Aviation Safety: FAA's Efforts to Implement Recommendations to Improve Certification and Regulatory Consistency Face Some Challenges
Published: 2014-07-23T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Among its responsibilities for aviation safety, FAA issues certificates for new aircraft and parts, and grants approvals for changes to air operations and aircraft, based on federal aviation regulations. Various studies, GAO's prior work, and industry stakeholders have raised questions about the efficiency of FAA's certification and approval processes, as well as the consistency of its staff in interpreting aviation regulations. Over time, FAA has implemented efforts to address these issues, but they persist as FAA faces greater industry demand and its overall workload has increased. The 2012 FAA Modernization and Reform Act required FAA to work with industry to resolve these issues. In response, FAA chartered two committees—one to address certification and approval processes and another to address regulatory consistency—which recommended improvements in 2012. In 2013, FAA published an implementation plan for addressing the certification and approval process recommendations and promised to publish an implementation plan for addressing the regulatory consistency recommendations at a later date.
This testimony provides information on FAA's progress in implementing the (1) certification and approval process recommendations and (2) regulatory consistency recommendations. It also discusses future challenges industry stakeholders believe FAA will face in implementing these recommendations. This testimony is based on GAO products issued from 2010 to 2014, updated in July 2014 through reviews of recent FAA and industry documents and interviews of FAA officials and industry representatives.
section_title: What GAO Found
paragraphs: The Federal Aviation Administration's (FAA) Aircraft Certification Service (Aircraft Certification) is responsible for addressing the certification and approval process recommendations, and has made progress. Aircraft Certification is implementing and has set milestones for completing 14 initiatives, several of which were originally begun as part of earlier certification process improvement efforts. The initiatives range from developing a comprehensive road map for major change initiatives, to improving Aircraft Certification's process for prioritizing requests for certifications and approvals (project sequencing), to reorganizing the small aircraft certification regulation. According to an update prepared by FAA in May 2014, one initiative has been completed and most are on track to be completed within 3 years. However, according to this update, two initiatives will not meet planned milestones, including the one for improving FAA's program for delegating authority to organizations to carry out some certification activities. Also, a third initiative for improving consistency of regulatory interpretation was at risk of not meeting planned milestones. Two additional initiatives, while on track for meeting planned milestones in May 2014, faced challenges because of opposition by FAA's labor unions, including one for improving Aircraft Certification's project sequencing process. GAO found in October 2013 that Aircraft Certification continued to lack performance measures for many of these initiatives, a condition that persists. In 2010, GAO had previously recommended that FAA develop a continuous evaluative process with performance goals and measures. FAA agreed but has not yet fully addressed the recommendation. Aircraft Certification officials discussed plans to develop metrics in three phases, beginning in July 2014 and in the future, for measuring (1) the progress of implementing the initiatives throughout FAA, (2) the outcomes of each initiative, and (3) the return on investment for FAA and the industry resulting from implementing the initiatives as a whole.
FAA's Flight Standards Service (Flight Standards) is responsible for addressing the regulatory consistency recommendations, is finalizing plans to do so. FAA has not published a detailed plan with milestones and performance metrics, and officials told GAO that they intend to publish a plan by August 2014. Flight Standards officials said they were making progress in addressing the committee's top priority recommendation—mapping all FAA policy and guidance to relevant federal aviation regulations and developing an electronic system that maintains this information and that is accessible by FAA and industry users. As part of this effort, officials told GAO that Flight Standards has begun eliminating obsolete guidance and linking existing policy and guidance to the regulations.
Going forward, Aircraft Certification's and Flight Standards' efforts may face challenges that could affect successful implementation of the committees' recommendations. Many of these recommendations represent a significant shift in how FAA normally conducts business, and if the workforce is reluctant to implement such changes, FAA's planned initiatives for addressing the recommendations could be delayed. Also, the fact that FAA has not yet implemented performance measures for most of the initiatives is a concern for both GAO and the industry. As GAO concluded in October 2013, without performance measures, FAA will be unable to gather the appropriate data to evaluate the success of current and future initiatives.

