Aviation Safety: Issues Related to Domestic Certification and Foreign Approval of U.S. Aviation Products
Published: 2015-01-21T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: FAA issues certificates for new U.S.-manufactured aviation products, based on federal aviation regulations. GAO and industry stakeholders have questioned the efficiency of FAA's certification process and the consistency of its regulatory interpretations. As required by the 2012 FAA Modernization and Reform Act, FAA chartered two committees--one to improve certification processes and another to address regulatory consistency--that recommended improvements in 2012. FAA also assists U.S. aviation companies seeking approval of their FAA-certificated products in foreign markets. FAA has negotiated BASAs with many FCAAs to provide a framework for the reciprocal approval of aviation products. However, U.S. industry stakeholders have raised concerns that some countries conduct lengthy processes for approving U.S. products.
This testimony focuses on (1) FAA's progress in implementing the certification process and regulatory consistency recommendations and (2) challenges selected U.S. companies face in obtaining foreign approvals. It is based on GAO products issued from 2010 to 2014, updated in January 2015 based on FAA documents, and preliminary observations from GAO's ongoing work on foreign approvals. This ongoing work includes an analysis of FAA data on approval applications submitted January 2012 through November 2014 and interviews of a nongeneralizable sample of 15 U.S. companies seeking foreign approvals, selected on the basis of the number of applications submitted and aviation product types manufactured.
section_title: What GAO Found
paragraphs: The Federal Aviation Administration (FAA) has made progress in addressing the Certification Process and the Regulatory Consistency committees' recommendations, but challenges remain and could affect successful implementation of the committees' recommendations.
FAA is implementing its plan for completing 14 initiatives for addressing the 6 certification process recommendations. According to a January 2015 FAA update, 10 initiatives have been completed or are on track to be completed, whereas the rest are at risk of not meeting or will not meet planned milestones.
FAA has developed plans for addressing the six regulatory consistency recommendations. In late December 2014, FAA officials indicated that the final plan to implement the recommendations is under agency review and is expected to be published in January 2015. According to a draft version of the plan, FAA closed two recommendations--one as not implemented and one as implemented in 2013--and plans to complete the remaining 4 by July 2016.
While FAA has made some progress, it is too soon for GAO to determine whether FAA's planned actions adequately address the recommendations. However, industry stakeholders continue to indicate concerns regarding FAA's efforts. These concerns include a lack of communication with and involvement of stakeholders as FAA implements the two committees' recommendations.
As part of its ongoing work, representatives of 15 selected U.S. aviation companies GAO interviewed reported facing various challenges in obtaining foreign approvals of their products, including challenges related to foreign civil aviation authorities (FCAA) as well as challenges related to FAA.
Reported FCAA-related challenges related to (1) the length and uncertainty of some FCAA approval processes, (2) the lack of specificity and flexibility in some of FAA's bilateral aviation safety agreements (BASA) negotiated with FCAAs, (3) difficulty with or lack of FCAA communications, and (4) high fees charged by some FCAAs. Although FAA's authority to address some of these challenges related to FCAAs is limited, FAA has been addressing many of them. For example, FAA has created a certification management team with its three major bilateral partners to provide a forum for addressing approval process challenges, among other issues. FAA has also taken action to mitigate the challenges related to some BASAs by holding regular meetings with bilateral partners and adding dispute resolution procedures to some BASAs.
Reported FAA-related challenges primarily involved (1) FAA's process for facilitating approval applications, which sometimes delayed the submission of applications to FCAAs; (2) limited availability of FAA staff for facilitating approval applications; and (3) lack of FAA staff expertise in issues unique to foreign approvals, such as intellectual property concerns and export control laws. FAA has initiatives under way to improve its process that may help resolve some of these challenges raised by U.S. companies. For example, FAA is making its approvals-related data more robust to better evaluate its relationships with bilateral partners. FAA is also addressing its resource limitations by taking actions to improve the efficiency of its process.

