FAA Proposes Policy Prohibiting Manufacturer Restrictions on Instructions for Continued Airworthiness

By Gregory J. Reigel

The FAA recently published a draft Policy Statement intended to address certain inappropriate conduct by manufacturers who publish and distribute Instructions for Continued Airworthiness (ICAs). The draft Policy Statement, “Inappropriate Design Approval Holder (DAH) Restrictions on the Use and Availability of Instructions for Continued Airworthiness (ICA),” is the FAA’s response to its discovery that certain DAHs were restricting the availability, distribution and use of ICAs.

As you may know, 14 C.F.R. 21.50(b) requires the holder of a design approval (e.g. a type certificate, amended type certificate or supplemental type certificate) to provide at least one set of complete ICAs to the owner of the certificated aircraft, aircraft engine or propeller when delivered, or upon issuance of the first standard airworthiness certificate. A DAH must also make ICAs available to any person required to comply with the ICA’s regulatory requirements (e.g., repair stations and maintenance providers who work on an owner’s or operator’s aircraft, aircraft engine or propeller).

Before ICAs are issued, the FAA reviews them in order to determine whether their provisions are acceptable, or to approve the provisions, as appropriate. The FAA has the authority to establish standards for what will and will not be acceptable language and practices in ICAs.

Why are ICAs necessary? The answer to that question is found in FAA Order 8110.54A, Instructions for Continued Airworthiness Responsibilities, Requirements and Contents. Order 8110.54A provides guidance for how a DAH must comply with its regulatory obligations with respect to ICAs. According to the Order, ICAs provide a way to keep products airworthy and ICAs provide documentation of recommended methods, inspections, processes and procedures. In other words, ICAs are necessary to ensure that aircraft, aircraft engines and propellers are maintained in a safe condition.

When viewed from a safety perspective, issuing ICAs seems pretty straightforward. Unfortunately, some DAHs started to use the issuance of ICAs as a means to not only meet their regulatory obligations, but also to try and add to the bottom line. Certain DAHs were making it a practice of only licensing their ICAs to repair stations and other maintenance providers if those licensees agreed not to use competitive products like parts manufacturing authority (PMA) parts or repairs by a designated engineering representative (DER). For example, an aircraft or engine manufacturer might not license its ICAs unless the licensee agrees not to purchase PMA parts for the aircraft or engine.

This practice didn’t sit well with the FAA. After all, why should a repair station or other maintenance provider by precluded from using PMA parts in order to obtain ICAs, especially when the regulations, and safety, already mandate distribution of ICAs by DAHs? The FAA responded to this practice by stating that “[i]t is not acceptable for a DAH to limit the distribution of ICA by imposing contractual requirements or adding restrictive language that would control the use of ICA by an owner/operator with respect to the maintenance of its product.” The FAA concluded that this practice establishes improper anti-competitive requirements on licensees and, ultimately, undermines safety.

The draft Policy Statement specifically spells out what the FAA considers to be unacceptable practices by a DAH:

A. DAH may not inhibit via contractual provisions an owner/operator from distributing ICA to current or potential future maintenance providers. Therefore, it is not acceptable for a DAH to limit the distribution of ICA by imposing contractual requirements or adding restrictive language that would control the use of ICA by an owner/operator with respect to the maintenance of its product.

In addition, while a DAH must identify the applicability of its ICA, the FAA will not accept restrictive statements or terms in ICA documents or related licensing agreements that purport to limit the appropriate availability (distribution) or use of the ICA where the FAA has determined the ICA continue to be acceptable for maintaining a DAH’s product or article with FAA-approved replacement parts, articles or materials installed (like PMA items). While not exhaustive, the FAA does not find the following DAH practices acceptable under the provisions of 14 CFR §21.50(b) and related ICA airworthiness requirements:

1. Requiring the use (installation) of only DAH-produced or authorized replacement parts, articles, appliances, or materials.

2. Requiring that alterations or repairs must be provided or otherwise authorized by the DAH.

3. Requiring the use of only repair stations or other persons authorized by the DAH to implement the ICA.

4. Establishing, or attempting to establish, any restriction on the right of the owner/operator to disclose or provide the ICA to persons authorized by the FAA to implement the ICA.

Comments to the draft Policy Statement were due Dec. 5, 2011. Overall, the comments submitted were positive and in favor of the draft Policy Statement. Now the director of the FAA’s Aircraft Certification Service will review the comments before issuing a final policy statement. Given the support for the draft Policy Statement, it is quite likely that the final policy statement will be issued in the near future (if it hasn’t already been issued by the time you read this article).

Once issued, the final policy statement will prevent DAHs from holding repair stations and maintenance providers hostage to their ICAs — and that’s a good thing for safety and for competition.

© January, 2012 All rights reserved.

Greg Reigel is an aviation attorney, author and pilot. He holds a commercial pilot certificate (single-engine land and sea and multi-engine land) with instrument rating. His practice concentrates on aviation litigation, including aviation insurance matters and FAA certificate actions, and also aviation transactional matters. He is admitted to practice law in Minnesota and Wisconsin and advises clients throughout the country on aviation law matters. A cum laude graduate of William Mitchell College of Law, Reigel is the founder and president of the law firm Reigel & Associates, Ltd./Aero Legal Services based in Hopkins, Minn. He is an adjunct professor for the Business Law Clinic and an instructor for the “Lawyering Skills” courses at William Mitchell. His articles have appeared in Private Pilot, the Midwest Flyer and on www.globalair.com. He frequently speaks to groups on aviation and business law issues. Reigel is a member of the AOPA Legal Services Panel, secretary of the Minnesota Aviation Trade Association, and a member of the NTSB Bar Association, National Business Aviation Association, Minnesota Business Aviation Association, ABA-Forum on Air & Space Law, Lawyer-Pilot Bar Association and Experimental Aircraft Association.