section_title: Letter
paragraphs: I appreciate the opportunity to testify today on the status of the Federal  Aviation Administration’s (FAA) efforts to improve its certification and  approval processes. As you know, FAA is responsible for aviation safety,  and part of this responsibility entails issuing certificates for new aircraft  and aircraft parts and equipment and granting approvals for such things  as changes to air operations and aircraft, based on federal aviation  regulations. FAA’s current efforts to improve these processes are aimed  at (1) improving its decision-making process for issuing certificates and  approvals, (2) keeping pace with emerging technology, and (3) enabling  industry growth and innovation. Studies published since 1980, our prior  work, industry stakeholders, and experts have long raised questions  about the efficiency of FAA’s certification and approval processes and  varying interpretations and applications of its regulations in making  certification and approval decisions. More recently, several aviation  industry groups have asserted that these issues persist, resulting in  delays and higher costs for their members. These delays have been  generally attributed to heavy staff workloads and a lack of staff resources  to begin new work on certifications and approvals. With greater industry  demand and the introduction of new aircraft, equipment, and technology  into the national aviation system, FAA’s workload has increased and is  expected to grow further over the next decade. We previously concluded  that it will be critical for FAA to follow through with reforms to its  certification and approval processes to meet industry’s future needs.
Over time, FAA has initiated various efforts and initiatives to improve its  certification and approval processes and interpret regulations more  consistently, including efforts in response to findings and  recommendations we made in 2010. However, to bring further attention  to these issues and spur additional action, Congress included the  following requirements for FAA in the FAA Modernization and Reform Act  of 2012: (1) work with the industry to assess and recommend  improvements to the certification and approval processes (Section 312)  and (2) address the findings from our 2010 report related to FAA  interpreting regulations more consistently (Section 313). To meet these  requirements, FAA chartered two aviation rulemaking committees in April  2012—the Aircraft Certification Process Review and Reform Aviation  Rulemaking Committee (Certification Process Committee) and the  Consistency of Regulatory Interpretation Aviation Rulemaking Committee  (Regulatory Consistency Committee)—which made recommendations to  FAA in May 2012 and November 2012, respectively. In an October 2013  statement, we made preliminary assessments of the two committees’  recommendations and FAA’s responses, finding that both FAA-chartered  committees took reasonable approaches in their work and made relevant,  clear, and actionable recommendations to FAA. However, we also  discussed challenges to making further improvements to the certification  and approval processes, most notably that FAA has not developed  performance metrics for measuring the outcomes of the initiatives. In  2010, GAO made two recommendations requiring, among other things,  that FAA develop a continuous evaluative process with performance  goals and measures for assessing its actions to improve the efficiency of  its certification and approval processes, and a method to track  submission approvals.
GAO-11-14. Specifically, we recommended that FAA develop a continuous evaluative  GAO-11-14; GAO, Aviation Safety: Additional FAA Efforts Could Enhance Safety Risk  Management, GAO-12-898 (Washington, D.C.: Sept. 12, 2012); GAO, Aviation: Status of  DOT’s Actions to Address the Future of Aviation Advisory Committee’s  Recommendations, GAO-13-657 (Washington, D.C.: July 25, 2013); GAO-142T; GAO,  FAA Reauthorization Act: Progress and Challenges Implementing Various Provisions of  the 2012 Act, GAO-14-285T (Washington, D.C.: Feb. 5, 2014); and GAO, Aviation Safety:  Additional Oversight Planning by FAA Could Enhance Safety Risk Management,  GAO-14-516 (Washington, D.C.: June 25, 2014). our prior work. We provided a draft of the new information contained in  this statement to the Department of Transportation (DOT) for technical  review and addressed its views in the body of our statement where  appropriate.
The work upon which this testimony is based was conducted in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: Located in FAA’s Office of Aviation Safety (Aviation Safety), the Aircraft  Certification Service (Aircraft Certification) and Flight Standards Service  (Flight Standards) issue certificates and approvals for new aviation  products to be used in the national airspace system as well as for new  operators in the system, such as air carriers, based on federal aviation  regulations (see fig. 1 below). FAA inspectors and engineers interpret and  implement these regulations governing certificates and approvals through  FAA policies and guidance, including orders, notices, and advisory  circulars. Additionally, FAA also has the authority to use private  individuals and organizational entities, known as designees, to carry out  many certification activities on behalf of the FAA Administrator in order to  enable FAA to better concentrate its limited staff resources on safety- critical functions.
In Aircraft Certification, approximately 880 engineers and inspectors issue  certifications and approvals to the designers and manufacturers of new  aircraft and aircraft engines, propellers, parts, and equipment, including  the avionics and other equipment required for modernizing the air traffic  control system under the Next Generation Air Transportation System  (NextGen). Since 2005, Aircraft Certification has used a project  sequencing system to nationally prioritize certification submissions on the  basis of available resources. In fiscal year 2013, Aircraft Certification  issued 3,496 design approvals, 57 production approvals, and 536  airworthiness certificates.