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 processes for  approving new aviation products for domestic use, and the challenges  faced by U.S. aviation companies seeking product approvals in foreign  countries. As you know, among its responsibilities for aviation safety, FAA  grants approvals (called type certificates) for new aircraft, engines, and  propellers. Studies published since 1980, our prior work, industry  stakeholders, and experts have long raised questions about the efficiency  of FAA’s certification processes and varying interpretations and  applications of its regulations in making certification decisions. Over time,  FAA has implemented efforts to address these issues, but as we reported  in July 2014, 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, in April 2012, FAA chartered two aviation rulemaking  committees—one to address certification processes (the Certification  Process Committee) and another to address regulatory consistency (the  Regulatory Consistency Committee)—which recommended  improvements in 2012. In 2013, FAA published an implementation plan  for addressing the six certification process recommendations and stated it  would publish an implementation plan for addressing the six regulatory  consistency recommendations at a later date. As we previously reported  in July 2014, FAA’s current efforts to improve these processes are aimed  at (1) improving its decision-making process for issuing certificates, (2)  keeping pace with emerging technology, and (3) enabling industry growth  and innovation. We previously concluded that it will be critical for FAA to  follow through with reforms to its certification processes to meet industry’s  future needs. We have also recommended that FAA develop a  continuous evaluative process with performance goals and measures to  determine the effectiveness of the agency’s actions to improve its  certification processes.
FAA also approves foreign aviation products that are manufactured in other countries for  use in the United States as a result of sales to U.S. customers. and safety. In 2012, the U.S. aerospace industry contributed $118.5  billion in export sales to the U.S. economy, with this sector remaining  strong in the European markets and growing in the emerging markets of  Asia and the Middle East. Internationally, according to the General  Aviation Manufacturers Association, the U.S. has historically been  viewed as setting the global standard for the approval of aviation  products. In fact, some countries accept the FAA approval outright as  evidence that the product is safe for use in their country. Some other  countries, however, do not accept the FAA certification and conduct their  own approval processes for U.S. products, which can be lengthy,  according to U.S. industry stakeholders. These stakeholders have raised  concerns that such practices provide no additional safety benefit and  result in U.S. companies facing uncertainty and costly delays in delivering  their products to foreign markets.
This testimony discusses (1) FAA’s progress in implementing the aviation  rulemaking committees’ recommendations regarding its certification  process and the consistency of its regulatory interpretations and (2) the  challenges, if any, that selected U.S. companies reported they have faced  when attempting to obtain foreign approvals of their products, and how  FAA is addressing some of the reported challenges. My statement is  based on several GAO products issued since 2010, selected updates on  this work, as well as preliminary observations of our ongoing study of the   The reports  challenges faced by companies seeking foreign approvals. and testimonies cited in this statement contain detailed explanations of  the methods used to conduct our prior work. For this testimony, we  updated the information in our previous work on FAA’s certification   in January 2015 through a review of more recent FAA and  processindustry documents, including the committees’ reports to FAA, FAA’s  reports to Congress in response to the committees’ recommendations as  well as additional government and industry documents and reports  related to this topic.
For our ongoing work in determining the challenges faced by companies  seeking foreign approvals, conducted from March 2014 to January 2015,  we reviewed (1) FAA data on the approximately 1,500 applications for  foreign approvals submitted January 2012 through November 2014, (2)  bilateral aviation safety agreements (BASA) and related documents,  and (3) FAA and industry reports and studies. We also interviewed 15 of  the approximately 288 U.S. companies that submitted applications for  foreign approvals—these companies submitted about 34 percent of the  roughly 1,500 applications to foreign countries from January 2012 through  November 2014. We selected these 15 U.S. companies to interview  primarily on the basis of the number of approval applications submitted  and to represent a diversity of aviation product types (e.g., engines, large  airplanes, small airplanes, rotorcraft, propellers, and parts). Because the  15 companies represent a non-generalizable sample, their views cannot  be attributed to all U.S. company applicants. We determined that the FAA  data were sufficiently reliable for the purposes of providing information on  the approximate number of approval applications, types of products for  which approvals were typically sought, and for selecting U.S. companies  to interview. This determination was based on consultation with FAA  officials responsible for overseeing the data. We also conducted  interviews with FAA headquarters and field staff and other industry  stakeholders—including representatives of the International Civil Aviation  Organization (ICAO) and U.S. aviation stakeholder groups. In order to  better understand whether the challenges faced by U.S. aviation  companies are unique or more commonly faced by aviation companies  worldwide, we also interviewed representatives of three foreign aviation  companies. Our selection was based on the company being a known  importer of aviation products into the United States, as well as based on  the type of product they produced. We provided a draft of the new  information in this statement to the Department of Transportation (DOT)  for technical review and addressed its views 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: FAA is the key federal agency responsible for certification of U.S. aviation  products to be used in the United States and has a significant role in  supporting approvals of U.S. products in other countries. Located in  FAA’s Office of Aviation Safety (Aviation Safety), the Aircraft Certification  Service (Aircraft Certification) issues certificates, including type  certificates and supplemental type certificates, for new aviation products  to be used in the national airspace system. Certification projects, which  involve the activities to determine compliance of a new product with  applicable regulatory standards and to approve products for certificates,  are typically managed by one of Aircraft Certification’s local offices  (generally known as aircraft certification offices, or ACOs).illustrates the range of U.S.-manufactured aviation products—including  aircraft, helicopters, propellers, and engines—for which Aircraft  Certification issues type certificates and supplemental type certificates  once all requirements are met.
