintain the current system. 

Cost Assumptions and Sources of 

Information 

Period of analysis is 2006–2015. 

Final rule will be effective by January 

1, 2006. 

Discount rate is 7 percent. 

Fully burdened labor rate for an 

aviation engineer is $110 an hour. 

The affected parties will be 4 aircraft 

and two propeller manufacturers that 

have 7 DOAs, 26 companies that have 

33 DASs, 13 companies that have 13 

SFAR 36 authorizations, 42 

organizations that have 47 maintenance 

ODARs, and 81 organizations that have 

89 manufacturing ODARs. We did not 

estimate a cost for the unknown number 

of organizations that do not currently 

have a designation authorization may 

choose to apply for an ODA. 

We obtained data from members of an 

ARAC working group, existing DAS, 

DOA, and SFAR 36 holders, and from 

public comments on the proposed rule. 

Estimated Benefits 

We determined that the rule will 

generate both improved safety and 

reduced costs. By shifting our 

inspection focus from reviewing test 

results to overseeing the designation 

program, we will be able to more 

efficiently use our resources while 

extending our oversight coverage, 

thereby increasing safety. In the NPRM, 

we requested that commenters provide 

quantitative estimates of their cost 

savings from substituting an ODA for 

their current designation authorizations. 

We did not receive any quantitative 

estimates, but nearly all of the industry 

commenters noted that an ODA will 

allow them to more efficiently schedule 

their work and save them time. This 

view was also the consensus in the 

ARAC working group. Under certain 

assumptions discussed in the 

Regulatory Evaluation, we estimate that 

the aviation industry could annually 

save $3.445 million in undiscounted 

opportunity costs. We received 

comments from individuals who believe 

that the ODA program will increase 

costs. We disagree with those 

comments. Were an ODA to increase an 

organization’s net costs, that 

organization has the option to not 

participate. 

Costs of This Rulemaking 

The average undiscounted initial cost 

for an existing DAS, DOA, or SFAR 36 

holder to transition to an ODA will be 

$13,480 for a large program and $7,980 

for a small program. The average annual 

incremental undiscounted cost will be 

$13,450 for an existing DAS, DOA, or 

SFAR 36 holder with a large program 

and $6,850 for those with a small 

program. We received two comments on 

the estimated costs for a manufacturing 

ODAR program to convert to an ODA. 

Taking the average of these costs, the 

average undiscounted initial cost for a 

large ODAR program will be $9,640 and 

$7,505 for a small ODAR program. The 

average incremental annual 

undiscounted cost will be $6,410 for a 

large ODAR program and $5,310 for a 

small ODAR program. 

Cost Benefit Summary 

Industry worked with us to improve 

our oversight efficiency and maintain 

system safety. This rule creates a more 

efficient system with benefits to both 

the industry and to the FAA. There were 

10 industry comments that supported 

the proposed rule as being cost 

beneficial and one industry comment 

opposing it. As noted earlier, under 

certain assumptions described in 

Section III.C of the Regulatory 

Evaluation, the present value of the 

annual reduction in the opportunity 

costs from the ODA program could be 

$24.9 million, which is greater than the 

present value of the compliance costs of 

$12.3 million. 

Changes From the NPRM to the Final 

Rule 

Based on the comments received from 

the NPRM, we made three moderate 

changes in the unit cost estimates from 

those in the NPRM to those in the final 

rule. In response to two comments from 

manufacturers that hold ODARs, we 

increased our annual compliance costs 

for a large ODAR holder from the 

estimated $7,320 in the NPRM to $9,640 

in the final rule analysis. In the NPRM, 

we had estimated that participants in 

the DDS program would have minimal 

costs. We received two comments 

stating that there will be costs for these 

programs to apply for an ODA. Based on 

the comments, we increased our initial 

compliance costs for DOA, DAS, and 

SFAR 36 holders from the estimated 

minimal amount in the NPRM to 

$13,480 in the final rule for a large 

program and $7,980 in the final rule for 

a small program. Finally, we increased 

our annual compliance costs for DOA, 

DAS, and SFAR 36 holders from a 

minimal amount in the NPRM to 

$13,450 in the final rule for a large 

program and $6,850 in the final rule for 

a small program. As a result, we 

calculate that the total initial costs for 

the final rule will be $1.725 million 

whereas we had estimated that it would 

Federal Register / Vol. 70, No. 197 / Thursday, October 13, 2005 / Rules and Regulations 59945 