In Flight Standards, approximately 4,000 inspectors issue certificates and  approvals allowing individuals and entities to operate in the national  airspace system. These include certificates to commercial air carriers,  operators of smaller commercial aircraft, repair stations, and flight training  schools and training centers. Flight Standards field office managers in  over 100 field offices initiate certification projects within their offices on a  first-come, first served basis. In fiscal year 2013, Flight Standards issued  259 air operator certificates and 159 air agency certificates.
When FAA receives aviation industry submissions for certificates and  approvals, it must determine whether or not resources are available to  begin the project. According to FAA, the agency considers its highest  priority to be overseeing the continued operational safety of the people  and products already operating within the national airspace system. The  same staff that provide this oversight are also tasked with other oversight  activities, such as processing new certifications and approvals that FAA  considers to be lower priority. FAA wait-lists new certification and  approval projects when resources are not available to begin the work.  Flight Standards, in particular, has historically had difficulty keeping up  with its certification workload across its regions and offices, a problem  that persists. FAA has considered ways to supplement its annual budget  by expanding its sources of funding to deal with its increasing workload  and staff shortages. However, FAA has limited options as it cannot levy  fees on its customers for most of the services it provides to industry,  including aviation product certifications and approvals.
Attempts have been made to provide FAA with additional funding from  industry stakeholders for processing certifications and approvals. In 2007,  the administration submitted a reauthorization proposal to Congress that  called for major changes to FAA’s funding and budget structure. These  changes were intended to provide a more stable, reliable basis for  funding in the long term, in part by allowing FAA to impose fees on  manufacturers for the various activities and costs related to aircraft  certification and approval. Congress has previously authorized other  agencies to charge these types of “user fees” for services rendered for  processing product certification and approval. For example, the Medical  Device User Fee and Modernization Act of 2002 authorized the Food and  Drug Administration (FDA) to charge and retain a fee for providing  services related to reviewing medical device products. However, this  broad authority has not been granted to FAA.
section_title: Most FAA Initiatives to Improve Its Aircraft Certification and Approval Process Are on Track
paragraphs: In May 2012, the Certification Process Committee made six  recommendations to Aircraft Certification to streamline and reengineer  the product certification and approval processes, improve efficiency and  effectiveness within Aircraft Certification, and redirect resources for  support of certification. The Certification Process Committee further  recommended that FAA develop measures of effectiveness for its  activities and a means of tracking its progress. In August 2012, FAA  reported its plan to Congress for addressing the Certification Process  Committee’s recommendations, and, in July 2013, the agency issued an  implementation plan with 14 initiatives. FAA updated this plan in January  2014 and plans to issue further updates on the status of the initiatives  periodically.
subsections: section_title: Most Initiatives Are on Track for Meeting Planned Completion Milestones
paragraphs: Since the January update, Aircraft Certification has continued its efforts to  address the recommendations to improve its certification and approval  processes and is implementing the 14 initiatives. These initiatives touch  on various aspects of Aircraft Certification’s work and, according to FAA  several predate the committee’s recommendations and were part of on- going continuous efforts to address long-standing certification issues and  to improve the certification process. The initiatives range from developing  a comprehensive road map for major change initiatives, to improving the  project sequencing process, to reorganizing the small aircraft certification  regulation. Figure 2, based on an interim May 2014 update that FAA  provided to us, summarizes FAA’s determination of the status of the 14  initiatives.
According to the May 2014 update that FAA provided to us, 1 of the 14  initiatives has been completed, and 10 initiatives are on track for  completion within planned time frames. FAA deployed a tracking system  to monitor the implementation of the initiatives in June 2013, but the  agency indicated it is still finalizing the mechanisms for authorizing staff  with the appropriate level of review and approval rights in the system.  Also, ten of the initiatives were on track for meeting their planned  completion milestones. For example, the initiatives to expand the  authority for approving aircraft emissions data and noise compliance  under the organization designation authorization (ODA) program are on  track to be completed in 2015. In addition, the initiative to expedite  rulemaking by, among other things, adopting a rulemaking prioritization  tool to update airworthiness standards for special conditions is scheduled  to be completed in September of this year. Further, three of the  initiatives were in danger of getting off track between 2011 and 2013 and  are now back on schedule.