section_title: FAA Has Made Progress in Addressing the Certification Process and Regulatory Consistency Committees’ Recommendations
subsections: section_title: FAA Reports that Most of the Initiatives to Improve Its Aircraft Certification Processes Have Been Implemented, but It Is Too Early to Assess Whether Expected Outcomes Will Be Achieved
paragraphs: Aircraft Certification is implementing and has set milestones for  completing 14 initiatives in response to May 2012 recommendations of  the Certification Process Committee. This Committee was chartered to  make recommendations to Aircraft Certification to streamline and  reengineer its certification process, improve efficiency and effectiveness  within Aircraft Certification, and redirect resources for support of  certification. Several of the initiatives 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 reorganizing the small aircraft certification regulations. Although we  reported in 2013 that the Certification Process Committee’s  recommendations were relevant, clear, and actionable, it is too soon for  us to determine whether FAA’s 14 initiatives adequately address the  recommendations.
According to an update prepared by FAA in January 2015, eight initiatives  have been completed, and two are on track to be completed within 3  years. However, according to this update, one initiative was at risk of not  meeting planned milestones, and three initiatives will not meet planned  milestones, including the update to 14 C.F.R. Part 21—the regulations  under which aircraft products and parts are certificated. We reported in  July 2014 that this initiative was in danger of not meeting planned  milestones because the October 2013 government shutdown delayed  some actions FAA had planned to move it into the rulemaking process.In its January 2015 update, FAA indicated that the formal rulemaking  project timeline has been delayed to late fiscal year 2015 to allow for  additional work with industry on developing guidance material and new  certificate holder requirements. Figure 4 illustrates the evolving status of  the 14 initiatives based on the publically-available periodic updates  reported by FAA.
We found in October 2013 that Aircraft Certification lacked performance  measures for many of these initiatives. As of July 2014, FAA had  developed metrics for measuring the progress of the implementation of 13  of the 14 initiatives. According to FAA officials, they plan to develop  these metrics in three phases. For the first phase, which was documented  in the July 2014 update of its implementation plan, FAA developed  metrics to measure the progress of the implementation of the initiatives.  For the second phase, FAA plans to develop metrics for measuring the  outcomes of each initiative. For the third phase, working with the  Aerospace Industries Association and General Aviation Manufacturers  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. FAA did not provide us a time frame for  developing the second and third phase metrics. While we continue to  believe that this plan for establishing performance measures is  reasonable, and recognizing that FAA is in the early stages of  implementation, it is critical for FAA to follow through with its plans for  developing and utilizing metrics to evaluate improvements to the  certification process. Without these metrics, FAA will be unable to fully  determine whether its efforts have been successful in addressing the  Certification Process Committee’s recommendations as intended, identify  areas that may need more attention, and modify efforts to sufficiently  address any gaps. In our previous work, we have reported on instances  where the implementation and metrics related to FAA efforts have not  achieved the intended outcomes as expected, e.g., modernizing the air  traffic control system under the Next Generation Air Transportation  System (NextGen) and the integration of unmanned aerial systems into  the national airspace system.
section_title: FAA Has Developed Plans to Address Recommendations to Improve the Consistency of Its Regulatory Interpretations, but Progress Has Been Slow
paragraphs: Flight Standards has also developed initiatives in response to the six  November 2012 recommendations of the Regulatory Consistency  Committee, but the planned initiatives have not yet been released  officially. This Committee was chartered to make recommendations to  FAA to improve (1) the consistency in how regulations are applied in  making certification decisions and (2) communications between FAA and  industry stakeholders regarding such decisions. In late December 2014,  FAA indicated that the draft plan to implement these recommendations  was currently under review within FAA but the final plan is expected to be  published by the end of January 2015, more than a year past the initial  target publication date of December 2013. However, according to an  October 2014 draft version of the plan that FAA provided to us, despite  not having yet officially released the plan, FAA noted that it had closed 2  of the 6 recommendations and plans to complete the remaining four by  July 1, 2016. FAA also noted that it had developed performance  measures to measure the progress of the implementation of the  remaining 4 recommendations. Table 1 provides a summary of the  recommendations and FAA’s plans for addressing them, based on the  October 2014 draft plan that FAA provided to us.