be $1.144 million in the NPRM. 

Whereas we had estimated that the 

annual incremental cost would be 

$1.102 million in the NPRM, for the 

final rule it will now be $2.175 million. 

Regulatory Flexibility Determination 

The Regulatory Flexibility Act of 1980 

(RFA) establishes ‘‘as a principle of 

regulatory issuance that agencies shall 

endeavor, consistent with the objective 

of the rule and of applicable statutes, to 

fit regulatory and informational 

requirements to the scale of the 

business, organizations, and 

governmental jurisdictions subject to 

regulation.’’ To achieve that principle, 

the RFA requires agencies to solicit and 

consider flexible regulatory proposals 

and to explain the rationale for their 

actions. The RFA covers a wide range of 

small entities, including small 

businesses, not-for-profit organizations 

and small governmental jurisdictions. 

Agencies must perform a review to 

determine whether a proposed or final 

rule will have a significant economic 

impact on a substantial number of small 

entities. If the agency determines that it 

will, the agency must prepare a 

regulatory flexibility analysis as 

described in the Act. In the Final 

Regulatory Evaluation, we note two 

important considerations for a small 

business impact. First, three of the four 

categories of designations already 

operate under programs that are very 

similar to the ODA program. Only the 

ODARs do not currently operate under 

an ODA-like system. There are about 

4,000 aircraft repair stations and aircraft 

parts manufacturers (nearly all of which 

are small entities). Twenty of the 47 

maintenance ODARs and 42 of the 89 

manufacturing ODARs are operated by 

small companies having fewer than 

1,500 employees. While there are a 

substantial number of small entities, the 

rule will not have a significant impact. 

The rule will not require them to 

operate an ODA. They can apply for 

one, but it is their choice. That is, if an 

ODA makes business sense, a small 

business has the option of applying for 

it, but is not required to have one. 

Second, the expected efficiency gains 

for some of these companies will exceed 

the expected compliance costs. 

In light of this evidence, the FAA 

Administrator certifies that the rule will 

not have a significant economic impact 

on a substantial number of small 

entities. 

International Trade Impact Assessment 

The Trade Agreements Act of 1979 

prohibits Federal agencies from 

establishing any standards or engaging 

in related activities that create 

unnecessary obstacles to the foreign 

commerce of the United States. 

Legitimate domestic objectives, such as 

safety, are not considered unnecessary 

obstacles. The FAA assessed the 

potential effect of this final rule and 

determined that because the compliance 

costs are minimal, and there will likely 

be net cost savings from increased 

scheduling efficiencies for primarily 

domestic organizations, this final rule 

will slightly reduce costs for U.S. 

organizations. It has no effect on foreign 

organizations. Thus, the final rule has a 

minimal effect on foreign commerce. 

Unfunded Mandates Reform Act 

The Unfunded Mandates Reform Act 

of 1995 (the Act) is intended, among 

other things, to curb the practice of 

imposing unfunded Federal mandates 

on State, local, and tribal governments. 

Title II of the Act requires each Federal 

agency to prepare a written statement 

assessing the effects of any Federal 

mandate in a proposed or final agency 

rule that may result in an expenditure 

of $100 million or more (adjusted 

annually for inflation) in any one year 

by State, local, and tribal governments, 

in the aggregate, or by the private sector; 

such a mandate is deemed to be a 

‘‘significant regulatory action.’’ The 

FAA currently uses an inflationadjusted value of $120.7 million in lieu 

of $100 million. 