section_title: Some Initiatives Will Not Meet or Are at Risk of Not Meeting Planned Milestones
paragraphs: Although most initiatives are on track, according to FAA’s May 2014  interim update, 2 of the 14 initiatives will not meet planned milestones:  Improve effectiveness of the ODA program: FAA and two aviation  industry groups—the Aerospace Industries Association and General  Aviation Manufacturers Association—developed a plan to improve  the effectiveness of the ODA process, which is used to authorize  organizations to act on behalf of FAA in conducting some safety  certification work. In conjunction with the plan, FAA revised the order  that outlines the new ODA procedures. However, this initiative was  purposely delayed to provide industry with additional time to adapt to  the changes in the ODA procedures. Representatives of three  industry associations we interviewed for this testimony supported the  use and expansion of ODA by FAA. In contrast, while the Professional  Aviation Safety Specialists (PASS) agrees with the concept of ODA, it  has concerns related to expanding the program because  representatives contend that oversight of the program requires  significant FAA resources. PASS also contends that due to current  staffing shortages and increased workload, FAA does not have  enough inspectors and engineers to provide the proper surveillance of  the designees who would be granted this additional delegation  authority. On May 14, 2014, the DOT OIG announced a review of  FAA’s oversight of the ODA program. The OIG plans to assess FAA’s  (1) process for determining staffing levels for ODA oversight and (2)  oversight of delegated organizations’ program controls.
Update 14 C.F.R. Part 21: FAA chartered another aviation rulemaking  committee in October 2012 to evaluate improvements to the  effectiveness and efficiency of certification procedures for aircraft  products and parts, along with incorporating new safety  management system (SMS) concepts into the design and  manufacturing environment. The committee submitted its report to  FAA in July 2014. FAA indicated that the government shutdown in  October 2013 delayed some of the actions that the agency had  planned to move this effort into the rulemaking process, including  submission of the application for rulemaking. According to FAA,  however, this delay will have no effect on completion of the final rule,  which is planned for 2017.
According to FAA’s May 2014 update, 1 of the 14 initiatives was at risk of  not meeting planned milestones, which increases the risk that FAA will  miss its established implementation time frames for the initiative for  addressing its associated recommendation.
Improve consistency of regulatory interpretations: The May 2014  interim update also indicated that the initiative for improving the  consistency of regulatory interpretation is at risk of getting off track or  off schedule. This initiative responds to the Regulatory Consistency  Committee’s recommendations for improving the consistency of  regulatory interpretation within both Aircraft Certification and Flight  Standards. However, Aircraft Certification is relying on Flight  Standards to complete the implementation plan for addressing the  recommendations. Therefore, Aircraft Certification has placed this  initiative on hold. (The next section of this statement discusses in  more detail FAA’s response to the Regulatory Consistency  Committee’s recommendations.)
section_title: Most Certification Process Improvement Initiatives Lack Measures of Effectiveness
paragraphs: As of May 2014, FAA had not developed metrics for measuring the  effectiveness of 9 of the 14 initiatives it has undertaken, nor has it  determined metrics to measure the effectiveness of its actions as a  whole. According to FAA officials, they plan to develop these metrics in  three phases. For the first phase, to be included in the July 2014 update  of its implementation plan, FAA will include metrics to measure the  progress of the implementation of the initiatives. For the second phase,  FAA plans to subsequently develop metrics for measuring the outcomes  of each initiative. For the third phase, working with the Aerospace  Industries Association, FAA plans to develop metrics for measuring the  global return on investment in implementing all of the initiatives, to the  extent that such measurement is possible. We believe that this plan for  establishing performance measures is reasonable.
section_title: FAA Has Made Some Progress in Addressing Recommendations to Improve the Consistency of Its Regulatory Interpretations, but Details Are Unclear
paragraphs: Unlike FAA’s efforts to improve the certification process, although FAA  has made some progress towards addressing the regulatory consistency  recommendations, the details remain unclear about how FAA will  structure its efforts. In November 2012, the Regulatory Consistency  Committee made six recommendations to Aircraft Certification and Flight  Standards to improve (1) the consistency in how regulations are applied  and (2) communications between FAA and industry stakeholders. In July  2013, FAA reported to Congress on its plans for addressing the  regulatory consistency recommendations, and included its preliminary  plan for determining the feasibility of implementing these  recommendations. The report also indicated that FAA would develop a  detailed implementation plan that would include an implementation  strategy, assign responsibilities to offices and staff, establish milestones,  and measure effectiveness for tracking purposes. We found in February  2014 that FAA expected to publish such a detailed implementation plan  by late June 2014, more than 6 months after its initial target date of  December 2013. In June 2014, FAA officials told us that the  implementation plan was under review within FAA and estimated that the  agency would issue its detailed plan in August 2014.