We reported in 2013 that the Regulatory Consistency Committee took a  reasonable approach in identifying the root causes of inconsistent  interpretation of regulations, and its recommendations are relevant to the  root causes, actionable, and clear.determine whether FAA’s planned actions adequately address the  recommendations. In addition, FAA’s draft plan stated that the resources  required to implement the recommendations must be balanced with other  important FAA activities, such as agency priorities and existing  rulemaking initiatives, and that if future priorities change, it may be forced   However, it is too soon for us to  to modify elements of this implementation plan. As we reported in July  2014, it will be critically important for FAA to follow through with its  initiatives aimed at improving the consistency of its regulatory  interpretation as well as its plans for developing performance metrics to  track the achievement of intended consistencies. We have previously  reported that large-scale change management initiatives—like those  recommended by the regulatory consistency committee—require the  concentrated efforts of both leadership and employees to realize intended  synergies and accomplish new organizational goals.
Further, industry representatives have continued to indicate a lack of  communication with and involvement of stakeholders as a primary  challenge for FAA in implementing the committees’ recommendations,  particularly the regulatory consistency recommendations. FAA has noted  that the processes for developing and updating its plans for addressing  the certification process and regulatory consistency recommendations  have been transparent and collaborative, and that FAA meets regularly  with industry representatives to continuously update them on the status of  the initiatives and for seeking their input. However, several industry  —that  representatives recently told us—and we reported in July 2014 FAA has not effectively collaborated with or sought input from industry  stakeholders in the agency’s efforts to address the two sets of  recommendations, especially the regulatory consistency  recommendations. For instance, some stakeholders reported that FAA  does not provide an opportunity for them to review and comment on the  certification process implementation plan updates, and did not provide an  opportunity for them to review and offer input on the regulatory  consistency implementation plan. However, FAA did meet with various  industry stakeholders in October 2014 to brief them on the general  direction and high-level concepts of FAA’s planned actions to address  each regulatory consistency recommendation.
GAO-14-728T.
section_title: Selected U.S. Companies Report Challenges in Obtaining Foreign Approvals, Which FAA Is Taking Steps to Address within Sovereignty Constraints
subsections: section_title: U.S. Companies Reported that they Experienced FCAA-Related Process, Communications, and Cost Challenges and FAA is Attempting to Address These Challenges
paragraphs: Representatives of the selected 15 U.S. aviation companies we  interviewed, as part of our ongoing work on foreign approvals, reported  that their companies faced challenges related to process,  communications, and cost in obtaining approvals from FCAAs. The  processes involved included FCAAs’ individual approval processes as  well as the processes spelled out in the relevant BASAs. FAA is making  some efforts to address these challenges, such as by holding regular  meetings with some bilateral partners and setting up forums in  anticipation of issues arising.
According to FAA data, from January 2012 through November 2014, U.S.  companies submitted approximately 1,500 applications for foreign  approvals to a total of 37 FCAAs. applications submitted to the top ten and other markets for foreign  approvals from January 2012 through November 2014.
The total includes Hong Kong, which is counted separately from China.
Others include the following bilateral partners, in descending order of the number of applications  submitted: South Korea, South Africa, Taiwan, New Zealand, Malaysia, Israel, and Singapore.
The percentages are based on an approximation of the total number of submitted applications by  U.S. aviation companies. According to FAA, the number of applications may be undercounted  because there is no formal requirement for U.S. aviation companies to submit applications to FAA for  foreign approvals unless the country is a FAA bilateral partner. Thus, some applications may not have  been entered into FAA’s tracking system.