This final rule does not contain such 

a mandate. The requirements of Title II 

do not apply. 

Regulatory Flexibility Determination 

The Regulatory Flexibility Act of 1980 

(RFA) establishes ‘‘as a principle of 

regulatory issuance that agencies shall 

endeavor, consistent with the objective 

of the rule and of applicable statutes, to 

fit regulatory and informational 

requirements to the scale of the 

business, organizations, and 

governmental jurisdictions subject to 

regulation.’’ To achieve that principle, 

the RFA requires agencies to solicit and 

consider flexible regulatory proposals 

and to explain the rationale for their 

actions. The RFA covers a wide range of 

small entities, including small 

businesses, not-for-profit organizations 

and small governmental jurisdictions. 

Agencies must perform a review to 

determine whether a proposed or final 

rule will have a significant economic 

impact on a substantial number of small 

entities. If the agency determines that it 

will, the agency must prepare a 

regulatory flexibility analysis as 

described in the Act. 

The rule will require every 

organization that has a designation 

authorization to apply for an ODA if it 

intends to continue to have a 

designation authorization. Most of the 

4,000 entities that participate in the 

aviation industry do not have 

designation authorizations. Rather, they 

perform their necessary testing and 

examinations using FAA-approved 

individuals operating under standard 

practices. This rule does not require 

these entities to have an ODA program 

and they can continue to operate using 

the existing system. As a result, the 

Administrator certifies that the rule will 

not have a significant impact on a 

substantial number of small entities. 

International Trade Impact Assessment 

As the compliance costs are minimal, 

this final rule will have a minimal trade 

impact. 

Unfunded Mandates Reform Act 

The Unfunded Mandates Reform Act 

of 1995 (the Act) is intended, among 

other things, to curb the practice of 

imposing unfunded Federal mandates 

on State, local, and tribal governments. 

Title II of the Act requires each Federal 

agency to prepare a written statement 

assessing the effects of any Federal 

mandate in a proposed or final agency 

rule that may result in an expenditure 

of $100 million or more (adjusted 

annually for inflation) in any one year 

by State, local, and tribal governments, 

in the aggregate, or by the private sector; 

such a mandate is deemed to be a 

‘‘significant regulatory action.’’

We note that the rule would not 

impose a significant private sector cost. 

Thus, this rule does not contain such a 

mandate and the requirements of Title 

II of the Unfunded Mandates Reform 

Act of 1995 do not apply. 

Executive Order 13132, Federalism 

The FAA has analyzed this final rule 

under the principles and criteria of 

Executive Order 13132, Federalism. We 

determined that this action will not 

have a substantial direct effect on the 

States, or the relationship between the 

National Government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government, and therefore does 

not have federalism implications. 

Environmental Analysis 

FAA Order 1050.1E identifies FAA 

actions that are categorically excluded 

from preparation of an environmental 

assessment or environmental impact 

statement under the National 

Environmental Policy Act in the 

absence of extraordinary circumstances. 

The FAA has determined this 

rulemaking action qualifies for the 

categorical exclusion identified in 

59946 Federal Register / Vol. 70, No. 197 / Thursday, October 13, 2005 / Rules and Regulations 

paragraph 303(d) and involves no 

extraordinary circumstances. 

Regulations That Significantly Affect 

Energy Supply, Distribution, or Use 

The FAA has analyzed this final rule 

under Executive Order 13211, Actions 

Concerning Regulations that 

Significantly Affect Energy Supply, 

Distribution, or Use (May 18, 2001). We 

have determined that it is not a 

‘‘significant energy action’’ under the 

executive order because it is not a 

‘‘significant regulatory action’’ under 

Executive Order 12866, and it is not 

likely to have a significant adverse effect 

on the supply, distribution, or use of 

energy. 