Until this detailed plan is released, the specific initiatives for addressing  the recommendations are unknown; thus, we cannot analyze information  on the status of any planned efforts similar to the information we provided  above for the certification process initiatives. Further, FAA’s July 2013  preliminary plan does not specify how FAA plans to measure the  effectiveness of the initiatives. FAA indicated that “although there may not  be any baseline for each recommendation against which to compare  improvements, FAA intends to consider: (1) identifying metrics, (2)  gathering and developing baseline data, and (3) periodically measuring  any changes, positive or negative, in rates of completion.” FAA officials  provided the following information on how the agency is planning to  respond to the six recommendations.
subsections: section_title: A Master Source Guidance System
paragraphs: The Regulatory Consistency Committee recommended that Aircraft  Certification and Flight Standards (1) review all guidance documents and  interpretations to identify and cancel outdated material and electronically  link the remaining materials to its applicable rule, and (2) to consolidate  Aircraft Certification’s and Flight Standards’ electronic guidance libraries  into a master source guidance system, organized by rule, to allow FAA  and industry users access to relevant rules and all active and superseded  guidance material and related documents. This recommendation for  creating the master source guidance system is the top priority of the  Regulatory Consistency Committee. FAA officials indicated that  establishing this system will require two main components:
As a first step, for linking (mapping) all relevant guidance materials to  the regulations, FAA plans to determine which "guidance" documents  exist across regional and field offices—including orders, notices, and  advisory circulars—outside FAA’s electronic guidance libraries, which  are being used to answer questions, interpret or analyze regulations,  and provide guidance on regulatory matters. In December 2013, Flight  Standards sent out a memorandum requesting that staff discontinue  using any guidance documents outside those found in the guidance  libraries, to be effective January 15, 2014. The memorandum also  asked for the staff to submit any unofficial guidance worth preserving  to FAA for review. Flight Standards then conducted a review to  determine which of the unofficial guidance documents submitted  should be added to the guidance libraries. Several members of the  Regulatory Consistency Committee responded in an e-mail to FAA to  express serious concerns about this approach and stated that the  committee did not envision the cancellation of any guidance before  FAA developed a methodology to include or exclude such guidance.  The committee members further noted that FAA’s memorandum  provided no method to allow existing certificate holders to retain  certifications that were based on any applied guidance that had been  cancelled. Further, these members requested that FAA either  withdraw the memorandum or address the issues they raised and  extend the date for FAA staff to comply with the memorandum.  However, two other Regulatory Consistency Committee members we  interviewed considered FAA’s actions to get staff to discontinue the  use of unofficial guidance in the field to be an appropriate first step.
Second, FAA plans to develop a master source guidance system with  the capability to consolidate information from Aircraft Certification’s  and Flight Standards’ electronic guidance libraries as well as legal  interpretations from the Office of Chief Counsel into a master  guidance system to allow FAA and industry users access. Specifically,  the Regulatory Consistency Committee recommended that this  system be searchable so that FAA and industry users can easily  access relevant rules and find the relevant guidance for the rule. FAA  officials assessed the possibility of using the existing Aviation Safety  Information Management System, but determined that it is not  adequate because (1) users cannot search for guidance by word and  (2) it is not compatible with other FAA data systems. According to  FAA officials, with about $750,000 in approved funding for this project,  FAA’s information technology division is in the process of developing  a dynamic regulatory system that should provide the needed  capabilities. Officials indicated that when users conduct a search for a  particular topic in this system, the search results should bring up  multiple entries for specific guidance. Initially, Flight Standards plans  to use an Excel spreadsheet for storing the guidance and then  transition to the new system once it is deployed. Flight Standards  hopes to test out a first version of this system within calendar year  2014. However, the officials were unsure of the total cost of  developing and deploying the system.