subsections: section_title: Reported FCAA Process Challenges
paragraphs: Of the 15 companies we interviewed, representatives from 12 companies  reported mixed or varied experiences with FCAAs’ approval processes,  and 3 reported positive experiences. Thirteen companies reported  challenges related to delays, 10 reported challenges with approval  process length, and 6 reported challenges related to FCAA staffs’ lack of  knowledge or uncertainty about the approval processes, including FCAA  requests for data and information that, in the companies’ views, were not  needed for approvals. Representatives of three companies stated that, in  their opinion, the EU’s process is sometimes lengthy and burdensome,  resulting in delays. Representatives of four companies noted examples of  approval projects that, in their opinions, were expected to be granted  within weeks or hours by FCAAs, in general, but instead took months or  years. As an example, there were several media reports on the EU’s 4- year process for the approval of the Robinson R66 helicopter, which was  reportedly awarded by EASA in May 2014. However, because we were  not provided the relevant factors and circumstances that could have  affected the delays in the specific examples provided, we did not assess  whether the approvals took longer than necessary. Eight companies also  noted that China often makes requests for data and detailed product  design information that in their view is not necessary for an approval, and  sometimes holds up approvals until those requests are fulfilled.
The 737 MAX is Boeing’s newest family of single-aisle airplanes. It can accommodate  up to 200 seats, and the first flight is scheduled in 2016 with deliveries to customers  beginning in 2017. approvals, and is expected to be completed in fiscal year 2015.According to FAA officials, this IPA is also expected to reduce the level of  involvement of the Civil Aviation Administration of China (CAAC) in  conducting approvals and prevent its certification staff from doing  extensive research for each approval project.
section_title: Reported Issues Related to Some BASAs
paragraphs: Although representatives from 11 of the 15 U.S. companies and the 3  foreign companies we interviewed reported being satisfied with the overall  effectiveness of having BASAs in place or with various aspects of the  current BASAs, representatives of 10 U.S. companies reported  challenges related to some BASAs lacking specificity and flexibility, 2  raised concerns that there is a lack of a formal dispute resolution process,  and 1 noted a lack of a distinction between approvals of simple and  complex aircraft. Companies suggested several ways to address these  issues, including updating BASAs more often and making them clearer.
FAA has taken action to improve some BASAs to better streamline the  approval process that those countries apply to imported U.S. aviation  products. For instance, according to FAA officials, they meet regularly  with bilateral partners to address approval process issues and are  working with these partners on developing a common set of approval  principles. FAA also noted that there are basic dispute resolution clauses  in most of the IPAs, and FAA is working toward adding specific dispute  resolution procedures as contained in the agreement with the EU. FAA  aims to complete negotiations to add a dispute resolution clause to the  BASA with China in fiscal year 2015. FAA officials also indicated that they  are working with longstanding bilateral partners—such as Brazil, Canada,  and the EU—to identify areas where mutual acceptance of approvals is  possible.
section_title: Reported Challenges in Communicating with FCAAs
paragraphs: Representatives from twelve U.S. companies reported challenges in  communicating with FCAAs. Representatives from six U.S. companies  reported, for example, that interactions with developing countries can be  confusing and difficult because of language and cultural issues.  Representatives from two companies noted that they hire local  representatives as consultants in China to help them better engage  CAAC staff with their approval projects and to navigate the CAAC’s  process. One company’s representative also reported having better  progress in communications with FCAAs in some Asian countries, such  as India Japan, and Vietnam, when a local “third-party agent” (consultant)  is involved because it provides a better relationship with the FCAAs’ staff.  They added this requires a lot of trust that the local agent will support the  best interests of the company, and, at times, this arrangement becomes  difficult because the company’s experts would prefer to be in charge of  the communications with FCAAs during the approval processes.  Representatives from three companies also reported that, in general,  some FCAAs often do not respond to approval requests or have no back- ups for staff who are unavailable. They noted that potential mitigations  could include a greater FAA effort to develop and nurture relationships  with FCAAs. According to FAA officials, they are working with the U.S.- China Aviation Cooperation Program to further engage with industry and  Chinese officials.
section_title: Reported Challenges Related to Foreign Approval Costs
paragraphs: Representatives from twelve of the 15 U.S. companies and 2 of the 3  foreign companies indicated challenges with regard to approval fees  charged by FCAAs. They specifically cited EASA and the Federal  Aviation Authority of Russia (FAAR). For example, they noted that  EASA’s fees are significantly high (up to 95 percent of the cost of a  domestic EASA certification)—especially relative to the amount levied  by other FCAAs—are levied annually, and are unpredictable because of  the unknown amount of time it takes for the approval to be granted. The  fees are based on the type of product being reviewed for approval and  can range from a few thousand dollars to more than a million dollars  annually. Representatives from two companies also noted that EASA  lacks transparency for how the work it conducts to grant approvals aligns  with the fees it levies for recovering its costs. FAA officials indicated to  us that a foreign approval should take significantly less time and work to  conduct than the work required for an original certification effort—roughly  about 20 percent—and that they have initiated discussions with EASA  officials about making a significant reduction in the fees charged to U.S.  companies.