List of Subjects 

14 CFR Part 21 

Aircraft, Aviation safety, Exports, 

Imports, Reporting and recordkeeping 

requirements. 

14 CFR Part 121 

Air carriers, Aircraft, Airmen, 

Aviation safety, Reporting and 

recordkeeping requirements, Safety, 

Transportation. 

14 CFR Part 135 

Air taxis, Aircraft, Airmen, Aviation 

safety, Reporting and recordkeeping 

requirements. 

14 CFR Part 145 

Aircraft, Aviation safety, Reporting 

and recordkeeping requirements. 

14 CFR Part 183 

Aircraft, Airmen, Authority 

delegations (Government agencies), 

Reporting and recordkeeping 

requirements. 

The Amendments 

■ The Federal Aviation Administration 

amends parts 21, 121, 135, 145, and 183 

of the Federal Aviation Regulations as 

follows: 

PART 21—CERTIFICATION 

PROCEDURES FOR PRODUCTS AND 

PARTS 

■ 1. The authority citation for part 21 

continues to read as follows: 

Authority: 42 U.S.C. 7572; 49 U.S.C. 

106(g), 40105, 40113, 44701–44702, 44707, 

44709, 44711, 44713, 44715, 45303. 

■ 2. Section 21.235 is revised to read as 

follows: 

§ 21.235 Application. 

(a) An application for a Delegation 

Option Authorization must be 

submitted, in a form and manner 

prescribed by the Administrator, to the 

Aircraft Certification Office for the area 

in which the manufacturer is located. 

(b) An application must include the 

names, signatures, and titles of the 

persons for whom authorization to sign 

airworthiness certificates, repair and 

alterations forms, and inspection forms 

is requested. 

(c) After November 14, 2006, the 

Administrator will no longer accept 

applications for a Delegation Option 

Authorization. 

(d) After November 14, 2009, no 

person may perform any function 

contained in a Delegation Option 

Authorization issued under this subpart. 

■ 3. Section 21.435 is revised to read as 

follows: 

§ 21.435 Application. 

(a) An applicant for a Designated 

Alteration Station authorization must 

submit an application, in writing and 

signed by an official of the applicant, to 

the Aircraft Certification Office 

responsible for the geographic area in 

which the applicant is located. The 

application must contain: 

(1) The repair station certificate 

number held by the repair station 

applicant, and the current ratings 

covered by the certificate; 

(2) The air carrier or commercial 

operator operating certificate number 

held by the air carrier or commercial 

operator applicant, and the products it 

may operate and maintain under the 

certificate; 

(3) A statement by the manufacturer 

applicant of the products for which he 

holds the type certificate; 

(4) The names, signatures, and titles 

of the persons for whom authorization 

to issue supplemental type certificates 

or experimental certificates, or amend 

airworthiness certificates, is requested; 

and 

(5) A description of the applicant’s 

facilities, and of the staff with which 

compliance with § 21.439(a)(4) is to be 

shown. 

(b) After November 14, 2006, the 

Administrator will no longer accept 

applications for a Designated Alteration 

Station authorization. 

(c) After November 14, 2009, no 

person may perform any function 

contained in a Designated Alteration 

Station authorization issued under this 

subpart. 

PART 121—OPERATING 

REQUIREMENTS: DOMESTIC, FLAG, 

AND SUPPLEMENTAL OPERATIONS 

■ 4. The authority citation for part 121 

continues to read as follows: 

Authority: 49 U.S.C. 106(g), 40113, 40119, 

44101, 44701–44702, 44705, 44709–44711, 

44713, 44716–44717, 44722, 44901, 44903–

44904, 44912, 46105. 

PART 135—OPERATING 

REQUIREMENTS: COMMUTER AND 

ON DEMAND OPERATIONS AND 

RULES GOVERNING PERSONS ON 

BOARD SUCH AIRCRAFT 

■ 5. The authority citation for part 135 

continues to read as follows: 

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

44702, 44705, 44709, 44711–44713, 44715–

44717, 44722. 