Representatives from four of the committee stakeholders we interviewed  for this testimony acknowledged that creating this system is a major effort  for FAA because of the volume of FAA guidance that potentially exists  across regional and field offices, some of which may not be in Aircraft  Certification’s and Flight Standards’ electronic guidance libraries.  Representatives of five industry stakeholders we interviewed provided  insights on how FAA might devise a plan for creating and populating this  system. Three of these noted that FAA will need to ensure that the  various types of guidance—such as orders, notices, and advisory  circulars—include links to the original federal aviation regulations. One of  these stakeholders recommended that FAA develop the system to allow a  user looking at FAA guidance to also see all relevant background  information on related decisions, and the past actions related to the  guidance in question and their relation to the original regulation. Because  of the large volume of FAA guidance, some stakeholders also suggested  that FAA begin by first choosing a starting date for which any new rules or  other new guidance it issues would include links to the relevant original  regulations. However, one stakeholder we interviewed noted that FAA  should consider prioritizing its effort by first mapping the guidance  materials for specific key regulations and then the guidance for less  significant regulations.
section_title: Instructional Tools for FAA Personnel for Applying Policy and Guidance
paragraphs: The Regulatory Consistency Committee noted multiple instances where  FAA guidance appeared to have created inconsistent interpretation and  application, and confusion; the Consistency Committee recommended  that FAA develop a standardized decision-making methodology for the  development of all policy and guidance material to ensure such  documents are consistent with adopted regulations. In interviews for this  testimony, FAA officials also provided some updates on how the agency  will respond to the recommendation to develop instructional tools for its  policy staff. FAA officials told us they had not initiated any efforts yet to  address this recommendation, but would begin by focusing on developing  instructions for policy staff to use for populating the master source  guidance system. In August 2014, FAA plans to form an internal work  group to establish a document management framework and work  processes that can be used by Aircraft Certification’s and Flight  Standards’ policy division staffs as they map existing guidance  documents to applicable source regulations in the master source  guidance system. The officials expected the work group would issue an  internal directive for FAA personnel on work processes to be used in  populating the guidance system by June of 2015.
section_title: FAA and Industry Training Priorities and Curriculums
paragraphs: The Regulatory Consistency Committee recommended that FAA, in  consultation with industry stakeholders, review and revise its regulatory  training for applicable agency personnel and make the curriculum  available to industry. FAA officials told us that FAA has begun to develop  improved training for its field staff—the third recommendation of the  Regulatory Consistency Committee—so that field inspector staffs are  better equipped to answer routine compliance-related questions  confidently and in a consistent manner. In addition, the officials told us  starting in 2015, FAA plans to conduct a gap analysis of existing training  for all FAA staff who are responsible for interpreting and applying  certification and approval regulations. For this analysis, FAA plans to  assess whether existing training can be modified to sufficiently address  any gaps. FAA also plans to coordinate with industry to share the results  of this review and analysis by the end of 2015.
section_title: Regulatory Consistency Communications Board
paragraphs: The Regulatory Consistency Committee made two similar  recommendations for FAA to consider: (1) establish a Regulatory  Consistency Communications Board comprising various FAA  representatives that would provide clarification on questions from FAA  and industry stakeholders related to the application of regulations and (2)  determine the feasibility of establishing a full-time Regulatory Operations  Communication Center as a centralized support center to provide real- time guidance to FAA personnel and industry certificate/approval holders  and applicants. FAA officials also discussed the agency’s conceptual  approach and plans for establishing a board—likely by the end of  calendar year 2014—to address these two recommendations. The  purpose of the board would be to provide a neutral and centralized  mechanism with a standardized process for addressing and resolving  regulatory compliance issues between FAA and industry. According to the  committee, this board would be comprised of representatives from the  relevant headquarters policy divisions in FAA to help answer complex  regulatory interpretation issues that arise between FAA inspectors and  engineers, and industry during the certification and approval processes.  FAA officials told us the board’s process, once established, would use a  modified version of the agency’s current Consistency and Standardization  Initiative (CSI), a process established as a means for industry to appeal  FAA decisions and actions.
As we found in 2010, resolution through the CSI can be a lengthy  process, with the total length of the process depending on how many  levels of appeal the industry stakeholder chooses. However, as we also  found, industry stakeholders have generally been reluctant to use CSI for  initiating appeals and raising concerns with the local field office for fear of  retribution. FAA officials told us in interviews that the modified process  would help address the retribution issue, because it would rely instead on  multiple sources to raise issues—not just solely on industry—and would  be the final arbiter for FAA and industry in disagreements on certification  and approval decisions. According to FAA officials, the board could also  serve the function of the proposed operations center recommended by  the committee to be a resource for assisting FAA personnel and industry  stakeholders with interpretation queries and establishing consistency in  regulatory application. FAA officials indicated that the agency had  decided not to establish the communications center because (1) the  board could serve a similar function and (2) FAA has limited resources  available to staff a communications center.