Representatives of two companies also indicated that some FCAAs (e.g.,  China and Indonesia) routinely conduct site visits to the United States to,  for example, review data and conduct test flights. According to the  companies we interviewed, these visits are paid for by the U.S.  companies seeking the approvals and the cost of these visits are  unpredictable because the logistics and duration are determined by the  FCAA. For example, representatives from one company told us that one  FCAA typically conducts 2-week visits, but they only need one and a half  days to provide information. Four companies’ representatives told us that  they sometimes (1) offer to send their staff to the FCAA or another  location because they can often do so less expensively or (2) schedule  these site visits to better coincide with a more favorable budget  environment for the company.
section_title: U.S. Companies Also Reported FAA-Related Challenges Which FAA Is Taking Actions to Address
subsections: section_title: Reported Challenges Related to FAA
paragraphs: As mentioned previously, FAA provides assistance to U.S. companies by  facilitating the application process for foreign approvals of aviation  products. U.S. companies seeking to export their aviation products to  countries with BASAs in place submit application packages for foreign  approvals to an appropriate ACO. ACO staff facilitates this process by  reviewing the application package for completeness and to ensure that all  country-specific requirements are met; and then forwarding the package  along with an FAA cover letter to the applicable FCAA for review and  approval. According to FAA officials, after the FCAA has reviewed the  package, sometimes the authority will submit “certification review items”— which document issues related to the original certification of a product  that requires an interpretation on how compliance was met or additional  clarifications, or represents a major technical or administrative problem— to the responsible ACO for review and response. The assigned ACO staff  reviews these items, determines whether a response is required from the  applicant company, and coordinates the response to the FCAA. In some  cases, ACO staff prepares issue papers which outline, among other  things, the certification basis upon which the original type certification was  issued. Also, according to FAA officials, FAA staff supports general and  technical meetings between applicant companies and FCAAs for foreign  approvals.
According to FAA officials, the agency strives to make its process in place  to support foreign approvals of aviation products as efficient as possible.  In an effort to measure progress toward this goal, FAA has centrally  tracked since January 2012 data on foreign approvals, including: the total  number of foreign approval applications received and processed, the  dates that applications are received by FAA, the dates packages are sent  by FAA to the FCAA, and the date when the FCAA ultimately approves or  finalizes the application. This data can be broken down by export country,  applicant company and product type. As will be discussed later, however,  FAA’s data on foreign approvals has some limitations. According to FAA  staff in two ACOs, each field office is responsible for setting its own time  goals related to processing foreign approvals. Officials in three field  offices told us that their goal is for each foreign approval package to be  forwarded to the FCAA within 30 days of receipt by FAA. FAA also  collects other information about foreign approvals in an effort to assess its  bilateral relationships and the overall effectiveness of its process. For  example, for some foreign approval projects, FAA field staff must  complete a Bilateral Relationship Management (BRM) form to provide  feedback on the interaction with a FCAA, which is submitted to FAA  headquarters. As we will further discuss later, however, FAA officials  acknowledged some issues with the BRM process which they plan to  address.
Although FAA seeks to provide an efficient process, companies we  interviewed reported challenges that they faced related to FAA’s role in  the foreign approval process. FAA-related challenges cited by the  companies we interviewed fell into three main categories:
Process for facilitating foreign approvals. Most of the U.S. companies  in our selection (12 out of 15) reported challenges related to FAA’s  process for handling foreign approvals. These included concerns  about foreign approvals not being a high enough priority for FAA staff,  a lack of performance measures for evaluating BASAs, and an  insufficient use of FAA’s potential feedback mechanisms. For  example, representatives of three companies told us that sometimes  FAA is delayed in submitting application packets to FCAAs because  other work takes priority; one of these companies indicated that  sometimes FAA takes several months to submit packets to FCAAs. In  another example, representatives of four companies cited concerns  that BASAs do not include any performance measures, such as any  expectations for the amount of time that it will take for a company’s  foreign approval to be finalized. With regard to FAA using feedback  mechanisms to improve its process for supporting foreign approvals,  representatives of one company told us that applicant companies are  not currently asked for post-approval feedback by FAA even though it  would be helpful in identifying common issues occurring with foreign  approvals.