PART 145—REPAIR STATIONS 

■ 6. The authority citation for part 145 

continues to read as follows: 

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

44702, 44707, 44717. 

■ 7. In parts 121, 135, and 145, Special 

Federal Aviation Regulation No. 36, the 

text of which is found at the beginning 

of part 121, is amended by revising the 

introductory text of section 4; revising 

the introductory text of section 7; 

revising the termination date to read as 

follows. 

Special Federal Aviation Regulation 

No. 36 

* * * * * 

4. Application. The applicant for an 

authorization under this Special Federal 

Aviation Regulation must submit an 

application before November 14, 2006, 

in writing, and signed by an officer of 

the applicant, to the certificate holding 

district office charged with the overall 

inspection of the applicant’s operations 

under its certificate. The application 

must contain—

* * * * * 

7. Duration of Authorization. Each 

authorization issued under this Special 

Federal Aviation Regulation is effective 

from the date of issuance until, 

November 14, 2009, unless it is earlier 

surrendered, suspended, revoked or 

otherwise terminated. Upon termination 

of such authorization, the terminated 

authorization holder must: 

* * * * * 

This Special Federal Aviation 

Regulation terminates November 14, 

2009. 

* * * * * 

PART 183—REPRESENTATIVES OF 

THE ADMINISTRATOR 

■ 8. The authority citation for part 183 

continues to read as follows: 

Authority: 31 U.S.C. 9701; 49 U.S.C. 

106(g), 40113, 44702, 44721, 45303. 

■ 9. Section 183.1 is revised to read as 

follows: 

Federal Register / Vol. 70, No. 197 / Thursday, October 13, 2005 / Rules and Regulations 59947 

§ 183.1 Scope. 

This part describes the requirements 

for designating private persons to act as 

representatives of the Administrator in 

examining, inspecting, and testing 

persons and aircraft for the purpose of 

issuing airman, operating, and aircraft 

certificates. In addition, this part states 

the privileges of those representatives 

and prescribes rules for the exercising of 

those privileges, as follows: 

(a) An individual may be designated 

as a representative of the Administrator 

under subparts B or C of this part. 

(b) An organization may be designated 

as a representative of the Administrator 

by obtaining an Organization 

Designation Authorization under 

subpart D of this part. 

■ 10. Section 183.15 is amended by 

removing paragraph (c), redesignating 

paragraph (d) as paragraph (c), and 

revising paragraphs (a) and (b) to read 

as follows: 

§ 183.15 Duration of certificates. 

(a) Unless sooner terminated under 

paragraph (c) of this section, a 

designation as an Aviation Medical 

Examiner is effective for one year after 

the date it is issued, and may be 

renewed for additional periods of one 

year at the Federal Air Surgeon’s 

discretion. A renewal is effected by a 

letter and issuance of a new 

identification card specifying the 

renewal period. 

(b) Unless sooner terminated under 

paragraph (c) of this section, a 

designation as Flight Standards or 

Aircraft Certification Service Designated 

Representative as described in 

§§ 183.27, 183.29, 183.31, or 183.33 is 

effective until the expiration date shown 

on the document granting the 

authorization. 

* * * * * 

■ 11. A new subpart D is added to part 

183 to read as follows: 

Subpart D—Organization Designation 

Authorization 

Secs. 

183.41 Applicability and definitions. 

183.43 Application. 

183.45 Issuance of Organization 

Designation Authorizations. 

183.47 Qualifications. 

183.49 Authorized functions. 

183.51 ODA Unit personnel. 

183.53 Procedures manual. 

183.55 Limitations. 

183.57 Responsibilities of an ODA Holder. 

183.59 Inspection. 

183.61 Records and reports. 

183.63 Continuing requirements: Products, 

parts or appliances. 