Several industry stakeholders we spoke with told us they support FAA’s  preliminary plans to establish the board and modify the CSI process as  part of this effort. For example, several stakeholders told us that they  support FAA’s plans to modify the current CSI process. One of these  stakeholders noted that a modified process would be more effective if it  allowed for industry stakeholders to raise issues anonymously. Also,  another stakeholder noted the board would not be beneficial until after  FAA has established the master source guidance system because the  board should be able to refer to that guidance in demonstrating how it  makes decisions.
section_title: Clarity in Final Rules
paragraphs: The Regulatory Consistency Committee recommended that FAA improve  the clarity of its final rules by ensuring that each final rule contains a  comprehensive explanation of the rule’s purpose and how it will increase  safety. FAA officials told us that this recommendation has been  addressed through the work of the Aviation Rulemaking Advisory   The officials told  Committee’s Rulemaking Prioritization Working Group.us that, as a result of this effort, all final rules, are now well-vetted across  FAA. The industry representatives we interviewed had mixed opinions  about whether FAA had addressed this recommendation as intended. For  example, two stakeholders were in agreement with FAA that the agency  had addressed it while two other stakeholders noted that FAA’s new rules  are still not as clear as they should be. Two stakeholders also said that it  is often not the final rules but the guidance that accompanies or follows  the final rules that is unclear and contributes to inconsistent interpretation  and application among FAA staff.
section_title: Challenges that Could Affect Successful Implementation of the Committees’ Recommendations
paragraphs: In our previous work on organizational transformations, we noted that  implementing large-scale change management initiatives—like those the  committees tasked FAA with—are not simple endeavors and require the  concentrated efforts of both leadership and employees to realize intended  synergies and accomplish new organizational goals. People are at the  center of any serious change management initiative because people  define the organization’s culture, drive its performance, and embody its  knowledge base. The best approach for these types of initiatives depends  upon a variety of factors specific to each context, but there has been  some general agreement on a number of key practices that have  consistently been found at the center of successful change management  initiatives. These include, among other things, securing organizational  support at all levels, developing clear principles and priorities to help  change the culture, communicating frequently with partners, and setting  performance measures to evaluate progress. In this final section of this  testimony, we discuss challenges for FAA in implementing the  committees’ certification and approval and regulatory consistency  recommendations that relate to these key practices.
subsections: section_title: Organizational Support
paragraphs: FAA officials and industry representatives we spoke to noted that shifting  priorities as well as declining resources may prohibit FAA from devoting  the time and resources needed for completing the initiatives in the  planned time frames. They agreed that a primary challenge for FAA will  be having the dedicated resources that will be needed to successfully  implement the committees’ recommendations. We have previously found  that successful organizational transformations and cultural changes  require several years of focused attention from the agency’s senior  leadership. This lesson is consistent with our previous work on  organizational transformation, which indicates that support from top  leadership is indispensable for fundamental change. Top leadership’s  clear and personal involvement in the transformation represents stability  for both the organization’s employees and its external partners. Top  leadership must set the direction, pace, and tone for the transformation.  Additionally, buy-in and acceptance among the workforce will be critical to  successful implementation of the initiatives to address the two  committees’ recommendations.
Additionally, as we described in our 2010 report, FAA prioritizes ensuring  the continued operational safety of the people and products already  operating in the national airspace system over processing new  certifications and approvals. We reported in the 2010 report that Flight  Standards staff had little or no incentive to perform certification work  under the system in which their pay grades are established and   Other than inspectors involved with overseeing air carriers,  maintained.Flight Standards inspectors are typically responsible for a variety of types  of certificate holders. Each certificate is allocated a point value based on  the complexity of the certificate or operation, and the combined point  value for each inspector’s oversight responsibilities must meet or exceed  the points allocated for the inspector’s grade. However, not all of the  inspectors’ duties—including certification work—receive points in this  system, and inspectors are subject to a downgrade if entities in their  portfolio relocate or go out of business.
