FAA Has Made Progress in Addressing the Certification Process and Regulatory Consistency Committees’ Recommendations

		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

Aircraft Certification is implementing and has set milestones for  completing 14 initiatives in response to May 2012 recommendations of  the Certification Process Committee. 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. FAA Has Developed Plans to Address Recommendations to Improve the Consistency of Its Regulatory Interpretations, but Progress Has Been Slow

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. 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. 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. 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. Selected U.S. Companies Report Challenges in Obtaining Foreign Approvals, Which FAA Is Taking Steps to Address within Sovereignty Constraints

		U.S. Companies Reported that they Experienced FCAA-Related Process, Communications, and Cost Challenges and FAA is Attempting to Address These Challenges

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. 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. applications submitted to the top ten and other markets for foreign  approvals from January 2012 through November 2014. Reported Issues Related to Some BASAs

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. 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. They specifically cited EASA and the Federal  Aviation Authority of Russia (FAAR). U.S. Companies Also Reported FAA-Related Challenges Which FAA Is Taking Actions to Address

			Reported Challenges Related to FAA

As mentioned previously, FAA provides assistance to U.S. companies by  facilitating the application process for foreign approvals of aviation  products. 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. FAA Initiatives to Address Challenges

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. 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.
Why GAO Did This Study

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.

What GAO Found

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.