Available resources. Most of the U.S. companies in our selection (10  out of 15) reported challenges related to the availability of FAA staff  and other resources. These include limited FAA travel funds and  limited FAA staff availability to process foreign approval applications.  According to FAA officials, FAA is responsible for defending the  original type certification and, more broadly, for handling any disputes  that arise with FCAAs during the foreign approval process. In doing  so, FAA is also responsible for working with a FCAA in an authority- to-authority capacity, and communications should flow through FAA to  the applicant company. However, representatives of five companies  noted that due to a lack of FAA travel funds, FAA staff is generally not  able to attend key meetings between U.S. companies and FCAAs  conducted at the beginning of the foreign approval process. These  representatives noted that this can complicate the process for  companies, which then have to take on a larger role in defending the  original type certificate issued for a product. Representatives of two  companies also noted that when there is limited FAA staff availability  at the time a foreign approval application is received that it contributes  to delays in obtaining their approvals. Industry stakeholders have  continued to suggest that FAA should more thoroughly utilize its  delegation authority in several areas to better utilize available FAA  resources. In fact, the Certification Process Committee made  recommendations to encourage FAA to include the expansion of  delegation in its efforts for improving the efficiency of its certification  process. FAA’s initiatives related to expanding the use of delegation  appear to be moving in the right direction, but FAA’s efforts have been  slower than industry would like and has expected.
Staff expertise. Some of the U.S. companies in our selection (7 out of  15) reported issues related to FAA staff expertise. These cited issues  included limited experience on the part of FAA staff in dispute  resolution as well as limited expertise related to intellectual property  and export control laws. For example, representatives of three  companies told us that FAA staff sometimes lack technical knowledge  due to having little to no experience with some aviation products,  while a representative of another company argued that increased  training for FAA staff in dispute resolution could be very helpful,  especially for disputes involving different cultural norms. In another  example, representatives of two companies described situations in  which FAA staff was ready to share information with a FCAA that the  applicant company considered proprietary until the company objected  and other solutions were found.
section_title: FAA Initiatives to Address Challenges
paragraphs: FAA has initiatives under way aimed at improving its process for  supporting foreign approvals that may help address some of the  challenges raised by the U.S. companies in our review. Specifically,  FAA’s current efforts to increase the efficiency of its foreign approval  process could help address reported challenges related to FAA’s process  and its limited staff and financial resources. For example, FAA is planning  to address its resource limitations by focusing on improving the efficiency  of its process with such actions as increasing international activities to  support U.S. interests in global aviation, and by implementing its 2018  strategic plan, which includes the possibility of allocating more resources  to strengthening international relationships.
FAA has also initiated efforts to improve the robustness of its data on  foreign approvals, to in turn further improve the efficiency of its process  for supporting these approvals. With more complete data, FAA aims to  track performance metrics such as average timeframes for foreign  approvals and to better evaluate FAA’s relationships with bilateral  partners. As previously mentioned, in 2012, FAA started tracking data on  foreign approval packages received and processed. In addition, according  to FAA officials, FAA currently tracks the time needed from initial receipt  of a foreign approval application by an ACO to the date the application is  forwarded to the FCAA. However, currently, there is no formal written  requirement for FAA field staff to enter foreign approval application  information into the central tracking system, so not all applications are  captured. FAA officials told us in December 2014 that the agency is  developing formal requirements for field staff to enter data into this  system, in order to ensure the integrity of data within its control, but they  did not provide an expected time frame for completion. According to FAA  staff in one field office, Aircraft Certification’s International Policy Office— which manages the central data system—recently updated this system  with additional data fields to capture more data on the number of foreign  approval projects in process and data for tracking performance metrics.
As previously mentioned, FAA collects Bilateral Relationship  Management (BRM) forms as a method for field staff to relay information  on specific foreign approval projects—both positive and negative  experiences—to headquarters. Based on discussions with us regarding  policies related to BRM submissions, FAA officials told us that they plan  to clarify BRM submission criteria and response policies for field and  headquarters staff to enhance information gathered through this process.