section_title: Commitment to Cultural Change
paragraphs: FAA and industry representatives also cited FAA’s organizational culture  as a primary challenge for FAA in successfully implementing these  initiatives. They noted that many of the certification process and  regulatory consistency initiatives FAA is attempting to implement  represent cultural shifts for FAA staff in how regulations, policy, and  guidance are applied, and ultimately how certification and approval  decisions are made. As we have previously found, the implementation of  recommendations that require a cultural shift for employees can be  delayed if the workforce is reluctant in accepting such change.
section_title: Communication with Stakeholders
paragraphs: Further, industry representatives have identified the lack of  communication with and involvement of stakeholders as a primary  challenge for FAA in implementing the committees’ recommendations,  particularly the regulatory consistency recommendations. Successful  agencies we have studied based their strategic planning, to a large  extent, on the interests and expectations of their stakeholders, and  stakeholder involvement is important to ensure agencies’ efforts and  resources are targeted at the highest priorities. However,  representatives of two industry organizations we interviewed told us that  FAA did not provide the opportunity for early input and that outreach is  low regarding the certification process recommendations, and  representatives of four industry organizations indicated that FAA has not  sought their input in responding to the regulatory consistency  recommendations. They reported that FAA had neither kept in contact  with or advised them of its plans nor engaged the Regulatory Consistency  Committee participants in the drafting of the detailed implementation plan  that is expected to be published in August. As an example, as previously  discussed, when Flight Standards published a memo in December 2013  calling for the cancellation of non-official guidance, several members of  the Regulatory Consistency Committee were unaware of the change and  expressed surprise and dissatisfaction with the action and offered their  assistance. Representatives of one industry group noted that FAA sought  their input on addressing the Certification Process Committee’s  recommendations for subsequent revisions of its implementation plan.
section_title: Setting Performance Measures
paragraphs: FAA has not fully developed performance metrics to ensure that any  initiatives it implements are achieving their intended outcomes. We have  previously found that agencies that have been successful in assessing  performance use measures that demonstrate results and provide useful  information for decision making.that FAA had not completed developing performance measures for either  the certification improvement or the regulatory consistency initiatives:   Earlier in this testimony, we reported
FAA had developed performance measures for 5 of the 14  certification process initiatives as of May 2014 and plans to further  develop measures in three phases. In addition, most of the initiatives  are scheduled to be implemented by 2017. Although we have  assessed FAA’s plan for developing these metrics as reasonable, the  agency may miss an opportunity to gather early data for evaluating  the effectiveness of its actions and making any needed corrections.
There is no detailed plan for implementing initiatives addressing the  consistency of regulatory interpretation recommendations and  measuring their outcomes. In recent meetings, FAA officials told us  they have had difficulty in determining how to measure the outcomes  of its regulatory consistency initiatives and have not been able to  determine what specific performance metrics could be used.
Going forward, it is critically important that FAA develop outcome-based  performance measures to determine what is actually being achieved  through the current and future initiatives, thereby making it easier to  determine the overall outcomes of each of the initiatives and to hold  FAA’s field and headquarters offices and employees accountable for the  results. We are not making any new recommendations because the  recommendation we made in 2010 for FAA to develop outcome-based  performance measures and a continuous evaluative process continue to  have merit related to this issue. To its credit, FAA has initiated some  efforts and sound planning for addressing the committees’  recommendations. However, it will be critical for FAA to follow through  with its initiatives and plans for developing performance metrics to  achieve the intended efficiencies and consistencies. As we noted in our  October 2013 statement, however, some improvements to the  certification and approval processes, will likely take years to implement  and, therefore, will require a sustained commitment as well as  congressional oversight.
Chairman LoBiondo, Ranking Member Larsen, and Members of the  Subcommittee, this completes my prepared statement. I would be  pleased to respond to any questions at this time.
section_title: GAO Contact and Staff Acknowledgments
paragraphs: For further information on this testimony, please contact Gerald L.  Dillingham, Ph.D., at (202) 512-2834 or dillinghamg@gao.gov. In  addition, contact points for our Offices of Congressional Relations and  Public Affairs may be found on the last page of this statement. Individuals  making key contributions to this testimony statement include Vashun  Cole, Assistant Director; Andrew Von Ah, Assistant Director; Jessica  Bryant-Bertail; Jim Geibel; Josh Ormond; Amy Rosewarne; and Pamela  Vines. The following individuals made key contributions to the prior GAO  work: Teresa Spisak, Assistant Director; Melissa Bodeau, Sharon Dyer,  Bess Eisenstadt, Amy Frazier, Brandon Haller, Dave Hooper, Sara Ann  Moessbauer, and Michael Silver.
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