183.65 Continuing requirements: 

Operational approvals. 

183.67 Transferability and duration. 

§ 183.41 Applicability and definitions. 

(a) This subpart contains the 

procedures required to obtain an 

Organization Designation Authorization, 

which allows an organization to perform 

specified functions on behalf of the 

Administrator related to engineering, 

manufacturing, operations, 

airworthiness, or maintenance. 

(b) Definitions. For the purposes of 

this subpart: 

Organization Designation 

Authorization (ODA) means the 

authorization to perform approved 

functions on behalf of the 

Administrator. 

ODA Holder means the organization 

that obtains the authorization from the 

Administrator, as identified in a Letter 

of Designation. 

ODA Unit means an identifiable group 

of two or more individuals within the 

ODA Holder’s organization that 

performs the authorized functions. 

§ 183.43 Application. 

An application for an ODA may be 

submitted after November 14, 2006. An 

application for an ODA must be 

submitted in a form and manner 

prescribed by the Administrator and 

must include the following: 

(a) A description of the functions for 

which authorization is requested. 

(b) A description of how the applicant 

satisfies the requirements of § 183.47 of 

this part; 

(c) A description of the applicant’s 

organizational structure, including a 

description of the proposed ODA Unit 

as it relates to the applicant’s 

organizational structure; and 

(d) A proposed procedures manual as 

described in § 183.53 of this part. 

§ 183.45 Issuance of Organization 

Designation Authorizations. 

(a) The Administrator may issue an 

ODA Letter of Designation if: 

(1) The applicant meets the applicable 

requirements of this subpart; and 

(2) A need exists for a delegation of 

the function. 

(b) An ODA Holder must apply to and 

obtain approval from the Administrator 

for any proposed changes to the 

functions or limitations described in the 

ODA Holder’s authorization. 

§ 183.47 Qualifications. 

To qualify for consideration as an 

ODA, the applicant must—

(a) Have sufficient facilities, 

resources, and personnel, to perform the 

functions for which authorization is 

requested; 

(b) Have sufficient experience with 

FAA requirements, processes, and 

procedures to perform the functions for 

which authorization is requested; and 

(c) Have sufficient, relevant 

experience to perform the functions for 

which authorization is requested. 

§ 183.49 Authorized functions. 

(a) Consistent with an ODA Holder’s 

qualifications, the Administrator may 

delegate any function determined 

appropriate under 49 U.S.C. 44702(d). 

(b) Under the general supervision of 

the Administrator, an ODA Unit may 

perform only those functions, and is 

subject to the limitations, listed in the 

ODA Holder’s procedures manual. 

§ 183.51 ODA Unit personnel. 

Each ODA Holder must have within 

its ODA Unit—

(a) At least one qualified ODA 

administrator; and either 

(b) A staff consisting of the 

engineering, flight test, inspection, or 

maintenance personnel needed to 

perform the functions authorized. Staff 

members must have the experience and 

expertise to find compliance, determine 

conformity, determine airworthiness, 

issue certificates or issue approvals; or 

(c) A staff consisting of operations 

personnel who have the experience and 

expertise to find compliance with the 

regulations governing the issuance of 

pilot, crew member, or operating 

certificates, authorizations, or 

endorsements as needed to perform the 

functions authorized. 

§ 183.53 Procedures manual. 

No ODA Letter of Designation may be 

issued before the Administrator 

approves an applicant’s procedures 

manual. The approved manual must: 

(a) Be available to each member of the 

ODA Unit; 

(b) Include a description of those 

changes to the manual or procedures 

that may be made by the ODA Holder. 

All other changes to the manual or 

procedures must be approved by the 

Administrator before they are 

implemented. 