According to FAA, collecting, sharing, and taking appropriate action on  information in BRM forms is necessary for FAA to recognize and resolve  issues. Initially, FAA officials indicated that field staff is required to submit  BRM forms whenever an employee meets with an official from a FCAA or  foreign company, but that other issues can trigger the submission of BRM  forms, such as when the FCAA is not adhering to the BASA, or is not  actively engaged in certification activities. FAA officials also said that  designated headquarters officials are required to respond to all BRM  forms received within 48 hours.
However, FAA officials at four ACOs we interviewed told us that field staff  does not consistently submit BRM forms, and that when staff does submit  BRM forms, field staff generally does not receive feedback from FAA  headquarters about the information received in the form. For example,  one ACO official indicated that his office’s staff is only likely to submit the  BRM form when there is a significant issue regarding an ongoing foreign  approval package, and not to report any positive outcomes or  circumstances. Further, the official said that the Aircraft Certification’s  International Policy Office does not provide feedback on issues raised in  these forms. Two officials from a different ACO indicated that the  submission of BRM forms varies greatly by project manager, with some  managers submitting these routinely whereas others do not submit them  at all; these officials also indicated that their staff do not typically receive  feedback from headquarters on submitted forms. After hearing about  these concerns about the BRM process raised by field staff, FAA  headquarters officials indicated that they plan to clarify to field staff when  BRM forms should be submitted and also clarify to designated  headquarters staff that each BRM form requires feedback to the  submitting field staff, but they did not provide an expected time frame for  completion. These planned efforts should help improve the robustness  and completeness of data shared in BRM forms.
Some current FAA efforts to collect additional data on foreign approvals  are aimed at improving FAA’s ability to evaluate its relationships with its  bilateral partners; such efforts could help to address domestic challenges  raised by companies about FAA not having performance metrics to  assess how well BASAs are working. For example, according to FAA  officials, in November 2013, Aircraft Certification formally expanded its  process for evaluating international partners to include risk-based  evaluation methods. Officials noted that this evaluation process includes  gathering quantitative and qualitative information about the effectiveness  of bilateral partnerships. Officials explained that FAA uses a structured  process to evaluate and to establish a risk factor for each foreign bilateral  partner, based on information in the BRM forms, the number of foreign  approval projects the respective authority has within FAA’s system, and  the authority’s most recent ICAO airworthiness score, among other  factors. FAA officials said that this evaluation system will continue to  expand as FAA identifies new data sources.
In conclusion, to its credit, FAA has made some progress in addressing  the Certification Process and Regulatory Consistency Committees’  recommendations, as well as in taking steps to address challenges faced  by U.S. aviation companies in obtaining foreign approvals of their  products. It will be critically important for FAA to follow through with its  current and planned initiatives to increase the efficiency and consistency  of its certification processes, and its efforts to address identified  challenges faced by U.S. companies in obtaining foreign approvals. Given  the importance of U.S. aviation exports to the overall U.S. economy,  forecasts for continued growth of aviation exports, and the expected  increase in FAA’s workload over the next decade, it is essential that FAA  undertake these initiatives to ensure it can meet industry’s future needs.  To demonstrate that it is making progress on these important initiatives, it  is also important that FAA continue to develop and refine its outcome- based performance measures to determine what is actually being  achieved through the current and future initiatives, and also through  improvements to its data tracking for monitoring the effectiveness of its  bilateral agreements and partnerships. Such outcome-based metrics will  make it easier for FAA to determine the overall outcomes of its actions  and relationships, hold field and headquarters staff accountable for the  results, and demonstrate to industry stakeholders, congressional  stakeholders, and others that progress is being made.
Going forward, we will continue to monitor FAA’s progress, highlight the  key challenges that remain, and the steps FAA and industry can take to  find a way forward on the issues covered in this statement as well as  other issues facing the industry. As we noted in our October 2013  statement, however, some improvements to the certification processes  will likely take years to implement and, therefore, will require a sustained   We are hopeful that our  commitment as well as congressional oversight.findings related to previous and ongoing work in these areas will continue  to assist this Committee and its Subcommittee on Aviation as they  develop the framework for the next FAA reauthorization act.
Chairman Shuster, Ranking Member DeFazio, and Members of the  Committee, this completes my prepared statement. I would be pleased to  respond to questions at this time.
section_title: GAO Contact and Staff Acknowledgements
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; Jessica Bryant-Bertail, Jim Geibel, Josh  Ormond, Amy Rosewarne, and Pamela Vines. Other contributors  included Kim Gianopoulos, Director; Dave Hooper; Stuart Kaufman, and  Sara Ann Moessbauer.
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