Manufacturing Regulations & Distributors

Manufacturing Regulators& Distributors By Jason Dickstein March 2000 Recently, a question was posed to the Airline Suppliers Association (ASA) from a distributor that works closely with several United States manufacturing companies. A...

One reason that a distinction might be made between PMA and non-PMA parts is because the FAA aftermarket part rules only apply to parts manufactured with the intent that they be installed on aircraft (or on their component parts). In an enforcement action, the FAA would try to prove that certain parts were manufactured outside the scope of the PMA, but were still produced with the intent that they be sold for installation on an aircraft. Proving this is the FAA's burden in an enforcement action. If the manufacturer keeps part-by-part records detailing the intended installation of the part (aviation vs. non-aviation), then this could help the FAA prove its case if the manufacturer violated the PMA parts rules. This is one important reason that the FAA would want a company to maintain such records - it permits the FAA to hang the company with its own paperwork. On the other hand, these sorts of records can help the manufacturer defend itself in an enforcement action if the PMA rules have not been violated. However, the state of the PMA rules and guidance today make it difficult to be certain that one is not violating the manner in which an individual FAA inspector will interpret the regulation.

Effect on Distributors
The reason this became important to an ASA member is that the distributor was asked to do two things based on the FAA manufacturing inspector's requirement.

First, the FAA inspector required that the manufacturer's distributors disclose to their customers, to double-check that the manufacturer's end-user expectations were being met. Just as there is no FAA regulation to require a manufacturer to keep records of end-users of parts, there is also no FAA regulation that requires a distributor to keep and disclose a list of its customers. If a distributor chooses to share this information with a manufacturer, then this should be a business decision based upon the needs of the manufacturer and distributor. This information would be a commercial document that should not ordinarily be available to the FAA inspector.

The second requirement communicated to the distributor was quite disturbing. This came from a different FAA inspector, through a different manufacturer in a similar situation. The manufacturer had obtained PMA on most of its parts but not on everything it manufactured. An FAA inspector apparently told the manufacturer that if it supplied parts without FAA production approval to an aviation parts distributor, then it must obtain a statement from the distributor that "the parts are being purchased for installation on an aircraft and is [sic] approved by the aircraft manufacturer."

There are serious problems with this situation. First, the manufacturer appears to be producing parts for sale for installation on an aircraft without benefit of a PMA or other exception to the PMA rules. This appears to represent a likely violation of the PMA rule, unless the manufacturer can demonstrate that it did not intend the parts to be sold for aviation use at the time they were manufactured. Even though the FAA bears the burden to demonstrate intent, a wise manufacturer should be prepared to prove its own intent in its own defense.

Second, the distributor is being asked to produce a document that could be used in an enforcement action against the manufacturer, and that appears to have no other possible purpose. Distributors should be very cautious if asked to disclose, in writing, that the parts it is buying are intended for aviation use when the distributor knows that the parts are not manufactured under a PMA or one of the exceptions to the PMA rules. In some cases, the manufacturer may be violating the regulations, and the document is intended to be used by the FAA in an enforcement action. Even when no laws are broken, this sort of transaction may be labeled as a Suspected Unapproved Part (SUP) transaction, and rumors of a SUP investigation can harm a company's business.

The third problem with the statement requested is that it asks the distributor to attest to an approval by the production certificate (PC) holder (like Boeing or Pratt & Whitney). In most cases, this is not possible because the PC holder has not "approved" the part. In fact, except when it is manufactured under a direct ship authority, there is generally no mechanism for a PC holder to approve manufacturing by a third-party manufacturer. Only the FAA has the power to grant production approval to a United States manufacturer. In the cases where the parts manufacturer has been granted direct ship authority by the PC holder, the manufacturers should possess the necessary paperwork to document the transaction, and the distributor should ask the manufacturer for copies of the direct ship documentation.

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