(c) Contain the following: 

(1) The authorized functions and 

limitations, including the products, 

certificates, and ratings; 

(2) The procedures for performing the 

authorized functions; 

(3) Description of the ODA Holder’s 

and the ODA Unit’s organizational 

structure and responsibilities; 

(4) A description of the facilities at 

which the authorized functions are 

performed; 

(5) A process and a procedure for 

periodic audit by the ODA Holder of the 

ODA Unit and its procedures; 

(6) The procedures outlining actions 

required based on audit results, 

59948 Federal Register / Vol. 70, No. 197 / Thursday, October 13, 2005 / Rules and Regulations 

including documentation of all 

corrective actions; 

(7) The procedures for communicating 

with the appropriate FAA offices 

regarding administration of the 

delegation authorization; 

(8) The procedures for acquiring and 

maintaining regulatory guidance 

material associated with each 

authorized function; 

(9) The training requirements for ODA 

Unit personnel; 

(10) For authorized functions, the 

procedures and requirements related to 

maintaining and submitting records; 

(11) A description of each ODA Unit 

position, and the knowledge and 

experience required for each position; 

(12) The procedures for appointing 

ODA Unit members and the means of 

documenting Unit membership, as 

required under § 183.61(a)(4) of this 

part; 

(13) The procedures for performing 

the activities required by § 183.63 or 

§ 183.65 of this part; 

(14) The procedures for revising the 

manual, pursuant to the limitations of 

paragraph (b) of this section; and 

(15) Any other information required 

by the Administrator necessary to 

supervise the ODA Holder in the 

performance of its authorized functions. 

§ 183.55 Limitations. 

(a) If any change occurs that may 

affect an ODA Unit’s qualifications or 

ability to perform a function (such as a 

change in the location of facilities, 

resources, personnel or the 

organizational structure), no Unit 

member may perform that function until 

the Administrator is notified of the 

change, and the change is approved and 

appropriately documented as required 

by the procedures manual. 

(b) No ODA Unit member may issue 

a certificate, authorization, or other 

approval until any findings reserved for 

the Administrator have been made. 

(c) An ODA Holder is subject to any 

other limitations as specified by the 

Administrator. 

§ 183.57 Responsibilities of an ODA 

Holder. 

The ODA Holder must—

(a) Comply with the procedures 

contained in its approved procedures 

manual; 

(b) Give ODA Unit members sufficient 

authority to perform the authorized 

functions; 

(c) Ensure that no conflicting nonODA Unit duties or other interference 

affects the performance of authorized 

functions by ODA Unit members. 

(d) Cooperate with the Administrator 

in his performance of oversight of the 

ODA Holder and the ODA Unit. 

(e) Notify the Administrator of any 

change that could affect the ODA 

Holder’s ability to continue to meet the 

requirements of this part within 48 

hours of the change occurring. 

§ 183.59 Inspection. 

The Administrator, at any time and 

for any reason, may inspect an ODA 

Holder’s or applicant’s facilities, 

products, components, parts, 

appliances, procedures, operations, and 

records associated with the authorized 

or requested functions. 

§ 183.61 Records and reports. 

(a) Each ODA Holder must ensure that 

the following records are maintained for 

the duration of the authorization: 

(1) Any records generated and 

maintained while holding a previous 

delegation under subpart J or M of part 

21, or SFAR 36 of this chapter. 

(2) For any approval or certificate 

issued by an ODA Unit member (except 

those airworthiness certificates and 

approvals not issued in support of type 

design approval projects): 

(i) The application and data required 

to be submitted under this chapter to 

obtain the certificate or approval; and 

(ii) The data and records documenting 

the ODA Unit member’s approval or 

determination of compliance. 

(3) A list of the products, components, 

parts, or appliances for which ODA Unit 

members have issued a certificate or 

approval. 

(4) The names, responsibilities, 

qualifications and example signature of 

each member of the ODA Unit who 

performs an authorized function. 

(5) A copy of each manual approved 

or accepted by the ODA Unit, including 

all historical changes. 

(6) Training records for ODA Unit 

members and ODA administrators. 

(7) Any other records specified in the 

ODA Holder’s procedures manual. 

(8) The procedures manual required 

under § 183.53 of this part, including all 

changes. 

(b) Each ODA Holder must ensure that 

the following are maintained for five 

years: 

(1) A record of each periodic audit 

and any corrective actions resulting 

from them; and 

(2) A record of any reported service 

difficulties associated with approvals or 

certificates issued by an ODA Unit 

member. 

(c) For airworthiness certificates and 

approvals not issued in support of a 

type design approval project, each ODA 

Holder must ensure the following are 

maintained for two years; 

(1) The application and data required 

to be submitted under this chapter to 

obtain the certificate or approval; and 

(2) The data and records documenting 

the ODA Unit member’s approval or 

determination of compliance. 

(d) For all records required by this 

section to be maintained, each ODA 

Holder must: 

(1) Ensure that the records and data 

are available to the Administrator for 

inspection at any time; 

(2) Submit all records and data to the 

Administrator upon surrender or 

termination of the authorization. 

(e) Each ODA Holder must compile 

and submit any report required by the 

Administrator to exercise his 

supervision of the ODA Holder. 

§ 183.63 Continuing requirements: 

Products, parts or appliances. 

For any approval or certificate for a 

product, part or appliance issued under 

the authority of this subpart, or under 

the delegation rules of subpart J or M of 

part 21, or SFAR 36 of this chapter, an 

ODA Holder must: 

(a) Monitor reported service problems 

related to certificates or approvals it 

holds; 

(b) Notify the Administrator of: 

(1) A condition in a product, part or 

appliance that could result in a finding 

of unsafe condition by the 

Administrator; or 

(2) A product, part or appliance not 

meeting the applicable airworthiness 

requirements for which the ODA Holder 

has obtained or issued a certificate or 

approval. 

(c) Investigate any suspected unsafe 

condition or finding of noncompliance 

with the airworthiness requirements for 

any product, part or appliance, as 

required by the Administrator, and 

report to the Administrator the results of 

the investigation and any action taken 

or proposed. 

(d) Submit to the Administrator the 

information necessary to implement 

corrective action needed for safe 

operation of the product, part or 

appliance. 

§ 183.65 Continuing requirements: 

Operational approvals. 

For any operational authorization, 

airman certificate, air carrier certificate, 

air operator certificate, or air agency 

certificate issued under the authority of 

this subpart, an ODA Holder must: 

(a) Notify the Administrator of any 

error that the ODA Holder finds it made 

in issuing an authorization or certificate; 

(b) Notify the Administrator of any 

authorization or certificate that the ODA 

Holder finds it issued to an applicant 

not meeting the applicable 

requirements; 

(c) When required by the 

Administrator, investigate any problem 

Federal Register / Vol. 70, No. 197 / Thursday, October 13, 2005 / Rules and Regulations 59949 

concerning the issuance of an 

authorization or certificate; and 

(d) When notified by the 

Administrator, suspend issuance of 

similar authorizations or certificates 

until the ODA Holder implements all 

corrective action required by the 

Administrator. 

§ 183.67 Transferability and duration. 

(a) An ODA is effective until the date 

shown on the Letter of Designation, 

unless sooner terminated by the 

Administrator. 

(b) No ODA may be transferred at any 

time. 

(c) The Administrator may terminate 

or temporarily suspend an ODA for any 

reason, including that the ODA Holder: 

(1) Has requested in writing that the 

authorization be suspended or 

terminated; 

(2) Has not properly performed its 

duties; 

(3) Is no longer needed; or 

(4) No longer meets the qualifications 

required to perform authorized 

functions. 

Issued in Washington, DC, on September 

30, 2005. 

Marion C. Blakey, 

Administrator. 

[FR Doc. 05–20470 Filed 10–12–05; 8:45 am] 

BILLING CODE 4910–13–P